CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
                                       OF
                 SERIES B CONVERTIBLE REDEEMABLE PREFERRED STOCK
                                       OF
                     COMMODORE SEPARATION TECHNOLOGIES, INC.

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

     I, Paul E. Hannesson, Chairman of the Board of Commodore Separation
Technologies, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions of
Section 103 thereof, DO HEREBY CERTIFY:

     That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the said Corporation, the said Board of
Directors as of December 3, 1998, adopted the following resolution creating a
series of 4,000 shares of 6% Series B Convertible Redeemable Preferred Stock,
par value $0.001 per share, designated as "6% Series B Convertible Redeemable
Preferred Stock":

     RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preferred Stock of the Corporation be and it hereby
is created, and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:

     1. DESIGNATION AND NUMBER. The designation of the series of preferred stock
fixed by this resolution shall be "6% Series B Convertible Redeemable Preferred
Stock" (hereinafter referred to as the "Series B Preferred Stock") and the
number of shares constituting such series shall be 4,000. The Board of Directors
of the Corporation may not increase or decrease the number of shares of this
series so designated except as hereinafter provided. The stated value of each
share of this series shall be $100.00, and each share of this series shall be
validly issued and fully paid upon receipt by the Corporation of legal
consideration in an amount at least equal to such stated value (less applicable
underwriting discounts or commissions) and shall not thereafter be assessable.

     2. RANK. The Series B Preferred Stock shall rank: (i) 
prior to all of the Corporation's Common Stock, par value $0.001 per share
("Common Stock"), (ii) prior to any class or series of capital stock of the
Corporation hereafter created either specifically ranking by its terms junior to
the Series B Preferred Stock or not specifically ranking by its terms senior to
or on parity with the Series B Preferred Stock (collectively with the Common
Stock, "Junior Securities"); (iii) subject to the provisions of subparagraph
4(ii) hereof, on parity with any class or series of

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capital stock of the Corporation hereafter created specifically ranking by its
terms on parity with the Series B Preferred Stock ("Parity Securities"); and
(iv) subject to the provisions of subparagraph 4(ii) hereof, junior to the
Corporation's 10% Senior Convertible Redeemable Preferred Stock, par value
$0.001 per share, and any class or series of capital stock of the Corporation
hereafter created specifically ranking by its terms senior to the Series B
Preferred Stock ("Senior Securities"), in each case, as to payment of dividends
or as to distributions of assets upon liquidation, dissolution or winding-up of
the Corporation, whether voluntary or involuntary (all such distributions being
referred to collectively as "Distributions").

     3. DIVIDENDS.

     (i) The dividend rate of the Series B Preferred Stock shall be computed at
a rate of $6.00 per share per annum from the date of the issuance of the Series
B Preferred Stock. Dividends shall be payable quarterly in arrears out of funds
legally available therefor on the last business day of March, June, September
and December of each year, commencing June 30, 1999 (each a "Dividend Payment
Date"). Dividends on shares of Series B Preferred Stock shall be cumulative and
shall accrue (whether or not declared), without interest, from the first day of
the quarterly period in which such dividend may be payable as herein provided,
except with respect to the first quarterly payment which shall accrue from the
date of issuance. On each Dividend Payment Date all dividends which shall have
accrued on each share of Series B Preferred Stock outstanding on the applicable
record date shall accumulate and be deemed to become "due." Any dividend which
shall not be paid on the Dividend Payment Date on which it shall become due
shall be deemed to be "past due" (a "Cumulated Dividend") until such Cumulated
Dividend shall have been paid.

     (ii) The Board of Directors shall declare and pay current dividends out of
funds legally available therefor (after giving effect to the payment of all
requisite dividends on Senior Securities).

     (iii) In order to determine the holders of the Series B Preferred Stock
entitled to receive dividends, the Corporation shall fix a record date not more
than 60 days prior to any Dividend Payment Date. If any such Dividend Payment
Date should fall on a day that is not a Business Day, then the Corporation shall
pay the applicable dividend on the next succeeding Business Day. "Business Day"
shall mean a day other than a Saturday, Sunday or other day on which any
national securities exchange or quotation system on which the Common Stock of
the Corporation is traded or quoted is authorized or required by law to close.

     (iv) The Corporation shall not: (A) pay or declare and set apart for
payment any dividends or Distributions on the Corporation's Junior Securities,
other than dividends payable in the form of additional shares of the same Junior
Security as that on which such dividend is declared, or (B) redeem, purchase, or
otherwise acquire any shares of Junior Securities or any right, warrant or
option to acquire any Junior Securities, unless full Cumulated Dividends have
been, or contemporaneously are, paid or declared and set apart for such payment
on the Series B Preferred Stock.

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<PAGE>

     (v) No full dividends shall be paid or declared and set apart for payments
on any class or series of Parity Securities for any period unless full Cumulated
Dividends have been, or contemporaneously are, paid or declared and set apart
for such payment on the Series B Preferred Stock for all dividend periods
terminating on or prior to the date of payment of such full Cumulated Dividends.
No full Cumulated Dividends shall be paid or declared and set apart for payment
on the Series B Preferred Stock for any period unless full cumulative dividends
have been, or contemporaneously are, paid or declared and set apart for payment
on the Parity Securities, for all dividend periods terminating on or prior to
the date of payment of such full Cumulated Dividends. When dividends are not
paid in full upon the Series B Preferred Stock and the Parity Securities, all
dividends paid or declared and set apart for payment upon shares of Series B
Preferred Stock and the Parity Securities shall be paid or declared and set
apart for payment PRO RATA, so that the amount of dividends paid or declared and
set apart for payment per share on the Series B Preferred Stock and the Parity
Securities shall in all cases bear to each other the same ratio that accrued and
unpaid dividends per share on the shares of Series B Preferred Stock and the
Parity Securities bear to each other (without taking into account the dividends
so paid and those so declared and set apart for payment).

     4. VOTING RIGHTS

     (i) Except as may otherwise be provided herein or required by law, the
holders of the shares of Series B Preferred Stock (the "Holders") shall not be
entitled to any vote in respect of such shares.

     (ii) So long as any shares of Series B Preferred Stock are outstanding, the
consent of the Holders of at least a majority of the shares of Series B
Preferred Stock at the time outstanding, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for such purpose,
shall be necessary for the Corporation to: (a) authorize any class or series of
Senior Securities; (b) authorize any class or series of Parity Securities; (c)
reclassify any Junior Securities into Parity or Senior Securities; or (d) amend,
repeal or modify any provision of, or add any provision to, the Corporation's
Certificate of Incorporation, By-Laws or this Certificate of Designation if such
action would alter or change the rights, preferences, privileges or powers of,
or the restrictions provided for the benefit of the Holders so as to adversely
affect the Series B Preferred Stock; PROVIDED, HOWEVER, that no such vote shall
be required pursuant to clause (a), (b), (c) or (d) in the event the Corporation
shall then have the right to redeem the Series B Preferred Stock and, prior to
the date of issuance or such new class or series of Senior Securities or Parity
Securities provision shall have been made for the redemption of all the
outstanding shares of the Series B Preferred Stock and such redemption occurs on
or prior to the date of issuance of such new series or class of Senior
Securities or Parity Securities.

     (iii) On all matters on which the Series B Preferred Stock is entitled to
vote by law, the Holders shall be entitled to one vote per share of Series B
Preferred Stock, voting separately as a single class, and the presence, in
person or by proxy, of the Holders of a majority of the outstanding shares of
the Series B Preferred Stock shall constitute a quorum.

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     5. CONVERSION RIGHTS.

     (i) Each share of Series B Preferred Stock may be converted, at the option
of each Holder, at any time and from time to time, into fully-paid and
non-assessable shares of Common Stock; PROVIDED, HOWEVER, a Holder's right to so
convert shares of Series B Preferred Stock shall terminate as to shares thereof
that are redeemed by the Corporation on the Redemption Date (as hereinafter
defined) therefor as provided in and subject to the terms and conditions of
subparagraph 7(ii) hereof. The number of shares of Common Stock to which the
Holder of each share of Series B Preferred Stock shall be entitled upon
conversion shall be the product obtained by multiplying the number of shares of
Series B Preferred Stock to be converted by the Conversion Rate (as hereinafter
defined); in addition, the Holder shall be entitled upon conversion to receive
cash in an amount equal to all Cumulated Dividends on each share of Series B
Preferred Stock so converted, PROVIDED there are funds legally available
therefor. To the extent the Corporation shall not have funds legally available
to pay all such Cumulated Dividends, the Corporation's obligation to make such
payment shall be deferred until the first date on which the Corporation shall
have funds legally available for all or a portion of such payment, which shall
then be made in whole or in part, as the case may be, until such Cumulated
Dividends shall have been paid in full. The "Conversion Rate," that is, the
number of shares of Common Stock for which each share of Series B Preferred
Stock may be converted, shall be determined by dividing $100.00 by $0.15
("Conversion Price"). The Conversion Price shall be adjusted from time to time
as set forth in subsection (ii) hereof. The Corporation shall not issue
fractional shares of Common Stock upon conversion of Series B Preferred Stock
but, in lieu thereof, shall pay to a Holder cash in an amount equal to such
fraction multiplied by the Last Sale Price of the Common Stock on the trading
day prior to the date on which the shares are converted. "Last Sale Price" shall
mean (w) the reported last sale price regular way or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the principal national securities exchange
or market on which the Common Stock is listed or admitted to trading or, (x) if
not listed or admitted to trading on any national securities exchange or market,
on the Nasdaq SmallCap Market or, (y) if the Common Stock is not listed or
admitted to trading on any national securities exchange or market or quoted on
the Nasdaq SmallCap Market, the average of the closing bid and asked prices in
the over-the-counter market as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for that purpose or,
(z) if the Common Stock is not listed or admitted to trading or otherwise quoted
as set forth above, the fair market value of the Common Stock as determined in
good faith using customary valuation methods by the Board of Directors of the
Corporation.

     (ii) The Series B Preferred Stock shall be converted into Common Stock in
the following manner:

     (A) Shares of Series B Preferred Stock received by the Corporation in
exchange for Common Stock shall be retired and canceled and shall no longer be
available for issuance as Series B Preferred Stock or any other series of
preferred stock.

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<PAGE>


     (B) A Holder shall give written notice to the Corporation of its desire to
convert all or a portion of the shares of Series B Preferred Stock owned by such
Holder. Such notice shall be accompanied by certificates, duly endorsed for
conversion, evidencing the number of shares of Series B Preferred Stock such
Holder desires to convert. The Corporation will, as soon as practicable
thereafter, deliver to such Holder or to such Holder's nominee or nominees, a
certificate or certificates for the appropriate number of shares of Common
Stock, together with cash, as provided in subparagraph 5(i), with respect to any
fractional shares otherwise issuable upon conversion, and cash in an amount
equal to all Cumulated Dividends on each share of Series B Preferred Stock so
converted, PROVIDED there are funds legally available therefor, and, in the
event of a partial conversion, a certificate representing the balance, it any,
of the shares of Series B Preferred Stock represented by the surrendered
certificate or certificates but not converted to Common Stock. To the extent the
Corporation shall not have funds legally available to pay all such Cumulated
Dividends, the Corporation's obligation to make such payment shall be deferred
until the first date on which the Corporation shall have funds legally available
for all or a portion of such payment, which shall then be made in whole or in
part, as the case may be, until such Cumulated Dividends shall have been paid in
full.

     (C) In the event that shares of Series B Preferred Stock are surrendered
for conversion on any date during the period from the close of business on a
record date fixed for determining the Holders entitled to receive dividends to
the opening of business on the corresponding Dividend Payment Date, the Holder
shall continue to be entitled to receive such dividend on such Dividend Payment
Date. In the event that the date on which the shares are converted is the
Dividend Payment Date, such Holder will be entitled to receive the dividend
payable with respect to such Series B Preferred Stock.

     (D) If, prior to the date on which all shares of Series B Preferred Stock
are converted, the Corporation shall (1) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock, (2) subdivide its
outstanding Common Stock, (3) combine its outstanding Common Stock into a
smaller number of shares of Common Stock or (4) issue by reclassification of its
Common Stock other securities of the Corporation, the Conversion Price in effect
on the opening of business on the record date for determining stockholders
entitled to participate in such transaction shall thereupon be adjusted, or, if
necessary, the right to convert shall be amended, such that the number of shares
of Common Stock receivable upon conversion of the shares of Series B Preferred
Stock immediately prior thereto shall be adjusted so that the Holder shall be
entitled to receive, upon the conversion of such shares of Series B Preferred
Stock, the kind and number of shares of Common Stock or other securities of the
Corporation which it would have owned or would have been entitled to receive
after the happening of any of the events described above had the Series B
Preferred Stock been converted immediately prior to the happening of such event
or any record date with respect thereto. Any adjustment made pursuant to this
subparagraph 5(ii)(D) shall become effective immediately after the effective
date of such event and such adjustment shall be retroactive to the record date,
if any, for such event. No adjustment with respect to any ordinary cash
dividends (made out of current earnings) on shares of Common Stock shall be
made.

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     (E) Except in respect of transactions described in subparagraph 5(ii)(D)
above, if, prior to the date on which all shares of Series B Preferred Stock are
converted, the Corporation shall sell or issue Common Stock or rights, options,
warrants or convertible securities (or rights, options or warrants to purchase
convertible securities) containing the right to subscribe for or purchase shares
of Common Stock (collectively, "Rights"), and the sale or issuance price per
share of Common Stock (or in the case of Rights, the sum of the consideration
paid or payable for any such Right entitling the holder thereof to acquire one
share of Common Stock and such additional consideration paid or payable upon
exercise or conversion of any such Right to acquire one share of Common Stock)
is less than the lower of the then current Conversion Price or the then current
average Market Price of the Common Stock (as defined in subparagraph 7(i) below)
for the five (5) trading days immediately preceding the dates of such sale or
issuance (the "Current Common Stock Price"), the Conversion Price shall
thereupon be adjusted such that the number of shares of Common Stock receivable
upon conversion of the Series B Preferred Stock shall be the number determined
by multiplying (1) the number of shares of Common Stock receivable upon
conversion of the shares of Series B Preferred Stock immediately prior to such
issuance or sale by (2) a fraction (not to be less than one) with a numerator
equal to the product of the number of shares of Common Stock outstanding after
giving effect to such sale or issuance (and assuming, in the case of Rights that
such Rights had been fully exercised or converted, as the case may be) and the
Current Common Stock Price and a denominator equal to the sum of (x) the product
of the number of shares of Common Stock outstanding immediately before the
issuance or sale or the record date, as the case may be, multiplied by the
Current Common Stock Price and (y) the aggregate consideration received or
deemed to be received by the Corporation for the shares of Common Stock to be
issued or sold or to be purchased or subscribed for upon exercise of such
Rights. For the purposes of such adjustments, the Common Stock which the holders
of any such Rights shall be entitled to subscribe for or purchase shall be
deemed to be issued and outstanding as of the date of such issuance or sale or
the record date, as the case may be.

     (F) Except in respect of transactions described in subparagraph 5(ii)(D)
above, if, prior to the date on which all shares of Series B Preferred Stock are
converted, the Corporation shall declare, order, pay or make a dividend or other
distribution (including without limitation any distribution of cash, other or
additional stock or other securities or property or options, by way of dividend
or spin-off, reclassification, recapitalization or similar corporate
rearrangement or otherwise, but excluding dividends described in paragraph 3 or
in the last sentence of subparagraph 5(ii)(D)), then, in each case, the
Conversion Price shall thereupon be adjusted such that the number of shares of
Common Stock thereafter receivable upon the conversion of shares of Series B
Preferred Stock shall be determined by multiplying (1) the number of shares of
Common Stock theretofore receivable upon conversion of the shares of the Series
B Preferred Stock by (2) a fraction of which the numerator shall be the then
Conversion Price on the record date for the determination of stockholders
entitled to receive such dividend or other distribution, and of which the
denominator shall be such Conversion Price on such date minus the amount of such
dividend or distribution applicable to one share of Common Stock. The Board of
Directors of the Corporation shall determine the amount of such dividend or
distribution allocable to one share of Common Stock and such determination, if
reasonable and based upon the Board of Directors' good faith business judgment,
shall be binding upon the Holder. Such adjustment shall be made whenever any
such

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<PAGE>


distribution is made and shall become effective on the date of distribution
retroactive to the record date for the determination of stockholders entitled to
receive such distribution.

     (G) Upon the expiration of any Rights if such shall not have been
exercised, the Conversion Price, to the extent that shares of Series B Preferred
Stock have not been converted, shall, upon such expiration, be readjusted and
shall thereafter be such as they would have been had they been originally
adjusted (or had the original adjustment not been required, as the case may be)
on the basis of (1) the fact that the only shares of Common Stock so issued were
the shares of Common Stock, if any, actually issued or sold upon the exercise of
such Rights and (2) such shares of Common Stock, if any, were issued or sold for
the consideration actually received by the Corporation (including for purposes
hereof, any underwriting discounts or selling commissions paid by the
Corporation) for the issuance, sale or grant of all such Rights, whether or not
exercised; PROVIDED, HOWEVER, that no such readjustment shall have the effect of
increasing the Conversion Price by a proportion (relative to the Conversion
Price in effect immediately prior to such readjustment) in excess of the inverse
of the aggregate proportional adjustment thereof made in respect of the issue,
sale, grant or assumption of such Rights.

     If the consideration provided for in any Right or the additional
consideration, if any, payable upon the conversion or exchange of any right
shall be reduced, or the rate at which any Right is exercisable or convertible
into or exchangeable for shares of Common Stock shall be increased, at any time
under or by reason of provisions with respect thereto designed to protect
against dilution, then, effective concurrently with each such change, the
Conversion Price then in effect shall first be adjusted to eliminate the effects
(if any) of the issuance (or deemed issuance) of such Right on the Conversion
Price and then readjusted as if such Right had been issued on the date of such
change with the terms in effect after such change, but only if as a result of
such readjustment the Conversion Price then in effect hereunder is thereby
reduced.

     (H) If, prior to the date on which all shares of Series B Preferred Stock
are converted, the Corporation shall (1) consolidate with or merge with or into
another person resulting in a reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock or (2) sell or otherwise
transfer all or substantially all of the assets of the Corporation, then a
Holder shall thereafter have the right to convert such shares of Series B
Preferred Stock into the kind and amount of stock, securities or assets, if any,
such Holder would have been entitled to receive upon such consolidation, merger,
sale or transfer had such Holder converted its shares of Series B Preferred
Stock into Common Stock immediately prior to such transaction.

     (I) For the purposes of this paragraph 5: (x) the consideration for the
issue or sale of any additional shares of Common Stock shall, irrespective of
the accounting treatment of such consideration, be deemed to be the
consideration actually received by the Corporation and (1) insofar as it
consists of cash, be computed at the net amount of cash received by the
Corporation, plus any expense paid or incurred by the Corporation and any
commissions or compensation paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in connection with
such issue or sale, (2) insofar as it consists of

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property (including securities) other than cash, be computed at the fair value
thereof at the time of such issue or sale, as determined in good faith by the
Board of Directors of the Corporation, and (3) in case additional shares of
Common Stock are issued or sold together with other stock or securities or other
assets of the Corporation for consideration which covers both cash and property,
be the portion of such consideration so received, computed as provided in
clauses (1) and (2) above, allocable to such additional shares of Common Stock,
all as determined in good faith by the Board of Directors of the Corporation;
(y) additional shares of Common Stock deemed to have been issued pursuant to
subparagraph 5(ii)(G) relating to Rights, shall be deemed to have been issued
for a consideration per share determined by dividing (1) the total amount, if
any, received by the Corporation as consideration for the issue, sale or grant
of the Rights in question, less the value of the Rights not actually received by
the Corporation as consideration therefor, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provisions contained therein for a subsequent adjustment
of such consideration to protect against dilution) payable to the Corporation
upon the exercise in or the conversion or exchange of such Rights or, in the
case of Rights which are rights, options or warrants for convertible securities,
the exercise of such Rights for convertible securities and the conversion or
exchange of such convertible securities, in each case computing such
consideration as provided in the foregoing clause (x) of this subparagraph
5(ii)(I), by (2) the maximum number of shares of Common Stock (as set forth in
the instruments relating thereto, without regard to any provision contained
therein for subsequent adjustment of such number to protect against dilution)
issuable upon the exercise, conversion or exchange of such Rights; and, (z)
additional shares of Common Stock deemed to have been issued pursuant to
subparagraph 5(ii)(D) and (F), relating to stock dividends, stock splits, etc.,
shall be deemed to, have been issued for no consideration. For the purposes of
this paragraph 5, the term "Common Stock" shall mean (i) the class of stock
designated as Common Stock in the Certificate of Incorporation of the
Corporation as may be amended as of the date hereof, or (ii) any other class of
stock resulting from successive changes or reclassification of such Common Stock
consisting solely of changes in par value or from par value to no par value, or
from no par value to par value.

     (J) No adjustment in the Conversion Price shall be required unless
explicitly provided for in this paragraph 5 and unless such adjustment (plus any
adjustments not previously made by reason of this subparagraph 5(ii)(J)), would
require an increase or decrease of at least five percent (5%) in such price;
PROVIDED, HOWEVER, that any adjustments which by reason of this subparagraph
5(ii)(J) are not required to be made shall be carried forward and shall be made
at the time of and together with the next succeeding adjustment which, together
with any adjustment so carried forward, shall amount to an increase or decrease
of at least five percent (5%) in such price. All calculations under this
subparagraph 5(ii)(J) shall be made to the nearest cent.

     (K) No adjustment shall be made (1) upon conversion of the Series B
Preferred Stock, (2) upon exercise of options and/or warrants of the Corporation
outstanding on the date hereof, (3) with respect to options thereafter granted
to employees, officers, directors or stockholders of or consultants to the
Corporation, pursuant to existing stock option plans, and (4) upon exercise of
the Redeemable Common Stock Purchase Warrants offered and sold in the
Corporation's initial public offering and the Representative's Warrants issued
in connection

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therewith.

     (L) Whenever the Conversion Price is adjusted pursuant to any of the
foregoing provisions of this paragraph 5, the Corporation shall forthwith
prepare a written statement signed by the president or any vice president and
the treasurer or any assistant treasurer or the secretary or any assistant
secretary of the Corporation, setting forth the adjusted Conversion Rate
determined as provided in this paragraph 5, and in reasonable detail the facts
requiring such adjustment. Such statement shall be filed among the permanent
records of the Corporation and a copy thereof shall be furnished to any Holder
requesting the same, and shall at all reasonable times during business hours be
open to inspection by the Holders. Within 10 days of the event requiring an
adjustment, the Corporation shall also cause a notice, stating that such an
adjustment has been made and setting forth the adjusted Conversion Rate, to be
mailed, first-class, postage prepaid, to all then Holders of record at their
addresses as the same appear on the stock records of the Corporation.

     (M) If a Holder has delivered notice to the Corporation of its desire to
convert all or a portion of its shares of Series B Preferred Stock, and
certificates, duly endorsed for conversion in respect of such shares have been
delivered to the Corporation, then all shares of Series B Preferred Stock so
tendered to the Corporation shall be deemed to be no longer outstanding and,
notwithstanding the failure of the Corporation to issue the Common Stock, such
Holder shall be deemed, for all purposes (except as set forth in the next
sentence of this subparagraph 5(ii)(M)), to be a holder of the number of shares
of Common Stock into which the shares of Series B Preferred Stock such Holder is
entitled to receive pursuant to the terms of this paragraph 5 in each case as of
the close of business on the date on which such conversion notice is delivered.
In the event such Holder has delivered notice to the Corporation of his desire
to convert all or a portion of his shares of Series B Preferred Stock, such
Holder shall retain the right to receive all Cumulated Dividends payable on the
shares so converted, as provided in this paragraph 5, notwithstanding such
conversion.

     (iii) The Corporation shall not, by amendment of its Certificate of
Incorporation as amended as of the date hereof, or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation but shall at all times in good faith assist in the carrying out of
all the provisions of this paragraph 5. The Corporation shall at all times
reserve and keep available out of its authorized but unissued Common Stock the
full number or shares of Common Stock deliverable upon the conversion of all the
then outstanding shares of Series B Preferred Stock and shall take all such
action and obtain all such permits or orders as may be necessary to enable the
Corporation to validly and legally issue fully paid and non-assessable shares of
Common Stock upon the conversion of Series B Preferred Stock. The Corporation
shall pay any and all transfer, stamp and other like taxes that may be payable
in respect of the issuance or delivery to a Holder of shares of Common Stock or
conversion of the Series B Preferred Stock by such holder.

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     6. LIQUIDATION PRICE. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
amount that shall be paid to a Holder of each share of Series B Preferred Stock
shall be $100.00 and an additional sum equal to all Cumulated Dividends on a
share of Series B Preferred Stock (hereinafter called the "Liquidation Price"),
and no more. Upon any liquidation, dissolution or winding-up of the Corporation,
the Holders will be entitled to be paid, after payment or provision for payment
of the debts and other liabilities of the Corporation and after payment or
provision for payment is made upon any Senior Securities, but before any
Distribution or payment is made upon any Junior Securities, an amount in cash
equal to the aggregate Liquidation Price of all shares outstanding, and the
Holders will not be entitled to any further payment. If, upon any such
liquidation, dissolution or winding-up of the Corporation, the Corporation's
assets to be distributed among the Holders and the holders of Parity Securities
(the "Parity Holders") are insufficient to permit payment in full to such
Holders and the Parity Holders of the aggregate amount which they are entitled
to be paid, then the available assets to be distributed will be distributed
ratably among such Holders and Parity Holders based upon the aggregate
Liquidation Price of the Series B Preferred Stock and the aggregate liquidation
preference of any Parity Securities held by each such Holder and Parity Holder,
respectively. The Corporation will mail written notice of such liquidation,
dissolution or winding-up, not less than 30 days prior to the payment date
stated therein, to each Holder of record. Neither the consolidation or merger of
the Corporation into or with any other corporation or any other person, nor the
sale or transfer by the Corporation of all or any part of its assets, nor the
reduction of the capital stock of the Corporation will be deemed to be a
liquidation, dissolution or winding-up of the Corporation within the meaning of
paragraphs 2 and 6 hereof.

     7. REDEMPTION.

     (i) TIME OF REDEMPTION. The Corporation may, at its option, redeem shares
of the Series B Preferred Stock, in whole but not in part, out of funds legally
available therefor, by action of the Board of Directors, at any time after
issuance of such Series B Preferred Stock, at a redemption price of $105.00 per
share, plus all Cumulated Dividends on such share of Series B Preferred Stock,
upon notice and in the manner set forth in, and subject to the conditions of,
this paragraph 7.

     (ii) PRIORITY OF REDEMPTION. None of the shares of any class or series of
Parity Securities or Junior Securities shall be redeemed, repurchased or
otherwise acquired unless full Cumulated Dividends have been, or
contemporaneously are, paid or declared and set apart for such payment on the
Series B Preferred Stock for all dividend periods terminating on or prior to the
date of payment of such full Cumulated Dividends. None of the shares of Series B
Preferred Stock shall be redeemed, repurchased or otherwise acquired unless full
cumulative dividends have been, or contemporaneously are, paid or declared and
set apart for payment on the Parity Securities or Senior Securities, for all
dividend periods terminating on or prior to the Redemption Date of Series B
Preferred Stock.

     8. PROCEDURES FOR REDEMPTION. The Series B Preferred Stock shall be
redeemed

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<PAGE>

pursuant to subparagraph 7(i) in the following manner:

     (i) Shares of the Series B Preferred Stock redeemed, repurchased or
otherwise acquired by the Corporation shall be retired and canceled and shall no
longer be available for issuance as Series B Preferred Stock or any other series
of preferred stock.

     (ii) In the event of a redemption of shares of Series B Preferred Stock
pursuant to subparagraph 7(i), notice of redemption of shares of Series B
Preferred Stock shall be given by the Corporation, not less than 30 nor more
than 60 days prior to the Business Day designated in such notice (the
"Redemption Date"), by first class mail to Holders at their respective addresses
then appearing on the records of the Corporation, and shall also be published,
on or about the date of such mailing, in the National Edition of the Wall Street
Journal. Such notice of redemption shall specify the Redemption Date, the
redemption price plus the Cumulated Dividends on a share of Series B Preferred
Stock, if any (the "Redemption Price"), the total number of shares of Series B
Preferred Stock to be redeemed and the place or places of payment. The
conversion rights of the Holders shall continue until the Redemption Date
(provided no default by the Corporation in the payment of the Redemption Price
shall have occurred and be continuing) and in the event of any such default the
Holders' conversion rights shall continue until such shares are actually
redeemed, exchanged or converted, and such notice shall state the then effective
Conversion Price and that the right of Holders to exercise their conversion
rights shall terminate at the close of business on the Redemption Date (provided
no default by the Corporation in the payment of the Redemption Price shall have
occurred and be continuing). On or before the Redemption Date, each Holder shall
surrender to the Corporation or its designated agent, at such place as it may
designate in the redemption notice, certificates, duly endorsed for transfer,
evidencing the number of shares of Series B Preferred Stock held by such Holder
and being redeemed. Upon such surrender, the Holder shall be entitled to receive
payment of the Redemption Price without interest.

     (iii) If, on the Redemption Date, (1) notice of redemption has been mailed
or delivered as provided herein, (2) the Corporation has deposited with an
independent paying agent funds necessary to pay the amount due for all shares of
Series B Preferred Stock subject to such redemption, and (3) all such funds are
available for the sole purpose of paying such amount, then, unless the
Corporation defaults on the payment of the Redemption Price, all shares of
Series B Preferred Stock subject to redemption shall, whether or not
certificates for such shares have been surrendered for cancellation, be deemed
to be no longer outstanding for any purpose and all rights with respect to such
shares shall cease, except the right of the Holder to receive the Redemption
Price, without interest; PROVIDED, HOWEVER, that the Corporation shall not have
to so redeem any shares of Series B Preferred Stock which have been converted to
Common Stock prior to the date of such redemption. If the Corporation shall not
have funds legally available for redemption of shares to be redeemed pursuant to
subparagraph 7(i) on the Redemption Date, the notice of redemption shall be null
and void and at such time as the Corporation shall have funds legally available
for redemption of such shares and shall determine to redeem the Series B
Preferred Stock on the terms and conditions set forth in subparagraph 7(i), a
new notice of redemption to Holders shall be required to effect such redemption.

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     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Paul E. Hannesson, its Chairman of the Board, as of this 3rd day of
December 1998.

                                   COMMODORE SEPARATION TECHNOLOGIES, INC.


                                   By:
                                       Paul E. Hannesson
                                       Chairman of the Board




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