CERTIFICATE OF INCORPORATION
                                       OF
                               ASC DELAWARE, INC.

         I, the undersigned,  for the purposes of incorporating and organizing a
corporation  under the  General  Corporation  Law of the State of  Delaware,  do
execute this Certificate of Incorporation and do hereby certify as follows:

         FIRST:  The name of the corporation is ASC Delaware, Inc.

         SECOND: The address of the corporation's registered office in the State
of Delaware  is 1209 Orange  Street,  in the City of  Wilmington,  County of New
Castle,  19801.  The  name  of its  registered  agent  at  such  address  is The
Corporation Trust Company.

         THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which  corporations may be organized under the General  Corporation
Law of the State of Delaware.

         FOURTH:  (1) The total number of shares of stock which the  corporation
shall have authority to issue is 115,500,000, divided into 100,000,000 shares of
Common Stock, par value of $.01 per share,  15,000,000  shares of Class A Common
Stock,  par value of $.01 per  share,  and  500,000  shares of Serial  Preferred
Stock, par value of $.01 per share.

         (2)      Class A Common Stock.

         (a)   The Class A Common Stock shall consist of 15,000,000 shares, each
               having a par value of $.01.

         (b)        (i) The holder of any shares of Class A Common  Stock  shall
                    have the right to convert such shares,  in whole or in part,
                    at any time  and from  time to  time,  into  fully  paid and
                    non-assessable  shares of Common  Stock on a share for share
                    basis; provided, however, that such conversion rate shall be
                    subject to  adjustment  as set forth in  paragraph  2(b)(iv)
                    below.

                    (ii) Any share of Class A Common Stock shall,  automatically
                    and without  further action by the corporation or the holder
                    thereof,  upon the  transfer  of such share to any person or
                    entity who is not Leslie B. Otten or an  Affiliate of Leslie
                    B.  Otten,  be  converted  on a share for share basis into a
                    fully  paid  and  non-assessable   share  of  Common  Stock;
                    provided,  however,  that  such  conversion  rate  shall  be
                    subject to  adjustment  as set forth in  paragraph  2(b)(iv)
                    below.   "Affiliate"   shall  mean,  for  purposes  of  this
                    paragraph 2, (A) the spouse or children or grandchildren (in
                    each  case,  natural or  adopted)  of Leslie B. Otten or any
                    Affiliate,  (B) any trust for the sole  benefit of Leslie B.
                    Otten or any Affiliate, (C) any charitable trust the grantor
                    of which  is  Leslie  B.  Otten  or any  Affiliate,  (D) any
                    corporation  or other  entity in which  Leslie  B.  Otten or
                    Affiliates  collectively  own at  least  80%  of the  equity
                    interest,  or (E) the heirs,  executors,  administrators  or
                    personal representatives of Leslie B. Otten or any Affiliate
                    upon the death of Leslie B. Otten or such  Affiliate or upon
                    the  incompetency  or  disability of Leslie B. Otten or such
                    Affiliate for purposes of the  protection  and management of
                    his or her assets.

                    (iii) In the event  that at any time the number of shares of
                    Class A Common  Stock  outstanding  is less  than 20% of the
                    aggregate  number of all shares of Class A Common  Stock and
                    Common Stock then issued and outstanding, then all shares of
                    Class A Common Stock shall automatically and without further
                    action  by  the  corporation  or  any  holder  thereof,   be
                    converted  on a share for share  basis  into  fully paid and
                    non-assessable  shares of Common Stock;  provided,  however,
                    that such  conversion rate shall be subject to adjustment as
                    set forth in paragraph 2(b)(iv) below.

                    (iv)  (A)  If  the  corporation   shall  (1)  subdivide  the
                    outstanding  shares of Common Stock into a larger  number of
                    shares,  (2) combine the outstanding  shares of Common Stock
                    into  a  smaller   number  of   shares,   or  (3)  issue  by
                    reclassification  of the Common  Stock any shares of capital
                    stock of the corporation, then the conversion rate in effect
                    immediately  prior  thereto  shall be  adjusted  so that the
                    holder of any share of Class A Common Stock  surrendered for
                    conversion  or  subject  to  automatic  conversion  shall be
                    entitled to receive the number of shares of the  corporation
                    which he would have owned or have been  entitled  to receive
                    after the happening of any of the events described above had
                    such  shares  of  Class  A  Common   Stock  been   converted
                    immediately prior to the happening of such event.

                         (B)  In  case  of  any  capital  reorganization  of the
                    corporation,  or in case of the  consolidation  or merger of
                    the corporation with or into another corporation, or in case
                    of  the  sale,  transfer  or  other  disposition  of  all or
                    substantially all of the property, assets or business of the
                    corporation  as a result of which  sale,  transfer  or other
                    disposition  property  other  than cash  shall be payable or
                    distributable to the holders of the Common Stock, each share
                    of Class A Common Stock shall be convertible into the number
                    and class of shares or other  securities  or property of the
                    corporation,  or of  the  corporation  resulting  from  such
                    consolidation  or merger or to which such sale,  transfer or
                    other  disposition shall have been made, to which the Common
                    Stock  otherwise  issuable upon  conversion of such share of
                    Class A Common  Stock  would  have been  entitled  upon such
                    reorganization,  consolidation, merger, or sale, transfer or
                    other disposition if outstanding at the time thereof; and in
                    any such case appropriate  adjustment,  as determined by the
                    Board of Directors of the corporation,  shall be made in the
                    application  of the  provisions  set forth in this paragraph
                    2(b) with respect to the conversion rights thereafter of the
                    holders  of the Class A Common  Stock,  to the end that such
                    provisions  shall  thereafter  be  applicable,  as nearly as
                    reasonably  may be, in relation to any shares or  securities
                    or other property  thereafter  issuable or deliverable  upon
                    the  conversion  of Class A Common Stock.  Proper  provision
                    shall  be  made  as  a  part  of  the   terms  of  any  such
                    consolidation, merger or sale, transfer or other disposition
                    whereby  the  conversion  rights of the  holders  of Class A
                    Common Stock shall be protected  and preserved in accordance
                    with  the  provisions  of this  paragraph  2(b)(iv)(B).  The
                    provisions of this  paragraph  2(b)(iv)(B)  shall  similarly
                    apply to successive capital reorganizations, consolidations,
                    mergers,  sales, transfers or other dispositions of property
                    as aforesaid.

                         (C) Whenever the  conversion  rate shall be adjusted as
                    provided in paragraph 2(b)(iv)(A),  the corporation, as soon
                    as practicable  and in no event later than ten full business
                    days thereafter,  shall file with the transfer agent for the
                    Class A Common Stock a statement,  signed by the  President,
                    any Vice  President  or the  Treasurer  of the  corporation,
                    stating the adjusted  conversion rate determined as provided
                    in  said   paragraph   2(b)(iv)(A)   and  setting  forth  in
                    reasonable  detail the facts requiring such adjustment,  and
                    shall  promptly mail a copy of such statement to each holder
                    of Class A Common Stock at his address then appearing on the
                    record books of the corporation. The transfer agent shall be
                    fully  protected in relying on such  statement  and shall be
                    under no duty to inquire into the truth or accuracy thereof.
                    If any question  shall at any time arise with respect to the
                    adjusted  conversion rate, such question shall be determined
                    by a firm of independent public accountants  selected by the
                    corporation, who may be the corporation's auditors, and such
                    determination  shall be binding upon the corporation and the
                    holders of the Common Stock and the Class A Common Stock.

                         (D) If the  corporation  shall  propose  to effect  any
                    reclassification   of  its  Common   Stock   (other  than  a
                    reclassification   involving   merely  the   subdivision  or
                    combination of outstanding  Common Stock),  or to effect any
                    capital reorganization, or shall propose to consolidate with
                    or merge into another  corporation,  or to sell, transfer or
                    otherwise  dispose  of  all  or  substantially  all  of  its
                    property,  assets  or  business,  or the  corporation  shall
                    propose to  liquidate,  dissolve or wind up,  then,  in each
                    such case,  the  corporation  shall  file with the  transfer
                    agent  for the Class A Common  Stock  and shall  mail to the
                    holders  of  record  of the  Class A  Common  Stock at their
                    respective  addresses  then appearing on the record books of
                    the corporation notice of such proposed action,  such notice
                    to be filed and  mailed at least 30 days prior to the record
                    date for the  purpose of  determining  holders of the Common
                    Stock entitled to vote with respect to such action or, if no
                    record date is taken for any such  purpose,  the date of the
                    taking of such  proposed  action.  Such notice shall specify
                    the date on  which  such  reclassification,  reorganization,
                    consolidation,    merger,   liquidation,    dissolution   or
                    winding-up  shall  take  place,  as the case may be, and the
                    date of participation therein by the holders of Common Stock
                    if any such date is to be fixed. Such notice shall set forth
                    such  facts  with  respect  thereto  as shall be  reasonably
                    necessary  to inform the  holders  of such  shares as to the
                    effect of such action upon their conversion rights.  Failure
                    to file any certificate or notice or to mail any notice,  or
                    any defect in any  certificate  or notice,  pursuant to this
                    paragraph  2(b)(iv)(D),  shall not  affect the  legality  or
                    validity of any adjustment,  dividend, distribution or right
                    referred to herein.  This  paragraph  2(b)(iv)(D)  shall not
                    impair any voting rights the holders of Class A Common Stock
                    may have with respect to any transaction referred to herein.

                         (E) (1) Any  holder of  shares of Class A Common  Stock
                    desiring  to  convert  the same into  Common  Stock or whose
                    shares of Class A Common Stock are  automatically  converted
                    into shares of Common  Stock as  provided in this  paragraph
                    2(b) shall  surrender the  certificate or  certificates  for
                    such  shares  of Class A Common  Stock at the  office of the
                    transfer agent therefor or at such other offices or agencies
                    of the  corporation,  if any, as the Board of Directors  may
                    determine,   which  certificate  or  certificates,   if  the
                    corporation  shall so  request,  shall be duly  endorsed  or
                    assigned to the  corporation  or in blank,  together (in the
                    case of a  conversion  at the option of the holder  thereof)
                    with a written  request for  conversion,  and accompanied by
                    funds in the  amount of any tax or taxes  payable in respect
                    of any  transfer  involved  in the  issue  and  delivery  of
                    certificates for shares of Common Stock in a name other than
                    that of the  record  holder of the  shares of Class A Common
                    Stock so surrendered for conversion.

                               (2)    The   corporation    will   as   soon   as
                                      practicable   after  such   surrender  for
                                      conversion of  certificates  for shares of
                                      Class A Common Stock,  accompanied  by the
                                      written  request  therefor  if  prescribed
                                      above,  issue and deliver at the office at
                                      which  such  certificates  for  shares  of
                                      Class  A  Common  Stock  shall  have  been
                                      surrendered   to  the   person  for  whose
                                      account  such  shares  of  Class A  Common
                                      Stock  were  so  surrendered,  or  to  his
                                      nominee or nominees,  certificates for the
                                      number of whole  shares of Common Stock to
                                      which he shall be entitled  as  aforesaid,
                                      together  with an  adjustment  in cash for
                                      any  fraction  of a share  as  hereinafter
                                      provided, if not evenly convertible.  Such
                                      conversion  shall be  deemed  to have been
                                      made as of the date of such  surrender  of
                                      the  certificates  for  shares  of Class A
                                      Common  Stock  to be  converted;  and  the
                                      person or persons  entitled to receive the
                                      shares of Common Stock  issuable  upon the
                                      conversion  of  such  shares  of  Class  A
                                      Common  Stock  shall  be  treated  for all
                                      purposes  as the  record  holders  of such
                                      Common  Stock on such date.  However,  the
                                      corporation   shall  not  be  required  to
                                      convert,  and no  surrender  of  shares of
                                      Class A Common  Stock  shall be  effective
                                      for that purpose, while the stock transfer
                                      books of the  corporation  are  closed for
                                      any purpose;  but the  surrender of shares
                                      of Class A  Common  Stock  for  conversion
                                      during any period  while such books are so
                                      closed   shall   become    effective   for
                                      conversion  immediately upon the reopening
                                      of such  books,  at the rate in  effect at
                                      the date of such surrender.

                         (F) The  corporation  shall  not be  required  to issue
                    fractional  shares of Common Stock or scrip upon  conversion
                    of shares of Class A Common Stock.  As to any final fraction
                    of a share of Common  Stock which the same record  holder of
                    one or more shares of Class A Common  Stock would  otherwise
                    be entitled to upon  conversion  of shares of Class A Common
                    Stock in the same  transaction,  the corporation shall pay a
                    cash  adjustment  in respect of such  final  fraction  in an
                    amount  equal to the same  fraction,  if the Common Stock is
                    listed or  admitted to trading on a  securities  exchange or
                    national  quotation  system, of the last sales price (or bid
                    price if there were no sales)  per share on such  securities
                    exchange or national  quotation  system on the business date
                    which  next  precedes  the date of  conversion  or,  if such
                    Common Stock is not so listed, of the market price per share
                    (as  determined  in a  manner  prescribed  by the  Board  of
                    Directors  of the  corporation)  at the close of business on
                    the business day which next precedes the date of conversion.

                         (G) The  corporation  will  pay any  documentary  stamp
                    taxes  attributable  to the  initial  issuance  of shares of
                    Common Stock upon conversion of any shares of Class A Common
                    Stock  pursuant   hereto,   provided,   however,   that  the
                    corporation  shall not be  required  to pay any tax or taxes
                    which may be payable in respect of any transfer  involved in
                    the issue or  delivery  of any  certificates  for  shares of
                    Common  Stock in a name  other  than that of the  registered
                    holder of shares of Class A Common Stock in respect of which
                    such shares of Common Stock are issued.

                         (H) The corporation shall at all times reserve and keep
                    available,  out of its  treasury  stock  or  authorized  and
                    unissued stock, or both, solely for the purpose of effecting
                    the  conversion of the shares of Class A Common Stock,  such
                    number of shares of Common  Stock as shall from time to time
                    be  sufficient  to effect  the  conversion  of all shares of
                    Class A Common  Stock  from  time to time  outstanding.  The
                    corporation  shall at all times  take any  corporate  action
                    which may, in the opinion of its  counsel,  be  necessary in
                    order that the  corporation  may validly  and legally  issue
                    fully  paid and  nonassessable  shares of Common  Stock upon
                    conversion of shares of Class A Common Stock.

         (3)      Voting Rights.

          (a)  Subject  to  paragraph  3(c) below and to the  provisions  of the
               Delaware General  Corporation Law (or its successor)  requiring a
               separate class vote, at each meeting of the  stockholders  of the
               corporation,  each holder of Class A Common Stock and each holder
               of Common  Stock  shall be  entitled  to one vote for each  share
               held, and such shares shall vote together as a single class.

          (b)  The  holders of Serial  Preferred  Stock  shall have such  voting
               rights  as  are  set  forth  elsewhere  in  this  Certificate  of
               Incorporation  (with  respect to the 10.5%  Repriced  Convertible
               Exchangeable  Preferred  Stock and the 8.50% Series B Convertible
               Participating   Preferred   Stock)  and,   with  respect  to  any
               additional  series of Serial Preferred Stock,  such voting rights
               may be fixed and  determined  by the Board of  Directors  for the
               particular series.

          (c)  (i) Subject to any rights of holders of Serial Preferred Stock to
               elect  additional  directors,  the  holders of the Class A Common
               Stock shall have the right,  voting as a separate class, to elect
               the  smallest  number  of  directors   sufficient  to  constitute
               two-thirds  (2/3) in number of such full Board of Directors,  and
               the  directors  so elected  shall be known as Class A  directors.
               Notwithstanding  the  foregoing,  if at any time  there are fewer
               than nine (9) directors,  the holders of the Class A Common Stock
               shall have the right,  voting as a separate  class,  to elect the
               largest  number of directors  sufficient to  constitute  not more
               than two-thirds  (2/3) in number of such full Board of Directors,
               and the  directors  so  elected  shall be  known  as the  Class A
               directors.  Subject to any rights of holders of Serial  Preferred
               Stock to elect  additional  directors,  the holders of the Common
               Stock shall have the right,  voting as a separate class, to elect
               the   remaining   directors  of  the   corporation.   By  way  of
               illustration,  if the  corporation  has ten (10)  directors,  the
               holders of the Class A Common Stock shall have the right to elect
               seven (7)  directors,  and the holders of the Common  Stock shall
               have the right to elect  three (3)  directors.  If the holders of
               Serial   Preferred   Stock  become  entitled  to  elect  two  (2)
               additional directors, the holders of Common Stock and the holders
               of Class A Common Stock shall have no voting  rights with respect
               to the election of such additional directors.  Therefore,  if the
               corporation  has ten (10)  directors and the size of the board is
               increased to twelve (12) to add directors  elected by the holders
               of Serial Preferred Stock, then the holders of the Class A Common
               Stock  shall  have the right to elect  seven (7)  directors,  the
               holders of the Common  Stock  shall have the right to elect three
               (3) directors,  and such holders of Serial  Preferred Stock shall
               have the  right to elect  two (2)  directors.  By way of  further
               illustration,  if the  corporation  has seven (7) directors,  the
               holders of the Class A Common Stock shall have the right to elect
               four (4)  directors,  and the  holders of the Common  Stock shall
               have the  right to elect  three  (3)  directors.  Subject  to any
               rights of holders of Serial  Preferred Stock to elect  additional
               directors,  in the event  that no shares of Class A Common  Stock
               remain  outstanding,  the holders of the Common  Stock shall have
               the right to elect all of the directors of the corporation.

               (ii) Subject to any rights of holders of Serial  Preferred  Stock
                    to elect  additional  directors,  at any time  following the
                    merger of American Skiing Company, a Maine corporation, with
                    and into this  corporation,  the Board of  Directors  of the
                    corporation shall consist of not less than seven (7) or more
                    than  fifteen  (15)  persons.  The exact number of directors
                    within the minimum and maximum limitations  specified in the
                    preceding  sentence  shall be fixed from time to time by the
                    Board of  Directors  pursuant to a  resolution  adopted by a
                    majority of the entire  Board of  Directors,  subject to the
                    other   applicable   provisions  of  this   Certificate   of
                    Incorporation,  but no decrease  in the number of  directors
                    constituting  the Board of Directors  shall shorten the term
                    of any incumbent  director.  Except as otherwise provided in
                    this Certificate of Incorporation  with respect to directors
                    elected  by the  holders  of  Serial  Preferred  Stock,  any
                    vacancies in the Board of Directors for any reason,  and any
                    directorships  resulting  from any increase in the number of
                    directors,  may be filled by the Board of Directors,  acting
                    by a majority of the directors then in office, although less
                    than a quorum, and any directors so chosen shall hold office
                    until  the next  annual  meeting  of  shareholders.  At such
                    annual  meeting,  such directors  shall be voted upon by the
                    holders  of Class A Common  Stock and the  holders of Common
                    Stock as provided in this paragraph  3(c), or by the holders
                    of Serial  Preferred Stock to the extent provided  elsewhere
                    in this Certificate of Incorporation.

          (d)  There shall be no  cumulative  voting  rights,  and no holders of
               stock  of  the  corporation  shall  have  pre-emptive  rights  to
               subscribe for any shares of any class of stock of the corporation
               whether now or hereafter authorized.

     (4)  Advance  Notice of  Business  to be  Conducted  at Annual  Shareholder
          Meetings.

         At an annual meeting of the  shareholders,  only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting business must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors,  (b)  otherwise  properly  brought  before  the  meeting by or at the
direction of the Board of Directors,  or (c) otherwise  properly  brought before
the meeting by a  shareholder.  For  business to be properly  brought  before an
annual meeting by a shareholder,  the item of business  must,  under  applicable
laws and regulations,  be proper for consideration by the shareholders,  and the
shareholder must have given timely notice thereof in writing to the Secretary of
the corporation.  To be timely,  a shareholder's  notice must be delivered to or
mailed and received at the principal  executive offices of the corporation,  not
less than 60 days nor more than 90 days prior to the meeting; provided, however,
that in the event that less than 70 days' notice or prior public  disclosure  of
the  date  of the  meeting  is  given  or made to  shareholders,  notice  by the
shareholder  to be  timely  must be so  received  not  later  than the  close of
business on the 10th day  following  the day on which such notice of the date of
the  annual   meeting  was  mailed  or  such  public   disclosure  was  made.  A
shareholder's  notice to the  Secretary  shall set forth as to each  matter  the
shareholder  proposes to bring before the annual meeting (a) a brief description
of the business  desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address, as
they  appear on the  corporation's  books,  of the  shareholder  proposing  such
business,  (c) the class and  number  of  shares  of the  corporation  which are
beneficially  owned by the  shareholder,  and (d) any  material  interest of the
shareholder  in such  business.  Notwithstanding  anything  in the Bylaws to the
contrary,  no  business  shall be  conducted  at any  annual  meeting  except in
accordance  with the  procedures  set forth in this paragraph 4. The Chairman of
the annual  meeting shall,  if the facts  warrant,  determine and declare to the
meeting  that  business  was not  properly  brought  before the  meeting  and in
accordance  with  the  provisions  of this  paragraph  4,  and if he  should  so
determine, he shall so declare to the meeting and any such business not properly
brought before the meeting shall not be transacted.

         (5)      Dividends.

         The holders of Class A Common Stock and Common Stock, without regard to
which class of shares they hold,  shall be entitled to such  dividends  on a pro
rata  basis as may be  declared  from  time to time by the  Board of  Directors,
subject to the other provisions of this Certificate of Incorporation.

         (6)      Liquidation.

         In the  event of the  liquidation,  dissolution  or  winding  up of the
corporation,  whether  voluntary or  involuntary,  the holders of Class A Common
Stock and Common Stock, without regard to which class of shares they hold, shall
be  entitled  to  participate  on a pro  rata  basis  in the net  assets  of the
corporation  remaining after  distributions  to the holders of Serial  Preferred
Stock.

         (7)      Serial Preferred Stock.

         The Board of Directors is authorized, subject to limitations prescribed
by law and the other  provisions  of this  Article  FOURTH,  to provide  for the
issuance  of the shares of Serial  Preferred  Stock in  series,  and by filing a
certificate  pursuant  to the  applicable  law  of the  State  of  Delaware,  to
establish  from time to time the  number of shares to be  included  in each such
series, and to fix the designation, powers, preferences and rights of the shares
of each such series and the qualifications, limitations or restrictions thereof.

         The  authority  of the Board of  Directors  with respect to each series
shall include, but not be limited to, determination of the following:

          (i)  The number of shares constituting that series and the distinctive
               designation of that series;

          (ii) The dividend rate on the shares of that series, whether dividends
               shall be  cumulative,  and, if so, from which date or dates,  and
               the relative rights of priority,  if any, of payment of dividends
               on shares of that series;

          (iii)Whether that series shall have voting rights,  in addition to the
               voting  rights  provided  by law,  and,  if so, the terms of such
               voting rights;

          (iv) Whether that series shall have conversion privileges, and, if so,
               the terms and conditions of such conversion,  including provision
               for adjustment of the conversion rate in such events as the Board
               of Directors shall determine;

          (v)  Whether or not the  shares of that  series  shall be  redeemable,
               and,  if  so,  the  terms  and  conditions  of  such  redemption,
               including  the date or date  upon or after  which  they  shall be
               redeemable,   and  the  amount  per  share  payable  in  case  of
               redemption,  which amount may vary under different conditions and
               at different redemption dates;

          (vi) Whether that series shall have a sinking fund for the  redemption
               or purchase of shares of that  series,  and, if so, the terms and
               amount of such sinking fund;

          (vii)The  rights  of  the  shares  of  that  series  in the  event  of
               voluntary or involuntary  liquidation,  dissolution or winding up
               of the corporation,  and the relative rights of priority, if any,
               of payment of shares of that series;

          (viii) Any other relative rights,  preferences and limitations of that
               series.

         Two series of Serial  Preferred Stock are hereby  designated as (x) the
10.5%   Repriced   Convertible   Exchangeable   Preferred   Stock   (herein  the
"Exchangeable Preferred Stock"),  having the powers,  preferences and rights set
forth in Exhibit A attached  hereto  and made a part  hereof,  and (y) the 8.50%
Series B Convertible  Participating  Preferred  Stock  (herein the  "Convertible
Preferred  Stock"),  having  the  powers,  preferences  and  rights set forth in
Exhibit B attached hereto and made a part hereof.

         FIFTH: The  incorporator of the corporation is Foster A. Stewart,  Jr.,
whose mailing address is c/o American Skiing Company, Sunday River Road, Bethel,
Maine 04217.

         SIXTH:  Unless  and  except  to the  extent  that  the  by-laws  of the
corporation shall so require,  the election of directors of the corporation need
not be by written ballot.

         SEVENTH:  In furtherance and not in limitation of the powers  conferred
by the laws of the State of Delaware,  the Board of Directors of the corporation
is  expressly   authorized  to  make,  alter  and  repeal  the  by-laws  of  the
corporation,  subject to the power of the  stockholders  of the  corporation  to
alter or repeal any by-law whether adopted by them or otherwise.

         EIGHTH:  The corporation  reserves the right at any time, and from time
to time,  to amend,  alter,  change or repeal any  provision  contained  in this
Certificate of Incorporation, and other provisions authorized by the laws of the
State of Delaware at the time in force may be added or  inserted,  in the manner
now or hereafter  prescribed by law; and all rights,  preferences and privileges
of whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this  Certificate of  Incorporation in its present
form or as hereafter  amended are granted subject to the rights reserved in this
article.

         The undersigned  incorporator  hereby  acknowledges  that the foregoing
certificate  of  incorporation  is his act and deed on this 4th day of  October,
1999.

                                             /s/ Foster A. Stewart, Jr.
                                            --------------------------------
                                            Foster A. Stewart, Jr.
                                            Incorporator

<PAGE>
                                                                       EXHIBIT A




                  Section 1. Designation and Amount. There is hereby created and
authorized a series of Serial Preferred Stock, the designation of which shall be
the  10.5%  Repriced  Convertible   Exchangeable  Preferred  Stock  (herein  the
"Exchangeable  Preferred Stock").  The number of issuable shares of Exchangeable
Preferred Stock shall be 40,000.

                  Section 2. Rank. All shares of Exchangeable  Preferred  Stock,
both as to payment of dividends and to distribution of assets upon  liquidation,
dissolution or winding up of the corporation,  whether voluntary or involuntary,
shall rank prior to all of the  corporation's  now or hereafter issued preferred
stock,  and senior to all of the  corporation's  now or hereafter  issued Common
Stock or any  other  common  stock of any  class  of the  corporation.  The term
"Common  Stock" shall mean the Common Stock,  par value $.01 per share,  and the
Class A Common Stock,  par value $.01 per share,  of the corporation as the same
exists at the date hereof or as such stock may be constituted from time to time.

                  Section 3. Dividends and Certain Restrictions.  The holders of
the Exchangeable  Preferred Stock shall be entitled to receive,  when, as and if
declared  by the  Board  of  Directors  of the  corporation  out of funds of the
corporation legally available  therefor,  dividends at a rate per share of 10.5%
per annum, and no more, which shall be fully  cumulative,  shall accrue (whether
or not declared or paid), shall compound quarterly, and shall be payable in cash
on November 12, 2002,  or, at the option of the Company,  in whole or in part on
any  January  1,  April 1, July 1 or  October  1 (except  that if such date is a
Saturday,  Sunday or legal  holiday,  then such  dividend will be payable on the
next day that is not a Saturday,  Sunday or legal  holiday) to holders of record
as they appear on the stock  transfer  books of the  corporation  on such record
date, not more than 60 nor less than 10 days preceding the payment date for such
dividend,  as is fixed by the Board of Directors.  For purposes hereof, the term
"legal holiday" shall mean any day on which banking  institutions  are obligated
or authorized to close in New York, New York or in Boston, Massachusetts.

                  On such dividend  payment date all dividends  which shall have
accrued  on each  share of  Exchangeable  Preferred  Stock  outstanding  on such
dividend  payment date shall  accumulate and be deemed to become "due".  If such
dividends  are not  fully  paid on such  dividend  payment  date,  such  accrued
dividends  shall be added  (solely  for the  purpose  of  calculating  dividends
payable on the Exchangeable  Preferred  Stock) to the Liquidation  Preference of
the  Exchangeable  Preferred  Stock  effective at the beginning of the quarterly
dividend  compounding  period next  succeeding  the dividend  payment date as to
which  such  dividends  were not paid and  shall  thereafter  accrue  additional
dividends in respect thereof until such unpaid dividends have been paid in full.
Dividends paid on shares of Exchangeable  Preferred Stock in an amount less than
the total amount of such dividends at the time  accumulated  and payable on such
shares  shall be  allocated  pro rata on a  share-by-share  basis among all such
shares at the time outstanding.

                  Unless all accrued and unpaid  dividends  on the  Exchangeable
Preferred  Stock have been paid in cash,  or declared and sums set aside for the
payment thereof, dividends (other than in Common Stock or any other stock of the
corporation  ranking junior to the Exchangeable  Preferred Stock as to dividends
and as to  liquidation  rights) may not be paid,  or declared  and set aside for
payment, and other distributions may not be made upon the Common Stock or on any
other stock of the  corporation  ranking  junior to the  Exchangeable  Preferred
Stock as to dividends. So long as any shares of Exchangeable Preferred Stock are
outstanding,  the Common  Stock (or any rights,  options or warrants to purchase
Common Stock), any other stock or other equity interests (or rights,  options or
warrants  to  purchase  such  other  stock or  other  equity  interests)  of the
corporation  ranking junior to the Exchangeable  Preferred Stock as to dividends
or upon liquidation may not be redeemed, purchased or otherwise acquired for any
consideration by the corporation.

                  The  corporation  shall  not  permit  any  subsidiary  of  the
corporation  to purchase or otherwise  acquire for  consideration  any shares of
stock (or  rights,  options or  warrants  to  purchase  shares of stock or other
equity interests) of the corporation  unless the corporation  could,  under this
Section 3,  purchase or  otherwise  acquire  such shares (or rights,  options or
warrants to purchase shares of stock) or units at such time and in such manner.

                  Any  reference to  "distribution"  contained in this Section 3
shall not be deemed to include  any  distribution  made in  connection  with any
liquidation,  dissolution or winding up of the corporation, whether voluntary or
involuntary.

                  Section  4.  Liquidation   Preference.   In  the  event  of  a
liquidation,  dissolution or winding up of the corporation, whether voluntary or
involuntary,  the holders of  Exchangeable  Preferred Stock shall be entitled to
receive  out of the assets of the  corporation,  whether  such assets are stated
capital or surplus of any nature,  an amount equal to the dividends  accrued and
unpaid thereon to the date of final distribution to such holders, whether or not
declared,  without  interest,  and a sum equal to $1,000 per share,  and no more
(such sum, the  "Liquidation  Preference"),  before any payment shall be made or
any assets  distributed  to the  holders of Common  Stock or any other  class or
series of the  corporation's  capital  stock  ranking  junior as to  liquidation
rights to the Exchangeable Preferred Stock; provided,  however, that such rights
shall accrue to the holders of  Exchangeable  Preferred  Stock only in the event
that the corporation's  payments with respect to the liquidation  preferences of
the holders of capital stock of the corporation ranking senior as to liquidation
rights to the Exchangeable  Preferred Stock (the "Senior Liquidation Stock") are
fully met. If the assets of the corporation available for distribution after the
liquidation  preferences of the Senior  Liquidation  Stock are fully met are not
sufficient to pay an amount equal to the  Liquidation  Preference to the holders
of  outstanding  shares of  Exchangeable  Preferred  Stock  and the  liquidation
preference to the holders of any other series of the corporation's capital stock
which may  hereafter be created in  accordance  with Section 6(c) hereof  having
liquidation  rights on a parity with the shares of Exchangeable  Preferred Stock
(the "Parity  Liquidation  Stock"),  then the assets of the corporation shall be
distributed  ratably among the holders of the  Exchangeable  Preferred Stock and
the  Parity  Liquidation  Stock in  proportion  to the  respective  preferential
amounts to which each is entitled  (but only to the extent of such  preferential
amounts).  Neither a consolidation,  merger or other business combination of the
corporation  with or into  another  corporation  or other  entity  nor a sale or
transfer  of all or part of the  corporation's  assets for cash,  securities  or
other property  shall be considered a liquidation,  dissolution or winding up of
the corporation  for purposes of this Section 4 (unless in connection  therewith
the liquidation of the corporation is specifically approved).

                  The holder of any shares of Exchangeable Preferred Stock shall
not be entitled to receive any payment owed for such shares under this Section 4
until  such  holder  shall  cause to be  delivered  to the  corporation  (i) the
certificate(s) representing such shares of Exchangeable Preferred Stock and (ii)
transfer  instrument(s)  satisfactory  to  the  corporation  and  sufficient  to
transfer such shares of Exchangeable  Preferred Stock to the corporation free of
any adverse interest.  As in the case of the Redemption Price, no interest shall
accrue on any payment upon liquidation after the due date thereof.

                  Section 5.  Redemption.  On November 12, 2002 (the  "Mandatory
Redemption  Date"), the corporation shall redeem, out of funds legally available
therefor,  all shares of the Exchangeable  Preferred Stock then outstanding at a
redemption  price (the "Redemption  Price") equal to the Liquidation  Preference
per share,  together with accrued and unpaid  dividends to the redemption  date.
If, on the Mandatory  Redemption  Date,  funds are not legally  available to the
corporation for redemption of the shares of Exchangeable  Preferred  Stock,  the
corporation  shall redeem on such date, at the Redemption  Price, that number of
shares of Exchangeable  Preferred Stock which it can lawfully  redeem,  and from
time to time thereafter, as soon as funds are legally available, the corporation
shall redeem at the  Redemption  Price shares of  Exchangeable  Preferred  Stock
until the corporation has redeemed the shares of Exchangeable Preferred Stock in
full.

                  The corporation,  at its option,  may at any time, redeem, out
of funds legally available therefor,  in whole or from time to time in part, the
Exchangeable Preferred Stock on any date set by the Board of Directors, for cash
at the  Redemption  Price,  together  with  accrued and unpaid  dividends to the
redemption  date  (subject  to the  right of the  holder  of record of shares of
Exchangeable  Preferred  Stock on a record date for the payment of a dividend on
the  Exchangeable  Preferred Stock to receive the dividend due on such shares of
Exchangeable Preferred Stock on the corresponding dividend payment date, if such
dividend  payment date is prior to the date set for  redemption);  provided that
the  Exchangeable  Preferred Stock may not be so redeemed prior to the Mandatory
Redemption  Date unless the closing price of the Common Stock for 45 consecutive
trading  days ending no more than 30  calendar  days prior to the date notice of
redemption  is first  mailed is at least 140% of the  Adjusted IPO Price then in
effect.  The  Adjusted  IPO Price  means  $17.10  (as  adjusted  for the  events
specified in Section 11(3)(a) hereof).

                   In  case  of the  redemption  of less  than  all of the  then
outstanding  Exchangeable  Preferred  Stock,  the  corporation  shall select the
shares of  Exchangeable  Preferred  Stock to be redeemed in accordance  with any
method permitted by the national  securities  exchange on which the Exchangeable
Preferred  Stock is then  listed,  or if not so listed,  the  corporation  shall
designate  by lot,  or in such  other  manner  as the  Board  of  Directors  may
determine,  the shares to be redeemed, or shall effect such redemption pro rata.
Notwithstanding the foregoing, the corporation shall not redeem less than all of
the  Exchangeable  Preferred Stock at any time  outstanding  until all dividends
accrued  to such  payment  date  upon  all  Exchangeable  Preferred  Stock  then
outstanding shall have been paid.

                  Not  more  than  120  nor  less  than  90  days  prior  to the
redemption date, notice by first class mail, postage prepaid,  shall be given to
each holder of record of the  Exchangeable  Preferred  Stock to be redeemed,  at
such holder's  address as it shall appear upon the stock  transfer  books of the
corporation.  Each such notice of  redemption  shall  specify the date fixed for
redemption,  the Redemption Price, the then current  Conversion Price, the place
or places of payment and conversion and that payment or conversion  will be made
upon  presentation and surrender of the  certificates)  evidencing the shares of
Exchangeable  Preferred  Stock  to  be  redeemed  or  converted,  and  that  the
Exchangeable  Preferred  Stock may be  converted at any time before the close of
business on the redemption date.

                  Any  notice  that  is  mailed  as  herein  provided  shall  be
conclusively  presumed to have been duly given, whether or not the holder of the
Exchangeable  Preferred  Stock  receives  such notice;  and failure to give such
notice by mail,  or any  defect in such  notice,  to the  holders  of any shares
designated for redemption  shall not affect the validity of the  proceedings for
the redemption of any other shares of Exchangeable  Preferred Stock. On or after
the date  fixed for  redemption  as stated in such  notice,  each  holder of the
shares called for redemption  shall  surrender the  certificate  evidencing such
shares to the  corporation  at the place  designated  in such  notice  and shall
thereupon be entitled to receive  payment of the Redemption  Price. If less than
all the shares represented by any such surrendered  certificate are redeemed,  a
new certificate shall be issued without cost to the holder thereof  representing
the unredeemed  shares.  If such notice of redemption  shall have been so mailed
and if, on or prior to the  redemption  date  specified in such notice all funds
necessary  for such  redemption  shall  have been set aside by the  corporation,
separate and apart from its other funds, in trust for the account of the holders
of  the  shares  so to be  redeemed  (as  to be  and  continue  to be  available
therefor),  then on and  after the  redemption  date,  notwithstanding  that any
certificate  for  shares  of the  Exchangeable  Preferred  Stock so  called  for
redemption shall not have been surrendered for  cancellation,  all shares of the
Exchangeable  Preferred  Stock with respect to which such notice shall have been
mailed and such funds  shall have been set aside shall be deemed to be no longer
outstanding  and all  rights  with  respect to such  shares of the  Exchangeable
Preferred  Stock so called for redemption  shall  forthwith cease and terminate,
except the right of the holders thereof to receive out of the funds so set aside
in trust the amount payable on redemption  thereof (including an amount equal to
accrued and unpaid dividends to the redemption date) without interest thereon.

                  The  holder of any  shares  of  Exchangeable  Preferred  Stock
redeemed upon any exercise of the  corporation's  redemption  right shall not be
entitled to receive  payment of the Redemption  Price for such shares until such
holder shall cause to be  delivered  to the place  specified in the notice given
with respect to such redemption (i) the certificate(s)  representing such shares
of  Exchangeable  Preferred  Stock  redeemed  and  (ii)  transfer  instrument(s)
satisfactory  to the  corporation  and  sufficient  to  transfer  such shares of
Exchangeable Preferred Stock to the corporation free of any adverse interest, No
interest  shall  accrue on the  Redemption  Price of any  share of  Exchangeable
Preferred Interests after its redemption date.

                  Section 6.        Voting Rights.

                  (a)  General.  The  holders  of  the  shares  of  Exchangeable
Preferred  Stock shall vote  together  with the holders of the Common Stock (and
any other class of equity  securities  which may similarly vote with the holders
of the Common Stock as a single class) upon all matters upon which  stockholders
are  entitled  to vote and shall be  entitled  to a number of votes per share of
Exchangeable  Preferred Stock equal to the number of shares of Common Stock into
which the shares of the  Exchangeable  Preferred  Stock are  convertible  on the
record date of the  determination  of stockholders  entitled to notice of and to
vote at such meeting; provided, however, that, other than as provided in Section
6(b) below,  the holders of  Exchangeable  Preferred  Stock shall have no voting
rights with respect to the election of directors, as to which the holders of the
Common Stock shall (subject to Section 6(b) below) have exclusive  voting rights
as provided  elsewhere in this Certificate of  Incorporation.  In addition,  the
holders of Exchangeable  Preferred Stock will have all voting rights required by
law, and shall also have all special voting rights provided below. Any shares of
Exchangeable Preferred Stock held by the corporation or any entity controlled by
the corporation  shall not have voting rights hereunder and shall not be counted
in determining the presence of a quorum.

                  (b)      Default Voting Rights.

                           (i) Right To Elect Directors.  Whenever  dividends on
         the Exchangeable Preferred Stock shall be in arrears, or the Redemption
         Price  (whether  mandatory or optional)  has not been paid in full when
         due, or an Event of Default (as hereinafter defined),  has occurred (A)
         the  number of  members of the Board of  Directors  of the  corporation
         shall be increased by two, effective as of the time of election of such
         directors  as  hereinafter  provided,   and  (B)  the  holders  of  the
         Exchangeable  Preferred Stock (voting  separately as a class) will have
         the exclusive right to vote for and elect such two additional directors
         of the corporation at any meeting of stockholders of the corporation at
         which directors are to be elected held during the period such dividends
         remain in arrears or such  redemption  price has not been paid in full.
         The right of the holders of the  Exchangeable  Preferred  Stock to vote
         for such two additional directors shall remain vested until (x) payment
         in  full  of all  accrued  and  unpaid  dividends  on the  Exchangeable
         Preferred Stock has been made, or (y) payment in full of any Redemption
         Price (whether  mandatory or optional) which has become due, or (z) the
         date on which such  conversion  is honored or such Event of Default has
         ceased to be  continuing,  at which time such  rights  shall  terminate
         (subject in each case to revesting).  An "Event of Default" shall occur
         if: (i) a default shall occur under any bond, debenture,  note or other
         evidence  of  Indebtedness  (as  defined  in  the  Securities  Purchase
         Agreement  (the  "Agreement"),  dated  July 2, 1997,  between  American
         Skiing Company, a Maine corporation,  and Madeleine L.L.C.),  for money
         borrowed by the corporation or any Restricted Subsidiary (as defined in
         the Agreement),  which default shall have resulted in such Indebtedness
         becoming or being declared  payable prior to the date on which it would
         otherwise have been due and payable (provided that the aggregate amount
         of such  Indebtedness  subject to  acceleration  exceeds  $5  million),
         without such  Indebtedness  having been discharged,  such  acceleration
         having been  rescinded  or annulled or there  having been  deposited in
         trust a sum of money sufficient to discharge in full such Indebtedness;
         or (ii) the corporation or any of its  Subsidiaries  (as defined in the
         Agreement)  fails to pay any  principal or interest  when due under any
         bond,  debenture,  note or other  evidence  of  Indebtedness  for money
         borrowed   (whether  by  scheduled   maturity,   required   prepayment,
         acceleration,  demand or  otherwise)  and such failure  shall  continue
         after the applicable grace period,  if any,  specified in the agreement
         or instrument  evidencing or governing such  Indebtedness,  has expired
         (provided  that the amount of such  Indebtedness,  and any  interest or
         premium thereon, exceeds $5 million).

                           (ii) Special Meeting. Whenever such right shall vest,
         it may be exercised  initially by the vote of the holders of a majority
         of the shares of the  Exchangeable  Preferred Stock present and voting,
         in  person  or by  proxy,  at a  special  meeting  of  holders  of  the
         Exchangeable   Preferred  Stock  or  at  the  next  annual  meeting  of
         stockholders,  or by  written  consent  of the  holders  of record of a
         majority of the outstanding shares of the Exchangeable  Preferred Stock
         without a meeting.  Unless such action shall have been taken by written
         consent  as  aforesaid,  a  special  meeting  of  the  holders  of  the
         Exchangeable  Preferred  Stock for the  exercise of such right shall be
         called by the Secretary of the  corporation  as promptly as possible in
         compliance with applicable law and regulations, and in any event within
         10 days after  receipt of a written  request  signed by the  holders of
         record of at least 25% of the  outstanding  shares of the  Exchangeable
         Preferred Stock,  subject to any applicable notice requirements imposed
         by law or by any national securities exchange on which any Exchangeable
         Preferred  Stock is listed.  Such meeting shall be held at the earliest
         practicable date thereafter.

                           (iii) Term of Office of  Directors.  Any director who
         shall have been elected by holders of the Exchangeable  Preferred Stock
         shall hold office for a term expiring  (subject to the earlier  payment
         of  all  dividends  and  redemption   payments  (whether  mandatory  or
         optional) in arrears on the  Exchangeable  Preferred Stock) at the next
         annual meeting of  stockholders  and during such term may be removed at
         any time,  either for or without cause, by and only by, the affirmative
         vote of the  holders  of  record  of a  majority  of the  shares of the
         Exchangeable  Preferred  Stock,  voting as a single class,  present and
         voting,   in  person  or  by  proxy,  at  a  special  meeting  of  such
         stockholders  called for such purpose,  or by written consent without a
         meeting  of the  holders  of record of a  majority  of the  outstanding
         shares of the Exchangeable  Preferred Stock,  voting as a single class,
         and any  vacancy  created  by such  removal  may also be filled at such
         meeting or by such written consent. A special meeting of the holders of
         the shares of the  Exchangeable  Preferred  Stock for the  removal of a
         director elected by the holders of the Exchangeable Preferred Stock and
         the  filling  of the  vacancy  created  thereby  shall be called by the
         Secretary of the  corporation  as promptly as possible and in any event
         within 10 days after receipt of request  therefor signed by the holders
         of not less  than 25% of the  outstanding  shares  of the  Exchangeable
         Preferred  Stock  taken as a single  class,  subject to any  applicable
         notice requirements  imposed by law or any national securities exchange
         on which any Exchangeable Preferred Stock is listed. Such meeting shall
         be held at the earliest practicable date thereafter.

                           (iv)  Vacancies.  Any vacancy  caused by the death or
         resignation  of a director  who shall have been  elected in  accordance
         with this  subparagraph (b) may be filled by the remaining  director so
         elected or, if not so filled,  by a vote of holders of one-third of the
         shares of the  Exchangeable  Preferred  Stock  present  and voting as a
         single  class,  in person or by proxy,  at a meeting of such holders of
         Exchangeable  Preferred  Stock called for such  purpose,  or by written
         consent without a meeting of the holders of record of a majority of the
         outstanding  shares  of the  Exchangeable  Preferred  Stock as a single
         class.  Unless such  vacancy  shall have been  filled by the  remaining
         director or by written  consent as  aforesaid,  such  meeting  shall be
         called by the Secretary of the corporation at the earliest  practicable
         date after such death or  resignation,  and in any event within 10 days
         after receipt of a written  request  signed by the holders of record of
         at least 25% of the outstanding  shares of the  Exchangeable  Preferred
         Stock taken as a single class.

                           (v)  Stockholders'  Right  to  Call  Meeting.  If any
         meeting of the holders of the Exchangeable  Preferred Stock required by
         this subparagraph (b) to be called shall not have been called within 10
         days after  personal  service of a written  request  therefor  upon the
         Secretary of the  corporation  or within 15 days after mailing the same
         within the United States of America by registered mail addressed to the
         Secretary of the  corporation at its principal  office,  subject to any
         applicable  notice   requirements   imposed  by  law  or  any  national
         securities  exchange  on  which  any  Exchangeable  Preferred  Stock is
         listed,  then the holders of record of at least 25% of the  outstanding
         shares of the  Exchangeable  Preferred Stock may designate in writing a
         holder  of a share of the  Exchangeable  Preferred  Stock to call  such
         meeting at the  expense of the  corporation,  and such  meeting  may be
         called by such Person so designated upon the notice required for annual
         meetings  of  stockholders  or such  shorter  notice  (but in no  event
         shorter than  permitted by law or any national  securities  exchange on
         which the Exchangeable  Preferred Stock is listed) as may be acceptable
         to the  holders  of a  majority  of the  total  number of shares of the
         Exchangeable Preferred Stock. Any holder of a share of the Exchangeable
         Preferred  Stock so designated  shall have access to the stock books of
         the corporation relating solely to the Exchangeable Preferred Stock for
         the  purpose of causing  such  meeting to be called  pursuant  to these
         provisions.

                           (vi)  Quorum.  At any  meeting of the  holders of the
         Exchangeable  Preferred  Stock called in accordance with the provisions
         of this subparagraph (b) for the election or removal of directors,  the
         presence in person or by proxy of the holders of one-third of the total
         number of shares of the Exchangeable  Preferred Stock as a single class
         shall be required to constitute a quorum; in the absence of a quorum, a
         majority of the holders  present in person or by proxy shall have power
         to adjourn the meeting  from time to time  without  notice,  other than
         announcement at the meeting, until a quorum shall be present.

                  (c) Class Voting Rights. So long as shares of the Exchangeable
Preferred  Stock  are  outstanding,  the  corporation  shall  not,  directly  or
indirectly or through merger or consolidation with any other person, without the
affirmative  vote or  consent  of the  holders  of at  least a  majority  of all
outstanding  Exchangeable  Preferred  Stock,  voting  separately as a class, (i)
amend, alter or repeal (by merger,  consolidation or otherwise) any provision of
the Certificate of Incorporation or the By-laws of the corporation,  as amended,
or prior to an exchange date, the Indenture (as hereinafter defined) (except for
such  amendments  which can be made  without  the  consent of the holders of the
debentures pursuant to the terms of the Indenture) so as to affect adversely the
relative rights, preferences, qualifications, limitations or restrictions of the
Exchangeable  Preferred  Stock or the rights of holders  of the  debentures  (if
issued),  (ii)  increase  the  authorized  number of shares of the  Exchangeable
Preferred Stock,  (iii) authorize or issue or increase the authorized  amount of
any  additional  class or series of stock  (including  any  series of  Preferred
Stock), or any security convertible into stock of such class or series,  ranking
on a parity with or senior to the  Exchangeable  Preferred Stock as to dividends
or as to rights upon liquidation,  dissolution or winding up, or (iv) effect any
reclassification  of the  Exchangeable  Preferred  Stock. In connection with any
right to vote  pursuant  to this  Section  6(c),  each  holder  of  Exchangeable
Preferred Stock will have one vote for each share held. A class vote on the part
of the Exchangeable Preferred Stock shall, without limitation,  specifically not
be deemed to be required  (except as otherwise  required by law or resolution of
the  corporation's  Board of Directors) in  connection  with the  authorization,
issuance or increase in the  authorized  amount of any shares of any other class
or series of stock that ranks junior to the  Exchangeable  Preferred  Stock upon
liquidation, dissolution or winding up of the corporation; provided that so long
as any of the  shares  of  Exchangeable  Preferred  Stock are  outstanding,  the
corporation may not create any shares of any other class or series of stock that
ranks  junior to the  Exchangeable  Preferred  Stock,  unless the terms  thereof
provide  that (A)  dividends on such junior class or series of stock are payable
solely  in  additional  shares of such  junior  class or series of stock if cash
dividends  have  not  been  paid  on the  Exchangeable  Preferred  Stock  on the
immediately preceding dividend payment date, and (B) such junior class or series
of stock shall not be subject to any mandatory  redemption or mandatory offer to
purchase requirements prior to the Mandatory Redemption Date.

                  Section  7.  Exchange.  The shares of  Exchangeable  Preferred
Stock are exchangeable at the option only of the  corporation,  in whole but not
in part, on any January 1, April 1, July 1 or October 1,  commencing  January 1,
1998,  for the  10.5%  Repriced  Subordinated  Debentures  due on the  Mandatory
Redemption Date (the  "Debentures")  of the  corporation,  to be issued under an
indenture  (the  "Indenture")  substantially  in the form  agreed to by American
Skiing  Company,  a  Maine  corporation,   and  Madeleine  L.L.C.,  between  the
corporation and a corporation organized and doing business under the laws of the
United  States  or any  State  thereof  or of the  District  of  Columbia  (or a
corporation or other person  permitted to act as a trustee by the Securities and
Exchange  Commission)  authorized  under such laws to exercise  corporate  trust
powers,  having a combined  capital  and  surplus of at least  $100,000,000  and
subject to supervision or examination by Federal,  State or District of Columbia
authority, as trustee under the Indenture (the "Trustee"),  as set forth therein
and with  such  changes  as may be  required  by law or  usage.  Holders  of the
outstanding  shares of Exchangeable  Preferred Stock will be entitled to receive
$1,000  principal  amount  of the  Debentures  in  exchange  for  each  share of
Exchangeable  Preferred  Stock held by them.  On the date of the  exchange,  the
corporation  shall pay an amount equal to accrued and unpaid  dividends,  at the
corporation's  option, in cash or in Debentures (at the rate of $1,000 principal
amount for each $1,000 in accrued and unpaid  dividends)  or in any  combination
thereof.

                  No such  exchange  of  Debentures  for shares of  Exchangeable
Preferred  Stock  shall be made  unless  on or  prior to the date on which  such
exchange is to be made (i) the Indenture  shall have been executed and delivered
by the  corporation  and the Trustee and (ii) the Trustee shall have received an
opinion of counsel,  dated such exchange  date,  substantially  to the following
effect  (together with  appropriate  assumptions or  qualifications),  with such
changes therein as such Trustee shall approve:

                  (1) the  corporation  has duly  authorized the exercise of its
         right to redeem the  Exchangeable  Preferred  Stock in exchange for the
         Debentures and has exercised such option;  (2) the corporation has full
         corporate  power  and  authority  to enter  into the  Indenture  and to
         perform its  obligations  under the  Indenture and to issue and deliver
         the Debentures and the shares of Common Stock issuable upon  conversion
         thereof;  (3) the  Indenture  has been duly  authorized,  executed  and
         delivered  by  the  corporation  and  is a  legal,  valid  and  binding
         agreement of the  corporation  enforceable  against the  corporation in
         accordance with its terms (subject,  as to enforcement of remedies,  to
         applicable bankruptcy, reorganization,  insolvency, moratorium or other
         laws affecting  creditors' rights generally from time to time in effect
         and to general  equitable  principles);  (4) the Debentures  will, when
         issued in accordance with the terms of the Indenture, constitute legal,
         valid and binding  obligations of the corporation  enforceable  against
         the  corporation  in  accordance  with  their  terms  (subject,  as  to
         enforcement  of remedies,  to  applicable  bankruptcy,  reorganization,
         insolvency,  moratorium  or  other  laws  affecting  creditors'  rights
         generally  from  time  to  time  in  effect  and to  general  equitable
         principles) and are entitled to the benefits of the Indenture;  (5) the
         shares of Common Stock issuable upon  conversion of the Debentures have
         been  reserved for issuance and upon such issuance will be duly issued,
         fully paid and  non-assessable  and free of pre-emptive  rights; (6) no
         consent, approval,  authorization or order of any court or governmental
         agency or body is  required  in  connection  with the  issuance  of the
         Debentures or the shares issuable upon  conversion  thereof except such
         as may be required under the blue sky laws of any jurisdiction and such
         other approvals (specified in such opinion) as have been obtained;  and
         (7) the issuance of Debentures and the  performance by the  corporation
         of its  obligations  under the  Indenture  (including  the  issuance of
         shares of Common Stock upon  conversion of  Debentures)  will not be in
         conflict  with or constitute a breach of or a default (with the passage
         of time or otherwise)  under (w) the  Certificate of  Incorporation  or
         By-laws of the  corporation in effect at the date of such opinion,  (x)
         the  charter or by-laws of any  subsidiary  of the  corporation,  which
         conflict,  breach or default is  material  to the  corporation  and its
         subsidiaries  taken as a whole,  in effect at the date of such opinion,
         (y) any  agreement or  instrument,  known to such counsel and which is,
         individually  or in the aggregate,  material to the corporation and its
         subsidiaries  taken as a whole,  to which the corporation or any of its
         subsidiaries  is a party or by which it or any of its  subsidiaries  is
         bound or (z) any statute,  law or regulation  known to such counsel and
         in effect at the date of such opinion to which the  corporation  or any
         of its  subsidiaries  or  any of  their  respective  properties  may be
         subject or any judgment, decree or order, known to such counsel, of any
         court or governmental agency or authority then in effect and applicable
         to the corporation or any of its subsidiaries  (which conflict,  breach
         or default is, in the case of this clause (z),  individually  or in the
         aggregate,  material to the corporation and its subsidiaries taken as a
         whole).

                  Upon  such  exchange  (unless  default  shall  be  made by the
corporation  in issuing  Debentures  in exchange for the  outstanding  shares of
Exchangeable Preferred Stock on the exchange date), the rights of the holders of
the Exchangeable  Preferred Stock as stockholders of the corporation shall cease
(except  the right to receive  on the date of  exchange  an amount  equal to the
amount of accrued and unpaid  dividends on the  Exchangeable  Preferred Stock to
the date of exchange and the Debentures),  and the person or persons entitled to
receive the  Debentures  issuable  upon such  redemption  and exchange  shall be
treated for all purposes as the registered holder or holders of such Debentures.
The  corporation  will mail to each holder of record of  Exchangeable  Preferred
Stock,  at such holder's last address as it shall appear upon the stock transfer
books of the  corporation,  written  notice of its  intention  to  exchange  the
Exchangeable Preferred Stock not less than 20 nor more than 60 days prior to the
exchange date. Such notice shall state: (i) the exchange date; (ii) the place or
places where certificates for such shares are to be surrendered for exchange for
Debentures; and (iii) that dividends on the shares to be exchanged will cease to
accrue on such exchange date.  Upon surrender in accordance  with said notice of
the certificates for any shares to be exchanged  (properly  endorsed or assigned
for  transfer,  if the  corporation  shall so require  and the  notice  shall so
state), the corporation will cause the Debentures to be authenticated and issued
in exchange for such shares of Exchangeable  Preferred Stock and to be mailed to
the  holder  of the  shares of  Exchangeable  Preferred  Stock at such  holder's
address of record or such other  address as the holder  shall  specify upon such
surrender of such certificates.

                  If on the exchange date the corporation shall be in default in
the payment of any dividends (including cumulative dividends,  if applicable) on
Exchangeable  Preferred Stock, or if there shall not be legally  available funds
sufficient  therefor,  or if such  exchange  shall on such date be prohibited by
applicable  law,  then no shares of the  Exchangeable  Preferred  Stock shall be
exchanged.

                  Section 8. Outstanding Shares. For purposes of this Exhibit A,
all shares of Exchangeable  Preferred Stock shall be deemed  outstanding  except
(i) from the date  fixed for  redemption  pursuant  to  Section 5, all shares of
Exchangeable  Preferred  Stock  that have been so called  for  redemption  under
Section 5 if funds  necessary  for  payment  of the  redemption  price have been
irrevocably  deposited in trust, for the account of the holders of the shares so
to be redeemed  (so as to be and  continue  to be  available  therefor),  with a
corporation  organized and doing business under the laws of the United States or
any State or territory  thereof or of the District of Columbia (or a corporation
or other  person  permitted to act as a trustee by the  Securities  and Exchange
Commission)  authorized  under such laws to  exercise  corporate  trust  powers,
having a combined  capital and surplus of at least  $100,000,000  and subject to
supervision  or  examination  by  Federal,  State or  District  of  Columbia  or
territorial  authority;  and (ii) from the date of registration of transfer, all
shares of Exchangeable  Preferred Stock held of record by the corporation or any
subsidiary of the corporation.

                  Section 9. Status of Acquired  Shares.  Shares of Exchangeable
Preferred Stock redeemed by the corporation,  received upon exchange pursuant to
Section 7 or  converted  pursuant  to Section 11, or  otherwise  acquired by the
corporation, will be restored to the status of authorized and unissued shares of
Serial Preferred Stock,  without designation as to series, and may thereafter be
issued, but not as shares of Exchangeable Preferred Stock.

                   Section 10.  Preemptive  Rights.  The holders of Exchangeable
Preferred  Stock are not entitled to any  preemptive or  subscription  rights in
respect of any securities of the corporation.

                  Section 11.       Conversion.

                  (1) Except as provided in the next succeeding  sentence,  each
share of the  Exchangeable  Preferred  Stock shall be convertible at any time at
the option of the holder  thereof into fully paid and  non-assessable  shares of
Common Stock, par value $.01 per share, of the corporation  ("Conversion Stock")
at the conversion price,  determined as hereinafter  provided,  in effect at the
time  of  conversion.  Unless  default  be made  in the  payment  in full of the
Redemption  Price and any accrued and unpaid  dividends,  shares of Exchangeable
Preferred Stock called for redemption  shall cease to be convertible into shares
of Conversion  Stock at the close of business on the Redemption  Date. The price
at which shares of the Conversion  Stock shall be delivered  upon  conversion of
shares of the Exchangeable  Preferred Stock (hereinafter the "Conversion Price")
shall be initially  $17.10 per share.  The number of shares of Conversion  Stock
issuable  upon  conversion  of  a  share  of  Exchangeable  Preferred  Stock  is
determined by dividing the  Liquidation  Preference  of a share of  Exchangeable
Preferred  Stock by the Conversion  Price in effect on the  Conversion  Date (as
hereinafter defined) and round the result to the nearest 1/100th of a share. The
Conversion  Price  shall be  subject  to  adjustment  as  provided  below.  Upon
conversion any accrued and unpaid dividends on the Exchangeable  Preferred Stock
shall be paid to the holder thereof,  at the option of the  corporation,  either
(i) in freely tradeable  shares of Conversion Stock at the Conversion  Price, or
(ii) in cash.  If a holder  converts  more than one share at the same time,  the
number of full shares issuable upon the conversion shall be based upon the total
number of shares converted.

                  (2) In order to convert shares of the  Exchangeable  Preferred
Stock into shares of Conversion Stock, the holder thereof shall surrender at the
office of any transfer  agent for the  Exchangeable  Preferred  Stock (or in the
absence of any transfer agent,  the corporation) the certificate or certificates
therefor,  duly endorsed to the corporation or in blank, and give written notice
to the  corporation at said office that he or she elects to convert such shares.
Shares  of the  Exchangeable  Preferred  Stock  shall  be  deemed  to have  been
converted immediately prior to the close of business on the date of surrender of
such  shares  for  conversion  in  accordance  with  the  foregoing   provisions
(hereinafter  the  "Conversion  Date"),  and the person or persons  entitled  to
receive shares of the Conversion  Stock issuable upon such  conversion  shall be
treated for all  purposes as the record  holder or holders of such shares of the
Conversion  Stock at such time. As promptly as practicable  after the Conversion
Date, the corporation  shall issue and deliver at said office the certificate or
certificates for the number of full shares of the Conversion Stock issuable upon
such conversion, together with a cash payment in lieu of any fraction of a share
of Conversion Stock, as hereinafter  provided, to the person or persons entitled
to receive the same or to the nominee or nominees of such person or persons.

                  (3) The  Conversion  Price shall be subject to  adjustment  as
follows:

                  (a) In case the corporation shall (i) pay a dividend in shares
of either  class of  Common  Stock to all  holders  of such  class,  (ii) make a
distribution  in shares of either  class of Common  Stock to all holders of such
class,  (iii)  subdivide its  outstanding  Common Stock into a greater number of
shares,  or (iv) combine its  outstanding  Common Stock into a smaller number of
shares,  the  Conversion  Price in effect  immediately  prior  thereto  shall be
adjusted  so that the  holder of any  shares  of  Exchangeable  Preferred  Stock
thereafter  surrendered for conversion  shall be entitled to receive that number
of shares of Conversion  Stock  representing  the percentage of all  outstanding
Common  Stock which he or she would have owned had such  Exchangeable  Preferred
Stock been  converted  immediately  prior to the  happening  of such  event.  An
adjustment  made  pursuant  to  this  subsection  (a)  shall  become   effective
immediately  after  the  record  date in the case of a  dividend  in  shares  or
distribution and shall become effective  immediately after the effective date in
the case of subdivision or combination.

                  (b) In case the corporation  shall issue rights or warrants to
all or  substantially  all holders of its either class of Common Stock entitling
them (for a period  commencing no earlier than the record date  described  below
and expiring  not more than 60 days after such record date) to subscribe  for or
purchase shares of Common Stock (or securities convertible into Common Stock) at
a price per share less than the current  market  price per share of Common Stock
(as determined in accordance  with  subsection (e) below) at the record date for
the  determination of shareholders  entitled to receive such rights or warrants,
the Conversion  Price in effect  immediately  prior thereto shall be adjusted so
that the same shall equal the price  determined by  multiplying  the  Conversion
Price in effect immediately prior to such record date by a fraction of which the
numerator  shall be the  number of shares of Common  Stock  outstanding  on such
record date, plus the number of shares which the aggregate offering price of the
total number of shares of Common Stock so offered (or the  aggregate  Conversion
Price of the  convertible  securities so offered) would purchase at such current
market  price,  and of which the  denominator  shall be the  number of shares of
Common  Stock  outstanding  on such  record  date plus the number of  additional
shares of Common  Stock  offered (or into which the  convertible  securities  so
offered are convertible).  Such adjustment shall be made  successively  whenever
any such rights or warrants are issued,  and shall become effective  immediately
after such record date.  If at the end of the period during which such rights or
warrants are  exercisable  not all rights or warrants shall have been exercised,
the adjusted  Conversion Price shall be immediately  readjusted to what it would
have been based upon the number of  additional  shares of Common Stock  actually
issued (or the number of shares of Common  Stock  issuable  upon  conversion  of
convertible securities actually issued).

                  (c)  In  case  the  corporation  shall  distribute  to  all or
substantially  all  holders  of any class of Common  Stock any shares of capital
stock of the corporation (other than Common Stock), evidences of indebtedness or
other  non-cash  assets  (including  securities  of any  company  other than the
corporation),  or shall  distribute to all or  substantially  all holders of any
class of Common Stock rights or warrants to subscribe for or purchase any of its
securities  (excluding those referred to in subsection (b) above),  then in each
such case the  Conversion  Price  shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion  Price in effect  immediately
prior to the date of such  distribution  by a  fraction  of which the  numerator
shall be the current market price per share (as defined in subsection (e) below)
of the Conversion  Stock on the record date mentioned below less the fair market
value on such  record  date (as  determined  by the  Board of  Directors  of the
corporation,  whose  determination  shall be  conclusive  evidence  of such fair
market  value) of the portion of the  capital  stock or assets or  evidences  of
indebtedness  so  distributed  or of such rights or warrants  applicable  to one
share of Common Stock (determined on the basis of the number of shares of Common
Stock outstanding on the record date), and of which the denominator shall be the
current  market  price per share (as  defined  in  subsection  (e) below) of the
Conversion  Stock on such record date.  Such adjustment  shall become  effective
immediately after the record date for the determination of shareholders entitled
to receive such distribution.  Notwithstanding the foregoing,  in the event that
the corporation  shall distribute  rights or warrants (other than those referred
to in  subsection  (b)  above)  ("Rights")  pro rata to  holders of any class of
Common Stock, the corporation may, in lieu of making any adjustment  pursuant to
this  Section  11,  make proper  provision  so that each holder of  Exchangeable
Preferred  Stock who  converts  such Stock (or any  portion  thereof)  after the
record date for such  distribution  and prior to the expiration or redemption of
the Rights shall be entitled to receive upon such conversion, in addition to the
shares of  Conversion  Stock  issuable  upon such  conversion  (the  "Conversion
Shares"), a number of Rights to be determined as follows: (i) if such conversion
occurs on or prior to the date for the  distribution to the holders of Rights of
separate certificates evidencing such Rights (the "Distribution Date"), the same
number of Rights to which a holder of a number of shares of Common  Stock  equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance  with the terms and  provisions  of and  applicable to the Rights and
(ii) if such conversion  occurs after the Distribution  Date, the same number of
Rights to which a holder of the number of shares of Common  Stock into which the
principal amount of the Security so converted was convertible  immediately prior
to the Distribution  Date would have been entitled on the  Distribution  Date in
accordance with the terms and provisions of and applicable to the Rights.

                  (d) In case the  corporation  shall, by dividend or otherwise,
at any time distribute (a "Triggering Distribution") to all or substantially all
holders of any class of Common Stock cash in an aggregate amount that,  together
with  the  aggregate   amount  of  any  other  cash   distributions  to  all  or
substantially all holders of any class of Common Stock made within the 12 months
preceding the date of payment of the Triggering  Distribution  and in respect of
which no Conversion Price adjustment  pursuant to this Section 11 has been made,
exceeds 10% of the product of the current  market price per share of  Conversion
Stock (as  determined in accordance  with  subsection (e) below) on the Business
Day (the  "Determination  Date")  immediately  preceding  the day on which  such
Triggering  Distribution is declared by the corporation multiplied by the number
of shares of Common Stock outstanding on such date (excluding shares held in the
treasury of the corporation),  the Conversion Price shall be reduced so that the
same shall equal the price  determined by multiplying  such Conversion  Price in
effect  immediately prior to the  Determination  Date by a fraction of which the
numerator  shall be the current market price per share of the  Conversion  Stock
(as determined in accordance  with  subsection  (e) below) on the  Determination
Date less the amount of cash so  distributed  within such 12 months  (including,
without  limitation,  the  Triggering  Distribution)  applicable to one share of
Common  Stock  (determined  on the basis of the number of shares of Common Stock
outstanding on the Determination Date) and the denominator shall be such current
market price per share of the Conversion Stock (as determined in accordance with
subsection  (e)  below) on the  Determination  Date,  such  reduction  to become
effective  immediately prior to the opening of business on the day following the
date on which the Triggering Distribution is paid.

                  (e) For the purpose of any computation  under subsections (b),
(c) and (d) of this  Section  11(3),  the  current  market  price  per  share of
Conversion  Stock on any date  shall be  deemed to be the  average  of the daily
closing  prices for the 30 consecutive  trading days  commencing 45 trading days
before (i) the Determination Date with respect to distributions under subsection
(d) above or (ii) the record date with  respect to  distributions,  issuances or
other events requiring such  computation  under subsection (b) or (c) above. The
closing price for each day shall be the last reported sales price or, in case no
such  reported  sale takes place on such date,  if the  Conversion  Stock is not
listed or admitted to trading on the New York Stock  Exchange  ("NYSE"),  on the
principal national  securities  exchange on which the Conversion Stock is listed
or admitted to trading or, if not listed or admitted to trading on any  national
securities  exchange,  the closing sales price of the Conversion Stock as quoted
by NASDAQ or, in case no reported  sale takes place,  the average of the closing
bid and asked  prices as quoted by NASDAQ or any  comparable  system  or, if the
Conversion Stock is not quoted on NASDAQ or any comparable  system,  the closing
sales price or, in case no reported sale takes place, the average of the closing
bid  and  asked  prices,  as  furnished  by any  two  members  of  the  National
Association  of  Securities  Dealers,  Inc.  selected  from  time to time by the
corporation  for that  purpose.  If no such  prices are  available,  the current
market price per share shall be the fair value of a share of Conversion Stock as
determined by the Board of Directors of the corporation.

                  (f) In any case in which this Section 11 shall require that an
adjustment be made following a record date or a Determination  Date, as the case
may be,  established  for purposes of this Section 11, the corporation may elect
to defer  (but only  until  five  Business  Days  following  the  mailing by the
corporation  to the holders of the Notice of Adjustment  described in subsection
(i) below) issuing to the holder of any  Exchangeable  Preferred Stock converted
after such record date or Determination  Date the shares of Conversion Stock and
other capital stock of the  corporation  issuable upon such  conversion over and
above the shares of Conversion  Stock and other capital stock of the corporation
issuable upon such conversion only on the basis of the Conversion Price prior to
adjustment; and, in lieu of the shares the issuance of which is so deferred, the
corporation shall issue or cause its transfer agents to issue due bills or other
appropriate  evidence  prepared by the  corporation of the right to receive such
shares.  If any distribution in respect of which an adjustment to the Conversion
Price  is  required  to be  made  as of  the  record  date,  effective  date  or
Determination  Date therefor is not thereafter  made or paid by the  corporation
for any reason, the Conversion Price shall be readjusted to the Conversion Price
which  would  then be in effect if such  record  date had not been fixed or such
effective date or Determination Date had not occurred.

                  (g) No Adjustment. No adjustment in the Conversion Price shall
be required  unless the  adjustment  would require an increase or decrease of at
least 1% in the Conversion Price as last adjusted;  provided,  however, that any
adjustments  which by reason of this  subsection (g) are not required to be made
shall be carried  forward and taken into account in any  subsequent  adjustment.
All  calculations  under this Section 11 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.

                  No adjustment  need be made for a  transaction  referred to in
(a), (b), (c) or (d) above if all holders of  Exchangeable  Preferred  Stock are
entitled to participate  in the  transaction on a basis and with notice that the
Board of Directors  determines to be fair and  appropriate in light of the basis
and notice on which holders of Common Stock participate in the transaction.  The
corporation  shall give 30 days prior  notice to the  transfer  agent and to the
holders of the Exchangeable Preferred Stock of any such determination.

                  No adjustment need be made for rights to purchase Common Stock
or issuances of Common Stock pursuant to a corporation  plan for reinvestment of
dividends or interest.

                  No adjustment  need be made for a change in the par value or a
change to no par value of the Common Stock.

                  To the extent that the  Exchangeable  Preferred  Stock becomes
convertible  into  the  right  to  receive  cash,  no  adjustment  need  be made
thereafter as to the cash. Interest will not accrue on the cash.

                  (h)  Adjustment  for Tax Purposes.  The  corporation  shall be
entitled to make such  reductions in the Conversion  Price, in addition to those
required  under other  provisions  of this  Section 11, as it in its  discretion
shall determine to be advisable in order that any stock dividends,  subdivisions
of  shares,   distributions  of  rights  to  purchase  stock  or  securities  or
distributions of securities convertible into or exchangeable for stock hereafter
made by the corporation to its shareholders shall not be taxable;  provided that
no such  reduction  shall give rise to a right of the  corporation to optionally
redeem the Exchangeable Preferred Stock pursuant to Section 5.

                  (i) Notice of  Adjustment.  Whenever the  Conversion  Price is
adjusted,  the  corporation  shall promptly mail to holders of the  Exchangeable
Preferred  Stock and to the transfer  agent a notice of the  adjustment  briefly
stating the facts  requiring the  adjustment and the manner of computing it. The
certificate shall be conclusive evidence of the correctness of such adjustment.

                  (j)      Notice of Certain Transactions.

                  In the event that:

               (1)  the  corporation  takes any action  which  would  require an
                    adjustment in the Conversion Price;

               (2)  the  corporation  consolidates  or merges with, or transfers
                    all  or   substantially   all  of  its  assets  to,  another
                    corporation and shareholders of the corporation must approve
                    the transaction; or

               (3)  there is a dissolution or liquidation of the corporation,

the corporation shall mail to holders of the Exchangeable Preferred Stock and to
the transfer  agent a notice stating the proposed  record or effective  date, as
the case may be. The corporation  shall mail the notice at least ten days before
such date.  Failure to mail such notice or any defect  therein  shall not affect
the  validity of any  transaction  referred to in clause (1), (2) or (3) of this
Section 11(3)(j).

               (k) Effect of Reclassification,  Consolidation, Merger or Sale on
          Conversion Privilege.

                  If  any  of  the  following  shall  occur,   namely:  (a)  any
reclassification   or  change  of  shares  of  Conversion  Stock  issuable  upon
conversion  of the  Exchangeable  Preferred  Stock  (other  than a change in par
value,  or from par value to no par value, or from no par value to par value, or
as a result of a subdivision  or  combination,  or any other change for which an
adjustment  is provided  in (a),  (b) or (c) above);  (b) any  consolidation  or
merger  to which the  corporation  is a party  other  than a merger in which the
corporation  is the  continuing  corporation  and which  does not  result in any
reclassification of, or change (other than a change in name, or in par value, or
from par  value to no par  value,  or from no par  value to par  value,  or as a
result of a subdivision or combination) in,  outstanding shares of Common Stock;
or (c) any sale or conveyance of all or  substantially  all of the assets of the
corporation  as  an  entirety,  then  the  corporation,  or  such  successor  or
purchasing  corporation,  as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, merger, sale or conveyance, ensure
that  effective  provision be made in the  certificate of  incorporation  of the
resulting or surviving corporation or otherwise that each holder of Exchangeable
Preferred  Stock  then  outstanding   shall  have  the  right  to  convert  such
Exchangeable  Preferred  Stock  into the kind and  amount of shares of stock and
other   securities  and  property   (including   cash)   receivable   upon  such
reclassification,  change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Conversion Stock  deliverable upon conversion of such
Exchangeable Preferred Stock immediately prior to such reclassification, change,
consolidation,  merger, sale or conveyance,  and that the Conversion Price shall
continue to be subject to adjustments which shall be as nearly equivalent as may
be practicable to the  adjustments of the Conversion  Price provided for in this
Section  11.  If in  the  case  of  any  such  consolidation,  merger,  sale  or
conveyance,  the  stock  or  other  securities  and  property  (including  cash)
receivable  thereupon by a holder of Conversion Stock include shares of stock or
other  securities  and  property of a  corporation  other than the  successor or
purchasing corporation, as the case may be, in such consolidation,  merger, sale
or conveyance, then effective provision shall also be made in the certificate of
incorporation  of  such  other  corporation  or  otherwise  of  such  additional
antidilution provisions as are necessary to protect the interests of the holders
of the Exchangeable  Preferred Stock by reason of the foregoing.  The provisions
of this Section  11(3)(k) shall  similarly  apply to successive  consolidations,
mergers, sales or conveyances.

                  Section 12.  Reports.  So long as the  Exchangeable  Preferred
Stock remains  outstanding,  the  corporation  shall cause its annual reports to
stockholders  and any  quarterly  or other  financial  reports  and  information
furnished by it to stockholders  pursuant to the  requirements of the Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  to be mailed to the
holders of the Exchangeable Preferred Stock  (contemporaneously with the mailing
of  such  materials  to  the  corporation's  stockholders)  at  their  addresses
appearing on the books of the corporation. If the corporation is not required to
furnish annual or quarterly reports to its stockholders pursuant to the Exchange
Act, it shall cause its financial  statements,  including any notes thereto (and
with respect to annual reports,  an auditors' report by a nationally  recognized
firm of independent  certified public accountants),  a "Management's  Discussion
and Analysis of Financial  Condition and Results of  Operations"  and such other
information  which the  corporation  would  otherwise  be required to include in
annual and  quarterly  reports filed under the Exchange Act, to be mailed to the
holders of the Exchangeable  Preferred  Stock,  within 120 days after the end of
each of the corporation's  fiscal years and within 60 days after the end of each
of its first three fiscal quarters.

                  Section   13.    Additional    and    Supplementary    Rights,
Qualifications,  Limitations  and  Restrictions.  In  addition  to  the  matters
contained herein, the Exchangeable Preferred Stock shall have such additional or
supplementary  rights,  and be  subject  to  such  additional  or  supplementary
qualifications,  limitations and  restrictions as are set forth in the Agreement
and made expressly applicable to the Exchangeable Preferred Stock.

                  Section 14.  Severability  of Provisions.  Whenever  possible,
each  provision  hereof shall be  interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under  applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity,  without invalidating or otherwise
adversely  affecting the remaining  provisions  hereof.  If a court of competent
jurisdiction  should  determine  that a  provision  hereof  would  be  valid  or
enforceable  if a period of time were  extended  or  shortened  or a  particular
percentage were increased or decreased,  then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
<PAGE>
                                                                       EXHIBIT B

                  There is  hereby  created  and  authorized  a series of Serial
Preferred  Stock,  the  designation  of  which  shall  be  the  8.50%  Series  B
Convertible  Participating  Preferred Stock (herein, the "Convertible  Preferred
Stock") having the following rights and preferences, designations, voting powers
and terms.

                  As  used  herein,  the  following  terms  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:

                  "Accretion  Amounts"  shall  have  the  meaning  specified  in
Section 3.

                  "Accretion  Rate" shall have the meaning  specified in Section
3.

                  "Additional   Preferred  Directors"  shall  have  the  meaning
specified in Section 6(b)(ii).

                  "Acquisition Transaction" shall mean any transaction or series
of transactions in which at least a majority of the outstanding  Common Stock is
acquired by any Person, whether pursuant to a tender offer, merger,  acquisition
or otherwise.

                  "Applicable  Base  Price"  shall  mean (a) with  respect to an
Acquisition  Transaction,  the Average  Market Price of Company Common Stock and
(b) with respect to a Stock Transaction, (i) the greater of the conversion price
per share and the Average Market Price if convertible  preferred stock is issued
in the Stock  Transaction,  (ii) the Average Market Price if newly issued shares
of Company  Common Stock are sold in the Stock  Transaction  and (iii) the price
per share  paid if the  outstanding  Company  Common  Stock is sold in the Stock
Transaction.

                  "Average   Market  Price"  shall  mean,  with  respect  to  an
Acquisition  Transaction or Stock Transaction,  the average of the daily closing
prices of the Company  Common Stock on the NYSE or, if not then listed or traded
on the NYSE, such other exchange, market or system that the Company Common Stock
is then listed or traded on, for 10 consecutive trading days,  commencing on the
fifth business day after the  consummation  of such  Acquisition  Transaction or
Stock Transaction.

                  "Board of Directors"  shall mean the board of directors of the
Corporation.

                  "Business  Day"  shall  mean any day  that is not a  Saturday,
Sunday or a Legal Holiday.

                  "Change of Control" shall mean any event that gives any Person
or Group  other than the  Holders,  the  Stockholders,  Leslie B. Otten or their
Permitted  Transferees  the ability to "control" the Corporation (a) through the
acquisition of either (i) substantially all of the assets of the Corporation and
its subsidiaries, taken as a whole, or (ii) at least a majority of the aggregate
voting power of the  Corporation=s  capital stock or (b) by otherwise being able
to elect or designate a majority of the Board of Directors  through a management
contract or otherwise.

                  "Class A Common  Stock"  shall mean the Class A common  stock,
par value $.01 per share, of the Corporation.

                  "Common  Stock"  shall mean the Company  Common  Stock and the
Class A Common  Stock as the same  exist as of the date  hereof or as such stock
may be constituted from time to time.

                  "Company Common Stock" shall mean the common stock,  par value
$.01 per share, of the Corporation.

                  "Conversion  Date" shall have the meaning specified in Section
9(b).

                  "Conversion  Price" shall mean the  applicable  price at which
Conversion   Shares  shall  be  delivered  upon  conversion  of  shares  of  the
Convertible Preferred Stock as specified in Section 9(a).

                  "Conversion  Shares"  shall  have  the  meaning  specified  in
Section 9(a).

                  "Convertible  Preferred  Stock"  shall mean the  Corporation=s
8.50% Series B Convertible  Participating  Preferred  Stock,  par value $.01 per
share.

                  "Corporation"  shall  mean  ASC  Delaware,  Inc.,  a  Delaware
corporation whose name is to be changed to American Skiing Company in connection
with the Delaware Reincorporation.

                  "Current  Market Price" shall mean the Current Market Price of
the Company Common Stock calculated in accordance with Section 9(c)(iv).

                  "Default  Voting  Event"  shall have the meaning  specified in
Section 6(b)(ii).

                  "Definitive   Agreements"   shall  mean  the  Preferred  Stock
Subscription  Agreement,  together  with the  schedules  attached  thereto,  the
Stockholders= Agreement, and the Voting Agreement.

                  "Delaware  Reincorporation"  shall mean the merger of American
Skiing Company ("ASC Maine"), a Maine corporation, with and into the Corporation
and  that,  after  giving  effect  to  such  merger,  will  have  the  identical
authorized,  issued  and  outstanding  capital  stock  with the same  rights and
preferences as ASC Maine and a board to which the directors are elected annually
instead of a staggered board of directors.

                  "Delaware  Reincorporation Vote" shall mean a vote in favor of
the Delaware  Reincorporation by a majority of the outstanding voting securities
of ASC Maine.

                  "Distribution  Date"  shall  have  the  meaning  specified  in
Section 9(c)(iii).

                  "Dividend Rate" shall have the meaning specified in Section 3.

                  "Equity  Equivalents"  shall  mean  Common  Stock  or  rights,
warrants,  options  or other  convertible  securities  (including  the  Repriced
Preferred Stock and any other convertible debt or equity) representing the right
to acquire  Common  Stock,  but  excluding  the  exercise of options  which were
granted prior to the initial public  offering of the Corporation or options that
were or are set at the market price at the time such options were or are granted
by  the  Corporation  or as  determined  by the  Board  of  Directors  or a duly
authorized committee or delegee thereof.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

                  "Fully  Diluted  Basis"  shall have the meaning  given to such
term in the Stockholders' Agreement.

                  "Group" shall have the meaning set forth in Rule 13d-5,  as in
effect on the date hereof, under the Exchange Act.

                  "Holders" shall mean the holders of the Convertible  Preferred
Stock.

                  "Issue Date" shall mean August 6, 1999,  the original  date of
issuance of the 8.50% Series B Convertible  Participating  Preferred  Stock, par
value $.01 per share, of ASC Maine.

                  "Junior Preferred" shall have the meaning specified in Section
2.

                  "Junior Stock" shall have the meaning specified in Section 2.

                  "Legal   Holiday"   shall  mean  any  day  on  which   banking
institutions  are obligated or authorized to close in The City of New York or in
the State of Maine.

                  "Liquidation  Price"  shall  mean,  as of any date,  an amount
equal to $1,000 per share,  plus (x) where cash  dividends are not paid pursuant
to Section 3, the  aggregate  Accretion  Amounts  through  such date and (y) all
accrued  and unpaid  dividends  to such date,  whether or not  declared,  to the
extent  such  accrued  and  unpaid  dividends  are not  taken  into  account  in
determining the Accretion Amounts under clause (x).

                  "Liquidation  Right" shall mean for each share of  Convertible
Preferred  Stock the  greater of (i) the  Liquidation  Price and (ii) the amount
that  would  be  received  in  liquidation  following  conversion  of a share of
Convertible Preferred Stock into Common Stock.

                  "Majority Holders" shall mean the Holders of a majority of the
then outstanding shares of Convertible Preferred Stock.

                  "Mandatory  Redemption" shall mean any mandatory redemption of
the Convertible Preferred Stock as specified in Section 5(a).

                  "NASDAQ"  shall mean the National  Association  of  Securities
Dealers Automated Quotation System.

                  "Notice" shall have the meaning specified in Section 5(b).

                  "NYSE" shall mean the New York Stock Exchange.

                  "Permitted  Transferees"  shall have the meaning given to such
term in the Stockholders' Agreement.

                  "Person" means any individual, firm, corporation, partnership,
limited   partnership,    limited   liability   company,   association,   trust,
unincorporated  organization or other entity,  as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3),  as in effect on the
date hereof, of the Exchange Act.

                  "Preferred  Directors"  shall have the  meaning  specified  in
Section 6(b)(i).

                  "Preferred  Stock" shall mean the Serial  Preferred Stock, par
value $.01 per share, of the Corporation.

                  "Preferred  Stock  Subscription   Agreement"  shall  mean  the
Preferred Stock  Subscription  Agreement dated July 9, 1999 among ASC Maine, Oak
Hill  Capital  Partners,  L.P.,  and the other  entities  identified  on Annex A
attached thereto.

                  "Redemption Price" shall have the meaning specified in Section
5(b).

                  "Repriced  Preferred  Stock"  shall  mean the  10.5%  Repriced
Convertible  Exchangeable  Preferred  Stock,  $.01 par value per  share,  of the
Corporation.

                  "Requisite NYSE Shareholder  Approval" shall mean the approval
by ASC Maine=s  shareholders  to the extent  required by the NYSE in  connection
with the issuance of Conversion Shares.

                  "Rights"   shall  have  the  meaning   specified   in  Section
9(c)(iii).

                  "Senior Liquidation Stock" shall have the meaning specified in
Section 4.

                  "Stock  Transaction"  shall mean any  transaction or series of
transactions  pursuant to which the Corporation issues or sells shares of common
stock representing, or convertible preferred stock convertible into, 40% or more
of the outstanding shares of Common Stock on a Fully Diluted Basis.

                  "Stockholder Director" shall mean a director designated by the
Stockholders pursuant to the Stockholders= Agreement.

                  "Stockholders" shall mean Oak Hill Capital Partners,  L.P. and
the other  entities  identified in Annex A to the Preferred  Stock  Subscription
Agreement.

               "Stockholders=  Agreement" shall mean the Stockholders= Agreement
dated August 6, 1999 among ASC Maine, the Holders, Leslie B. Otten and
ING (U.S.) Capital Corporation.

                  "Third Party Redemption Date" shall have the meaning specified
in Section 5(a).

                  "Third   Party   Transaction"   shall  mean  any   Acquisition
Transaction or Stock  Transaction in which the financial  terms, in the judgment
of the Board of  Directors,  are  superior to those set forth in the  Definitive
Agreements.

         Section 1.  DESIGNATION  AND AMOUNT.  The designation of such series of
Serial  Preferred Stock shall be the Convertible  Preferred Stock. The number of
issuable shares of Convertible Preferred Stock shall be 150,000.

         Section 2. RANK. All shares of Convertible  Preferred Stock, both as to
payment of dividends and to distribution of assets upon liquidation, dissolution
or winding up of the Corporation,  whether voluntary or involuntary,  shall rank
(i) senior to all of the  Corporation=s  now or hereafter issued preferred stock
(the "Junior Preferred") except for the Repriced Preferred Stock, as to which it
shall rank junior,  and (ii) senior to all of the Corporation=s now or hereafter
issued  Common Stock or any other  common stock of any class of the  Corporation
(collectively with the Junior Preferred, the "Junior Stock").

         Section 3.  DIVIDENDS  AND CERTAIN  RESTRICTIONS.  The Holders shall be
entitled to receive,  when,  as and if declared by the Board of Directors out of
funds of the Corporation  legally  available  therefor,  dividends at a rate per
share of 8.50% per annum (as may be  adjusted  from time to time as  provided in
this Section 3) of the Liquidation Price (the "Dividend  Rate"),  which shall be
fully cumulative, shall accrue, and shall be compounded and payable quarterly on
October 31, January 31, April 30 and July 31 of each year, commencing on October
31, 1999 (except that if such date is a Saturday,  Sunday or Legal Holiday, then
such  dividend will be payable on the next Business Day) to Holders of record as
they appear on the stock  transfer  books of the  Corporation on the record date
for the payment of such dividend,  which shall be not more than 60 nor less than
30 days preceding the payment date for such  dividend,  as is fixed by the Board
of Directors.  Dividends may, at the option of the  Corporation,  be paid (i) in
cash at the Dividend Rate or (ii) until the five-year  anniversary  of the Issue
Date, by way of an increase in the Liquidation Price in effect immediately prior
to the relevant quarterly dividend payment date in an amount calculated based on
the  following  rates per  annum,  compounded  quarterly  (such  rate  being the
"Accretion Rate" and each such amount being an "Accretion  Amount") (a) 8.50% of
the Liquidation Price until January 31, 2001, (b) 9.50% of the Liquidation Price
until January 31, 2002 and (c) 10.5% of the Liquidation  Price  thereafter until
July 31, 2004, in the case of clauses (i) and (ii), payable quarterly in arrears
on October 31,  January 31,  April 30 and July 31 of each year.  Notwithstanding
the foregoing,  dividends shall be payable solely in accordance with clause (ii)
if cash  dividends  have not been paid on the  Repriced  Preferred  Stock on the
immediately  preceding  dividend  payment  date with  respect  to such  Repriced
Preferred  Stock.  The Dividend Rate and the Accretion  Rate on the  Convertible
Preferred Stock shall also be subject to adjustment as provided below.

         In addition to the dividends described in the preceding paragraph,  the
Holders  shall be  entitled  to receive an amount  equal to the amount  that the
Holders  would be entitled to receive if the  Convertible  Preferred  Stock were
fully  converted into Company Common Stock on the record date for the payment of
any such dividends.

         The Dividend  Rate and the Accretion  Rate shall  increase to 12.5% per
annum,  compounded quarterly,  of the Liquidation Price in the event that either
(a) the Delaware  Reincorporation  Vote or (b) the  Requisite  NYSE  Shareholder
Approval is not  obtained on or before  December  31,  1999.  Once the  Delaware
Reincorporation  Vote and the Requisite NYSE Shareholder  Approval are obtained,
such  increased  rate will revert back to the  applicable  rate set forth in the
first  paragraph of Section 3. In addition,  the Dividend Rate and the Accretion
Rate on the Convertible  Preferred Stock shall be increased by 2% per annum upon
a declaration  of Default  Voting Event as set forth in Section  6(b)(ii) for so
long as such Dividend Default remains uncured.

         On any such  dividend  payment  date all  dividends  which  shall  have
accrued  on each  share  of  Convertible  Preferred  Stock  outstanding  on such
dividend  payment date shall  accumulate and be deemed to become "due" but shall
nonetheless be payable as set forth in the first paragraph of this Section 3. If
such  dividends are not fully paid on such dividend  payment date,  such accrued
dividends  shall  also be added  to the  Liquidation  Price  of the  Convertible
Preferred Stock effective as of such dividend  payment date and shall thereafter
accrue additional  dividends in respect thereof until such unpaid dividends have
been paid in full. Dividends paid on shares of Convertible Preferred Stock in an
amount less than the total amount of such dividends at the time  accumulated and
payable on such shares shall be  allocated  pro rata on a  share-by-share  basis
among all such shares at the time outstanding.

         Any reference to  "distribution"  contained in this Section 3 shall not
be deemed to include any  distribution  made in connection with any liquidation,
dissolution or winding up of the Corporation,  whether voluntary or involuntary,
that is effected in accordance  with the preferences and priorities set forth in
this  Certificate of Incorporation  and all certificates of designation  setting
forth the rights of the holders of the Corporation=s Preferred Stock.

         Section  4.   LIQUIDATION   RIGHT.  In  the  event  of  a  liquidation,
dissolution or winding up of the Corporation,  whether voluntary or involuntary,
the Holders  shall be entitled to receive out of the assets of the  Corporation,
whether such assets are stated capital or surplus of any nature, the Liquidation
Right, before any payment shall be made or any assets distributed to the holders
of Common Stock or any other class or series of the Corporation=s  capital stock
ranking  junior as to liquidation  rights to the  Convertible  Preferred  Stock;
provided,  however,  that such rights  shall  accrue to the Holders  only in the
event  that  the   Corporation=s   payments  with  respect  to  the  liquidation
preferences of the holders of capital stock of the Corporation ranking senior as
to  liquidation   rights  to  the  Convertible   Preferred  Stock  (the  "Senior
Liquidation  Stock") are fully met. If the assets of the  Corporation  available
for  distribution  after the liquidation  preferences of the Senior  Liquidation
Stock are fully met are not sufficient to pay an amount equal to the Liquidation
Right to the holders of outstanding shares of Convertible  Preferred Stock, then
the assets of the  Corporation  shall be distributed  ratably among the Holders.
Neither a consolidation, merger or other business combination of the Corporation
with or into another  corporation  or other entity nor a sale or offer of all or
part of the Corporation=s assets for cash, securities or other property shall be
considered  a  liquidation,  dissolution  or winding up of the  Corporation  for
purposes of this Section 4 (unless in connection  therewith the  liquidation  of
the Corporation is specifically approved).

         Section 5.        REDEMPTION.

         (a) MANDATORY REDEMPTION.  The Corporation shall mandatorily redeem all
of the outstanding shares of Convertible  Preferred Stock (each of the following
being a "Mandatory  Redemption")  (i) on August 6, 2009,  at a redemption  price
equal to the  Liquidation  Price per share (plus an amount  equal to all accrued
and  unpaid  dividends  to such date of  redemption)  or (ii) if (A)  either the
Delaware  Reincorporation Vote or the Requisite NYSE Shareholder Approval is not
obtained by December 31, 1999 and (B) if within twelve months following the date
of the Preferred Stock  Subscription  Agreement,  the  Corporation  announces or
consummates a Third Party Transaction, at the Liquidation Price plus the excess,
if any, of (x) the Applicable  Base Price over (y) $5.25,  as such number may be
adjusted from time to time as provided in Section 9, multiplied by the number of
Conversion  Shares into which the Convertible  Preferred Stock being redeemed is
convertible on the date immediately  preceding such announcement or consummation
of the Third Party  Transaction (a "Third Party Redemption  Date"). In addition,
if the Company  Common  Stock  continues  to be publicly  traded  following  the
consummation  of any Third  Party  Transaction,  the Holders  whose  Convertible
Preferred  Stock has been redeemed  pursuant to clause (ii) of this Section 5(a)
shall be entitled to receive within ten days after the first  anniversary of the
Third Party  Redemption  Date an amount equal to the excess,  if any, of (i) the
highest  average  consecutive  30-day  trading price of the Company Common Stock
during the 12 months  following  the Third Party  Redemption  Date over (ii) the
Applicable Base Price,  multiplied by the number of Conversion Shares into which
the  Convertible  Preferred  Stock could have been  converted on the Third Party
Redemption Date.

         No  Mandatory  Redemption  pursuant to this  Section 5(a) shall be made
unless and until all  outstanding  Repriced  Preferred Stock has been converted,
repurchased,  redeemed or otherwise retired. If, upon any Mandatory  Redemption,
funds are not legally  available to the  Corporation  for  redemption of all the
shares of Convertible  Preferred  Stock,  the  Corporation  shall redeem on such
date, at the applicable  redemption  price, that number of shares of Convertible
Preferred Stock which it can lawfully redeem,  and from time to time thereafter,
as soon as funds are legally  available,  the  Corporation  shall  redeem at the
applicable  redemption  price shares of  Convertible  Preferred  Stock until the
Corporation has redeemed the shares of Convertible Preferred Stock in full.

         In the event that the  Corporation  is in arrears in the  redemption of
its  Convertible  Preferred  Stock  pursuant  to  a  Mandatory  Redemption,  the
Corporation may not (i) purchase, redeem or pay dividends on any Junior Stock or
(ii) make any  mandatory  purchase or redemption  of any  Convertible  Preferred
Stock or  stock on a parity  therewith  except  pro rata  according  to all such
obligations then due or in arrears among all such outstanding stock.

         (b) OPTIONAL REDEMPTION.  Other than pursuant to a Mandatory Redemption
in  accordance  with Section  5(a) or a  redemption  upon a Change of Control in
accordance  with Section 5(c), the shares of Convertible  Preferred  Stock shall
not be  redeemable  at  the  option  of the  Company  by the  Corporation  until
following the four-year  anniversary of the Issue Date. Following such date, the
Corporation  shall have the right,  at its  option,  upon not less than 60 days=
prior  written  notice  ("Notice"),  but  subject to the right of the Holders to
convert their shares of Convertible  Preferred Stock into shares of Common Stock
pursuant to Section 9, to redeem, out of funds legally available  therefor,  all
or a portion of the shares of  Convertible  Preferred  Stock during the 12-month
period  beginning on July 31 of the years  indicated below (subject to the right
of the Holder of record on a record  date for the  payment of a dividend  on the
Convertible  Preferred  Stock to  receive  the  dividend  due on such  shares of
Convertible Preferred Stock on the corresponding  dividend payment date, if such
dividend payment date is prior to the date set for redemption) at the redemption
prices  (expressed  as a percentage  of the  Liquidation  Price) set forth below
(each a "Redemption Price"):

                  Year                                        Redemption Price
                  ----                                        ----------------
                  2003                                                 105%
                  2004                                                 104%
                  2005                                                 103%
                  2006                                                 102%
                  2007                                                 101%
                  2008 and thereafter                                  100%

provided  that the  Corporation  shall not be  entitled  to  redeem  Convertible
Preferred  Stock in  accordance  with this  subparagraph  (b) unless the closing
sales  price  for  shares  of  Common  Stock on the NYSE for the 30  consecutive
trading days immediately preceding the date of the Notice shall be at least 350%
of the current  Conversion  Price on or prior to June 30, 2004 and at least 150%
of the current Conversion Price thereafter.

         In case of the  redemption  of less  than all of the  then  outstanding
Convertible  Preferred  Stock,  the  Corporation  shall  select  the  shares  of
Convertible  Preferred  Stock to be  redeemed  in  accordance  with  any  method
permitted by the national securities exchange on which the Convertible Preferred
Stock is then listed,  or if not so listed,  the Corporation  shall designate by
lot, or in such other manner as the Board of Directors may determine, the shares
to be redeemed,  or shall effect such redemption pro rata.  Notwithstanding  the
foregoing,  the  Corporation  shall not redeem less than all of the  Convertible
Preferred  Stock at any time  outstanding  until all  dividends  accrued to such
payment date upon all Convertible  Preferred Stock then  outstanding  shall have
been paid.

         The Notice shall be given by first class mail, postage prepaid, to each
Holder of record of the  Convertible  Preferred  Stock to be  redeemed,  at such
Holder=s  address  as it shall  appear  upon  the  stock  transfer  books of the
Corporation.  Each such notice of  redemption  shall  specify the date fixed for
redemption,  the Redemption Price, the then current  Conversion Price, the place
or places of payment and conversion and that payment or conversion  will be made
upon presentation of and surrender of the certificates  evidencing the shares of
Convertible  Preferred  Stock  to  be  redeemed  or  converted,   and  that  the
Convertible  Preferred  Stock may be  converted  at any time before the close of
business on such date fixed for redemption.

         Any  notice  that is mailed as herein  provided  shall be  conclusively
presumed to have been duly given,  whether or not the Holder of the  Convertible
Preferred  Stock receives such notice;  and failure to give such notice by mail,
or any  defect  in  such  notice,  to a  Holder  of any  shares  designated  for
redemption  shall not affect the validity of the  proceedings for the redemption
of any shares of Convertible Preferred Stock owned by other Holders to whom such
notice was duly given.  On or after the date fixed for  redemption  as stated in
such Notice, each Holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation at the place designated in
such notice and shall thereupon be entitled to receive payment of the Redemption
Price.  If  less  than  all  the  shares  represented  by any  such  surrendered
certificate are redeemed,  a new certificate shall be issued without cost to the
Holder thereof  representing  the unredeemed  shares.  If such Notice shall have
been so mailed  and if, on or prior to the  redemption  date  specified  in such
notice, all funds necessary for such redemption shall have been set aside by the
Corporation,  separate and apart from its other funds,  in trust for the account
of the  holders of the shares so to be  redeemed  (as to be and  continue  to be
available therefor), then on and after the redemption date, notwithstanding that
any  certificate  for shares of the  Convertible  Preferred  Stock so called for
redemption shall not have been surrendered for  cancellation,  all shares of the
Convertible  Preferred  Stock with  respect to which such notice shall have been
mailed and such funds  shall have been set aside shall be deemed to be no longer
outstanding  and all  rights  with  respect  to such  shares of the  Convertible
Preferred  Stock so called for redemption  shall  forthwith cease and terminate,
except  the right of the  Holders  to  receive  out of the funds so set aside in
trust the amount payable on the redemption thereof (including an amount equal to
accrued and unpaid dividends to the redemption date) without interest thereon.

         The Holder of any shares of Convertible  Preferred  Stock redeemed upon
any exercise of the Corporation=s redemption right under this Section 5(b) shall
not be entitled to receive payment of the Redemption Price for such shares until
such Holder shall cause to be delivered to the place specified in the Notice (i)
the  certificate(s)  representing  such shares of  Convertible  Preferred  Stock
redeemed and (ii) transfer  instrument(s)  satisfactory  to the  Corporation and
sufficient  to  transfer  such  shares  of  Convertible  Preferred  Stock to the
Corporation  free of any  adverse  interests;  provided  that the  foregoing  is
subject to the other  provisions of the Certificate of  Incorporation  or Bylaws
governing lost certificates generally.

         (c) CHANGE OF CONTROL. Upon the occurrence of a Change of Control, each
Holder  may  require  the  Corporation  to  redeem  such   requesting   Holder=s
Convertible  Preferred  Stock at a purchase  price in cash in an amount equal to
101.0% of the  applicable  Liquidation  Price per share (plus an amount equal to
all accrued and unpaid  dividends  to such date of  redemption)  (the "Change of
Control Price").

         Within 45 days following any Change of Control,  the Corporation  shall
give to each Holder a written notice (a "Change of Control Notice") stating:

         (i) that a Change of Control has  occurred and that such Holder has the
right to require the Corporation to redeem such Holder=s  Convertible  Preferred
Stock at the Change of Control Price as set forth above;

     (ii) the circumstances and relevant facts regarding such Change of Control;

     (iii) the redemption  date, which date shall be no earlier than 45 days nor
later than 60 days from the date such notice is mailed; and

         (iv)  the  instructions  a  Holder  must  follow  in  order to have its
Convertible Preferred Stock redeemed pursuant to this Section 5(c).

         Change of Control Notices shall otherwise be governed by the provisions
set forth above in paragraph (b) relating to Notices.

         Holders  electing to have  Convertible  Preferred  Stock redeemed under
this Section 5(c) will be required to surrender such Convertible Preferred Stock
to the  Corporation at the address  specified in the Change of Control Notice at
least five Business Days prior to the specified redemption date. Any Holder will
be entitled to withdraw its election if the Corporation receives, not later than
three Business Days prior to the redemption date, a telegram,  telex,  facsimile
transmission or letter setting forth the name of such Holder,  the amount of the
Convertible  Preferred Stock delivered for redemption by such Holder as to which
its election is to be withdrawn and a statement  that such Holder is withdrawing
its election to have such Convertible Preferred Stock redeemed.

         No Change of Control  Notice  shall be issued  pursuant to this Section
5(c) unless and until all  outstanding  Repriced  Preferred  Stock has been,  or
shall  have  been as part of the  Change  of  Control,  converted,  repurchased,
redeemed or  otherwise  retired.  If, upon any Change of Control,  funds are not
legally available to the Corporation for redemption of the shares of Convertible
Preferred Stock that the Holders have requested to be redeemed,  the Corporation
shall redeem on such date, at the Change of Control Price, that number of shares
of Convertible  Preferred Stock which it can lawfully  redeem,  and from time to
time thereafter,  as soon as funds are legally available,  the Corporation shall
redeem at the Change of Control  Price  shares of  Convertible  Preferred  Stock
until the Corporation has redeemed all the shares of Convertible Preferred Stock
that the Holders have requested be redeemed.

         Section 6.        VOTING RIGHTS.

         (a) GENERAL.  The Holders  shall vote  together with the holders of the
Common Stock (and any other class of equity  securities which may similarly vote
with the  holders of the  Common  Stock as a single  class  with  respect to any
matter) upon all matters upon which  stockholders  are entitled to vote,  except
for the election of directors (on which the Holders shall be entitled to vote as
a separate  class  pursuant to paragraph (b) below) and except for the Requisite
NYSE Shareholder Approval or the Delaware Reincorporation, and shall be entitled
to a number of votes  per  share of  Convertible  Preferred  Stock  equal to the
number of  shares  of Common  Stock  into  which the  shares of the  Convertible
Preferred  Stock are  convertible  on the record  date of the  determination  of
stockholders entitled to notice of and to vote on such matter;  provided,  that,
nothing in this Section 6(a) shall prevent Oak Hill from exercising or enforcing
its rights under the Voting Agreement, dated as of August 6, 1999, among the ASC
Maine,  Oak Hill,  and certain of ASC Maine=s  stockholders.  In  addition,  the
Holders  will have all voting  rights  required by law,  and shall also have all
special voting rights provided below. Any shares of Convertible  Preferred Stock
held by the Corporation or any entity  controlled by the  Corporation  shall not
have  voting  rights  hereunder  and shall not be  counted  in  determining  the
presence of a quorum.

         (b)      CLASS VOTING RIGHTS.

                  (i)  RIGHT  TO  ELECT  DIRECTORS.  So  long as any  shares  of
Convertible Preferred Stock are outstanding,  the minimum number of directors on
the Board of Directors  shall be eleven.  The Holders  shall be entitled to vote
together as a class to elect four directors of the  Corporation  (the "Preferred
Directors"); provided at least 112,000 shares of the Convertible Preferred Stock
remain  outstanding.  In the event that (i) fewer than 112,000 shares and 75,000
or more shares of Convertible Preferred Stock are outstanding, the Holders shall
be entitled to elect three  Preferred  Directors,  (ii) fewer than 75,000 shares
and 37,500 or more shares of Convertible  Preferred Stock are  outstanding,  the
Holders  shall be entitled to elect two  Preferred  Directors,  (iii) fewer than
37,500  shares  and 7,500 or more  shares  of  Convertible  Preferred  Stock are
outstanding,  the Holders shall be entitled to elect one Preferred  Director and
(iv) fewer than 7,500 shares of Convertible Preferred Stock are outstanding, the
Holders shall not be entitled to elect any Preferred Directors.

                  (ii) DEFAULT VOTING RIGHTS.  If, without either the consent of
Majority  Holders  or  the  consent  of  at  least  one  Preferred  Director  or
Stockholder  Director,  the Corporation (a) fails to make any quarterly dividend
payment (in accordance with Section 3) on the Convertible Preferred Stock or (b)
breaches a material  covenant  contained  in the  Definitive  Agreements  or the
provisions of Section 6(b)(iii) hereof (any event described in clause (a) or (b)
being a "Default  Voting Event"),  the Holders,  following in the case of clause
(b), a declaration  of default by the Majority  Holders,  will have the right to
elect two additional Preferred Directors ("Additional Preferred Directors").  In
addition,  the Dividend Rate and the Accretion Rate on the Convertible Preferred
Stock shall be increased by 2% per annum for so long as any Default Voting Event
remains  uncured by the  Corporation.  At such time as a Default Voting Event no
longer  exists,  any Additional  Preferred  Directors  elected  pursuant to this
Section 6(b)(ii) shall be deemed to have  automatically  resigned from the Board
of  Directors  and they shall  cease to be  directors  of the  Corporation.  The
Holders (voting separately as a class) will have the exclusive right to vote for
and elect such Additional  Preferred  Directors pursuant to a written consent or
at a meeting  of  stockholders  without  any  further  action on the part of the
Corporation or the Holders as provided below.

                  (iii) ACTIONS REQUIRING AFFIRMATIVE VOTE. So long as shares of
Convertible Preferred Stock are outstanding, the Corporation shall not, directly
or indirectly, or through merger or consolidation with any other person, without
the affirmative vote or consent of the Majority Holders, with the Holders voting
separately as a class, (a) amend,  alter or repeal (by merger,  consolidation or
otherwise) any provision of this  Certificate of Incorporation or the By-laws of
the  Corporation,  as amended,  so as to affect  adversely the relative  rights,
preferences,   powers  (including,   without  limitation,   voting  powers)  and
privileges of the Convertible  Preferred  Stock,  (b) authorize or issue any new
class of  shares or Equity  Equivalents  having a  preference  with  respect  to
dividends,   redemption  and/or   liquidation  over,  or  on  parity  with,  the
Convertible Preferred Stock, (c) reclassify any of its capital stock into shares
having a preference  with respect to dividends,  redemption  and/or  liquidation
over,  or on  parity  with,  the  Convertible  Preferred  Stock or (d) issue any
additional  shares of Convertible  Preferred Stock. In connection with any right
to vote pursuant to this Section  6(b)(iii),  each Holder will have one vote for
each share of Convertible Preferred Stock held.

                  (iv)  SPECIAL  MEETING.  Whenever the rights  described  above
shall vest, they may be exercised  initially by the vote of the Majority Holders
present and voting, in person or by proxy, at a special meeting of Holders or at
the next annual meeting of  stockholders,  or by written consent of the Majority
Holders  without a meeting.  Unless such action shall have been taken by written
consent as aforesaid,  a special  meeting of the Holders for the exercise of any
such right shall be called by the  Secretary of the  Corporation  as promptly as
possible in compliance  with  applicable law and  regulations,  and in any event
within 10 days  after  receipt  of a written  request  signed by the  Holders of
record  of at  least  25% of the  then  outstanding  shares  of the  Convertible
Preferred Stock, subject to any applicable notice requirements imposed by law or
by any national securities exchange on which any Convertible  Preferred Stock is
listed. Such meeting shall be held at the earliest practicable date thereafter.

                  (v) TERM OF OFFICE OF DIRECTORS.  Any Preferred Director shall
hold office for a term expiring at the next annual meeting of  stockholders  and
during such term may be removed at any time, either for or without cause, by and
only by, the  affirmative  vote of the  Majority  Holders  of  record,  with the
Convertible  Preferred  Stock voting as a single class,  present and voting,  in
person or by proxy,  at a special meeting of such  stockholders  called for such
purpose,  or by written  consent  without a meeting of the  Majority  Holders of
record, with the Convertible Preferred Stock voting as a single class. A special
meeting of the Holders  for the removal of a director  elected by the Holders in
accordance  with this  subparagraph  (b) and the filling of the vacancy  created
thereby  shall be called by the  Secretary  of the  Corporation  as  promptly as
possible  and in any event  within 10 days after  receipt  of  request  therefor
signed  by the  holders  of not less than 25% of the  outstanding  shares of the
Convertible  Preferred Stock taken as a single class,  subject to any applicable
notice requirements  imposed by law or any national securities exchange on which
any  Convertible  Preferred  Stock is listed.  Such meeting shall be held at the
earliest practicable date thereafter.

                  (vi) VACANCIES.  Any vacancy caused by the death,  resignation
or removal of any Preferred  Director may be filled by the  remaining  Preferred
Directors  or, if not so filled,  or if there are no Preferred  Directors on the
Board of Directors,  by and only by a vote of the Majority  Holders  present and
voting as a single  class,  in person or by proxy,  at a meeting of such Holders
called for such purpose, or by written consent without a meeting of the Majority
Holders.  Unless such vacancy shall have been filled by the remaining  Preferred
Directors or by written  consent as  aforesaid,  such meeting shall be called by
the Secretary of the  Corporation  at the earliest  practicable  date after such
death, resignation or removal, and in any event within 10 days after the receipt
of a  written  request  signed by the  Holders  of record of at least 25% of the
outstanding shares of the Convertible Preferred Stock taken as a single class.

                  (vii)  STOCKHOLDERS=  RIGHT TO CALL MEETING. If any meeting of
the Holders  required by this  subparagraph (b) to be called shall not have been
called within 10 days after personal  service of a written request therefor upon
the Secretary of the Corporation or within 15 days after mailing the same within
the United  States of America by registered  mail  addressed to the Secretary of
the  Corporation  at its  principal  office,  subject to any  applicable  notice
requirements  imposed by law or any  national  securities  exchange on which any
Convertible  Preferred  Stock is then  listed,  then the Holders of record of at
least 25% of the then outstanding shares of the Convertible  Preferred Stock may
designate in writing a Holder of the  Convertible  Preferred  Stock to call such
meeting at the reasonable  expense of the  Corporation,  and such meeting may be
called by such Person so designated upon the notice required for annual meetings
of  stockholders  or such shorter notice (but in no event shorter than permitted
by law or any national  securities  exchange on which the Convertible  Preferred
Stock is then listed) as may be acceptable to the Majority  Holders.  Any Holder
of Convertible Preferred Stock so designated shall have reasonable access to the
stock books of the  Corporation  relating  solely to the  Convertible  Preferred
Stock for the  purpose of causing  such  meeting to be called  pursuant to these
provisions.

                  (viii)  QUORUM.  At any  meeting  of  the  Holders  called  in
accordance  with the  provisions  of this  subparagraph  (b) for the election or
removal of directors, the presence in person or by proxy of the Majority Holders
with the Holders of Convertible  Preferred  Stock voting as a single class shall
be required to  constitute a quorum;  in the absence of a quorum,  a majority of
the  Holders  present in person or by proxy  shall  have  power to  adjourn  the
meeting  from  time to time  without  notice,  other  than  announcement  at the
meeting, until a quorum shall be present.

         Section 7. OUTSTANDING  SHARES.  For purposes of this  Resolution,  all
shares of Convertible  Preferred  Stock shall be deemed  outstanding  except (i)
from the date  fixed  for  redemption  pursuant  to  Section  5, all  shares  of
Convertible  Preferred  Stock  that  have been so called  for  redemption  under
Section 5 if funds  necessary  for  payment  of the  Redemption  Price have been
irrevocably  deposited in trust, for the account of the Holders of the shares so
to be redeemed  (so as to be and  continue  to be  available  therefor),  with a
corporation  organized and doing business under the laws of the United States or
any State or territory  thereof or of the District of Columbia (or a corporation
or other  person  permitted to act as a trustee by the  Securities  and Exchange
Commission),  authorized  under such laws to exercise  corporate  trust  powers,
having a combined  capital and surplus of at least  $100,000,000  and subject to
supervision  or  examination  by  Federal,  State or  District  of  Columbia  or
territorial  authority;  and (ii) from the date of registration of transfer, all
shares of Convertible  Preferred  Stock held of record by the Corporation or any
subsidiary of the Corporation.

         Section 8. STATUS OF ACQUIRED  SHARES.  The Corporation  shall take all
such actions as are necessary to cause any shares of Convertible Preferred Stock
redeemed by the Corporation,  received upon conversion pursuant to Section 9, or
otherwise  acquired  by  the  Corporation,  to be  restored  to  the  status  of
authorized and unissued  shares of Preferred  Stock,  without  designation as to
series,  and  such  shares  may  thereafter  be  issued,  but not as  shares  of
Convertible  Preferred Stock unless the other provisions of this Resolution have
been complied with.

         Section 9.        CONVERSION.

         (a) Except as provided in the next succeeding  sentence,  each share of
the  Convertible  Preferred  Stock shall be convertible  at any time,  after the
Requisite  NYSE  Shareholder  Approval is obtained,  at the option of the Holder
thereof,  into  validly  issued,  fully  paid and  non-assessable  shares of the
Company Common Stock ("Conversion  Shares") at the Conversion Price,  determined
as hereinafter provided, in effect at the time of conversion.  Unless default be
made in the payment in full of the  Redemption  Price and any accrued and unpaid
dividends,  shares of  Convertible  Preferred  Stock  called for  redemption  in
accordance  with the terms herein shall cease to be convertible  into Conversion
Shares at the close of business on the redemption  date.  The  Conversion  Price
shall be initially  $5.25 per share.  The number of Conversion  Shares  issuable
upon  conversion  of a share of  Convertible  Preferred  Stock is  determined by
dividing the Liquidation  Price (inclusive of any accrued and unpaid  dividends)
of a share of Convertible  Preferred Stock by the Conversion  Price in effect on
the  Conversion  Date (as  hereinafter  defined)  and rounding the result to the
nearest 1/100th of a share.  The Conversion Price shall be subject to adjustment
as provided  below.  Upon  conversion,  any accrued and unpaid  dividends on the
Convertible  Preferred  Stock shall be paid to the Holder  thereof in accordance
with the  provisions  of Section 3. If a holder  converts more than one share at
the same time, the number of full shares  issuable upon the conversion  shall be
based upon the total number of shares converted.

         (b) In order to convert shares of the Convertible  Preferred Stock into
Conversion  Shares,  the Holder  thereof  shall  surrender  at the office of any
transfer  agent for the  Convertible  Preferred  Stock (or in the absence of any
transfer agent, the Corporation) the certificate or certificates therefor,  duly
endorsed  to the  Corporation  or in  blank,  and  give  written  notice  to the
Corporation at said office that he or she elects to convert such shares.  Shares
of the  Convertible  Preferred  Stock  shall be deemed  to have  been  converted
immediately  prior to the close of  business  on the date of  surrender  of such
shares for conversion in accordance with the foregoing  provisions  (hereinafter
the "Conversion Date"), and the person or persons entitled to receive Conversion
Shares  issuable upon such  conversion  shall be treated for all purposes as the
record holder or holders of such Conversion  Shares at such time. As promptly as
practicable  after the Conversion Date, the Corporation  shall issue and deliver
at said office the certificate or certificates for the number of full Conversion
Shares  issuable upon such  conversion,  together with a cash payment in lieu of
any fraction of a Conversion  Share, as hereinafter  provided,  to the person or
persons  entitled  to receive  the same or to the  nominee or  nominees  of such
person or persons.

         (c) The Conversion Price shall be subject to adjustment as follows:

                  (i) In case the Corporation shall (i) pay a dividend in shares
of any class of its  Common  Stock to all  holders  of such  class,  (ii) make a
distribution  in shares of any class of its Common  Stock to all holders of such
class, (iii) subdivide any of its outstanding Common Stock into a greater number
of shares,  or (iv) combine any of its  outstanding  Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior thereto shall
be  adjusted  so that the holder of any shares of  Convertible  Preferred  Stock
thereafter  surrendered for conversion  shall be entitled to receive that number
of Conversion  Shares  representing the percentage of all outstanding  shares of
Common  Stock which the Holder would have owned had such  Convertible  Preferred
Stock been  converted  immediately  prior to the happening of such event and the
Conversion Price shall be adjusted  accordingly.  An adjustment made pursuant to
this subsection (i) shall become effective  immediately after the record date in
the case of a dividend  in shares or  distribution  and shall  become  effective
immediately after the effective date in the case of subdivision or combination.

                  (ii) In case the Corporation shall issue Equity Equivalents to
all or  substantially  all  holders of any class of its  Common  Stock or to any
other  person  (other  than the  Holders)  entitling  such  person or persons to
subscribe  for,  purchase  or  otherwise  acquire  shares  of  Common  Stock (or
securities in any manner  representing  the right to acquire  Common Stock) at a
price per share  that is less than the then  Current  Market  Price per share of
Common Stock (as  determined in  accordance  with  subsection  (v) below) at the
record date for the  determination  of  shareholders  entitled  to receive  such
Equity Equivalents on the date of issuance thereof or, with respect to issuances
to persons other than Holders, on the issue date, as applicable,  the Conversion
Price in effect  immediately  prior  thereto  shall be adjusted so that the same
shall equal the price  determined by multiplying the Conversion  Price in effect
immediately  prior  to such  record  date or issue  date,  as  applicable,  by a
fraction of which the  numerator  shall be the number of shares of Common  Stock
outstanding on such record date or issue date, as applicable, plus the number of
shares  which the  aggregate  offering  price of the  total  number of shares of
Common Stock so offered,  (or the aggregate  conversion price of the convertible
securities so offered)  would  purchase at such Current Market Price (as defined
in subsection (iv) below),  and of which the denominator  shall be the number of
shares of  Common  Stock  outstanding  on such  record  date or issue  date,  as
applicable,  plus the number of  additional  shares of Common Stock  offered (or
into  which  the  convertible  securities  so  offered  are  convertible).  Such
adjustment  shall be made  successively  whenever  any  Equity  Equivalents  are
issued,  and shall become effective  immediately  after such record date or such
sale date, as  applicable.  If at the end of the period during which such Equity
Equivalents  are  exercisable  not all such Equity  Equivalents  shall have been
exercised,  the adjusted  Conversion  Price shall be readjusted to what it would
have been based upon the number of  additional  shares of Common Stock  actually
issued (or the number of shares of Common  Stock  issuable  upon  conversion  of
convertible securities actually issued).

                  (iii)  In case  the  Corporation  shall  distribute  to all or
substantially  all  holders  of any class of Common  Stock any shares of capital
stock of the Corporation (other than Common Stock), evidences of indebtedness or
other  non-cash  assets  (including  securities  of any  company  other than the
Corporation),  or shall  distribute to all or  substantially  all holders of any
class of Common Stock rights or warrants to subscribe for or purchase any of its
securities  (excluding those referred to in subsection (ii) above), then in each
such case the  Conversion  Price  shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion  Price in effect  immediately
prior to the date of such  distribution  by a  fraction  of which the  numerator
shall be the  Current  Market  Price per share (as  defined in  subsection  (iv)
below) of the Conversion Shares on the record date mentioned below less the fair
market  value on such  record  date (as  reasonably  determined  by the Board of
Directors,  whose determination shall be conclusive evidence of such fair market
value)  of  the  portion  of  the  capital  stock  or  assets  or  evidences  of
indebtedness  so  distributed  or of such rights or warrants  applicable  to one
share of Common Stock (determined on the basis of the number of shares of Common
Stock outstanding on the record date), and of which the denominator shall be the
Current  Market  Price per share (as  defined in  subsection  (iv) below) of the
Conversion  Shares on such record date. Such adjustment  shall become  effective
immediately after the record date for the determination of shareholders entitled
to receive such distribution.

                  Notwithstanding   the   foregoing,   in  the  event  that  the
Corporation shall distribute rights or warrants (other than those referred to in
subsection  (ii)  above)  ("Rights")  pro rata to holders of any class of Common
Stock,  the  Corporation  may, at its option,  in lieu of making any  adjustment
pursuant  to this  Section  9, make  proper  provision  so that  each  holder of
Convertible  Preferred  Stock who converts  such stock (or any portion  thereof)
after the  record  date for such  distribution  and prior to the  expiration  or
redemption of the Rights shall be entitled to receive upon such  conversion,  in
addition to the shares of  Conversion  Stock  issuable upon such  conversion,  a
number of Rights to be determined as follows:  (i) if such conversion  occurs on
or prior to the date for the  distribution  to the holders of Rights of separate
certificates  evidencing such Rights (the "Distribution  Date"), the same number
of Rights to which a holder of a number of shares of Common  Stock  equal to the
number  of  Conversion  Shares is  entitled  at the time of such  conversion  in
accordance  with the terms and  provisions  of and  applicable to the Rights and
(ii) if such conversion  occurs after the Distribution  Date, the same number of
Rights to which a holder of the number of shares of Common  Stock into which the
principal amount of the security so converted was convertible  immediately prior
to the Distribution  Date would have been entitled on the  Distribution  Date in
accordance with the terms and provisions of and applicable to the Rights.

                  (iv) For the purpose of any computation under subsections (ii)
and (iii) of this Section 9(c),  the current  market price (the "Current  Market
Price")  per  Conversion  Share on any date  shall be  deemed to be equal to the
average of the daily  closing  prices of the Common Stock on the NYSE or, if not
then listed or traded on the NYSE,  such other  exchange,  market or system that
the Common Stock is then listed or traded on for the 10 trading days immediately
prior to the record  date or date of  issuance  with  respect to  distributions,
issuances or other events  requiring such  computation  under subsection (ii) or
(iii) above;  provided that in the case of an  underwritten  public  offering of
Equity Equivalents which are currently traded, the Current Market Price shall be
the closing  price of the Common Stock on the issuance  date,  less an allowance
for a customary discount to the current market trading price which is reasonably
required to effect such  offering.  The closing  price for each day shall be the
closing price on the NYSE or the last reported sales price or, if the Conversion
Shares are not listed or  admitted  to  trading  on the NYSE,  on the  principal
national  securities  exchange  on which the  Conversion  Shares  are  listed or
admitted to trading  or, if not listed or  admitted  to trading on any  national
securities exchange,  the closing sales price of the Conversion Shares as quoted
by NASDAQ or, in case no reported  sale takes place,  the average of the closing
bid and asked  prices as quoted by NASDAQ or any  comparable  system  or, if the
Conversion Shares are not quoted on NASDAQ or any comparable system, the closing
sales price or, in case no reported sale takes place, the average of the closing
bid  and  asked  prices,  as  furnished  by any  two  members  of  the  National
Association  of  Securities  Dealers,  Inc.  selected  from  time to time by the
Corporation  for that  purpose.  If no such  prices are  available,  the Current
Market  Price  per  share  shall be the  fair  value  of a  Conversion  Share as
reasonably determined by the Board of Directors.

                  (v) In any case in which this Section 9 shall  require that an
adjustment be made  following a record date the  Corporation  may elect to defer
(but only until five Business Days  following the mailing by the  Corporation to
the holders of the notice of  adjustment  described  in  subsection  (ix) below)
issuing to the Holder of any  Convertible  Preferred  Stock converted after such
record date the  Conversion  Shares and other capital  stock of the  Corporation
issuable upon such  conversion  over and above the  Conversion  Shares and other
capital stock of the Corporation issuable upon such conversion only on the basis
of the  Conversion  Price  prior to  adjustment;  and, in lieu of the shares the
issuance  of which is so  deferred,  the  Corporation  shall  issue or cause its
transfer agents to issue due bills or other appropriate evidence prepared by the
Corporation of the right to receive such shares.  If any distribution in respect
of which an adjustment to the Conversion  Price is required to be made as of the
record date therefor is not thereafter  made or paid by the  Corporation for any
reason,  the Conversion  Price shall be readjusted to the Conversion Price which
would then be in effect if such record date had not been fixed or such effective
date had not occurred.

                  (vi) NO  ADJUSTMENT.  No  adjustment in the  Conversion  Price
shall be required unless the adjustment would require an increase or decrease of
at least 1% in the Conversion Price as last adjusted;  provided,  however,  that
any  adjustments  which by reason of this subsection (vi) are not required to be
made  shall  be  carried  forward  and  taken  into  account  in any  subsequent
adjustment.  All calculations  under this Section 9 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.

                  No adjustment  need be made for a  transaction  referred to in
paragraph  (c)(i),  (ii) or (iii) above if all Holders of Convertible  Preferred
Stock are entitled to participate in the  transaction on a basis and with notice
that the Board of Directors  determines to be fair and  appropriate  in light of
the basis and  notice  on which  holders  of  Common  Stock  participate  in the
transaction.  The  Corporation  shall give 30 days prior  notice to any transfer
agent  and to the  Holders  of  the  Convertible  Preferred  Stock  of any  such
determination.

                  No  adjustment  need be made for (a) issuances of Common Stock
pursuant to a Corporation plan for reinvestment of dividends or interest,  (b) a
change in the par value or a change to no par value of the Common  Stock and (c)
the  issuance  of Common  Stock to  directors,  officers  and  employees  of the
Corporation and its subsidiaries pursuant to any stock-based incentive plan duly
approved by the Board of Directors or any duly  authorized  committee or delegee
thereof.

                  To the extent that the  Convertible  Preferred  Stock  becomes
convertible  into  the  right  to  receive  cash,  no  adjustment  need  be made
thereafter as to the cash. Interest will not accrue on the cash.

                  (vii)  ADJUSTMENT FOR TAX PURPOSES.  The Corporation  shall be
entitled to make such  reductions in the Conversion  Price, in addition to those
required by other  provisions of this Section 9, as it in its  discretion  shall
determine  to be advisable in order that any stock  dividends,  subdivisions  of
shares, distributions of rights to purchase stock or securities or distributions
of securities  convertible  into or exchangeable for stock hereafter made by the
Corporation to its shareholders shall not be taxable.

                  (viii) NOTICE OF ADJUSTMENT.  Whenever the Conversion Price is
adjusted,  the  Corporation  shall  promptly mail to holders of the  Convertible
Preferred  Stock and to the transfer  agent a notice of the  adjustment  briefly
stating the facts  requiring the  adjustment and the manner of computing it. The
certificate shall be conclusive evidence of the correctness of such adjustment.

                  (ix)     NOTICE OF CERTAIN TRANSACTIONS.

                  In the event that:

     (A) the  Corporation  takes any action which would require an adjustment in
the Conversion Price;

     (B) the  Corporation  consolidates  or merges  with,  or  transfers  all or
substantially all of its assets to, another  corporation and shareholders of the
Corporation    must   approve   the   transaction    (excluding   the   Delaware
Reincorporation); or

     (C) there is a dissolution or liquidation of the Corporation,

the Corporation shall mail to holders of the Convertible  Preferred Stock and to
any transfer  agent a notice stating the proposed  record or effective  date, as
the case may be. The  Corporation  shall mail the notice at least 10 days before
such date.  Failure to mail such notice or any defect  therein  shall not affect
the  validity of any  transaction  referred to in clause (A), (B) or (C) of this
Section 9(c)(ix).

                  (x) EFFECT OF RECLASSIFICATION,  CONSOLIDATION, MERGER OR SALE
ON CONVERSION  PRIVILEGE.  If any of the following  (which shall not include the
Delaware  Reincorporation)  shall occur,  namely:  (a) any  reclassification  or
change  of  Conversion  Shares  issuable  upon  conversion  of  the  Convertible
Preferred  Stock (other than a change in par value,  or from par value to no par
value,  or from no par value to par value,  or as a result of a  subdivision  or
combination,  or any other change for which an adjustment is provided in (c)(i),
(ii) or (iii) above);  (b) any  consolidation or merger to which the Corporation
is a party  other  than a merger  in which  the  Corporation  is the  continuing
corporation  and which  does not  result in any  reclassification  of, or change
(other  than a change  in name,  or in par  value,  or from par  value to no par
value,  or from no par value to par value,  or as a result of a  subdivision  or
combination)  in,  outstanding  shares  of  Common  Stock;  or (c)  any  sale or
conveyance of all or  substantially  all of the assets of the  Corporation as an
entirety, then the Corporation,  or such successor or purchasing corporation, as
the case may be,  shall,  as a  condition  precedent  to such  reclassification,
change,  consolidation,  merger,  sale  or  conveyance,  ensure  that  effective
provision  be made in the  certificate  of  incorporation  of the  resulting  or
surviving  corporation or otherwise  that each holder of  Convertible  Preferred
Stock  then  outstanding  shall  have the  right  to  convert  such  Convertible
Preferred Stock into the kind and amount of shares of stock and other securities
and property  (including  cash) receivable upon such  reclassification,  change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Conversion Stock deliverable upon conversion of such Convertible Preferred Stock
immediately prior to such reclassification,  change, consolidation, merger, sale
or  conveyance,  and that the  Conversion  Price shall continue to be subject to
adjustment  which shall be as nearly  equivalent  as may be  practicable  to the
adjustments  of the  Conversion  Price provided for in this Section 9. If in the
case of any such consolidation,  merger, sale or conveyance,  the stock or other
securities and property  (including  cash)  receivable  thereupon by a holder of
Conversion  Stock include shares of stock or other  securities and property of a
corporation other than the successor or purchasing corporation,  as the case may
be, in such consolidation,  merger, sale or conveyance, then effective provision
shall also be made in the certificate of incorporation of such other corporation
or otherwise of such  additional  antidilution  provisions  as are  necessary to
protect the  interests  of the  holders of the  Convertible  Preferred  Stock by
reason of the foregoing.  The provisions of this Section 9(c)(x) shall similarly
apply to successive consolidations, mergers, sales or conveyances.

         Section 10. REPORTS. So long as the Convertible Preferred Stock remains
outstanding,  the Corporation shall cause its annual reports to stockholders and
any  quarterly or other  financial  reports and  information  furnished by it to
stockholders  pursuant to the  requirements of the Exchange Act, to be mailed to
the  holders of the  Convertible  Preferred  Stock  (contemporaneously  with the
mailing of such materials to the Corporation=s  stockholders) at their addresses
appearing on the books of the Corporation. If the Corporation is not required to
furnish annual or quarterly reports to its stockholders pursuant to the Exchange
Act, it shall cause its financial  statements,  including any notes thereto (and
with respect to annual reports,  an auditors= report by a nationally  recognized
firm of independent certified public accounts),  a "Management=s  Discussion and
Analysis  of  Financial  Condition  and  Results of  Operations"  and such other
information  which the  Corporation  would  otherwise  by required to include in
annual and  quarterly  reports filed under the Exchange Act, to be mailed to the
holders of the  Convertible  Preferred  Stock,  within 120 days after the end of
each of the Corporation=s  fiscal years and within 60 days after the end of each
of its first three fiscal quarters.

         Section  11.  SEVERABILITY  OF  PROVISIONS.   Whenever  possible,  each
provision  hereof shall be  interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by or
invalid under  applicable law, such provision  shall be ineffective  only to the
extent of such  prohibition or  invalidity,  without  invalidating  or otherwise
adversely  affecting the remaining  provisions  hereof.  If a court of competent
jurisdiction  should  determine  that a  provision  hereof  would  be  valid  or
enforceable  if a period of time were  extended  or  shortened  or a  particular
percentage were increased or decreased,  then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.