<PAGE>  

RECEIVED
1996 JUL -3  PM 2:21
SECRETARY OF STATE
STATE OF COLORADO


                        CERTIFICATE OF DESIGNATION
                                     
                ESTABLISHING THE RIGHTS AND PREFERENCES OF

                    10% SERIES B PREFERRED STOCK
                                     
                     BROWN DISC PRODUCTS COMPANY, INC.
                          a Colorado corporation


  RONALD H. COLE and DARYL M. SILVERSPARRE hereby certify that:

  (1)   They are the President and Secretary, respectively, of BROWN DISC
PRODUCTS COMPANY, INC., a Colorado corporation (the "Corporation").

  (2)   Pursuant to the authority granted under the Corporation's Articles
of Incorporation, the Board of Directors of said Corporation has duly adopted
the following recitals and resolutions:

        "WHEREAS, this Corporation is authorized by its Articles of
  Incorporation to issue 50,000,000 shares of preferred stock, no par
  value (the "Preferred Stock"); and

        "WHEREAS, this Corporation has previously designated 63,000 shares
  of its Preferred Stock as a series designated as Series A Redeemable
  Preferred Stock; and

        "WHEREAS, the Board of Directors of this Corporation is
  authorized, as to the Preferred Stock, within the limitations and
  restrictions stated in the Articles of Incorporation, to fix by
  resolution or resolutions the designation of each series of Preferred
  Stock and the powers, preferences and relative participating, optional
  or other special rights and qualifications, limitations or restrictions
  thereof, including, without limitation, such provisions as may be
  desired concerning dividends, redemption, voting, dissolution or the
  distribution of assets, conversion or exchange, and such other subjects
  or matters as may be fixed by resolution or resolutions of the Board of
  Directors; and

        "WHEREAS, the Board of Directors of this Corporation desires,
  pursuant to its authority granted under the Articles of Incorporation,
  to determine and fix the rights, preferences, privileges and
  restrictions relating to a second series of said Preferred Stock, and to
  fix the number of shares constituting and the designation of such
  series;

        "NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized a
  series of Preferred Stock on the terms and with the provisions herein
  set forth:



                                    B-1





<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock


        SECTION 1.   DESIGNATION, NUMBER AND RESTRICTIONS ON ISSUANCE.  
  The designation of the series of Preferred Stock authorized by these
  resolutions shall be "10% Series B Convertible Preferred Stock" (the
  "Series B Preferred Stock").  The authorized number of shares
  constituting the Series B Preferred Stock shall be Two Hundred Thousand
  (200,000) shares.  The Board of Directors is further authorized, within
  the limitations and restrictions set forth in the Articles of
  Incorporation or stated in any resolution or resolutions of the Board of
  Directors, to increase or decrease (but not below the number of shares
  of such series then outstanding) the number of shares of Series B
  Preferred Stock subsequent to the issuance of shares of such series.  In
  case the number of shares of any series shall be so decreased, the
  shares constituting such decrease shall resume the status which they had
  prior to the adoption of these or any subsequent resolutions originally
  fixing the number of shares of such series.

        SECTION 2.   CONVERSION RIGHTS.

        2.1.  As used herein, the term "Common Stock" shall mean and
  include the Corporation's Common Stock, no par value, as constituted on
  September 30, 1995, and as the same shall be constituted thereafter
  including adjustments required for any capital reorganization or
  reclassification thereof subsequent to September 30, 1995.  At any time
  hereafter and up to the close of business on the day immediately
  preceding a date fixed for redemption of Series B Preferred Stock in
  accordance with Section 7 below, at the election of the respective
  holders of Series B Preferred Stock and subject to the terms and
  conditions set forth herein, issued and outstanding shares of the Series
  B Preferred Stock may be converted into fully paid and nonassessable
  shares of Common Stock of the Corporation at the conversion ratio of Ten
  (10) shares of Common Stock for each share of Series B Preferred Stock,
  subject to adjustment from time to time as provided in Section 2.4 below
  (herein called the "Conversion Ratio").

        2.2.  In order to exercise the conversion privilege, a holder of
  outstanding shares of Series B Preferred Stock shall surrender
  certificates for the Series B Preferred Stock to be converted and
  exchanged at the principal office of the Corporation in the State of
  Colorado, and shall give written notice to the Corporation at said
  office that the holder elects to convert such Series B Preferred Stock
  into shares of the Corporation's Common Stock.  Such notice shall also
  state the name or names (with addresses) in which certificates for
  shares of Common Stock issuable on such conversion shall be issued,
  subject to compliance with applicable securities laws.

        2.3.  No certificates for fractional shares of Common Stock shall
  be issued upon conversion of Series B Preferred Stock, and in lieu
  thereof the number of shares of Common Stock issuable upon conversion
  shall be rounded up to the next whole share.  So long as there is
  outstanding any Series B Preferred Stock, there shall be reserved
  unissued, out of the authorized but unissued shares of Common Stock, a
  number of shares sufficient to



                                    B-2








<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock


  provide for conversion of Series B Preferred Stock in accordance with
  the provisions of this Section 2.

        2.4.  The Conversion Ratio shall be subject to adjustment from
  time to time hereafter as follows:

              (A)   In case the Corporation at any time after September
        30, 1995 shall issue a stock dividend on its outstanding shares of
        Common Stock or shall subdivide or combine the outstanding shares
        of Common Stock issuable upon conversion of the Series B Preferred
        Stock, the Conversion Ratio and number of shares issuable upon
        conversion of the Series B Preferred Stock shall be
        proportionately and equitably adjusted as if the holder of record
        of Series B Preferred Stock had converted shares of Series B
        Preferred Stock into Common Stock immediately prior to such event. 
        Any such adjustment shall become effective at the close of
        business on the date that such stock dividend, subdivision or
        combination relating to the Common Stock shall become effective. 
        For the purposes of such adjustment, the Conversion Ratio in
        effect immediately prior to such stock dividend, subdivision or
        combination shall forthwith be changed to a Conversion Ratio
        determined by:

                    (i)  dividing the total number of shares of Common
              Stock outstanding immediately after the stock dividend,
              subdivision or combination, by an amount equal to the total
              number of shares of Common Stock outstanding immediately
              prior to such stock dividend, subdivision or combination;
              and
        
                    (ii)  multiplying the result of clause (i) above by
              the actual Conversion Ratio in effect immediately prior to
              such stock dividend, subdivision or combination. 

        and the total of shares of Common Stock thereafter issuable and
        deliverable on conversion of the Series B Preferred Stock shall be
        the number of shares obtained by applying the Conversion Ratio as
        so adjusted.

              (B)  In case of any capital reorganization or any
        reclassification of the shares of Common Stock of the Corporation
        (other than as a result of a stock dividend, subdivision or
        combination, as aforesaid), or in case of any consolidation with
        or merger of the Corporation into or with another corporation, or
        the sale, lease or other disposition of the properties of the
        Corporation as an entirety or substantially as an entirety, then
        as a part of such reorganization, reclassification, consolidation,
        merger, sale, lease or other disposition, as the case may be,
        lawful provision shall be made so that the holders of record of
        the Series B Preferred Stock shall have the right thereafter to
        receive upon conversion thereof the kind and amount of shares of
        stock or other securities or property which such holders would
        have been entitled to receive if, immediately prior to such
        reorganization, reclassification, consolidation, merger, sale,



                                    B-3






<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock


        lease or other disposition, such holders had held the number of
        shares of Common Stock which were then issuable upon the
        conversion of the Series B Preferred Stock then held by them.  In
        any such case, appropriate adjustment shall be made in the
        application of the provisions set forth herein with respect to the
        rights and interests thereafter of the holders of record of the
        Series B Preferred Stock, to the end that the provisions set forth
        herein (including provisions with respect to adjustments of the
        Conversion Ratio) shall thereafter be applicable, as nearly as
        reasonably may be, in relation to any shares of stock or other
        property thereafter deliverable upon the conversion of such Series
        B Preferred Stock.

        SECTION 3.   VOTING RIGHTS.  The holders of Series B Preferred
  Stock shall not be entitled to any voting rights except as required by
  law.

        SECTION 4.   RANK AND PREFERENCE.  Shares of Series B Preferred
  Stock shall, with respect to dividend rights, rights on redemption and
  rights on liquidation, winding up and dissolution, have preference over
  and rank prior to all classes of Common Stock and shall rank pari passu
  with all other series of Preferred Stock.  In case the stated dividends
  and the amounts payable on liquidation, distribution or sale of assets,
  dissolution or winding up of the Corporation are not paid in full, the
  shareholders of all series of Preferred Stock shall share ratably in the
  payment of dividends, including accumulations, if any, in accordance
  with the sums which would be payable on such shares if all dividends
  were declared and paid in full and in any distribution of assets other
  than by way of dividends, in accordance with the sums which would be
  payable on such distribution if all sums payable were discharged and
  paid in full.

        SECTION 5.   DIVIDENDS AND RESTRICTIONS ON CERTAIN REPURCHASES.

        5.1.  The holders of the shares of Series B Preferred Stock shall
  be entitled to receive, when, as and if declared by the Board of
  Directors, out of funds legally available for the payment of dividends,
  cumulative dividends at the annual rate of 10% per annum ($0.50 per
  share), subject to adjustment as provided by Section 5.2.  Each of such
  annual dividends shall be fully cumulative and shall accrue (whether or
  not declared or permitted to be paid), from the first day such shares
  were first issued.

        5.2.  Dividends on Series B Preferred Stock shall be payable in
  annual payments commencing on September 30, 1996 and on each anniversary
  thereafter (each of which is herein called a "Dividend Payment Date");
  in the event any shares of Series B Preferred Stock shall be outstanding
  for less than a year, the amount of the dividend shall be prorated for
  such year. Such dividends shall be paid to the holders of record at the
  close of business on the date specified by the Board of Directors of the
  Corporation at the time the dividend is declared; provided, however,
  that such record date shall be not more than 20 days nor less than 10
  days prior to the respective Dividend Payment Date.




                                    B-4






<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock


        5.3.  In the event there shall be any shares of Series A
  Redeemable Preferred Stock issued and outstanding on any Dividend
  Payment Date, the Corporation, at the election of its Board of Directors
  made on or before any Dividend Payment Date, may elect to pay the annual
  dividend otherwise due and payable for all (but not less than all) of
  the Series B Preferred Stock outstanding on such Dividend Payment Date
  in shares of Common Stock of the Corporation in lieu of cash.  In such
  event, the Corporation shall advise each holder of record of Series B
  Preferred Stock in writing, not later than the tenth business day after
  such Dividend Payment Date, of the Corporation's election to make such
  dividend payment in Common Stock.

        5.4.  For any dividend payment to be made in Common Stock as
  herein provided, the number of shares of Common Stock issuable for such
  dividend payment shall be determined by dividing the dividend payment
  due on said Dividend Payment Date by the Common Stock Value.  "Common
  Stock Value" shall mean 100% of the Fair Market Value of the Common
  Stock determined as of the applicable Dividend Payment Date.  For this
  purpose "Fair Market Value" as of any specific date shall be determined
  by reference to the average closing sale prices for the Common Stock
  during the ten days on which such shares are actually traded in the
  over-the-counter market or on a recognized securities exchange
  immediately prior to the date upon which Fair Market Value is to be
  determined.  (If for any reason closing sale prices are not quoted for
  any such day, then the closing market price for such day shall be deemed
  the closing bid price for such day as reported by the National Quotation
  Bureau.)

        5.5.  All dividends paid with respect to shares of the Series B
  Preferred Stock shall be paid pro rata to the holders entitled thereto.

        5.6.  No dividends, other than dividends payable solely in Common
  Stock, shall be declared by the Board of Directors on any class or
  series of equity securities of the Corporation unless and until such
  time as all accrued and unpaid dividends on the Series B Preferred Stock
  have been paid in full or unless the Series B Preferred Stock has been
  redeemed in accordance with its terms or are fully converted into Common
  Stock of the Corporation or are otherwise reacquired and retired in full
  by the Corporation. The Corporation may not pay or set apart for
  payment, other than dividends or other distributions or payments payable
  solely in Common Stock, any other distributions on any shares of the
  Corporation's Common Stock, and may not purchase or otherwise redeem for
  cash or other tangible property, other than shares of Common Stock, any
  shares of the Corporation's Common Stock or any warrants, rights or
  options exercisable for or convertible into any shares of Common Stock
  unless and until such time as the Series B Preferred Stock has been
  redeemed in accordance with its terms or are fully converted into Common
  Stock of the Corporation or are otherwise reacquired and retired in full
  by the Corporation.



                                    B-5












<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock


        SECTION 6.   LIQUIDATION, DISSOLUTION OR WINDING-UP. 

        6.1.  In the event of any liquidation, dissolution or winding up
  of the Corporation, either voluntary or involuntary, the holders of
  Series B Preferred Stock then outstanding shall be entitled to receive
  ratably, prior and in preference to any distribution of any of the
  assets of the Corporation to the holders of any other equity securities
  of the Corporation other than Preferred Stock, by reason of their
  ownership thereof, the sum of FIVE DOLLARS ($5.00) per share outstanding
  plus all accrued and unpaid dividends thereon, each payable in cash
  (which may be payable from either capital or surplus) or, if cash is not
  then available, in property of the Corporation.  In the event it is
  necessary or advisable for the Corporation to determine the value of
  property for any purpose hereunder,  the value of such property so
  received by holders of Series B Preferred Stock will be deemed to be its
  fair market value as determined in good faith by the Board of Directors
  of the Corporation unless a majority in interest of the holders of
  issued and outstanding Series B Preferred Stock shall demand an
  independent appraisal of such property.  If, upon the occurrence of any
  such event, the assets thus distributed among the holders of the Series
  B Preferred Stock shall be insufficient to permit the payment to such
  holders of the full preferential amount due to them hereunder, then the
  entire assets of this Corporation legally available for distribution
  shall be distributed ratably among the holders of all series of the
  Preferred Stock.  Except as provided above, holders of the Series B
  Preferred Stock shall not be entitled to any distribution in the event
  of liquidation, dissolution or winding up of the affairs of the
  Corporation.

        6.2.  For the purposes of this Section 6, a sale of all or
  substantially all of the assets of this Corporation or a merger of the
  Corporation with or into any other corporation or corporations where the
  Corporation is not the surviving entity, shall not be deemed to be a
  liquidation, dissolution or winding-up of the Corporation within the
  meaning of Section 6.1 unless no provision has been made for the
  exchange of securities for Series B Preferred Stock in connection with
  the consummation of any such sale of assets or merger.  

        6.3.  The liquidation payment with respect to each outstanding
  fractional share of Series B Preferred Stock shall be equal to a ratably
  proportionate amount of the liquidation payment with respect to each
  outstanding share of Series B Preferred Stock.

        SECTION 7.  REDEMPTION.

        7.1.  MANDATORY REDEMPTION.  The Corporation shall have no
  mandatory obligation to redeem shares of Series B Preferred Stock; 
  provided, however, in the event of any liquidation, dissolution or
  winding-up of the Corporation, either voluntary or involuntary, or in
  the event or sale of all or substantially all of the assets of this
  Corporation or a merger of the Corporation with or into any other
  corporation or corporations where the Corporation is not the surviving
  entity and in which no provision has been made for the exchange of


                                    B-6









<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock


  securities for Series B Preferred Stock, each share of Series B
  Preferred Stock then outstanding shall be entitled to receive the
  consideration specified in Section 6.1 above.

        7.2.  OPTIONAL REDEMPTION.  At any time after September 30, 1996,
  the Corporation at its option may redeem all, but not less than all, of
  the Series B Preferred Stock then outstanding at a redemption price of
  FIVE DOLLARS ($5.00) per share plus the payment of all accrued and
  unpaid dividends on the shares so redeemed.

        7.3.  Upon any redemption of Series B Preferred Stock, written
  notice shall be given to the holders of the Series B Preferred Stock for
  shares to be purchased or redeemed at least thirty (30) days prior to
  the date fixed for redemption.  The notice shall be addressed to each
  such shareholder at the address of such holder appearing on the books of
  the Corporation or given by such holder to the Corporation for the
  purpose of notice, or, if no such address appears or is so given, at the
  last known address of such shareholder.  Such notice shall specify the
  date fixed for redemption, shall state that all shares of Series B
  Preferred Stock outstanding are to be redeemed and the number of shares
  of Series B Preferred Stock to be so redeemed, and shall call upon such
  holder to surrender to the Corporation on said date, at the place
  designated in the notice, such holder's certificate or certificates
  representing the shares to be redeemed on the date fixed for redemption
  stated in such notice.  Unless such person shall elect to convert the
  same into Common Stock in accordance with Section 2 above, each holder
  of shares of Series B Preferred Stock called for redemption shall
  surrender the certificate or certificates evidencing such shares to the
  Corporation at the place designated in such notice and shall thereupon
  be entitled to receive payment of the redemption price on the date fixed
  for redemption.

        7.4.  If, on or prior to any date fixed for redemption, the
  Corporation deposits, with any bank or trust company in the State of
  Colorado or in the State of New York, as a trust fund, a sum sufficient
  to redeem all shares of Series B Preferred Stock called for redemption
  which have not theretofore been surrendered for conversion, with
  irrevocable instructions and authority to the bank or trust company to
  pay, on or after the date fixed for redemption, the redemption price of
  the shares to their respective holders upon the surrender of their share
  certificates, then from and after the date of redemption the shares to
  be redeemed shall be redeemed and dividends and other distributions on
  those shares shall cease to accrue after the date such shares were
  called for redemption.  The deposit shall constitute full payment for
  the shares of Series B Preferred Stock to their holders and from and
  after the date of the deposit the shares of Series B Preferred Stock
  shall no longer be outstanding, and the holders thereof shall cease to
  be shareholders with respect to such shares, and shall have no rights
  with respect thereto except the right to receive from the bank or trust
  company payment of the redemption price of the shares without interest
  upon surrender of their certificates therefor and the right to receive
  from the Corporation any accrued dividends thereon through the date such
  shares were called for redemption.  Any interest accrued on any funds so
  deposited shall be the property of, and paid to, the Corporation.



                                    B-7






<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock

        7.5.  Upon any redemption of Series B Preferred Stock in
  accordance with the foregoing, all of such shares of Series B Preferred
  Stock shall be cancelled and revert to the status of authorized and
  unissued shares of Preferred Stock.

        SECTION 8.  REQUIRED NOTICES.  In case at any time:

        (a)   the Corporation shall declare or pay any dividend payable in
              stock or other consideration or make any distribution to the
              holders of its Common Stock; or

        (b)   the Corporation shall offer to the holders of its Common
              Stock any additional shares of stock of any class or other
              rights;

        (c)   there shall be any capital reorganization or
              reclassification of the capital stock of the Corporation, or
              any consolidation or merger of the Corporation with, or sale
              of all or substantially all of its assets to, another
              corporation; or

        (d)   there shall be a voluntary or involuntary dissolution,
              liquidation or winding-up of the Corporation;

  then, in any one or more of such cases, the Corporation shall cause to
  be mailed to the holders of record of then outstanding shares of Series
  B Preferred Stock  (i) at least 30 days' prior written notice of the
  date on which the books of the Corporation shall close or a record shall
  be taken for such dividend, distribution or subscription rights or for
  determining rights to vote in respect of any such reorganization,
  reclassification, consolidation, merger, sale, dissolution, liquidation
  or winding-up, and  (ii) in the case of any such reorganization,
  reclassification, consolidation, merger, sale, dissolution, liquidation
  or winding-up, at least 30 days' prior written notice of the date when
  the same shall take place.  Such notice in accordance with the foregoing
  clause (i) shall also specify, in the case of any such dividend,
  distribution or subscription rights, the date on which the holders of
  Common Stock shall be entitled thereto, and such notice in accordance
  with the foregoing clause (ii) shall also specify the date on which the
  holders of Common Stock shall be entitled to exchange their Common Stock
  for securities or other property deliverable upon such reorganization,
  reclassification, consolidation, merger, sale, dissolution, liquidation
  or winding-up, as the case may be.

        SECTION 9.   AMENDMENTS AND ADDITIONAL COVENANTS.

        9.1.  So long as any Series B Preferred Stock shall be
  outstanding, this Corporation shall not, without the prior approval of
  the holders of not less than a majority of the then issued and
  outstanding shares of Series B Preferred Stock voting as a class, permit
  the Corporation to amend or repeal any provision of, or add any
  provision to, this Certificate or the Corporation's Articles of
  Incorporation or bylaws, if such action would alter or change


                                    B-8










<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock


  the preferences, rights, privileges or powers of, or the restrictions
  provided for the benefit of, the Series B Preferred Stock.

        9.2.  So long as any Series B Preferred Stock shall be
  outstanding, the Corporation shall:

  9.2.1 maintain its books of account and financial statements and records
        in accordance with generally accepted accounting principles, and
        all determinations hereunder, if any,  which are dependent upon a
        calculation of the Corporation's financial condition shall be
        determined in accordance with generally accepted accounting
        principles;

  9.2.2 promptly pay and discharge, or cause to be paid and discharged,
        when due and payable, all lawful taxes, assessments and
        governmental charges or levies imposed upon the income, profits,
        property, or business of the Corporation or any subsidiary, except
        where the Corporation is contesting any of the foregoing in good
        faith by appropriate proceedings; and

  9.2.3 keep its properties in good repair, working order, and condition,
        reasonable wear and tear excepted, and from time to time make all
        needful and proper repairs, renewals, replacements, additions, and
        improvements thereto, and the Corporation shall at all times
        comply with the provisions of all material leases to which it is a
        party or under which it occupies property so as to prevent any
        loss or forfeiture thereof or thereunder.

        9.3.  So long as any Series B Preferred Stock shall be
  outstanding, the Corporation shall furnish to each holder of record of
  the Series B Preferred Stock:

  (a)   prompt written notice of any material actions, suits, claims,
        notices of violation, hearings, investigations or proceedings
        pending (of which the Corporation has notice) or threatened in
        writing against the Corporation with respect to the ownership,
        use, maintenance or operation of any of material portion of its
        property or proprietary rights;

  (b)   as soon as practicable, but in any event within 120 days after the
        end of each fiscal year of the Corporation, an income statement,
        statement of cash flow and statement of changes in stockholders'
        equity for such fiscal year, and a balance sheet of the
        Corporation as of the end of such year, such year-end financial
        statements to be in reasonable detail, prepared in accordance with
        generally accepted accounting principles, and audited and
        certified by independent public accountants selected by the Board
        of Directors of the Corporation; and



                                   B-10













<PAGE>

Certificate of Designation
Series B Convertible Preferred Stock


  (c)   as soon as practicable, but in any event within forty-five (45)
        days after the end of each of the first three (3) quarters of each
        fiscal year of the Corporation, an unaudited income statement,
        statement of cash flows and statement of changes in stockholders'
        equity for such fiscal quarter and for the fiscal year to date,
        and an unaudited balance sheet as of the end of such fiscal
        quarter.

        RESOLVED FURTHER, that the President or any Vice President of this
  Corporation and the Secretary or any Assistant Secretary of the
  Corporation are hereby authorized and directed to prepare, sign, and
  file with the Secretary of the State of Colorado a Certificate of
  Designation of Series B Preferred Stock of the Corporation in accordance
  with the resolutions set forth herein."

  (3)  We further certify that the authorized number of shares of
Preferred Stock of this Corporation is 50,000,000 shares;  that the number of
shares constituting the Series A Redeemable Preferred Stock is 63,000 shares,
of which 62,256 shares are issued and outstanding; and the number of shares
constituting the 10% Series B Convertible Preferred Stock established by the
foregoing resolutions, none of which have been issued, is 200,000 shares.

  IN WITNESS WHEREOF, the undersigned have executed this Certificate at
Colorado Springs, State of Colorado, on this 30th day of MAY, 1996.


                           BROWN DISC PRODUCTS COMPANY, INC.


                           By:  /s/  Ronald H. Cole 
                               -------------------------------
                               Ronald H. Cole, President

ATTEST:

/s/  Daryl M. Silversparre
----------------------------------
Daryl M. Silversparre, Secretary