<PAGE>

                                    RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                           STELLEX TECHNOLOGIES, INC.,
                             a Delaware corporation

         Stellex Technologies, Inc. (originally incorporated as Stellex Holdings
Corp.) (the "Corporation"), a corporation organized and existing under the
General Corporation Law of the State of Delaware, hereby certifies as follows:

         1. The original Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on September 5, 1997.

         2. Immediately prior to this amendment of the Certificate of
Incorporation of the Corporation, as hereinbelow set forth, the Corporation had
authority to issue an aggregate of One Thousand Five Hundred (1,500) shares, of
which One Thousand (1,000) shares, without par value, were designated "Common
Stock" and Five Hundred (500) shares, without par value, were designated "Series
A Preferred Stock", having a stated value of Fifty Thousand Dollars ($50,000)
per share.

         3. Pursuant to Sections 242 and 245 of the General Corporation Law of
the State of Delaware, this Restated Certificate of Incorporation restates and
integrates and further amends the Certificate of Incorporation of this
Corporation (including the Certificate of the Powers, Designations, Preferences
and Rights of the Series A Preferred Stock filed on October 24, 1997) by:

               a. Authorizing the issuance and designating the terms of an
aggregate Forty-Three Thousand (43,000) shares, of which: (i) Two Thousand
(2,000) shares, without par value, shall be designated "Common Stock"; and (ii)
Forty-One Thousand (41,000) shares, without par value, shall be designated
"Preferred Stock," of which Forty Thousand (40,000) shares, without par value,
but with a stated value of One Thousand Dollars ($1,000) per share, shall be
designated "13% Senior Cumulative Redeemable Preferred Stock"; Five Hundred
(500) shares, without par value, but with a stated value of Fifty Thousand
Dollars ($50,000) per share shall be designated "Series A Preferred Stock"; and
Five Hundred (500) shares, without par value, but with a stated value of Ten
Thousand Dollars ($10,000) per share, shall be designated "Serial Preferred
Stock" in Article FOURTH; and

               b. Deleting Article FIFTH, which contained the name of the sole
incorporator and initial directors and conforming the remaining articles
accordingly.


<PAGE>


         4. The text of the Certificate of Incorporation is hereby amended and
restated to read as herein set forth in full.

FIRST.   The name of the corporation is Stellex Technologies, Inc. (the
         "corporation", the "Corporation" or the "Company")

SECOND.  The address of the registered office of the corporation in the State of
         Delaware is 1013 Centre Road, in the City of Wilmington, County of New
         Castle. The name of its registered agent at that address is Corporation
         Service Company.

THIRD.   The nature or purposes of the business to be conducted or promoted is
         to engage in any lawful act or activity for which corporations may be
         organized under the General Corporation Law of the State of Delaware.

FOURTH.  The Corporation shall have authority to issue: (i) Two Thousand (2,000)
         shares of Common Stock, without par value; and (ii) Forty-One Thousand
         (41,000) shares of "Preferred Stock," of which Forty Thousand (40,000)
         shares, without par value, but with a stated value of One Thousand
         Dollars ($1,000) per share, shall be designated "13% Senior Cumulative
         Redeemable Preferred Stock"; Five Hundred (500) shares, without par
         value, but with a stated value of Fifty Thousand Dollars ($50,000) per
         share, shall be designated "Series A Preferred Stock"; and Five Hundred
         (500) shares, without par value, but with a stated value of Ten
         Thousand Dollars ($10,000) per share, shall be designated "Serial
         Preferred Stock". The 13% Senior Cumulative Redeemable Preferred Stock,
         Series A Preferred Stock and Serial Preferred Stock are collectively
         referred to herein as the "Preferred Stock".

         The designations, preferences, privileges and powers and relative,
         participating, optional or other special rights and qualifications,
         limitations or restrictions of the above classes of capital stock shall
         be as follows:

      A. 13% Senior Cumulative Redeemable Preferred Stock

         (a)      Designation. There is hereby created out of the authorized and
                  unissued shares of preferred stock of the Company a series of
                  preferred stock designated as the "13% Senior Cumulative
                  Redeemable Preferred Stock" (the "Redeemable Preferred
                  Stock"). The number of shares constituting such series shall
                  be 40,000 shares of Redeemable Preferred Stock, consisting of
                  an initial issuance of 20,000 shares of Redeemable Preferred
                  Stock, plus up to 20,000 additional shares of Redeemable
                  Preferred Stock which may be issued to pay dividends on the
                  Redeemable Preferred Stock if the Company elects to pay
                  dividends in additional shares of Redeemable Preferred Stock.
                  The liquidation preference of the Redeemable Preferred Stock
                  shall be $1,000 per share.


                                       2
<PAGE>



         (b)      Rank. The Redeemable Preferred Stock shall, with respect to
                  dividend distributions and distributions upon the liquidation,
                  winding-up and dissolution of the Company, rank (i) senior to
                  all classes of common stock of the Company (the "Common
                  Stock") and each other class of Capital Stock or series of
                  Preferred Stock of the Company existing on the date hereof or
                  hereafter created by the Board of Directors the terms of which
                  do not expressly provide that it ranks on a parity with the
                  Redeemable Preferred Stock (collectively referred to with the
                  Common Stock of the Company as "Junior Securities") and (ii)
                  on a parity with each series of Preferred Stock created in
                  accordance with paragraph (f)(ii)(A) hereof, the terms of
                  which expressly provide that it ranks on parity with any
                  Redeemable Preferred Stock as to dividend distributions and
                  distributions upon the liquidation, winding-up and dissolution
                  of the Company (collectively referred to as "Parity
                  Securities"). No Capital Stock shall rank senior to the
                  Redeemable Preferred Stock as to dividend distributions and
                  distributions upon the liquidation, winding-up and dissolution
                  of the Company.

         (c)      Dividends.

                  (i)      Beginning on the Issue Date, the Holders of
                           outstanding shares of Redeemable Preferred Stock
                           shall be entitled to receive, when, as and if
                           declared by the Board of Directors of the Company,
                           out of funds legally available therefor, dividends on
                           each share of Redeemable Preferred Stock outstanding,
                           at a rate per annum equal to 13% of the liquidation
                           preference per share of the Redeemable Preferred
                           Stock. All dividends shall be cumulative, whether or
                           not earned or declared, on a daily basis from the
                           Issue Date and shall be payable quarterly in arrears
                           on each Dividend Payment Date, commencing on August
                           31, 1999. Dividends may be paid, at the Company's
                           option, on any Dividend Payment Date occurring on or
                           before August 31, 2004 either in cash or by the
                           issuance of additional duly authorized, validly
                           issued, fully paid and non-assessable shares of
                           Redeemable Preferred Stock (including fractional
                           shares) having an aggregate liquidation preference
                           equal to the amount of such dividends (rounded to the
                           nearest whole cent) due on such Dividend Payment
                           Date. In the event that on or prior to August 31,
                           2004 dividends are declared and paid through the
                           issuance of additional shares of Redeemable 
                           Preferred Stock as provided in the previous sentence,
                           such dividends shall be deemed paid in full and shall
                           not accumulate. After August 31, 2004, all dividends
                           on outstanding shares of Redeemable Preferred Stock
                           shall be paid in cash only. Each distribution in the
                           form of a dividend (whether in cash or in additional
                           shares of Redeemable 


                                       3
<PAGE>


                           Preferred Stock) shall be payable to Holders of
                           record as they appear on the stock register of the
                           Company on the applicable Dividend Record Date.
                           Dividends shall cease to accumulate in respect of
                           shares of the Redeemable Preferred Stock on the date
                           of their redemption unless the Company shall have
                           failed to pay the relevant redemption price on the
                           date called for redemption.

                  (ii)     All dividends paid with respect to shares of
                           Redeemable Preferred Stock pursuant to paragraph
                           (c)(i) shall be paid pro rata to the Holders entitled
                           thereto.

                  (iii)    Dividends in arrears for any past Dividend Period and
                           dividends in connection with any optional redemption
                           pursuant to paragraph (e)(i) may be declared and paid
                           at any time, without reference to any regular
                           Dividend Payment Date, to Holders of record on such
                           date, not less than 10 nor more than 60 days prior to
                           the payment thereof, as may be fixed by the Board of
                           Directors.

                  (iv)     No dividends shall be declared by the Board of
                           Directors or paid or funds set apart for payment of
                           dividends by the Company on any Parity Securities for
                           any period unless full cumulative dividends shall
                           have been or contemporaneously are declared, and paid
                           in full or declared, and (in the case of dividends
                           payable in cash) a sum in cash set apart sufficient
                           for such payment, on the Redeemable Preferred Stock
                           for all Dividend Periods terminating on or prior to
                           the date of payment of such dividends on such Parity
                           Securities. If any dividends are not paid in full, as
                           aforesaid, upon the shares of the Redeemable
                           Preferred Stock and any other Parity Securities, all
                           dividends declared upon shares of the Redeemable
                           Preferred Stock and any other Parity Securities shall
                           be declared pro rata so that the amount of dividends
                           declared per share on the Redeemable Preferred Stock
                           and such Parity Securities shall in all cases bear to
                           each other the same ratio that accrued dividends per
                           share on the Redeemable Preferred Stock and such
                           Parity Securities bear to each other.

                  (v)      (A)      Holders of shares of the Redeemable
                                    Preferred Stock shall be entitled to receive
                                    the dividends provided for in this paragraph
                                    (c) in preference to and in priority over
                                    any dividends or distributions upon any of
                                    the Junior Securities.

                           (B)      So long as any shares of Redeemable
                                    Preferred Stock are outstanding, the Company
                                    shall not declare, pay or set apart for
                                    payment any dividend on any Junior
                                    Securities or make 



                                       4
<PAGE>


                                    any payment on account of, or set apart for
                                    payment money for a sinking or other similar
                                    fund for, the purchase, redemption or other
                                    retirement of, any Junior Securities or any
                                    warrants, rights, calls or options
                                    exercisable for or convertible into any
                                    Junior Securities, or make any distribution
                                    in respect thereof, either directly or
                                    indirectly, and whether in cash, obligations
                                    or shares of the Company or other property
                                    (other than dividends on Junior Securities
                                    paid in additional shares of Junior
                                    Securities), and shall not permit any
                                    corporation or other entity directly or
                                    indirectly controlled by the Company to
                                    purchase or redeem any Junior Securities or
                                    any such warrants, rights, calls or options
                                    unless cumulative dividends determined in
                                    accordance herewith have been paid in full
                                    on the Redeemable Preferred Stock.

                           (C)      So long as any shares of Redeemable
                                    Preferred Stock are outstanding, the Company
                                    shall not make any payment on account of, or
                                    set apart for payment money for a sinking or
                                    other similar fund for, the purchase,
                                    redemption or other retirement of, any
                                    Parity Securities or any warrants, rights,
                                    calls or options exercisable for or
                                    convertible into any Parity Securities, and
                                    shall not permit any corporation or other
                                    entity directly or indirectly controlled by
                                    the Company to purchase or redeem any Parity
                                    Securities or any such warrants, rights,
                                    calls or options unless (1) the dividends
                                    determined in accordance herewith on the
                                    Redeemable Preferred Stock have been paid in
                                    full and (2) the Company makes a pari passu
                                    Offer (as defined in paragraph (g)(i)(A)
                                    hereof) to purchase, redeem or otherwise
                                    retire the Redeemable Preferred Stock.

                  (vi)     Dividends payable on shares of the Redeemable
                           Preferred Stock for any period less than a year shall
                           be computed on the basis of a 360-day year of twelve
                           30-day months and the actual number of days elapsed
                           in the period for which payable. If any Dividend
                           Payment Date occurs on a day that is not a Business
                           Day, any accrued dividends otherwise payable on such
                           Dividend Payment Date shall be paid on the next
                           succeeding Business Day.

                  (vii)    (A)      In the event of (1) an initial public
                                    offering of Common Stock resulting in gross
                                    proceeds to the Company of at least $20
                                    million, the proceeds of which have not been
                                    applied to redeem all of the Redeemable
                                    Preferred Stock pursuant to 




                                       5
<PAGE>


                                    paragraph (e)(i)(A) or (e)(i)(B) and/or (2)
                                    the receipt by the Company of at least $20
                                    million in gross proceeds from the sale of
                                    capital stock to a third-party equity
                                    investor, the proceeds of which have not
                                    been applied to redeem all of the Redeemable
                                    Preferred Stock pursuant to paragraph
                                    (e)(i)(A) or (e)(i)(B), in each case
                                    occurring during a period when the
                                    Redeemable Preferred Stock is redeemable at
                                    the option of the Company pursuant to the
                                    terms of paragraph (e)(i)(A) or (e)(i)(B),
                                    dividends on each share of Redeemable
                                    Preferred Stock shall automatically accrue,
                                    commencing on the date that is 30 days after
                                    the consummation of such initial public
                                    offering or third-party equity investment,
                                    as applicable, at a rate per annum equal to
                                    18% of the liquidation preference per share
                                    of the Redeemable Preferred Stock, unless
                                    the Redeemable Preferred Stock shall have
                                    been redeemed by such date.

                           (B)      In the event of a Change of Control
                                    occurring prior to February 1, 2008 and not
                                    otherwise subject to paragraph (g)(i)(A)
                                    hereof, if the Company shall not have made
                                    an offer to purchase all the Redeemable
                                    Preferred Stock at a cash purchase price
                                    equal to or greater than 101% of the
                                    aggregate liquidation preference thereof,
                                    plus, without duplication, an amount in cash
                                    equal to all accumulated and unpaid
                                    dividends per share (including an amount in
                                    cash equal to a prorated dividend for the
                                    period from the Dividend Payment Date
                                    immediately prior to the date of purchase)
                                    by the date that is 45 days after the
                                    consummation of such Change of Control, then
                                    the Holders of a majority of the outstanding
                                    shares of Redeemable Preferred Stock may
                                    require, by written notice to the Company,
                                    that dividends on each share of Redeemable
                                    Preferred Stock shall accrue, commencing on
                                    the date that is 45 days after the
                                    consummation of such Change of Control, at a
                                    rate per annum equal to 18% of the
                                    liquidation preference per share of the
                                    Redeemable Preferred Stock; provided,
                                    however, that if the Company shall have made
                                    an offer as described in this paragraph
                                    (c)(vii)(B), the Company shall not be
                                    required to purchase any shares of
                                    Redeemable Preferred Stock pursuant to such
                                    offer and the Holders shall not be permitted
                                    to increase the dividend rate on the
                                    outstanding shares of Redeemable Preferred
                                    Stock, if the Holders of a majority of the
                                    outstanding shares of Redeemable Preferred
                                    Stock shall have elected not to have 


                                       6
<PAGE>


                                    their shares of Redeemable Preferred Stock
                                    purchased pursuant to such offer; provided
                                    further, that if the Company makes an offer
                                    described in this paragraph (c)(vii)(B) and
                                    defaults in its payment obligations
                                    thereunder, the Holders of a majority of the
                                    outstanding shares of Redeemable Preferred
                                    Stock may require, by written notice to the
                                    Company, that dividends on each share of
                                    Redeemable Preferred Stock that has not been
                                    purchased by the Company shall accrue,
                                    commencing on the date that is 45 days after
                                    the consummation of the applicable Change of
                                    Control and ending on the date any such
                                    default in its payment obligations is cured,
                                    at a rate per annum equal to 18% of the
                                    liquidation preference per share of the
                                    Redeemable Preferred Stock.

         (d)      Liquidation Preference.

                  (i)      Upon any voluntary or involuntary liquidation,
                           dissolution or winding-up of the affairs of the
                           Company, the Holders of shares of Redeemable
                           Preferred Stock then outstanding shall be entitled to
                           be paid, out of the assets of the Company available
                           for distribution to its stockholders, $1,000 per
                           share of Redeemable Preferred Stock, plus an amount
                           in cash equal to all accumulated and unpaid dividends
                           thereon to the date fixed for liquidation,
                           dissolution or winding-up (including an amount equal
                           to a prorated dividend for the period from the last
                           Dividend Payment Date to the date fixed for
                           liquidation, dissolution or winding-up), before any
                           payment shall be made or any assets distributed to
                           the holders of any of the Junior Securities,
                           including, without limitation, Common Stock of the
                           Company. If, upon any voluntary or involuntary
                           liquidation, dissolution or winding-up of the
                           Company, the assets of the Company are not sufficient
                           to pay in full the liquidation preference and
                           accumulated and unpaid dividends payable to the
                           Holders of outstanding shares of the Redeemable
                           Preferred Stock and all Parity Securities, then the
                           holders of all such Redeemable Preferred Stock and
                           Parity Securities shall share equally and ratably in
                           such distribution of assets of the Company in
                           proportion to the full liquidation preferences plus
                           all accumulated and unpaid dividends which would be
                           payable on such distribution if the amount to which
                           the Holders of outstanding shares of Redeemable
                           Preferred Stock and the holders of outstanding Parity
                           Securities are entitled were paid such amounts in
                           full.


                                       7
<PAGE>


                  (ii)     After payment in cash of the full amount of the
                           liquidation preference and all accumulated and unpaid
                           dividends to which they are entitled, the holders of
                           shares of the Redeemable Preferred Stock shall not be
                           entitled to any further participation in any
                           distribution of assets of the Company.

                  (iii)    For the purposes of this paragraph (d), neither the
                           sale, conveyance, exchange or transfer (for cash,
                           shares of stock, securities or other consideration)
                           of all or substantially all of the property or assets
                           of the Company nor the consolidation or merger of the
                           Company with or into one or more corporations, in
                           each case in accordance with the terms hereof, shall
                           be deemed to be a liquidation, dissolution or
                           winding-up of the affairs of the Company (unless such
                           sale, conveyance, exchange, transfer, consolidation
                           or merger is in connection with a dissolution or
                           winding-up of the business of the Company).

         (e)      Redemption.

                  (i)      Optional Redemption.

                           (A)      The Company may redeem at any time on or
                                    prior to August 31, 1999, from any source of
                                    funds legally available therefor, in whole,
                                    in the manner provided in paragraph (e)(iii)
                                    hereof, all of the shares of the Redeemable
                                    Preferred Stock, at a redemption price of
                                    100% of the liquidation preference thereof
                                    plus, without duplication, an amount in cash
                                    equal to a prorated dividend for the period
                                    from the Dividend Payment Date immediately
                                    prior to the Redemption Date (or if no
                                    Dividend Payment Date has occurred, the
                                    Issue Date) to the Redemption Date (the
                                    "Early Optional Redemption Price");
                                    provided, however, that if prior to August
                                    31, 1999, the Company (1) has filed a
                                    registration statement with the Commission
                                    with respect to an offering by the Company
                                    of securities the proceeds of which are to
                                    be used to finance the redemption of the
                                    Redeemable Preferred Stock or (2) certifies
                                    in an Officers' Certificate delivered to the
                                    Holders that (x) it is in the process of
                                    preparing an offering memorandum with
                                    respect to an unregistered offering,
                                    pursuant to Rule 144A under the Securities
                                    Act or otherwise, of securities the proceeds
                                    of which are to be used to finance the
                                    redemption of the Redeemable Preferred Stock
                                    and (y) it intends to circulate such
                                    offering memorandum to investors within 30
                                    calendar 



                                       8
<PAGE>


                                    days of the date of such Officer's
                                    Certificate, then the Company shall have
                                    until October 15, 1999 (the "Extension
                                    Date") to redeem the Redeemable Preferred
                                    Stock at the Early Optional Redemption Price
                                    in accordance with this paragraph (e)(i)(A).

                           (B)      The Company may redeem at any time
                                    subsequent to August 31, 1999, or, if
                                    applicable, the Extension Date, and prior to
                                    January 1, 2000, from any source of funds
                                    legally available therefor, in whole, in the
                                    manner provided in paragraph (e)(iii)
                                    hereof, all of the shares of the Redeemable
                                    Preferred Stock, at a redemption price of
                                    106.50% of the aggregate liquidation
                                    preference thereof, plus, without
                                    duplication, an amount in cash equal to a
                                    prorated dividend for the period from the
                                    Dividend Payment Date immediately prior to
                                    the Redemption Date to the Redemption Date
                                    (the "Second Early Optional Redemption
                                    Price"); provided, however, that if prior to
                                    January 1, 2000, the Company (1) has filed a
                                    registration statement with the Commission
                                    with respect to an offering by the Company
                                    of securities the proceeds of which are to
                                    be used to finance the redemption of the
                                    Redeemable Preferred Stock or (2) certifies
                                    in an Officers' Certificate delivered to the
                                    Holders that (x) it is in the process of
                                    preparing an offering memorandum with
                                    respect to an unregistered offering,
                                    pursuant to Rule 144A under the Securities
                                    Act or otherwise, of securities the proceeds
                                    of which are to be used to finance the
                                    redemption of the Redeemable Preferred Stock
                                    and (y) it intends to circulate such
                                    offering memorandum to investors within 30
                                    calendar days of the date of such Officer's
                                    Certificate, then the Company shall have
                                    until March 15, 2000 (the "Second Extension
                                    Date") to redeem the Redeemable Preferred
                                    Stock at the Second Early Optional
                                    Redemption Price in accordance with this
                                    paragraph (e)(i)(B).

                           (C)      Except as set forth in paragraphs (e)(i)(A)
                                    and (B) above and (D) below, the Redeemable
                                    Preferred Stock shall not be redeemable at
                                    the Company's option prior to August 31,
                                    2004. From and after August 31, 2004, the
                                    Company may redeem, at its option, at any
                                    time, from any source of funds legally
                                    available therefor, in whole or in part, in
                                    the manner provided in paragraph (e)(iii)
                                    hereof, any or all of the shares of the
                                    Redeemable Preferred Stock, at the
                                    redemption 



                                       9
<PAGE>

                                    prices (expressed as a percentage of the
                                    liquidation preference thereof) set forth
                                    below plus, without duplication, an amount
                                    in cash equal to all accumulated and unpaid
                                    dividends per share (including an amount in
                                    cash equal to a prorated dividend for the
                                    period from the Dividend Payment Date
                                    immediately prior to the Redemption Date to
                                    the Redemption Date) (the "Optional
                                    Redemption Price"), if redeemed during the
                                    12-month period beginning on August 31 of
                                    each of the calendar years indicated below:

       YEAR                                              PERCENTAGE
       ----                                              ----------
       
       2004.........................                      106.500%
       
       2005.........................                      104.333%
       
       2006 ........................                      102.167%
       
       2007 and thereafter .........                      100.000%

                                    provided that no optional redemption
                                    pursuant to this paragraph (e)(i)(C) shall
                                    be made unless prior thereto full unpaid
                                    cumulative dividends for all Dividend
                                    Periods terminating on or prior to the
                                    Redemption Date and a prorated dividend for
                                    the period from the Dividend Payment Date
                                    immediately prior to the Redemption Date to
                                    the Redemption Date shall have been or
                                    immediately prior to the Redemption Date are
                                    declared and paid in cash or declared and a
                                    sum set apart sufficient for such cash
                                    payment on the Redemption Date, on the
                                    outstanding shares of the Redeemable
                                    Preferred Stock.

                           (D)      In addition, at any time and from time to
                                    time subsequent to January 1, 2000, or, if
                                    applicable, the Second Extension Date and
                                    prior to the third anniversary of the Issue
                                    Date, the Company may redeem, in whole, in
                                    the manner provided in paragraph (e)(iii)
                                    hereof, shares of Redeemable Preferred Stock
                                    redeemable out of the net proceeds
                                    therefrom, at a redemption price equal to
                                    113% of the aggregate liquidation preference
                                    thereof plus, without duplication, an amount
                                    in cash equal to all accumulated and unpaid
                                    dividends per share (including an amount in
                                    cash equal to a 



                                       10
<PAGE>


                                    prorated dividend for the period from the
                                    Dividend Payment Date immediately prior to
                                    the Redemption Date to the Redemption Date)
                                    (the "Equity Offering Redemption Price"),
                                    out of the proceeds of any Equity Offering
                                    completed during such period; provided that
                                    such redemption shall occur within 45 days
                                    after consummation of such Equity Offering.

                           (E)      In the event of a redemption of only a
                                    portion of the then outstanding shares of
                                    the Redeemable Preferred Stock, the Company
                                    shall effect such redemption pro rata
                                    according to the number of shares held by
                                    each Holder of the Redeemable Preferred
                                    Stock or by lot, as may be determined by the
                                    Company in its sole discretion, except that
                                    the Company may redeem such shares held by
                                    any Holder of fewer than 100 shares (or
                                    shares held by Holders who would hold less
                                    than 100 shares as a result of such
                                    redemption), without regard to any pro rata
                                    redemption requirement.

                  (ii)     Mandatory Redemption. On August 31, 2010, the Company
                           shall redeem from any source of funds legally
                           available therefor, in whole, in the manner provided
                           in paragraph (e)(iii) hereof, all of the shares of
                           the Redeemable Preferred Stock then outstanding, at a
                           redemption price in cash of 100% of the liquidation
                           preference thereof, plus, without duplication, an
                           amount in cash equal to all accumulated and unpaid
                           dividends per share (the "Mandatory Redemption
                           Price").

                  (iii)    Procedures for Redemption.

                           (A)      At least 15 days and not more than 60 days
                                    prior to the date fixed for any redemption
                                    of the Redeemable Preferred Stock, written
                                    notice (the "Redemption Notice") shall be
                                    given by first-class mail, postage prepaid,
                                    to each Holder of record on the record date
                                    fixed for such redemption of the Redeemable
                                    Preferred Stock at such Holder's address as
                                    the same appears on the stock register of
                                    the Company; provided, that during the
                                    period that SG Cowen Securities Corporation
                                    ("SG Cowen") is a Holder of record such
                                    Redemption Notice may be given at least five
                                    (5) days and not more than 60 days prior to
                                    the date fixed for any such redemption and,
                                    provided further, that no failure to give
                                    such notice nor any deficiency therein shall
                                    affect the validity of the procedure for the
                                    redemption of any shares of Redeemable
                                    Preferred Stock to be redeemed except as to
                                    the Holder or Holders to whom the 



                                       11
<PAGE>


                                    Company has failed to give said notice or
                                    except as to the Holder or Holders whose
                                    notice was defective. The Redemption Notice
                                    shall state:

                                             (1) whether the redemption is
                                    pursuant to paragraph (e)(i)(A), (e)(i)(B),
                                    (e)(i)(C), (e)(i)(D) or (e)(ii) hereof;

                                             (2) the Early Optional Redemption
                                    Price, the Second Early Optional Redemption
                                    Price, the Optional Redemption Price, the
                                    Equity Offering Redemption Price or the
                                    Mandatory Redemption Price, as applicable;

                                             (3) whether all or less than all
                                    the outstanding shares of the Redeemable
                                    Preferred Stock are to be redeemed and the
                                    total number of shares of the Redeemable
                                    Preferred Stock being redeemed;

                                             (4) the number of shares of
                                    Redeemable Preferred Stock held, as of the
                                    appropriate record date, by the Holder that
                                    the Company intends to redeem;

                                             (5) the date fixed for redemption;

                                             (6) that the Holder is to surrender
                                    to the Company, at the place or places where
                                    certificates for shares of Redeemable
                                    Preferred Stock are to be surrendered for
                                    redemption, in the manner and at the price
                                    designated, the certificate or certificates
                                    representing the shares of Redeemable
                                    Preferred Stock to be redeemed; and

                                             (7) that dividends on the shares of
                                    the Redeemable Preferred Stock to be
                                    redeemed shall cease to accrue on such
                                    Redemption Date unless the Company defaults
                                    in the payment of the Early Optional
                                    Redemption Price, the Second Early Optional
                                    Redemption Price, the Optional Redemption
                                    Price, the Equity Offering Redemption Price
                                    or the Mandatory Redemption Price, as the
                                    case may be.

                           (B)      Each Holder of Redeemable Preferred Stock
                                    shall surrender the certificate or
                                    certificates representing such shares of
                                    Redeemable Preferred Stock to the Company,
                                    duly endorsed, in the manner and at the
                                    place designated in the Redemption Notice,
                                    and on the Redemption Date the full Early
                                    Optional Redemption Price, the 



                                       12
<PAGE>


                                    Second Early Optional Redemption Price,
                                    Optional Redemption Price, Equity Offering
                                    Redemption Price or the Mandatory Redemption
                                    Price, as the case may be, for such shares
                                    shall be payable in cash to the Person whose
                                    name appears on such certificate or
                                    certificates as the owner thereof, and each
                                    surrendered certificate shall be canceled
                                    and retired. In the event that less than all
                                    of the shares represented by any such
                                    certificate are redeemed, a new certificate
                                    shall be issued representing the unredeemed
                                    shares. All payments to the Holders in
                                    respect of the Redeemable Preferred Stock,
                                    whether on account of liquidation,
                                    dividends, redemption or otherwise, shall be
                                    subject to the satisfaction of all
                                    applicable Federal, State, local and foreign
                                    withholding taxes and other amounts required
                                    by law to be withheld.

                           (C)      Unless the Company defaults in the payment
                                    in full of the applicable redemption price,
                                    dividends on the Redeemable Preferred Stock
                                    called for redemption shall cease to
                                    accumulate on the Redemption Date, and the
                                    Holders of such redemption shares shall
                                    cease to have any further rights with
                                    respect thereto on the Redemption Date,
                                    other than the right to receive the Early
                                    Optional Redemption Price, the Second Early
                                    Optional Redemption Price, the Optional
                                    Redemption Price, the Equity Offering
                                    Redemption Price or the Mandatory Redemption
                                    Price, as the case may be, without interest.
                                    In connection with a redemption at the Early
                                    Optional Redemption Price during the period
                                    from the date hereof to August 31, 1999, or,
                                    if applicable, the Extension Date, the
                                    Company may deliver one (1) Redemption
                                    Notice pursuant to paragraph (e)(i)(A) above
                                    that may state that such redemption of
                                    Redeemable Preferred Stock is contingent
                                    upon the receipt of financing the proceeds
                                    of which are to be applied to redeem the
                                    Redeemable Preferred Stock. In the event
                                    such contingency does not occur within the
                                    time frame set forth in such Redemption
                                    Notice, the Company shall return to the
                                    Holders any certificates representing the
                                    Redeemable Preferred Stock delivered by
                                    Holders to the Company and dividends on the
                                    Redeemable Preferred Stock shall continue to
                                    accumulate as if such Redemption Notice had
                                    not been delivered.

                  (f)      Voting Rights.

                           (i)      The Holders of shares of the Redeemable
                                    Preferred Stock, except as otherwise
                                    required under the laws of the State of
                                    Delaware or as set forth in paragraphs (ii)
                                    and (iii) below and in paragraph (l) hereof,
                                    shall not be entitled or permitted to vote
                                    on any matter 



                                       13
<PAGE>


                                    required or permitted to be voted upon by
                                    the stockholders of the Company.

                  (ii)     (A)      So long as any shares of the Redeemable
                                    Preferred Stock are outstanding, the Company
                                    shall not authorize the issuance of any
                                    class of Parity Securities without the
                                    affirmative vote or consent of Holders of at
                                    least 66 2/3% of the then outstanding shares
                                    of Redeemable Preferred Stock, voting or
                                    consenting, as the case may be, separately
                                    as one class, given in person or by proxy,
                                    either in writing or by resolution adopted
                                    at an annual or special meeting, except that
                                    without the approval of Holders of the
                                    Redeemable Preferred Stock, the Company may
                                    (1) authorize or issue additional shares of
                                    Redeemable Preferred Stock payable as
                                    dividends pursuant to paragraph (c) hereof
                                    and (2) authorize or issue shares of Parity
                                    Securities in exchange for, or the net
                                    proceeds of which are used to redeem or
                                    repurchase, in accordance with the terms
                                    hereof, any or all shares of Redeemable
                                    Preferred Stock or other Parity Securities
                                    then outstanding.

                           (B)      So long as any shares of the Redeemable
                                    Preferred Stock are outstanding, the Company
                                    shall not amend this Certificate of
                                    Incorporation so as to affect adversely the
                                    specified rights, preferences, privileges or
                                    voting rights of Holders of shares of
                                    Redeemable Preferred Stock or, except as
                                    provided in paragraph (f)(ii)(A) above, to
                                    authorize the issuance of any additional
                                    shares of Redeemable Preferred Stock without
                                    the affirmative vote or consent of Holders
                                    of a least 66 2/3% of the outstanding shares
                                    of Redeemable Preferred Stock, voting or
                                    consenting, as the case may be, separately
                                    as one class, given in person or by proxy,
                                    either in writing or by resolution adopted
                                    at an annual or special meeting.

                           (C)      (1) The creation, authorization or issuance
                                    of any shares of any Junior Securities, (2)
                                    the decrease in the amount of authorized
                                    capital stock of any class, including the
                                    Redeemable Preferred Stock, or (3) the
                                    increase in the amount of authorized capital
                                    stock of any class of Junior Securities
                                    shall not require the consent of Holders of
                                    Redeemable Preferred Stock and shall not be
                                    deemed to affect adversely the rights,
                                    preferences, privileges or voting rights of
                                    Holders of shares of Redeemable Preferred
                                    Stock.



                                       14
<PAGE>


                  (iii)    

                           (A)      If (1) dividends on the Redeemable Preferred
                                    Stock are in arrears and unpaid (and, in the
                                    case of dividends payable after August 31,
                                    2004, are not paid in cash) for six
                                    quarterly periods (a "Dividend Default");
                                    (2) the Company fails to discharge any
                                    repurchase or redemption obligation
                                    (including pursuant to paragraph (g) hereof)
                                    of the Redeemable Preferred Stock when
                                    required (a "Redemption Default"), whether
                                    or not the Company is permitted to do so by
                                    the terms of the New Credit Facility, the
                                    2007 Notes or any other obligations of the
                                    Company; (3) the Company breaches or
                                    violates one of the provisions set forth in
                                    paragraph (l) hereof and the breach or
                                    violation continues for a period of 60 days
                                    or more after the Company receives notice
                                    thereof specifying the default from Holders
                                    representing at least 25% of the Redeemable
                                    Preferred Stock then outstanding (a
                                    "Covenant Default"); (4) a default occurs on
                                    the obligations to pay principal of,
                                    interest on or any other payment obligation
                                    on one or more classes of Indebtedness of
                                    the Company or any Subsidiary of the Company
                                    within any applicable grace period after
                                    final maturity (a "Payment Default"),
                                    whether such Indebtedness exists on the
                                    Issue Date or is incurred thereafter, or any
                                    other Payment Default occurs on one or more
                                    such classes of Indebtedness and such class
                                    or classes of Indebtedness are declared due
                                    and payable prior to their respective
                                    maturities, and the amount of such
                                    Indebtedness unpaid at final maturity or
                                    declared due and payable exceeds, in the
                                    aggregate, $10 million or its foreign
                                    currency equivalent; or (5) any final,
                                    non-appealable judgment or decree by a court
                                    of competent jurisdiction for the payment of
                                    money in excess of $10 million is rendered
                                    against the Company or any Significant
                                    Subsidiary of the Company and such judgment
                                    or decree remains outstanding for a period
                                    of 60 days following such judgment and is
                                    not discharged, waived or stayed (a
                                    "Judgment Default"), then, in any such case,
                                    the number of directors constituting the
                                    Board of Directors of the Company shall be
                                    immediately and automatically adjusted to
                                    permit the Holders of the majority of the
                                    then outstanding shares of Redeemable
                                    Preferred Stock, voting separately as one
                                    class, to elect two directors. Subject to
                                    paragraph (f)(iii)(B) below, Holders of a
                                    majority of the issued and outstanding
                                    shares of the Redeemable Preferred Stock,
                                    voting separately as one class,



                                       15
<PAGE>


                                    shall have the exclusive right to elect two
                                    directors at a meeting therefor called upon
                                    occurrence of such Dividend Default,
                                    Redemption Default, Covenant Default,
                                    Payment Default or Judgment Default, as the
                                    case may be, and at every subsequent meeting
                                    at which the terms of office of the
                                    directors so elected by the Holders of the
                                    Redeemable Preferred Stock expire (other
                                    than as described in paragraph (f)(iii)(B)
                                    below). Each such event described in clauses
                                    (l), (2), (3), (4) and (5) is a "Voting
                                    Rights Triggering Event."

                           (B)      The right of the Holders of Redeemable
                                    Preferred Stock voting separately as one
                                    class to elect members of the Board of
                                    Directors as set forth in paragraph
                                    (f)(iii)(A) above shall continue until such
                                    time as (1) in the event such right arises
                                    due to a Dividend Default, all accumulated
                                    dividends that are in arrears on the
                                    Redeemable Preferred Stock are paid in full
                                    (and, in the case of Dividends payable after
                                    August 31, 2004, are paid in cash); and (2)
                                    in the event such right arises due to a
                                    Redemption Default, a Covenant Default, a
                                    Payment Default or a Judgment Default, the
                                    Company remedies any such failure, breach or
                                    default, at which time the term of any
                                    directors elected pursuant to paragraph
                                    (f)(iii)(A) shall terminate, subject always
                                    to the same provisions for the renewal and
                                    divestment of such special voting rights in
                                    the case of any future Voting Rights
                                    Triggering Event. At any time after voting
                                    power to elect directors shall have become
                                    vested and be continuing in the Holders of
                                    shares of the Redeemable Preferred Stock
                                    pursuant to this paragraph (f)(iii), or if
                                    vacancies shall exist in the offices of
                                    directors elected by the Holders of shares
                                    of the Redeemable Preferred Stock, a proper
                                    officer of the Company may, and upon the
                                    written request of the Holders of record of
                                    at least 10% of the shares of Redeemable
                                    Preferred Stock then outstanding addressed
                                    to the Secretary of the Company shall, call
                                    a special meeting of the Holders of
                                    Redeemable Preferred Stock, for the purpose
                                    of electing the directors which such Holders
                                    are entitled to elect. If such meeting shall
                                    not be called by the proper officer of the
                                    Company within 20 days after personal
                                    service of said written request upon the
                                    Secretary of the Company, or within 20 days
                                    after mailing the same within the United
                                    States by certified mail, addressed to the
                                    Secretary of the Company at its principal
                                    executive offices, then the Holders of
                                    record of at least 20% 



                                       16
<PAGE>


                                    of the outstanding shares of the Redeemable
                                    Preferred Stock may designate in writing one
                                    of their numbers to call such meeting at the
                                    expense of the Company, and such meeting may
                                    be called by the Person so designated upon
                                    the notice required for the annual meeting
                                    of stockholders of the Company and shall be
                                    held at the place for holding the annual
                                    meetings of Stockholders or such other place
                                    in the United States as shall be designated
                                    in such notice. Notwithstanding the
                                    provisions of this paragraph (f)(iii)(B), no
                                    such special meeting shall be called if any
                                    such request is received by the Company less
                                    than 30 days before the date fixed for the
                                    next ensuing annual or special meeting of
                                    stockholders of the Company. Any Holder of
                                    shares of the Redeemable Preferred Stock so
                                    designated shall have, and the Company shall
                                    provide, access to the lists of Holders of
                                    shares of the Redeemable Preferred Stock for
                                    purposes of calling a meeting pursuant to
                                    the provisions of this paragraph
                                    (f)(iii)(B).

                           (C)      At any meeting held for the purpose of
                                    electing directors at which the Holders of
                                    Redeemable Preferred Stock shall have the
                                    right, voting separately as one class, to
                                    elect directors as aforesaid, the presence
                                    in person or by proxy of the Holders of at
                                    least a majority of the outstanding
                                    Redeemable Preferred Stock shall be required
                                    to constitute a quorum of such Redeemable
                                    Preferred Stock.

                           (D)      Any vacancy occurring in the office of a
                                    director elected by the Holders of shares of
                                    the Redeemable Preferred Stock may be filled
                                    by the remaining director elected by the
                                    Holders of shares of the Redeemable
                                    Preferred Stock unless and until such
                                    vacancy shall be filled by the Holders of
                                    shares of the Redeemable Preferred Stock.

                  (iv)     In any case in which the Holders of shares of the
                           Redeemable Preferred Stock shall be entitled to vote
                           pursuant to this paragraph (f) or pursuant to the
                           laws of the State of Delaware, each Holder of shares
                           of the Redeemable Preferred Stock shall be entitled
                           to one vote for each share of Redeemable Preferred
                           Stock held.



                                       17
<PAGE>


         (g)      Change of Control.

                  (i)      (A)      Upon the occurrence of a Change of Control
                                    on or after the earlier to occur of (1) such
                                    date that the 2007 Notes are no longer
                                    outstanding and (2) February 1, 2008, each
                                    Holder of Redeemable Preferred Stock shall
                                    have the right to require the Company to
                                    purchase all or any part of such Holder's
                                    Redeemable Preferred Stock pursuant to an
                                    offer (an "Offer") at a purchase price in
                                    cash equal to 101% of the aggregate
                                    liquidation preference thereof plus, without
                                    duplication, an amount in cash equal to all
                                    accumulated and unpaid dividends per share
                                    (including an amount in cash equal to a
                                    prorated dividend for the period from the
                                    Dividend Payment Date immediately prior to
                                    the repurchase date to the repurchase date),
                                    if any, to the repurchase date (subject to
                                    the right of Holders of Redeemable Preferred
                                    Stock of record on the relevant record date
                                    to receive dividends due on the relevant
                                    Dividend Payment Date); provided, however,
                                    that notwithstanding the occurrence of a
                                    Change of Control, the Company shall not be
                                    obligated to purchase the Redeemable
                                    Preferred Stock pursuant to this paragraph
                                    (g) in the event that it has irrevocably
                                    exercised its right to redeem all of the
                                    Redeemable Preferred Stock under paragraph
                                    (e)(i) hereof and, provided further, that
                                    the Company does not default in its
                                    redemption obligations pursuant to such
                                    election.

                           (B)      In the event that at the time of such Change
                                    of Control the terms of the Bank
                                    Indebtedness restrict or prohibit the
                                    repurchase of Redeemable Preferred Stock
                                    pursuant to this paragraph (g), then prior
                                    to the mailing of the notice to Holders of
                                    Redeemable Preferred Stock provided for in
                                    paragraph (g)(ii) below but in any event
                                    within 30 days following any Change of
                                    Control (unless the Company has exercised
                                    its right to redeem all the Redeemable
                                    Preferred Stock under paragraph (e)(i)
                                    hereof), the Company shall (1) repay in full
                                    all Bank Indebtedness or offer to repay in
                                    full all Bank Indebtedness and repay the
                                    Bank Indebtedness of each lender who has
                                    accepted such offer or (2) obtain the
                                    requisite consent under the agreements
                                    governing the Bank Indebtedness to permit
                                    the repurchase of the Redeemable Preferred
                                    Stock as provided for in paragraph (g)(ii)
                                    below.



                                       18
<PAGE>


                           (ii)     Unless the Company has exercised its right
                                    to redeem all the Redeemable Preferred Stock
                                    under paragraph (e)(i) hereof, within 30
                                    days following any Change of Control
                                    described in clause (g)(i)(A) above, the
                                    Company shall mail a notice to each Holder
                                    of Redeemable Preferred Stock stating: (A)
                                    that a Change of Control has occurred or
                                    will occur and that such Holder of
                                    Redeemable Preferred Stock has (or upon such
                                    occurrence will have) the right to require
                                    the Company to purchase such Holder's
                                    Redeemable Preferred Stock at a purchase
                                    price in cash equal to 101% of the aggregate
                                    liquidation preference thereof, plus an
                                    amount in cash equal to all accumulated and
                                    unpaid dividends per share (including an
                                    amount in cash equal to a prorated dividend
                                    for the period from the Dividend Payment
                                    Date immediately prior to the repurchase
                                    date to the repurchase date), if any, to the
                                    repurchase date (subject to the right of the
                                    Holders of Redeemable Preferred Stock of
                                    record on a record date to receive dividends
                                    on the relevant Dividend Payment Date); (B)
                                    the circumstances and relevant facts
                                    regarding such Change of Control; (C) the
                                    repurchase date (which shall be no earlier
                                    than 30 days nor later than 60 days from the
                                    date such notice mailed); and (D) the
                                    instructions determined by the Company,
                                    consistent with this paragraph (g), that a
                                    Holder of Redeemable Preferred Stock must
                                    follow in order to have its Redeemable
                                    Preferred Stock purchased.


                           (iii)    (A)      Holders of Redeemable Preferred
                                             Stock electing to have shares of
                                             Redeemable Preferred Stock
                                             purchased shall be required to
                                             surrender Redeemable Preferred
                                             Stock, together with all necessary
                                             endorsements and appropriate forms
                                             duly completed, to the Company at
                                             the address specified in the notice
                                             at least three Business Days prior
                                             to the purchase date. Holders of
                                             Redeemable Preferred Stock shall be
                                             entitled to withdraw their election
                                             if the Company receives not later
                                             than two Business Days prior to the
                                             purchase date a facsimile
                                             transmission or letter setting
                                             forth the name of the Holder of
                                             Redeemable Preferred Stock, the
                                             liquidation preference of the
                                             Redeemable Preferred Stock which
                                             was delivered for purchase by the
                                             Holder of Redeemable Preferred
                                             Stock as to which such notice of
                                             withdrawal is being submitted and a
                                             statement that such Holder of
                                             Redeemable Preferred Stock is
                                             withdrawing his election to have
                                             such Redeemable Preferred Stock
                                             purchased.



                                       19
<PAGE>


                                    (B)      On the repurchase date, all shares
                                             of Redeemable Preferred Stock
                                             purchased by the Company under this
                                             paragraph (g) shall be retired by
                                             the Company, and the Company shall
                                             pay the purchase price plus
                                             accumulated and unpaid dividends,
                                             if any, to the Holders entitled
                                             thereto.

                                    (C)      Unless the Company defaults in the
                                             payment for the shares of
                                             Redeemable Preferred Stock tendered
                                             pursuant to the Offer, dividends
                                             shall cease to accrue with respect
                                             to the shares of Redeemable
                                             Preferred Stock tendered and all
                                             rights of Holders of such tendered
                                             shares shall terminate, except for
                                             the right to receive payment
                                             therefor, on the purchase date.

                           (iv)     The Company shall comply, to the extent
                                    applicable, with the requirements of Section
                                    14(e) under the Exchange Act and any other
                                    securities laws and regulations, in
                                    connection with the repurchase of Redeemable
                                    Preferred Stock pursuant to this paragraph
                                    (g). To the extent that the provisions of
                                    any applicable securities laws or
                                    regulations conflict with provisions of this
                                    paragraph (g), the Company will comply with
                                    the applicable securities laws and
                                    regulations and it will not be deemed to
                                    have breached its obligations under this
                                    paragraph (g) by virtue thereof.

                  (h)      Conversion or Exchange. Neither the Company nor the
                           Holders of shares of Redeemable Preferred Stock shall
                           have any rights hereunder to convert such shares into
                           or exchange such shares for shares of any other class
                           or classes or of any other series of any class or
                           classes of Capital Stock or Indebtedness of the
                           Company.

                  (i)      Preemptive Rights. No shares of Redeemable Preferred
                           Stock shall have any rights of preemption whatsoever
                           as to any securities of the Company, or any warrants,
                           rights or options issued or granted with respect
                           thereto, regardless of how such securities or such
                           warrants, rights or options may be designated, issued
                           or granted.

                  (j)      Reissuance of Redeemable Preferred Stock. Shares of
                           Redeemable Preferred Stock that have been issued and
                           reacquired in any manner, including shares purchased
                           or redeemed or exchanged, shall (upon compliance with
                           any applicable provisions of the laws of Delaware)
                           have the status of authorized but unissued shares of
                           Preferred Stock of the Company undesignated as to
                           series and may be designated or redesignated and
                           issued or reissued, as the case may be, as part of
                           any series of Preferred Stock of the Company,
                           provided that any issuance of such shares 



                                       20
<PAGE>


                           as Redeemable Preferred Stock must be in compliance
                           with the terms hereof.

                  (k)      Business Day. If any payment, redemption or other
                           action shall be required by the terms hereof to be
                           made on a day that is not a Business Day, such
                           payment, redemption or other action shall be made on
                           the immediately succeeding Business Day.

                  (l)      Certain Additional Provisions.

                           (i)      Merger or Consolidation. The Company shall
                                    not consolidate or merge with or into, or
                                    convey, transfer or lease all or
                                    substantially all of its assets to, any
                                    Person unless (A) the resulting, transferee
                                    or surviving Person (the "Successor
                                    Company") will be a Person organized and
                                    existing under the laws of the United States
                                    of America, any State thereof or the
                                    District of Columbia; (B) the Redeemable
                                    Preferred Stock shall be converted into or
                                    exchanged for and shall become shares of the
                                    Successor Company having in respect of such
                                    successor, transferee or resulting
                                    corporation substantially the same powers,
                                    preferences and relative participating,
                                    optional or other special rights, and the
                                    qualifications, limitations or restrictions
                                    thereon that the Redeemable Preferred Stock
                                    had immediately prior to such transaction;
                                    (C) immediately after such transaction, no
                                    Voting Rights Triggering Event, and no event
                                    that after the giving of notice or lapse of
                                    time or both would become a Voting Rights
                                    Triggering Event, shall have occurred and be
                                    continuing; (D) immediately after giving pro
                                    forma effect to such transaction (and
                                    treating any Indebtedness which becomes any
                                    obligation of the Successor Company or any
                                    Restricted Subsidiary as a result of such
                                    transaction as having been Incurred by the
                                    Successor Company or such Restricted
                                    Subsidiary at the time of such transaction)
                                    no Voting Rights Triggering Event shall have
                                    occurred and be continuing; (E) immediately
                                    after giving pro forma effect to such
                                    transaction, the Successor Company would be
                                    able to Incur an additional $1.00 of
                                    Indebtedness under paragraph (l)(v)(A); (F)
                                    immediately after giving effect to such
                                    transaction, the Successor Company will have
                                    a Consolidated Net Worth in an amount which
                                    is not less than the Consolidated Net Worth
                                    of the Company immediately prior to such
                                    transaction; and (G) prior to the
                                    consummation of any such proposed
                                    transaction, the Company shall have
                                    delivered to the Holders of a majority of
                                    the outstanding shares of Redeemable
                                    Preferred Stock an Officers' Certificate and
                                    an Opinion of Counsel, each stating that
                                    such transaction complies 



                                       21
<PAGE>


                                    with the terms of this Certificate of
                                    Incorporation and that all conditions
                                    precedent to such transaction have been
                                    satisfied.

                                    Notwithstanding paragraphs (l)(i)(E) and
                                    (l)(i)(F), any Wholly Owned Subsidiary may
                                    consolidate with, merge into or transfer all
                                    or part of its properties and assets to the
                                    Company.

                           (ii)     Limitation on Restricted Payments. The
                                    Company will not, and will not permit any
                                    Restricted Subsidiary to, directly or
                                    indirectly, (A) declare or pay any dividend
                                    or make any distribution on or in respect of
                                    any Junior Securities (including any payment
                                    in connection with any merger or
                                    consolidation involving the Company) except
                                    dividends or distributions payable solely in
                                    Junior Securities (other than Disqualified
                                    Stock) or in options, warrants or other
                                    rights to purchase such Junior Securities
                                    and except dividends or distributions
                                    payable to the Company or another Restricted
                                    Subsidiary (and, if such Restricted
                                    Subsidiary making such dividend or
                                    distribution is not wholly owned, to its
                                    other stockholders on a pro rata basis), (B)
                                    purchase, repurchase, redeem, retire or
                                    otherwise acquire or retire for value any
                                    Junior Securities or Parity Securities of
                                    the Company held by Persons other than the
                                    Company or a Restricted Subsidiary or (C)
                                    make any Investment (other than a Permitted
                                    Investment) in any Person (any such
                                    dividend, distribution, purchase,
                                    redemption, repurchase, other acquisition,
                                    retirement, payment or Investment being
                                    herein referred to as a "Restricted
                                    Payment") if at the time the Company or such
                                    Restricted Subsidiary makes such Restricted
                                    Payment:

                                             (x) a Voting Rights Triggering
                                    Event shall have occurred and be continuing
                                    or would occur as a consequence thereof;

                                             (y) the Company and its Restricted
                                    Subsidiaries could not Incur at least $1.00
                                    of additional Indebtedness under paragraph
                                    (l)(v)(A); or

                                             (z) the aggregate amount of such
                                    Restricted Payment and all other Restricted
                                    Payments (the amount so expended, if other
                                    than in cash, to be determined in good faith
                                    by the Board of Directors of the Company)
                                    made subsequent to the Issue Date (excluding
                                    Restricted Payments permitted by paragraphs
                                    (l)(ii)(1), (l)(ii)(3) and (l)(ii)(6)),
                                    would exceed the sum of: (i) 50% of the
                                    Consolidated Net Income with respect to the
                                    period (treated as one accounting period)
                                    from the beginning of the fiscal quarter in
                                    which the Issue Date occurs) to the end of
                                    the most recent fiscal 



                                       22
<PAGE>


                                    quarter for which internal financial
                                    statements are available ending at least 30
                                    days prior to the date of such Restricted
                                    Payment (or, in case such Consolidated Net
                                    Income is a deficit, minus 100% of such
                                    deficit); (ii) the aggregate Net Cash
                                    Proceeds received by the Company from the
                                    issue or sale of Capital Stock (other than
                                    Disqualified Stock) subsequent to the Issue
                                    Date (other than an issuance or sale to a
                                    Subsidiary) and, without duplication, the
                                    aggregate amount of any other capital
                                    contributions received by the Company in
                                    cash subsequent to the Issue Date and on or
                                    prior to the date the Restricted Payment
                                    occurs; (iii) the amount by which
                                    Indebtedness of the Company is reduced on
                                    the Company's balance sheet upon the
                                    conversion or exchange (other than by a
                                    Restricted Subsidiary) subsequent to the
                                    Issue Date of any Indebtedness of the
                                    Company convertible or exchangeable for
                                    Capital Stock (other than Disqualified
                                    Stock) of the Company (less the amount of
                                    any cash or other property distributed by
                                    the Company upon such conversion or
                                    exchange); and (iv) the amount equal to the
                                    net reduction in Investments in Unrestricted
                                    Subsidiaries resulting from (a) repayments
                                    of the principal of loans or advances or
                                    other transfers of assets to the Company or
                                    any Restricted Subsidiary from Unrestricted
                                    Subsidiaries or (b) the redesignation of
                                    Unrestricted Subsidiaries as Restricted
                                    Subsidiaries or (c) the sale or liquidation
                                    of any Unrestricted Subsidiaries (valued in
                                    each case as provided in the definition of
                                    "Investment") not to exceed, in the case of
                                    any Unrestricted Subsidiary, the amount of
                                    Investments previously made by the Company
                                    or any Restricted Subsidiary in such
                                    Unrestricted Subsidiary, which amount was
                                    previously included in the calculation of
                                    the amount of Restricted Payments.

                                    Notwithstanding the foregoing, this
                                    Certificate of Incorporation shall not
                                    prohibit as Restricted Payments:

                                    (1)      any purchase, redemption,
                                             repurchase, defeasance, retirement
                                             or other acquisition of Junior
                                             Securities or Parity Securities
                                             made by exchange (including any
                                             such exchange pursuant to the
                                             exercise of a conversion right or
                                             privilege in connection with which
                                             cash is paid in lieu of the
                                             issuance of fractional shares) for,
                                             or out of the net proceeds of the
                                             substantially concurrent sale of,
                                             Junior Securities or Parity
                                             Securities of the Company (other
                                             than Disqualified Stock and other
                                             than Capital Stock issued or sold
                                             to a Subsidiary); provided,
                                             however, that (a) such purchase,
                                             redemption, defeasance or other
                                             acquisition will be excluded in the



                                       23
<PAGE>


                                             calculation of the amount of
                                             Restricted Payments pursuant to
                                             paragraph (l)(ii)(z) and (b) the
                                             Net Cash Proceeds from such sale
                                             will be excluded from paragraph
                                             (l)(ii)(z);

                                    (2)      dividends paid within 60 days after
                                             the date of declaration thereof if
                                             at such date of declaration such
                                             dividend would have complied with
                                             this Certificate of Incorporation,
                                             including without limitation
                                             paragraph (l)(ii); provided,
                                             however, that the amount of such
                                             dividend will be included in the
                                             calculation of the amount of
                                             Restricted Payments pursuant to
                                             paragraph (l)(ii)(z);

                                    (3)      Investments in securities not
                                             constituting cash or Temporary Cash
                                             Investments received in connection
                                             with an Asset Disposition effected
                                             in accordance with the Indenture
                                             governing the 2007 Notes (the
                                             "Indenture"); provided, however,
                                             that such amounts will be excluded
                                             in the calculation of the amount of
                                             Restricted Payments pursuant to
                                             paragraph (l)(ii)(z);

                                    (4)      the payment of scheduled dividends
                                             on, or the scheduled or mandatory
                                             redemption, repurchase or
                                             retirement of, any Disqualified
                                             Stock (other than Put/Call
                                             Preferred Stock) issued after the
                                             date hereof in compliance with the
                                             provisions of this Certificate of
                                             Incorporation; provided, however,
                                             that such amounts will be included
                                             in the calculation of the amount of
                                             Restricted Payments pursuant to
                                             paragraph (l)(ii)(z);

                                    (5)     payments made with respect to the
                                            repurchase, redemption or other
                                            acquisition or retirement for value
                                            of Management Equity Interests (a)
                                            prior to October 31, 2000 in an
                                            aggregate principal amount not to
                                            exceed $500,000 in any twelve-month
                                            period and (b) subsequent to October
                                            31, 2000 in an aggregate principal
                                            amount not to exceed $2 million in
                                            any twelve month period; provided,
                                            however, that (x) subsequent to
                                            October 31, 2000, the Company may
                                            make an additional $2 million of
                                            such payments in any such
                                            twelve-month period if, after giving
                                            pro forma effect to all such
                                            payments, the Consolidated Coverage
                                            Ratio would be greater than 2.5:1,
                                            and (y) to the extent such
                                            Management Equity Interests have
                                            been exchanged for Put/Call
                                            Promissory Notes or Put/Call
                                            Preferred Stock incurred or issued
                                            in accordance with paragraph
                                            (l)(v)(B)(11), such 



                                       24
<PAGE>


                                             amounts may be applied toward the
                                             repurchase of or payment on such
                                             Put/Call Promissory Notes and
                                             Put/Call Preferred Stock; and
                                             provided further that such amounts
                                             will be included in the calculation
                                             of the amount of Restricted
                                             Payments pursuant to paragraph
                                             (l)(ii)(z);

                                    (6)      the repurchase of Management Equity
                                             Interests in exchange for Put/Call
                                             Promissory Notes and Put/Call
                                             Preferred Stock incurred or issued
                                             in accordance with paragraph
                                             (l)(v)(B)(11); provided that such
                                             repurchase will be excluded in the
                                             calculation of the amount of
                                             Restricted Payments pursuant to
                                             paragraph (l)(ii)(z); and

                                    (7)      other Restricted Payments in an
                                             aggregate amount not to exceed $10
                                             million; provided that such amounts
                                             will be included in the calculation
                                             of the amount of Restricted
                                             Payments pursuant to paragraph
                                             (l)(ii)(z);

                                    provided, however, that at the time of, and
                                    after giving effect to, any Restricted
                                    Payment permitted by paragraphs (l)(ii)(4),
                                    (l)(ii)(5) and (l)(ii)(7) hereof no Voting
                                    Rights Triggering Event shall have occurred
                                    and be continuing. In addition, dividends on
                                    the Company's Capital Stock used in good
                                    faith to effect the payment of fees,
                                    expenses and other transactions which are
                                    permitted pursuant to paragraph (l)(iii)(B)
                                    shall not be deemed to be Restricted
                                    Payments.

                           (iii)    Transactions with Affiliates.

                                    (A)      The Company will not, and will not
                                             permit any Restricted Subsidiary
                                             to, directly or indirectly, enter
                                             into or conduct any transaction or
                                             series of related transactions
                                             (including the purchase, sale,
                                             lease or exchange of any property
                                             or the rendering of any service)
                                             with any Affiliate of the Company
                                             or a Restricted Subsidiary (an
                                             "Affiliate Transaction") unless (1)
                                             the terms of such transaction are
                                             no less favorable to the Company or
                                             such Restricted Subsidiary, as the
                                             case may be, than those that could
                                             be obtained at the time of such
                                             transaction in arm's-length
                                             dealings with a Person who is not
                                             such an Affiliate, (2) in the event
                                             such Affiliate Transaction involves
                                             an aggregate amount in excess of
                                             $2.0 million, the terms of such
                                             transaction shall have been
                                             approved by a majority of the
                                             members of the Board of Directors
                                             (and such majority determines that
                                             such 



                                       25
<PAGE>


                                             Affiliate Transaction satisfies the
                                             criteria set forth in paragraph
                                             (l)(iii)(A)(1) and (3) in the event
                                             such Affiliate Transaction involves
                                             an aggregate amount in excess of
                                             $7.5 million, the Company has
                                             received a written opinion from (I)
                                             a nationally recognized independent
                                             accounting or investment banking
                                             firm or (II) in the event the
                                             applicable Affiliate Transaction
                                             requires expertise of an expert
                                             other than an accounting or an
                                             investment banking firm, an
                                             appraiser selected by the Company
                                             with expertise in analyzing the
                                             applicable Affiliate Transaction,
                                             that such Affiliate Transaction is
                                             fair to the Company or such
                                             Restricted Subsidiary from a
                                             financial point of view.

                                    (B)      The provisions of paragraph
                                             (l)(iii)(A) shall not prohibit (1)
                                             any Restricted Payment permitted to
                                             be made pursuant to paragraph
                                             (l)(ii), (2) any issuance of
                                             securities, or other payments,
                                             awards or grants in cash,
                                             securities or otherwise pursuant
                                             to, or the funding of, employment
                                             arrangements, stock options and
                                             stock ownership plans approved by
                                             the Board of Directors of the
                                             Company, (3) any fees, indemnities,
                                             loans or advances to employees in
                                             the ordinary course of business,
                                             (4) any transaction between the
                                             Company and a Restricted Subsidiary
                                             or between Restricted Subsidiaries,
                                             (5) any agreement in effect on the
                                             Issue Date or any amendment thereto
                                             or transaction contemplated thereby
                                             (and any replacement or amendment
                                             of any such agreement so long as
                                             any such amendment or replacement
                                             thereof is not materially less
                                             favorable to the Holders than the
                                             original agreement in effect on the
                                             Issue Date), (6) payments by the
                                             Company or any of its Restricted
                                             Subsidiaries to Mentmore and/or its
                                             Affiliates made for any financial
                                             advisory, financing, underwriting
                                             or placement services or in respect
                                             of other investment banking
                                             activities, including, without
                                             limitation, in connection with
                                             acquisitions or divestitures, which
                                             payments are approved by a majority
                                             of the members of the Board of
                                             Directors of the Company in good
                                             faith, (7) payments under any tax
                                             sharing agreement to the extent
                                             such payments do not otherwise
                                             exceed the tax liability the
                                             Company would have had were it not
                                             party to such tax sharing
                                             agreement, (8) any other payment or
                                             reimbursement of reasonable and
                                             customary fees and expenses
                                             incurred by an Affiliate for
                                             services rendered to the Company or
                                             any of its Restricted Subsidiaries
                                             not to exceed $250,000 in any
                                             twelve-month 



                                       26
<PAGE>


                                             period (without duplication for any
                                             amounts paid pursuant to any other
                                             clause of this paragraph
                                             (l)(iii)(B)), and (9) payments
                                             under the Management Agreement in
                                             an amount equal to the greater of
                                             (a) $750,000 in any fiscal year and
                                             (b) 1% of the Company's total
                                             consolidated sales in any fiscal
                                             year, provided, in the case of
                                             clause (b) of this paragraph
                                             (l)(iii)(B)(9), that the Company's
                                             Consolidated Coverage Ratio, after
                                             giving pro forma effect to such
                                             payment, is equal to or greater
                                             than 2.25 to 1, in each case plus
                                             reasonable expenses incurred in
                                             connection with and reimbursable
                                             under the Management Agreement.

                           (iv)     Reports. Whether or not required by the
                                    rules and regulations of the Commission, so
                                    long as any shares of Redeemable Preferred
                                    Stock are outstanding, the Company will
                                    furnish to the Holders of Redeemable
                                    Preferred Stock, within 15 days after it is
                                    or would have been required to file such
                                    with the Commission, (A) all quarterly and
                                    annual financial information that would be
                                    required to be contained in a filing with
                                    the Commission on Forms 10-Q and 10-K if the
                                    Company were required to file such Forms,
                                    including a "Management's Discussion and
                                    Analysis of Financial Condition and Results
                                    of Operations" and, with respect to the
                                    annual information only, a report thereon by
                                    the Company's certified independent
                                    accountants and (B) all current reports that
                                    would be required to be filed with the
                                    Commission on Form 8-K if the Company was
                                    required to file such reports. In addition,
                                    whether or not required by the rules and
                                    regulations of the Commission, the Company
                                    will file a copy of all such information and
                                    reports with the Commission for public
                                    availability (unless the Commission will not
                                    accept such a filing) and make such
                                    information available to securities analysts
                                    and prospective investors upon request. In
                                    addition, the Company has agreed that, for
                                    so long as any shares of Redeemable
                                    Preferred Stock remain outstanding, it will
                                    furnish to the Holders and to securities
                                    analysts and prospective investors, upon
                                    their request, the information required to
                                    be delivered pursuant to Rule 144A(d)(4)
                                    under the Securities Act.



                                       27
<PAGE>


                           (v)      Limitation on Indebtedness.

                                    (A) (1) The Company will not Incur, and will
                                    not permit any Restricted Subsidiary to
                                    Incur, any Indebtedness (including Acquired
                                    Indebtedness) or issue Disqualified Stock
                                    and (2) the Company will not permit any of
                                    its Restricted Subsidiaries to issue any
                                    shares of Preferred Stock; provided,
                                    however, that the Company may Incur
                                    Indebtedness (including Acquired
                                    Indebtedness) or issue Disqualified Stock
                                    and any Restricted Subsidiary may incur
                                    Indebtedness (including Acquired
                                    Indebtedness but excluding Preferred Stock),
                                    in each case if on the date thereof (and
                                    after giving effect to the application of
                                    proceeds therefrom) the Consolidated
                                    Coverage Ratio would be greater than 2.0:1.

                                    (B)     Notwithstanding paragraph (l)(v)(A),
                                            the Company and its Restricted
                                            Subsidiaries may Incur:

                                             (1) Indebtedness (including,
                                    without limitation, letters of credit and
                                    Guarantees) of the Company or any Restricted
                                    Subsidiary under the New Credit Facility in
                                    an aggregate principal amount outstanding at
                                    any time not to exceed $235 million;

                                             (2) Indebtedness of the Company
                                    owing to and held by any Restricted
                                    Subsidiary or Indebtedness of a Restricted
                                    Subsidiary owing to and held by the Company
                                    or any Restricted Subsidiary; provided,
                                    however, that any subsequent issuance or
                                    transfer of any Capital Stock or any other
                                    event which results in any such Restricted
                                    Subsidiary ceasing to be a Restricted
                                    Subsidiary or any subsequent transfer of any
                                    such Indebtedness (except to the Company or
                                    a Restricted Subsidiary or a pledge or other
                                    transfer thereof intended to create a
                                    security interest therein) will be deemed to
                                    constitute the Incurrence of such
                                    Indebtedness by the issuer thereof;

                                             (3) Indebtedness of the Company
                                    represented by the Redeemable Preferred
                                    Stock and any Indebtedness, Disqualified
                                    Stock or Preferred Stock of the Company or
                                    any Restricted Subsidiary (other than the
                                    Indebtedness described in paragraphs
                                    (l)(v)(B)(1) and (l)(v)(B)(2)) outstanding
                                    on the Issue Date (including the $100
                                    million aggregate principal amount of the
                                    2007 Notes and the Guarantees thereof
                                    outstanding on the Issue Date);



                                       28
<PAGE>


                                             (4) Indebtedness, Disqualified
                                    Stock or Preferred Stock of a Restricted
                                    Subsidiary outstanding on or prior to the
                                    date on which such Restricted Subsidiary was
                                    acquired by the Company or a Restricted
                                    Subsidiary (other than Indebtedness,
                                    Disqualified Stock or Preferred Stock
                                    Incurred in connection with, or in
                                    contemplation of, the transaction or series
                                    of related transactions pursuant to which
                                    such Restricted Subsidiary became a
                                    Restricted Subsidiary or was otherwise
                                    acquired by the Company or a Restricted
                                    Subsidiary); provided, however, that the
                                    aggregate principal amount, accreted value
                                    or liquidation preference, as applicable, of
                                    such Indebtedness, Disqualified Stock or
                                    Preferred Stock does not exceed $7.5 million
                                    at any one time outstanding;

                                             (5) Indebtedness (a) in respect of
                                    performance bonds, bankers' acceptances,
                                    workers' compensation claims, surety or
                                    appeal bonds, payment obligations in
                                    connection with self-insurance or similar
                                    obligations, and bank overdrafts (and
                                    letters of credit in respect thereof)
                                    provided by the Company or any Restricted
                                    Subsidiary in the ordinary course of its
                                    business and which do not secure other
                                    Indebtedness and (b) under Currency
                                    Agreements and Interest Rate Agreements
                                    Incurred which, at the time of Incurrence,
                                    is in the ordinary course of business;
                                    provided that such agreements are entered
                                    into for bona fide hedging purposes, are not
                                    for speculation or trading purposes and are
                                    designed to protect against fluctuations in
                                    interest rates or currency exchange rates,
                                    as the case may be, and, in the case of
                                    Interest Rate Agreements, any such Interest
                                    Rate Agreement has a notional amount
                                    corresponding to the Indebtedness being
                                    hedged thereby;

                                             (6) Indebtedness represented by
                                    Guarantees by the Company of Indebtedness
                                    otherwise permitted to be Incurred pursuant
                                    to this paragraph (l)(v) and Indebtedness
                                    represented by Guarantees by a Restricted
                                    Subsidiary of Indebtedness of the Company or
                                    of another Restricted Subsidiary otherwise
                                    permitted to be Incurred pursuant to this
                                    paragraph (l)(v) (including Guarantees of
                                    the 2007 Notes);



                                       29
<PAGE>


                                             (7) Indebtedness Incurred by the
                                    Company or any Restricted Subsidiary and
                                    arising from agreements providing for
                                    indemnification, adjustment of purchase
                                    price or similar obligations, and from
                                    guarantees or letters of credit, surety
                                    bonds or performance bonds securing any
                                    obligations of the Company or any Restricted
                                    Subsidiary pursuant to such agreements, in
                                    each case incurred in connection with the
                                    purchase or sale of a business or assets
                                    otherwise permitted by this Certificate of
                                    Incorporation;

                                             (8) Indebtedness, Disqualified
                                    Stock or Preferred Stock of the Company or
                                    Indebtedness (other than Preferred Stock) of
                                    any Restricted Subsidiary in an aggregate
                                    principal amount (or having an aggregate
                                    liquidation preference) not to exceed $5
                                    million at any time outstanding (including
                                    pursuant to any refinancing thereof)
                                    incurred in connection with the purchase,
                                    redemption, acquisition, cancellation or
                                    other retirement for value of Management
                                    Equity Interests;

                                             (9) the incurrence by the Company
                                    or any Restricted Subsidiary of Indebtedness
                                    represented by Capitalized Lease
                                    Obligations, mortgage financings or purchase
                                    money obligations, in each case incurred for
                                    the purpose of financing or refinancing all
                                    or any part of the purchase price or cost of
                                    construction or improvement of property,
                                    plant or equipment used in the business of
                                    the Company or such Restricted Subsidiary,
                                    in an aggregate principal amount not to
                                    exceed the principal amount of such
                                    Capitalized Lease Obligations outstanding on
                                    the date hereof plus $10 million at any time
                                    outstanding;

                                             (10) the issuance by Stellex
                                    Aerospace of Series B Preferred Stock having
                                    an aggregate liquidation preference not to
                                    exceed $200,000 at any one time outstanding
                                    to its officers and employees;

                                             (11) (a) Indebtedness of the
                                    Company or a Restricted Subsidiary
                                    represented by Put/Call Promissory Notes and
                                    (b) Preferred Stock (other than Disqualified
                                    Stock) of the Company or a Restricted
                                    Subsidiary represented by Put/Call Preferred
                                    Stock, in each case incurred or issued in
                                    exchange for Management Equity Interests, in
                                    an aggregate amount not to exceed the value
                                    (calculated in accordance with the
                                    respective agreements pursuant to which such
                                    Management Equity Interests were issued or
                                    exchanged) of the Management Equity
                                    Interests so exchanged;



                                       30
<PAGE>


                                             (12) the issuance by the Company or
                                    any Restricted Subsidiary of Refinancing
                                    Indebtedness in exchange for, or the net
                                    proceeds which are used to refund, refinance
                                    or replace, Indebtedness that was permitted
                                    by paragraph (l)(v)(A) or by paragraphs
                                    (l)(v)(B)(3) and (4) to be incurred;

                                             (13) other Indebtedness or
                                    Preferred Stock (other than Disqualified
                                    Stock) of the Company or other Indebtedness
                                    (other than Preferred Stock) of any
                                    Restricted Subsidiary in an aggregate
                                    principal amount (or having an aggregate
                                    liquidation preference) at any one time
                                    outstanding not to exceed $20 million; and

                                             (14) Indebtedness of a Restricted
                                    Subsidiary represented by Preferred Stock
                                    issued to the seller in connection with the
                                    acquisition from the seller of such
                                    Restricted Subsidiary (or the assets
                                    comprising all or a portion of the assets
                                    held by such Restricted Subsidiary) by the
                                    Company or a Restricted Subsidiary, having
                                    an aggregate liquidation preference at any
                                    one time outstanding not to exceed $20
                                    million; provided that after giving effect
                                    to any such incurrence and the related
                                    dividends in accordance with the definition
                                    of Consolidated Coverage Ratio, the Company
                                    would have been able to incur at least $1.00
                                    of additional Indebtedness under paragraph
                                    (l)(v)(A).

                                    (C)      The Company will not permit any
                                             Unrestricted Subsidiary to Incur
                                             any Indebtedness other than
                                             Non-Recourse Debt, provided,
                                             however, if any such Indebtedness
                                             ceases to be Non-Recourse Debt,
                                             such event shall be deemed to
                                             constitute an Incurrence of
                                             Indebtedness by the Company or a
                                             Restricted Subsidiary.

                                    (D)      For purposes of determining
                                             compliance with this section
                                             (l)(v), (1) in the event that an
                                             item of Indebtedness meets the
                                             criteria of more than one of the
                                             types of Indebtedness described
                                             above, the Company will classify
                                             (and may reclassify from time to
                                             time) such item of Indebtedness and
                                             only be required to include the
                                             amount and type of such
                                             Indebtedness in one of the above
                                             clauses and (2) an item of
                                             Indebtedness may be divided and
                                             classified in more than one of the
                                             types of Indebtedness described
                                             above.

                           (vi)     Limitation on Restrictions on Distributions
                                    from Restricted Subsidiaries. The Company
                                    will not, and will not permit any Restricted
                                    Subsidiary to, create or otherwise cause or
                                    permit to 



                                       31
<PAGE>


                                    exist or become effective any consensual
                                    encumbrance or restriction on the ability of
                                    any Restricted Subsidiary to (A) pay
                                    dividends or make any other distributions on
                                    its Capital Stock or pay any Indebtedness or
                                    other obligation owed to the Company, (B)
                                    make any loans or advances to the Company or
                                    (C) transfer any of its property or assets
                                    to the Company, except:

                                             (1) any encumbrance or restriction
                                    pursuant to an agreement in effect at or
                                    entered into on the Issue Date (including
                                    the New Credit Facility and the Indenture
                                    governing the 2007 Notes);

                                             (2) any encumbrance or restriction
                                    with respect to a Restricted Subsidiary
                                    pursuant to an agreement relating to any
                                    Capital Stock of such Restricted Subsidiary
                                    or Indebtedness Incurred by such Restricted
                                    Subsidiary on or prior to the date on which
                                    such Restricted Subsidiary was acquired by
                                    the Company or a Restricted Subsidiary and
                                    outstanding on such date (other than
                                    Indebtedness Incurred in connection with, or
                                    in contemplation of, the transaction or
                                    series of related transactions pursuant to
                                    which such Restricted Subsidiary became a
                                    Restricted Subsidiary or was acquired by the
                                    Company or a Restricted Subsidiary);

                                             (3) any encumbrance or restriction
                                    contained in agreements or instruments with
                                    respect to purchase money obligations for
                                    property acquired in the ordinary course of
                                    business that impose restrictions of the
                                    nature described in clause (C) of this
                                    section (l)(vi) on the property so acquired;

                                             (4) any encumbrance or restriction
                                    pursuant to an agreement effecting a
                                    Refinancing of Indebtedness Incurred
                                    pursuant to an agreement referred to in
                                    paragraphs (l)(vi)(1), (2) or (3) or
                                    contained in any amendment to an agreement
                                    referred to in paragraphs (l)(vi)(1), (2) or
                                    (3); provided, however, that the
                                    encumbrances and restrictions contained in
                                    any such refinancing agreement or amendment
                                    are not, taken as a whole, materially less
                                    favorable to the Holders than the
                                    encumbrances and restrictions contained in
                                    any such agreement as determined in good
                                    faith by the Company;



                                       32
<PAGE>


                                             (5) in the case of paragraph
                                    (l)(vi)(C), any encumbrance or restriction
                                    (a) that restricts in a customary manner the
                                    subletting, assignment or transfer of any
                                    property or asset that is subject to a
                                    lease, license or similar contract, (b) by
                                    virtue of any transfer of, agreement to
                                    transfer, option or right with respect to,
                                    or Lien on, any property or assets of the
                                    Company or any Restricted Subsidiary not
                                    otherwise prohibited by this Certificate of
                                    Incorporation or (c) contained in security
                                    agreements, mortgages or Capitalized Lease
                                    Obligations securing Indebtedness of a
                                    Restricted Subsidiary to the extent such
                                    encumbrance or restrictions restrict the
                                    transfer of the property subject to such
                                    security agreements, mortgages or
                                    Capitalized Lease Obligations;

                                             (6) any restriction with respect to
                                    a Restricted Subsidiary imposed pursuant to
                                    an agreement entered into for the sale or
                                    disposition of Capital Stock or assets of
                                    such Restricted Subsidiary pending the
                                    closing of such sale or disposition;

                                             (7) any encumbrance or restriction
                                    arising under or by reason of applicable
                                    law;

                                             (8) any encumbrance or restriction
                                    contained in this Certificate of
                                    Incorporation;

                                             (9) customary net worth provisions
                                    contained in leases and other agreements
                                    entered into by a Restricted Subsidiary in
                                    the ordinary course of business; and

                                             (10) customary restrictions
                                    contained in any agreements or documentation
                                    governing Indebtedness issued pursuant to
                                    paragraph (l)(v)(B)(13); provided that such
                                    restrictions are no more restrictive, taken
                                    as a whole, than those pursuant to the New
                                    Credit Facility.

                           (vii)    Limitation on Sales of Subsidiary Capital
                                    Stock. The Company (A) will not, and will
                                    not permit any Restricted Subsidiary of the
                                    Company to, transfer, convey, sell, lease or
                                    otherwise dispose of any Capital Stock of
                                    any Restricted Subsidiary to any Person
                                    (other than to the Company or a 



                                       33
<PAGE>


                                    Wholly Owned Subsidiary or to management of
                                    such Restricted Subsidiary) and (B) will not
                                    permit any Restricted Subsidiary to issue
                                    any of its Capital Stock (other than to
                                    management of such Restricted Subsidiary
                                    and, if necessary, shares of its Capital
                                    Stock constituting directors' qualifying
                                    shares) to any Person other than to the
                                    Company or a Wholly Owned Subsidiary, unless
                                    after any such transfer, conveyance, sale,
                                    lease, disposition or issuance, such
                                    Restricted Subsidiary continues to be a
                                    Restricted Subsidiary; provided, however,
                                    that this provision shall not prohibit the
                                    transfer, conveyance, sale, lease or other
                                    disposition of all of the Capital Stock of
                                    any Restricted Subsidiary or the retention
                                    of Preferred Stock in connection with any
                                    such transfer, conveyance, sale, lease or
                                    other disposition.

                           (viii)   Compliance Certificate. The Company and each
                                    Restricted Subsidiary shall deliver to the
                                    Holders of a majority of the outstanding
                                    shares of Redeemable Preferred Stock within
                                    120 days after the end of each fiscal year
                                    of the Company an Officers' Certificate
                                    signed by the chief executive officer, the
                                    chief financial officer or the chief
                                    accounting officer stating that in the
                                    course of the performance by the signers of
                                    their duties as Officers of the Company they
                                    would normally have knowledge of any Voting
                                    Rights Triggering Event and whether or not
                                    the signers know of any Voting Rights
                                    Triggering Event that occurred during such
                                    period. If they do, the certificate shall
                                    describe the Voting Rights Triggering Event,
                                    its status and what action the Company is
                                    taking or proposes to take with respect
                                    thereto.

                           (ix)     Further Instruments and Acts. Upon request
                                    of the Holders of a majority of the
                                    outstanding shares of Redeemable Preferred
                                    Stock, the Company will execute and deliver
                                    such further instruments and do such further
                                    acts as may be reasonably necessary or
                                    proper to carry out more effectively the
                                    purpose of this Certificate of
                                    Incorporation.

                           (x)      Corporate Existence. Except as otherwise
                                    permitted by section (l)(i), the Company
                                    shall do or cause to be done, at its own
                                    cost and expense, all things necessary to
                                    preserve and keep in full force and effect
                                    its corporate existence and the corporate
                                    existence of each of its Subsidiaries in
                                    accordance with the respective
                                    organizational documents of each such
                                    Subsidiary and the material rights (charter
                                    and statutory) and franchises of the Company
                                    and each such Subsidiary; provided, however,
                                    that the Company shall not be required to
                                    preserve, with respect to itself, any
                                    material right or franchise and, with
                                    respect to any of its Subsidiaries, any such
                                    existence, material right or franchise, if
                                    the Board of Directors of the Company shall
                                    determine in good faith that the
                                    preservation thereof is no longer desirable
                                    in the conduct of the business of the
                                    Company and the Subsidiaries, taken as a
                                    whole.



                                       34
<PAGE>


                           (xi)     Payment of Taxes and Other Claims. The
                                    Company shall pay or discharge or cause to
                                    be paid or discharged, before the same shall
                                    become delinquent, (A) all material taxes,
                                    assessments and governmental charges
                                    (including withholding taxes and any
                                    penalties, interest and additions to taxes)
                                    levied or imposed upon it or any of its
                                    Subsidiaries or properties of it or any of
                                    its Subsidiaries and (B) all lawful claims
                                    for labor, materials and supplies that, if
                                    unpaid, might by law become a Lien upon the
                                    property of it or any of its Subsidiaries;
                                    provided, however, that the Company shall
                                    not be required to pay or discharge or cause
                                    to be paid or discharged any such tax,
                                    assessment, charge or claim whose amount,
                                    applicability or validity is being contested
                                    in good faith by appropriate proceedings
                                    properly instituted and diligently conducted
                                    for which adequate reserves, to the extent
                                    required under GAAP, have been taken.

                           (xii)    Maintenance of Properties and Insurance.

                                    (A)      The Company shall, and shall cause
                                             each of its Subsidiaries to,
                                             maintain its material properties in
                                             good working order and condition
                                             (subject to ordinary wear and tear)
                                             and make all necessary repairs,
                                             renewals, replacements, additions,
                                             betterments and improvements
                                             thereto and actively conduct and
                                             carry on its business; provided,
                                             however, that nothing in this
                                             section (l)(xii) shall prevent the
                                             Company or any of its Subsidiaries
                                             from discontinuing the operation
                                             and maintenance of any of its
                                             properties, if such discontinuance
                                             is, in the good faith judgment of
                                             the Board of Directors of the
                                             Company or the Subsidiary, as the
                                             case may be, desirable in the
                                             conduct of their respective
                                             businesses and is not
                                             disadvantageous in any material
                                             respect to the Holders.

                                    (B)      The Company shall provide or cause
                                             to be provided, for itself and each
                                             of its Subsidiaries, insurance
                                             (including appropriate
                                             self-insurance) against loss or
                                             damage of the kinds that, in the
                                             good faith judgment of the Board of
                                             Directors of the Company, are
                                             adequate and appropriate for the
                                             conduct of the business of the
                                             Company and such Subsidiaries in a
                                             prudent manner, with reputable
                                             insurers or with the government of
                                             the United States of America or any
                                             agency or instrumentality thereof,
                                             in such amounts, with such
                                             deductibles, and by such methods as
                                             shall be 



                                       35
<PAGE>


                                             customary, in the good faith 
                                             judgment of the Board of Directors
                                             of the Company, for companies 
                                             similarly situated in the industry.

                           (xiii)   Compliance with Laws. The Company shall
                                    comply, and shall cause each of its
                                    Subsidiaries to comply, with all applicable
                                    statutes, rules, regulations, orders and
                                    restrictions of the United States of
                                    America, all states and municipalities
                                    thereof, and of any governmental department,
                                    commission, board, regulatory authority,
                                    bureau, agency and instrumentality of the
                                    foregoing, in respect of the conduct of
                                    their respective businesses and the
                                    ownership of their respective properties,
                                    except for such noncompliances as are not in
                                    the aggregate reasonably likely to have a
                                    material adverse effect on the financial
                                    condition or results of operations of the
                                    Company and its Subsidiaries, taken as a
                                    whole.

                  (m)      Definitions. As used in this Article FOURTH, Section
                           A of the Certificate of Incorporation, the following
                           terms shall have the following meanings (with terms
                           deemed in the singular having comparable meanings
                           when used in the plural and vice versa), unless the
                           context otherwise requires:

                           "Acquired Indebtedness" of any specified Person means
                           Indebtedness of any other Person existing at the time
                           such other Person is merged with or into or becomes a
                           Restricted Subsidiary of such specified Person,
                           including Indebtedness Incurred in connection with,
                           or in contemplation of, such other Person's becoming
                           a Restricted Subsidiary of such specified Person.

                           "Affiliate" of any specified Person means any other
                           Person, directly or indirectly, controlling or
                           controlled by or under direct or indirect common
                           control with such specified Person. For the purposes
                           of this definition, "control" when used with respect
                           to any Person means the power to direct the
                           management and policies of such Person, directly or
                           indirectly, whether through the ownership of voting
                           securities, by contract or otherwise; and the terms
                           "controlling" and "controlled" have meanings
                           correlative to the foregoing; provided that the
                           beneficial ownership of 10% or more of the Voting
                           Stock of a Person shall be deemed to be control.

                           "Asset Disposition" means any sale, lease, transfer
                           or other disposition (or series of related sales,
                           leases, transfers or dispositions) of shares of
                           Capital Stock of a Restricted Subsidiary (other than
                           directors' qualifying shares), property or other
                           assets, including by way of a Sale/Leaseback
                           Transaction (each referred to for the purposes of
                           this definition as a "disposition"), by the Company
                           or any of its Restricted Subsidiaries (including any



                                       36
<PAGE>


                           disposition by means of a merger, consolidation or
                           similar transaction) other than (i) a disposition by
                           a Restricted Subsidiary to the Company or by the
                           Company or a Restricted Subsidiary to a Restricted
                           Subsidiary, (ii) a disposition of property or assets
                           in the ordinary course of business, (iii)
                           dispositions of inventory in the ordinary course of
                           business, (iv) dispositions of obsolete or worn-out
                           equipment and (v) dispositions with a fair market
                           value of less than $1.0 million in any 12-month
                           period.

                           "Average Life" means, as of the date of
                           determination, with respect to any Indebtedness or
                           Preferred Stock, the quotient obtained by dividing
                           (i) the sum of the product of the numbers of years
                           from the date of determination to the dates of each
                           successive scheduled principal payment of such
                           Indebtedness or redemption or similar payment with
                           respect to such Preferred Stock multiplied by the
                           amount of such payment by (ii) the sum of all such
                           payments.

                           "Bank Indebtedness" means any and all Obligations,
                           whether outstanding on the Issue Date or thereafter
                           incurred, payable by the Company or its Subsidiaries
                           under or in respect of the New Credit Facility and
                           any related notes, collateral documents, letters of
                           credit and guarantees, including, without limitation,
                           principal, premium (if any), interest (including
                           interest accruing on or after the filing of any
                           petition in bankruptcy or for reorganization relating
                           to the Company whether or not a claim for post filing
                           interest is allowed in such proceedings), fees,
                           charges, expenses, reimbursement obligations,
                           guarantees, indemnities and all other amounts payable
                           thereunder or in respect thereof.

                           "Board of Directors" means the Board of Directors or
                           equivalent governing body of a Person (or the general
                           partner of such Person, as the case may be) or any
                           committee thereof duly authorized to act on behalf of
                           such Board of Directors or equivalent governing body.

                           "Business Day" means a day other than a Saturday,
                           Sunday or other day on which banking institutions in
                           New York State are authorized or required by law to
                           close.

                           "Capitalized Lease Obligation" of a Person means an
                           obligation of such Person that is required to be
                           classified and accounted for on the balance sheet of
                           such Person as a capitalized lease for financial
                           reporting purposes in accordance with GAAP, and the
                           amount of Indebtedness represented by such obligation
                           shall be the capitalized amount of such obligation
                           determined in accordance with GAAP; and the Stated
                           Maturity thereof shall be the date of the last
                           payment of rent or any other amount due under such
                           lease.



                                       37
<PAGE>


                           "Capital Stock" of any Person means (i) in the case
                           of a corporation, corporate stock, (ii) in the case
                           of an association or business entity, any and all
                           shares, interests, participations, rights or other
                           equivalents (however designated) of corporate stock,
                           (iii) in the case of a partnership or limited
                           liability company, partnership or membership
                           interests (whether general or limited) and (iv) any
                           other interest or participation that confers on a
                           Person the right to receive a share of the profits
                           and losses of, or distributions of assets of, the
                           issuing Person, in each case, including Preferred
                           Stock.

                           "Change of Control" means the occurrence of any of
                           the following events:

                           (i)(A) the consummation of any transaction
                           (including, without limitation, any merger or
                           consolidation) the result of which is that any
                           "person" (as such term is used in Sections 13(d) and
                           14(d) of the Exchange Act), other than one or more
                           Permitted Holders, is or becomes the beneficial owner
                           (as defined in Rules 13d-3 and 13d-5 under the
                           Exchange Act), directly or indirectly, of more than
                           35% of the total voting power of the Voting Stock of
                           the Company and (B) the Permitted Holders
                           "beneficially own" (as defined in Rules 13d-3 and
                           13d-5 under the Exchange Act), directly or
                           indirectly, in the aggregate a lesser percentage of
                           the total voting power of the Voting Stock of the
                           Company than such other person and do not have the
                           right or ability by voting power, contract or
                           otherwise to elect or designate for election a
                           majority of the Board of Directors of the Company;

                           (ii) the first day on which a majority of the members
                           of the Board of Directors of the Company are not
                           Continuing Directors;

                           (iii) any sale, lease, exchange or other transfer (in
                           one transaction or a series of related transactions)
                           of all, or substantially all, the assets of the
                           Company and its Restricted Subsidiaries taken as a
                           whole to any "person" or group of "persons" for
                           purposes of Section 13(d) of the Exchange Act (other
                           than to any Wholly Owned Subsidiary of the Company or
                           to one or more Permitted Holders); or

                           (iv) the adoption of a plan of liquidation of the
                           Company.

                  "Code" means the Internal Revenue Code of 1986, as amended.

                  "Commission" means the Securities and Exchange Commission.

                  "Consolidated Coverage Ratio" as of any date of determination
                  means the ratio of 


                                       38
<PAGE>


                  (i) the aggregate amount of EBITDA for the period of the most
                  recent four consecutive fiscal quarters for which internal
                  financial information is available ending at least 30 days
                  prior to the date of such determination to (ii) Consolidated
                  Interest Expense for such four fiscal quarters; provided,
                  however, that, without duplication, (1) if the Company or any
                  Restricted Subsidiary has Incurred any Indebtedness (other
                  than in the case of Indebtedness arising under revolving
                  credit borrowings, in which case Consolidated Interest Expense
                  shall be computed based upon the average daily balance of such
                  Indebtedness during the period) since the beginning of such
                  period that remains outstanding or if the transaction giving
                  rise to the need to calculate the Consolidated Coverage Ratio
                  is an Incurrence of Indebtedness, or both, EBITDA and
                  Consolidated Interest Expense for such period shall be
                  calculated after giving effect on a pro forma basis to such
                  Indebtedness as if such Indebtedness had been Incurred on the
                  first day of such period and the discharge of any other
                  Indebtedness repaid, repurchased, defeased or otherwise
                  discharged with the proceeds of such new Indebtedness as if
                  such discharge had occurred on the first day of such period,
                  (2) if since the beginning of such period the Company or any
                  Restricted Subsidiary shall have made any Asset Disposition or
                  if the transaction giving rise to the need to calculate the
                  Consolidated Coverage Ratio is an Asset Disposition, the
                  EBITDA for such period shall be reduced by an amount equal to
                  the EBITDA (if positive) directly attributable to the assets
                  which are the subject of such Asset Disposition for such
                  period, or increased by an amount equal to the EBITDA (if
                  negative) directly attributable thereto for such period and
                  Consolidated Interest Expense for such period shall be reduced
                  by an amount equal to the Consolidated Interest Expense
                  directly attributable to any Indebtedness of the Company or
                  any Restricted Subsidiary repaid, repurchased, defeased or
                  otherwise discharged with respect to the Company and its
                  continuing Restricted Subsidiaries in connection with such
                  Asset Disposition for such period (and, if the Capital Stock
                  of any Restricted Subsidiary is sold, the Consolidated
                  Interest Expense for such period directly attributable to the
                  Indebtedness of such Restricted Subsidiary to the extent the
                  Company and its continuing Restricted Subsidiaries are no
                  longer liable for such Indebtedness after such sale), (3) if
                  since the beginning of such period the Company or any
                  Restricted Subsidiary (by merger or otherwise) shall have made
                  an Investment in any Restricted Subsidiary (or any Person
                  which becomes a Restricted Subsidiary) or an acquisition of
                  assets, including any acquisition of assets occurring in
                  connection with a transaction causing a calculation to be made
                  hereunder, which constitutes all or substantially all of an
                  operating unit of a business, EBITDA and Consolidated Interest
                  Expense for such period shall be calculated after giving pro
                  forma effect thereto (including the Incurrence or retirement
                  of any Indebtedness) as if such Investment or acquisition
                  occurred on the first day of such period and EBITDA for such
                  period shall be calculated without giving effect to clause
                  (ii) set forth in the definition of Consolidated Net Income
                  and (4) if since the beginning of such period any Person (that
                  subsequently became a Restricted Subsidiary or was merged with
                  or into the 



                                       39
<PAGE>


                  Company or any Restricted Subsidiary since the beginning of
                  such period) shall have made any Asset Disposition or any
                  Investment that would have required an adjustment pursuant to
                  clause (2) or (3) above if made by the Company or a Restricted
                  Subsidiary during such period, EBITDA and Consolidated
                  Interest Expense for such period shall be calculated after
                  giving pro forma effect thereto as if such Asset Disposition
                  or Investment occurred on the first day of such period. For
                  purposes of this definition, whenever pro forma effect is to
                  be given to an acquisition of assets, the amount of income or
                  earnings relating thereto and the amount of Consolidated
                  Interest Expense associated with any Indebtedness Incurred in
                  connection therewith, the pro forma calculations shall be
                  determined in good faith by a responsible financial or
                  accounting officer of the Company. If any Indebtedness bears a
                  floating rate of interest and is being given pro forma effect,
                  the interest expense on such Indebtedness shall be calculated
                  as if the rate in effect on the date of determination had been
                  the applicable rate for the entire period (taking into account
                  any Interest Rate Agreement applicable to such Indebtedness).

                  "Consolidated Interest Expense" means, for any period, the
                  total interest expense of the Company and its consolidated
                  Restricted Subsidiaries, plus, to the extent not included in
                  such interest expense, (i) interest expense attributable to
                  capital leases, (ii) amortization of debt discount and debt
                  issuance cost (excluding the amortization of deferred
                  financing fees), (iii) capitalized interest, (iv) non-cash
                  interest expense, (v) commissions, discounts and other fees
                  and charges owed with respect to letters of credit and
                  bankers' acceptance financing, (vi) interest actually paid by
                  the Company or any such Restricted Subsidiary under any
                  Guarantee of Indebtedness or other obligation of any other
                  Person, (vii) net costs associated with Hedging Obligations
                  (including amortization of fees), (viii) (A) Disqualified
                  Stock dividends and (B) Preferred Stock dividends of a
                  Restricted Subsidiary, in each case, other than dividends paid
                  in Capital Stock (except Disqualified Stock) and only in
                  respect of such Disqualified Stock or Preferred Stock held by
                  Persons other than the Company or a Wholly Owned Subsidiary
                  and (ix) the cash contributions to any employee stock
                  ownership plan or similar trust to the extent such
                  contributions are used by such plan or trust to pay interest
                  or fees to any Person (other than the Company or a
                  Wholly-Owned Subsidiary) in connection with Indebtedness
                  Incurred by such plan or trust; provided, however, that there
                  shall be excluded therefrom (A) any such interest expense of
                  any Unrestricted Subsidiary to the extent the related
                  Indebtedness is not Guaranteed or paid by the Company or any
                  Restricted Subsidiary, (B) interest on Put/Call Promissory
                  Notes, (C) dividends on Put/Call Preferred Stock and (D)
                  dividends on the Redeemable Preferred Stock.

                  "Consolidated Net Income" means, for any period, the net
                  income (loss) of the Company and its consolidated
                  Subsidiaries; provided, however, that there shall not be
                  included in such Consolidated Net Income:



                                       40
<PAGE>


                  (i) any net income (loss) of any Person (other than the
                  Company) if such Person is not a Restricted Subsidiary, except
                  that (A), subject to the limitations contained in clause (iv)
                  below, the Company's equity in the net income of any such
                  Person for such period shall be included in such Consolidated
                  Net Income up to the aggregate amount of cash actually
                  distributed by such Person during such period to the Company
                  or a Restricted Subsidiary as a dividend or other distribution
                  (subject, in the case of a dividend or other distribution paid
                  to a Restricted Subsidiary, to the limitations contained in
                  clause (iii) below) and (B) the Company's equity in a net loss
                  of any such Person (other than an Unrestricted Subsidiary) for
                  such period shall be included in determining such Consolidated
                  Net Income,

                  (ii) any net income (loss) of any Person acquired by the
                  Company or a Subsidiary in a pooling of interests transaction
                  for any period prior to the date of such acquisition,

                  (iii) any net income of any Restricted Subsidiary to the
                  extent such Restricted Subsidiary is prohibited, directly or
                  indirectly, from paying dividends or distributions, directly
                  or indirectly, to the Company or any other Restricted
                  Subsidiary, except that (A), subject to the exclusion
                  contained in clause (iv) below, the Company's equity in the
                  net income of any such Restricted Subsidiary for such period
                  shall be included in such Consolidated Net Income up to the
                  aggregate amount of cash actually distributed by such
                  Restricted Subsidiary during such period to the Company or
                  another Restricted Subsidiary as a dividend or other
                  distribution (subject, in the case of a dividend paid to
                  another Restricted Subsidiary, to the limitation contained in
                  this clause) and (B) the Company's equity in a net loss of any
                  such Restricted Subsidiary for such period shall be included
                  in determining such Consolidated Net Income,

                  (iv) any gain or loss realized upon the sale or other
                  disposition of any property, plant or equipment of the Company
                  or its consolidated Subsidiaries (including pursuant to any
                  Sale/Leaseback Transaction) which is not sold or otherwise
                  disposed of in the ordinary course of business and any gain or
                  loss realized upon the sale or other disposition of any
                  Capital Stock of any Person,

                  (v) any extraordinary gain or loss,

                  (vi) the cumulative effect of a change in accounting
                  principles,

                  (vii) foreign currency exchange gains and losses, and

                  (viii) any income (loss) from discontinued operations.



                                       41
<PAGE>


                  Notwithstanding the foregoing, for the purpose of section
                  (l)(ii) only, there shall be excluded from Consolidated Net
                  Income any dividends, repayments of loans or advances or other
                  transfers of assets from Unrestricted Subsidiaries to the
                  Company or a Restricted Subsidiary to the extent such
                  dividends, repayments or transfers increase the amount of
                  Restricted Payments permitted under paragraph (l)(ii)(z)(iv).

                  "Consolidated Net Worth" means the total of the amounts shown
                  on the balance sheet of the Company and its Restricted
                  Subsidiaries, determined on a consolidated basis in accordance
                  with GAAP, as of the end of the most recent fiscal quarter of
                  the Company ending at least 30 days prior to the taking of any
                  action for the purpose of which the determination is being
                  made, as (i) the par or stated value of all outstanding
                  Capital Stock of the Company plus (ii) paid-in capital or
                  capital surplus relating to such Capital Stock plus (iii) any
                  retained earnings or earned surplus less (A) any accumulated
                  deficit and (B) any amounts attributable to Disqualified
                  Stock.

                  "Continuing Directors" means, as of any date of determination,
                  any member of the Board of Directors of the Company who (i)
                  was a member of such Board of Directors on the Issue Date or
                  (ii) was nominated by either of the Principals or the Holders
                  to serve on such Board of Directors.

                  "Currency Agreement" means in respect of a Person any foreign
                  exchange contract, currency swap agreement or other similar
                  agreement or arrangement as to which such Person is a party or
                  a beneficiary.

                  "Disqualified Stock" means, with respect to any Person, any
                  Capital Stock which by its terms (or by the terms of any
                  security into which it is convertible or for which it is
                  exchangeable) or upon the happening of any event (other than
                  as a result of a change of control or an asset sale) (i)
                  matures or is mandatorily redeemable pursuant to a sinking
                  fund obligation or otherwise, (ii) is convertible or
                  exchangeable automatically or at the option of the holder
                  thereof for Indebtedness or other Disqualified Stock or (iii)
                  is redeemable at the option of the holder thereof, in whole or
                  in part, in each case on or prior to the 91st day following
                  the Stated Maturity of the Redeemable Preferred Stock. For
                  avoidance of doubt, the Redeemable Preferred Stock shall not
                  be deemed Disqualified Stock.

                  "Dividend Payment Date" means August 31, November 30, February
                  28 (or February 29, as applicable) and May 31 of each year,
                  commencing August 31, 1999.

                  "Dividend Period" means the Initial Dividend Period and,
                  thereafter, each Quarterly Dividend Period.



                                       42
<PAGE>


                  "Dividend Record Date" means August 15, November 15, February
                  15 and May 15 of each year.

                  "EBITDA" for any period means the Consolidated Net Income for
                  such period, plus the following (without duplication) to the
                  extent deducted in calculating such Consolidated Net Income:
                  (i) income tax expense, (ii) Consolidated Interest Expense,
                  (iii) depreciation expense, (iv) amortization expense
                  (including amortization of goodwill and other intangibles),
                  (v) non-cash management compensation expense, (vi) any
                  increase in cost of sales resulting from the write-up of
                  inventory in accordance with Accounting Principles Board
                  Opinion No. 16 (or a successor provision) and (vii) all other
                  non-cash items reducing Consolidated Net Income (excluding any
                  non-cash item to the extent it requires an accrual of or
                  reserve for cash disbursements for any future period), in each
                  case for such period, (viii) any extraordinary, non-recurring
                  or unusual loss plus any net loss realized in connection with
                  an asset disposition and (ix) all premiums on prepayments of
                  Indebtedness and minus (x) all non-cash items increasing
                  Consolidated Net Income.

                  "Equity Offering" means any public or private offering by the
                  Company of its Common Stock or Preferred Stock, or options,
                  warrants or rights to acquire such Capital Stock other than
                  offerings registered on Forms S-4 or S-8 (or any successor
                  forms).

                  "Exchange Act" means the Securities Exchange Act of 1934, as
                  amended.

                  "GAAP" means generally accepted accounting principles in the
                  United States of America as in effect as of the date of this
                  Certificate of Designation, including those set forth in the
                  opinions and pronouncements of the Accounting Principles Board
                  of the American Institute of Certified Public Accountants and
                  statements and pronouncements of the Financial Accounting
                  Standards Board or in such other statements by such other
                  entity as approved by a significant segment of the accounting
                  profession. All ratios and computations based on GAAP
                  contained in this Article FOURTH, Section A of the Certificate
                  of Incorporation shall be computed in conformity with GAAP.

                  "Guarantee" means a guarantee, direct or indirect, in any
                  manner (including, without limitation, letters of credit and
                  reimbursement agreements in respect thereof), of all or any
                  part of any Indebtedness; provided, however, that the term
                  "Guarantee" shall not include endorsements for collection or
                  deposit in the ordinary course of business. The term
                  "Guarantee" used as a verb has a corresponding meaning.

                  "Hedging Obligations" of any Person means the obligations of
                  such Person pursuant to any Interest Rate Agreement or
                  Currency Agreement.



                                       43
<PAGE>


                  "Holder" means a holder of record of Redeemable Preferred
                  Stock.

                  "Incur" means issue, assume, Guarantee, incur or otherwise
                  become liable for; provided, however, that any Indebtedness or
                  Disqualified Stock of a Person existing at the time such
                  Person becomes a Subsidiary (whether by merger, consolidation,
                  acquisition or otherwise) shall be deemed to be incurred by
                  such Subsidiary at the time it becomes a Subsidiary.

                  "Indebtedness" means, with respect to any Person on any date
                  of determination (without duplication),

                  (i) the principal of and, if any is due and payable at such
                  time, premium in respect of indebtedness of such Person for
                  borrowed money,

                  (ii) the principal of and, if any is due and payable at such
                  time, premium in respect of obligations of such Person
                  evidenced by bonds, debentures, notes or other similar
                  instruments,

                  (iii) all obligations of such Person in respect of
                  unreimbursed drawings under letters of credit or other similar
                  instruments (including reimbursement obligations with respect
                  thereto) (other than letters of credit securing obligations
                  entered into in the ordinary course of business to the extent
                  any drawings thereunder are reimbursed no later than the fifth
                  Business Day following receipt by such Person of a demand for
                  reimbursement following payment on the letter of credit),

                  (iv) all obligations of such Person to pay the deferred and
                  unpaid purchase price of property or services (except Trade
                  Payables), which purchase price is due more than six months
                  after the date of placing such property in service or taking
                  delivery and title thereto or the completion of such services,

                  (v) all Capitalized Lease Obligations of such Person,

                  (vi) the amount of all obligations of such Person with respect
                  to the redemption, repayment or other repurchase of any
                  Disqualified Stock or, with respect to any Restricted
                  Subsidiary, the aggregate liquidation preference of any
                  Preferred Stock (but excluding, in each case, any accrued
                  dividends),

                  (vii) all Indebtedness of other Persons secured by a Lien on
                  any asset of such Person, whether or not such Indebtedness is
                  assumed by such Person; provided, however, that the amount of
                  such Indebtedness shall be the lesser of (A) the fair market
                  value of such asset at such date of determination and (B) the
                  amount of such Indebtedness of such other Person,



                                       44
<PAGE>


                  (viii) all Indebtedness of other Persons to the extent
                  Guaranteed by such Person,

                  (ix) to the extent not otherwise included in this definition,
                  Hedging Obligations, and

                  (x) Acquired Indebtedness.

                  The amount of Indebtedness of any Person at any date shall be
                  the outstanding balance at such date of all unconditional
                  obligations as described above (or the accreted value thereof,
                  in the case of Indebtedness that does not require current
                  payments of interest) and the maximum liability, upon the
                  occurrence of the contingency giving rise to the obligation,
                  of any contingent obligations at such date. Indebtedness shall
                  not include interest or commitment or other fees.

                  "Initial Dividend Period" means the dividend period commencing
                  on the Issue Date and ending on the day before the first
                  Dividend Payment Date to occur thereafter.

                  "Interest Rate Agreement" means with respect to any Person any
                  interest rate protection agreement, interest rate future
                  agreement, interest rate option agreement, interest rate swap
                  agreement, interest rate cap agreement, interest rate collar
                  agreement, interest rate hedge agreement or other similar
                  agreement or arrangement as to which such Person is party or a
                  beneficiary.

                  "Investment" in any Person means any direct or indirect
                  advance, loan (other than advances to customers or suppliers
                  in the ordinary course of business that are recorded as
                  accounts receivable on the balance sheet of such Person and
                  advances to employees of such Person and its Restricted
                  Subsidiaries made in the ordinary course of business) or other
                  extension of credit (including by way of Guarantee or similar
                  arrangement) or capital contribution to (by means of any
                  transfer of cash or other property to others or any payment
                  for property or services for the account or use of others), or
                  any purchase or acquisition for consideration of Capital
                  Stock, Indebtedness or other similar instruments issued by
                  such Person; provided that if the sole consideration for any
                  such investment is Capital Stock of such Person or its
                  Subsidiaries that is not Disqualified Stock, then such
                  investment shall not be deemed an Investment for purposes of
                  this Certificate of Designation. "Investment" shall exclude
                  extensions of trade credit by the Company and its Restricted
                  Subsidiaries on commercially reasonable terms in accordance
                  with such Person's normal trade practices. For purposes of the
                  definition of "Unrestricted Subsidiary" and paragraph (l)(ii)
                  of this Article FOURTH, Section A of the Certificate of
                  Incorporation, (i) "Investment" shall include the portion
                  (proportionate to the Company's equity interest in such
                  Subsidiary) of the fair market value of the net assets of any
                  Subsidiary of the Company at the time that 



                                       45
<PAGE>


                  such Subsidiary is designated an Unrestricted Subsidiary;
                  provided, however, that upon a redesignation of such
                  Subsidiary as a Restricted Subsidiary, the Company shall be
                  deemed to continue to have a permanent "Investment" in an
                  Unrestricted Subsidiary in an amount (if positive) equal to
                  (x) the Company's "Investment" in such Subsidiary at the time
                  of such original designation less (y) the portion
                  (proportionate to the Company's equity interest in such
                  Subsidiary) of the fair market value of the net assets of such
                  Subsidiary at the time that such Subsidiary is so
                  re-designated a Restricted Subsidiary; and (ii) any property
                  transferred to or from an Unrestricted Subsidiary shall be
                  valued at its fair market value at the time of such transfer,
                  in each case as determined in good faith by the Board of
                  Directors. For the purposes of calculating the amount of other
                  "Investments," including Permitted Investments, the amount of
                  any Investment shall be the original cost of such Investment
                  plus the cost of all additional Investments by the Company or
                  any of its Restricted Subsidiaries, without any adjustments
                  for increases or decreases in value, or write-ups, write-downs
                  or write-offs with respect to such Investment, reduced by the
                  payment of dividends or distributions in connection with such
                  Investment or any other amounts received in respect of such
                  Investment; provided that no such payment of dividends or
                  distributions or receipt of any such other amounts shall
                  reduce the amount of any Investment if such payment of
                  dividends or distributions or receipt of any such amounts
                  would be included in Consolidated Net Income.

                  "Issue Date" means the date on which the Redeemable Preferred
                  Stock is originally issued under this Certificate of
                  Incorporation.

                  "Lien" means any mortgage, pledge, security interest,
                  encumbrance, lien or charge of any kind (including any
                  conditional sale or other title retention agreement or lease
                  in the nature thereof).

                  "Management Agreement" means the Amended and Restated
                  Management Advisory Services Agreement, dated as of May 29,
                  1998, between the Company, certain of its Subsidiaries and
                  Mentmore, as it may be amended, modified, supplemented or
                  restated from time to time.

                  "Management Equity Interests" means shares of Capital Stock of
                  the Company or of a Restricted Subsidiary or options, warrants
                  or stock appreciation or similar rights to purchase such
                  Capital Stock, in each case held by any current or former
                  officer, employee or other member of management (or their
                  estates or beneficiaries under their estates or their
                  respective family members) of the Company or of such
                  Restricted Subsidiary pursuant to any management equity
                  subscription agreement, employment agreement, employee benefit
                  plan, stockholder agreement, warrant agreement, stock option
                  agreement or similar management investor agreement and which
                  may be required to be repurchased by the Company or such
                  Restricted Subsidiary, or which may be repurchased at the



                                       46
<PAGE>


                  option of the Company or such Restricted Subsidiary, in each
                  case pursuant to the terms of any agreement governing such
                  equity interests or under which such equity interests were
                  issued.

                  "Mentmore" means Mentmore Holdings Corporation and its
                  successors.

                  "Net Cash Proceeds", with respect to any issuance or sale of
                  Capital Stock, means the cash proceeds of such issuance or
                  sale net of attorneys' fees, accountants' fees, underwriters'
                  or placement agents' fees, discounts or commissions and
                  brokerage, consultant and other fees actually incurred in
                  connection with such issuance or sale and net of taxes paid or
                  payable as a result thereof.

                  "New Credit Facility" means the credit facility dated as of
                  April 22, 1999, among the Company, its Subsidiaries, Societe
                  Generale, as administrative agent, and Lehman Commercial
                  Paper, Inc., as syndication agent, and the lenders from time
                  to time party thereto, including all collateral documents,
                  instruments and agreements executed in connection therewith,
                  and the term New Credit Facility shall also include any
                  amendments, supplements, modifications, extensions, renewals,
                  restatements or refundings thereof and any credit facilities
                  or agreements that replace, refund or refinance any part of
                  the loans, other credit facilities or commitments thereunder,
                  including any such replacement, refunding or refinancing
                  facility that increases the amount borrowable thereunder or
                  alters the maturity thereof.

                  "Non-Recourse Debt" means Indebtedness (i) as to which neither
                  the Company nor any Restricted Subsidiary (a) provides any
                  Guarantee or credit support of any kind (including any
                  undertaking, Guarantee, indemnity, agreement or instrument
                  that would constitute Indebtedness) or (b) is directly or
                  indirectly liable (as a guarantor or otherwise) and (ii) no
                  default with respect to which (including any rights that the
                  holders thereof may have to take enforcement action against an
                  Unrestricted Subsidiary) would permit (upon notice, lapse of
                  time or both) any holder of any other Indebtedness of the
                  Company or any Restricted Subsidiary to declare a default
                  under such other Indebtedness or cause the payment thereof to
                  be accelerated or payable prior to its stated maturity.

                  "Obligations" means any principal, interest, penalties, fees,
                  indemnities, damages and other liabilities payable under the
                  instruments governing, or under agreements entered into in
                  connection with, any Indebtedness.

                  "Officer" means the Chairman of the Board, the President, any
                  Vice President, the Treasurer or the Secretary of the Company,
                  as applicable.

                  "Officers' Certificate" means a certificate signed by two
                  Officers.



                                       47
<PAGE>


                  "Opinion of Counsel" means a written opinion from Winston &
                  Strawn or other outside legal counsel to the Company.

                  "Permitted Holders" means (i) Richard L. Kramer and William L.
                  Remley (the "Principals"), (ii) any spouse or immediate family
                  member of a Principal and any child or spouse of any spouse or
                  immediate family member of a Principal, (iii) a trust,
                  corporation, partnership or other entity, the beneficiaries,
                  stockholders, partners, owners or Persons beneficially
                  holding, directly or indirectly, a controlling interest of
                  which consists of a Principal and/or such other Persons
                  referred to in the immediately preceding clause (ii) or (iv)
                  the trustees of any trust referred to in clause (iii).



                                       48
<PAGE>


                  "Permitted Investment" means an Investment by the Company or
                  any Restricted Subsidiary in (i) the Company or in a
                  Restricted Subsidiary or a Person which will, upon the making
                  of such Investment, become a Restricted Subsidiary; provided,
                  however, that the primary business of such Restricted
                  Subsidiary is a Related Business; (ii) another Person if as a
                  result of such Investment such other Person is merged or
                  consolidated with or into, or transfers or conveys all or
                  substantially all its assets to, the Company or a Restricted
                  Subsidiary; provided, however, that such Person's primary
                  business is a Related Business; (iii) Temporary Cash
                  Investments; (iv) receivables owing to the Company or any
                  Restricted Subsidiary, if created or acquired in the ordinary
                  course of business and payable or dischargeable in accordance
                  with customary trade terms; provided, however, that such trade
                  terms may include such concessionary trade terms as the
                  Company or any such Restricted Subsidiary deems reasonable
                  under the circumstances; (v) payroll, travel, relocation and
                  similar advances to cover matters that are expected at the
                  time of such advances ultimately to be treated as expenses for
                  accounting purposes and that are made in the ordinary course
                  of business; (vi) loans or advances to employees made in the
                  ordinary course of business of the Company or such Restricted
                  Subsidiary; (vii) stock, obligations or securities received in
                  settlement of debts created in the ordinary course of business
                  and owing to the Company or any Restricted Subsidiary or in
                  satisfaction of judgments; (viii) Guarantees permitted to be
                  made pursuant to section (l)(v); (ix) Investments in
                  securities of trade creditors received in settlement of
                  obligations or pursuant to any plan of reorganization or
                  similar arrangement upon the bankruptcy of insolvency of any
                  trade creditors of customers; (x) Currency Agreements and
                  Interest Rate Agreements entered into in the ordinary course
                  of business; provided that such agreements are entered into
                  for bona fide hedging purposes, are not for speculation or
                  trading purposes and are designed to protect against
                  fluctuations in interest rates, currency exchange rates or
                  commodity prices, as the case may be, and, in the case of
                  Interest Rate Agreements, any such Interest Rate Agreement has
                  a notional amount corresponding to the Indebtedness being
                  hedged thereby; (xi) Investments made by the Company or any
                  Restricted Subsidiary in connection with an Asset Disposition
                  made in compliance with the provisions of the Indenture
                  governing the 2007 Notes; (xii) any acquisition of assets
                  solely in exchange for the issuance of Capital Stock (other
                  than Disqualified Stock) of the Company; (xiii) any Investment
                  existing on the date of this Certificate of Incorporation; and
                  (xiv) other Investments in any Person having an aggregate fair
                  market value, when taken together with all other Investments
                  made pursuant to this clause (xiii) that are at the time
                  outstanding, not to exceed $10 million.

                  "Person" means any individual, corporation, partnership joint
                  venture, association, joint-stock company, trust, limited
                  liability company, unincorporated organization, government or
                  any agency or political subdivision thereof or any other
                  entity.



                                       49
<PAGE>


                  "Preferred Stock", as applied to the Capital Stock of any
                  corporation, means Capital Stock of any class or classes
                  (however designated) which is preferred as to the payment of
                  dividends, or as to the distribution of assets upon any
                  voluntary or involuntary liquidation or dissolution of such
                  corporation, over shares of Capital Stock of any other class
                  of such corporation.

                  "Put/Call Preferred Stock" means Preferred Stock which may be
                  issued by the Company or a Restricted Subsidiary to the
                  holders of any Management Equity Interests of the Company or a
                  Restricted Subsidiary in exchange for such Management Equity
                  Interests held by such holders; provided that (a) payments on
                  such Preferred Stock, including pursuant to any redemption,
                  repurchase or default provision, and payments of dividends on
                  such Preferred Stock, in each case in cash, may be made only
                  to the extent Restricted Payments would then be permitted to
                  be made in accordance with section (l)(ii) with any such
                  payment being included in the calculation of the amount of
                  Restricted Payments pursuant to clause (z) of such section and
                  (b) no failure to pay such Preferred Stock or failure to
                  comply with any other provision of such Preferred Stock or of
                  the instrument governing such Preferred Stock shall cause a
                  default or event of default under any Indebtedness of the
                  Company and its Restricted Subsidiaries.

                  "Put/Call Promissory Notes" means promissory notes which may
                  be issued by the Company or a Restricted Subsidiary to the
                  holders of any Management Equity Interests of the Company or
                  such Restricted Subsidiary in exchange for such Management
                  Equity Interests held by such holders; provided that (a)
                  payments of principal on such notes, including pursuant to any
                  guarantee, redemption, repurchase or default provision, and
                  payments of interest on such notes, including pursuant to any
                  guarantee, in each case in cash, may be made only to the
                  extent Restricted Payments would then be permitted to be made
                  in accordance with section (l)(ii), with any such payment
                  being included in the calculation of the amount of Restricted
                  Payments pursuant to clause (z) of such section and (b) no
                  failure to pay such notes or failure to comply with any other
                  provision of such notes or of the instrument governing such
                  notes shall cause a default or event of default under any
                  Indebtedness of the Company and its Restricted Subsidiaries.

                  "Quarterly Dividend Period" shall mean the quarterly period
                  commencing on each August 31, November 30, February 28 (or
                  February 29, as applicable) and May 31 and ending on the day
                  before the following Dividend Payment Date.

                  "Redemption Date" with respect to any shares of Redeemable
                  Preferred Stock, means the date on which such shares of
                  Redeemable Preferred Stock are redeemed by the Company.

                  "Refinancing Indebtedness" means Indebtedness issued in
                  exchange for, or that refunds, refinances, replaces, renews,
                  repays or extends (including pursuant to any 



                                       50
<PAGE>


                  defeasance or discharge mechanism) (collectively,
                  "refinances," and "refinanced" shall have a correlative
                  meaning) any Indebtedness existing on the date of this
                  Certificate of Incorporation or Incurred in compliance with
                  this Certificate of Incorporation (including Indebtedness of
                  the Company that refinances Indebtedness of any Restricted
                  Subsidiary and Indebtedness of any Restricted Subsidiary that
                  refinances Indebtedness of another Restricted Subsidiary)
                  including Indebtedness that refinances other Refinancing
                  Indebtedness; provided, however, that (i) the Refinancing
                  Indebtedness has a Stated Maturity no earlier than the Stated
                  Maturity of the Indebtedness being refinanced (or, if earlier,
                  the Stated Maturity of the Redeemable Preferred Stock), (ii)
                  the Refinancing Indebtedness has an Average Life at the time
                  such Refinancing Indebtedness is Incurred that is equal to or
                  greater than the Average Life of the Indebtedness being
                  refinanced and (iii) such Refinancing Indebtedness is Incurred
                  in an aggregate principal amount (or if issued with original
                  issue discount, an aggregate issue price) that is equal to or
                  less than the sum of the aggregate principal amount (or if
                  issued with original issue discount, the aggregate accreted
                  value) then outstanding of the Indebtedness being refinanced
                  plus the amount of reasonable fees and expenses and prepayment
                  premiums incurred in connection with such refinancing;
                  provided further, however, that Refinancing Indebtedness shall
                  not include (x) Indebtedness of a Restricted Subsidiary that
                  refinances Indebtedness of the Company or (y) Indebtedness of
                  the Company or a Restricted Subsidiary that refinances
                  Indebtedness of an Unrestricted Subsidiary (unless such
                  Unrestricted Subsidiary is concurrently redesignated a
                  Restricted Subsidiary).

                  "Related Business" means the businesses of the Company and the
                  Restricted Subsidiaries on the date hereof and any business
                  related, ancillary or complementary thereto, or which is an
                  extension thereof, in each case as determined by the Company
                  in good faith.

                  "Restricted Subsidiary" means any Subsidiary of the Company
                  other than an Unrestricted Subsidiary.

                  "Sale/Leaseback Transaction" means an arrangement relating to
                  property now owned or hereafter acquired whereby the Company
                  or a Restricted Subsidiary transfers such property to a Person
                  (other than to the Company or a Restricted Subsidiary) and the
                  Company or a Restricted Subsidiary leases it from such Person.

                  "Secured Indebtedness" means any Indebtedness of the Company
                  or a Restricted Subsidiary secured by a Lien.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Significant Subsidiary" means any Restricted Subsidiary that
                  would be a 



                                       51
<PAGE>


                  'Significant Subsidiary' of the Company within the meaning of
                  Rule 1-02 under Regulation S-X promulgated by the Commisssion.

                  "Stated Maturity" means, with respect to any security, the
                  date specified in such security as the fixed date on which the
                  payment of principal of such security is due and payable,
                  including pursuant to any mandatory redemption provision (but
                  excluding any provision providing for the repurchase of such
                  security at the option of the holder thereof upon the
                  happening of any contingency unless such contingency has
                  occurred).

                  "Stellex Aerospace" means Stellex Aerospace, Inc., a
                  Restricted Subsidiary of the Company on the Issue Date, and
                  its successors and assigns.

                  "Subsidiary" of any Person means any corporation, association,
                  partnership or other business entity of which more than 50% of
                  the total voting power of shares of Capital Stock or other
                  interests (including partnership interests) entitled (without
                  regard to the occurrence of any contingency) to vote in the
                  election of directors, managers or trustees thereof is at the
                  time owned or controlled, directly or indirectly, by (i) such
                  Person, (ii) such Person and one or more Subsidiaries of such
                  Person or (iii) one or more Subsidiaries of such Person.

                  "Temporary Cash Investments" means any of the following:
                  (A)(i) pounds sterling, (ii) Euro, (iii) French Francs or (iv)
                  German Deutschemarks and (B)(i) any investment in direct
                  obligations of the United States of America or any agency
                  thereof or obligations Guaranteed by the United States of
                  America or any agency thereof, (ii) investments in time
                  deposit accounts, certificates of deposit, eurodollar time
                  deposits, bankers' acceptances and money market deposits
                  maturing within 360 days of the date of acquisition thereof
                  issued by a bank or trust company which is organized under the
                  laws of the United States of America, any state thereof or any
                  foreign country recognized by the United States of America
                  having capital, surplus and undivided profits aggregating in
                  excess of $250,000,000 (or the foreign currency equivalent
                  thereof) and whose long-term debt is rated "A" (or such
                  similar equivalent rating) or higher by at least one
                  nationally recognized statistical rating organization (as
                  defined in Rule 436 under the Securities Act), (iii)
                  repurchase obligations with a term of not more than 30 days
                  for underlying securities of the types described in clause
                  (B)(i) above entered into with a bank meeting the
                  qualifications described in clause (B)(ii) above, (iv)
                  investments in commercial paper, maturing not more than 180
                  days after the date of acquisition, issued by a corporation
                  (other than an Affiliate of the Company) organized and in
                  existence under the laws of the United States of America or
                  any foreign country recognized by the United States of America
                  with a rating at the time as of which any investment therein
                  is made of "P-1" (or higher) according to Moody's Investors
                  Service, Inc. or "A-1" (or higher) according to Standard &
                  Poor's Ratings Services, (v) investments in securities with
                  maturities of six 



                                       52
<PAGE>


                  months or less from the date of acquisition issued or fully
                  guaranteed by any state, commonwealth or territory of the
                  United States of America, or by any political subdivision or
                  taxing authority thereof, and rated at least "A" by Standard &
                  Poor's Ratings Services or "A" by Moody's Investors Service,
                  Inc. and (vi) investment funds registered under the Investment
                  Company Act of 1940, as amended, investing at least 95% of
                  their assets in securities of any of the types described in
                  clauses (B)(i) through (v) above.

                  "2007 Notes" means the Company's 9 1/2% Senior Subordinated
                  Notes due 2007, as the same may be amended, supplemented or
                  modified from time to time.

                  "Unrestricted Subsidiary" means (i) any Subsidiary of the
                  Company that at the time of determination shall be designated
                  an Unrestricted Subsidiary by the Board of Directors in the
                  manner provided below and (ii) any Subsidiary of an
                  Unrestricted Subsidiary. The Board of Directors may designate
                  any Subsidiary of the Company (including any newly acquired or
                  newly formed Subsidiary of the Company) to be an Unrestricted
                  Subsidiary unless such Subsidiary or any of its Subsidiaries
                  owns any Capital Stock or Indebtedness of, or owns or holds
                  any Lien on any property of, the Company or any other
                  Subsidiary of the Company that is not a Subsidiary of the
                  Subsidiary to be so designated; provided, however, that either
                  (A) the Subsidiary to be so designated has total consolidated
                  assets of $10,000 or less or (B) if such Subsidiary has
                  consolidated assets greater than $10,000, then such
                  designation would be permitted under section (l)(ii). The
                  Board of Directors may designate any Unrestricted Subsidiary
                  to be a Restricted Subsidiary; provided, however, that
                  immediately after giving effect to such designation (x) the
                  Company could Incur $1.00 of additional Indebtedness under
                  paragraph (l)(v)(A) and (y) no Voting Rights Triggering Event
                  shall have occurred and be continuing or would occur as a
                  consequence thereof. Any such designation by the Board of
                  Directors shall be evidenced to the Holders of the Redeemable
                  Preferred Stock by promptly sending to the Holders of the
                  Redeemable Preferred Stock a copy of the Board Resolution
                  giving effect to such designation and an Officers' Certificate
                  certifying that such designation complied with the foregoing
                  provisions.

                  "Voting Stock" of a corporation means all classes of Capital
                  Stock of such corporation then outstanding and normally
                  entitled to vote in the election of directors.

                  "Wholly Owned Subsidiary" means a Restricted Subsidiary of the
                  Company all the outstanding Capital Stock of which (other than
                  directors' qualifying shares) is owned by the Company or
                  another Wholly Owned Subsidiary.

                  (n       Registration Rights.



                                       53
<PAGE>


                           Reference is made to the Registration Rights
                           Agreement by and between the Company and SG Cowen,
                           dated April 22, 1999, as such agreement may be
                           amended, modified or supplemented from time to time.
                           So long as any shares of Redeemable Preferred Stock
                           constitute "Transfer Restricted Securities" as
                           defined in the Registration Rights Agreement, each
                           Holder shall be entitled to the rights granted by the
                           Company thereunder, and shall be bound by the
                           restrictions contained therein, on the certificates
                           representing the Redeemable Preferred Stock.

         B.       Series A Preferred Stock

                  1.       Designation and Number of Shares. There shall be
                           hereby established a series of the preferred stock,
                           without par value, but with a stated value of Fifty
                           Thousand Dollars ($50,000) per share (the "Stated
                           Value"), designated as "Series A Preferred Stock"
                           (such series being hereinafter referred to as the
                           "Series A Preferred Stock"). The authorized number of
                           shares of Series A Preferred Stock shall be 500.

                  2.       Rank. The Series A Preferred Stock shall, with
                           respect to dividend distributions and distributions
                           of assets and rights upon the liquidation, winding up
                           and dissolution of the Corporation, rank junior to
                           the 13% Senior Preferred Stock (the "13% Senior
                           Preferred Stock"). The Series A Preferred Stock
                           shall, however, rank senior to all classes of common
                           stock of the Corporation (including, without
                           limitation, the currently authorized common stock,
                           without par value, of the Corporation (the "Common
                           Stock")), and to each other class or series of
                           Capital Stock (as hereinafter defined) of the
                           Corporation hereafter created with respect to
                           dividend distributions and distributions of assets
                           and rights upon the liquidation, winding up and
                           dissolution of the Corporation (collectively with the
                           Common Stock, the "Junior Stock").



                                       54
<PAGE>


                  3.       Dividends.

                           a.       The holders of the outstanding shares of
                                    Series A Preferred Stock shall be entitled
                                    to receive, when, as and if declared by the
                                    Board of Directors, out of funds legally
                                    available therefor, cash dividends on each
                                    share of Series A Preferred Stock at a rate
                                    equal to ten percent (10%) per annum of the
                                    sum of (i) the Liquidation Preference (as
                                    hereinafter defined) and (ii) any dividends
                                    which may be in arrears. All dividends shall
                                    be cumulative, whether or not earned or
                                    declared, from the date of issuance of the
                                    Series A Preferred Stock and shall be
                                    payable quarterly in arrears on each
                                    Dividend Payment Date (as hereinafter
                                    defined), commencing on the first Dividend
                                    Payment Date after the issuance of the
                                    Series A Preferred Stock. Each distribution
                                    on the Series A Preferred Stock shall be
                                    payable to holders of record as they appear
                                    on the stock record books of the Corporation
                                    on such record dates, not less than ten (10)
                                    nor more than sixty (60) days preceding the
                                    applicable Dividend Payment Date, as shall
                                    be fixed by the Board of Directors of the
                                    Corporation.

                           b.       All dividends paid with respect to shares of
                                    Series A Preferred Stock pursuant to Article
                                    FOURTH, subparagraph (B)(3)(a) shall be paid
                                    pro rata and in a like manner to all of the
                                    holders entitled thereto.

                           c.       Nothing herein contained shall in any way or
                                    under any circumstances be construed or
                                    deemed to require the Board of Directors to
                                    declare, or the Corporation to pay or set
                                    apart for payment, any dividends on shares
                                    of the Series A Preferred Stock at any time,
                                    except out of funds legally available
                                    therefor.

                           d.       Dividends on account of arrears for any past
                                    Dividend Period (as hereinafter defined) may
                                    be declared and paid at any time, without
                                    reference to any regular Dividend Payment
                                    Date, to holders of record on such date, not
                                    less than ten (10) nor more than sixty (60)
                                    days prior to the payment thereof, as may be
                                    fixed by the Board of Directors.

                           e.       Without the affirmative vote or consent of
                                    holders of at least a majority of the then
                                    outstanding shares of Series A Preferred
                                    Stock, voting or consenting, as the case may
                                    be, as one class, the Corporation shall not
                                    declare, pay or set apart for payment any
                                    dividend on any shares of Junior Stock or
                                    make any payment on account of, or set apart
                                    for payment money for a sinking or other



                                       55
<PAGE>


                                    similar fund for, the purchase, redemption
                                    or other retirement of, any shares of Junior
                                    Stock or any warrants, rights, puts, calls
                                    or options exercisable for or convertible
                                    into any shares of Junior Stock or make any
                                    distribution in respect thereof, either
                                    directly or indirectly, whether in cash,
                                    obligations or shares of the Corporation or
                                    other property (all such prohibited payments
                                    and other actions set forth above in this
                                    subparagraph 3(e) being collectively
                                    referred to as "Restricted Junior Payments")
                                    
                                    except that the Corporation may pay
                                    dividends or other distributions on Junior
                                    Stock in the form of additional shares of
                                    Junior Stock (or the adjustment of the
                                    amount of the liquidation preference, if
                                    any, of such Junior Stock).

                           f.       Dividends payable on the Series A Preferred
                                    Stock for any period less than a year shall
                                    be computed on the basis of a 365-day year
                                    and the actual number of days elapsed in the
                                    period for which such dividends are payable.

                  4.       Liquidation Preference.

                           a.       The liquidation preference of the Series A
                                    Preferred Stock shall be $50,000 per share
                                    (the "Liquidation Preference"). In the event
                                    of any voluntary or involuntary liquidation,
                                    dissolution or winding up of the affairs of
                                    the Corporation, the holders of shares of
                                    Series A Preferred Stock then outstanding
                                    shall be entitled to be paid for each share
                                    held, out of the assets of the Corporation
                                    available for distribution to its
                                    stockholders, an amount in cash equal to the
                                    aggregate Liquidation Preference plus an
                                    amount in cash equal to all accumulated and
                                    unpaid dividends thereon to the date fixed
                                    for liquidation, dissolution or winding up
                                    (including, without duplication, an amount
                                    equal to pro rated dividends for the period
                                    from the last Dividend Payment Date to the
                                    date fixed for liquidation, dissolution or
                                    winding up), before any payment shall be
                                    made or any assets distributed to the
                                    holders of any shares of Junior Stock.
                                    Except as provided in the preceding
                                    sentence, holders of the Series A Preferred
                                    Stock shall not be entitled to any
                                    distribution in the event of any
                                    liquidation, dissolution or winding up of
                                    the affairs of the Corporation. If the
                                    assets of the Corporation are not sufficient
                                    to pay in full the liquidation payments
                                    payable to the holders of outstanding shares
                                    of the Series A Preferred Stock, then the
                                    holders of all such shares shall share
                                    ratably in such distribution of assets.

                           b.       For purposes of this paragraph 4, neither
                                    the sale, conveyance, exchange or transfer
                                    (for cash, shares of stock, securities or
                                    other consideration) of all or substantially
                                    all or part of the property or 



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<PAGE>


                                    assets of the Corporation nor the
                                    consolidation or merger of the Corporation
                                    into or with one or more other corporations
                                    or entities shall be deemed to be a
                                    liquidation, dissolution or winding up,
                                    voluntary or involuntary, of the affairs of
                                    the Corporation.

                  5.       Voting Rights.

                           a.       So long as any shares of the Series A
                                    Preferred Stock are outstanding, the
                                    Corporation shall not reclassify any Junior
                                    Stock into any preferred stock of the
                                    Corporation that ranks on a partly or senior
                                    (in either case as to dividends or other
                                    distributions or rights upon liquidation,
                                    dissolution or winding up) to the Series A
                                    Preferred Stock ("Parity Stock" or "Senior
                                    Stock", respectively) or create or authorize
                                    any new class of Parity Stock or Senior
                                    Stock without the affirmative vote or
                                    consent of holders of at least a majority of
                                    the then outstanding shares of Series A
                                    Preferred Stock, voting or consenting, as
                                    the case may be, as one class.

                           b.       So long as any shares of Series A Preferred
                                    Stock are outstanding, the Corporation shall
                                    not amend the Certificate of Incorporation
                                    of the Corporation so as to adversely affect
                                    the specified rights, preferences,
                                    privileges or voting rights of holders of
                                    shares of the Series A Preferred Stock,
                                    without the affirmative vote or consent of
                                    at least a majority of the issued and
                                    outstanding shares of Series A Preferred
                                    Stock, voting or consenting, as the case may
                                    be, as one class.

                           c.       In any case in which the holders of Series A
                                    Preferred Stock shall be entitled to vote
                                    pursuant to Article FOURTH, paragraph (B)(5)
                                    or pursuant to the General Corporation Law
                                    of the State of Delaware, each holder of
                                    Series A Preferred Stock shall be entitled
                                    to one vote for each share of Series A
                                    Preferred Stock. Except as otherwise
                                    provided in this paragraph 5 and under the
                                    General Corporation Law of the State of
                                    Delaware, holders of Series A Preferred
                                    Stock shall not be entitled to vote on any
                                    matters.



                                       57
<PAGE>


                  6.       Redemption.

                           a.       The Series A Preferred Stock may be redeemed
                                    in cash, in whole or in part, at any time or
                                    from time to time, at the option of the
                                    Corporation by resolution of the Board of
                                    Directors at a price per share equal to the
                                    Liquidation Preference plus an amount equal
                                    to all dividends thereon accrued and unpaid
                                    (the "Redemption Price") to the date fixed
                                    by the Board of Directors as the redemption
                                    date (the "Redemption Date"). If fewer than
                                    all shares of Series A Preferred Stock are
                                    to be redeemed, shares of Series A Preferred
                                    Stock shall be redeemed ratably among the
                                    holders thereof.

                           b.       Notice of any redemption pursuant to this
                                    paragraph 6 (a "Redemption Notice") shall be
                                    mailed, first class, postage prepaid, not
                                    less than fifteen (15) days nor more than
                                    sixty (60) days prior to the Redemption Date
                                    to the holders of record of the shares of
                                    Series A Preferred Stock to be redeemed, at
                                    their respective addresses as the same
                                    appear upon the stock record books of the
                                    Corporation or are supplied by them in
                                    writing to the Corporation for the purposes
                                    of such notice. Such notice shall set forth
                                    the anticipated Redemption Price or formula
                                    on which such Redemption Price will be
                                    based, the anticipated Redemption Date
                                    within such fifteen (15) to sixty (60) day
                                    period, the number of shares to be redeemed
                                    and the place at which the shares called for
                                    redemption will, upon presentation and
                                    surrender of the stock certificates
                                    evidencing such shares, be redeemed.

                           c.       On or before the anticipated Redemption
                                    Date, each holder of Series A Preferred
                                    Stock shall surrender the certificate or
                                    certificates representing such shares of
                                    Series A Preferred Stock to the Corporation,
                                    in the manner and at the place designated in
                                    the Redemption Notice, and on the Redemption
                                    Date, if the redemption occurs, the full
                                    Redemption Price for such shares shall be
                                    payable in cash to the Person (as
                                    hereinafter defined) whose name appears on
                                    such certificate or certificates as the
                                    owner thereof, and each surrendered
                                    certificate shall be canceled and retired.
                                    If for any reason the redemption does not
                                    occur, the certificates shall be returned.
                                    In the event that fewer than all of the
                                    Series A Preferred Stock represented by any
                                    such certificate are redeemed, a new
                                    certificate shall be issued representing the
                                    unredeemed shares.



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<PAGE>


                           d.       If any Redemption Notice by the Corporation
                                    pursuant to this paragraph 6 shall have been
                                    mailed as provided in Article FOURTH,
                                    subparagraph (B)(6)(b) and if on or before
                                    the Redemption Date, the consideration
                                    necessary for such redemption shall have
                                    been irrevocably set apart in trust for the
                                    benefit of the holders of shares to be so
                                    redeemed so as to be available therefor and
                                    only therefor, then on and after the close
                                    of business on the Redemption Date, the
                                    shares called for redemption,
                                    notwithstanding that any certificate
                                    therefor shall not have been surrendered for
                                    cancellation, shall no longer be deemed
                                    outstanding, and all rights with respect to
                                    such shares shall forthwith cease and
                                    terminate, except the right of the holders
                                    thereof to receive upon surrender of their
                                    certificates the consideration payable upon
                                    redemption thereof.

                  7.       Payment in Kind. Any payments by the Corporation on
                           account of the Series A Preferred Stock as a result
                           of the declaration of dividends on the Series A
                           Preferred Stock may, in the sole discretion of the
                           Board of Directors, be payable, in whole or in part,
                           in the form of additional shares of Series A
                           Preferred Stock of the Corporation or any of the
                           assets of the Corporation. For the purposes of such
                           payment, shares of Series A Preferred Stock shall be
                           valued at the Stated Value or upon such other
                           reasonable basis as the Board of Directors shall
                           determine in its sole discretion.

                  8.       Business Day. If any payment shall be required by the
                           terms hereof to be made on a day that is not a
                           Business Day, such payment shall be made on the
                           immediately succeeding Business Day.

                  9.       Preemptive Rights. The holders of the Series A
                           Preferred Stock shall not have any preemptive right
                           to subscribe for or purchase any shares of stock or
                           any other securities that may be issued by the
                           Corporation.

                  10.      Exclusion of Other Rights. The shares of Series A
                           Preferred Stock shall not have any designation,
                           preferences, limitations or relative rights, other
                           than those specifically set forth in the Certificate
                           of Incorporation of the Corporation.

                  11.      Legends. Unless the Series A Preferred Stock is to be
                           registered under the Securities Act of 1933, as
                           amended, or any other applicable federal or state
                           securities law, the following legends shall be placed
                           on the Series A Preferred Stock:



                                       59
<PAGE>


                                    THE SECURITIES REPRESENTED BY THIS
                                    CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
                                    THE SECURITIES ACT OF 1933, AS AMENDED, OR
                                    ANY OTHER APPLICABLE FEDERAL OR STATE
                                    SECURITIES LAW AND MAY NOT BE TRANSFERRED IN
                                    THE ABSENCE OF SUCH REGISTRATION UNLESS THE
                                    PROPOSED TRANSFER DOES NOT REQUIRE ANY SUCH
                                    REGISTRATION AND THE CORPORATION HAS
                                    RECEIVED AN OPINION OF COUNSEL TO SUCH
                                    EFFECT.

                  12.      Headings. The headings of the various paragraphs and
                           subparagraphs hereof are for convenience of reference
                           only and shall not affect the interpretation of any
                           of the provisions hereof.

                  13.      Definitions. As used in this Article FOURTH, Section
                           B of the Certificate of Incorporation, the following
                           terms shall have the following meanings, unless the
                           context otherwise requires:

                           "Board of Directors" means the Board of Directors of
                           the Corporation.

                           "Business Day" means any day except a Saturday,
                           Sunday or any day on which banking institutions in
                           New York City, New York or Los Angeles, California
                           are required or authorized by law or other
                           governmental action to be closed.

                           "Capital Stock" means all common stock and any other
                           capital stock of the Corporation authorized from time
                           to time, and any other shares, options, interests,
                           participations, or other equivalents (however
                           designated), whether voting or nonvoting, including,
                           without limitation, common stock, options, warrants,
                           preferred stock, phantom stock, stock appreciation
                           rights, convertible notes or debentures, stock
                           purchase rights, and all agreements, instruments,
                           documents, and securities convertible, exercisable or
                           exchangeable, in whole or in part, into any one or
                           more of the foregoing.

                           "Closing Date" means October 31, 1997.

                           "Common Stock" means the common stock, without par
                           value, of the Corporation.

                           "Corporation" means Stellex Technologies, Inc., a
                           Delaware corporation.

                           "Dividend Payment Date" means March 31, June 30,
                           September 30 and December 31 of each year.



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<PAGE>


                           "Dividend Period" means the Initial Dividend Period
                           and, thereafter, each Quarterly Dividend Period.

                           "Initial Dividend Period" means the dividend period
                           commencing on the Closing Date and ending on the
                           first Dividend Payment Date to occur thereafter.

                           "Junior Stock" has the meaning ascribed to it in
                           Article FOURTH, paragraph (B)(2).

                           "Liquidation Preference" has the meaning ascribed to
                           it in Article FOURTH, paragraph (B)(4).

                           "Parity Stock" has the meaning ascribed to it in
                           Article FOURTH, paragraph (B)(5).

                           "Person" means any individual, corporation, limited
                           liability company, partnership, joint venture,
                           association, joint-stock company, trust,
                           unincorporated organization or government or any
                           agency or political subdivision thereof.

                           "Quarterly Dividend Period" means the quarterly
                           periods commencing on each January 1, April 1, July 1
                           and October 1 and ending on each Dividend Payment
                           Date, respectively.

                           "Redemption Date" has the meaning ascribed to it in
                           Article FOURTH, paragraph (B)(6).

                           "Redemption Notice" has the meaning ascribed to it in
                           Article FOURTH, paragraph (B)(6).

                           "Redemption Price" has the meaning ascribed to it in
                           Article FOURTH, paragraph (B)(6).

                           "Restricted Junior Payments" has the meaning ascribed
                           to it in Article FOURTH, paragraph (B)(3).

                           "Senior Stock" has the meaning ascribed to it in
                           Article FOURTH, paragraph (B)(5).

                           "Series A Preferred Stock" has the meaning ascribed
                           to it in Article FOURTH, paragraph (B)(1).



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<PAGE>


                           "Stated Value" has the meaning ascribed to it in
                           Article FOURTH, paragraph (B)(1).

                           "13% Senior Preferred Stock" has the meaning ascribed
                           to it in Article FOURTH, paragraph (B)(2).

         C.       Serial Preferred Stock

                  The Board of Directors is hereby empowered to cause the Serial
         Preferred Stock of the Corporation to be issued in series with such of
         the variations permitted by clauses (1)-(8) of this Section C as shall
         have been fixed and determined by the Board of Directors with respect
         to any series prior to the issue of any shares of such series.

                  The shares of the Serial Preferred Stock of different series
         may vary as to:

                           (1)      the number of shares constituting such
                                    series and the designation of such series,
                                    which shall be such as to distinguish the
                                    shares thereof from the shares of all other
                                    series and classes;

                           (2)      the rate of dividend, the time of payment
                                    and, if cumulative, the dates from which
                                    dividends shall be cumulative, the extent of
                                    participation rights, if any, and the
                                    priority in payment of dividends;

                           (3)      any right to vote with holders of shares of
                                    any other series or class and any right to
                                    vote as a class, either generally or as a
                                    condition to specified corporate acts;

                           (4)      the price at and the terms and conditions on
                                    which shares may be redeemed;

                           (5)      the amount payable upon shares and the
                                    priority of payment in event of involuntary
                                    liquidation;

                           (6)      the amount payable upon shares and the
                                    priority of payment in event of voluntary
                                    liquidation;

                           (7)      any sinking fund provisions for the
                                    redemption or purchase of shares; and

                           (8)      the terms and conditions on which shares may
                                    be converted, if the shares of any series
                                    are issued with the privilege of conversion.



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<PAGE>


                  The shares of all series of Serial Preferred Stock shall be
         identical except as, within the limitations set forth above in this
         Section C, shall have been fixed and determined by the Board of
         Directors prior to the issuance thereof. Except as specifically set
         forth in any Certificate of Serial Designation filed with the Secretary
         of State of the State of Delaware or as required by the General
         Corporation Law of the State of Delaware, none of these shares of any
         series of Serial Preferred Stock shall have any right to vote on any
         matters.

         D.       Common Stock.

                  1.       Dividends. When and if declared by the Board of
                           Directors, the holders of the Common Stock shall only
                           be entitled to receive cash dividends and dividends
                           payable in property other than securities of the
                           Corporation at such time as all dividends on the
                           Preferred Stock through the record date of any such
                           Common Stock dividend have been paid in full.

                  2.       Liquidation. In the event of the voluntary or
                           involuntary liquidation, dissolution, distribution of
                           assets or winding-up of the Corporation, after
                           distribution in full to the holders of Preferred
                           Stock of their preferred liquidation payments, the
                           holders of Common Stock shall be entitled to receive
                           the remaining assets of the Corporation.

                  3.       Voting Rights. Except as may be otherwise required by
                           law or the Certificate of Incorporation of the
                           Corporation, as amended, each share of Common Stock
                           shall have one (1) vote on all matters voted upon by
                           the stockholders.

FIFTH.   The Corporation is to have perpetual existence.

SIXTH.   Election of directors need not be by written ballot unless the by-laws
         of the Corporation shall so provide.

SEVENTH. The Corporation reserves the rights to amend, alter, change or repeal
         any provision contained in this Certificate of Incorporation, in the
         manner now or hereafter prescribed by statute, and all rights conferred
         upon stockholders herein are granted subject to this reservation.

EIGHTH.  A director of the Corporation shall not be personally liable to the
         Corporation or its stockholders for monetary damages for broach of
         fiduciary duty as a director except for liability (i) for any breach of
         the director's duty of loyalty to the Corporation or its stockholders,
         (ii) for acts or omissions not in good faith or which involve
         intentional misconduct or a knowing violation of law, (iii) under
         Section 174 of the General Corporation Law of the State of Delaware or
         (iv) for any transaction from which the director derived any improper
         personal benefit.



                                       63
<PAGE>


         IN WITNESS WHEREOF, the Corporation has caused this Restated
Certificate of Incorporation to be signed by William L. Remley, Its President,
this ___ day of _________, 1999.



                                            /s/ William L. Remley,
                                            ------------------------------------
                                            William L. Remley, President


                                      64