State of Delaware
                                
                Office of the Secretary of State
                                
 ______________________________________________________________
                                
      I,  EDWARD  J. FREEL, SECRETARY OF STATE OF  THE  STATE  OF
DELAWARE,  DO HEREBY CERTIFY THE ATTACHED IS A TRUE  AND  CORRECT
COPY  OF CERTIFICATE OF DESIGNATION OF "XCL LTD.", FILED IN  THIS
OFFICE  ON  THE FOURTH DAY OF MARCH, A.D. 1998, AT  4:30  O'CLOCK
P.M.



              [GREAT SEAL OF THE STATE OF DELAWARE]
                                
                                
                                
 [SEAL OF SECRETARY OF STATE]  /s/ Edward J. Freel
                              ____________________________
                              Edward J. Freel, Secretary of State

2147839     8100                 AUTHENTICATION:      8955712

981085154                                  DATE:      03/05/98

     CERTIFICATE OF DESIGNATION
     OF
     AMENDED SERIES B, CUMULATIVE CONVERTIBLE PREFERRED STOCK
     OF
     XCL LTD.

     _____________________________________________

     Pursuant to Section 151 of the
     General Corporation Law of the State of Delaware


           XCL  Ltd., a corporation organized and existing  under

the  laws  of  the  State  of Delaware  (the  "Company"),  HEREBY

CERTIFIES that the resolutions set forth below were duly  adopted

by  the  Board of Directors of the Company pursuant to  authority

conferred  upon the Board of Directors by the provisions  of  the

Amended and Restated Certificate of Incorporation of the Company,

which  authorizes  the  issuance of up  to  2,400,000  shares  of

Preferred  Stock,  par value $1.00 per share, and  in  accordance

with the provisions of Section 151 of the General Corporation Law

of the State of Delaware, respectively:

            WHEREAS,  the  holders  of  all  of  the  issued  and

outstanding   shares  of  the  Company's  Series  B,   Cumulative

Preferred  Stock, par value $1.00 per share (the  "Old  Series  B

Preferred Stock") wish to exchange such shares for the equivalent

number  of  shares  of  a  new series of Preferred  Stock  to  be

designated  Amended  Series B, Cumulative  Convertible  Preferred

Stock,  plus  additional shares of Amended Series  B,  Cumulative

Convertible Preferred Stock constituting payment in kind  of  all

accrued and unpaid dividends on the Old Series B Preferred Stock,

with  the powers, preferences, rights and restrictions set  forth

in Exhibit A hereto; and

           WHEREAS, the Board deems it desirable and in the  best

interests of the Company to effectuate such exchange; it was

           RESOLVED, that, pursuant to such exchange, all of  the

issued and outstanding shares of the Old Series B Preferred Stock

be  reacquired  by  the Company from the holders  thereof,  Arbco

Associates,  L.P.,  Kayne  Anderson Non-Traditional  Investments,

L.P.,  Offense Group Associates, L.P. and Opportunity Associates,

L.P.,  each  a  California  limited partnership  (the  "Series  B

Holders"),  retired  and cancelled, simultaneously  with  and  in

exchange for the issuance of 44,465 shares of the Amended  Series

B Preferred Stock (as defined below) to the Series B Holders, and

that the Company issue 2,260 shares of Amended Series B Preferred

Stock  to  the  Series B Holders in payment of  all  accrued  and

unpaid  dividends on the Old Series B Preferred Stock,  all  such

newly  issued shares of Amended Series B Preferred  Stock  to  be

allocated  among the Series B Holders pursuant to the request  of

KAIM  Non-Traditional, L.P., the general partner of each  of  the

Series B Holders; and

            FURTHER  RESOLVED, that the Company establish  a  new

series  of  Preferred Stock, par value $1.00  per  share,  to  be

designated as Amended Series B, Cumulative Convertible  Preferred

Stock  ("Amended  Series B Preferred Stock"),  70,000  shares  of

which are hereby authorized for issuance; and

           FURTHER  RESOLVED,  that the powers,  preferences  and

relative,  participating, optional or other special  rights,  and

the  qualifications, limitations and restrictions thereof, of the

Amended Series B Preferred Stock, in addition to those stated  in

Article  FOURTH  of  the  Amended  and  Restated  Certificate  of

Incorporation  which  are applicable to all series  of  Preferred

Stock,  are  hereby  established as set  forth  in  the  attached

Exhibit A; and.

           FURTHER RESOLVED, that the Executive Committee of  the

Board  of Directors is hereby authorized to make such changes  to

Exhibit  A  of  this  resolution as  it  may  deem  necessary  or

desirable, except with respect to the voting rights provided  for

therein.



            IN  WITNESS  WHEREOF,  the  Company  has  caused  its

corporate seal to be hereunto affixed and this certificate to  be

signed  by  Benjamin Blanchet, its Executive Vice President,  and

attested  by  Lisha Falk, its Secretary, this 3rd day  of  March,

1998.


                                        XCL LTD.


                                        /s/ Benjamin B. Blanchet

                                        Benjamin Blanchet
                                        Executive Vice President
[Corporate Seal]

ATTEST:

/s/ Lisha C. Falk

Lisha Falk
Secretary
                                             EXHIBIT A


      E.     The Corporation shall have the authority to issue up
to  70,000 shares of Preferred Stock designated Amended Series B,
Cumulative  Convertible Preferred Stock (the  "Amended  Series  B
Preferred Stock"), each share of Amended Series B Preferred Stock
being  identical  with  each  other share  of  Amended  Series  B
Preferred  Stock  and all shares of Amended  Series  B  Preferred
Stock   having   the   following  characteristics,   rights   and
preferences:

     Paragraph 1.  Designation and Amount.

           The shares of this series of Preferred Stock shall  be
  designated   as   Amended  Series  B,  Cumulative   Convertible
  Preferred Stock, par value of $1.00 per share ("Amended  Series
  B  Preferred  Stock"),  and the number of  shares  constituting
  such series shall be 70,000.

     Paragraph 2.  Definitions.

           The  following  terms, not defined  elsewhere  herein,
     shall have the following meanings:

           "Amended  Series A Preferred Stock" means the  Amended
     Series A, Cumulative Convertible Preferred Stock, par  value
     $1.00 per share, of the Company.

           "The American Stock Exchange" means the American Stock
     Exchange, Inc.

           "Board  of Directors" means the Board of Directors  of
     the Company as may be constituted from time to time.

           "Business  Day" means any day (other than a  Saturday,
     Sunday  or public holiday in the Borough of Manhattan,  City
     of  New York, New York) on which banking institutions in New
     York  City  are  not  authorized  or  obligated  by  law  or
     executive order to close.

          "Closing Price" of a security on any day means the last
     sales price, regular way, per share of such security on such
     day  as  reported  in  the principal consolidated  reporting
     system  with respect to such security listed on The American
     Stock  Exchange or The New York Stock Exchange  or,  if  the
     shares  of  such  security are not  listed  or  admitted  to
     trading on The American Stock Exchange or The New York Stock
     Exchange,  the  middle market quotations for the  shares  of
     such  security (derived from The London Stock Exchange Daily
     Official  List) listed or admitted to trading on The  London
     Stock  Exchange, or if the shares of such security  are  not
     listed  or admitted to trading on The London Stock Exchange,
     the  last  sales  price as reported in the  Nasdaq  National
     Market, or if the shares of such security are not listed  or
     admitted  to  trading  in the Nasdaq  National  Market,  the
     average of the high bid and low asked prices in the over-the-
     counter market as reported by the Nasdaq Stock Market, or if
     the  bid  and asked prices on each such day shall  not  have
     been  reported through the Nasdaq Stock Market, the  average
     of the bid and asked prices for such day as furnished by any
     New  York  Stock  Exchange member firm  regularly  making  a
     market  in  such security selected for such purpose  by  the
     Board  of  Directors or a committee thereof on each  Trading
     Day  during such trading periods.  In any of such  alternate
     cases  when such security is not traded in prices  expressed
     in  Dollars,  such  Closing Price shall  be  converted  into
     Dollars  at the spot market exchange rate of pounds sterling
     (UK)  into Dollars as quoted by The Chase Manhattan Bank  on
     the date of determination.

           "Common  Stock" means the shares of common stock,  par
     value $.01 per share, of the Company.

            "Company"  or  "XCL"  means  XCL  Ltd.,  a   Delaware
     corporation.

          "Directors" means the directors of the Company.

           "Dividend Stock" means the shares of Common  Stock  or
     Amended  Series B Preferred Stock paid to holders of Amended
     Series  B  Preferred  Stock in lieu of a  cash  dividend  as
     provided in Section 3(b) hereof.

          "$" means Dollars.

          "Dollars" means the freely transferable currency of the
     USA.

           "Redemption  Stock" means the shares of  Common  Stock
     that  may be issuable by the Company upon redemption of  the
     Amended Series B Preferred Stock as hereinafter provided.

          "Shareholders" means the holders of the Common Stock.

           "Stock  Option  Plans" means the Incentive  and  (non-
     qualified)  Stock Option Plans adopted by  the  Company  for
     employees  and certain other individuals rendering  services
     to the Company.

           "The  London  Stock Exchange" means The  London  Stock
     Exchange Limited.

           "The New York Stock Exchange" means The New York Stock
     Exchange. Inc.

           "Trading Day" means a day on which the market used for
     calculating the Closing Price is open for the transaction of
     business  or,  if  the shares of such security  are  not  so
     listed or admitted to trading, a Business Day.

           "Transfer  Agent"  means the transfer  agent  for  the
     Amended   Series  B  Preferred  Stock  from  time  to   time
     obtaining.

           "UK" and" "United Kingdom" means the United Kingdom of
     Great Britain and Northern Ireland.

          "USA" and "US" means the United States of America.

     Paragraph 3.     Dividends and Distributions.

           (a)     Each share of Amended Series B Preferred Stock
     shall  entitle the record holder to receive,  out  of  funds
     legally available therefor, when, as and if declared by  the
     Board of Directors, dividends in cash at the annual rate  of
     $9.50  per share, which shall be payable in arrears in equal
     semi-annual installments on June 30th and December 31st,  or
     in  the  event any such date is a Saturday, Sunday or public
     holiday  in the Borough of Manhattan, the City of New  York,
     New  York,  on  the first Business Day following  such  date
     (hereinafter  a  "Dividend  Payment  Date")  in  each  year,
     provided,  however, that the dividend payable on  the  first
     such  Dividend  Payment Date occurring after March  3,  1998
     shall  be equal to the product obtained by multiplying $4.75
     by a fraction, the denominator of which shall be 182 and the
     numerator  of which shall be the number of days  expired  in
     the  period between March 4, 1998 (the "Issuance Date")  and
     such  first  Dividend Payment Date (inclusive of  both  such
     dates);  provided, however, that if as of the tenth Business
     Day  prior  to any such Dividend Payment Date the  Board  of
     Directors has neither (i) declared a cash dividend of  $9.50
     per share nor (ii) delivered written notice of the Company's
     election  to pay a dividend hereunder in kind in  shares  of
     Common Stock or Amended Series B Preferred Stock, as elected
     by  the holder of the Amended Series B Preferred Stock,  the
     Company  shall,  to  the  extent legally  and  contractually
     permitted,  declare a dividend and use its best  efforts  to
     pay  such  dividend  in shares of Common  Stock  or  Amended
     Series  B Preferred Stock, as elected by the holder  of  the
     Amended  Series  B  Preferred Stock, as set  forth  in  sub-
     paragraph 3(b).

           (b)      The  Company may, at its option exercised  by
     written  notice  to  the holders of  the  Amended  Series  B
     Preferred Stock given at least ten (10) Business Days  prior
     to  the Dividend Payment Date, elect to pay any dividend due
     and  payable hereunder, and the Company shall to the  extent
     required by sub-paragraph 3(a), in kind in shares of  either
     Common  Stock  or Amended Series B Preferred Stock,  at  the
     option of the holder, in-lieu of a dividend payment in cash.
     The  amount  of  shares of Dividend Stock issuable  to  each
     holder of Amended Series B Preferred Stock pursuant to  this
     sub-paragraph 3(b) on each such Dividend Payment Date  shall
     equal  0.0475 shares of Dividend Stock per share of  Amended
     Series  B  Preferred  Stock held  by  such  holders  if  the
     Dividend Stock is Amended Series B Preferred Stock and shall
     equal  the  number of shares of Common Stock  equal  to  the
     quotient  obtained by dividing $4.75 by the  lowest  average
     Closing  Price  per share of Common Stock as calculated  for
     the  last  5, 10 and 30 Trading Days preceding the  Dividend
     Payment  Date  if  the Dividend Stock is Common  Stock.   No
     fractional shares of Dividend Stock shall be issued  by  the
     Company.  Instead of any fractional share of Dividend  Stock
     that  would otherwise be issuable to a holder by  way  of  a
     dividend  on  the  Amended Series  B  Preferred  Stock,  the
     Company shall either (i) pay a cash adjustment in respect of
     such  fractional  share  in  an amount  equal  to  the  same
     fraction of $4.75 computed to the nearest whole cent or (ii)
     aggregate all such fractional shares into a whole number  of
     shares  and sell such aggregated fractional shares on behalf
     of  the holders entitled thereto in a public or private sale
     and  distribute the net cash proceeds from the sale  thereof
     to  such holders pro rata.  If the Company shall elect so to
     aggregate and sell such fractional shares, it shall endeavor
     to  use its best efforts to secure the best available  sales
     price  for such shares but shall not be obligated to  secure
     the highest price obtainable for such shares.  The amount of
     Dividend  Stock issuable to a holder by way  of  a  dividend
     shall  be  computed on the basis of the aggregate number  of
     shares  of  Amended Series B Preferred Stock  registered  in
     such  holder's name on the record date fixed for the payment
     of such dividend.  Dividends payable on the Amended Series B
     Preferred  Stock for any period less than a full semi-annual
     period  shall be computed on the basis of a 360-day year  of
     twelve 30-day months.

           (c)   Dividends  shall be cumulative, whether  or  not
     earned  and  whether  or  not  surplus  shall  be  available
     therefor  and  shall commence to accrue and accumulate  from
     day  to day from the Issuance Date.  Such accumulation shall
     include,  if not paid, the dividend payable on such Dividend
     Payment  Date.  Accrued but unpaid dividends shall not  bear
     interest.  Such dividends shall be declared and set apart or
     paid  before any dividends (other than dividends payable  in
     Common  Stock)  shall  be  paid on  the  Common  Stock.   No
     dividend shall be paid upon or set apart for shares  of  any
     other class of stock of XCL (other than shares of preference
     stock ranking pari passu with the Amended Series B Preferred
     Stock)  until all dividend arrears on the Amended  Series  B
     Preferred Stock shall be fully paid.  The shares of  Amended
     Series  B  Preferred Stock shall rank pari  passu  with  the
     shares  of the Amended Series A Preferred Stock with respect
     to the payment of dividends.

           (d)  Dividends paid on the shares of Amended Series  B
     Preferred  Stock in an amount less than the total amount  of
     such  dividends  at  the time accrued and  payable  on  such
     shares shall be allocated pro-rata on a share-by-share basis
     among all such shares at the time outstanding.  The Board of
     Directors  may  fix a record date for the  determination  of
     holders  of  Amended Series B Preferred  Stock  entitled  to
     receive payment of a dividend declared thereon, which record
     date  shall  be no more than sixty days prior  to  the  date
     fixed for the payment thereof.

     Paragraph 4.     Dissolution, Liquidation or Winding Up.

          In the event of any dissolution, liquidation or winding
     up  of  the  affairs of XCL, after payment or provision  for
     payment  of  the  debts and other liabilities  of  XCL,  the
     registered holders of Amended Series B Preferred Stock shall
     be  entitled to share on a pro rata basis with the shares of
     Amended  Series  A Preferred Stock and all other  series  of
     XCL's  preference stock ranking on a parity with the Amended
     Series  B  Preferred Stock in respect of distributions  upon
     dissolution, liquidation or winding up of the Company and to
     receive,  out of the net assets of XCL, $100.00  per  share,
     plus  an  amount equal to all the dividend arrears  on  each
     such  share  up  to the date fixed for distribution  and  no
     more,  before distribution shall be made to the  holders  of
     the  Common Stock or any other shares ranking junior to  the
     Amended Series B Preferred Stock in respect of distributions
     upon  dissolution, liquidation or winding up of the Company.
     Neither  the merger or consolidation of XCL, nor  the  sale,
     lease or conveyance of all or a part of its assets, shall be
     deemed to be a dissolution, liquidation or winding up of the
     affairs of XCL within the meaning of this Paragraph 4.

     Paragraph 5.  Redemption.

            The  Amended  Series  B  Preferred  Stock  shall   be
     redeemable  at the redemption price specified below  and  on
     the following terms and conditions:

           (a)  Amended Series B Preferred Stock is redeemable at
     the option of the holder at any time after December 21, 2001
     ("Optional Redemption"), at $100.00 per share plus an amount
     equal  to  the accrued and unpaid dividends thereon  to  the
     Redemption  Date (as hereinafter defined),  whether  or  not
     earned  and  whether  or not surplus is available  therefor,
     payable  out of funds legally available therefor.  In  order
     to  exercise an Optional Redemption, such holder  must  give
     written notice of such redemption to the Company ninety (90)
     calendar  days  prior  to the redemption  date  ("Redemption
     Date").  In the event funds are legally available to  redeem
     only  a  portion  of  the Amended Series B  Preferred  Stock
     outstanding,  such funds shall be applied to  redemption  to
     the extent available and the shares to be redeemed shall  be
     selected by lot as determined by the Board of Directors  and
     the remainder of the shares to be redeemed shall be promptly
     redeemed as funds become legally available.  Each holder  so
     electing  to have the Company redeem its shares  of  Amended
     Series  B  Preferred Stock shall elect such redemption  with
     respect to at least 5,000 such shares registered in its name
     on  the Redemption Date; provided, however, that a holder of
     less  than 16,667 shares of Amended Series B Preferred Stock
     so  electing to have the Company redeem any of its shares of
     Amended Series B Preferred Stock shall elect such redemption
     with  respect to all such shares registered in its  name  on
     the Redemption Date.

           (b)   In  the  event  of an Optional  Redemption,  the
     Company  may  elect,  at its option, to pay  the  redemption
     price by issuing shares of Redemption Stock to those holders
     of  Amended  Series B Preferred Stock who  have  elected  to
     redeem  their  shares of Amended Series B  Preferred  Stock,
     provided  the Company's Common Stock is then listed  on  The
     American Stock Exchange, The New York Stock Exchange or  The
     London  Stock Exchange or is admitted to trading  in  Nasdaq
     National Market. In the event the Company elects to pay  the
     redemption price in shares of Redemption Stock, the  Company
     shall  advise  the holders by written notice  within  thirty
     (30)  calendar days after receipt of written notice of  such
     holders'  election  to redeem shares  of  Amended  Series  B
     Preferred  Stock.  The number of shares of Redemption  Stock
     so  to be issued to such holders shall equal the product  of
     the  number  of  shares of Amended Series B Preferred  Stock
     registered  in  the name of each such holder, multiplied  by
     the quotient obtained by dividing the sum of $100.00 plus an
     amount  equal  to the accrued and unpaid dividends  on  each
     share  of Amended Series B Preferred Stock to the Redemption
     Date  by the lowest average Closing Price per share  of  the
     Common Stock as calculated for the last 5, 10 and 30 Trading
     Days  preceding the Redemption Date.  Issuance and  delivery
     of the Redemption Stock to such holders shall be effected by
     the Company or the Redemption Agent (as hereinafter defined)
     in  the same manner and to the same effect as the payment of
     the   redemption  price  in  cash  in  accordance  with  the
     procedures set forth in sub-paragraph 5(c) below.

           (c)  If a holder of record submits to the Company,  on
     or   prior   to  a  Redemption  Date,  the  certificate   or
     certificates for the Amended Series B Preferred Stock to  be
     redeemed,  with the redemption notice thereon  appropriately
     completed, the redemption price shall be payable as soon  as
     practicable thereafter, but in any event no later  than  ten
     (10)  Business  Days  after receipt of such  certificate  or
     certificates.    The  Company  may  deposit  the   aggregate
     redemption  price in trust with a bank or trust company  (in
     good standing, organized under the laws of the United States
     of  America  or of the State of New York, doing business  in
     the  Borough of Manhattan, City of New York, New  York,  and
     having capital surplus and undivided profits aggregating  at
     least $25,000,000) as the "Redemption Agent", for payment to
     the  holders so the shares so to be redeemed, upon surrender
     (and endorsement, if required by the Board of Directors)  of
     the  certificates for such shares.  Upon a  Redemption  Date
     (unless the Company shall fail to make payment or deposit of
     the redemption price as above set forth), each holder of the
     shares of Amended Series B Preferred Stock so to be redeemed
     shall  cease to be a shareholder with respect to such shares
     and shall have no interest in, or claim against, the Company
     and  shall  have no voting or other rights with  respect  to
     such  shares, except the right to receive the moneys payable
     upon  such  redemption from such bank or trust  company,  or
     from  the  Company, without interest thereon, upon surrender
     (and  endorsement if required by the Board of Directors)  of
     the  certificates; and the shares represented thereby  shall
     no  longer  be deemed to be outstanding.  In the  event  the
     holder  of  any  shares of Amended Series B Preferred  Stock
     shall  not,  within six years after such deposit  claim  the
     amount deposited as above stated for the redemption thereof,
     the  depositary shall, upon demand, pay over to the  Company
     such unclaimed amount so deposited, and the depositary shall
     thereupon be relieved of all responsibility therefor to such
     holder.

            (d)      Notwithstanding  anything  to  the  contrary
     contained   herein,  if,  in  the  event  of   an   Optional
     Redemption,  the  Company is unable to  redeem  all  of  the
     shares  of  Amended  Series B Preferred Stock  because  such
     redemption would violate the applicable laws of the State of
     Delaware,  or if such redemption would create any  liability
     on  the  part  of  the directors of the  Company  under  any
     provisions  of the Delaware General Corporation Law  or  any
     successor  law thereto, then the Company shall  redeem  only
     such  number  of shares as shall not violate  such  laws  or
     create  such liability and shall redeem all remaining shares
     subject to the redemption notice as soon thereafter  as  the
     restrictions  precluding such redemption  or  imposing  such
     liability shall no longer be applicable.

     Paragraph 6.  Voting Rights.

           Except as may be otherwise provided herein or in  this
     Restated  Certificate of Incorporation of  XCL,  as  amended
     from time to time with the consent of the holders of Amended
     Series  B Preferred Stock, provided such consent is required
     to be obtained hereunder, or as required by applicable law:

           (a)   The Amended Series B Preferred Stock shall  vote
     together  with the Common Stock of the Company as  a  single
     class on all actions to be taken by the stockholders of  the
     Company.   Each  share of Amended Series B  Preferred  Stock
     shall  entitle the holder thereof to cast 50  votes  on  all
     matters on which the Amended Series B Preferred Stock  shall
     vote with the Common Stock.  No adjustment shall be made  in
     the  voting  rights  per  share  of  the  Amended  Series  B
     Preferred   Stock   on   any  matters  (including,   without
     limitation,  the voting rights set forth in this  Section  6
     and  in  Sections  7  and 8 hereof)  upon  any  increase  or
     decrease in the number of shares outstanding of any class of
     stock which is also entitled to vote on such matters;

          (b)  The Amended Series B Preferred Stock shall vote as
     a  separate class on any resolution proposed for adoption by
     the  stockholders of the Company which seeks to amend, alter
     or  repeal, the provisions of XCL's Restated Certificate  of
     Incorporation  or  of  the  resolutions  contained  in   the
     Certificate of Designation of the Amended Series B Preferred
     Stock  designating the Amended Series B Preferred Stock  and
     the  preferences  and  privileges, relative,  participating,
     optional   or   other  special  rights  and  qualifications,
     limitations  and  restrictions thereof, so as  to  adversely
     affect  any right, preference, privilege or voting power  of
     the Amended Series B Preferred Stock or the holders thereof;
     provided,  however, that any increase in the amount  of  the
     issued Amended Series B Preferred Stock or the creation  and
     issue  of other series of preference stock (whether  or  not
     denominated  in Dollars), or any increase in the  amount  of
     authorized  shares of Amended Series B Preferred  Stock,  in
     each  case  either being Parity Stock (as defined below)  or
     junior  to the Amended Series B Preferred Stock with respect
     to  the  payment of dividends and the distribution of assets
     upon  dissolution, liquidation or winding  up  and  with  or
     without  similar voting rights will not be deemed to  affect
     adversely  such  rights, preferences, privileges  or  voting
     powers of the Amended Series B Preferred Stock;

           (c)  Except in the event that arrangements are or have
     been  offered  to  the  holders  of  the  Amended  Series  B
     Preferred Stock which ensure that the rights of such holders
     would  not  be prejudiced, XCL will ensure that no  plan  of
     compromise  or arrangement affecting the Common Stock  shall
     become effective unless the holders of the Amended Series  B
     Preferred Stock shall be parties to the plan and unless  the
     plan shall be approved by the holders of at least two thirds
     of  the then issued and outstanding shares of Amended Series
     B Preferred Stock, voting as a class together with all other
     series  of  preference stock ranking on a  parity  with  the
     Amended  Series B Preferred Stock as to the right to receive
     any dividends and any payment or distribution of assets upon
     dissolution, liquidation or winding up (herein  referred  to
     as  "Parity  Stock").  The Amended Series A Preferred  Stock
     shall be deemed Parity Stock for all purposes herein.

           (d)   In  the case of a vote on a resolution regarding
     (i)  the  capital reorganization, dissolution or liquidation
     of  XCL;  or  (ii) any matter for which the consent  of  the
     holders  of  Amended Series B Preferred Stock is  sought  in
     accordance  with  the provisions of sub-paragraphs  6(b)  or
     6(c)  or  Paragraphs 7 or 8 hereof; every record  holder  of
     Amended  Series  B Preferred Stock who is  present  at  that
     meeting in person or by proxy shall be entitled to cast  one
     (1)  vote for each share of Amended Series B Preferred Stock
     registered in its name (voting (A) as a separate class  with
     respect  to the matters set forth in sub-paragraph 6(b)  and
     (B)  together with all other Parity, Stock with  respect  to
     the matters set forth in sub-paragraphs 6(c) and 6(d)(i) and
     Paragraphs 7 and 8) and the decision of at least two  thirds
     of  the votes cast at the meeting by such holders (as to any
     matters set forth in clause (A) above) and such, holders and
     the holders of any Parity Stock (as to any matters set forth
     in clause (B) above) shall be determinative of the matter so
     long as a quorum (as defined in sub-paragraph 6(e) below) is
     present; provided that in the case of sub-paragraph 6(d)(ii)
     above such consent may be sought without a meeting and shall
     be  deemed  to  be granted upon the receipt of  the  written
     consent  of  at  least  two thirds of the  then  issued  and
     outstanding shares of stock entitled to vote on such  matter
     as a class.

           (e)   At  each  meeting of stockholders at  which  the
     holders  of the Amended Series B Preferred Stock shall  have
     the  right to vote as a separate class or together with  any
     other class of stock, the presence in person or by proxy  of
     the  holders of record of a majority of the total number  of
     shares  of  stock  entitled to vote as a single  class  then
     outstanding shall be necessary and sufficient to  constitute
     a  quorum  of such class for the transaction of business  by
     such  stockholders  as  a class.  At  any  such  meeting  or
     adjournment thereof:

           (i)   the  absence of a quorum of the holders  of  the
        Amended  Series B Preferred Stock shall not  prevent  the
        election  of  Directors  or the transaction  of  business
        other  than  the transaction of business with respect  to
        which the holders of the Amended Series B Preferred Stock
        are  entitled to vote as a separate class and the absence
        of  a  quorum of the holders of any other class of  stock
        for  the  election of Directors or the  conduct  of  such
        other  business shall not prevent the conduct of business
        on which the Amended Series B Preferred Stock is entitled
        to vote as a separate class, and

           (ii)   in the absence of any such quorum, the  holders
        present  in  person or by proxy of the class  or  classes
        which lack a quorum shall have the power to adjourn  (for
        a  period  of up to 30 days) the meeting for the election
        of  Directors which they are entitled to elect from  time
        to  time,  or  for the conduct of such business,  without
        notice  other  than announcement at the meeting  until  a
        quorum shall be present.

     Paragraph 7.  Further Issues: Par Value.

           So  long  as any shares of Amended Series B  Preferred
     Stock   remain  outstanding,  XCL  will  not   without   the
     affirmative  vote or consent of the holders of  the  Amended
     Series B Preferred Stock and any Parity Stock, in each  case
     outstanding at the time, given in person or by proxy, either
     in  writing or at a meeting, (i) authorize, create or issue,
     or increase the authorized or issued amount, of any class or
     series  of  stock  ranking senior to the  Amended  Series  B
     Preferred  Stock  with respect to payment  of  dividends  or
     distribution  of  assets  on  dissolution,  liquidation   or
     winding  up  or which may be convertible into any  class  of
     shares ranking as regards participation in dividends or  the
     distribution  of  assets  on  dissolution,  liquidation   or
     winding  up senior to the Amended Series B Preferred  Stock;
     or  (ii)  increase or decrease the par value of  the  Common
     Stock.

     Paragraph 8.  Other Matters.

          So long as any Amended Series B Preferred Stock remains
     issued and outstanding then:

           (a)   except  as  authorized by  the  adoption  of  an
     appropriate resolution by the affirmative vote or consent of
     the  holders of the Amended Series B Preferred Stock and any
     Parity Stock in accordance with sub-paragraph 6(d):

           (i)   XCL will not purchase any of its own outstanding
        shares  of  Common Stock otherwise than (A) in accordance
        with  XCL's Stock Option Plans to the extent Common Stock
        is  used to satisfy the exercise of stock options granted
        thereunder;  or  (B)  pursuant to  a  resolution  of  the
        Shareholders adopted at an Extraordinary General  Meeting
        held on December 4, 1987; and

            (ii)    XCL  shall  cause  the  Group  not  to  incur
        Indebtedness  which  shall exceed in aggregate  principal
        amount  an  amount equal to 200 percent of the amount  of
        Shareholders'  Equity of the Group as reported  in  XCL's
        Latest Consolidated Balance Sheet.

          For the purposes of sub-paragraph (ii) above:

          (A)  "Indebtedness" means all borrowed moneys and shall
        be  deemed  to include to the extent not otherwise  taken
        into account:

          (1)     the principal amount raised in respect of loans
          or acceptances by any bank or accepting house under any
          loan facility or acceptance credit opened on behalf  of
          and  in favor of XCL and any corporation a majority  of
          whose  shares of voting securities are owned by XCL  (a
          "Subsidiary");

          (2)     the principal amount of any debentures (secured
          or unsecured) of XCL or any Subsidiary; and

          (3)     the principal amount for which XCL is liable as
          a  guarantor  of,  or surety for the obligations  of  a
          third party;

     But  shall  not  include, as determined in  accordance  with
        generally accepted U.S. accounting principles:

          (1)     intra-Group debt;

          (2)       the   amount  of  all  consolidated   current
          liabilities of XCL and its Subsidiaries incurred in the
          ordinary  course  of business, other than  for  current
          maturities of long term debt and other than short  term
          borrowings;

          (3)     deferred revenues; and

          (4)     deferred U.S. taxes.

           (B)      "Shareholders'  Equity" means  the  aggregate
        amount   appearing  as  shareholders'   equity   in   the
        applicable   Latest   Consolidated   Balance   Sheet   as
        determined  in  accordance  with  generally  accepted  US
        accounting principles;

           (C)      "Latest Consolidated Balance Sheet" means  at
        any  date the then latest published consolidated  balance
        sheet  of the Group prepared in accordance with generally
        accepted  US  accounting principles and  which  has  been
        audited  and  has been reported on by XCL's auditors  for
        the time being.

          (D)     "the Group" means XCL and its Subsidiaries from
        time to time.

           (b)      XCL  shall concurrently send a copy of  every
     report  and financial statement sent to its Shareholders  to
     every holder of Amended Series B Preferred Stock.

     Paragraph 9.  Reacquired Shares.

           Any  shares  of  the Amended Series B Preferred  Stock
     redeemed  or purchased or otherwise acquired by the  Company
     in  any  manner  whatsoever shall be retired  and  cancelled
     promptly  after  the acquisition thereof.  All  such  shares
     shall upon their cancellation become authorized but unissued
     shares of Amended Series B Preferred Stock, par value $1.00,
     and  may be reissued as Amended Series B Preferred Stock  or
     part  of  a new series of preference stock to be created  by
     resolution or resolutions of the Board of Directors, subject
     to  the  conditions  or restrictions on issuance  set  forth
     herein.

     Paragraph 10.     Conversion Privilege

                (a)      Right of Conversion.  At any time on  or
       after   the   earlier  of  the  effective  date   of   the
       registration  of the Conversion Stock (as defined  herein)
       under  the  Securities  Act  of  1933,  as  amended   (the
       "Securities  Act")  or  August 31, 1998  (the  "Conversion
       Date"),  each  share of Amended Series B  Preferred  Stock
       shall  be convertible at the option of the holder  thereof
       into  fully paid and nonassessable shares of Common  Stock
       ("Conversion Stock"), at a conversion rate per full  share
       of   Amended  Series  B  Preferred  Stock  determined   by
       dividing  $100.00  by the conversion price  per  share  of
       Common  Stock  in  effect  on  the  date  such  share   is
       surrendered  for  conversion, or into such  additional  or
       other  securities,  cash or property  and  at  such  other
       rates  as  required in accordance with the  provisions  of
       this  Paragraph 10, except that if shares have been called
       for redemption, the conversion right will terminate as  to
       the  shares  called for redemption at 5:00 p.m.  New  York
       City  time,  on the business day prior to the  date  fixed
       for  such  redemption.  For purposes of  this  resolution,
       the  "conversion  price" per share  of  Amended  Series  B
       Preferred  Stock shall initially be (i) in the  event  the
       Conversion  Stock shall be registered under the Securities
       Act,  $4.75  or  (ii)  in the event the  Conversion  Stock
       shall  not  be so registered, $3.80, and, in either  case,
       the  conversion price shall be adjusted from time to  time
       in  accordance  with the provisions of this Paragraph  10.
       For  purposes  of  this resolution, the "conversion  rate"
       per  share  of  Amended  Series B  Preferred  Stock  shall
       initially  be  21.0526 shares of Conversion Stock  in  the
       event  the Conversion Stock shall be registered under  the
       Securities  Act  and 26.3158 in the event  the  Conversion
       Stock  shall  not be so registered and shall  be  adjusted
       from  time  to  time in accordance with the provisions  of
       this  Paragraph  10.   Each  share  of  Amended  Series  B
       Preferred Stock may be converted in whole only.

                (b)      Conversion Procedures.   Any  holder  of
       shares  of  Amended Series B Preferred Stock  desiring  to
       convert such shares into Common Stock shall surrender  the
       certificate  or  certificates evidencing  such  shares  of
       Amended  Series  B Preferred Stock at the  office  of  the
       transfer  agent for the Amended Series B Preferred  Stock,
       which  certificate or certificates, if the  Company  shall
       so  require, shall be duly endorsed to the Company  or  in
       blank,  or  accompanied by proper instruments of  transfer
       to  the  Company  or in blank, accompanied by  irrevocable
       written  notice to the Company that the holder  elects  to
       convert  such  shares of Amended Series B Preferred  Stock
       and  specifying  the  name  or  names  (with  address   or
       addresses)   in   which  a  certificate  or   certificates
       evidencing shares of Common Stock are to be issued.

                Except as otherwise described in Paragraph  10(i)
       or  in  this sub-paragraph, no payments or adjustments  in
       respect  of  dividends  on  shares  of  Amended  Series  B
       Preferred  Stock surrendered for conversion, whether  paid
       or  unpaid and whether or not in arrears, or on account of
       any   dividend  on  the  Conversion  Stock   issued   upon
       conversion  shall  be  made  by  the  Company   upon   the
       conversion  of  any shares of Amended Series  B  Preferred
       Stock  at the option of the holder.  The holder of  record
       of  shares  of  Amended  Series B  Preferred  Stock  on  a
       dividend  record  date  who  surrenders  such  shares  for
       conversion during the period between such dividend  record
       date  and the corresponding Dividend Payment Date will  be
       entitled to receive the dividend on such Dividend  Payment
       Date   notwithstanding  the  conversion  of  such  shares;
       provided, however, that unless such shares, prior to  such
       surrender,  had been called for redemption on a redemption
       date  during the period between such dividend record  date
       and  the  Dividend  Payment  Date,  such  shares  must  be
       accompanied,  upon  surrender for conversion,  by  payment
       from  the holder to the Company of an amount equal to  the
       dividend  payable on such shares on that Dividend  Payment
       Date.

                The  Company shall, as soon as practicable  after
       such  surrender  of  certificates  evidencing  shares   of
       Amended  Series  B  Preferred  Stock  accompanied  by  the
       written  notice  and compliance with any other  conditions
       herein  contained, deliver at such office of such transfer
       agent  to  the  person for whose account  such  shares  of
       Amended  Series B Preferred Stock were so surrendered,  or
       to  the  nominee or nominees of such person,  certificates
       evidencing  the number of full shares of Common  Stock  to
       which   such   person  shall  be  entitled  as  aforesaid,
       together  with  a  cash  adjustment  in  respect  of   any
       fraction  of  a  share  of  Common  Stock  as  hereinafter
       provided.   Such conversion shall be deemed to  have  been
       made  as  of the date of such surrender of the  shares  of
       Amended Series B Preferred Stock to be converted, and  the
       person  or  persons entitled to receive the  Common  Stock
       deliverable  upon  conversion of  such  Amended  Series  B
       Preferred Stock shall be treated for all purposes  as  the
       record  holder  or holders of such Common  Stock  on  such
       date.

                 (c)      Adjustment  of  Conversion  Price   and
       Conversion  Rate.  The conversion price at which  a  share
       of  Amended  Series B Preferred Stock is convertible  into
       Common  Stock, and the conversion rate at which shares  of
       Conversion  Stock are issuable upon conversion of  Amended
       Series  B  Preferred Stock, shall be subject to adjustment
       in  certain  events  including, without  duplication,  the
       following:

                    (i)     In case the Company shall pay or make
       a  dividend  or  other distribution on  its  Common  Stock
       exclusively in Common Stock  to all holders of its  Common
       Stock,  the  conversion price in effect at the opening  of
       business on the business day following the date fixed  for
       the  determination  of stockholders  entitled  to  receive
       such  dividend or other distribution shall be  reduced  by
       multiplying such conversion price by a fraction  of  which
       the  numerator  shall be the number of  shares  of  Common
       Stock  outstanding at the close of business  on  the  date
       fixed for such determination and the denominator shall  be
       the  sum of such number of shares and the total number  of
       shares constituting or included in such dividend or  other
       distribution,   such   reduction   to   become   effective
       immediately  after  the opening of  business  on  the  day
       following the date fixed for such determination.  For  the
       purposes  of this paragraph (i), the number of  shares  of
       Common  Stock  at any time outstanding shall  not  include
       shares  held in the treasury of the Company.  The  Company
       shall  not  pay  any dividend or make any distribution  on
       shares  of  Common  Stock  held in  the  treasury  of  the
       Company.

                     (ii)      In case the Company shall  pay  or
       make  a dividend or other distribution on its Common Stock
       consisting  exclusively of, or shall  otherwise  issue  to
       all  holders  of  its  Common Stock,  rights  or  warrants
       entitling  the  holders  thereof  to  subscribe   for   or
       purchase shares of Common Stock at a price per share  less
       than  the  Market Price per share (determined as  provided
       in  paragraph (vi) of this Paragraph 10(c)) of the  Common
       Stock   on  the  date  fixed  for  the  determination   of
       stockholders entitled to receive such rights or  warrants,
       the  conversion price in effect at the opening of business
       on   the   day   following  the  date   fixed   for   such
       determination   shall  be  reduced  by  multiplying   such
       conversion  price  by  a fraction of which  the  numerator
       shall  be the number of shares of Common Stock outstanding
       at  the  close  of  business on the date  fixed  for  such
       determination  plus the number of shares of  Common  Stock
       which  the  aggregate of the offering price of  the  total
       number   of   shares  of  Common  Stock  so  offered   for
       subscription  or purchase would purchase  at  such  Market
       Price  and  the denominator shall be the number of  shares
       of  Common  Stock outstanding at the close of business  on
       the  date fixed for such determination plus the number  of
       shares  of  Common  Stock so offered for  subscription  or
       purchase,  such reduction to become effective  immediately
       after  the  opening of business on the day  following  the
       date fixed for such determination.  In case any rights  or
       warrants referred to in this paragraph (ii) in respect  of
       which  an  adjustment shall have been  made  shall  expire
       unexercised,  the conversion price shall be readjusted  at
       the  time of such expiration to the conversion price  that
       would  have been in effect if no adjustment had been  made
       on  account  of  the  distribution  or  issuance  of  such
       expired rights or warrants.

                     (iii)      In  case  outstanding  shares  of
       Common Stock shall be subdivided into a greater number  of
       shares of Common Stock, the conversion price in effect  at
       the  opening of business on the day following the day upon
       which   such  subdivision  becomes  effective   shall   be
       proportionately   reduced,   and   conversely,   in   case
       outstanding shares of Common Stock shall each be  combined
       into  a  smaller  number of shares of  Common  Stock,  the
       conversion  price in effect at the opening of business  on
       the  day  following  the day upon which  such  combination
       becomes  effective  shall  be  proportionately  increased,
       such  reduction or increase, as the case may be, to become
       effective  immediately after the opening  of  business  on
       the  day following the day upon which such subdivision  or
       combination becomes effective.

                    (iv)     Subject to the last sentence of this
       paragraph (iv), in case the Company shall, by dividend  or
       otherwise,  distribute to all holders of its Common  Stock
       evidences  of  its indebtedness, shares of  any  class  or
       series   of  capital  stock,  cash  or  assets  (including
       securities, but excluding any rights or warrants  referred
       to   in  paragraph  (ii)  of  this  Paragraph  10(c),  any
       dividend or distribution paid exclusively in cash and  any
       dividend or distribution referred to in paragraph  (i)  of
       this  Paragraph 10(c)), the conversion price in effect  on
       the  day following the date fixed for the payment of  such
       distribution  (the date fixed for payment  being  referred
       to   as   the  "Reference  Date")  shall  be  reduced   by
       multiplying such conversion price by a fraction  of  which
       the   numerator  shall  be  the  Market  Price  per  share
       (determined  as  provided  in  paragraph  (vi)   of   this
       Paragraph  10(c))  of the Common Stock  on  the  Reference
       Date  less  the fair market value (as determined  in  good
       faith  by  the  Board  of Directors,  whose  determination
       shall  be conclusive and described in a resolution of  the
       Board  of Directors) on the Reference Date of the  portion
       of  the  evidences  of  indebtedness,  shares  of  capital
       stock,  cash and assets so distributed applicable  to  one
       share  of Common Stock, and the denominator shall be  such
       Market   Price  per  share  of  the  Common  Stock,   such
       reduction  to  become effective immediately prior  to  the
       opening  of  business on the day following  the  Reference
       Date.   If  the  Board  of Directors determines  the  fair
       market  value  of  any distribution for purposes  of  this
       paragraph  (iv) by reference to the actual or when  issued
       trading   market   for  any  securities  comprising   such
       distribution, it must in doing so consider the  prices  in
       such  market  over the same period used in  computing  the
       Market  Price  per  share  of  Common  Stock  pursuant  to
       paragraph  (vi) of this Paragraph 10(c).  For purposes  of
       this  paragraph  (iv), any dividend or  distribution  that
       includes  shares of Common Stock or rights or warrants  to
       subscribe for or purchase shares of Common Stock shall  be
       deemed  to  be  (A)  a  dividend or  distribution  of  the
       evidences  of  indebtedness, cash,  assets  or  shares  of
       capital  stock other than such shares of Common  Stock  or
       rights  or warrants (making any conversion price reduction
       required  by this paragraph (iv)) immediately followed  by
       (B)  a  dividend or distribution of such shares of  Common
       Stock  or  such  rights or warrants  (making  any  further
       conversion  price reduction required by paragraph  (i)  or
       (ii)  of  this Paragraph 10(c)), except (1) the  Reference
       Date  of such dividend or distribution as defined in  this
       paragraph  (iv)  shall be substituted as "the  date  fixed
       for  the determination of stockholders entitled to receive
       such dividend or other distribution," "the date fixed  for
       the  determination  of stockholders  entitled  to  receive
       such  rights  or  warrants" and "the date fixed  for  such
       determination"  within the meaning of paragraphs  (i)  and
       (ii)  of this Paragraph 10(c) and (2) any shares of Common
       Stock included in such dividend or distribution shall  not
       be  deemed  "outstanding at the close of business  on  the
       date  fixed for such determination" within the meaning  of
       paragraph (i) of this Paragraph 10(c).

                    (v)     In case the Company shall pay or make
       a  dividend or other distribution on its Common  Stock  in
       cash  (excluding (A) cash that is part of  a  distribution
       referred  to in paragraph (iv) above and (B) in  the  case
       of  any  quarterly cash dividend on the Common Stock,  the
       portion thereof that does not exceed the per share  amount
       of  the  next  preceding quarterly cash  dividend  on  the
       Common Stock (as adjusted to appropriately reflect any  of
       the  events  referred to in paragraphs (i),  (ii),  (iii),
       (iv)  and  (v) of this Paragraph 10(c)), or  all  of  such
       quarterly  cash dividend if the amount thereof  per  share
       of  Common Stock multiplied by four does not exceed 15% of
       the  Market  Price per share (determined  as  provided  in
       paragraph  (vi)  of this Paragraph 10(c))  of  the  Common
       Stock  as  of the trading day next preceding the  date  of
       declaration  of  such  dividend, the conversion  price  in
       effect  immediately prior to the opening  of  business  on
       the  day following the date fixed for the payment for such
       distribution   shall  be  reduced  by   multiplying   such
       conversion  price  by  a fraction of which  the  numerator
       shall  be  the  Market  Price  per  share  (determined  as
       provided  in  paragraph (vi) of this Paragraph  10(c))  of
       the  Common  Stock on the date fixed for  the  payment  of
       such  distribution less the amount of cash so  distributed
       and  not  excluded  as provided above  applicable  to  one
       share  of Common Stock, and the denominator of which shall
       be  such Market Price per share of the Common Stock,  such
       reduction  to  become effective immediately prior  to  the
       opening  of  business on the day following the date  fixed
       for the payment of such distribution.

                     (vi)      For the purpose of any computation
       under   paragraph  (ii),  (iii),  (iv)  or  (v)  of   this
       Paragraph  10(c) or Paragraph 10(d), the Market Price  per
       share  of Common Stock on any date shall be deemed  to  be
       the  average of the Market Prices for the five consecutive
       trading  days  ending  with  and  including  the  date  in
       question;  provided, however, that (A) if  the  "ex"  date
       (as  hereinafter  defined) for any event (other  than  the
       issuance or distribution requiring such computation)  that
       requires  an  adjustment to the conversion price  pursuant
       to  paragraph (i), (ii), (iii), (iv) or (v) above  ("Other
       Event")  occurs after the fifth trading day prior  to  the
       date  in  question  and prior to the  "ex"  date  for  the
       issuance  or distribution requiring such computation  (the
       "Current  Event"), the Market Price for each  trading  day
       prior  to  the  "ex" date for such Other  Event  shall  be
       adjusted  by  multiplying such Market Price  by  the  same
       fraction  by which the conversion price is so required  to
       be  adjusted as a result of such Other Event, (B)  if  the
       "ex"  date for any Other Event occurs after the "ex"  date
       for  the  Current Event and on or prior  to  the  date  in
       question,  the Market Price for each trading  day  on  and
       after  the  "ex"  date  for  such  Other  Event  shall  be
       adjusted   by  multiplying  such  Market  Price   by   the
       reciprocal  of the fraction by which the conversion  price
       is  so  required to be adjusted as a result of such  Other
       Event, (C) if the "ex" date for any Other Event occurs  on
       the  "ex" date for the Current Event, one of those  events
       shall  be  deemed for purposes of clauses (A) and  (B)  of
       this  proviso to have an "ex" date occurring prior to  the
       "ex"  date  for the other event, and (D) if the "ex"  date
       for  the  Current  Event is on or prior  to  the  date  in
       question,   after  taking  into  account  any   adjustment
       required  pursuant  to  clause (B) of  this  proviso,  the
       Market  Price for each trading day on or after  such  "ex"
       date  shall  be adjusted by adding thereto the  amount  of
       any  cash  and  the  fair market  value  on  the  date  in
       question  (as  determined in good faith by  the  Board  of
       Directors  in  a manner consistent with any  determination
       of  such  value for purposes of paragraph (iv) or  (v)  of
       this   Paragraph  10(c),  whose  determination  shall   be
       conclusive and described in a resolution of the  Board  of
       Directors)  of  the  portion  of  the  rights,   warrants,
       evidences  of  indebtedness, shares of  capital  stock  or
       assets  being  distributed  applicable  to  one  share  of
       Common  Stock.  For purposes of this paragraph,  the  term
       "ex"  date, (1) when used with respect to any issuance  or
       distribution,  means the first date on  which  the  Common
       Stock  trades regular way on the relevant exchanges or  in
       the  relevant  market  from which  the  Market  Price  was
       obtained  without  the right to receive such  issuance  or
       distribution  and  (2)  when  used  with  respect  to  any
       subdivision  or  combination of shares  of  Common  Stock,
       means  the  first  date on which the Common  Stock  trades
       regular  way on such exchange or in such market after  the
       time  at  which  such  subdivision or combination  becomes
       effective.   As  used  in  this  Paragraph  10(c)  or   in
       Paragraph  10(d), the term "Market Price"  of  the  Common
       Stock  for  any  day means the last reported  sale  price,
       regular  way, on such day, or, if no sale takes  place  on
       such  day,  the  average of the reported closing  bid  and
       asked  prices  on such day, regular way,  in  either  case
       reported  on  The  American  Stock  Exchange  Consolidated
       Transaction  Tape, or, if the Common Stock is  not  listed
       or  admitted to trading on The American Stock Exchange  on
       such  day,  on the principal national securities  exchange
       on  which  the  Common  Stock is  listed  or  admitted  to
       trading,  if  the  Common Stock is listed  on  a  national
       securities exchange, or the Nasdaq National Market or,  if
       not  listed  or  admitted  to trading  on  such  quotation
       system,  on  the principal quotation system on  which  the
       Common  Stock  may  be listed or admitted  to  trading  or
       quoted  or, if not listed or admitted to trading or quoted
       on  any  national securities exchange or quotation system,
       the  average  of the closing bid and asked prices  of  the
       Common Stock in the over-the-counter market on the day  in
       question  as  reported  by the National  Quotation  Bureau
       Incorporated,  or  similar  generally  accepted  reporting
       service,  or,  if  not so available  in  such  manner,  as
       furnished  by  any  American Stock  Exchange  member  firm
       selected  from time to time by the Board of  Directors  of
       the  Company  for that purpose or, if not so available  in
       such manner, as otherwise determined in good faith by  the
       Board of Directors of the Company.

                     (vii)      No  adjustment in the  conversion
       price  shall  be  required unless  such  adjustment  would
       require  an  increase or decrease of at least  1%  in  the
       conversion  price; provided, however, that any adjustments
       which  by  reason of this paragraph (vii) are not required
       to  be  made  shall  be  carried forward  and  taken  into
       account in any subsequent adjustment.

                     (viii)     Whenever the conversion price  is
       adjusted as herein provided:

                (A)      the  Company shall make  an  appropriate
       corresponding  proportional adjustment to  the  conversion
       rate  which shall become effective when the adjustment  to
       the conversion price becomes effective;

                (B)      the  Company shall compute the  adjusted
       conversion price and conversion rate and shall  prepare  a
       certificate  signed by a Vice President or  the  Treasurer
       of  the  Company  setting  forth the  adjusted  conversion
       price  and  conversion  rate  and  showing  in  reasonable
       detail  the  facts upon which such adjustments are  based,
       and  such  certificate shall forthwith be filed  with  the
       transfer  agent for the Amended Series B Preferred  Stock;
       and

                 (C)       as  soon  as  practicable  after   the
       adjustments, the Company shall mail to all record  holders
       of   Amended  Series  B  Preferred  Stock  at  their  last
       addresses as they shall appear in stock transfer books  of
       the  Company  a  notice stating that the conversion  price
       and  conversion rate have been adjusted and setting  forth
       the adjusted conversion price and conversion rate.

                     (ix)      The Company from time to time  may
       reduce  the  conversion price or  increase the  conversion
       rate  by  any amount for any period of time if the  period
       is  at  least twenty (20) days and the Board of  Directors
       has   made   a  determination  that  such  reduction   (or
       increase)  would be in the best interest of  the  Company,
       which  determination  shall be conclusive.   Whenever  the
       conversion  price  is  reduced  (or  the  conversion  rate
       increased)   pursuant  to  the  preceding  sentence,   the
       Company  shall  mail  to  the record  holders  of  Amended
       Series  B  Preferred Stock a notice of the  reduction  (or
       increase)  at least fifteen (15) days prior  to  the  date
       the  reduced  conversion  price (or  increased  conversion
       rate)  takes  effect,  and such  notice  shall  state  the
       reduced  conversion price (or increased  conversion  rate)
       and the period it will be in effect.

                (d)      No  Fractional  Shares.   No  fractional
       shares of Common Stock shall be issued upon conversion  of
       the  Amended Series B Preferred Stock.  If more  than  one
       certificate   evidencing  shares  of  Amended   Series   B
       Preferred  Stock  shall be surrendered for  conversion  at
       such  time  by  the  holder, the  number  of  full  shares
       issuable upon conversion thereof shall be computed on  the
       basis  of the aggregate number of shares of Amended Series
       B   Preferred  Stock  so  surrendered.   Instead  of   any
       fractional  share of Common Stock that would otherwise  be
       issuable  to  a  holder upon conversion of any  shares  of
       Amended  Series  B  Preferred  Stock,  the  Company  shall
       either  (i)  pay  a  cash adjustment in  respect  of  such
       fractional  share in an amount equal to the same  fraction
       of  the Market Price for the shares of Common Stock as  of
       the  day  of  such conversion or (ii) aggregate  all  such
       fractional shares into a whole number of shares  and  sell
       such  aggregated  fractional  shares  on  behalf  of   the
       holders  entitled thereto in a public or private sale  and
       distribute the net cash proceeds from the sale thereof  to
       such holders pro rata.  If the Company should so elect  so
       to  aggregate and sell such fractional shares, it shall be
       entitled  to  retain  the services of  a  third  party  to
       effect   any  such  aggregation  and/or  sale  and   shall
       endeavor  to  use  its best efforts  to  secure  the  best
       available  sales price for such shares but  shall  not  be
       obligated to secure the highest price obtainable for  such
       shares.

               (e)     Reclassification, Consolidation, Merger or
       Sale of Assets.  In the event that the Company shall be  a
       party  to  any  transaction pursuant to which  the  Common
       Stock  is  converted  into  the  right  to  receive  other
       securities,  cash  or  other property (including,  without
       limitation,  any  recapitalization or reclassification  of
       the  Common  Stock (other than a change in par  value,  or
       from  par  value to no par value, or from no par value  to
       par  value, or as a result of a subdivision or combination
       of  the  Common Stock), any consolidation of  the  Company
       with,  or  merger of the Company into, any  other  person,
       any  merger of another person into the Company (other than
       a  merger  which  does  not result in a  reclassification,
       conversion,   exchange  or  cancellation  of   outstanding
       shares  of Common Stock), any sale or transfer of  all  or
       substantially  all  of the assets of the  Company  or  any
       share  exchange), then lawful provisions shall be made  as
       part  of the terms of such transaction whereby the  holder
       of  each  share of Amended Series B Preferred  Stock  then
       outstanding  shall  have the right thereafter  to  convert
       such  share  only into the kind and amount of  securities,
       cash  and  other property receivable upon such transaction
       by  a  holder of the number of shares of Common Stock into
       which  such  share  might have been converted  immediately
       prior to such transaction, provided, however, that if  the
       holders of Common Stock were entitled by the terms of  the
       transaction  to  make  an election to receive  securities,
       cash  or  property, or any combination of  the  foregoing,
       lawful  provision shall be made as part of  the  terms  of
       such  transaction  whereby the holder  of  each  share  of
       Amended  Series  B Preferred Stock then outstanding  shall
       have  the right thereafter to convert such share only into
       the  kind and amount of securities, cash or other property
       receivable  upon  such transaction  by  a  holder  of  the
       number  of  shares of Common Stock who  made  one  of  the
       elections  provided for in such transaction (as determined
       by  the  Board of Directors, whose determination shall  be
       conclusive)  into  which  such  share  might   have   been
       converted  immediately  prior to  such  transaction.   The
       Company  or  the  person formed by such  consolidation  or
       resulting  from such merger or which acquires such  shares
       or  which  acquires the Company's shares, as the case  may
       be,  shall make provisions in its certificate or  articles
       of   incorporation  or  other  constituting  document   to
       establish  such  right.  Such certificate or  articles  of
       incorporation   or  other  constituting   document   shall
       provide  for  adjustments which, for events subsequent  to
       the  effective  date of such certificate  or  articles  of
       incorporation or other constituting document, shall be  as
       nearly   equivalent   as  may  be   practicable   to   the
       adjustments provided for in this Paragraph 10.  The  above
       provisions    shall   similarly   apply   to    successive
       transactions of the foregoing type.

                (f)      Reservation of Shares; Etc.  The Company
       shall  at all times reserve and keep available, free  from
       preemptive  rights  out  of its  authorized  and  unissued
       Common  Stock and/or Common Stock held in treasury, solely
       for  the  purpose  of  effecting  the  conversion  of  the
       Amended  Series B Preferred Stock, such number  of  shares
       of  its  Common  Stock  as shall  from  time  to  time  be
       sufficient  to  effect the conversion  of  all  shares  of
       Amended  Series  B  Preferred  Stock  from  time  to  time
       outstanding.   The  Company shall from time  to  time,  in
       accordance  with  the laws of the State  of  Delaware,  in
       good  faith and as expeditiously as possible, endeavor  to
       cause  the authorized number of shares of Common Stock  to
       be  increased  (or combine or repurchase  its  outstanding
       shares  of  Common  Stock) if at any time  the  number  of
       shares  of  authorized and unissued  Common  Stock  and/or
       Common Stock held in treasury, shall not be sufficient  to
       permit  the conversion of all the then outstanding  shares
       of Amended Series B Preferred Stock.

                If  any  shares  of Common Stock required  to  be
       reserved  for  the purposes of conversion of  the  Amended
       Series  B  Preferred Stock hereunder require  registration
       with  or approval of any governmental authority under  any
       Federal  or  State law before such shares  may  be  issued
       upon  conversion, the Company will in good  faith  and  as
       expeditiously  as possible endeavor to cause  such  shares
       to  be duly registered or approved as the case may be.  If
       the  Common  Stock  is  listed on any national  securities
       exchange, the Company will, if permitted by the  rules  of
       such  exchange,  list and keep listed  on  such  exchange,
       upon  official  notice of issuance, all shares  of  Common
       Stock  issuable  upon conversion of the Amended  Series  B
       Preferred   Stock,  for  so  long  as  the  Common   Stock
       continues to be so listed.

               (g)     Prior Notice of Certain Events.  In case:

                     (i)      the  Company shall (A) declare  any
       dividend (or any other distribution) on its Common  Stock,
       other  than  (1)  a dividend payable in shares  of  Common
       Stock  or  (2)  a  dividend payable in  cash  out  of  its
       retained  earnings other than any special or  nonrecurring
       or   other  extraordinary  dividend  or  (B)  declare   or
       authorize a redemption or repurchase of in excess  of  10%
       of the then outstanding shares of Common Stock; or

                     (ii)      the  Company shall  authorize  the
       granting  to  all  holders of Common Stock  of  rights  or
       warrants to subscribe for or purchase any shares of  stock
       of  any  class  or  series  or  of  any  other  rights  or
       warrants; or

                     (iii)      of any reclassification of Common
       Stock  (other  than  a subdivision or combination  of  the
       outstanding  Common Stock, or a change in  par  value,  or
       from  par  value to no par value, or from no par value  to
       par  value),  or of any consolidation or merger  to  which
       the  Company  is  party  and for  which  approval  of  any
       stockholders of the Company shall be required, or  of  the
       sale  or  transfer  of  all or substantially  all  of  the
       assets  of  the  Company or of any share exchange  whereby
       the  Common  Stock of the Company is converted into  other
       securities, cash or other property; or

                     (iv)      of  the  voluntary or  involuntary
       dissolution, liquidation or winding up of the Company;

           then  the  Company shall cause to be  filed  with  the
       transfer  agent for the Amended Series B Preferred  Stock,
       and  shall cause to be mailed to all holders of record  of
       the  Amended  Series  B  Preferred  Stock  at  their  last
       addresses  as  they shall appear upon the  stock  transfer
       books of the Company, at least fifteen (15) days prior  to
       the   applicable  record  or  effective  date  hereinafter
       specified,  a  notice  stating (x) the  date  on  which  a
       record  (if  any) is to be taken for the purpose  of  such
       dividend, distribution, redemption, repurchase,  or  grant
       of  rights or warrants or, if a record is not to be taken,
       the  date  as  of  which the holders of  Common  Stock  of
       record  to  be  entitled  to such dividend,  distribution,
       redemption,  repurchase, rights  or  warrants  are  to  be
       determined    or    (y)   the   date   on    which    such
       reclassification, consolidation, merger,  sale,  transfer,
       share exchange, dissolution, liquidation or winding up  is
       expected  to become effective and the date as of which  it
       is  expected that holders of Common Stock of record  shall
       be  entitled to exchange their shares of Common Stock, for
       securities, cash or other property deliverable  upon  such
       reclassification, consolidation, merger,  sale,  transfer,
       share  exchange, dissolution, liquidation  or  winding  up
       (but  no failure to mail such notice or any defect therein
       or  in  the  mailing thereof shall affect the validity  of
       the  corporate  action required to be  specified  in  such
       notice).

                (h)      Certain Additional Rights.  In case  the
       Company  shall, by dividend or otherwise, declare or  make
       a   distribution  on  its  Common  Stock  referred  to  in
       Paragraph   10(c)(iv)  or  10(c)(v)  (including,   without
       limitation, dividends or distributions referred to in  the
       last  sentence of Paragraph 10(c)(iv)), the holder of each
       share  of  Amended  Series  B  Preferred  Stock  upon  the
       conversion thereof subsequent to the close of business  on
       the  date  fixed  for  the determination  of  stockholders
       entitled  to  receive such distribution and prior  to  the
       effectiveness  of  the  conversion  price  adjustment   in
       respect  of  such  distribution,  shall  be  entitled   to
       receive  for  each share of Common Stock into  which  such
       share  of  Amended Series B Preferred Stock is  converted,
       the  portion  of  the  shares  of  Common  Stock,  rights,
       warrants,  evidences of indebtedness,  shares  of  capital
       stock,  cash and assets as distributed applicable  to  one
       share  of  Common Stock; provided, however,  that  at  the
       election   of  the  Company  (whose  election   shall   be
       evidenced by a resolution of the Board of Directors)  with
       respect to all holders so converting, the Company may,  in
       lieu  of  distributing to such holder any portion of  such
       distribution not consisting of cash or securities  of  the
       Company,  pay such holder an amount in cash equal  to  the
       fair market value thereof (as determined in good faith  by
       the  Board  of  Directors, which  determination  shall  be
       conclusive).   If  any conversion of a  share  of  Amended
       Series  B  Preferred  Stock described in  the  immediately
       preceding sentence occurs prior to the payment date for  a
       distribution to holders of Common Stock which  the  holder
       of  the  share  of  Amended Series B  Preferred  Stock  so
       converted  is entitled to receive in accordance  with  the
       immediately  preceding  sentence, the  Company  may  elect
       (such  election  to  be evidenced by a resolution  of  the
       Board  of  Directors) to distribute to such holder  a  due
       bill  for  the  shares of Common Stock, rights,  warrants,
       evidences  of indebtedness, shares of capital stock,  cash
       or  assets  to which such holder is so entitled,  provided
       that  such  due bill (a) meets any applicable requirements
       of  the  principal national securities exchange  or  other
       market  on  which  the Common Stock  is  then  traded  and
       (b)  requires payment or delivery of such shares of Common
       Stock,   rights,  warrants,  evidences  of   indebtedness,
       shares of capital stock, cash or assets no later than  the
       date  of payment or delivery thereof to holders of  shares
       of Common Stock receiving such distribution.

               (i)     Mandatory Conversion Right.

                     (i)      At any time after August 31,  1998,
       and  provided that the Company is current in  the  payment
       of  dividends on the Amended Series B Preferred  Stock  to
       the  Mandatory Conversion Date, the Company  may,  at  its
       option,  require  the  conversion of all  the  outstanding
       shares of Amended Series B Preferred Stock into shares  of
       Common  Stock  as  set  forth below;  provided  that  such
       shares  of  Common Stock shall have been registered  under
       the  Securities Act.  The Company may exercise this option
       only if for twenty (20) Trading Days within any period  of
       thirty  (30) consecutive Trading Days, including the  last
       trading  day of such period, the Current Market Price  (as
       defined in sub-paragraph (iii) below) of the Common  Stock
       equals  or  exceeds $11.25, such conversion  price  to  be
       subject  to  adjustments in the same manner  and  for  the
       same  events  as  the  conversion price  in  sub-paragraph
       10(c)  or  elsewhere in this Paragraph 10.   In  order  to
       exercise  its  mandatory conversion  option,  the  Company
       must  provide written notice to the holder of the  Amended
       Series  B  Preferred Stock, announcing the effective  date
       of  the  mandatory  conversion of  the  Amended  Series  B
       Preferred  Stock (the "Mandatory Conversion  Date")  prior
       to  the  opening  of  business on the second  trading  day
       after  any  period in which the condition in the preceding
       sentence  has  been met, but in no event prior  to  August
       31,  1998.  The press release shall announce the Mandatory
       Conversion Date and provide the current conversion  price,
       current  conversion rate and Current Market Price  of  the
       Common Stock, in each case as of the close of business  on
       the  trading  day next preceding the date of  the  notice.
       Effective  on the Mandatory Conversion Date,  all  of  the
       issued   and  outstanding  shares  of  Amended  Series   B
       Preferred  Stock shall be converted into  fully  paid  and
       non-assessable  shares  of Common Stock  at  such  current
       conversion price and current conversion rate set forth  in
       such   press  release  in  the  manner  provided  in  this
       Paragraph  10.  Effective as of the close of  business  on
       the  Mandatory  Conversion Date,  the  shares  of  Amended
       Series B Preferred Stock shall no longer be deemed  to  be
       issued  and  outstanding and certificates evidencing  such
       Stock  shall  solely  evidence the right  to  receive  the
       shares of Common Stock issuable in such conversion.

                     (ii)      Notice  of  the  exercise  of  the
       Mandatory  Conversion Right will be given  by  first-class
       mail  to  the  record  holders of  the  Amended  Series  B
       Preferred  Stock  not  more than four  (4)  business  days
       after   the   Company  issues  the  press  release.    The
       Mandatory Conversion Date will be a date selected  by  the
       Company  not  less than thirty (30) nor  more  than  sixty
       (60)  days after the date on which the Company issues  the
       press  release  announcing its intention to  exercise  its
       Mandatory Conversion Right.

                     (iii)     The term "Current Market Price" of
       the  Common  Stock for any day means the reported  closing
       bid  price, regular way, on such day, as reported  on  The
       American  Stock Exchange, or, if the Common Stock  is  not
       listed  or  admitted  to  trading on  The  American  Stock
       Exchange   on   such   day,  on  the  principal   national
       securities  exchange on which the Common Stock  is  listed
       or  admitted to trading, if the Common Stock is listed  on
       a  national  securities exchange, or the  Nasdaq  National
       Market  or, if the Common Stock is not quoted or  admitted
       to  trading  on  such quotations system, on the  principal
       quotation  system in which the Common Stock may be  listed
       or  admitted  to trading or quoted or, if  not  listed  or
       admitted  to trading or quoted on any national  securities
       exchange  or quotation system, the average of the  closing
       bid  and asked prices of the Common Stock in the over-the-
       counter market on the day in question as reported  by  the
       National   Quotation  Bureau  Incorporated,   or   similar
       generally  accepted  reporting  service,  or,  if  not  so
       available  in  such manner, as furnished by  any  American
       Stock  Exchange member firm selected from time to time  by
       the  Board  of  Directors of the Company for that  purpose
       or,  if  not  so  available in such manner,  as  otherwise
       determined in good faith by the Board of Directors of  the
       Company, which determination shall be conclusive.

     Paragraph 11.  Miscellaneous.

               (a)     All notices referred to herein shall be in
       writing,  and  all notices hereunder shall  be  deemed  to
       have  been  given upon the earlier of receipt  thereof  or
       three (3) Business Days after the mailing thereof if  sent
       by  registered or certified mail (unless first-class  mail
       shall be specifically permitted for such notice under  the
       terms  hereof) with postage prepaid, addressed: (i) if  to
       the  Company,  to  its  office as specified  in  its  most
       recent  Annual  Report  on Form  10-K  (or  any  successor
       report  or  form) or to the Transfer Agent or other  agent
       of  the Company designated as permitted thereby or (ii) if
       to  any holder of the Amended Series B Preferred Stock  or
       Common  Stock, as the case may be, to such holder  at  the
       address  of  such  holder as listed in  the  stock  record
       books  of  the Company (which may include the  records  of
       any  Transfer  Agent  for the Amended Series  B  Preferred
       Stock  or  Common Stock, as the case may be) or  (iii)  to
       such  other address as the Company or any such holder,  as
       the   case  may  be,  shall  have  designated  by   notice
       similarly given.

          (b)  A copy of any notice given hereunder to any holder
  of  Amended Series B Preferred Stock shall be provided to Kayne
  Anderson  Management,  Inc., 1800  Avenue  of  the  Stars,  2nd
  Floor,   Los   Angeles,  California  90067,  unless   otherwise
  requested in writing by any such holder.

           (c)   The Company shall pay any and all stock transfer
  and  documentary stamp taxes that may be payable in respect  of
  any  original issuance or delivery of shares of Amended  Series
  B   Preferred  Stock  or  shares  of  Common  Stock  or   other
  securities  issued  on account of Amended  Series  B  Preferred
  Stock  pursuant hereto or certificates representing such shares
  or  securities.  The Company shall not, however, be required to
  pay  any  such  tax  which may be payable  in  respect  of  any
  transfer  involved  in the issuance or delivery  of  shares  of
  Amended  Series  B  Preferred Stock or Common  Stock  or  other
  securities  in  a name other than that in which the  shares  of
  Amended  Series B Preferred Stock with respect  to  which  such
  shares  or  other  securities  are  issued  or  delivered  were
  registered  (including,  without  limitation,  any   sales   or
  transfers  of  Redemption  Stock arranged  by  the  Company  on
  behalf of a holder of Amended Series B Preferred Stock), or  in
  respect  of any payment to any person with respect to any  such
  shares  or  securities other than a payment to  the  registered
  holder  thereof,  and shall not be required to  make  any  such
  issuance,  delivery  or payment unless  and  until  the  person
  otherwise  entitled to such issuance, delivery or  payment  has
  made  arrangements satisfactory to the Transfer Agent  for  the
  payment  to  the Company of the amount of any such tax  or  has
  established, to the satisfaction of the Company, that such  tax
  has been paid or is not payable.

      Until  after  the  third anniversary of the  Issuance  Date
  neither  the  Company nor the Transfer Agent shall be  required
  to  recognize or record on the books and records of the Company
  or  the  Transfer Agent any transfer of any shares  of  Amended
  Series  B  Preferred Stock to a person who is not a citizen  or
  resident  of  the  United States of America without  the  prior
  written  consent of the Company to such transfer, which consent
  shall  not be unreasonably withheld, and the Company  shall  be
  entitled  to  request  and  receive  reasonable  proof  of  the
  citizenship  or  residency  of  any  such  proposed  transferee
  before  authorizing  the  transfer of such  shares  of  Amended
  Series B Preferred Stock.

           (d)   In  the event that a holder of shares of Amended
  Series  B Preferred Stock shall not by written notice designate
  to  whom payment upon redemption of shares of Amended Series  B
  Preferred  Stock  should be made or the address  to  which  the
  such payment, should be sent, the Company shall be entitled  to
  make  such  payment, in the name of the holder of such  Amended
  Series  B  Preferred  Stock as shown  on  the  records  of  the
  Company  and  to  send  such payment, to the  address  of  such
  holder shown on the records of the Company.

            (e)   Unless  otherwise  provided  in  this  Restated
  Certificate  of Incorporation of the Company, all  payments  in
  the   form   of   dividends,  distributions  on  voluntary   or
  involuntary   dissolution,   liquidation   or   winding-up   or
  otherwise  made upon the shares of Amended Series  B  Preferred
  Stock  and any other stock ranking on a parity with the Amended
  Series  B  Preferred  Stock with respect to  such  dividend  or
  distribution shall be made pro rata, so that amounts  paid  per
  share  on  the Amended Series B Preferred Stock and such  other
  stock  shall  in  all cases bear to each other the  same  ratio
  that  the required dividend distributions or payments,  as  the
  case  may  be,  then  payable per share on the  shares  of  the
  Amended  Series B Preferred Stock and such other stock bear  to
  each other.

           (f)   The Company may appoint, and from time  to  time
  discharge  and  change,  the Transfer  Agent  for  the  Amended
  Series  B  Preferred  Stock.   Upon  any  such  appointment  or
  discharge  of a Transfer Agent, the Company shall  send  notice
  thereof  by  first-class mail, postage prepaid, to each  holder
  of  record  of Amended Series B Preferred, Stock.  The  initial
  Transfer  Agent for the Amended Series B Preferred Stock  shall
  be the Company.