<PAGE>   1
                                                                     Exhibit 3.2


                     INKINE PHARMACEUTICAL COMPANY, INC.(1)

                                     BY-LAWS

                             A New York Corporation

--------

1        On November 6, 1997, the Corporation's name was changed from Panax
         Pharmaceutical Company Ltd. to InKine Pharmaceutical Company, Inc.


<PAGE>   2


                                     BY-LAWS

                                   ARTICLE I

                                 The Corporation

                  Section 1. Name. The legal name of this corporation
(hereinafter called the "Corporation") is InKine Pharmaceutical Company, Inc.(2)

                  Section 2. Offices. The Corporation shall have its principal
office in the State of New York. The Corporation may also have offices at such
other places within and without the United States as the Board of Directors may
from time to time appoint or the business of the Corporation may require.

                  Section 3. Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, New York". One or more duplicate dies for impressing such seal
may be kept and used.

                                   ARTICLE II

                             Meeting of Shareholders

                  Section 1. Place of Meetings. All meetings of the shareholders
shall be held at the principal office of the Corporation in the State of New
York or at such other place, within or without the State of New York, as is
fixed in the notice of the meeting.

                  Section 2. Annual Meeting. An annual meeting of the
shareholders of the Corporation for the election of directors and the
transaction of such other business as may properly come before the meeting shall
be held on the first Monday of [ ] in each year if not a legal holiday, and if a
legal holiday, then on the next secular day following, at ten o'clock A.M.,
Eastern Standard Time, or at such other time as is fixed in the notice of the
meeting. If for any reason any annual meeting shall not be held at the time
herein specified, the same may be held at any time thereafter upon notice, as
herein provided, or the business thereof may be transacted at any special
meeting called for the purpose.

                  Section 3. Special Meetings. Special meetings of shareholders
may be called by the President whenever he deems it necessary or advisable. A
special meeting of the shareholders shall be called by the President whenever so
directed in writing by a majority of the entire Board of Directors or whenever
the holders of one-third (1/3) of the number of shares of the capital stock of
the Corporation entitled to vote at such meeting shall, in writing, request the
same.


--------

2        On November 6, 1997, the Corporation's name was changed from Panax
         Pharmaceutical Company Ltd. to InKine Pharmaceutical Company, Inc.


                                      -2-

<PAGE>   3



                  Section 4. Notice of Meetings. Notice of the time and place of
the annual and of each special meeting of the shareholders shall be given to
each of the shareholders entitled to vote at such meeting by mailing the same in
a postage prepaid wrapper addressed to each such shareholder at his address as
it appears on the books of the Corporation, or by delivering the same personally
to any such shareholder in lieu of such mailing, at least ten (10) and not more
than fifty (50) days prior to each meeting. Meetings shall be held without
notice if all of the shareholders entitled to vote thereat are present in person
or by proxy, or if notice thereof is waived by all such shareholders not present
in person or by proxy, before or after the meeting. Notice by mail shall be
deemed to be given when deposited, with postage thereon prepaid, in the United
States mail. If a meeting is adjourned to another time, not more than thirty
(30) days hence, or to another place, and if an announcement of the adjourned
time or place is made at the meeting, it shall not be necessary to give notice
of the adjourned meeting unless the Board of Directors, after adjournment fix a
new record date for the adjourned meeting. Notice of the annual and each special
meeting of the shareholders shall indicate that it is being issued by or at the
direction of the person or persons calling the meeting, and shall state the name
and capacity of each such person. Notice of each special meeting shall also
state the purpose or purposes for which it has been called. Neither the business
to be transacted at nor the purpose of the annual or any special meeting of the
shareholders need be specified in any written waiver of notice.

                  Section 5. Record Date for Shareholders. For the purpose of
determining the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividend or other distribution
or the allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion, or exchange of stock or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty (60) days nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other
action.(3) If no record date is fixed, the record date for determining
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if no notice is given, the day on which the meeting is held; the
record date for determining shareholders entitled to express consent to
corporate action in writing without a meeting, when no prior action by the Board
of Directors is necessary, shall be the day on which the first written consent
is expressed; and the record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A determination of
shareholders of record entitled to notice of or to vote at any meeting of
shareholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.

                  Section 6. Proxy Representation. Every shareholder may
authorize another person or persons to act for him by proxy in all matters in
which a shareholder is entitled to participate, whether by waiving notice of any
meeting, voting or participating at a meeting, or 

--------

3        Italicized words changed from "fifty (50)" by resolution of the Board
         of Directors adopted at a meeting held on May 5, 1998.


                                      -3-

<PAGE>   4


expressing consent or dissent without a meeting. Every proxy must be signed by
the shareholder or by his attorney-in-fact. No proxy shall be voted or acted
upon after eleven months from its date unless such proxy provides for a longer
period. Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided in Section 608 of the New York
Business Corporation Law.

                  Section 7. Voting at Shareholders' Meetings. Each share of
stock shall entitle the holder thereof to one vote. In the election of
directors, a plurality of the votes cast shall elect. Any other action shall be
authorized by a majority of the votes cast except where the New York Business
Corporation Law prescribes a different percentage of votes or a different
exercise of voting power. In the election of directors, and for any other
action, voting need not be by ballot.

                  Section 8. Quorum and Adjournment. Except for a special
election of directors pursuant to Section 603 of the New York Business
Corporation Law, the presence, in person or by proxy, of the holders of a
majority of the shares of the stock of the Corporation outstanding and entitled
to vote thereat shall be requisite and shall constitute a quorum at any meeting
of the shareholders. When a quorum is once present to organize a meeting, it
shall not be broken by the subsequent withdrawal of any shareholders. If at any
meeting of shareholders there shall be less than a quorum so present, the
shareholders present in person or by proxy and entitled to vote thereat, may
adjourn the meeting from time to time until a quorum shall be present, but no
business shall be transacted at any such adjourned meeting except such as might
have been lawfully transacted had the meeting not adjourned.

                  Section 9. List of Shareholders. The officer who has charge of
the stock ledger of the Corporation shall prepare, make and certify, at least
ten (10) days before every meeting of shareholders, a complete list of the
shareholders, as of the record date fixed for such meeting, arranged in
alphabetical order, and showing the address of each shareholder and the number
of shares registered in the name of each shareholder. Such list shall be open to
the examination of any shareholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city or other municipality or
community where the meeting is to be held. The list shall also be produced and
kept at the time and place of the meeting during the whole time thereof, and may
be inspected by any shareholder who is present. If the right to vote at any
meeting is challenged, the inspectors of election, if any, or the person
presiding thereat, shall require such list of shareholders to be produced as
evidence of the right of the persons challenged to vote at such meeting, and all
persons who appear from such list to be shareholders entitled to vote thereat
may vote at such meeting.

                  Section 10. Inspectors of Election. The Board of Directors, in
advance of any meeting, may, but need not, appoint one or more inspectors of
election to act at the meeting or any adjournment thereof. If an inspector or
inspectors are not appointed, the person presiding at the meeting may, and at
the request of any shareholder entitled to vote thereat shall, appoint one or
more inspectors. In case any person who may be appointed as an inspector fails
to appear or act, the vacancy may be filled by appointment made by the Board of
Directors in advance of the meeting or at the meeting by the person presiding
thereat. Each inspector, if any, before entering 


                                      -4-

<PAGE>   5



upon the discharge of his duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict impartiality and
according to the best of his ability. The inspectors, if any, shall determine
the number of shares of stock outstanding and the voting power of each, the
shares of stock represented at the meeting, the existence of a quorum, the
validity and effect of proxies, and shall receive votes, ballots or consents,
hear and determine all challenges and questions arising in connection with the
right to vote, count and tabulate all votes, ballots or consents, determine the
result, and do such acts as are proper to conduct the election or vote with
fairness to all shareholders. On request of the person presiding at the meeting
or any shareholder entitled to vote thereat, the inspector or inspectors, if
any, shall make a report in writing of any challenge, question or matter
determined by him or them and execute a certificate of any fact found by him or
them. Any report or certificate made by the inspector or inspectors shall be
prima facie evidence of the facts stated and of the vote as certified by them.

                  Section 11. Action of the Shareholders Without Meetings. Any
action which may be taken at any annual or special meeting of the shareholders
may be taken without a meeting on written consent, setting forth the action so
taken, signed by the holders of all outstanding shares entitled to vote thereon.
Written consent thus given by the holders of all outstanding shares entitled to
vote shall have the same effect as a unanimous vote of the shareholders.

                                  ARTICLE III

                                    Directors

                  Section 1. Number of Directors. The number of directors which
shall constitute the entire Board of Directors shall be at least three, except
that where all outstanding shares of the stock of the Corporation are owned
beneficially and of record by less than three shareholders, the number of
directors may be less than three but not less than the number of shareholders.
Subject to the foregoing limitation, such number may be fixed from time to time
by action of a majority of the entire Board of Directors or of the shareholders
at an annual or special meeting, or, if the number of directors is not so fixed,
the number shall be three or shall be equal to the number of shareholders
(determined as aforesaid), whichever is less. Until such time as the Corporation
shall issue shares of its stock, the Board of Directors shall consist of two
persons. No decrease in the number of directors shall shorten the term of any
incumbent director.

                  Section 2. Election and Term. The initial Board of Directors
shall be elected by the incorporator and each initial director so elected shall
hold office until the first annual meeting of shareholders and until his
successor has been elected and qualified. Thereafter, each director who is
elected at an annual meeting of shareholders, and each director who is elected
in the interim to fill a vacancy or a newly created directorship, shall hold
office until the next annual meeting of shareholders and until his successor has
been elected and qualified.

                  Section 3. Filling Vacancies, Resignation and Removal. Any
director may tender his resignation at any time. Any director or the entire
Board of Directors may be 


                                      -5-

<PAGE>   6

removed, with or without cause, by vote of the shareholders. In the interim,
between annual meetings of shareholders or special meetings of shareholders
called for the election of directors or for the removal of one or more directors
and for the filling of any vacancy in that connection, newly created
directorships and any vacancies in the Board of Directors, including unfilled
vacancies resulting from the resignation or removal of directors for cause or
without cause, may be filled by the vote of a majority of the remaining
directors then in office, although less than a quorum, or by the sole remaining
director.

                  Section 4. Qualifications and Powers. Each director shall be
at least eighteen years of age. A director need not be a shareholder, a citizen
of the United States or a resident of the State of New York. The business of the
Corporation shall be managed by the Board of Directors, subject to the
provisions of the Certificate of incorporation. In addition to the powers and
authorities by these By-Laws expressly conferred upon it, the Board may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of incorporation or by these By-Laws
directed or required to be exercised or done exclusively by the shareholders.

                  Section 5. Regular and Special Meetings of the Board. The
Board of Directors may hold its meetings, whether regular or special, either
within or without the State of New York. The newly elected Board may meet at
such place and time as shall be fixed by the vote of the shareholders at the
annual meeting, for the purpose of organization or otherwise, and no notice of
such meeting shall be necessary to the newly elected directors in order legally
to constitute the meeting, provided a majority or the entire Board shall be
present; or they may meet at such place and time as shall be fixed by the
consent in writing of all directors. Regular meetings of the Board may be held
with or without notice at such time and place as shall from time to time be
determined by resolution of the Board. Whenever the time or place of regular
meetings of the Board shall have been determined by resolution of the Board, no
regular meetings shall be held pursuant to any resolution of the Board altering
or modifying its previous resolution relating to the time or place of the
holding of regular meetings, without first giving at least three days written
notice to each director, either personally or by telegram, or at least five days
written notice to each director by mail, of the substance and effect of such new
resolution relating to the time and place at which regular meetings of the Board
may thereafter be held without notice. Special meetings of the Board shall be
held whenever called by the President, Vice-President, the Secretary or any
director in writing. Notice of each special meeting of the Board shall be
delivered personally to each director or sent by telegraph to his residence or
usual place of business at least three days before the meeting, or mailed to him
to his residence or usual place of business at least five days before the
meeting. Meetings of the Board, whether regular or special, may be held at any
time and place, and for any purpose, without notice, when all the directors are
present or when all directors not present shall, in writing, waive notice of and
consent to the holding of such meeting, which waiver and consent may be given
after the holding of such meeting. All or any of the directors may waive notice
of any meeting and the presence of a director at any meeting of the Board shall
be deemed a waiver of notice thereof by him. A notice, or waiver of notice, need
not specify the purpose or purposes of any regular or special meeting of the
Board.

                                      -6-
<PAGE>   7

                  Section 6. Quorum and Action. A majority of the entire Board
of Directors shall constitute a quorum except that when the entire Board
consists of one director, then one director shall constitute a quorum, and
except that when a vacancy or vacancies prevents such majority, a majority of
the directors in office shall constitute a quorum, provided that such majority
shall constitute at least one-third of the entire Board. A majority of the
directors present, whether or not they constitute a quorum, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the New York Business Corporation Law, the vote
of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board.

                  Section 7. Telephonic Meetings. Any member of members of the
Board of Directors, or of any committee designated by the Board, may participate
in a meeting of the Board, or any such committee, as the case may be, by means
of conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time, and
participation in a meeting by such means shall constitute presence in person at
such meeting.

                  Section 8. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.

                  Section 9. Compensation of Directors. By resolution of the
Board of Directors, the directors may be paid their expenses, if any, for
attendance at each regular or special meeting of the Board or of any committee
designated by the Board and may be paid a fixed sum for attendance at such
meeting, or a stated salary as director, or both. Nothing herein contained shall
be construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor; provided, however, that directors
who are also salaried officers shall not receive fees or salaries as directors.

                                   ARTICLE IV

                                   Committees

                  Section 1. In General. The Board of Directors may, by
resolution or resolutions passed by the affirmative vote therefore of a majority
of the entire Board, designate an Executive Committee and such other committees
as the Board may from time to time determine, each to consist of three or more
directors, and each of which, to the extent provided in the resolution or in the
Certificate of incorporation or in the By-Laws, shall have all the powers of the
Board, except that no such Committee shall have power to fill vacancies in the
Board, or to change the membership of or to fill vacancies in any Committee, or
to make, amend, repeal or adopt By-Laws of the Corporation, or to submit to the
shareholders any action that needs shareholder approval under these By-Laws or
the New York Business Corporation Law, or to fix the compensation of the
directors for serving on the Board or any committee thereof, or to amend 



                                      -7-
<PAGE>   8

or repeal any resolution of the Board which by its terms shall not be so
amendable or repealable. Each committee shall serve at the pleasure of the
Board. The Board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of a member of a committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.

                  Section 2. Executive Committee. Except as otherwise limited by
the Board of Directors or by these By-Laws, the Executive Committee, if so
designated by the Board of Directors, shall have and may exercise, when the
Board is not in session, all the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall have power
to authorize the seal of the Corporation to be affixed to all papers which may
require it. The Board shall have the power at any time to change the membership
of the Executive Committee, to fill vacancies in it, or to dissolve it. The
Executive Committee may make rules for the conduct of its business and may
appoint such assistance as it shall from time to time deem necessary. A majority
of the members of the Executive Committee, if more than a single member, shall
constitute a quorum.

                                   ARTICLE V

                                    Officers

                  Section 1. Designation, Term and Vacancies. The officers of
the Corporation shall be a President, one or more Vice-Presidents, a Secretary,
a Treasurer, and such other officers as the Board of Directors may from time to
time deem necessary. Such officers may have and perform the powers and duties
usually pertaining to their respective offices, the powers and duties
respectively prescribed by law and by these By-Laws, and such additional powers
and duties as may from time to time be prescribed by the Board. The same person
may hold any two or more offices, except that the offices of President and
Secretary may not be held by the same person unless all the issued and
outstanding stock of the Corporation is owned by one person, in which instance
such person may hold all or any combination of offices.

                  The initial officers of the Corporation shall be appointed by
the initial Board of Directors, each to hold office until the meeting of the
Board of Directors following the first annual meeting of shareholders and until
his successor has been appointed and qualified. Thereafter, the officers of the
Corporation shall be appointed by the Board as soon as practicable after the
election of the Board at the annual meeting of shareholders, and each officer so
appointed shall hold office until the first meeting of the Board of Directors
following the next annual meeting of shareholders and until his successor has
been appointed and qualified. Any officer may be removed at any time, with or
without cause, by the affirmative vote therefor of a majority of the entire
Board of Directors. All other agents and employees of the Corporation shall hold
office at the pleasure of the Board of Directors. Vacancies occurring among the




                                      -8-
<PAGE>   9

officers of the Corporation shall be filled by the Board of Directors. The
salaries of all officers of the Corporation shall be fixed by the Board of
Directors.

                  Section 2. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the shareholders and of the Board at which the
Chairman is present. Subject to the control of the Board, the Chairman shall
have general charge of the business and affairs of the Company and shall keep
the Board fully advised. The Chairman of the Board shall have such powers and
perform such duties as generally pertain to the office of the Chairman of the
Board, as well as such further powers and duties as may be prescribed by the
Board. The Chairman of the Board may vote the shares or other securities of any
other domestic or foreign company of any type or kind which may at any time be
owned by the Corporation, may execute any shareholder or other consent in
respect thereof, and may in the Chairman's discretion delegate such powers by
executing proxies, or otherwise, on behalf of the Corporation. The Board, by
resolution from time to time, may confer like powers upon any other person or
persons.

                  Section 3. Vice-Chairman of the Board. A Vice-Chairman shall
have such of the Chairman's of the Board powers and duties as the Chairman may
from time to time delegate to him, and shall have such other powers and perform
such other duties as may be assigned to him by the Board of Directors. During
the absence or incapacity of the Chairman of the Board, the Vice-Chairman shall
perform the duties of the Chairman and when so acting shall have all the powers
and be subject to all the responsibilities of the office of Chairman.

                  Section 4. President. The President shall preside at all
meetings of the shareholders and at all meetings of the Board of Directors at
which he may be present. Subject to the direction of the Board of Directors, he
shall be the chief executive officer of the Corporation, and shall have general
charge of the entire business of the Corporation. He may sign certificates of
stock and sign and seal bonds, debentures, contracts or other obligations
authorized by the Board, and may, without previous authority of the Board, make
such contracts as the ordinary conduct of the Corporation's business requires.
He shall have the usual powers and duties vested in the President of a
Corporation. He shall have power to select and appoint all necessary officers
and employees of the Corporation, except those selected by the Board of
Directors, and to remove all such officers and employees except those selected
by the Board of Directors, and make new appointments to fill vacancies. He may
delegate any of his powers to a Vice-President of the Corporation.

                  Section 5. Vice-President. A Vice-President shall have such of
the President's powers and duties as the President may from time to time
delegate to him, and shall have such other powers and perform such other duties
as may be assigned to him by the Board of Directors. During the absence or
incapacity of the President, the Vice-President, or, if there be more than one,
the Vice-President having the greatest seniority in office, shall perform the
duties of the President, and when so acting shall have all the powers and be
subject to all the responsibilities of the office of President.

                  Section 6. Treasurer. The Treasurer shall have custody of such
funds and securities of the Corporation as may come to his hands or be committed
to his care by the Board 



                                      -9-
<PAGE>   10

of Directors. Whenever necessary or proper, he shall endorse on behalf of the
Corporation, for collection, checks, notes, or other obligations, and shall
deposit the same to the credit of the Corporation in such bank or banks or
depositories, approved by the Board of Directors as the Board of Directors or
President may designate. He may sign receipts or vouchers for payments made to
the Corporation, and the Board of Directors may require that such receipts or
vouchers shall also be signed by some other officer to be designated by them.
Whenever required by the Board of Directors, he shall render a statement of his
cash accounts and such other statements respecting the affairs of the
Corporation as may be required. He shall keep proper and accurate books of
account. He shall perform all acts incident to the office of Treasurer, subject
to the control of the Board.

                  Section 7. Secretary. The Secretary shall have custody of the
seal of the Corporation and when required by the Board of Directors, or when any
instrument shall have been signed by the President duly authorized to sign the
same, or when necessary to attest any proceedings of the shareholders or
directors, shall affix it to any instrument requiring the same and shall attest
the same with his signature, provided that the seal may be affixed by the
President or Vice-President or other officer of the Corporation to any document
executed by either of them respectively on behalf of the Corporation which does
not require the attestation of the Secretary. He shall attend to the giving and
serving of notices of meetings. He shall have charge of such books and papers as
properly belong to his office or as may be committed to his care by the Board of
Directors. He shall perform such other duties that pertain to his office or as
may be required by the Board of Directors.

                  Section 8. Delegation. In case of the absence of any officer
of the Corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board may temporarily delegate the powers or duties, or any of
them, of such officer to any other officer or to any director.

                                   ARTICLE VI

                                      Stock

                  Section 1. Certificates Representing Shares. All certificates
representing shares of the capital stock of the Corporation shall be in such
form not inconsistent with the Certificate of incorporation, these By-Laws or
the laws of the State of New York and shall set forth thereon the statements
prescribed by Section 508, and where applicable, by Sections 505, 616, 620, 709
and 1002 of the New York Business Corporation Law. Such shares shall be approved
by the Board of Directors, and shall be signed by the President or a
Vice-President and by the Secretary or the Treasurer and shall bear the seal of
the Corporation and shall not be valid unless so signed and sealed. Certificates
countersigned by a duly appointed transfer agent and/or registered by a duly
appointed registrar shall be deemed to be so signed and sealed whether the
signatures be manual or facsimile signatures and whether the seal be a facsimile
seal or any other form of seal. All certificates shall be consecutively numbered
and the name of the person owning the shares represented thereby, his residence,
with the number of such shares and the date of issue, shall be entered on the
Corporation's books. All certificates surrendered shall be 



                                      -10-
<PAGE>   11

canceled and no new certificates issued until the former certificates for the
same number of shares shall have been surrendered and canceled, except as
provided for herein.

                  In case any officer or officers who shall have signed or whose
facsimile signature or signatures shall have been affixed to any such
certificate or certificates, shall cease to be such officer or officers of the
Corporation before such certificate or certificates shall have been delivered by
the Corporation, such certificate or certificates may nevertheless be adopted by
the Corporation, and may be issued and delivered as though the person or persons
who signed such certificates, or whose facsimile signature or signatures shall
have been affixed thereto, had not ceased to be such officer or officers of the
Corporation.

                  Any restriction on the transfer or registration of transfer of
any shares of stock of any class or series shall be noted conspicuously on the
certificate representing such shares.

                  Section 2. Fractional Share Interests. The Corporation may,
but shall not be required to, issue certificates for fractions of a share. If
the Corporation does not issue fractions of a share, it shall (1) arrange for
the disposition of fractional interests by those entitled thereto, (2) pay in
cash the fair value of fractions of a share as of the time when those entitled
to receive such fractions are determined, or (3) issue scrip or warrants in
registered or bearer form which shall entitle the holder to receive a
certificate for a full share upon the surrender of such scrip or warrants
aggregating a full share. A certificate for a fractional share shall, but scrip
or warrants shall not unless otherwise provided herein, entitle the holder to
exercise voting rights, to receive dividends thereon, and to participate in any
distribution of the assets of the Corporation in the event of liquidation. The
Board of Directors may cause scrip or warrants to be issued subject to the
conditions that they shall become void if not exchanged for certificates
representing full shares before a specified date, or subject to the condition
that the shares for which scrip or warrants are exchangeable may be sold by the
Corporation and the proceeds thereof distributed to the holders of scrip or
warrants, or subject to any other conditions which the Board of Directors may
impose.

                  Section 3. Addresses of Shareholders. Every shareholder shall
furnish the Corporation with an address to which notices of meetings and all
other notices may be served upon or mailed to him, and in default thereof
notices may be addressed to him at his last known post office address.

                  Section 4. Stolen, Lost or Destroyed Certificates. The Board
of Directors may in its sole discretion direct that a new certificate or
certificates of stock be issued in place of any certificate or certificates of
stock theretofore issued by the Corporation, alleged to have been stolen, lost
or destroyed, and the Board of Directors when authorizing the issuance of such
new certificate or certificates, may, in its discretion, and as a condition
precedent thereto, require the owner of such stolen, lost or destroyed
certificate or certificates or his legal representatives to give to the
Corporation and to such registrar or registrars and/or transfer agent or
transfer agents as may be authorized or required to countersign such new
certificate or certificates, a bond in such sum as the Corporation may direct
not exceeding double the value of the stock represented by the certificate
alleged to have been stolen, lost or destroyed, as indemnity against any claim




                                      -11-
<PAGE>   12

that may be made against them or any of them for or in respect of the shares of
stock represented by the certificate alleged to have been stolen, lost or
destroyed.

                  Section 5. Transfers of Shares. Upon compliance with all
provisions restricting the transferability of shares, if any, transfers of stock
shall be made only upon the books of the Corporation by the holder in person or
by his attorney thereunto authorized by power of attorney duly filed with the
Secretary of the Corporation or with a transfer agent or registrar, if any, upon
the surrender and cancellation of the certificate or certificates for such
shares properly endorsed and the payment of all taxes due thereon. The Board of
Directors may appoint one or more suitable banks and/or trust companies as
transfer agents and/or registrars of transfers, for facilitating transfers of
any class or series of stock of the Corporation by the holders thereof under
such regulations as the Board of Directors may from time to time prescribe. Upon
such appointment being made all certificates of stock of such class or series
thereafter issued shall be countersigned by one of such transfer agents and/or
one of such registrars of transfers, and shall not be valid unless so
countersigned.

                                  ARTICLE VII

                              Dividends and Finance

                  Section 1. Dividends. The Board of Directors shall have power
to fix and determine and to vary, from time to time, the amount of the working
capital of the Corporation before declaring any dividends among its
shareholders, and to direct and determine the use and disposition of any net
profits or surplus, and to determine the date or dates for the declaration and
payment of dividends and to determine the amount of any dividend, and the amount
of any reserves necessary in their judgment before declaring any dividends among
its shareholder, and to determine the amount of the net profits of the
Corporation from time to time available for dividends.

                  Section 2. Fiscal Year. The fiscal year of the Corporation
shall end on the last day of [ ] in each year and shall begin on the next
succeeding day, or shall be for such other period as the Board of Directors may
from time to time designate with the consent of the Department of Taxation and
Finance, where applicable.

                                      -12-
<PAGE>   13

                                  ARTICLE VIII

                            Miscellaneous Provisions

                  Section 1. Stock of Other Corporations. The Board of Directors
shall have the right to authorize any director, officer or other person on
behalf of the Corporation to attend, act and vote at meetings of the
shareholders of any Corporation in which the Corporation shall hold stock, and
to exercise thereat any and all rights and powers incident to the ownership of
such stock, and to execute waivers of notice of such meetings and calls
therefor; and authority may be given to exercise the same either on one or more
designated occasions, or generally on all occasions until revoked by the Board.
In the event that the Board shall fail to give such authority, such authority
may be exercised by the President in person or by proxy appointed by him on
behalf of the Corporation.

                  Any stocks or securities owned by this Corporation may, if so
determined by the Board of Directors, be registered either in the name of this
Corporation or in the name of any nominee or nominees appointed for that purpose
by the Board of Directors.

                  Section 2. Books and Records. Subject to the New York Business
Corporation Law, the Corporation may keep its books and accounts outside the
State of New York.

                  Section 3. Notices. Whenever any notice is required by these
By-Laws to be given, person notice is not meant unless expressly so stated, and
any notice so required shall be deemed to be sufficient if given by depositing
the same in a post office box in a sealed postpaid wrapper, addressed to the
person entitled thereto at his last known post office address, and such notice
shall be deemed to have been given on the date of such mailing.

                  Whenever any notice whatsoever is required to be given under
the provisions of any law, or under the provisions of the Certificate of
incorporation or these By-Laws a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.

                  Section 4. Amendments. Except as otherwise provided herein,
these By-Laws may be altered, amended or repealed and By-Laws may be made at any
annual meeting of the shareholders or at any special meeting thereof if notice
of the proposed alteration, amendment or repeal, or By-Law or By-Laws to be made
be contained in the notice of such special meeting, by the holders of a majority
of the shares of stock of the Corporation outstanding and entitled to vote
thereat; or by a majority of the Board of Directors at any regular meeting of
the Board of Directors, or at any special meeting of the Board of Directors, if
notice of the proposed alteration, amendment or repeal, or By-Law or By-Laws to
be made, be contained in the Notice of such Special Meeting.


                                      -13-
<PAGE>   14

                                 ARTICLE IX(4)

                Indemnification of Directors, Officers and Others

                  Section 1. Indemnification Generally. Each person who was or
is made a party or is threatened to be made a party to or is otherwise involved
in any action, suit, or proceeding, whether civil, criminal administrative, or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
is or was a director or officer of the Corporation or any of its direct or
indirect subsidiaries or is or was serving at the request of the Corporation as
a director or officer of any other corporation or of a partnership, joint
venture, trust, or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director or officer or
in any other capacity while serving as a director or officer, shall be
indemnified and be held harmless by the Corporation to the fullest extent
authorized by the New York Business Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than permitted prior thereto), against all expense, liability, and loss
(including attorneys' fees, judgments, fines, excise or other taxes assessed
with respect to an employee benefit plan, penalties, and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith, and such indemnification shall continue as to an indemnitee who has
ceased to be a director or officer and shall inure to the benefit of the
indemnitee's heirs, executors, and administrators; provided, however, that,
except as set forth in Section 3 of this Article IX with respect to proceedings
to enforce rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation.

                  Section 2. Advancement of Expenses. The right to
indemnification conferred in Section 1 of this Article IX shall include the
right to be paid by the Corporation the expenses incurred in defending any
proceeding for which such right to indemnification is applicable in advance of
its final disposition (hereinafter "advancement of expenses"); provided,
however, that if the New York Business Corporation Law requires, an advancement
of expenses to an indemnitee shall be made only upon delivery to the Corporation
of an undertaking (hereinafter an "undertaking") by or on behalf of such
indemnitee to repay all amounts so advanced if it shall ultimately be determined
by final judicial decision from which there is no further right to appeal
(hereinafter a "final adjudication") that such indemnitee is not entitled to be
indemnified for such expenses under this Article IX or otherwise.

                  Section 3. Enforcement; Defenses; Burden of Proof. The rights
to indemnification and to the advancement of expenses conferred in Sections 1
and 2 of this Article IX shall be contract rights. If a claim under Section 1 or
2 of this Article IX is not paid in full by 

---------------
(4) Article IX was added by resolution of the Board of Directors adopted at a
    meeting held on February 2, 1998.



                                      -14-
<PAGE>   15

the Corporation within 60 days after a written claim has been received by the
Corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be 20 days, the indemnitee may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. In any suit brought by the
indemnitee to enforce a right to indemnification hereunder (but not in a suit
brought by an indemnitee to enforce a right to an advancement of expenses) it
shall be a defense that the indemnitee has not met any applicable standard for
indemnification set forth in the New York Business Corporation Law. In any suit
by the Corporation to recover an advancement of expenses pursuant to the terms
of an undertaking, the Corporation shall be entitled to recover such expenses
upon a final adjudication that the indemnitee has not met any applicable
standard for indemnification set forth in the New York Business Corporation Law.
Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of such suit that indemnification of the indemnitee is proper
in the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the New York Business Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel or stockholders) that the indemnitee has not met such applicable
standard of conduct, shall create a presumption that the indemnitee has not met
the applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving the indemnitee is not entitled to
be indemnified or not entitled to such advancement of expenses under this
Article IX or otherwise shall be on the Corporation.

                  Section 4. Rights Not Exclusive. The rights to indemnification
and to the advancement of expenses conferred in this Article IX shall not be
exclusive of any other right that any person may have or hereafter acquire under
the Corporation's Certificate of Incorporation or these By-laws or any statute,
agreement, vote of stockholders or disinterested directors or otherwise.

                  Section 5. Insurance. The Corporation may maintain insurance,
at its expense, to protect itself and any director or officer of the Corporation
or another corporation, partnership, joint venture, trust, or other enterprise
against any expense, liability, or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability, or loss
under the New York Business Corporation Law.

                  Section 6 Reduction of Benefit. The Corporation's obligation,
if any, to indemnify any person who was or is serving as a director or officer
of any direct or indirect subsidiary of the Corporation or, at the request of
the Corporation, of any other corporation or of a partnership, joint venture,
trust, or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other corporation, partnership, joint
venture, trust, or other enterprise.

                                      -15-
<PAGE>   16

                  Section 7. Effect of Repeal or Modification. Any repeal or
modification of the foregoing provisions of this Article IX shall not adversely
affect any right or protection hereunder of any person in respect of any act or
emission occurring prior to the time of such repeal or modification.


                                      -16-