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          Certificate of Designation, Powers, Preferences and Rights
                                      of
                Series B Cumulative Redeemable Preferred Stock
                                      of
                         Maxcor Financial Group Inc.

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


                  We, Gilbert D. Scharf, Chairman of the Board, President and
Chief Executive Officer, and Roger E. Schwed, Vice President, General Counsel
and Secretary, of Maxcor Financial Group Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:

                  That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on September 25, 1998, adopted the
following resolution creating a series of 2,000 shares of Preferred Stock
designated as Series B Cumulative Redeemable Preferred Stock:

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

                             (1) Designation; Number of Shares. The
         designation of such series of Preferred Stock shall be "Series B
         Cumulative Redeemable Preferred Stock" (the "Series B Preferred
         Stock") of Maxcor Financial Group Inc., a Delaware corporation (the
         "Corporation"). The stated value ("Stated Value") of each share of
         the Series B Preferred Stock shall be One Thousand U.S. Dollars
         (U.S.$1,000). The maximum number of shares of Preferred Stock
         authorized hereby shall be two thousand (2,000). The Series B
         Preferred Stock may be issued in fractional shares.

                             (2) Holder. The Series B Preferred Stock is being
         issued to a single holder, Yagi Euro Corporation (the "Holder"), for
         the business purpose of maintaining cross-ownership between the
         Holder and certain subsidiaries of the Corporation, and is subject to
         restrictions on transfer as described in paragraph (12) below.
         References to multiple holders herein are solely for convenience in
         the event that the Holder seeks, and the Corporation consents to,
         future transfers of the Series B Preferred Stock, and are not
         intended to modify or otherwise alter the restrictions in said
         paragraph (12).

                             (3) Rank. The Series B Preferred Stock shall,
         with respect to dividend rights 

                             Page 25 of 34 Pages

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         and rights on liquidation, winding up, and dissolution, rank senior to
         all series and classes of the Common Stock, par value $.001 per share
         (the "Common Stock"), of the Corporation and to the Series A Junior
         Participating Preferred Stock, par value $.001 per share, of the
         Corporation. Unless specifically designated as being pari passu with
         the Series B Preferred Stock with respect to dividend rights or rights
         on liquidation, winding up or dissolution, all other series and classes
         of Preferred Stock of the Corporation hereinafter authorized or
         outstanding shall be junior to the Series B Preferred Stock with
         respect to such rights. All securities of the Corporation to which the
         Series B Preferred Stock ranks senior, including the Common Stock, are
         collectively referred to herein as the "Junior Securities"; and all
         securities of the Corporation with which the Series B Preferred Stock
         ranks pari passu are collectively referred to herein as the "Parity
         Securities."

                             (4)    Dividends.

                                    (i)     Amount; Payment Dates. The holders
         of shares of Series B Preferred Stock shall be entitled to receive,
         when, as and if declared by the Board of Directors of the Corporation,
         out of funds legally available for the payment of dividends, cumulative
         dividends on each share of Series B Preferred Stock at the annual rate
         of two percent (2%) of the Stated Value of such share and no more. Such
         dividends shall be payable in arrears in equal quarterly payments on
         each of March 31, June 30, September 30 and December 31, commencing
         with December 31, 1998 (each of such dates being a "dividend payment
         date"), in preference to dividends on any Junior Securities. Such
         dividends shall be paid to the holders of record of the Series B
         Preferred Stock at the close of business on the business date 10 days
         prior to the relevant dividend payment date or such other date as may
         be specified by the Board of Directors of the Corporation at the time
         such dividend is declared; provided, however, that such date shall not
         be more than 60 days nor less than 10 days prior to the relevant
         dividend payment date. Each of such quarterly dividends shall be fully
         cumulative and shall accrue (whether or not declared and whether or not
         there shall be funds legally available for the payment of dividends, at
         the annual rate of two percent (2%) compounded quarterly) from the
         first day of the quarterly period in which such dividend may be payable
         as herein provided, except that with respect to the period prior to the
         first dividend payment date, dividends shall accrue from October 1,
         1998 (the "Issue Date"). Any dividends paid on the Series B Preferred
         Stock shall be deemed to be paid with respect to the earliest dividend
         payment dates for which cumulative dividends have not been paid in
         full. All references to accrued dividends herein shall be calculated in
         accordance with this paragraph (4) (i).

                                    (ii)    Form. Any dividends that accrue on
         the Series B Preferred Stock shall be paid in cash. All dividends paid
         pursuant to this paragraph shall be paid pro rata to the holders
         entitled thereto.

                                    (iii)   Fractional Shares. Each fractional
         share of the Series B Preferred Stock outstanding shall be entitled to
         a ratably proportionate amount of all dividends accruing with respect
         to each outstanding share of Series B Preferred Stock pursuant to
         paragraph (4) (i) hereof.

                             Page 26 of 34 Pages

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                             (5) Liquidation Preference. In the event of any
         voluntary or involuntary liquidation, dissolution or winding up of
         the affairs of the Corporation, the holders of the shares of Series B
         Preferred Stock then outstanding shall be entitled to be paid out of
         the assets of the Corporation available for distribution to its
         stockholders, whether such assets are capital or surplus and whether
         or not any dividends are declared, an amount in cash equal to the
         Stated Value of each share outstanding (the "Liquidation
         Preference"), plus an amount in cash equal to all accrued and unpaid
         dividends thereon to the date payment is made available to the
         holders of the Series B Preferred Stock, before any payment shall be
         made or any assets distributed to any holder of Junior Securities.
         Except as provided in the preceding sentence, the holders of Series B
         Preferred Stock shall not be entitled to any distribution in the
         event of liquidation, dissolution or winding up of the affairs of the
         Corporation. If the assets of the Corporation are not sufficient to
         pay in full the liquidation payments payable to the holders of
         outstanding shares of the Series B Preferred Stock and the holders of
         any Parity Securities, then the holders of all such shares and such
         Parity Securities shall share ratably in such distribution of assets
         in accordance with the amount that would be payable on such
         distribution if the amounts to which the holders of outstanding
         shares of Series B Preferred Stock and such Parity Securities are
         entitled were paid in full. The liquidation payment with respect to
         each fractional share of the Series B Preferred Stock outstanding
         shall be equal to a ratably proportionate amount of the liquidation
         payment with respect to each outstanding share of the Series B
         Preferred Stock. For the purposes of this paragraph (5), neither the
         voluntary sale, lease, conveyance, exchange or transfer (for cash,
         shares of stock, securities or other consideration) of all or
         substantially all the property or assets of the Corporation nor the
         consolidation or merger of the Corporation with one or more other
         corporations shall be deemed to be a liquidation, dissolution or
         winding up, voluntary or involuntary, unless such voluntary sale,
         lease, conveyance, exchange or transfer shall be in connection with a
         plan of liquidation, dissolution or winding up of the Corporation.

                             (6)    Redemption.

                                    (i)     Optional Redemption. The Corporation
         may, at any time or from time to time, redeem in whole or in part, at
         its option, the Series B Preferred Stock, to the extent the Corporation
         shall have funds legally available for such payment, at a per share
         cash redemption price equal to the Liquidation Preference per share,
         plus an amount in cash equal to all accrued and unpaid dividends
         thereon to the date of redemption (the "Redemption Price")

                                    (ii)    Mandatory Redemption. (a)  On the
         tenth anniversary of the Issue Date, the Corporation shall redeem at
         the Redemption Price, to the extent the Corporation shall have funds
         legally available for such payment, all of the shares of Series B
         Preferred Stock then outstanding.

                                            (b)      In addition, if any time
         the Corporation sells, transfers or otherwise disposes of its
         indirectly held investment in the Common Stock of the Holder (whether

                             Page 27 of 34 Pages

<PAGE>

         in whole or in part), other than to another wholly-owned subsidiary of
         the Issuer (it being understood that having directors' shares or their
         equivalent outstanding shall not prevent a subsidiary from being
         considered wholly-owned for purposes of this subparagraph), then,
         within sixty (60) days of such sale, transfer or disposition, the
         Corporation shall redeem at the Redemption Price, to the extent the
         Corporation shall have funds legally available for such payment, a
         number of shares of the Series B Preferred Stock that represents a
         percentage of the total number of shares of Series B Preferred Stock
         then outstanding equal to the percentage that the number of shares of
         Common Stock of the Holder so sold, transferred or disposed by the
         Corporation (or its subsidiary) represents of the total number of
         shares of Common Stock of the Holder then held by the Corporation (or
         its subsidiary).

                                              (c)    If the Corporation shall
         fail to discharge any mandatory redemption obligation pursuant to this
         paragraph (6) (ii), such failure shall have the consequences specified
         in paragraph (11) below and the Corporation shall discharge such
         mandatory redemption obligation as soon as it is able to do so.

                                     (iii)  Reacquired Shares. Shares of Series
         B Preferred Stock which have been issued and reacquired by the
         Corporation in any manner, including shares purchased or redeemed,
         shall (upon compliance with any applicable provisions of the laws of
         the State of Delaware) have the status of authorized and unissued
         shares of the class of Preferred Stock, undesignated as to any series
         of the Preferred Stock; provided, however, that no such issued and
         reacquired shares of the Series B Preferred Stock shall be reissued or
         sold as Series B Preferred Stock.

                             (7)    Procedure for Redemption.

                                     (i)    Selection. In the event that fewer
         than all of the outstanding shares of Series B Preferred Stock are to
         be redeemed, the shares shall be redeemed pro rata. If less than all of
         the shares held by a holder are to be redeemed, a new certificate shall
         be issued representing the unredeemed shares without cost to the holder
         thereof.

                                     (ii)   Notice. In the event the Corporation
         shall redeem shares of Series B Preferred Stock, notice of such
         redemption shall be given by first class mail, postage prepaid, mailed
         not less than 10 days nor more than 60 days prior to the redemption
         date, to each record holder of the shares to be redeemed at such
         holder's address as the same appears on the stock register of the
         Corporation; provided, however, that any failure to give such notice or
         any defect therein shall not affect the validity of the proceeding for
         the redemption of any shares of Series B Preferred Stock to be redeemed
         except as to the holder to whom the Corporation has failed to give said
         notice or except as to the holder whose notice was defective. Each such
         notice shall state: (a) the redemption date; (b) the number of shares
         of Series B Preferred Stock to be redeemed and, if less than all shares
         held by such holder are to be redeemed from such holder, the number of
         shares to be redeemed from such holder; (c) the Redemption Price
         (including a calculation of all accrued 


                             Page 28 of 34 Pages

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         and unpaid dividends); (d) the place or places where certificates for
         such shares are to be surrendered for payment of the Redemption Price;
         and (e) that dividends on the shares to be redeemed will cease to
         accrue on such redemption date except to the extent provided in
         paragraph (8).

                             (8) Effect of Redemption. From and after the
         redemption date, dividends on the shares of Series B Preferred Stock
         so called for redemption shall cease to accrue (unless the
         Corporation defaults in promptly providing money for the payment of
         the Redemption Price to the holders of the redeemed shares who
         deliver shares of Series B Preferred Stock in accordance with the
         terms of the notice sent to such holders), and said shares shall no
         longer be deemed to be outstanding and shall have the status of
         authorized but unissued shares of Preferred Stock, undesignated as to
         series, and all rights of the holders thereof as stockholders of the
         Corporation in respect of such shares shall cease and terminate
         (except the right to receive from the Corporation the Redemption
         Price). If notice of redemption shall have been mailed and if prior
         to the date of redemption specified in such notice all said funds
         necessary for such redemption shall have been irrevocably deposited
         in trust, for the account of the holders of the shares of the Series
         B Preferred Stock to be redeemed, with a bank or trust company (which
         shall have combined capital and surplus of at least $100,000,000) in
         the borough of Manhattan, City of New York named in such notice,
         thereupon and without awaiting the redemption date, all shares of the
         Series B Preferred Stock with respect to which such notice shall have
         been so mailed and such deposit shall have been so made, shall be
         deemed to be redeemed and no longer outstanding and all rights with
         respect to such shares of the Series B Preferred Stock shall
         forthwith upon such deposit in trust cease and terminate (except the
         right of the holders on or after the redemption date to receive from
         such deposit in trust the amount payable upon the redemption). In
         case the holders of shares of the Series B Preferred Stock that shall
         have been called for redemption shall not within one year (or any
         longer period if required by law) after the redemption date claim any
         amount so deposited in trust for the redemption of such shares, such
         bank or trust company shall, upon demand and if permitted by
         applicable law, pay over to the Corporation any such unclaimed amount
         so deposited with it and shall thereupon be relieved of all
         responsibility in respect thereof, and thereafter the holders of such
         shares shall, subject to applicable escheat laws, look only to the
         Corporation for payment of the redemption price thereof, but without
         interest from the date for which redemption was scheduled.

                             (9) Merger or Consolidation. In the event of a
         merger or consolidation of the Corporation with or into any person
         pursuant to which the Corporation shall not be the continuing person,
         or pursuant to which the Corporation shall become a subsidiary of a
         public company, the Series B Preferred Stock shall at the option of
         the Corporation either: (i) be redeemed in accordance with the
         provisions of paragraph (7) or (ii) be converted into or exchanged
         for and shall become preferred shares of such successor, resulting or
         public company, having in respect of such successor, resulting or
         public company substantially the same powers, preferences and
         relative participating, optional or other special rights, and the
         qualifications, limitations or restrictions thereon, that the Series
         B Preferred Stock had immediately prior to such transaction.

                             Page 29 of 34 Pages


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                             (10) Voting Rights. (i) The holders of shares of
         Series B Preferred Stock shall not be entitled to any voting rights
         except as provided in this paragraph (10) or as otherwise required by
         law.

                                     (ii)   (a)      If at any time or times (1)
         dividends payable on the Series B Preferred Stock shall be in arrears
         and shall not have been paid in full for the two immediately preceding
         quarters, or (2) the Corporation shall have failed to meet the
         mandatory redemption obligation as provided in paragraph (6)(ii), then
         the number of directors constituting the Board of Directors, without
         further action, shall be increased by one. The directorship created by
         the failure to meet mandatory redemption obligations or to declare or
         pay dividends on the Series B Preferred Stock shall be referred to as a
         "Preferred Stock Director". The holders of Series B Preferred Stock,
         voting separately as a class, shall have the right to elect one
         Preferred Stock Director, with the remaining directors to be elected by
         the other class or classes of stock entitled to vote therefor, at each
         meeting of stockholders held for the purpose of electing directors.

                                             (b)     Whenever such voting right
         shall have vested, such right may be exercised initially at the
         holders' election either at a special meeting of the holders of Series
         B Preferred Stock, called as hereinafter provided, or at any annual
         meeting of stockholders held for the purpose of electing directors, and
         thereafter at such annual meeting, or by the unanimous written consent
         of all holders of the Series B Preferred Stock. Such voting right shall
         continue until such time as (i) all accrued and unpaid dividends on all
         outstanding Series B Preferred Stock shall have been paid in full and
         (ii) all mandatory redemption obligations which have matured have been
         met, at which time such voting right of the holders of Series B
         Preferred Stock shall terminate, subject to revesting in the event of
         each and every subsequent event of the character indicated above.

                                              (c)    At any time when such 
         voting rights shall have vested in the holders of Series B Preferred 
         Stock and if such right shall not already have been initially 
         exercised, a proper officer of the Corporation shall, upon the written 
         request of any holder of record of Series B Preferred Stock then 
         outstanding,addressed to the Secretary of the Corporation, call a 
         special meeting of holders of Series B Preferred Stock. Such meeting 
         shall be held at the earliest practicable date upon the notice 
         required for annual meetings 

                             Page 30 of 34 Pages

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         of stockholders at the place for holding annual meetings of
         stockholders of the Corporation or, if none, at a place designated by
         the Secretary of the Corporation. If such meeting shall not be called
         by the proper officer of the Corporation within 30 days after the
         personal service of such written request upon the Secretary of the
         Corporation, or within 30 days after mailing the same within the United
         States, by registered mail, addressed to the Secretary of the
         Corporation at its principal office (such mailing to be evidenced by
         the registered receipt issued by the postal authorities), then the
         holders of record of 10% of the shares of Series B Preferred Stock then
         outstanding may designate in writing a holder of Series B 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 and shall be held at the
         same place as is elsewhere provided in this paragraph (10) (ii) (c).
         Any holder of Series B Preferred Stock that would be entitled to vote
         at such meeting shall have access to the stock books of the Corporation
         in respect of the Series B Preferred Stock for the purpose of causing a
         meeting of stockholders to be called pursuant to the provisions of this
         paragraph (10) (ii) (c). Notwithstanding the provisions of this
         paragraph (10) (ii) (c), however, no such special meeting shall be
         called during a period within 90 days immediately preceding the date
         fixed for the next annual meeting of stockholders of the Corporation.

                                              (d)    At any meeting held for the
         purpose of electing directors at which the holders of Series B
         Preferred Stock shall have the right to elect a Preferred Stock
         Director as provided herein, the presence in person or by proxy of the
         holders of at least a majority of the then outstanding shares of Series
         B Preferred Stock shall be required and shall be sufficient to
         constitute a quorum of such class for the election of a Preferred Stock
         Director by such class. At any such meeting or adjournment thereof, (x)
         the absence of a quorum of the holders of Series B Preferred Stock
         shall not prevent the election of directors other than the Preferred
         Stock Director to be elected, and the absence of a quorum or quorums of
         the holders of capital stock entitled to elect such other directors
         shall not prevent the election of a Preferred Stock Director to be
         elected by the holders of Series B Preferred Stock and (y) in the
         absence of a quorum of the holders of shares of Series B Preferred
         Stock, a majority of such holders present in person or by proxy shall
         have the power to adjourn the meeting for the election of a Preferred
         Stock Director that the holders of Series B Preferred Stock may be
         entitled to elect, from time to time, without notice (except as
         required by law) other than announcement at the meeting, until a quorum
         shall be present.

                                              (e)    The term of office of the
         Preferred Stock Director elected pursuant to this paragraph (10) in
         office at any time when the aforesaid voting right is vested in the
         holders of Series B Preferred Stock shall terminate upon the election
         of such Director's successor at any meeting of stockholders for the
         purpose of electing directors of the class of directors to which the
         Preferred Stock Director belongs. Upon any termination of the voting
         right of the holders of Series B Preferred Stock, the term of office of
         the Preferred Stock Director elected pursuant to this paragraph (10)
         then in office shall automatically terminate, and, if the number of
         directors constituting the Board of Directors was increased by one
         pursuant to paragraph (10) (ii) (a), then upon such termination the
         number of directors constituting the Board of Directors shall, without
         further action, be reduced by one, subject to an increase in the number
         of directors pursuant to paragraph (10) (ii) (a) in the case of the
         future right of the holders of Series A Preferred stock to elect
         directors.

                                              (f)    In case of any vacancy
         occurring for the Preferred Stock Director so elected, the holders of
         Series B Preferred Stock may, at a special meeting of such holders
         called as provided above, elect a successor to hold office for the
         unexpired term of the director whose place shall be vacant.

                                     (iii) So long as any shares of Series B
         Preferred Stock remain outstanding, 

                             Page 31 of 34 Pages

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         the Corporation will not, without the affirmative vote at a meeting, or
         the written consent (in lieu of a meeting), of the holders of at least
         a majority in number of shares of the Series B Preferred Stock then
         outstanding, (a) amend, alter or repeal any of the provisions of the
         Certificate of Incorporation of the Corporation (including the
         Certificate of Designations which creates the Series B Preferred Stock)
         so as to affect adversely the powers, preferences or special rights of
         the Series B Preferred Stock or (b) increase the authorized number of
         shares of the Series B Preferred Stock; provided, however, that nothing
         herein shall limit the ability or authority of the Board of Directors
         of the Corporation to create, authorize or issue any Junior Securities
         or Parity Securities.

                             (11) Certain Restrictions. If at any time or
         times (1) dividends payable on the Series B Preferred Stock shall be in
         arrears and shall not have been paid in full for the two immediately
         preceding quarters, or (2) the Corporation shall have failed to meet
         the mandatory redemption obligation as provided in paragraph (6)(ii),
         then, if and so long as any such obligation with respect to dividends
         or redemption shall not be fully discharged, the Corporation shall not
         (x) declare or pay any dividend or make any distributions on, or
         directly or indirectly purchase, redeem or satisfy any mandatory
         redemption, sinking fund or other similar obligation in respect of any
         Parity Securities or any warrants, rights or options exercisable for or
         convertible or exchangeable into Parity Securities (except in
         connection with any such obligation to be satisfied pro rata with the
         obligation in respect of the Series B Preferred Stock) or (y) declare
         or pay any dividend or make any distributions on, or directly or
         indirectly purchase, redeem or satisfy any mandatory redemption,
         sinking fund or other similar obligation in respect of any Junior
         Securities (other than in such Junior Securities) or any warrants,
         rights or options exercisable for or convertible or exchangeable into
         Junior Securities.

                             (12) Transfer Restrictions. The Series B Preferred
         Stock is being issued to the Holder pursuant to, and is subject to the
         terms and restrictions of, the Stock Acquisition Agreement, dated as of
         October 1, 1998, between the Holder and the Corporation.

                             Page 32 of 34 Pages

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                  IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this 25th day of September, 1998.




                                       /s/ Gilbert D. Scharf
                                       ---------------------------------
                                           Chairman of the Board


Attest:



/s/ Roger E. Schwed
---------------------------
Secretary


                             Page 33 of 34 Pages