FOURTH AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                            OUTSOURCING SOLUTIONS INC.


               Outsourcing  Solutions Inc., a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as follows:

               1.  The  name  of  the  corporation is Outsourcing Solutions Inc.
(the "Corporation"). The Corporation was originally incorporated as OSI Holdings
Corp. in the State of Delaware on the 21st day of September,  1995 pursuant to a
Certificate of  Incorporation  filed with the Secretary of State of the State of
Delaware on that date.

               2.  This Fourth Amended and Restated Certificate of Incorporation
amends and restates the Third Amended and Restated  Certificate of Incorporation
of the Corporation filed with the Secretary of State of the State of Delaware on
January 13,  1999,  as amended on November  29,  1999.  This Fourth  Amended and
Restated Certificate of Incorporation has been adopted by the Corporation and by
its stockholders pursuant to Sections 242 and 245 of the General Corporation Law
of the State of Delaware.

               3.  On  December  3,  1999,  Directors  of  the  Corporation duly
adopted  resolutions  authorizing the following amendment and restatement of the
Certificate of Incorporation  of the  Corporation,  declaring such amendment and
restatement to be advisable and in the best interests of the Corporation and its
stockholders  and  authorizing  the  appropriate  officers  to  solicit  written
consents  of  the  stockholders  of  the  Corporation  in  accordance  with  the
provisions  of  Section  228 of the  General  Corporation  Law of the  State  of
Delaware. Thereafter, pursuant to resolutions of the Board of Directors, in lieu
of a meeting and vote of holders of the Corporation's common stock and preferred
stock,  stockholders  holding a majority of the issued and outstanding shares of
common  stock of the  Corporation  and  holders of a majority  of the issued and
outstanding  shares of each of the (i) preferred stock,  (ii) Class A Non-Voting
Common Stock,  (iii) Class B Non-Voting Common Stock and (iv) Class C Non-Voting
Common Stock of the Corporation  adopted the following amendment and restatement
of the Certificate of Incorporation of the Corporation.

               4.  The text of Certificate of Incorporation, is  hereby restated
and amended to read in its entirety as follows:

               FIRST:  The name of the Corporation is Outsourcing Solutions Inc.

               SECOND: The registered office of the Corporation in the  State of
Delaware is 1013 Centre Road, Wilmington,  Delaware 19805, County of New Castle.
The name of its registered agent in the State of Delaware at such address is The
Prentice-Hall Corporation System, Inc.

               THIRD:  The purpose of the Corporation is to engage,  directly or
indirectly,  in any  lawful  act  or  activity  for  which  corporations  may be
organized  under the  General  Corporation  Law of the State of Delaware as from
time to time in effect.

               FOURTH: The  total number of shares which the  Corporation  shall
have the  authority to issue is  17,300,000  shares of capital stock as follows:
300,000  shares of  Preferred  Stock,  no par  value  (the  "Preferred  Stock"),
15,000,000  shares of Voting Common Stock, par value $.01 per share (the "Voting
Common  Stock") and  2,000,000  shares of Non-Voting  Stock,  par value $.01 per
share (the "Non-Voting Common Stock", and together with the Voting Common Stock,
the "Common Stock"). Each share of Preferred Stock is hereafter referred to as a
"Preferred  Share" and collectively as "Preferred  Shares." Each share of Voting
Common  Stock  is  hereafter   referred  to  as  a  "Voting  Common  Share"  and
collectively as "Voting Common Shares". Each share of Non-Voting Common Stock is
hereafter  referred  to as a  "Non-Voting  Common  Share"  and  collectively  as
"Non-Voting  Common  Shares".  The Voting  Common Shares and  Non-Voting  Common
Shares are hereafter collectively referred to as "Common Shares".

               A.  Preferred Stock.

               Authorized but unissued  shares of Preferred  Stock may be issued
from time to time in one or more series or classes.  The Board of  Directors  is
hereby  authorized to determine and fix by resolution  all rights,  preferences,
and privileges and  qualifications,  limitations  and  restrictions  (including,
without  limitation,   voting  rights,  dividend  rights,  redemption  features,
conversion  rights or  protective  features,  and the  limitation  and exclusion
thereof)  applicable  to any such  series  or class of  Preferred  Stock and the
number  of shares  constituting  any such  series  or class and the  designation
thereof,  and,  subject to the terms of any such series or class, to increase or
decrease  (but not below the  number  of  shares  of such  series or class  then
outstanding) the number of shares of any series or class subsequent to the issue
of shares of that series or class then outstanding. In the event that the number
of shares of any series or class is so decreased,  the shares  constituting such
reduction shall resume the status which such shares had prior to the adoption of
the resolution originally fixing the number of such series or class.

               B.  Common Stock.

               The  voting  powers,   designations,   preferences  and  relative
participating,   optional  or  other  special  rights,  and  qualifications,  or
restrictions thereof, of the Common Stock are as follows:

               1.  Dividend  Rights.  Subject to the  preferential rights of the
Preferred  Shares,  the  Board  of  Directors  of the  Corporation  may,  in its
discretion,  out of funds legally  available for the payment of dividends and at
such times and in such manner as determined  by the Board of Directors,  declare
and pay dividends on the Common Shares of the Corporation.

               No dividend  (other than a dividend in capital stock ranking on a
parity with the Common Shares or cash in lieu of fractional  shares with respect
to such stock  dividend) shall be declared or paid on any share or shares of any
class of stock or series  thereof  ranking on a parity with the Common Shares in
respect of payment of dividends for any dividend  period unless there shall have
been declared, for the same dividend period, like proportionate dividends on all
shares of Common Shares then outstanding.

               As and when  dividends are declared or paid  thereon,  whether in
cash,  property  or  securities  of the  Corporation,  the holders of the Voting
Common  Shares and of the  Non-Voting  Common  Shares  will be entitled to share
ratably,  on a share for share basis, in such dividends,  provided,  that (i) if
dividends  are declared  which are payable in Voting Common Shares or Non-Voting
Common Shares,  dividends will be declared which are payable at the same rate on
both classes of stock and the dividends  payable in Voting Common Shares will be
payable to holders of such shares and the dividends payable in Non-Voting Common
Shares  will be  payable to  holders  of such  shares and (ii) if the  dividends
consist of other voting securities of the Corporation,  (a) the Corporation will
make  available to each holder of  Non-Voting  Common  Shares,  at such holder's
request,  dividends consisting of non-voting securities of the Corporation which
are otherwise  identical to the voting securities and which are convertible into
or exchangeable  for such voting  securities on the same terms as the Non-Voting
Common Shares are convertible into Voting Common Shares.

               2.  Rights  on  Liquidation.  In the  event  of any  liquidation,
dissolution,  distribution of assets or winding up of the  Corporation,  whether
voluntary or  involuntary  (collectively,  a  "Liquidation"),  after  payment or
provision for payment of the debts and other  liabilities of the Corporation and
the setting aside for payment of any  preferential  amount due to the holders of
any other class or series of stock (including,  without limitation,  the holders
of  Preferred  Shares),  the  holders  of  Common  Shares  (including,   without
limitation,  the Voting Common Shares and the Non-Voting  Common Shares) and any
other  class of stock or series  thereof  ranking  on a parity  with the  Common
Shares in respect of distributions  on Liquidation  shall be entitled to receive
ratably on a share for share  basis,  any or all assets  remaining to be paid or
distributed.

               3.  Voting  Rights.  Except  as may be otherwise required by law,
all voting rights shall be vested in the Voting Common Shares and each holder of
Voting  Common Shares shall have one vote in respect of each Voting Common Share
held by such holder on all matters to be voted upon by the  stockholders  of the
Corporation.  The holders of the Non-Voting Shares will have no right to vote on
any matters to be voted on by the  stockholders  of the  Corporation;  provided,
that the holders of the Non-Voting Common Shares shall have the right to vote as
a  separate  class on any  matter  on which the  Non-Voting  Common  Shares  are
required to vote as a class pursuant to the General Corporation Law of the State
of Delaware.

               4.  Conversion.

               A.  Conversion of Non-Voting Common Shares.

               Any holder of Non-Voting  Common Shares shall have the right,  at
its option, at any time and from time to time, to convert,  subject to the terms
and provisions of this Section 4A, any or all of such holder's Non-Voting Common
Shares into an equal number of shares of fully paid and non-assessable shares of
Voting Common Shares as provided below; provided,  however, if the holder in any
such  conversion is subject to the Bank Holding  Company Act of 1956, as amended
(12  U.S.C.  ss.1841,  et.  seq.)  and the  regulations  promulgated  thereunder
(collectively  and  including any successor  provisions,  the "BHCA Act"),  such
conversion may be made only if:

                      (i)    the  BHCA  Act  would not prohibit such holder from
holding such shares of Voting Common Shares; and

                      (ii)   such shares of Voting Common Shares to be  received
upon such  conversion  will be (A)  distributed  or sold in connection  with any
public equity offering  registered under the Securities Act of 1933, as amended,
and the rules and  regulations  promulgated  thereunder  (the "1933  Act"),  (B)
distributed or sold in a "broker's transaction" (as defined in Rule 144(g) under
the 1933 Act)  pursuant to Rule 144 under the 1933 Act or any similar  rule then
in force,  (C)  distributed  or sold to a person or group (within the meaning of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of persons if,
after such  distribution  or sale, such person or group of persons would not, in
the  aggregate,  own,  control or have the right to acquire  more than 2% of the
outstanding  securities of the  Corporation  entitled to vote on the election of
directors  of the  Corporation,  (D)  distributed  or sold to a person  or group
(within  the meaning of the 1934 Act) of persons  if,  prior to such sale,  such
person or group of persons  had  control of the  Corporation,  (E)  distributed,
sold,  or held in any other manner  permitted  under the BHCA,  including  after
giving effect to the amendment of the BHCA by the  Gramm-Leach-Bliley  Financial
Services Act;

provided,  further,  that if the holder converts any Non-Voting Common Shares as
provided  in  clauses  (i) and (ii)  above and any  distribution  or sale of the
Non-Voting  Common  Shares  fails to occur for any reason or such  holder is not
otherwise permitted to hold the Voting Common Shares into which such shares were
converted,  such holder may convert the Voting Common Shares into the Non-Voting
Common Shares  converted in anticipation  of such  distribution or sale or other
permitted holding.

               B.  Conversion Procedure.

               (i) Unless otherwise  provided herein,  each conversion of shares
of  Non-Voting  Common Stock into shares of Voting Common Stock will be effected
by the surrender of the certificate or certificates  representing the Non-Voting
Common Shares to be converted at the principal  office of the Corporation at any
time during normal business hours,  together with a written notice by the holder
of such  Non-Voting  Common Shares  stating that such holder  desires to convert
such  Non-Voting  Common Shares,  or a stated number of such  Non-Voting  Common
Shares,  represented by such certificate(s) into shares of Voting Common Shares.
Unless otherwise  provided  herein,  each conversion will be deemed to have been
effected as of the close of  business  on the date on which such  certificate(s)
have been  surrendered  and such notice has been received,  and at such time the
rights of the holder of the converted  Non-Voting Common Shares, as such holder,
will cease and the  person or persons in whose name or names the  certificate(s)
for Voting Common Shares are to be issued upon such conversion will be deemed to
have  become  the  holder  or  holders  of record of the  Voting  Common  Shares
represented thereby.

               (ii) Promptly after the surrender of certificates and the receipt
of written notice, the Corporation will issue and deliver in accordance with the
surrendering  holder's instructions (a) the certificate(s) for the Voting Common
Shares  issuable upon such  conversion  and (b) a certificate  representing  any
Non-Voting Common Shares that was represented by the certificate(s) delivered to
the Corporation in connection with such conversion but that was not converted.

               (iii) The issuance of certificates  for Voting Common Shares upon
conversion  of  Non-Voting  Common  Shares  will be made  without  charge to the
holders of such shares for any issuance tax in respect  thereof  (other than any
tax in connection with the issuance of shares in a different name) or other cost
incurred by the  Corporation in connection  with such conversion and the related
issuance of Voting Common Shares.

               (iv) The Corporation will at all times reserve and keep available
out of its authorized but unissued Voting Common Shares,  solely for the purpose
of issuance upon the conversion of the  Non-Voting  Common Shares such number of
Voting  Common Shares as are issuable  upon the  conversion  of all  outstanding
Non-Voting  Common Shares.  All Common Shares which are so issuable  will,  when
issued,  be  duly  and  validly  issued,  fully  paid  and  nonassessable.   The
Corporation  will take all such  actions as may be  necessary to assure that all
such Common Shares may be so issued  without  violation of any applicable law or
governmental  regulation or any requirements of any domestic securities exchange
upon which Common Shares may be listed (except for official  notices of issuance
which will be immediately transmitted by the Corporation upon issuance).

               (v) The Corporation will not close its books against the transfer
of Common Shares in any manner which would interfere with the timely  conversion
of any Non-Voting Common Shares.

               5.  Stock Splits.  If the Corporation in any manner subdivides or
combines the outstanding  shares of one class of Common Shares,  the outstanding
shares of the other class of Common Shares will be proportionately subdivided or
combined in a similar manner.

               6.  Notices.  All  notices  referred  to  in  this Article FOURTH
shall be in writing,  shall be  delivered  personally,  by facsimile or by first
class  mail,  postage  prepaid,  and shall be deemed to have been  given when so
delivered  or mailed  to the  Corporation  at its  principal  office  and to any
stockholder  at such holder's  address as it appears in the stock records of the
Corporation.

               7.  Amendment  and  Waiver.  No  amendment   or   waiver  of  any
provision of paragraph 4 of this Article  FOURTH or of this paragraph 7 shall be
effective  without  the prior  approval of both the holders of a majority of the
Voting  Common  Shares then  outstanding,  voting as a separate  class,  and the
holders of a majority of the Non-Voting Common Shares then  outstanding,  voting
as a separate class.

               FIFTH: The business of the Corporation shall be managed under the
direction  of the Board of Directors  except as  otherwise  provided by law. The
number of Directors of the  Corporation  shall be fixed from time to time by, or
in the manner  provided  in, the By-Laws.  Election of Directors  need not be by
written ballot unless the By-Laws of the Corporation shall so provide.

               SIXTH:  The  Board  of  Directors  may  make, alter or repeal the
By-Laws of the Corporation  except as otherwise  provided in the By-Laws adopted
by the Corporation's stockholders.

               SEVENTH: The Directors of the Corporation shall be protected from
personal liability,  through indemnification or otherwise, to the fullest extent
permitted  under the  General  Corporation  Law of the State of Delaware as from
time to time in effect.

               1.  A Director of the Corporation  shall  under no  circumstances
have any personal  liability to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a Director except for those breaches and
acts or omissions with respect to which the General Corporation Law of the State
of  Delaware,  as from  time to  time  amended,  expressly  provides  that  this
provision  shall not  eliminate or limit such  personal  liability of Directors.
Neither the  modification  or repeal of this paragraph 1 of Article  SEVENTH nor
any  amendment to said General  Corporation  Law that does not have  retroactive
application  shall limit the right of Directors  hereunder to  exculpation  from
personal  liability for any act or omission  occurring  prior to such amendment,
modification or repeal.

               2.  The Corporation  shall indemnify each Director and Officer of
the Corporation to the fullest extent permitted by applicable law, except as may
be otherwise  provided in the Corporation's  By-Laws,  and in furtherance hereof
the Board of  Directors  is  expressly  authorized  to amend  the  Corporation's
By-Laws from time to time to give full effect hereto,  notwithstanding  possible
self  interest  of  the  Directors  in  the  action  being  taken.  Neither  the
modification  or repeal of this paragraph 2 of Article SEVENTH nor any amendment
to the  General  Corporation  Law of the  State of  Delaware  that does not have
retroactive  application  shall  limit the right of  Directors  and  Officers to
indemnification hereunder with respect to any act or omission occurring prior to
such modification, amendment or repeal.

               EIGHTH:  The  Corporation  reserves  the right 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.

               IN WITNESS WHEREOF, said  Outsourcing Solutions  Inc.  has caused
this Amended and Restated Certificate of Incorporation of Outsourcing  Solutions
Inc. to be executed by its officer  thereunto duly  authorized  this  7th day of
December, 1999.

                             OUTSOURCING SOLUTIONS INC.

                             By:/s/ Eric R. Fencl
                                --------------------------
                                 Name: Eric Fencl
                                 Title: Vice President and General Counsel

<PAGE>

                   CERTIFICATE OF DESIGNATION OF THE POWERS,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
                OPTIONAL AND OTHER SPECIAL RIGHTS OF CLASS A 14%
                 SENIOR MANDATORILY REDEEMABLE PREFERRED STOCK,
                  SERIES A, AND CLASS B 14% SENIOR MANDATORILY
            REDEEMABLE PREFERRED STOCK, SERIES A, AND QUALIFICATIONS,
                      LIMITATIONS ANDRESTRICTIONS THEREOF

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

               Outsourcing  Solutions  Inc. (the  "Corporation"),  a corporation
organized  and  existing  under  the  General  Corporation  Law of the  State of
Delaware,  does hereby  certify that,  pursuant to authority  conferred upon the
board  of  directors  of the  Corporation  (the  "Board  of  Directors")  by its
Certificate  of  Incorporation,  as  amended  (hereinafter  referred  to as  the
"Certificate of  Incorporation"),  and pursuant to the provisions of Section 151
of  the  General  Corporation  Law of the  State  of  Delaware,  said  Board  of
Directors,  by unanimous  written consent dated December 10, 1999, duly approved
and adopted the following resolution (the "Resolution"):

               RESOLVED,  that, pursuant to the authority vested in the Board of
          Directors by its Certificate of Incorporation,  the Board of Directors
          does  hereby  designate  and  authorize  50,000  shares of Class A 14%
          Senior Mandatorily  Redeemable Preferred Stock, no par value, of which
          25,000  shares  shall be  designated  Class A 14%  Senior  Mandatorily
          Redeemable  Preferred  Stock,  Series  A,  no par  value;  and  futher
          resolved  that the  Board  of  Directors  does  hereby  designate  and
          authorize 150,000 shares of Class B 14% Senior Mandatorily  Redeemable
          Preferred  Stock,  no par  value,  of  which  75,000  shares  shall be
          designated  as Class B 14%  Senior  Mandatorily  Redeemable  Preferred
          Stock,   Series  A,  no  par  value,  each  having  the  designations,
          preferences,  relative,  participating,  optional  and  other  special
          rights and the  qualifications,  limitations and restrictions  thereof
          that are set forth in the  Certificate  of  Incorporation  and in this
          Resolution as follows:

               (a)  Designation.  There is hereby  created out of the authorized
          and unissued  shares of Preferred  Stock of the Corporation a class of
          Preferred  Stock  designated  as the "Class A 14%  Senior  Mandatorily
          Redeemable  Preferred  Stock." The number of shares  constituting such
          class  shall be 50,000  and are  referred  to  herein as the  "Class A
          Senior  Preferred  Stock."  25,000 shares of Class A Senior  Preferred
          Stock,  designated as the "Class A 14% Senior  Mandatorily  Redeemable
          Preferred Stock, Series A," shall be initially issued. There is hereby
          created out of the authorized and unissued  shares of Preferred  Stock
          of the Corporation a class of Preferred Stock designated as the "Class
          B 14% Senior  Mandatorily  Redeemable  Preferred Stock." The number of
          shares  constituting  such class shall be 150,000 and are  referred to
          herein as the "Class B Senior Preferred Stock." 75,000 shares of Class
          B Senior  Preferred  Stock,  designated  as the  "Class  B 14%  Senior
          Mandatorily  Redeemable Preferred Stock, Series A," shall be initially
          issued.  The  Class A Senior  Preferred  Stock  and the Class B Senior
          Preferred  Stock are  collectively  referred  to herein as the "Senior
          Preferred  Stock."  The  Corporation  may  issue up to one  additional
          series of the Class A Senior Preferred Stock (designated as the "Class
          A 14%  Mandatorily  Redeemable  Preferred  Stock,  Series  B") and one
          additional series of the Class B Senior Preferred Stock (designated as
          the "Class B 14% Mandatorily  Redeemable  Preferred Stock,  Series B")
          pursuant to this  Certificate of Designation  (without  complying with
          paragraph (f)(ii)(A) hereof) solely to Holders of the Senior Preferred
          Stock,  in exchange  for shares of the Class A 14% Senior  Mandatorily
          Redeemable  Preferred  Stock,  Series  A, or the  Class  B 14%  Senior
          Mandatorily Redeemable Preferred Stock, Series A, as applicable, as is
          necessary  to  comply  with  the   registration   provisions   of  the
          Registration Rights Agreement.

               (b) Rank.  The Senior  Preferred  Stock  shall,  with  respect to
          dividend distributions and distributions upon liquidation,  winding-up
          and dissolution of the Corporation, rank (i) senior (to the extent set
          forth herein) to all classes of Common Stock of the Corporation and to
          each other class or series of Capital Stock  (including  Capital Stock
          issuable upon exercise of any options,  warrants or rights to purchase
          Capital Stock) of the Corporation now authorized (including the Junior
          Preferred  Stock)  or  hereafter  created  the  terms  of which do not
          expressly  provide that it ranks  senior to, or on a parity with,  the
          Senior Preferred Stock as to dividend  distributions and distributions
          upon  liquidation,  winding-up  and  dissolution  of  the  Corporation
          (collectively  referred to,  together with all classes of Common Stock
          of the Corporation, as "Junior Securities"); (ii) on a parity with any
          class or series of Capital Stock  (including  Capital  Stock  issuable
          upon exercise of any options,  warrants or rights to purchase  Capital
          Stock)  of the  Corporation  hereafter  created  the  terms  of  which
          expressly provide that such class or series will rank on a parity with
          the  Senior   Preferred  Stock  as  to  dividend   distributions   and
          distributions    upon   liquidation,    winding-up   and   dissolution
          (collectively  referred to as "Parity Securities"),  provided that any
          such  Parity  Securities  that were not  approved  by the  Holders  in
          accordance  with  paragraph  (f)(ii)(A)  hereof  shall be deemed to be
          Junior Securities and not Parity Securities;  and (iii) junior to each
          other  class or series  of  Capital  Stock  (including  Capital  Stock
          issuable upon exercise of any options,  warrants or rights to purchase
          Capital Stock) of the Corporation hereafter created the terms of which
          expressly  provide  that such class or series  will rank senior to the
          Senior Preferred Stock as to dividend  distributions and distributions
          upon  liquidation,  winding-up  and  dissolution  of  the  Corporation
          (collectively  referred to as "Senior Securities"),  provided that any
          such  Senior  Securities  that were not  approved  by the  Holders  in
          accordance  with  paragraph  (f)(ii)(B)  hereof  shall be deemed to be
          Junior Securities and not Senior Securities.

               (c) Dividends.

               (i) From the Issue Date, the Holders of the outstanding shares of
          Senior  Preferred Stock shall be entitled to receive,  when, as and if
          declared by the Board of  Directors,  out of funds  legally  available
          therefor,  dividends on each share of Senior Preferred Stock at a rate
          per  annum  equal to 14% of the  Liquidation  Preference  per share of
          Senior  Preferred  Stock in effect  from time to time.  All  dividends
          shall accrue, whether or not earned or declared, on a daily basis from
          the Issue Date, shall be cumulative and shall be payable  quarterly in
          arrears  on  each  Dividend  Payment  Date,  commencing  on the  first
          Dividend Payment Date after the Issue Date. If any dividend payable on
          any  Dividend  Payment  Date on or prior to  December  1,  2004 is not
          declared or paid in full in cash on such  Dividend  Payment Date then,
          to the extent of legally  available  funds  therefor,  the Liquidation
          Preference of each share shall be increased on such  Dividend  Payment
          Date by an amount (the "Accrued Dividend Amount") equal to the product
          of (A) the amount  payable as dividends on such share on such Dividend
          Payment  Date that is not paid in cash  divided  by the  total  amount
          payable as dividends on such share on such Dividend  Payment Date, and
          (B)one-quarter  (or,  if the Issue Date was less than 90 days prior to
          the  applicable  Dividend  Payment  Date, a fraction the  numerator of
          which  is the  number  of days  elapsed  from  the  Issue  Date to the
          applicable  Dividend Payment Date and the denominator of which is 360)
          of the Accrued  Dividend Rate times the then  Liquidation  Preference.
          The amount of the dividend  otherwise payable in cash that is so added
          to the Liquidation Preference shall be deemed for all purposes to have
          been paid in full in cash,  shall not be deemed to be arrearages or in
          arrears and shall not accumulate. In the event that any portion of the
          Accrued  Dividend  Amount  may  not be so  added  to  the  Liquidation
          Preference  because of the lack of legally  available  funds  therefor
          (such portion, the "Default Dividends") and any portion of the Accrued
          Dividend Amount not so added to the Liquidation  Preference because of
          the lack of legally  available  funds therefo shall be accumulated and
          payable  in  cash.  Any  Default  Dividends  shall  thereafter  accrue
          dividends at an annual rate equal to the Accrued  Dividend  Rate.  All
          dividends  accumulating  and accruing  after  December 1, 2004 must be
          paid in cash (when,  as and if declared by the Board of Directors  out
          of funds  legally  available  therefor).  If, at any time,  any Voting
          Rights  Triggering  Event  described  in  clause  (1),  (2)  or (3) of
          paragraph (f)(iii)(A) shall have occurred, the per annum dividend rate
          will be increased by (x) 2% per annum in the case of clause (1) or (2)
          of paragraph  (f)(iii)(A)  during the  continuance  of any such Voting
          Rights Triggering Event and (y) 6% per annum in the case of clause (3)
          of  paragraph  (f)(iii)(A)  beginning  on the date of such  Change  of
          Control;  provided,  that  upon  the  occurrence  of a  Voting  Rights
          Triggering  Event described in clause (3)(x) of paragraph  (f)(iii)(A)
          the  Corporation  may,  at its  option,  offer to  redeem  the  Senior
          Preferred Stock pursuant to paragraph  (e)(i)(C) within 30 days of the
          occurrence of such Change of Control,  in which case the dividend rate
          will not  increase by 6% per annum.  After the date on which the right
          of the Holders to elect and to be  represented by members of the Board
          of Directors ceases to exist in accordance with paragraph (f)(iii)(B),
          the  dividend  rate will  revert to the rate  originally  borne by the
          Senior Preferred Stock.  Each dividend shall be payable to the Holders
          of record as they appear on the stock books of the  Corporation on the
          Dividend  Record  Date  immediately  preceding  the  related  Dividend
          Payment  Date.  Dividends  shall cease to accrue  and, if  applicable,
          accumulate  in  respect  of the enior  Preferred  Stock on the date of
          their redemption  unless the Corporation  shall have failed to pay the
          relevant  redemption price on Senior Preferred Stock to be redeemed on
          the date fixed for redemption.

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

               (iii)  Dividends  accruing  after  December 1, 2004 on the Senior
          Preferred  Stock  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
          Dividend  Payment  Date,  to Holders of record on such date,  not more
          than  forty-five  (45) days prior to the  payment  thereof,  as may be
          fixed by the Board of Directors.

               (iv) (A) Nodividends  shall be declared by the Board of Directors
          or paid or set apart for  payment  by the  Corporation  on any  Parity
          Securities for any period unless full  cumulative  dividends have been
          or  contemporaneously  are declared and paid in full, or declared and,
          if  payable  in cash,  a sum in cash  set  apart  sufficient  for such
          payment,  on the  Senior  Preferred  Stock  for all  Dividend  Periods
          terminating  on or prior to the date of payment of such  dividends  on
          such  Parity  Securities;  provided,  that with  respect to  dividends
          payable on the Senior Preferred Stock on or prior to December 1, 2004,
          any such  dividends  that  are  added  to the  Liquidation  Preference
          pursuant to paragraph (c)(i) shall be deemed to have already been paid
          in full. If any dividends are not so paid, all dividends declared upon
          shares of the Senior  Preferred Stock and any other Parity  Securities
          shall be declared  pro rata so that the amount of  dividends  declared
          per share on the Senior  Preferred  Stock and such  Parity  Securities
          shall in all cases  bear to each  other the same  ratio  that  accrued
          dividends  per share on the  Senior  Preferred  Stock and such  Parity
          Securities bear to each other.

               (B)  So  long  as  any  share  of  Senior   Preferred   Stock  is
          outstanding,  the Corporation shall not declare,  pay or set apart for
          payment  any  dividend  on any of the Junior  Securities  (other  than
          dividends in Junior  Securities  to the holders of Junior  Securities,
          including  with respect to the Junior  Preferred  Stock),  or 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 of the Junior  Securities  or any warrants,  rights,  calls or
          options  exercisable  for  or  convertible  into  any  of  the  Junior
          Securities  whether in cash,  obligations or shares of the Corporation
          or other  property  (other than in exchange for Junior  Securities  or
          pursuant to clause (ii), (vi), (vii) or (ix) of paragraph (j)(ii)(B)),
          and shall not permit  any  corporation  or other  entity  directly  or
          indirectly  controlled by the Corporation to purchase or redeem any of
          the Junior Securities or any such warrants,  rights,  calls or options
          (other than in exchange  for Junior  Securities  or pursuant to clause
          (ii), (vi), (vii) or (ix) of paragraph (j)(ii)(B)).

               (C) So  long  as any  share  of the  Senior  Preferred  Stock  is
          outstanding,  the  Corporation  shall  not  (except  with  respect  to
          dividends as permitted  by paragraph  (c)(iv)(A))  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
          of the Parity  Securities  or any warrants,  rights,  calls or options
          exercisable  for or  convertible  into  any of the  Parity  Securities
          whether in cash,  obligations  or shares of the  Corporation  or other
          property,  and  shall  not  permit  any  corporation  or other  entity
          directly or indirectly  controlled by the  Corporation  to purchase or
          redeem  any of the Parity  Securities  or any such  warrants,  rights,
          calls or  options  unless  full  cumulative  dividends  determined  in
          accordance  herewith  on the  Senior  Preferred  Stock  have  been  or
          contemporaneously  are paid in full;  provided,  that with  respect to
          dividends  payable  on the  Senior  Preferred  Stock  on or  prior  to
          December 1, 2004, any such dividends that are added to the Liquidation
          Preference  pursuant  to  paragraph  (c)(i)  shall be  deemed  to have
          already been paid in full.

               (v)  Dividends  payable  on the  Senior  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,  for periods not  involving a full
          calendar  month,  the actual  number of days elapsed (not to exceed 30
          days).

               (d) Liquidation Preference.

               (i) In the event of any  voluntary  or  involuntary  liquidation,
          dissolution  or  winding-up  of the  affairs of the  Corporation,  the
          Holders of shares of Senior Preferred Stock then outstanding  shall be
          entitled to be paid out of the assets of the Corporation available for
          distribution  to its  stockholders  an  amount  in cash  equal  to the
          Liquidation  Preference  for each  share  outstanding,  plus,  without
          duplication,  an amount in cash equal to accrued  and, if  applicable,
          accumulated  and  unpaid   dividends   thereon   (including,   without
          limitation,  Default  Dividends)  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  windingup)  before any
          distribution  shall be made or any  assets  distributed  in respect of
          Junior Securities to the holders of any Junior  Securities  including,
          without  limitation,  Common  Stock  of the  Corporation.  If upon any
          voluntary or involuntary liquidation, dissolution or winding-up of the
          Corporation,  the amounts  available  for payment  with respect to the
          Senior  Preferred  Stock  and  all  other  Parity  Securities  are not
          sufficient  to pay the  Holders  thereof,  the  Holders  of the Senior
          Preferred  Stock and the  Parity  Securities  will share  equally  and
          ratably in any distribution of assets of the Corporation in proportion
          to the  amounts  that  would be payable  on such  distribution  if the
          amounts to which the  Holders of the  Senior  Preferred  Stock and any
          Parity Securities are entitled were paid in full.

               (ii) For the purposes of this  paragraph  (d),  neither the sale,
          conveyance,  exchange,  assignment  or transfer  (for cash,  shares of
          stock,  securities or other consideration) of all or substantially all
          of the property or assets of the Corporation nor the  consolidation or
          merger  of the  Corporation  with or  into  one or  more  entities  in
          accordance   with  paragraph   (j)(viii)  shall  be  deemed  to  be  a
          liquidation,   dissolution   or  winding-up  of  the  affairs  of  the
          Corporation.

               (e) Redemption.

               (i)  Optional  Redemption.  (A) The  Corporation  may  redeem the
          Senior Preferred Stock at its option,  in whole at any time or in part
          from  time to  time,  from  any  source  of  funds  legally  available
          therefor, in the manner provided for in paragraph (e) (iii) hereof, at
          the  redemption  prices  in cash  (expressed  as a  percentage  of the
          Liquidation Preference) set forth below for each of the Class A Senior
          Preferred Stock and the Class B Senior Preferred Stock,  plus, without
          duplication,   an  amount  in  cash  equal  to  all  accrued  and,  if
          applicable,  accumulated and unpaid dividends  (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) if redeemed during the 12-month period  beginning on
          December 15 of each year listed below (unless otherwise specified):

               Class A Senior Preferred Stock

          1999 through June 15, 2001.................................     110.0%
          June 16, 2001 through December 14, 2003....................     114.0%
          2003.......................................................     107.0%
          2004.......................................................     103.5%
          2005 and thereafter........................................     100.0%

               Class B Senior Preferred Stock

          1999 and thereafter........................................     100.0%

          ; provided that (I) no redemption pursuant to this paragraph (e)(i)(A)
          shall be  authorized or made unless prior thereto full accrued and, if
          applicable,  accumulated and unpaid dividends are declared and paid in
          full, or declared and a sum in cash is set apart  sufficient  for such
          payment,  on the  Senior  Preferred  Stock  for all  Dividend  Periods
          terminating  on or prior to the Redemption  Date,  (II) any redemption
          pursuant to this  paragraph  (e)(i)(A) must be made pro rata among the
          Class A Senior  Preferred Stock and the Class B Senior Preferred Stock
          outstanding at such time,  except that the Corporation may redeem such
          shares  held by Holders  of fewer  than ten shares (or shares  held by
          Holders  who  would  hold  less  than ten  shares  as a result of such
          redemption),  as may be determined by the  Corporation,  and (III) any
          redemption  pursuant to this paragraph  (e)(i)(A) must be for at least
          $15.0  million;  provided,  that if less than $15.0  million of Senior
          Preferred  Stock is outstanding at the time of such  redemption,  such
          redemption pursuant to this paragraph (e)(i)(A) must be for all of the
          outstanding Senior Preferred Stock.

               (B) [Intentionally Omitted].

               (C) In addition to the foregoing  paragraph  (e)(i)(A),  upon the
          occurrence of a Change of Control, the Corporation may, at its option,
          offer to redeem all but not less than all of the outstanding shares of
          Senior  Preferred  Stock,  upon not less than 30 nor more than 60 days
          prior notice (but in no event may any such redemption  occur more than
          120 days after the occurrence of the Change of Control), such offer to
          remain open for not less than 30 days,  mailed by first-class  mail to
          each Holder's  registered address, at a redemption price equal to 100%
          of the Liquidation Preference thereof,  plus, without duplication,  an
          amount  in  cash  equal  to  all  accumulated  and  unpaid   dividends
          (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); provided,  that no redemption
          pursuant  to this  paragraph  (e)(i)(C)  shall be  authorized  or made
          unless  prior  thereto  full  accumulated  and  unpaid  dividends  are
          declared and paid in full,  or declared and a sum in cash is set apart
          sufficient  for such payment,  on the Senior  Preferred  Stock for all
          Dividend Periods terminating on or prior to the Redemption Date.

               (D) In the event of a redemption  pursuant to paragraph (e)(i)(A)
          hereof  of only a  portion  of the then  outstanding  shares of Senior
          Preferred Stock, the Corporation shall effect such redemption on a pro
          rata basis  according  to the number of shares  held by each Holder of
          Senior  Preferred  Stock,  except that the Corporation may redeem such
          shares  held by Holders  of fewer  than ten shares (or shares  held by
          Holders  who  would  hold  less  than ten  shares  as a result of such
          redemption), as may be determined by the Corporation.

               (ii) Mandatory  Redemption.  On December 10, 2007 (the "Mandatory
          Redemption  Date"),  the  Corporation  shall redeem,  to the extent of
          funds  legally  available  therefor,  in the  manner  provided  for in
          paragraph  (e) (iii)  hereof,  all of the  shares of Senior  Preferred
          Stock then  outstanding  at a  redemption  price  equal to 100% of the
          Liquidation Preference per share, 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).

               (iii)  Procedures  for  Redemption.  (A) At least 30 days and not
          more than 60 days  prior to the date fixed for any  redemption  of the
          Senior 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 Senior
          Preferred Stock at such Holder's address as it appears in the register
          maintained  by the  Transfer  Agent for the  Senior  Preferred  Stock,
          provided  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 Senior  Preferred  Stock to be redeemed  except as to
          the Holder or Holders to whom the  Corporation 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) or (C) or paragraph (e)(ii)hereof;

                        (2)  the redemption price;

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

                        (4)  the Redemption Date;

                        (5)  that the Holder is to surrender to the Corporation,
                  in the  manner, at  the  place or  places  and  at  the  price
                  designated, his certificate or certificates representing   the
                  shares of Senior Preferred Stock to be redeemed; and

                        (6)  that  dividends  on the  shares of Senior Preferred
                  Stock to be redeemed shall cease  to  accumulate and accrue on
                  such  Redemption Date  unless  the Corporation defaults in the
                  payment of the redemption price.

               (B) Each Holder shall  surrender the  certificate or certificates
          representing such shares of Senior Preferred Stock to the Corporation,
          duly endorsed (or otherwise in proper form for transfer, as determined
          by the Corporation),  in the manner and at the place designated in the
          Redemption  Notice,  and on the  Redemption  Date the full  redemption
          price 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.

               (C) On and after the  Redemption  Date,  unless  the  Corporation
          defaults in the payment in full of the  applicable  redemption  price,
          dividends on Senior  Preferred Stock called for redemption shall cease
          to accumulate on the Redemption Date, and all rights of the Holders of
          redeemed shares shall terminate with respect thereto on the Redemption
          Date, other than the right to receive the redemption price;  provided,
          however, that if a Redemption Notice shall have been given as provided
          in paragraph  (iii)(A)  above and the funds  necessary for  redemption
          (including  an amount in cash in  respect of all  dividends  that will
          accumulate  to  the  Redemption  Date)  shall  have  been  irrevocably
          deposited  in trust for the equal and ratable  benefit for the Holders
          of the shares of Senior  Preferred Stock to be redeemed,  then, at the
          close  of  business  on the  Business  Day on  which  such  funds  are
          segregated  and set aside,  the  Holders of the shares to be  redeemed
          shall  cease  to be  stockholders  of the  Corporation  and  shall  be
          entitled only to receive the redemption price.

               (D) All of the shares of the Senior Preferred Stock referenced in
          and  created by this  Certificate  of  Designation  shall at all times
          (including during any bankruptcy  proceeding) be treated as and deemed
          to be equity interests in the Corporation.

               (f) Voting Rights.


               (i) The Holders of Senior  Preferred  Stock,  except as otherwise
          required under Delaware law or as set forth in paragraphs  (ii), (iii)
          and (iv)  below,  shall not be entitled  or  permitted  to vote on any
          matter  required or permitted to be voted upon by the  stockholders of
          the Corporation.

               (ii) (A) So long as any  shares  of  Senior  Preferred  Stock are
          outstanding,  the Corporation  shall not authorize or issue any Parity
          Securities (except pursuant to the Registration Rights Agreement or in
          connection with the refinancing and concurrent  redemption of all, but
          not less than all, of the outstanding  Senior Preferred Stock) without
          the affirmative vote or consent of Holders of at least 60% of the then
          outstanding shares of Senior Preferred Stock, voting or consenting, as
          the case may be, as one class, given in person or by proxy,  either in
          writing or by resolution adopted at an annual or special meeting.

               (B)  So  long  as  any  shares  of  Senior  Preferred  Stock  are
          outstanding,  the Corporation  shall not authorize or issue any Senior
          Securities  without the  affirmative  vote or consent of Holders of at
          least 60% of the then  outstanding  shares of Senior  Preferred Stock,
          voting  or  consenting,  as the case may be,  as one  class,  given in
          person or by proxy,  either in writing or by resolution  adopted at an
          annual or special meeting.

               (C)  So  long  as  any  shares  of  Senior  Preferred  Stock  are
          outstanding,  the  Corporation  shall not  amend  this  Resolution  or
          Certificate  of  Designation  so as to affect  adversely the specified
          rights, preferences,  privileges or voting rights of Holders of shares
          of Senior  Preferred Stock without the affirmative  vote or consent of
          Holders  of at least a  majority  of the then  outstanding  shares  of
          Senior Preferred Stock,  voting or consenting,  as the case may be, as
          one  class,  given in  person or by proxy,  either  in  writing  or by
          resolution adopted at an annual or special meeting; provided, however,
          that no such  amendment  or waiver  may,  without  the  prior  written
          consent of (x) the Holder of each share of Senior Preferred Stock then
          outstanding and affected thereby,  (i) reduce the dividend rate on any
          share  of  Senior  Preferred   Stock,   (ii)  postpone  the  Mandatory
          Redemption Date or any Dividend Payment Date with respect to any share
          of  Senior  Preferred  Stock,  (iii)  change  the  percentage  of  the
          aggregate  outstanding  number of shares of Senior Preferred Stock the
          Holders of which shall be required to consent or take any other action
          under  this  Certificate  of  Designation  or (iv) make any  change to
          clauses (1), (2) or (4) of the definition of Voting Rights  Triggering
          Event and (y) at least 66 2/3% of the Holders of the then  outstanding
          shares  of Senior  Preferred  Stock,  (i)  subject  any  Holder to any
          additional obligation hereunder or (ii) make any change to clauses (3)
          or (5) of the definition of Voting Rights Triggering Event.

               (iii)  (A)  If  (1)  dividends   accruing  and,  if   applicable,
          accumulating on the Senior  Preferred Stock after December 1, 2004 are
          in  arrears  and not paid in cash for one or more  quarterly  Dividend
          Periods (whether or not consecutive) (a "Dividend  Default");  (2) the
          Corporation  fails to  redeem  all of the then  outstanding  shares of
          Senior  Preferred Stock on the Mandatory  Redemption Date or otherwise
          fails to  discharge  any  redemption  obligation  with  respect to the
          Senior  Preferred Stock; (3) a Change of Control occurs and either (x)
          the Corporation does not make an offer pursuant to paragraph (e)(i)(C)
          within 30 days  after such  Change of  Control or (y) the  Corporation
          fails to redeem any shares  validly  tendered in connection  with such
          offer in accordance  with  paragraph  (e)(i)(C);  (4) the  Corporation
          breaches  or  violates  one or more of the  provisions  set  forth  in
          paragraph  (j)  hereof  and the breach or  violation  continues  for a
          period  of 60 days or  more  after  the  Corporation  receives  notice
          thereof specifying the default from the Holders of at least 50% of the
          shares of Senior  Preferred Stock then  outstanding;  or (5) a payment
          default occurs under any mortgage, indenture or instrument under which
          there may be issued or by which there may be secured or evidenced  any
          Indebtedness of the Corporation or any of the Restricted  Subsidiaries
          (or payment of which is  guaranteed by the  Corporation  or any of the
          Restricted  Subsidiaries),  whether such Indebtedness or guarantee now
          exists,  or is created  after the date hereof  and, in each case,  the
          principal amount of any such Indebtedness, together with the principal
          amount of any other such  Indebtedness  under which a payment  default
          has  occurred,  aggregates  $10.0 million or more (other than any such
          payment  default  being  contested in good faith by the  Corporation),
          then in the  case of any of  clauses  (1)  through  (5)  (each of such
          clauses (1)  through  (5) a "Voting  Rights  Triggering  Event"),  the
          number  of  directors  constituting  the Board of  Directors  shall be
          adjusted by the number, if any, necessary to permit the Holders of the
          Senior Preferred Stock,  voting  separately and as one class, to elect
          that number of  directors  constituting  at least 25%  (rounded to the
          nearest whole number) of the Board of Directors;  provided,  that such
          number of  directors  shall not be less than two;  provided,  further,
          that, in the event more than one of the above defaults occurs,  at the
          same or at different  times, the maximum number of directors that such
          Holders  shall  be  entitled  to  elect is that  number  of  directors
          constituting at least 25% (rounded to the nearest whole number) of the
          Board of Directors;  provided, that such number of directors shall not
          be less than two.  Such  members  of the Board of  Directors  shall be
          elected by a  plurality  vote of the  Holders of the Senior  Preferred
          Stock at a meeting  therefor called upon the occurrence of such Voting
          Rights Triggering Event, and at every subsequent  meeting at which the
          terms of office of the  directors  so elected by the Holders of Senior
          Preferred   Stock  expire   (other  than  as  described  in  paragraph
          (f)(iii)(B)  below).  Such  Holders  shall be entitled  to  cumulative
          voting rights in  connection  with the election of such members of the
          Board of Directors.  In addition to the voting rights provided herein,
          any  Significant   Holder  shall  be  entitled  to  an  injunction  or
          injunctions  to prevent  material  breaches of the  provisions of this
          Certificate of Designation  and to enforce  specifically  the remedies
          under  this  Certificate  of  Designation  in any court of the  United
          States  or any  state  thereof  having  jurisdiction,  this  being  in
          addition  to any other  remedy to which such Holder may be entitled at
          law  or in  equity;  provided  that,  notwithstanding  the  foregoing,
          Holders  holding at least a majority  of the then  outstanding  Senior
          Preferred  Stock may by written consent waive any such material breach
          and such Significant Holder shall thereafter terminate its enforcement
          action with respect to such material breach. No such waiver or consent
          shall extend to any subsequent or other material  breach or impair any
          right consequent thereon except to the extent expressly so waived.

               (B) The right of the Holders of the Senior Preferred Stock voting
          together  as a  separate  class  to  elect  members  of the  Board  of
          Directors as set forth in paragraph  (f)(iii)(A)  above shall continue
          until  such  time  as (x) in the  event  such  right  arises  due to a
          Dividend  Default,  all such accrued  dividends that are in arrears on
          the Senior  Preferred Stock are paid in full in cash; (y) in the event
          such right  arises due to a Change of  Control,  an offer  pursuant to
          paragraph  (e)(i)(C) is made and the related redemption is consummated
          at any time within 120 days after such  Change of Control;  and (z) in
          all other cases, the event, failure,  breach or default giving rise to
          such  Voting  Rights  Triggering  Event  is  remedied  or cured by the
          Corporation  or waived by the  Holders of at least a  majority  of the
          shares of Senior Preferred Stock then outstanding and entitled to vote
          thereon,  at which time (1) the special right of the Holders of Senior
          Preferred  Stock so to vote as a class for the election of  directors,
          (2) the term of office of the  directors  elected  by the  Holders  of
          Senior Preferred Stock shall each terminate and the directors  elected
          by the holders of Common Stock or Capital Stock (other than the Senior
          Preferred  Stock) shall  constitute  the entire Board of Directors and
          (3) such Voting  Rights  Triggering  Event shall be deemed to cease to
          exist  or be  continuing.  At any  time  after  voting  power to elect
          directors shall have become vested and be continuing in the Holders of
          Senior Preferred Stock pursuant to paragraph  (f)(iii)  hereof,  or if
          vacancies  shall  exist in the  offices  of  directors  elected by the
          Holders of Senior Preferred Stock, a proper officer of the Corporation
          may, and upon the written request of the Holders of record of at least
          25% of the shares of Senior Preferred Stock then outstanding addressed
          to the secretary of the Corporation  shall,  call a special meeting of
          the Holders of Senior Preferred Stock, for the purpose of electing the
          directors  which such Holders are  entitled to elect.  If such meeting
          shall not be called by a proper officer of the  Corporation  within 20
          days after personal service of said written request upon the secretary
          of the  Corporation,  or within 20 days after  mailing the same within
          the United States by certified mail, addressed to the secretary of the
          Corporation at its principal  executive  offices,  then the Holders of
          record of at least 25% of the outstanding  shares of Senior  Preferred
          Stock may  designate in writing one Holder to call such meeting at the
          expense  of the  Corporation,  and such  meeting  may be called by the
          Person so designated  upon the notice required for the annual meetings
          of  stockholders of the Corporation and shall be held at the place for
          holding  the annual  meetings  of  stockholders.  Any Holder of Senior
          Preferred Stock so designated  shall have, and the  Corporation  shall
          provide,  access to the lists of stockholders to be called pursuant to
          the provisions hereof.

               (C) At any meeting held for the purpose of electing  directors at
          which the  Holders  of Senior  Preferred  Stock  shall have the right,
          voting  together as a separate class, to elect directors as aforesaid,
          the  presence  in  person  or by  proxy of the  Holders  of at least a
          majority of the outstanding  shares of Senior Preferred Stock entitled
          to vote thereat shall be required to constitute a quorum of the Senior
          Preferred Stock.

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

               (E)  Notwithstanding  anything to the contrary in this  paragraph
          (f), DB Capital  Investors,  L.P.,  First Union  Investors,  Inc.  and
          Heller  Financial,  Inc. or any of their respective direct or indirect
          transferees of shares of the Class B Senior  Preferred  Stock,  or any
          other Holder that is a bank holding  company or any affiliate  thereof
          (each, a "Regulated  Holder"),  shall not be entitled to vote with the
          other  Holders  of Senior  Preferred  Stock  unless,  until and to the
          extent (x)  permitted  by the Bank  Holding  Company  Act of 1956,  as
          amended,  and  Section  225.2(q)(2)(i)  of  Regulation  Y  promulgated
          thereunder,  and (y) such  Regulated  Holder  provides  written notice
          thereof  to  the  Corporation.   Notwithstanding   the  foregoing  the
          Corporation  shall  send to each  Regulated  Holder  any  information,
          consent  solicitation  documents,  notices or any other  documents  or
          correspondence that is sent to the Holders. Each such Regulated Holder
          shall have 10 days after  receipt of such  information,  documents  or
          notices to provide the Corporation with notice that it is permitted to
          vote on any such  matter  set  forth  therein;  provided,  that if any
          Regulated  Holder does not give the Corporation  notice within such 10
          days such Regulated Holder shall be deemed not to be permitted to vote
          on any such matter.

               (iv) In any case in which the  Holders  of the  Senior  Preferred
          Stock  shall be entitled to vote  pursuant  to this  paragraph  (f) or
          pursuant  to  Delaware  law,  each  Holder of Senior  Preferred  Stock
          entitled to vote with  respect to such matter shall be entitled to one
          vote for each share of Senior Preferred Stock held.

               (v) Any action  required or permitted to be taken at a meeting of
          Holders  may be taken  without a  meeting,  without  prior  notice and
          without a vote,  if one or more written  consents,  setting  forth the
          action so taken,  shall be signed by the Holders of outstanding Senior
          Preferred  Stock having not less than the minimum number of votes that
          would be  necessary  to  authorize or take such action at a meeting at
          which all shares of Senior  Preferred  Stock  entitled to vote thereon
          were present and voted.

               (g) Conversion or Exchange;  Registration  Rights. The Holders of
          shares of Senior  Preferred Stock shall not 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 of the  Corporation  other than as  provided  in the
          Registration  Rights  Agreement.  The  Holders  of  shares  of  Senior
          Preferred  Stock shall have the rights  described in the  Registration
          Rights Agreement.

               (h)  Reissuance  of  Senior  Preferred  Stock.  Shares  of Senior
          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 and unissued  shares of Preferred  Stock
          undesignated as to series and may be redesignated and reissued as part
          of any series of Preferred  Stock;  provided that any issuance of such
          shares of Preferred Stock must be in compliance with the terms hereof.

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

               (j) Certain Covenants.

               (i) Intentionally Omitted.

               (ii) Restricted Payments.

               (A) The Corporation  shall not, and shall not cause or permit any
          of the Restricted Subsidiaries to, directly or indirectly:

               (i) declare or pay any dividend or make any other distribution or
          payment  on or in respect of Capital  Stock or  options,  warrants  or
          rights to purchase  Capital Stock of the  Corporation  (other than (x)
          dividends  or  distributions  payable  solely in  shares of  Qualified
          Capital  Stock of the  Corporation  or in  options,  warrants or other
          rights to acquire  shares of such  Qualified  Capital  Stock,  and (y)
          subject to paragraph (c)(iv), dividends or distributions in respect of
          Senior  Securities or Parity  Securities of the Corporation  that were
          issued in accordance with paragraph (f)(ii)(A) or (B), as applicable);

               (ii) purchase, redeem, defease or otherwise acquire or retire for
          value,  directly or  indirectly  (including  through  the  purchase of
          Capital Stock or options, warrants or rights to purchase Capital Stock
          of any Person that  directly or  indirectly  owns Capital Stock of the
          Corporation),  the  Capital  Stock or  options,  warrants or rights to
          purchase  Capital  Stock of the  Corporation  (other than (x) any such
          Capital Stock owned by the Corporation  (other than Redeemable Capital
          Stock) or (y)  subject to  paragraph  (c)(iv),  Senior  Securities  or
          Parity  Securities of the  Corporation  that were issued in accordance
          with paragraph (f)(ii)(A) or (B), as applicable,  or options, warrants
          or other rights to acquire such Capital Stock); or

               (iii) make any Investment  (other than any Permitted  Investment)
          in any Person;

(any  of  the  foregoing   actions  described  in  clauses  (i)  through  (iii),
collectively,   "Restricted  Payments"),   unless  (1)  immediately  before  and
immediately after giving effect to such Restricted Payment on a pro forma basis,
no Voting Rights  Triggering Event (other than a Voting Rights  Triggering Event
described in clause (3) or (5) of paragraph (f)(iii)(A)) shall have occurred and
be continuing;  (2) immediately  before and  immediately  after giving effect to
such Restricted  Payment on a pro forma basis, the Corporation could incur $1.00
of additional  Indebtedness (other than Permitted  Indebtedness) under paragraph
(j)(iv);  and (3) after giving effect to the proposed  Restricted  Payment,  the
aggregate  amount of all such  Restricted  Payments  declared or made (or deemed
made) after the Issue Date, does not exceed the sum of:

               (I)  50%  of  the  cumulative  Consolidated  Net  Income  of  the
          Corporation  during  the period  (treated  as one  accounting  period)
          beginning  on  the  Issue  Date  and  ending  on the  last  day of the
          Corporation's  most recently  ended fiscal  quarter for which internal
          financial  statements  are  available  at or prior to the time of such
          Restricted  Payment (or, if such  cumulative  Consolidated  Net Income
          shall be a deficit, minus 100% of such deficit); plus

               (II) 100% of the aggregate net cash proceeds  received  after the
          Issue Date by the Corporation from the issuance or sale (other than to
          any of its Subsidiaries) of Qualified Capital Stock of the Corporation
          or from the  exercise of any  options,  warrants or rights to purchase
          such  Qualified  Capital  Stock of the  Corporation  or of  Redeemable
          Capital  Stock or debt  securities of the  Corporation  that have been
          converted into such Qualified  Capital Stock or any options,  warrants
          or rights to purchase such Qualified  Capital Stock  (except,  in each
          case,  to the extent such  proceeds  are used to  purchase,  redeem or
          otherwise  retire  Capital  Stock as set forth below in clause (ii) or
          (iv) of paragraph (B) below); plus

               (III)  in  the  case  of  the  disposition  or  repayment  of any
          Investment  (other than a Permitted  Investment)  made after the Issue
          Date,  an amount (to the  extent  not  included  in  Consolidated  Net
          Income)  equal to the lesser of (x) the return of capital with respect
          to such  Investment,  less the cost of disposition of such  Investment
          and (y) the initial amount of such Investment; plus

               (IV)  so  long  as  the  Designation  thereof  was  treated  as a
          Restricted  Payment  made after the Issue  Date,  with  respect to any
          Unrestricted  Subsidiary  that has been  redesignated  as a Restricted
          Subsidiary   after  the  Issue  Date  in  accordance   with  paragraph
          (j)(xi),the  lesser  of (x) the net book  value  of the  Corporation's
          Investment  in  such  Unrestricted  Subsidiary  at the  time  of  such
          redesignation  and (y) the Fair Market Value of such Investment at the
          time of such redesignation; plus

               (V) 100% of the aggregate  amounts  contributed to the capital of
          the Corporation since the Issue Date; plus

               (VI) 50% of any dividends received by the Corporation or a Wholly
          Owned Restricted  Subsidiary (except to the extent that such dividends
          were already included in Consolidated Net Income) after the Issue Date
          from an Unrestricted Subsidiary.

               (B)  Notwithstanding the foregoing clause (A), and in the case of
clauses (iii),(iv) and (vi) below, so long as no Voting Rights  Triggering Event
(other than a Voting  Rights  Triggering  Event described in clause (3) or (5)of
paragraph  (f)(iii)(A))  shall have  occurred and be  continuing  or would arise
therefrom,  the  foregoing  provisions  of clause  (A) shall  not  prohibit  the
following actions,  which shall, however, be subject to paragraph (c)(iv), (each
of clauses (i) through (ix) being referred to as a "Permitted Payment"):

               (i) the payment of any dividend or redemption  payment  within 60
          days  after  the  date of  declaration  thereof,  if at  such  date of
          declaration  such  payment was  permitted  by the  provisions  of this
          Certificate of Designation, including as described under paragraph (A)
          of this paragraph (j)(ii);

               (ii)  the  repurchase,   redemption,   or  other  acquisition  or
          retirement of any shares of Capital Stock (or any options, warrants or
          rights to purchase Capital Stock) of the Corporation or any Restricted
          Subsidiary in exchange for  (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),  or
          out of the net cash proceeds of a substantially  concurrent  issue and
          sale for cash to any Person (other than to a Restricted  Subsidiary of
          the  Corporation)  of, shares of Qualified  Capital Stock (or options,
          warrants or rights to purchase such  Qualified  Capital  Stock) of the
          Corporation; provided that the net cash proceeds that are utilized for
          any such repurchase, redemption or other acquisition or retirement are
          excluded from clause (II) of paragraph (A) of this paragraph (j)(ii);

               (iii)  Restricted  Payments in an aggregate  amount not to exceed
          $10.0 million;

               (iv)  Investments  (in  addition  to  Permitted  Investments)  in
          Persons  engaged in a Permitted  Business that are made out of the net
          cash  proceeds  of the  issuance  of  Qualified  Capital  Stock of the
          Corporation; provided, that (x) such Investment is made within 30 days
          of the  receipt of the  proceeds  of the  issuance  of such  Qualified
          Capital  Stock  and  (y)  such  Investment  together  with  all  other
          Investments  made  pursuant  to this  clause  (iv) does not  exceed an
          aggregate  amount of $15.0 million;  provided,  further,  that the net
          cash proceeds from the sale of such shares of Qualified  Capital Stock
          are  excluded  from clause  (II) of  paragraph  (A) of this  paragraph
          (j)(ii);

               (v) subject to paragraph (c)(iv), any dividends or other payments
          on or with respect to the Senior Preferred Stock or Parity  Securities
          issued in accordance with paragraph (f)(ii);

               (vi) the repurchase,  redemption, retirement or other acquisition
          for value of any  shares of Capital  Stock (or  options,  warrants  or
          rights to purchase Capital Stock) of the Corporation or any Restricted
          Subsidiary (other than any such repurchase,  redemption, retirement or
          other acquisition in connection with the Recapitalization) held by any
          director,  officer  or  employee  of  the  Corporation  or  any of its
          Restricted   Subsidiaries   pursuant  to  any  employment   agreement,
          management equity subscription agreement,  stock option or acquisition
          agreement;  provided,  that  the  aggregate  price  paid  for all such
          repurchased,  redeemed, acquired or retired Capital Stock (or options,
          warrants  or  rights  to  purchase  Capital  Stock)  (x) from  current
          employees of the  Corporation  or any of its  Restricted  Subsidiaries
          shall not exceed $1.0 million or (y) from former  directors,  officers
          or employees of the Corporation or any of its Restricted  Subsidiaries
          shall not exceed $3.0  million,  in each case in the  aggregate in any
          twelve-month  period  (other  than  any such  repurchase,  redemption,
          retirement   or   other    acquisition   in   connection    with   the
          Recapitalization);

               (vii)  repurchases  of Capital  Stock (or  options,  warrants  or
          rights  to  purchase  Capital  Stock)  deemed to occur  upon  cashless
          exercise  of stock  options  to the  extent  such  Capital  Stock  (or
          options,  warrants or rights to purchase  Capital Stock)  represents a
          portion of the exercise  price of such options or related  withholding
          taxes (but only to the  extent  such  withholding  taxes do not exceed
          $250,000 in any twelve-month period);

               (viii)  any  payments  on  Redeemable  Capital  Stock  issued  in
          accordance with this Certificate of Designation; and

               (ix)  payments of up to $3.0  million  with  respect to which the
          Corporation  has  no  indemnification   rights  under  the  agreements
          governing the Recapitalization in connection with the final resolution
          of  any  disputes  existing  as of  the  Issue  Date  regarding  stock
          ownership.

               In computing the amount of Restricted  Payments  previously  made
for  purposes  of  clause  (3) of  paragraph  (A)  of  this  paragraph  (j)(ii),
Restricted  Payments under the immediately  preceding clauses (i) and (vi) shall
be included.

               The amount of all Restricted  Payments (other than cash) shall be
the Fair Market Value  (evidenced  by a resolution of the Board of Directors set
forth in an officers'  certificate  delivered to the Significant Holders) on the
date of the Restricted Payment of the asset(s) proposed to be transferred by the
Corporation or such Restricted  Subsidiary,  as the case may be, pursuant to the
Restricted  Payment.  Not later than the date of making any Restricted  Payment,
the  Corporation   shall  deliver  to  the  Significant   Holders  an  officers'
certificate  stating that such Restricted Payment is permitted and setting forth
the basis upon which the  calculations  required by this paragraph  (j)(ii) were
computed,  which  calculations  may  be  based  upon  the  Corporation's  latest
available  financial  statements.   No  payment  made  in  connection  with  the
Recapitalization shall be deemed to be a Restricted Payment hereunder.

              (iii) Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.  The  Corporation  shall not, and shall not cause or permit any of
the Restricted  Subsidiaries  to,  directly or  indirectly,  create or otherwise
cause or suffer to exist or become  effective or enter into any  agreement  with
any Person that would cause to become effective,  any consensual  encumbrance or
restriction of any kind, on the ability of any  Restricted  Subsidiary to (A)(i)
pay  dividends,  in cash or otherwise,  or make any other  distributions  to the
Corporation  or any of the  Restricted  Subsidiaries  (x) on or in  respect  its
Capital Stock or (y) with respect to any other interest or participation  in, or
measured by, its profits,  or (ii) pay any Indebtedness  owed to the Corporation
or  any  of  the  Restricted  Subsidiaries,  (B)  make  any  Investment  in  the
Corporation or any of the Restricted Subsidiaries or (C) sell, lease or transfer
any of its  properties  or assets to the  Corporation  or any of the  Restricted
Subsidiaries,  except for such encumbrances or restrictions existing under or by
reason  of:  (i) any  encumbrance  or  restriction  existing  under  the  Credit
Agreement or the Indenture and any other agreement, in each case as in effect on
the Issue Date, (ii) customary non-assignment provisions in leases, licenses and
other agreements  entered into in the ordinary course of business and consistent
with past practices,  (iii) Purchase Money  Obligations for property acquired in
the ordinary course of business that impose restrictions of the nature described
in  clause  (C) above on the  property  so  acquired,  (iv) any  encumbrance  or
restriction, with respect to a Person that is not a Restricted Subsidiary on the
Issue Date in existence at the time such Person becomes a Restricted  Subsidiary
and not  incurred  in  connection  with,  or in  contemplation  of,  such Person
becoming a Restricted Subsidiary;  provided, however, that such encumbrances and
restrictions  are not  applicable  to the  Corporation  or any other  Restricted
Subsidiary,  or the  properties  or  assets  of  the  Corporation  or any  other
Restricted  Subsidiary,  (v) customary restrictions with respect to a Restricted
Subsidiary  pursuant to an agreement  that has been entered into for the sale or
disposition of all or  substantially  all of the Capital Stock or assets of such
Restricted Subsidiary; provided, however, that any such restriction relates only
to the Capital Stock or assets being sold pursuant to such  agreement,  (vi) any
customary  restriction in an agreement  governing  Indebtedness  of a Restricted
Subsidiary  incurred after the Issue Date in compliance with paragraph  (j)(iv);
(vii) any encumbrance or restriction  existing under any agreement that extends,
renews,  refinances or replaces the agreements  containing the  encumbrances  or
restrictions  in the  foregoing  clause  (i),  (iii) or (iv),  or in this clause
(vii); provided, however, that the terms and conditions of any such encumbrances
or  restrictions  are no more  restrictive  than those  under or pursuant to the
agreement so extended,  renewed,  refinanced or replaced;  and (viii) applicable
law.

               (iv) Incurrence of Indebtedness.

               (A) The Corporation shall not,  and shall not cause or permit any
of the  Restricted  Subsidiaries  to,  directly or  indirectly,  create,  incur,
assume, issue,  guarantee or in any manner become liable for or with respect to,
contingently  or  otherwise  (in each case,  to  "incur"),  the  payment of, any
Indebtedness (including any Acquired Indebtedness);  provided, however, that the
Corporation  or any  Restricted  Subsidiary  may incur  Indebtedness  (including
Acquired  Indebtedness),  if, in either case, immediately after giving pro forma
effect thereto,  the Consolidated Fixed Charge Coverage Ratio of the Corporation
is at least equal to 2.0:1.0.

               (B)  Notwithstanding  the foregoing,  to the extent  specifically
set forth below, the Corporation and the Restricted  Subsidiaries may incur each
and all of the following (collectively, "Permitted Indebtedness"):

               (i)   Indebtedness   of  the   Corporation   and  its  Restricted
          Subsidiaries  under  the  Senior  Subordinated  Notes  and  guarantees
          thereof in an aggregate principal amount, when taken together with any
          refinancings  thereof  pursuant to clause (ix),  not to exceed  $100.0
          million at any one time outstanding;

               (ii)   Indebtedness   of  the   Corporation  and  its  Restricted
          Subsidiaries under the Credit Agreement (and guarantees thereof) in an
          aggregate  principal  amount not to exceed $475.0  million at any time
          outstanding,  less the principal  amount of any scheduled or mandatory
          payments made under the Credit Agreement to the extent the commitments
          thereunder are reduced in connection therewith;

               (iii)   Indebtedness   of  the   Corporation  or  any  Restricted
          Subsidiary  outstanding on the Issue Date (other than under the Credit
          Agreement and the Senior Subordinated Notes);

               (iv)  Indebtedness  of the  Corporation  owing to a Wholly  Owned
          Restricted  Subsidiary for so long as such  Indebtedness is owing to a
          Wholly Owned  Restricted  Subsidiary;  provided that the  disposition,
          pledge or transfer of any such  Indebtedness to a Person (other than a
          disposition,   pledge  or  transfer  to  a  Wholly  Owned   Restricted
          Subsidiary)  shall be deemed to be an incurrence of such  Indebtedness
          by the Corporation not permitted by this clause (iv);

               (v) Indebtedness of a Restricted  Subsidiary owing to and held by
          the Corporation or another  Restricted  Subsidiary;  provided that (a)
          any  disposition,  pledge or  transfer of any such  Indebtedness  to a
          Person (other than the Corporation or a Restricted  Subsidiary)  shall
          be deemed to be an incurrence of such  Indebtedness by the obligor not
          permitted  by this clause  (v),  and (b) any  transaction  pursuant to
          which any Restricted  Subsidiary,  which has Indebtedness owing to the
          Corporation  or  any  other  Restricted  Subsidiary,  ceases  to  be a
          Restricted  Subsidiary  shall  be  deemed  to  be  the  incurrence  of
          Indebtedness  by such  Restricted  Subsidiary that is not permitted by
          this clause (v);

               (vi)  the  incurrence  by  the   Corporation  or  any  Restricted
          Subsidiary  of  Hedging  Obligations  that  are  incurred  (a) for the
          purpose of fixing or hedging  interest  rate risk with  respect to any
          Indebtedness  that is  permitted  to be  incurred by the terms of this
          Certificate of Designation or (b) for the purpose of fixing or hedging
          currency exchange rate risk with respect to any currency exchanges, in
          either case not for speculative purposes;

               (vii)   Indebtedness   of  the   Corporation  or  any  Restricted
          Subsidiary  represented by Capitalized  Lease  Obligations or Purchase
          Money  Obligations  or  other  Indebtedness  incurred  or  assumed  in
          connection  with the  acquisition  or  development of real or personal
          (tangible  or  intangible)  property  in each  case  incurred  for the
          purpose of  financing or  refinancing  all or any part of the purchase
          price,  or  cost  of  installation,  construction  or  improvement  of
          property used in the business of the  Corporation  or such  Restricted
          Subsidiary, in an aggregate principal amount, when taken together with
          any refinancings  thereof pursuant to clause (ix), not to exceed $10.0
          million at any one time outstanding;

               (viii)  letters  of  credit  to  support   workers   compensation
          obligations  and bankers  acceptances and  performance  bonds,  surety
          bonds and performance guarantees, of the Corporation or any Restricted
          Subsidiary,   in  each  case,  in  the  ordinary  course  of  business
          consistent with past practice;

               (ix)  any  renewals,   extensions,   substitutions,   refundings,
          refinancings or replacements  (collectively,  a "refinancing")  of any
          Indebtedness incurred under paragraph (j)(iv)(A) above or described in
          clauses  (B)(i),  (ii),  (iii) and  (vii),  including  any  successive
          refinancings  so long as the aggregate  principal  amount (or accreted
          value,  if  applicable)  of  Indebtedness  represented  thereby is not
          increased by such  refinancing plus the amount of any premium or other
          payment  required  to be paid in  connection  with such a  refinancing
          pursuant to the terms of the  Indebtedness  being  refinanced plus the
          amount of  expenses  of the  Corporation  or a  Restricted  Subsidiary
          incurred in connection with such refinancing and such refinancing does
          not reduce the Average Life to Stated  Maturity or the Stated Maturity
          of such Indebtedness;

               (x) guarantees by the Corporation or any Restricted Subsidiary of
          Indebtedness incurred by the Corporation or a Restricted Subsidiary so
          long as the  incurrence of such  Indebtedness  by the primary  obligor
          thereon  was  permitted  under  the  terms  of  this   Certificate  of
          Designation;

               (xi)   the   incurrence   by   the   Corporation's   Unrestricted
          Subsidiaries of Non-Recourse Debt; provided, however, that if any such
          Indebtedness  ceases  to  be  Non-Recourse  Debt  of  an  Unrestricted
          Subsidiary,  such event shall be deemed to constitute an incurrence of
          Indebtedness by a Restricted Subsidiary of the Corporation; and

               (xii)   Indebtedness   of  the   Corporation  or  any  Restricted
          Subsidiary  in addition to that  described in clauses (i) through (xi)
          above, and any refinancing thereof, so long as the aggregate principal
          amount of all such  additional  Indebtedness  shall not  exceed  $20.0
          million  outstanding  at any one time in the aggregate (all or part of
          which may, but need not, be incurred under the Credit Agreement).

               (C) For  purposes  of determining  compliance with this paragraph
(j)(iv),  in the event that an item of  Indebtedness  meets the criteria of more
than one of the  categories  of  Indebtedness  described  in clauses (i) through
(xii) of the immediately  preceding paragraph (B), the Corporation shall, in its
sole discretion,  classify such item of Indebtedness in any manner that complies
with this paragraph  (j)(iv) and will only be required to include the amount and
type of such  Indebtedness  in one of such  clauses  or  pursuant  to  paragraph
(j)(iv)(A);  provided that (1) Indebtedness outstanding on the Issue Date (other
than under the Credit Agreement or the Senior Subordinated Notes) will be deemed
outstanding  under  clause  (B)(iii),  and (2)  Indebtedness  under  the  Credit
Agreement  (including  amounts  outstanding  on the Issue  Date) of up to $475.0
million (as reduced under clause  (B)(ii)) will be deemed  incurred under clause
(B)(ii).  Accrual of interest,  accretion  of accreted  value and the payment of
interest through the issuance of securities  paid-in-kind shall not be deemed to
be an incurrence of Indebtedness for purposes of this paragraph (j)(iv).

               (v) Transactions with Affiliates. The Corporation shall not,  and
shall  not cause or  permit  any of the  Restricted  Subsidiaries  to,  make any
payment  to,  or  sell,  lease,  transfer  or  otherwise  dispose  of any of its
properties  or assets to, or purchase any property or assets from, or enter into
or make or amend  any  contract,  agreement,  understanding,  loan,  advance  or
guarantee  with, or for the benefit of, any Affiliate of the Corporation or of a
Restricted  Subsidiary (other than transactions between or among the Corporation
and/or any of its  Restricted  Subsidiaries)  unless (A) such  transaction is on
terms  that  are  no  less  favorable  to the  Corporation  or  such  Restricted
Subsidiary,  as the case may be,  than  those that  might  reasonably  have been
obtained in a comparable  transaction with an unrelated Person, (B) with respect
to any transaction or series of related  transactions  involving aggregate value
in excess of $2.5 million,  the Corporation  delivers to each Significant Holder
an Officers' Certificate describing such transaction or transactions, certifying
that such  transaction or  transactions  have been approved by a majority of the
Disinterested  Directors of the  Corporation,  or in the event there is only one
Disinterested Director, by such Disinterested Director, and certifying that such
transaction or transactions comply with clause (A) above and (C) with respect to
any transaction or series of related  transactions  involving aggregate payments
in excess of $7.5  million,  the  Corporation  delivers to each Holder a written
opinion of an  Independent  Financial  Advisor  stating that the  transaction or
series of related  transactions  is fair to the  Corporation or such  Restricted
Subsidiary  from a financial point of view (it being agreed that an opinion from
an Independent  Financial Advisor stating that the transaction is at Fair Market
Value shall be  sufficient);  provided,  however,  that this provision shall not
apply to: (I) any  transaction  with an officer or director  of the  Corporation
(acting  in such  capacity)  entered  into in the  ordinary  course of  business
(including  compensation  and employee  benefit  arrangements  with any officer,
director or employee of the  Corporation,  including  under any stock  option or
stock  incentive  plans);  (II) any Restricted  Payment or Permitted  Investment
otherwise permitted by the terms of this Certificate of Designation; (III) those
agreements and  arrangements  existing and as in effect on the Issue Date;  (IV)
the  payment  of  reasonable  and  customary  fees  and   compensation  to,  and
indemnification  agreements  (and  payments  thereunder)  for  the  benefit  of,
officers,  directors  and  employees  entered  into in the  ordinary  course  of
business;  (V) the agreements and arrangements pursuant to or referred to in the
Purchase  Agreement,  this Certificate of Designation,  the Registration  Rights
Agreement  and  the  other  documents   entered  into  in  connection  with  the
Recapitalization; (VI) so long as no Voting Rights Triggering Event has occurred
and is  continuing,  the  payment  of  management,  consulting,  monitoring  and
advisory fees and related expenses to the Equity Investor and its Affiliates not
to exceed  $500,000 in any  calendar  year  (other  than the fees and  unrelated
expenses  incurred  by and paid to or on behalf of the Equity  Investor  and its
Affiliates in connection with the Recapitalization,  which fees and expenses are
exempt from the terms hereof);  and (VII) any transaction with OSI Funding Corp.
(or any other  Person  engaged in business  with the  Corporation  or any of its
Restricted Subsidiaries similar to OSI Funding Corp.'s business) entered into in
the ordinary course of business consistent with past practices.

               (vi)  Limitation  on  Issuances  and  Sales  of  Capital Stock of
Restricted  Subsidiaries.  The  Corporation  shall  not,  and shall not cause or
permit any of the Restricted  Subsidiaries to, transfer,  convey, sell, issue or
otherwise   dispose  of  any  Capital  Stock  of  any  Wholly  Owned  Restricted
Subsidiaries  to any  Person  (other  than the  Corporation  or a  Wholly  Owned
Restricted Subsidiary),  unless such transfer,  conveyance, sale, issue or other
disposition  (x) is  pursuant  to and  in  accordance  with  the  provisions  of
paragraphs  (j)(viii),  (j)(ix) or, with  respect to the  transfer,  conveyance,
sale,  lease or other  disposition of all of the Capital Stock of a Wholly Owned
Restricted Subsidiary,  (j)(xv) or (y) is of directors' qualifying shares to the
extent required by applicable law; provided,  however,  that this covenant shall
not apply to any pledge of and  foreclosure  on Capital Stock of any  Restricted
Subsidiary to secure Indebtedness under the Credit Agreement.

               (vii) Payments  for  Consents. Neither the Corporation nor any of
its  Subsidiaries  shall,  directly or  indirectly,  pay or cause to be paid any
economic  consideration,  whether by way of interest,  fee or otherwise,  to any
Holder  in  consideration  for or as an  inducement  to any  consent,  waiver or
amendment of any of the terms or provisions of this  Certificate  of Designation
unless such  economic  consideration  is  concurrently  offered to be paid or is
concurrently  paid to all Holders that  consent,  waive or agree to amend in the
time frame set forth in the  solicitation  documents  relating to such  consent,
waiver or agreement.

               (viii)  Merger, Consolidation, or Sale of Assets. The Corporation
shall not  consolidate or merge with or into (whether or not the  Corporation is
the  surviving   corporation),   or  directly  and/or  indirectly   through  its
Subsidiaries sell, assign,  transfer,  lease, convey or otherwise dispose of all
or  substantially  all of the properties and assets of the  Corporation  and its
Restricted Subsidiaries taken as a whole in one or more related transactions, to
any other Person unless (A)(i) the  Corporation is the surviving  corporation or
(ii) the entity or the Person formed by or surviving any such  consolidation  or
merger  (if other  than the  Corporation)  or to which  such  sale,  assignment,
transfer,  lease,  conveyance  or other  disposition  shall  have been made (the
entity or Person described in this clause (ii), the "Successor  Corporation") is
a corporation  organized or existing  under the laws of the United  States,  any
state thereof or the District of Columbia; (B) the Successor Corporation assumes
all the obligations of the Corporation under this Certificate of Designation and
the Purchase Agreement pursuant to an amendment or supplement hereto or thereto,
as applicable, and each other instrument,  document or agreement entered into by
the  Corporation  in  connection  therewith,  in each case in a form  reasonably
satisfactory to the Required Holders;  (C) immediately after such transaction no
Voting  Rights  Triggering  Event (other than a Voting Rights  Triggering  Event
described in clause (1) (so long as, on a pro forma basis after giving effect to
such  transaction,  the  Corporation  will pay any accrued and unpaid  dividends
since December 1, 2004 in cash, (3) or (5) of paragraph (f)(iii)(A)) exists; and
(D) the Corporation  will, at the time of such  transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable  four-quarter  period,  be  permitted  to  incur  at  least  $1.00 of
additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio
test set forth in paragraph (j)(iv)(A) hereof.

               (ix)  Successor Corporation Substituted.  Upon any  consolidation
of the Corporation  with, or merger of the Corporation into, any other Person or
any  transfer,   conveyance,   sale,  lease  or  other  disposition  of  all  or
substantially  all of the  properties  and  assets  of the  Corporation  and its
Subsidiaries taken as a whole in one or more related  transactions in accordance
with paragraph  (j)(viii),  the Successor  Corporation  shall succeed to, and be
substituted  for,  and may  exercise  every right and power of, the  Corporation
under this  Certificate of Designation and the Purchase  Agreement with the same
effect as if such Successor Corporation had been named as the Corporation herein
or  therein,  and  thereafter,  except in the case of a lease,  the  predecessor
Corporation  shall be  relieved  of all  obligations  and  covenants  under this
Certificate of Designation and the Purchase Agreement.

               (x) Intentionally Omitted.


               (xi)  Limitations on Unrestricted  Subsidiaries.  The Corporation
may  designate  after  the  Issue  Date  any  Subsidiary  as  an   "Unrestricted
Subsidiary" under this Certificate of Designation (a "Designation") only if:


               (A) no Voting Rights Triggering Event (other than a Voting Rights
          Triggering  Event  described  in clause (1),  (3) or (5) of  paragraph
          (f)(iii)(A))  shall have  occurred and be continuing at the time of or
          after giving effect to such Designation;

               (B) the  Corporation  would be permitted to make an Investment at
          the  time  of  Designation   (assuming  the   effectiveness   of  such
          Designation)  pursuant to this Certificate of Designation in an amount
          (the  "Designation  Amount")  equal  to the Fair  Market  Value of the
          interest of the  Corporation  and the Restricted  Subsidiaries in such
          Subsidiary  on such  date;  provided,  that the Fair  Market  Value of
          securities of such Subsidiary  shall be deemed to be the cash purchase
          price paid by the Corporation or such Restricted  Subsidiary therefor;
          and

               (C) the Corporation  would be permitted under this Certificate of
          Designation to incur $1.00 of additional  Indebtedness pursuant to the
          Consolidated  Fixed Charge  Coverage Ratio test set forth in paragraph
          (j)(iv)(A) at the time of such Designation (assuming the effectiveness
          of such Designation).

               In the event of any such  Designation,  the Corporation  shall be
deemed  to have made an  Investment  for all  purposes  of this  Certificate  of
Designation in the Designation Amount.

               Except  to  the  extent  permitted  by  paragraph  (j)(ii),   the
Corporation  shall not, and shall not cause or permit any Restricted  Subsidiary
to, at any time (x) provide credit support for or subject any of its property or
assets  (other than the Capital  Stock of any  Unrestricted  Subsidiary)  to the
satisfaction of, any Indebtedness of any Unrestricted  Subsidiary (including any
undertaking,  agreement or instrument  evidencing such  Indebtedness)  or (y) be
directly  or  indirectly   liable  for  any  Indebtedness  of  any  Unrestricted
Subsidiary. All Subsidiaries of Unrestricted Subsidiaries shall automatically be
deemed to be Unrestricted Subsidiaries.

               The  Corporation may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:

               (A) no Voting Rights Triggering Event (other than a Voting Rights
          Triggering  Event  described  in clause (1),  (3) or (5) of  paragraph
          (f)(iii)(A))  shall have occurred and be continuing at the time of and
          after giving effect to such Revocation; and

               (B) all Indebtedness of such Unrestricted  Subsidiary outstanding
          immediately following such Revocation would, if incurred at such time,
          be permitted to be incurred  for all purposes of this  Certificate  of
          Designation.

               All Designations and Revocations must be evidenced by resolutions
of the Board of  Directors  of the  Corporation  delivered  to each  Significant
Holder certifying compliance with the foregoing provisions.

               (xii) Conduct of Business.  The  Corporation  and the  Restricted
Subsidiaries shall not engage in any business other than a Permitted Business.

               (xiii) Sale and Leaseback. The Corporation will not, and will not
permit any of its Restricted  Subsidiaries to, enter into any Sale and Leaseback
Transaction unless (a) the Corporation or its Restricted  Subsidiaries  entering
into such Sale and Leaseback  Transaction  could have incurred the  Indebtedness
relating to such Sale and  Leaseback  pursuant to paragraph  (j)(iv) and (b) the
net cash proceeds of such Sale and Leaseback  Transaction  are at least equal to
the Fair Market Value of such  property as  determined by the Board of Directors
of the Corporation and are applied in accordance with paragraph (j)(xv).

               (xiv)  Reports;  Books,  Records  and  Access.  So  long  as  the
Corporation is subject to the periodic  reporting  requirements  of the Exchange
Act, it will file the information  required thereby with the Commission and will
furnish such information to Holders upon filing thereof with the Commission.  If
the Corporation is entitled under the Exchange Act not to file such  information
with  the  Commission,  it will  nonetheless  file  such  information  with  the
Commission to the extent  permitted by the  Commission  and further will furnish
such  information  to Holders on the date on which  filing  with the  Commission
would have been required.

               (xv) Asset Sales.  (A) The  Corporation  shall not, and shall not
cause or permit any Restricted Subsidiary to, directly or indirectly, consummate
an Asset Sale, unless (i) at least 85% of the consideration from such Asset Sale
is  received  in cash or Cash  Equivalents  and  (ii)  the  Corporation  or such
Restricted  Subsidiary receives  consideration at the time of such Asset Sale at
least  equal to the Fair  Market  Value of the shares or assets  subject to such
Asset Sale; provided,  however, that the amount of (x) any liabilities (as shown
on the Corporation's or such Restricted  Subsidiary's most recent balance sheet)
of  the  Corporation  or any  Restricted  Subsidiary  that  are  assumed  by the
transferee of such assets pursuant to any arrangement  releasing the Corporation
or such Restricted  Subsidiary from further liability and (y) any notes or other
obligations  received by the Corporation or any such Restricted  Subsidiary from
such  transferee  that are  immediately  converted  by the  Corporation  or such
Restricted  Subsidiary into cash (to the extent of the cash received),  shall be
deemed to be cash for purposes of this  provision.  Notwithstanding  anything to
the  contrary  contained  herein,  any Asset Sale to OSI Funding  Corp.  (or any
successor  entity  thereof) in the ordinary  course of business  consistent with
past practices shall be deemed to have complied with clause (ii) above.

               (B) Within 365 days  after the  receipt of any net cash  proceeds
from an Asset Sale,  the  Corporation or the  applicable  Restricted  Subsidiary
shall apply such net cash proceeds (i) to repay  Indebtedness of the Corporation
or any  Restricted  Subsidiary  and  permanently  reduce any related  commitment
and/or  (ii) to the  acquisition  of a  controlling  interest  in any  Permitted
Business,  the making of a capital  expenditure or the  acquisition of Purchased
Portfolios or any other long-term  assets,  in each case, in, or that is used or
useful in, a Permitted Business and/or (iii) to make an Investment in properties
or assets  that  replace the  properties  or assets that are the subject of such
Asset Sale.  Pending the final  application of any such net cash  proceeds,  the
Corporation  may  invest  such  net  cash  proceeds  in any  manner  that is not
prohibited by this  Certificate of Designation  and in any event may temporarily
reduce  Indebtedness under a revolving credit facility otherwise permitted to be
entered into under this Certificate of Designation, or otherwise may invest such
proceeds in Cash Equivalents.

               (k) Transfer Agent and Registrar. The Corporation is the transfer
agent (the "Transfer Agent") and registrar for the Senior Preferred Stock.

               (l) Definitions. As used in this Certificate of  Designation, the
following  terms shall have the  following  meanings  (with terms defined in the
singular  having  comparable  meanings  when used in the plural and vice versa),
unless the context otherwise requires:

               "Accrued  Dividend  Amount"  shall have the  meaning  provided in
paragraph (c)(i).

               "Accrued Dividend Rate" means an annual rate equal to 14%.

               "Acquired  Indebtedness"  means  Indebtedness  of  a  Person  (i)
assumed  in  connection  with an Asset  Acquisition  from  such  Person  or (ii)
existing at the time such Person is merged with or into or  otherwise  becomes a
Restricted  Subsidiary of any other Person (including,  without limitation,  any
Indebtedness  incurred in connection  with, or in  contemplation  of, such Asset
Acquisition  or such Person  merging with or into or otherwise  becoming  such a
Restricted Subsidiary).  Acquired Indebtedness shall be deemed to be incurred on
the  date of the  related  Asset  Acquisition  from any  Person  or the date the
acquired  Person  is  merged  with or into or  otherwise  becomes  a  Restricted
Subsidiary, as the case may be.

               "Advisory   Services   Agreement"  means  the  Advisory  Services
Agreement,  dated as of  September  21,  1995,  between  the Company and Madison
Dearborn Capital Partners III, L.P. (as successor to MDC Management Company III,
L.P.), as amended from time to time.

               "Affiliate" means with respect to any specified  Person:  (i) any
other Person directly or indirectly controlling or controlled by or under direct
or indirect  common  control with such specified  Person;  (ii) any other Person
that  owns,  directly  or  indirectly,  10% or more of such  specified  Person's
Capital  Stock;  or (iii) any other  Person 10% or more of the  Voting  Stock of
which is  beneficially  owned or held directly or  indirectly by such  specified
Person. For the purposes of this definition, "control" when used with respect to
any specified  Person means the power to direct the  management  and policies of
such  Person,  directly  or  indirectly,  whether  through  ownership  of voting
securities,   by  contract  or  otherwise;   and  the  terms  "controlling"  and
"controlled"  have  meanings  correlative  to  the  foregoing.   Notwithstanding
anything to the  contrary  contained  herein,  no  portfolio  company of Madison
Dearborn Capital Partners III, L.P., nor any portfolio company of a fund managed
by or  affiliated  with  Madison  Dearborn  Partners,  Inc.,  shall be deemed an
Affiliate of the Corporation. None of Ares, DB, First Union, Abbott Capital 1330
Investors II, L.P.,  Abbott Capital  Private Equity Fund III, L.P., BNY Partners
Fund, L.L.C.,  Heller Financial,  Inc. or Magnetite Asset Investors L.L.C. shall
be deemed to be an Affiliate of the Corporation.

               "Ares"  means  Ares  Leveraged  Investment  Fund,  L.P.  and Ares
Leveraged Investment Fund II, L.P. and/or any of their Affiliates.

               "Asset Acquisition" means (i) an Investment by the Corporation or
any Restricted Subsidiary in any other Person pursuant to which such Person will
become a Restricted  Subsidiary or will be merged or  consolidated  with or into
the  Corporation  or any  Restricted  Subsidiary or (ii) the  acquisition by the
Corporation  or any  Restricted  Subsidiary  of the assets of any  Person  which
constitute  substantially  all of the assets of such Person,  or any division or
line of business of such Person,  or which is otherwise  outside of the ordinary
course of business.

               "Asset Sale" means any sale,  issuance,  conveyance,  transfer or
other  disposition  (including  pursuant  to a Sale and  Leaseback  Transaction)
(collectively,  a "transfer"),  in one or a series of related transactions,  of:
(i)  any  Capital  Stock  of  any  Restricted  Subsidiary  (other  than  to  the
Corporation or any other Restricted Subsidiary); or (ii) any other properties or
assets  of the  Corporation  or any  Restricted  Subsidiary  other  than  in the
ordinary  course of  business.  For the  purposes of this  definition,  the term
"Asset Sale" shall not include:  (a) the transfer of all or substantially all of
the  assets  of  the  Corporation  in a  manner  permitted  pursuant  to  and in
accordance  with the  provisions of paragraph  (j)(viii)  hereof or any transfer
that   constitutes  a  Change  of  Control   pursuant  to  this  Certificate  of
Designation;  (b)  any  transfer  that  is a  Restricted  Payment  or  Permitted
Investment that is permitted  under the provisions of paragraph  (j)(ii) hereof;
(c) any transfer or related series of transfers of assets with an aggregate Fair
Market Value of less than $1.0 million; or (d) any sale of a Purchased Portfolio
in the ordinary course of business.

               "Average  Life to Stated  Maturity"  means,  when  applied to any
Indebtedness  at any date of  determination,  the  number of years  obtained  by
dividing  (a)  the  then   outstanding   aggregate   principal  amount  of  such
Indebtedness  into  (b)  the  sum  of the  total  of the  products  obtained  by
multiplying  (i) the amount of each then  remaining  installment,  sinking fund,
serial  maturity or other required  payment of principal,  including  payment at
final maturity,  in respect thereof,  by (ii) the number of years (calculated to
the nearest  one-twelfth)  which will elapse between such date and the making of
such payment.

               "Board of Directors" shall have the meaning provided in the first
paragraph of this Certificate of Designation.

               "Business  Day" means any day except a Saturday,  a Sunday,  or a
day on  which  banking  institutions  in The  City of New  York or at a place of
payment are authorized by law, regulation or executive order to remain closed.

               "Capital  Stock" means,  (i) with respect to any Person that is a
corporation,  corporate  stock;  (ii)  with  respect  to any  Person  that is an
association or business entity, any and all shares,  interests,  participations,
rights or other  equivalents  (however  designated and whether or not voting) of
corporate  stock,  including  each class of Common Stock and Preferred  Stock of
such Person; (iii) with respect to any Person that is not a corporation, any and
all partnership,  membership or other equity interests of such Person;  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 the assets of,
the issuing Person.

               "Capitalized  Lease Obligation"  means, at the time determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be  required  to be  capitalized  on a balance  sheet in
accordance with GAAP.

               "Cash Equivalents" means, at any time, (i) United States dollars,
(ii) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality  thereof having maturities of
not more  than one year  from the date of  acquisition,  (iii)  certificates  of
deposit and  eurodollar  time deposits with  maturities of one year or less from
the date of acquisition,  bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any domestic commercial bank
having  capital and surplus in excess of $500.0 million and a Thomson Bank Watch
Rating of "B" or better,  (iv)  repurchase  obligations  with a term of not more
than seven days for underlying securities of the types described in clauses (ii)
and  (iii)  above  entered  into  with any  financial  institution  meeting  the
qualifications  specified in clause (iii) above and (v)  commercial  paper rated
A-1 or higher by  Standard  & Poor's  Corporation  or P-1 by  Moody's  Investors
Service,  Inc.  and in each  case  maturing  within  one year  after the date of
acquisition.

               "Certificate   of   Designation"   means  this   Certificate   of
Designation creating the Senior Preferred Stock.

               "Certificate of Incorporation" shall have the meaning provided in
the first paragraph of this Certificate of Designation.

               "Change of Control" means the  occurrence,  after the date of the
Recapitalization, of any of the following events (whether or not approved by the
Board of  Directors  of the  Corporation):  (i) any "person" or "group" (as such
terms are used in  Sections  13(d) and 14(d) of the  Exchange  Act),  other than
Permitted  Holders,  is or becomes the  "beneficial  owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act,  except that a Person shall be deemed to
have "beneficial  ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time),  directly or  indirectly,  of 50% or more of the total voting power of
the then outstanding Voting Stock of the Corporation;  (ii) during any period of
two  consecutive  years,  individuals  who  at  the  beginning  of  such  period
constituted  the Board of Directors of the  Corporation  (together  with any new
directors  whose election to such board or whose  nomination for election by the
stockholders of the Corporation was approved by a vote of at least a majority of
the directors then still in office who were either directors at the beginning of
such period or whose  election or  nomination  for  election was  previously  so
approved)  cease for any  reason  to  constitute  a  majority  of such  Board of
Directors then in office; (iii) the Corporation consolidates with or merges with
or into any Person (other than a Wholly Owned  Restricted  Subsidiary) or sells,
assigns,   conveys,   transfers,   leases  or  otherwise   disposes  of  all  or
substantially  all of its  assets  to any  Person  (other  than a  Wholly  Owned
Restricted Subsidiary),  or any corporation  consolidates with or merges into or
with the  Corporation,  in any such event pursuant to a transaction in which the
outstanding  Voting Stock of the  Corporation  is changed into or exchanged  for
cash,  securities or other property,  other than any such transaction  where the
outstanding  Voting Stock of the  Corporation is not changed or exchanged at all
(except to the extent  necessary  solely to reflect a change in the jurisdiction
of incorporation  of the Corporation) or where (A) the outstanding  Voting Stock
of the  Corporation  is changed  into or  exchanged  for (x) Voting Stock of the
surviving  corporation  which  is not  Redeemable  Capital  Stock  or (y)  cash,
securities  and  other  property  (other  than  Capital  Stock of the  surviving
corporation) in an amount which could be paid by the Corporation as a Restricted
Payment as described under  paragraph  (j)(ii) (and such amount shall be treated
as a Restricted  Payment  subject to the provisions  described  under  paragraph
(j)(ii)) and (B) no "person" or "group" owns immediately after such transaction,
directly or indirectly,  more of the total voting power of the then  outstanding
Voting  Stock of the  surviving  corporation  than the total voting power of the
then outstanding Voting Stock of the surviving corporation held by the Permitted
Holders;  or (iv) any order,  judgment  or decree  shall be entered  against the
Corporation  decreeing the  dissolution or split-up of the  Corporation and such
order shall  remain  undischarged  or  unstayed  for a period in excess of sixty
days.

               "Class A Senior  Preferred Stock" shall have the meaning provided
in paragraph (a).

               "Class B Senior  Preferred Stock" shall have the meaning provided
in paragraph (a).

               "Commission"  means the  Securities and Exchange  Commission,  as
from time to time constituted, created under the Exchange Act or, if at any time
after the Issue Date such  Commission is not existing and  performing the duties
now assigned to it under the Exchange  Act, the body  performing  such duties at
such time.

               "Common  Stock" of any  Person  means all  Capital  Stock of such
Person that is generally entitled to:

               (i) vote in the election of directors of such Person

or

               (ii) if  such  Person  is not a  corporation,  vote or  otherwise
          participate in the selection of the governing body, partners, managers
          or others  that will  control  the  management  and  policies  of such
          Person.

               "Consolidated  Cash Flow Available for Fixed Charges" means,  for
any period,  the Consolidated Net Income of the Corporation for such period plus
(i) an amount  equal to any  extraordinary  loss plus any net loss  realized  in
connection  with all Asset Sales (to the extent  such  losses  were  deducted in
computing such Consolidated Net Income),  plus (ii) provision for taxes based on
income or profits of the  Corporation and its Restricted  Subsidiaries  for such
period,  to the extent that such  provision  for taxes was deducted in computing
such Consolidated Net Income,  plus (iii)  consolidated  interest expense of the
Corporation  and its Restricted  Subsidiaries  for such period,  whether paid or
accrued  and  whether  or  not  capitalized   (including,   without  limitation,
amortization  of  original  issue  discount,  non-cash  interest  payments,  the
interest component of any deferred payment  obligations,  the interest component
of all payments associated with Capitalized Lease Obligations,  imputed interest
with respect to Indebtedness attributable to any Sale and Leaseback Transaction,
commissions,  discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings,  and net payments (if any) pursuant
to Hedging  Obligations),  to the extent that any such  expense was  deducted in
computing such  Consolidated  Net Income,  plus (iv) any  Consolidated  Non-Cash
Charges that were deducted in computing such  Consolidated Net Income,  less (v)
the  aggregate  amount of contingent  and  "earnout"  payments in respect of any
Permitted Business acquired by the Corporation or any Restricted Subsidiary that
are paid in cash during such period and less (vi) any non-cash items  increasing
Consolidated Net Income for such period.

               "Consolidated Fixed Charge Coverage Ratio" means the ratio of the
aggregate  amount of  Consolidated  Cash Flow Available for Fixed Charges of the
Corporation for the four full fiscal quarters immediately  preceding the date of
the transaction  (the  "Calculation  Date") giving rise to the need to calculate
the Consolidated  Fixed Charge Coverage Ratio for which  consolidated  financial
information  of the  Corporation  is  available  (such four full fiscal  quarter
period being  referred to herein as the "Four Quarter  Period") to the aggregate
amount of  Consolidated  Fixed Charges of the  Corporation for such Four Quarter
Period. In the event that the Corporation or any of its Restricted  Subsidiaries
incurs,  assumes,  guarantees or redeems any Indebtedness  (other than revolving
credit  or  other  similar  borrowings  which  may  be  repaid  and  reborrowed)
subsequent to the  commencement of the period for which the  Consolidated  Fixed
Charge  Coverage Ratio is being  calculated but prior to the  Calculation  Date,
then the Consolidated Fixed Charge Coverage Ratio shall be calculated giving pro
forma  effect  to  such  incurrence,  assumption,  guarantee  or  redemption  of
Indebtedness,  as if the same had occurred at the  beginning  of the  applicable
Four  Quarter  Period.  In  addition,  for  purposes  of making the  computation
referred to above, (i) acquisitions  (including  Asset  Acquisitions)  that have
been made by the  Corporation or any of its Restricted  Subsidiaries,  including
through  mergers  or   consolidations   and  including  any  related   financing
transactions, during the Four Quarter Period or subsequent to such period and on
or prior to the  Calculation  Date shall be deemed to have occurred on the first
day of the Four Quarter  Period and  Consolidated  Cash Flow Available For Fixed
Charges and  Consolidated  Fixed  Charges for such  period  shall be  calculated
giving pro forma  effect  (excluding  any pro forma  increase  in  revenues  but
including  any pro  forma  expense  and cost  reductions  calculated  on a basis
consistent  with  Regulation  S-X  under  the  Securities  Act)  to  such  Asset
Acquisition  and without  giving effect to clause (iii) of the proviso set forth
in the definition of Consolidated  Net Income,  and (ii) the  Consolidated  Cash
Flow Available for Fixed Charges  attributable  to discontinued  operations,  as
determined in accordance with GAAP, and to operations or businesses  disposed of
prior to the Calculation  Date,  shall be excluded,  and (iii) the  Consolidated
Fixed  Charges  attributable  to  discontinued  operations,   as  determined  in
accordance  with GAAP, and to operations or businesses  disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such  Consolidated  Fixed Charges shall not be obligations of the
Corporation  or any of its  Restricted  Subsidiaries  following the  Calculation
Date.

               "Consolidated  Fixed Charges" means,  for any period,  the sum of
(i) the  consolidated  interest  expense of the  Corporation  and its Restricted
Subsidiaries  for such  period,  whether  paid or  accrued  and  whether  or not
capitalized  (including,  without  limitation,  amortization  of original  issue
discount,  non-cash interest  payments,  the interest  component of any deferred
payment  obligations,  the interest  component of all payments  associated  with
Capitalized  Lease  Obligations,  imputed  interest with respect to Indebtedness
attributable to any Sale and Leaseback Transaction,  commissions,  discounts and
other fees and  charges  incurred  in  respect  of letter of credit or  bankers'
acceptance   financings,   and  net  payments  (if  any)   pursuant  to  Hedging
Obligations,  but  excluding  amortization  of those  deferred  financing  costs
reflected on the  Corporation's  combined  consolidated  balance sheet as of the
date of this  Certificate of  Designation)  and (ii) the  consolidated  interest
expense of the Corporation and its Restricted  Subsidiaries that was capitalized
during such period,  and (iii) any interest  expense on  Indebtedness of another
Person  that  is  guaranteed  by  the  Corporation  or  one  of  its  Restricted
Subsidiaries  or  secured by a Lien on assets of the  Corporation  or one of its
Restricted  Subsidiaries  (whether or not such guarantee or Lien is called upon)
and (iv) the product of (a) all cash dividend  payments  (and non-cash  dividend
payments in the case of a Person that is a Restricted  Subsidiary) on any series
of Preferred Stock of such Person, times (b) a fraction,  the numerator of which
is one and the  denominator  of which is one  minus the then  current  effective
federal,  state and local  statutory  tax rate of such  Person,  expressed  as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.

               "Consolidated Net Income" means, for any period, the aggregate of
the Net  Income of the  Corporation  and its  Restricted  Subsidiaries  for such
period, on a consolidated  basis,  determined in accordance with GAAP;  provided
that (i) the Net Income  (but not loss) of any Person  that is not a  Restricted
Subsidiary or that is accounted for by the equity method of accounting  shall be
included only to the extent of the amount of dividends or distributions  paid in
cash to the Corporation or a Wholly Owned Restricted  Subsidiary  thereof,  (ii)
the Net Income of any Restricted Subsidiary shall be excluded to the extent that
the  declaration  or  payment  of  dividends  or  similar  distributions  by the
Restricted  Subsidiary  of that Net  Income is not at the date of  determination
permitted without any prior  governmental  approval (that has not been obtained)
or,  directly or  indirectly,  by  operation  of the terms of its charter or any
agreement,  instrument,  judgment,  decree, order, statute, rule or governmental
regulation applicable to that Restricted  Subsidiary or its stockholders,  (iii)
the Net Income of any Person  acquired in a pooling of interest  transaction for
any period prior to the date of such  acquisition  shall be  excluded,  (iv) the
cumulative effect of a change in accounting principles shall be excluded and (v)
the Net Income of any Unrestricted  Subsidiary shall be excluded,  except to the
extent set forth in clause (i) above.

               "Consolidated  Non-cash  Charges"  means,  for  any  period,  the
aggregate depreciation and amortization (including (i) amortization of goodwill,
(ii)  amortization  of  Purchased  Portfolios,  (iii)  amortization  of  amounts
reflected on the  Corporation's  combined  consolidated  balance sheet as of the
date of this Certificate of Designation related to "in-process technology," (iv)
any incremental  increase in amortization  of account  inventory  resulting from
write-ups of such inventory in connection with the purchase accounting treatment
of an acquisition and (v)  amortization of other  intangibles and other non-cash
charges (excluding any such intangible and non-cash charge to the extent that it
represents  an accrual of or reserve  for cash  charges in any future  period or
amortization  of a prepaid cash expense that was paid in a prior period)) of the
Corporation  and its  Restricted  Subsidiaries  for such  period,  in each case,
determined on a consolidated basis in accordance with GAAP.

               "Corporation"  shall  have  the  meaning  provided  in the  first
paragraph of this Certificate of Designation.

               "Credit Agreement" means the Senior Secured Credit Facility dated
as of  November  30, 1999 among the  Corporation,  certain  subsidiaries  of the
Corporation,  as guarantors,  DLJ Capital Funding,  Inc., as Syndication  Agent,
Fleet National Bank, N.A., as  Administrative  Agent, and Harris Trust & Savings
Bank, as Documentation Agent, and the other financial  institutions from time to
time party  thereto,  together  with the  related  documents  (including  notes,
guarantees,   collateral  documents,  instruments  and  agreements  executed  in
connection therewith),  and in each case as amended (including any amendment and
restatement thereof),  modified,  renewed, refunded, replaced or refinanced from
time to time,  including any agreement  extending the maturity of,  refinancing,
replacing  or  otherwise  restructuring  (including  increasing  the  amount  of
available  borrowings  thereunder  or  adding  Restricted  Subsidiaries  of  the
Corporation as additional borrowers or guarantors thereunder) all or any portion
of the  Indebtedness  under  such  agreement  or any  successor  or  replacement
agreement  and  whether  by the  same or any  other  agent,  lender  or group of
creditors.

               "DB"  means  DB  Capital  Investors,  L.P.  and/or   any  of  its
Affiliates.


               "Default  Dividends" shall have the meaning provided in paragraph
(c)(i).

               "Designation"    shall    have   the    meaning    provided    in
paragraph(j)(xi).

               "Designation   Amount"   shall  have  the  meaning   provided  in
paragraph(j)(xi).

               "Disinterested  Director" means,  with respect to any transaction
or series of  related  transaction,  a member of the Board of  Directors  of the
Corporation who does not have any material direct or indirect financial interest
in or with respect to such transaction or series of related transactions.

               "Dividend  Default" shall have the meaning  provided in paragraph
(f)(iii)(A).

               "Dividend Payment Date" means March 1, June 1,  September  1  and
December 1 of each year.

               "Dividend   Period"  means  the  Initial   Dividend  Period  and,
thereafter,  each  quarterly  period  from a Dividend  Payment  Date to the next
following  Dividend  Payment Date (but without  including such Dividend  Payment
Date).

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

               "Equity Investor" means collectively,  Madison  Dearborn  Capital
Partners  III,  L.P.,  Madison  Dearborn  Special  Equity III,  L.P. and Special
Advisers Fund I, L.L.C.

               "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
amended, and the rules and regulations promulgated thereunder.

               "Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between an informed and willing seller under no compulsion to sell and
an informed and willing buyer,  neither of which is under pressure or compulsion
to complete the transaction.  Fair Market Value shall be determined by the Board
of Directors of the Corporation or the applicable  Restricted  Subsidiary acting
reasonably and in good faith.

               "First Union" means First Union Investors, Inc. and/or any of its
Affiliates.

               "GAAP" means, at any date of  determination,  generally  accepted
accounting principles in effect in the United States which are applicable at the
date of determination.

               "guarantee"  means a  guarantee  (other  than by  endorsement  of
negotiable  instruments  for  collection  in the ordinary  course of  business),
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.

               "Hedging  Obligations"  means,  with  respect to any Person,  the
obligations of such Person under (i) currency exchange agreements, interest rate
swap agreements, interest rate cap agreements or interest rate collar agreements
and (ii) other  agreements  or  arrangements  designed  to protect  such  Person
against fluctuations in currency exchange or interest rates.

               "Holder"  means a holder of shares of Senior  Preferred  Stock as
reflected  in the  register  maintained  by the  Transfer  Agent for the  Senior
Preferred Stock.

               "incur" shall have the meaning provided in paragraph (j)(iv).

               "Indebtedness"   means,   with   respect  to  any   Person,   any
indebtedness of such Person,  whether or not contingent,  in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of  credit  (or  reimbursement   agreements  in  respect  thereof)  or  banker's
acceptances  or  representing  Capitalized  Lease  Obligations  or  the  balance
deferred and unpaid of the purchase price of any property (other than contingent
or  "earnout"  payment  obligations)  or  representing  any Hedging  Obligations
(except any such balance that  constitutes an accrued  expense or trade payable)
or any Redeemable  Capital Stock of such Person, if and to the extent any of the
foregoing  indebtedness  (other than letters of credit and Hedging  Obligations)
would  appear as a liability  upon a balance  sheet of such  Person  prepared in
accordance with GAAP, as well as all indebtedness of others secured by a Lien on
any  asset of such  Person  in an amount  equal to the  lesser of the  aggregate
amount  of such  indebtedness  secured  by such Lien and the value of all of the
assets  of  such  Person  securing  such  indebtedness   (whether  or  not  such
indebtedness  is  assumed by such  Person)  and,  to the  extent  not  otherwise
included, the guarantee by such Person of any indebtedness of any other Person.

               "Indenture"  means the indenture dated as of November 6, 1996, by
and between the Corporation and Wilmington Trust Company, as trustee,  governing
the  Senior   Subordinated  Notes,  as  amended  (including  any  amendment  and
restatement thereof),  modified,  renewed, refunded, replaced or refinanced from
time to time,  including any agreement  extending the maturity of,  refinancing,
replacing  or  otherwise  restructuring  all or any portion of the  Indebtedness
under such agreement or any successor or replacement agreement.

               "Independent Financial Advisor" means an accounting, appraisal or
investment banking firm which is nationally  recognized within the United States
of America

               (i) which does not, and whose  directors,  officers and employees
          or Affiliates do not, have a direct or indirect  financial interest in
          the Corporation or any of its Subsidiaries or Affiliates, and

               (ii)  which,  in the  judgment of the Board of  Directors  of the
          Corporation,  is otherwise  independent  and  qualified to perform the
          task for which it is to be engaged.

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

               "Investment"  means,  with  respect to any Person,  any direct or
indirect  advance,  loan or other  extension of credit  (including by means of a
guarantee) or capital  contribution  (excluding  commission,  travel and similar
advances to officers and employees  made in the ordinary  course of business) 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  otherwise),  or any
purchase  or  acquisition  by such Person of any Capital  Stock,  bonds,  notes,
debentures or other securities or evidences of Indebtedness  issued by any other
Person and all other items that would be classified as  investments on a balance
sheet prepared in accordance with GAAP.  Investments shall exclude extensions of
trade credit on  commercially  reasonable  terms in accordance with normal trade
practices.  If the  Corporation or any Restricted  Subsidiary of the Corporation
sells or  otherwise  disposes  of any  Capital  Stock of any direct or  indirect
Restricted  Subsidiary of the Corporation  such that, after giving effect to any
such  sale  or  disposition,   the  Corporation  no  longer  owns,  directly  or
indirectly,  a majority  of the  outstanding  Capital  Stock of such  Restricted
Subsidiary,  the  Corporation  shall be deemed to have made an Investment on the
date of any such  sale or  disposition  equal to the  Fair  Market  Value of the
Capital Stock of such Restricted Subsidiary not sold or disposed of.

               "Issue Date" means December 10, 1999.

               "Junior  Preferred  Stock" means the Company's  Junior  Preferred
Stock issued in connection with the Recapitalization,  with terms and conditions
thereof as set forth in the Certificate of Designation of the Power, Preferences
and  Relative,  Participating,  Optional  and  Other  Special  Rights  of Junior
Preferred Stock, and Qualifications,  Limitations and Restrictions thereof filed
on the Issue Date.

               "Junior  Securities" shall have the meaning provided in paragraph
(b).

               "Lien"  means,  with respect to any asset,  any  mortgage,  lien,
pledge, charge,  security interest or encumbrance of any kind in respect of such
asset,  whether or not filed,  recorded or otherwise  perfected under applicable
law (including any  conditional  sale or other title  retention  agreement,  any
lease in the nature  thereof,  any option or other  agreement  to sell or give a
security  interest  in and any  filing  of or  agreement  to give any  financing
statement  under the Uniform  Commercial  Code (or  equivalent  statutes) of any
jurisdiction).

               "Liquidation Preference" means, initially, $1,000.00 per share of
Senior  Preferred Stock subject to increase as provided under  paragraph  (c)(i)
hereof and, thereafter, means the Liquidation Preference as so increased.

               "Mandatory  Redemption  Date" shall have the meaning  provided in
paragraph (e)(ii).

               "Net Income"  means,  with respect to any Person,  the net income
(loss)  of such  Person,  determined  in  accordance  with GAAP and  before  any
reduction in respect of Preferred Stock dividends,  excluding,  however, (i) any
gain (but not loss),  together with any related provision for taxes on such gain
(but not loss),  realized  in  connection  with (a) any Asset  Sale  (including,
without limitation, dispositions pursuant to Sale and Leaseback Transactions) or
(b) the  disposition  of any  securities by such Person or any of its Restricted
Subsidiaries or the  extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss),  together with any related provision for taxes on such  extraordinary
or nonrecurring gain (but not loss).

               "Non-Recourse  Debt" means  Indebtedness  (i) as to which neither
the  Corporation  nor any of its  Restricted  Subsidiaries  (a) provides  credit
support of any kind  (including any  undertaking,  agreement or instrument  that
would  constitute  Indebtedness),  (b) is  directly or  indirectly  liable (as a
guarantor or otherwise), or (c) constitutes the lender; 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
Corporation or any of its Restricted  Subsidiaries  to declare a default on such
other  Indebtedness  or cause the payment  thereof to be  accelerated or payable
prior to its  stated  maturity;  and  (iii) as to which  the  lenders  have been
notified in writing that they shall not have any recourse to the stock or assets
of the Corporation or any of its Restricted Subsidiaries.

               "Parity  Securities" shall have the meaning provided in paragraph
(b).

               "Permitted  Business"  means the business of the  Corporation and
its Subsidiaries as of the Issue Date and any other business reasonably related,
ancillary or complementary thereto.

               "Permitted Holders" means Ares, DB,  First  Union, Abbott Capital
1330  Investors II, L.P.,  Abbott  Capital  Private  Equity Fund III,  L.P., BNY
Partners Fund, L.L.C., Heller Financial,  Inc., Magnetite Asset Investors L.L.C.
and Madison  Dearborn  Capital  Partners III,  L.P. and any of their  respective
Affiliates.

               "Permitted  Investments"  means:  (i) any  Investment  (a) by the
Corporation or any Restricted  Subsidiary in the  Corporation or in a Restricted
Subsidiary  or  (b)  by   Unrestricted   Subsidiaries   in  other   Unrestricted
Subsidiaries;  (ii)  any  Investment  in cash and Cash  Equivalents;  (iii)  any
Investment by the Corporation or any Restricted  Subsidiary in a Person, if as a
result of such Investment (a) such Person becomes a Restricted Subsidiary or (b)
such Person is merged, consolidated or amalgamated with or into, or transfers or
conveys all or  substantially  all of its assets to, or is liquidated  into, the
Corporation or a Restricted Subsidiary;  (iv) any Investment made as a result of
the receipt of non-cash  consideration from an Asset Sale that was made pursuant
to and in compliance with the provisions of paragraph (j)(xv) hereof;  (v) other
Investments  in any  Person  (other  than a  Restricted  Subsidiary)  having  an
aggregate Fair Market Value  (measured on the date each such Investment was made
and without giving effect to subsequent  changes in value),  when taken together
with all other Investments made pursuant to this clause (v) that are at the time
outstanding,  not to exceed $7.5 million;  (vi) loans and advances to employees,
directors and officers of the Corporation and the Restricted Subsidiaries in the
ordinary  course  of  business  not to  exceed  $5.0  million  at any  one  time
outstanding;  (vii)  Investments  acquired  by  the  Corporation  or  any of its
Restricted  Subsidiaries  (A) in exchange for any other Investment or receivable
held by the Corporation or any such Restricted  Subsidiary in connection with or
as a result of a bankruptcy,  workout, reorganization or recapitalization of the
issuer  of  such  other  Investment  or  receivable  or  (B)  as a  result  of a
foreclosure  by the  Corporation  or any of  its  Restricted  Subsidiaries  with
respect to any secured Investment or other transfer of title with respect to any
secured  Investment  in  default;  (viii)  Investments  represented  by  Hedging
Obligations; (ix) any Investment existing on the Issue Date; (x) any acquisition
by  the  Corporation  or  any  of  its  Restricted   Subsidiaries  of  Purchased
Portfolios;  (xi) any acquisition of assets, Capital Stock, options, warrants or
other  rights to acquire  shares of  Capital  Stock or other  securities  by the
Corporation for consideration consisting of Common Stock or options, warrants or
other  rights to acquire  shares of Common Stock of the  Corporation;  and (xii)
subject  to  paragraph  (f)(ii),  Investments  the  payment  for which  consists
exclusively of Capital Stock (exclusive of Redeemable Capital Stock) or options,
warrants or other rights to acquire shares of Qualified Capital Stock.

               "Permitted  Payment" shall have the meaning provided in paragraph
(j)(ii).

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

               "Preferred  Stock"  means,  with  respect to any Person,  Capital
Stock of any class or  classes  (however  designated)  of such  Person  which is
preferred  as to  the  payment  of  dividends  or  distributions,  or as to  the
distribution  of  assets  upon  any  voluntary  or  involuntary  liquidation  or
dissolution  of such  Person,  over  Capital  Stock of any  other  class of such
Person.  With  respect to the  Corporation,  the term  "Preferred  Stock"  shall
include the Senior Preferred Stock.

               "property"  means any  interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.

               "Purchase Agreement" means the Purchase Agreement dated  December
10, 1999 by and among the  Corporation,  Ares Leveraged  Investment  Fund, L.P.,
Ares Leveraged Investment Fund II, L.P., DB Capital Investors, L.P., First Union
Investors,  Inc., Abbott Capital 1330 Investors II, L.P., Abbott Capital Private
Equity Fund III, L.P., BNY Partners Fund,  L.L.C.,  Heller  Financial,  Inc. and
Magnetite Asset Investors L.L.C.

               "Purchase  Money  Obligation"  means  Indebtedness  of  a  Person
incurred  in the normal  course of  business  of such  Person for the purpose of
financing all or any part of the purchase  price,  or the cost of  installation,
construction or improvement of any property or assets.

               "Purchased   Portfolios"  means  account  receivable   portfolios
purchased  by the  Corporation  or any of  its  Restricted  Subsidiaries  in the
ordinary course of business.

               "Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.

               "Recapitalization"  means the recapitalization of the Corporation
pursuant to the Stock Subscription and Redemption  Agreement dated as of October
8, 1999 among the Corporation,  Madison Dearborn Capital Partners III, L.P., and
the  stockholders,  optionholders,  and  warrantholders of the Corporation party
thereto, which shall be consummated on the Issue Date.

               "Redeemable  Capital  Stock" means any Capital Stock that, 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,  matures  or is
mandatorily  reedemable,  pursuant to a sinking fund obligation or otherwise, or
is  redeemable at the option of the holder  thereof,  in whole or in part, on or
prior to the date  that is 91 days  after  the  Stated  Maturity  of the  Senior
Preferred Stock.

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

               "Redemption  Notice" shall have the meaning provided in paragraph
(e)(iii).

               "refinancing"  shall  have  the meaning provided in paragraph (j)
(iv).

               "Registration  Rights  Agreement"  means  the Registration Rights
Agreement  dated as of the Issue  Date  among the  Corporation,  Ares  Leveraged
Investment  Fund,  L.P.,  Ares  Leveraged  Investment  Fund II, L.P., DB Capital
Investors,  L.P., First Union Investors, Inc., Abbott Capital 1330 Investors II,
L.P.,  Abbott Capital Private Equity Fund III, L.P., BNY Partners Fund,  L.L.C.,
Heller  Financial,  Inc.,  and  Magnetite  Asset  Investors  L.L.C.  as  initial
purchasers of the Senior  Preferred  Stock,  relating to the registration of the
Senior Preferred Stock.

               "Required  Holders"  means  holders  of  more  than  50%  of  the
outstanding shares of Senior Preferred Stock.

               "Resolution"  shall  have  the  meaning  provided  in  the  first
paragraph of this Certificate of Designation.

               "Restricted   Payments"  shall  have  the  meaning   provided  in
paragraph (j)(ii).

               "Restricted  Subsidiary"  means any Subsidiary of the Corporation
that has not been designated by the Board of Directors of the Corporation,  by a
board  resolution  delivered  to the  Significant  Holders,  as an  Unrestricted
Subsidiary  or a direct or indirect  Subsidiary  of an  Unrestricted  Subsidiary
pursuant to and in compliance with paragraph  (j)(xi).  Any such designation may
be revoked by a board  resolution  of the Board of Directors of the  Corporation
delivered to the  Significant  Holders  subject to the  provisions  of paragraph
(j)(xi).

               "Revocation"   shall  have  the  meaning  provided  in  paragraph
(j)(xi).

               "Sale and  Leaseback  Transaction"  means any direct or  indirect
arrangement  with any Person or to which any such  Person is a party,  providing
for the leasing to the  Corporation or a Restricted  Subsidiary of any property,
whether owned by the Corporation or any Restricted  Subsidiary on the Issue Date
or  later  acquired,  which  has  been or is to be sold  or  transferred  by the
Corporation or such Restricted  Subsidiary to such Person or to any other Person
from whom funds have been or are to be advanced  by such Person on the  security
of such Property.

               "Securities  Act" means the  Securities  Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

               "Senior  Securities" shall have the meaning provided in paragraph
(b).

               "Senior  Preferred  Stock"  shall have the  meaning  provided  in
paragraph (a).

               "Senior  Subordinated  Notes" means the  Corporation's 11% Senior
Subordinated Notes due 2006.

               "Significant  Holder" means (x) any Holder  which,  together with
its Affiliates, holds at least 20% of the outstanding shares of Senior Preferred
Stock and (y) Ares Leveraged  Investment Fund,  L.P., Ares Leveraged  Investment
Fund II, L.P. and any of their  respective  Affiliates  so long as such entities
described  in  this  clause  (y)  hold  in the  aggregate  at  least  15% of the
outstanding shares of Senior Preferred Stock.

               "Stated  Maturity"  means (a) with respect to any share of Senior
Preferred Stock, the Mandatory Redemption Date, (b) with respect to any dividend
on the Senior  Preferred  Stock,  the dates  specified  in this  Certificate  of
Designation  as the fixed  date on which the  principal  of such share of Senior
Preferred  Stock or such dividend is due and payable and (c) with respect to any
other  Indebtedness,  the  date  specified  in  the  instrument  governing  such
Indebtedness  as the fixed date on which the principal of such  Indebtedness  or
any installment of interest is due and payable.

               "Subsidiary"   means,  with  respect  to  any  Person,   (a)  any
corporation  of which the  outstanding  shares of Voting Capital Stock having at
least a majority of the votes  entitled to be cast in the  election of directors
shall at the time be owned,  directly or  indirectly,  by such  Person,  (b) any
partnership,  limited  liability  company,  association,  joint venture or other
entity in which such Person and/or one or more of its  Subsidiaries has at least
a majority  of the shares of Voting  Stock of such entity at the time or (c) any
partnership  (i) the sole  general  partner or the managing  general  partner of
which is such Person or a  Subsidiary  of such  Person or (ii) the only  general
partners of which are such Person or one or more Subsidiaries of such Person (or
any combination thereof).

               "Successor  Corporation"  shall  have  the  meaning  provided  in
paragraph (j)(xiii).

               "Transfer  Agent"  shall have the meaning  provided in  paragraph
(k).

               "Unrestricted   Subsidiary"   means   each   Subsidiary   of  the
Corporation  designated  as such pursuant to and in  compliance  with  paragraph
(j)(xi).  Any  such  designation  may be  revoked  by a  resolution  of Board of
Directors of the Corporation  delivered to the Significant  Holders,  subject to
the provisions of such paragraph (j)(xi).

               "Voting Rights  Triggering Event" shall have the meaning provided
in paragraph (f)(iii).

               "Voting  Stock"  means  any class or  classes  of  Capital  Stock
pursuant  to which the  holders  thereof  have the  general  voting  power under
ordinary  circumstances  to elect at least a majority of the Board of Directors,
managers or trustees of any Person (irrespective of whether or not, at the time,
stock of any other class or classes shall have,  or might have,  voting power by
reason of the happening of any contingency).

               "Wholly  Owned  Restricted   Subsidiary"   means  any  Restricted
Subsidiary  of  which  100% of the  outstanding  Capital  Stock  is owned by the
Corporation and/or another Wholly Owned Restricted  Subsidiary.  For purposes of
this  definition,  any  directors'  qualifying  shares shall be  disregarded  in
determining the ownership of a Restricted Subsidiary.


<PAGE>


               IN WITNESS WHEREOF,  said  Outsourcing  Solutions Inc. has caused
this  Certificate of Designation to be signed by Timothy M. Hurd, its Secretary,
this 10th day of December, 1999.

                                            OUTSOURCING SOLUTIONS INC.


                                       By: /s/ Timothy M. Hurd
                                           -------------------------------------
                                                   Name: Timothy M. Hurd
                                                   Title: Secretary
<PAGE>
                    CERTIFICATE OF DESIGNATION OF THE POWER, PREFERENCES

                   AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL

                    RIGHTS OF JUNIOR PREFERRED STOCK, AND QUALIFICATIONS,

                            LIMITATIONS AND RESTRICTIONS THEREOF
--------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------

               Outsourcing  Solutions  Inc. (the  "Corporation"),  a corporation
organized  and  existing  under  the  General  Corporation  Law of the  State of
Delaware,  does hereby  certify that,  pursuant to authority  conferred upon the
board  of  directors  of the  Corporation  (the  "Board  of  Directors")  by its
Certificate  of  Incorporation,  as  amended  (hereinafter  referred  to as  the
"Certificate of  Incorporation"),  and pursuant to the provisions of Section 151
of  the  General  Corporation  Law of the  State  of  Delaware,  said  Board  of
Directors,  by unanimous  written consent dated December 10, 1999, duly approved
and adopted the following resolution (the "Resolution"):

        RESOLVED,  that,  pursuant  to the  authority  vested  in the  Board  of
        Directors by its  Certificate of  Incorporation,  the Board of Directors
        does hereby  create,  authorize  and provide for the  issuance of Junior
        Preferred Stock, no par value,  consisting of 50,000 shares,  having the
        designations,  preferences, relative, participating,  optional and other
        special  rights and the  qualifications,  limitations  and  restrictions
        thereof that are set forth in the  Certificate of  Incorporation  and in
        this Resolution as follows:

        (a)  Designation.  There is hereby  created  out of the  authorized  and
unissued shares of Preferred Stock of the Corporation a class of Preferred Stock
designated as the "Junior  Preferred  Stock." The number of shares  constituting
such  Junior  Preferred  Stock shall be 50,000.  Each share of Junior  Preferred
Stock is hereafter referred to as a "Junior Preferred Share."

        (b)    Voting Rights.

               The record holders of the issued and outstanding Junior Preferred
Shares  shall  have no voting  rights,  unless  (and  then  only to the  extent)
otherwise expressly provided by law or as set forth below.

               In  addition  to  any  other vote required by this paragraph (b),
without  the  affirmative  vote  of the  holders  of a  majority  of the  Junior
Preferred Stock,  voting  separately as a class, the Corporation shall not amend
the Certificate of Incorporation of the Corporation,  including this Certificate
of Designation,  if the amendment would alter or change the powers,  preferences
or special rights of the shares of Junior  Preferred  Stock so as to affect them
adversely  (within  the meaning of Section  242(b)(2)  of the  Delaware  General
Corporate Law).

        (c)    Dividend Rights.

               (1)    The  record  holders  shall  be  entitled  to  receive  in
preference  to all holders of Common Stock and any other shares of capital stock
of the  Corporation  other than the Senior  Preferred  Stock (as defined below),
when,  as and if  declared by the  Corporation's  Board of  Directors  or a duly
authorized  committee  thereof,  out of funds legally  available for the payment
thereof,  fully  cumulative  dividends at the Dividend  Rate set forth in (c)(2)
below on the  Liquidation  Preference  (as  defined in (d) below) on each Junior
Preferred Share, to be payable in arrears in additional  Junior Preferred Shares
(such dividends paid in kind being herein referred to as "PIK Dividends") on the
day  immediately  succeeding  the last day of a Payment  Period (as such term is
defined below in (c)(5)) (except that if any such date is a Saturday,  Sunday or
legal holiday,  then such dividends shall be payable on the next day that is not
a Saturday, Sunday or legal holiday) (each a "Dividend Payment Date"). Dividends
shall cease to accrue on each Junior  Preferred  Share on its date of redemption
or conversion,  unless the Corporation defaults in its obligations to convert or
redeem such shares.

               (2)    The  "Dividend  Rate"  shall  be  an  annual  rate of five
percent (5%) until  December 10, 2003,  and an annual rate of eight percent (8%)
thereafter;  provided,  however,  that the  Dividend  Rate shall be increased to
twenty percent (20%) upon the  consummation of (i) a Change in Control,  (ii) an
Approved Sale or (iii) a Major Public Offering.

               (3)    PIK Dividends with respect to any Payment Period shall  be
paid by delivering to the record holders of Junior  Preferred  Stock a number of
Junior Preferred Shares  determined by dividing the Dividend Payment Amount with
respect to such Payment  Period (as defined in (c)(4) below) by the  Liquidation
Preference  (as  defined in (d) below) per share.  The  issuance of any such PIK
Dividend  in such  number  of  shares  shall  constitute  full  payment  of such
dividend.  Fractional  Junior  Preferred  Shares payable as PIK Dividends may be
paid by the Corporation, at its option, in cash. Any additional Junior Preferred
Shares issued pursuant to this section shall be subject in all respects,  except
as to issue date and the date from which  dividends  accrue and  cumulate as set
forth below, to the same terms as the Junior Preferred Shares  originally issued
hereunder.

               (4)    Dividends  shall accrue (whether or  not  declared  by the
Board of Directors) on the Liquidation Preference on each Junior Preferred Share
during each  Payment  Period and be fully  cumulative  on a daily basis from the
first day of each Payment  Period to the last day of such  Payment  Period (with
the amount of accrued dividends per share, as expressed in dollars, with respect
to any Payment Period determined in accordance with the applicable Dividend Rate
or Rates being herein referred to as the "Dividend Payment Amount"). In the case
of Junior Preferred Stock issued and/or accumulated as a PIK Dividend, dividends
shall  accrue  (whether  or not  declared  by the  Board  of  Directors)  on the
Liquidation  Preference  and be  fully  cumulative  on a daily  basis  from  the
Dividend Payment Date in respect of which such shares were issued as a dividend.
Dividends  shall be paid to the holders of record of Junior  Preferred  Stock at
the close of business on the date  specified  by the Board of  Directors  of the
Corporation or a duly authorized  committee thereof at the time such dividend is
declared in accordance with the Delaware  General  Corporation Law (each of such
dates  being a "Record  Date").  A Record Date shall not be more than sixty (60)
days nor less than ten (10) days prior to the applicable Dividend Payment Date.

               (5)    The term  "Payment Period"  shall mean the one year period
commencing on December 10, 1999 and each one year period thereafter during which
any Junior Preferred Shares are issued and outstanding;  provided, that, for the
purpose of  determining  any Dividend  Payment  Amount,  a Payment  Period shall
commence on the last  Dividend  Payment Date on which  dividends  were  actually
paid.

        (d)    Rights on Liquidation and Ranking.

               In the event of the liquidation, dissolution or winding-up of the
Corporation,  whether  voluntary or  involuntary  (each a  "Liquidation"),  each
holder of a Junior  Preferred Share shall be entitled to receive with respect to
such Junior Preferred Share, before any distribution is made to or set aside for
the  holders  of  Common  Stock (or any other  shares  of  capital  stock of the
Corporation,  other than the Senior Preferred Stock), payable in cash or, if the
amount of cash available to the  Corporation is  insufficient,  out of the other
assets of the Corporation,  whether such assets are stated capital or surplus of
any nature,  an amount  equal to One  Thousand  Dollars  ($1,000.00)  per Junior
Preferred Share (the "Liquidation  Preference"),  plus all dividends accrued and
unpaid on such Junior Preferred Share on the date of final  distribution to such
holder,  whether or not authorized or declared. If the assets of the Corporation
available  for  distribution  to  holders  of Junior  Preferred  Stock  shall be
insufficient  to permit  the  payment  in full of the  amount  due such  holders
pursuant to this  paragraph  (d), all assets of the  Corporation  available  for
distribution to such holders shall be distributed pari passu among such holders.
The fair market value of any assets of the  Corporation  and the  proportion  of
cash and other assets  distributed  by the  Corporation to the holders of Junior
Preferred  Stock shall be  reasonably  determined in good faith by a vote of the
Board of Directors of the Corporation. Except as provided in this paragraph, the
holders of Junior  Preferred Shares shall not be entitled to any distribution in
the event of a  Liquidation.  For the  purposes of this  paragraph,  neither the
consolidation or merger of the Corporation into or with another corporation, nor
the sale of all or substantially all of the assets of the Corporation to another
corporation  or any other entity shall be deemed a  liquidation,  dissolution or
winding-up of the affairs of the Corporation. Notwithstanding anything herein to
the  contrary,  the Junior  Preferred  Stock ranks junior in all respects to the
Senior  Preferred Stock,  and no dividend  distributions  or distributions  upon
Liquidation  shall be made with respect to the Junior Preferred Stock (i) unless
and until all dividend  distributions  and  distributions  upon Liquidation with
respect to the Senior  Preferred  Stock have been made in full,  and (ii) unless
otherwise  made  in  accordance  with  the  limitations  in the  Certificate  of
Designation of the Senior  Preferred Stock. The Junior Preferred Stock will rank
senior to all other  capital  stock of the  Corporation  other  than the  Senior
Preferred Stock.

        (e)    Redemption Rights.

               (1)    Optional Redemption.  To  the  extent that the Corporation
shall have funds legally available therefor, the Corporation may, at its option,
at any  time and  from  time to time,  and  subject  to the  limitations  in the
Certificate of Designation  for the Senior  Preferred  Stock,  redeem all or any
portion of the outstanding  Junior Preferred Shares (each a "Redemption")  for a
sum in cash equal to One Thousand Dollars ($1,000.00) per Junior Preferred Share
plus an amount in cash equal to all accrued and unpaid  dividends on such shares
through  the  date  fixed by the  Board of  Directors  for  such  redemption  (a
"Redemption  Date"),  whether or not  authorized  and  declared  (such sum being
referred to as the "Redemption Price").

               (2)    Mandatory Redemption . On January 10, 2008 (the "Mandatory
Redemption  Date"), the Corporation shall redeem, to the extent of funds legally
available  therefor,  in the manner provided for in paragraph (e)(3) hereof, all
or any portion of the outstanding  Junior  Preferred  Shares then outstanding at
the Redemption Price.  Notwithstanding the foregoing, the Junior Preferred Stock
shall not be redeemed pursuant to this paragraph (e)(2) at any time during which
the  Corporation  has failed to redeem the Senior  Preferred Stock in accordance
with its terms.

               (3)    Notice of  Redemption.  Not  more than sixty (60) nor less
than ten (10) days  prior to any  Redemption  Date or the  Mandatory  Redemption
Date, as  appropriate,  the Corporation  shall give written notice  ("Redemption
Notice")  of a  Redemption  to each  holder  of  Junior  Preferred  Shares to be
redeemed at its address as it appears on the stock records of the Corporation by
deposit thereof in first class U.S. mail, postage prepaid. The Redemption Notice
shall state:

               (i)  the Redemption Price;

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

               (iii) the date fixed for redemption;

               (iv) that the holder is to surrender to the  Corporation,  in the
manner,  at the place or places  and at the  Redemption  Price  designated,  his
certificate or certificates representing the shares of Junior Preferred Stock to
be redeemed; and

               (v) that dividends on the shares of the Junior Preferred Stock to
be redeemed  shall cease to  accumulate  on such  Redemption  Date or  Mandatory
Redemption Date unless the Corporation defaults in the payment of the Redemption
Price.

On the Redemption Date or the Mandatory Redemption Date, as the case may be, the
Corporation  shall transfer to an account  designated by each holder of a Junior
Preferred Share to be redeemed the Redemption  Price thereof by wire transfer in
immediately available funds, but only upon each holder of Junior Preferred Stock
having  surrendered the certificate  representing such share of Junior Preferred
Stock to the  Corporation,  duly  endorsed  (or  otherwise  in  proper  form for
transfer,  as  determined  by the  Corporation),  in the manner and at the place
designated  in the  Redemption  Notice.  In the event  that less than all of the
shares  represented  by any  certificate  so  surrendered  are  redeemed,  a new
certificate shall be issued representing the unredeemed shares.

               (4)    Selection  of  Shares.  The  Corporation  shall select the
Junior Preferred Shares to be redeemed in any Redemption in which not all Junior
Preferred Shares are able to be redeemed  pursuant to this paragraph so that the
Junior  Preferred  Shares of each holder selected for Redemption  shall bear the
same proportion to the total Junior Preferred Shares owned by that holder as the
proportion of all Junior  Preferred  Shares selected for Redemption bears to the
total  of  all  then  outstanding  Junior  Preferred  Shares,  but  adjusted  as
determined  by the Board of  Directors  to avoid the  redemption  of  fractional
Junior Preferred Shares.  Notice having been given as provided above, if, on the
date fixed for Redemption, funds necessary for the redemption shall be available
therefor and shall have been irrevocably deposited or set aside in trust for the
holders  of  the  Junior  Preferred  Shares,  then,   notwithstanding  that  the
certificates  representing  any shares so called for  Redemption  shall not have
been surrendered,  dividends with respect to the shares so called shall cease to
accrue after the date fixed for Redemption, such shares will no longer be deemed
outstanding,  the  holders  thereof  shall  cease  to  be  stockholders  of  the
Corporation  and all rights  whatsoever  with respect to such shares (except the
right of the holders to receive  the  Redemption  Price  without  interest  upon
surrender of their  certificates  therefor)  shall  terminate.  If funds legally
available  for such  purpose are not  sufficient  for  redemption  of the Junior
Preferred Shares to be redeemed pursuant to a Redemption,  then the certificates
representing  such  shares  shall be deemed not to be  surrendered,  such shares
shall remain  outstanding and the rights of holders of Junior  Preferred  Shares
thereafter  shall  continue  to be only  those of a holder of  Junior  Preferred
Shares.  Should any Junior  Preferred  Shares  required to be redeemed under the
terms of any Redemption not be redeemed solely by reason of limitations  imposed
by law, the applicable Junior Preferred Shares shall be redeemed on the earliest
possible date  thereafter  that the applicable  Junior  Preferred  Shares may be
redeemed to the maximum extent  permitted by law. Except as set forth above, the
Board of Directors shall  prescribe the manner in which any Redemption  shall be
effected.

        (f)    Conversion.

               (1)    At  the  consummation of a Qualified Public Offering, each
holder of Junior  Preferred  Shares shall have the right to convert all, but not
less than all, of such holder's Junior  Preferred Shares into a number of shares
of Voting Common Stock (the "Conversion  Stock") equal to (i) the sum of (A) the
number of Junior Preferred Shares to be converted  multiplied by $1,000 plus (B)
the amount of all accrued and unpaid dividends on the Junior Preferred Shares to
be  converted  (whether or not  declared)  from the last  Dividend  Payment Date
through the effective  date of the  conversion,  divided by (ii) the  Conversion
Price.  The  "Conversion  Price"  shall be the  price  per  share  at which  the
Corporation's Voting Common Stock is sold to the public in such Qualified Public
Offering.  The  Corporation  may,  at its  option,  pay cash in lieu of  issuing
fractional shares of Voting Common Stock in connection with such conversion.  At
least 30 days prior to the  effectiveness of a Qualified  Public  Offering,  the
Corporation shall provide written  notification (the "Notice") to each holder of
Junior  Preferred Stock that the  Corporation  intends to consummate a Qualified
Public Offering.  The Notice shall include the expected date of the consummation
of the Qualified Public Offering (the "Expected Date") and the expected range of
offering price to the public.  At least 10 days prior to the Expected Date, each
holder of Junior  Preferred  Stock who elects to convert  such  holder's  Junior
Preferred  Shares into  Conversion  Stock shall provide  written  notice of such
election to the  Corporation.  Any holder of Junior Preferred Stock who does not
provide written notice to the Corporation shall be deemed to have elected not to
convert  such  holder's  Junior  Preferred  Shares into  Conversion  Stock.  The
Conversion  Stock issued in connection with such conversion shall be entitled to
piggyback  registration  rights (including with respect to such Qualified Public
Offering) as set forth in the Stockholders Agreement.

               (2)    Except as  otherwise  provided  herein,  the conversion of
Junior  Preferred  Stock  shall be deemed to have been  effected  at the time of
consummation of the Qualified Public  Offering.  At the time any such conversion
has been  effected,  the  rights of the holder of the  Junior  Preferred  Shares
converted  shall  cease and the  Person or  Persons  in whose  name or names any
certificate or certificates for shares of Conversion Stock are to be issued upon
such  conversion  shall be deemed to have become the holder or holders of record
of the shares of Conversion Stock represented thereby.

               (3)    As soon as possible after a  conversion has been effected,
the  Corporation  shall  deliver  to the  converting  holder  a  certificate  or
certificates  representing  the number of shares of Conversion Stock issuable by
reason  of such  conversion  in such  name or  names  and such  denomination  or
denominations as the converting holder has specified.

               (4)    The  issuance  of  certificates  for  shares of Conversion
Stock upon conversion of Junior  Preferred Stock shall be made without charge to
the holders of such Junior  Preferred  Stock for any issuance tax (other than in
connection  with a transfer into a different  name) in respect  thereof or other
cost incurred by the  Corporation  in connection  with such  conversion  and the
related issuance of shares of Conversion  Stock.  Upon conversion of each Junior
Preferred Share, the Corporation shall take all such actions as are necessary in
order  to  insure  that the  Conversion  Stock  issuable  with  respect  to such
conversion shall be validly issued, fully paid and nonassessable.

               (5)    The Corporation shall not  close  its  books  against  the
transfer of Junior  Preferred  Stock or of  Conversion  Stock issued or issuable
upon conversion of Junior  Preferred  Stock in any manner which  interferes with
the timely  conversion of Junior Preferred  Stock. The Corporation  shall assist
and cooperate  with any holder of Junior  Preferred  Stock  required to make any
governmental  filings  or  obtain  any  governmental  approval  prior  to  or in
connection with any conversion of Junior  Preferred Stock hereunder  (including,
without limitation, making any filings required to be made by the Corporation).

               (6)    The  Corporation  shall  in  connection with any Qualified
Public  Offering  reserve and keep  available out of its authorized but unissued
shares  of  Conversion  Stock,  solely  for the  purpose  of  issuance  upon the
conversion of the Junior  Preferred  Stock,  such number of shares of Conversion
Stock as the Corporation reasonably believes may be issuable upon the conversion
of all outstanding  Junior Preferred Stock. All shares of Conversion Stock which
are so issuable shall, when issued,  be duly and validly issued,  fully paid and
nonassessable.  The Corporation  shall take all such actions as may be necessary
to assure  that all such  shares of  Conversion  Stock may be so issued  without
violation of any applicable law or governmental  regulation or any  requirements
of any domestic securities exchange upon which shares of Conversion Stock may be
listed  (except  for  official  notice of issuance  which  shall be  immediately
delivered by the Corporation upon each such issuance). The Corporation shall not
take any action which would cause the number of authorized  but unissued  shares
of  Conversion  Stock to be less than the number of such  shares  required to be
reserved hereunder for issuance upon conversion of the Junior Preferred Stock.

        (g)    Transfers of  Junior  Preferred  Shares.   The  Junior  Preferred
Shares may not be sold, assigned or transferred by the holders without the prior
written consent of the  Corporation,  and by acceptance of any Junior  Preferred
Shares,  the holder agrees not to sell,  assign or transfer such shares  without
such consent.

        (h)    Merger,  Consolidation,  or Sale of Assets. The Corporation shall
not  consolidate  or merge with or into (whether or not the  Corporation  is the
surviving  corporation),  or directly and/or indirectly through its subsidiaries
sell,  assign,   transfer,   lease,  convey  or  otherwise  dispose  of  all  or
substantially  all of the  properties  and  assets  of the  Corporation  and its
subsidiaries taken as a whole in one or more related transactions,  to any other
Person unless (A) (i) the  Corporation is the surviving  corporation or (ii) the
entity or the Person formed by or surviving any such consolidation or merger (if
other than the Corporation) or to which such sale, assignment,  transfer, lease,
conveyance  or other  disposition  shall  have been  made (the  entity or Person
described in this clause (ii),  the  "Successor  Corporation ") is a corporation
organized or existing under the laws of the United States,  any state thereof or
the  District of Columbia;  and (B) the  Successor  Corporation  assumes all the
obligations of the Corporation under this Certificate of Designation pursuant to
an  amendment  or  supplement  hereto  or  thereto,  as  applicable,  in a  form
reasonably  satisfactory  to the  holders of a majority  of the then  issued and
outstanding shares of Junior Preferred Stock.

        (i)    Definitions.  As used in this  Certificate  of  Designation,  the
following  terms shall have the  following  meanings  (with terms defined in the
singular  having  comparable  meanings  when used in the plural and vice versa),
unless the context otherwise requires:

               "Affiliate" means with respect to any specified  Person:  (i) any
other Person directly or indirectly controlling or controlled by or under direct
or indirect  common  control with such specified  Person;  (ii) any other Person
that  owns,  directly  or  indirectly,  10% or more of such  specified  Person's
capital stock; or (iii) any other Person 10% or more of the voting capital stock
of which is beneficially  owned or held directly or indirectly by such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified  Person means the power to direct the  management  and policies of
such  Person,  directly  or  indirectly,  whether  through  ownership  of voting
securities,   by  contract  or  otherwise;   and  the  terms  "controlling"  and
"controlled" have meanings correlative to the foregoing.

               "Approved  Sale"  shall have the  meaning  ascribed  to it in the
Stockholders Agreement (as in effect on the date hereof).

               "Change of Control" shall have the meaning  ascribed to it in the
Certificate of Designation for the Senior Preferred Stock.

               "Common Stock" means collectively the Voting Common Stock and the
Non-Voting Common Stock.

               "Qualified Public Offering" means any underwritten primary public
offering  registered  under the  Securities  Act of 1933 of capital stock of the
Corporation having an aggregate offering value of at least $50 million.

               "Major Public  Offering"  means an  underwritten  primary  public
offering  registered  under the  Securities  Act of 1933 of capital stock of the
Corporation in which the  Corporation  receives in excess of $200 million in net
proceeds (after deducting any underwriting fees or commissions).

               "Non-Voting  Common  Stock"  means the  Corporation's  Non-Voting
Common Stock, par value $0.01.

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

               "Senior  Preferred  Stock"  shall mean (a) the Class A 14% Senior
Mandatorily  Redeemable  Preferred Stock, (b) the Class B 14% Senior Mandatorily
Redeemable  Preferred Stock and (c) any other securities issued or issuable with
respect to or in exchange for such Senior  Preferred  Stock described in clauses
(a) or (b)  by  way  of  share  exchange,  stock  dividend,  stock  split  or in
connection with a combination of shares, recapitalization, merger, consolidation
or other  reorganization  or pursuant to any registration  agreement  applicable
thereto or otherwise.

               "Stockholders Agreement" means the Stockholders Agreement,  dated
as of December 10, 1999, by and among the Corporation and the Persons  signatory
thereto.

               "Voting  Common  Stock"  means the  Corporation's  Voting  Common
Stock, par value $0.01.


               IN  WITNESS  WHEREOF,  said Outsourcing Solutions Inc. has caused
this Certificate of Designation of Outsourcing  Solutions Inc. to be executed by
its officer thereunto duly authorized this 10th day of December, 1999.

                                            OUTSOURCING SOLUTIONS INC.

                                            By:/s/ Timothy M. Hurd
                                               ---------------------------------
                                            Name:  Timothy M. Hurd
                                            Title: Secretary