<PAGE>   1

                                                                     EXHIBIT 3.2

                                                   As Amended, November 10, 2000

                                     BY-LAWS


                                       OF


                           PHILIP SERVICES CORPORATION


                                    ARTICLE I

                                  STOCKHOLDERS

                  Section 1. Annual Meeting. The annual meeting of the
stockholders of the Corporation shall be held either within or without the State
of Delaware, on such date, at such time and at such place as the Board of
Directors may designate in the call or in a waiver of notice for the purpose of
electing directors and for the transaction of such other business as may
properly be brought before the meeting.

                  Section 2. Special Meetings. Special Meetings of the
stockholders may be called by the Board of Directors or by the President, and
shall be called by the President or by the Secretary upon the written request of
the holders of record of at least ten percent (10%) of the shares of stock of
the Corporation, issued and outstanding and entitled to vote, at such times and
at such place either within or without the State of Delaware as may be stated in
the call or in a waiver of notice thereof.

                  Section 3. Notice of Meetings. Notice of the time, place and
purpose of every meeting of stockholders shall be delivered personally or mailed
not less than ten days nor more than sixty days previous thereto to each
stockholder of record entitled to vote, at such stockholder's post office
address appearing upon the records of the Corporation or at such other address
as shall be furnished in writing by him or her to the Corporation for such
purpose. Such further notice shall be given as may be required by law or by
these By-Laws. Any meeting may be held without notice if all stockholders
entitled to vote are present in person or by proxy, or if notice is waived in
writing, either before or after the meeting, by those not present.

                  Section 4. Quorum. The holders of record of at least a
majority of the shares of the stock of the Corporation, issued and outstanding
and entitled to vote, present in person or by proxy, shall, except as otherwise
provided by law or by these By-Laws, constitute a quorum at all meetings of the
stockholders; if there be no such quorum, the holders of a majority of such
shares so present or represented may adjourn the meeting from time to time until
a quorum shall have been obtained. A quorum, once established, shall not be
broken by the withdrawal of enough votes to have less than a quorum.

                  Section 5. Organization of Meetings. Meetings of the
stockholders shall be presided over by the Chairman of the Board, if there be
one, or if the Chairman of the Board is not present by the President, or if the
President is not present, by a chairman to be chosen at the meeting. The
Secretary of the Corporation, or in the Secretary of the Corporation's absence,
an Assistant Secretary, shall act as Secretary of the meeting, if present.
<PAGE>   2

                  Section 6. Voting. At each meeting of stockholders, except as
otherwise provided by statute or the Certificate of Incorporation, every holder
of record of stock entitled to vote shall be entitled to one vote in person or
by proxy for each share of such stock standing in his or her name on the records
of the Corporation. Elections of directors shall be determined by a plurality of
the votes cast and, except as otherwise provided by statute, the Certificate of
Incorporation, or these By-Laws, all other action shall be determined by a
majority of the votes cast at such meeting. Each proxy to vote shall be in
writing and signed by the stockholder or by such stockholder's duly authorized
attorney.

                  At all elections of directors, the voting shall be by ballot
or in such other manner as may be determined by the stockholders present in
person or by proxy entitled to vote at such election. With respect to any other
matter presented to the stockholders for their consideration at a meeting, any
stockholder entitled to vote may, on any question, demand a vote by ballot.

                  A complete list of the stockholders entitled to vote at each
such meeting, arranged in alphabetical order, with the address of each, and the
number of shares registered in the name of each stockholder, shall be prepared
by the Secretary and shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not so specified, at the place where the meeting is to be
held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.

                  Section 7. Inspectors of Election. The Board of Directors in
advance of any meeting of stockholders may appoint one or more Inspectors of
Election to act at the meeting or any adjournment thereof. If Inspectors of
Election are not so appointed, the chairman of the meeting may, and on the
request of any stockholder entitled to vote shall, appoint one or more
Inspectors of Election. Each Inspector of Election, before entering upon the
discharge of his duties, shall take and sign an oath faithfully to execute the
duties of Inspector of Election at such meeting with strict impartiality and
according to the best of his or her ability. If appointed, Inspectors of
Election shall take charge of the polls and, when the vote is completed, shall
make a certificate of the result of the vote taken and of such other facts as
may be required by law.

                  Section 8. Action by Consent. Any action required or permitted
to be taken at any meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if, prior to such action, a written
consent or consents thereto, setting forth such action, is signed by the holders
of record of shares of the stock of the Corporation, issued and outstanding and
entitled to vote thereon, having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted.

                                   ARTICLE II

                                    DIRECTORS

                  Section 1. Number, Quorum, Term, Vacancies, Removal. Each
director shall be at least 18 years of age. A director need not be a
stockholder, a citizen of the United States, or a resident of the State of
Delaware. The number of directors constituting the entire Board shall

                                      -2-
<PAGE>   3

initially consist of nine (9) members and thereafter shall consist of not less
than three (3) nor more than fifteen (15) members, the exact number of which
shall be fixed from time to time by action of the Board of Directors, one of
whom may be selected by the Board of Directors to be its Chairman. The use of
the phrase "entire Board" herein refers to the total number of directors which
the Corporation would have if there were no vacancies or unfilled newly created
directorships.

                  A majority of the members of the Board of Directors then
holding office (but not less than one-third of the total number of directors nor
less than two directors) shall constitute a quorum for the transaction of
business, but if at any meeting of the Board there shall be less than a quorum
present, a majority of those present may adjourn the meeting from time to time
until a quorum shall have been obtained.

                  Directors shall hold office until the next annual election and
until their successors shall have been elected and shall have qualified, unless
sooner displaced.

                  Whenever any vacancy shall have occurred in the Board of
Directors, by reason of death, resignation, or otherwise, other than removal of
a director with or without cause by a vote of the stockholders, it shall be
filled by a majority of the remaining directors, though less than a quorum
(except as otherwise provided by law), or by the stockholders, and the person so
chosen shall hold office until the next annual election and until a successor is
duly elected and has qualified.

                  Any one or more of the directors of the Corporation may be
removed either with or without cause at any time by a vote of the holders of
record of at least a majority of the shares of stock of the Corporation, issued
and outstanding and entitled to vote, and thereupon the term of the director or
directors who shall have been so removed shall forthwith terminate and there
shall be a vacancy or vacancies in the Board of Directors, to be filled by a
vote of the stockholders as provided in these By-Laws.

                  Section 2. Meetings, Notice. Meetings of the Board of
Directors shall be held at such place either within or without the State of
Delaware, as may from time to time be fixed by resolution of the Board, or as
may be specified in the call or in a waiver of notice thereof. Regular meetings
of the Board of Directors shall be held at such times as may from time to time
be fixed by resolution of the Board, and special meetings may be held at any
time upon the call of two directors, the Chairman of the Board, if one be
elected, or the President, by oral, telegraphic or written notice, duly served
on or sent or mailed to each director not less than two days before such
meeting. A meeting of the Board may be held without notice immediately after the
annual meeting of stockholders at the same place at which such meeting was held.
Notice need not be given of regular meetings of the Board. Any meeting may be
held without notice, if all directors are present, or if notice is waived in
writing, either before or after the meeting, by those not present.

                  Section 3. Meetings by Means of Conference Telephone. Unless
otherwise provided in the Certificate of Incorporation, members of the Board of
Directors of the Corporation, or any committee thereof, may participate in a
meeting of the Board of Directors or such committee by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this Section 3 shall constitute presence in person at such meeting.

                                      -3-
<PAGE>   4

                  Section 4. Committees. The Board of Directors may, in its
discretion, by resolution passed by a majority of the whole Board, designate
from among its members one or more committees which shall consist of two or more
directors. The Board may designate one or more directors as alternate members of
any such committee, who may replace any absent or disqualified member at any
meeting of the committee. Such committees shall have and may exercise such
powers as shall be conferred or authorized by the resolution appointing them. A
majority of any such committee may determine its action and fix the time and
place of its meetings, unless the Board of Directors shall otherwise provide.
The Board shall have power at any time to change the membership of any such
committee, to fill vacancies in it, or to dissolve it.

                  Section 5. Action by Consent. Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting, if prior to such action a written
consent or consents thereto is signed by all members of the Board, or of such
committee as the case may be, and such written consent or consents is filed with
the minutes of proceedings of the Board or committee.

                  Section 6. Compensation. The Board of Directors may determine,
from time to time, the amount of compensation which shall be paid to its
members. The Board of Directors shall also have power, in its discretion, to
allow a fixed sum and expenses for attendance at each regular or special meeting
of the Board, or of any committee of the Board. In addition, the Board of
Directors shall also have power, in its discretion, to provide for and pay to
directors rendering services to the Corporation not ordinarily rendered by
directors, as such, special compensation appropriate to the value of such
services, as determined by the Board from time to time.

                                   ARTICLE III

                                    OFFICERS

                  Section 1. Titles and Election. The officers of the
Corporation, who shall be chosen by the Board of Directors at its first meeting
after each annual meeting of stockholders, shall be a President, a Treasurer and
a Secretary. The Board of Directors from time to time may elect a Chairman of
the Board, one or more Vice Presidents, Assistant Secretaries, Assistant
Treasurers and such other officers and agents as it shall deem necessary, and
may define their powers and duties. Any number of offices may be held by the
same person.

                  Section 2. Terms of Office. Officers shall hold office until
their successors are chosen and qualify.

                  Section 3. Removal. Any officer may be removed, either with or
without cause, at any time, by the affirmative vote of a majority of the Board
of Directors.

                  Section 4. Resignations. Any officer may resign at any time by
giving written notice to the Board of Directors or to the Secretary. Such
resignation shall take effect at the time specified therein, and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.

                  Section 5. Vacancies. If the office of any officer or agent
becomes vacant by reason of death, resignation, retirement, disqualification,
removal from office or otherwise, the



                                      -4-
<PAGE>   5

directors may choose a successor, who shall hold office for the unexpired term
in respect of which such vacancy occurred.

                  Section 6. Chairman of the Board. The Chairman of the Board of
Directors, if one be elected, shall preside at all meetings of the Board of
Directors and of the stockholders, and the Chairman shall have and perform such
other duties as from time to time may be assigned to the Chairman by the Board
of Directors.

                  Section 7. President. The President shall be the chief
executive officer of the Corporation and, in the absence of the Chairman, shall
preside at all meetings of the Board of Directors, and of the stockholders. The
President shall exercise the powers and perform the duties usual to the chief
executive officer and, subject to the control of the Board of Directors, shall
have general management and control of the affairs and business of the
Corporation; the President shall appoint and discharge employees and agents of
the Corporation (other than officers elected by the Board of Directors) and fix
their compensation; and the President shall see that all orders and resolutions
of the Board of Directors are carried into effect. The President shall have the
power to execute bonds, mortgages and other contracts, agreements and
instruments of the Corporation, and shall do and perform such other duties as
from time to time may be assigned to the President by the Board of Directors.

                  Section 8. Vice Presidents. If chosen, the Vice Presidents, in
the order of their seniority, shall, in the absence or disability of the
President, exercise all of the powers and duties of the President. Such Vice
Presidents shall have the power to execute bonds, notes, mortgages and other
contracts, agreements and instruments of the Corporation, and shall do and
perform such other duties incident to the office of Vice President and as the
Board of Directors, or the President shall direct.

                  Section 9. Secretary. The Secretary shall attend all sessions
of the Board and all meetings of the stockholders and record all votes and the
minutes of proceedings in a book to be kept for that purpose. The Secretary
shall give, or cause to be given, notice of all meetings of the stockholders and
of the Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors. The Secretary shall affix the corporate
seal to any instrument requiring it, and when so affixed, it shall be attested
by the signature of the Secretary or an Assistant Secretary or the Treasurer or
an Assistant Treasurer who may affix the seal to any such instrument in the
event of the absence or disability of the Secretary. The Secretary shall have
and be the custodian of the stock records and all other books, records and
papers of the Corporation (other than financial) and shall see that all books,
reports, statements, certificates and other documents and records required by
law are properly kept and filed.

                  Section 10. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys, and other valuable effects in the name and to the credit of
the Corporation, in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board, taking proper vouchers for such disbursements, and shall
render to the directors whenever they may require it, an account of all his or
her transactions as Treasurer and of the financial condition of the Corporation.

                                      -5-
<PAGE>   6

                  Section 11. Duties of Officers May Be Delegated. In case of
the absence or disability of any officer of the Corporation, or for any other
reason that the Board may deem sufficient, the Board may delegate, for the time
being, the powers or duties, or any of them, of such officer to any other
officer, or to any director.

                                   ARTICLE IV

                                 INDEMNIFICATION

                  Section 1. Actions by Others. The Corporation (1) shall
indemnify any person who was or is a party or involved in or is threatened to be
made a party to or involved in any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Corporation) by reason of the fact that
he or she is or was a director, nominee for director nominated by the Board of
Directors or a duly authorized committee thereof (a "nominee") or officer of the
Corporation or, while a director, nominee, or officer of the Corporation, is or
was serving at the request of the Corporation as a director, nominee, officer,
employee or agent of, or participant in, another corporation, partnership, joint
venture, trust or other enterprise, whether the basis of the action, suit or
proceeding is alleged action in an official capacity as a director, nominee,
officer, employee, agent or participant as aforesaid, or in any other capacity,
to the fullest extent permitted by law, including but not limited to the
Delaware General Corporation Law, as the same exists or may hereafter be amended
(but in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than were
permitted prior thereto), and (2) may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he or she is or was an employee or agent of the
Corporation, or while an employee or agent of the Corporation, is or was serving
at the request of the Corporation as a director, nominee, officer, employee or
agent of, or participant in, another corporation, partnership, joint venture,
trust or other enterprise, against all expenses, judgments, fines and amounts
actually and reasonably incurred by such person in connection with such action,
suit or proceeding (including attorneys' fees, excise taxes or penalties arising
under the Employee Retirement Income Security Act of 1974, as in effect from
time to time, and amounts to be paid in settlement), if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful; provided, however, that except as to actions to enforce
indemnification rights pursuant to Section 6 of this Article, the Corporation
shall indemnify any person seeking indemnification in connection with an action,
suit or proceeding (or part thereof) initiated by such person only if the
action, suit or proceeding was authorized or consented to by the Board of
Directors of the Corporation. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that his
or her conduct was unlawful. For purposes of this Article IV, a person shall be
deemed to be "involved in" an action, suit or proceeding if he or she is
involved as a witness or otherwise requires representation by counsel in
connection with said matter.

                                      -6-
<PAGE>   7

                  Section 2. Actions by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or involved in or
is threatened to be made a party to or involved in any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he or she is or was a director,
nominee, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee, agent of or
participant in another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection with the defense or settlement of such
action or suit if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper.

                  Section 3. Successful Defense. To the extent that a person who
is or was a director, nominee, officer, employee or agent of the Corporation has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 1 or Section 2 of this Article, or in defense
of any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her in connection therewith.



                  Section 4. Specific Authorization. Any indemnification under
Section 1 or Section 2 of this Article (unless ordered by a court) shall be made
by the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, nominee, officer, employee or agent is
proper in the circumstances because such person has met the applicable standard
of conduct set forth in said Sections 1 and 2. Such determination shall be made,
with respect to a person who is a director or officer at the time of such
determination (1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or proceeding,
or (2) by a committee of such directors designated by majority vote of such
directors, even though less than a quorum, or (3) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (4) by the stockholders.

                  Section 5. Advance of Expenses. Expenses incurred by a
director, nominee or officer of the Corporation who may have a right of
indemnification under this Article in connection with a civil or criminal
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on behalf
of the director, nominee or officer to repay such amount if it shall ultimately
be determined that he or she is not entitled to be indemnified by the
Corporation pursuant to this Article. Any such obligation to reimburse the
Corporation for expense advances shall be unsecured and no interest shall be
charged thereon. Expenses incurred by employees or agents of the Corporation may
be advanced upon such terms as the Board of Directors deems appropriate, which
may include, without limitation, an undertaking to repay such amount as
aforesaid.

                                      -7-
<PAGE>   8

                  Section 6. Right of Claimant to Bring Suit. If a claim under
Section 1, 2, 3 or 5 of this Article is not paid within 30 days after a written
claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense (including attorneys' fees) of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending an action, suit or proceeding
in advance of its final disposition where the required undertaking has been
tendered to the Corporation) that the claimant has not met the standards of
conduct that make it permissible under the Delaware General Corporation Law for
the Corporation to indemnify the claimant for the amount claimed. The burden of
proving such a defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action, suit or proceeding that indemnification of the claimant is proper under
the circumstances because the claimant has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the claimant had not met such
applicable standard of conduct, shall result in a shift of such burden of proof
from the Corporation, be a defense to the action or create a presumption that
claimant has not met the applicable standard of conduct.


                  Section 7. Requested Service. Any director, nominee, officer,
employee or agent of the Corporation serving, in any capacity (a) any
corporation, partnership, joint venture, trust or other enterprise of which a
majority of the voting or ownership interest is held directly or indirectly by
the Corporation, or (b) any employee benefit plan of the Corporation or of any
corporation, partnership, joint venture, trust or other enterprise referred to
in clause (a) hereof, shall be deemed to be doing so at the request of the
Corporation, provided that the fact that a corporation, partnership, joint
venture, trust, other enterprise or benefit plan does not come within clause (a)
or (b) hereof shall not create any presumption that a director, nominee,
officer, employee or agent is not serving such corporation, partnership, joint
venture, trust, other enterprise or benefit plan at the request of the
Corporation.

                  Section 8. Definition. For purposes of this Article,
references to the "Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, nominees, officers, employees and agents, so that any person who is
or was a director, nominee, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as director, nominee, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article, with respect to the resulting or
surviving corporation as he or she would have with respect to such constituent
corporation if its separate existence had continued.

                  Section 9. Contractual Right; Right of Indemnity Not
Exclusive. The rights to indemnification and advancement of expenses conferred
in this Article shall be deemed to be a contract between the Corporation and
each person who serves in the capacities described above at any time while this
Article is in effect. Any repeal or modification of this Article shall not in



                                      -8-
<PAGE>   9

any way diminish any rights to indemnification or advancement of expenses of
such person or the obligations of the Corporation arising hereunder. The
indemnification and advancement of expenses provided by this Article shall not
be deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
nominee, officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.

                  Section 10. Indemnity Agreements; Indemnification of Employees
and Agents of the Corporation. The Corporation may from time to time enter into
indemnity agreements with persons who are directors, nominees or executive
officers of the Corporation and with such other officers of the Corporation or
other persons as the Board of Directors may designate. The Corporation may,
under procedures authorized from time to time by the Board of Directors, grant
rights to indemnification, and to be paid by the Corporation the expenses
incurred in connection with any action, suit or proceeding in advance of its
final disposition to any employee or agent of the Corporation.

                  Section 11. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, nominee,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, nominee, officer, employee or agent of
or participant in another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of such person's status as
such, whether or not the Corporation would have the power to indemnify him or
her against such liability under the provisions of this Article, Section 145 of
the Delaware General Corporation Law or otherwise.

                  Section 12. Subrogation. In the event of payment under this
Article, the Corporation shall be subrogated to the extent of such payment to
all of the rights of recovery of the claimant, who shall execute all papers
required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Corporation
effectively to bring suit to enforce such rights.

                  Section 13. No Duplication of Payments. The Corporation shall
not be liable under this Article to make any payment to the extent the claimant
has otherwise actually received payment (under any insurance policy, agreement,
vote or otherwise) of the amounts otherwise indemnifiable hereunder.

                  Section 14. Loan and Credit Agreements. The provisions of this
Article shall not require or permit indemnification or advancement of expenses
in any particular case to the extent that such action would constitute a breach
or violation of the Loan Agreement, dated as of March 31, 2000, among the
Corporation, Foothill Capital Corporation, as agent, and certain other parties,
or the Credit Agreement (Secured PIK/Term), dated as of March 31, 2000, among
the Corporation, Canadian Imperial Bank of Commerce, as agent, and certain other
parties, as such agreements are in effect on November 10, 2000, except to the
extent that such agreements are thereafter amended or otherwise modified so that
such action would not constitute a breach or violation thereof.

                                      -9-
<PAGE>   10

                  Section 15. Invalidity of Any Provisions of This Article. The
invalidity or unenforceability of any provision of this Article shall not affect
the validity or enforceability of the remaining provisions of this Article.

                                    ARTICLE V

                                  CAPITAL STOCK

                  Section 1. Certificates. The interest of each stockholder of
the Corporation shall be evidenced by certificates for shares of stock in such
form as the Board of Directors may from time to time prescribe. The certificates
of stock shall be signed by the President or a Vice President and by the
Secretary, or the Treasurer, or an Assistant Secretary, or an Assistant
Treasurer, sealed with the seal of the Corporation or a facsimile thereof, and
countersigned and registered in such manner, if any, as the Board of Directors
may by resolution prescribe. Any or all of the signatures on a certificate may
be a facsimile. Where any such certificate is countersigned by a transfer agent
other than the Corporation or its employee, or registered by a registrar other
than the Corporation or its employee, the signature of any such officer may be a
facsimile signature. In case any officer or officers who shall have signed, or
whose facsimile signature or signatures shall have been used on, any such
certificate or certificates shall cease to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, before such
certificate or certificates shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature or signatures shall have been used thereon had not ceased to
be such officer or officers of the Corporation.

                  Section 2. Transfer. The shares of stock of the Corporation
shall be transferred only upon the books of the Corporation by the holder
thereof in person or by his or her attorney, upon surrender for cancellation of
certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof of
the authenticity of the signature as the Corporation or its agents may
reasonably require.

                  Section 3. Record Dates. The Board of Directors may fix in
advance a date, not less than ten nor more than sixty days preceding the date of
any meeting of stockholders, or the date for the payment of any dividend, or the
date for the distribution or allotment of any rights, or the date when any
change, conversion or exchange of capital stock shall go into effect, as a
record date for the determination of the stockholders entitled to notice of, and
to vote at, any such meeting, or entitled to receive payment of any such
dividend, or to receive any distribution or allotment of such rights, or to
exercise the rights in respect of any such change, conversion or exchange of
capital stock, and in such case only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting, or to receive payment of such dividend, or to receive such
distribution or allotment or rights or to exercise such rights, as the case may
be, notwithstanding any transfer of any stock on the books of the Corporation
after any such record date fixed as aforesaid.

                  Section 4. Lost Certificates. In the event that any
certificate of stock is lost, stolen, destroyed or mutilated, the Board of
Directors may authorize the issuance of a new certificate of the same tenor and
for the same number of shares in lieu thereof. The Board may in its discretion,
before the issuance of such new certificate, require the owner of the lost,
stolen, destroyed or mutilated certificate, or the legal representative of the
owner to make an affidavit or


                                      -10-
<PAGE>   11

affirmation setting forth such facts as to the loss, destruction or mutilation
as it deems necessary, and to give the Corporation a bond in such reasonable sum
as it directs to indemnify the Corporation.

                                   ARTICLE VI

                               CHECKS, NOTES, ETC.

                  Section 1. Checks, Notes, Etc.. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money, may
be signed by the President, any Vice President or the Treasurer and may also be
signed by such other officer or officers, agent or agents, as shall be thereunto
authorized from time to time by the Board of Directors.

                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS

                  Section 1. Offices. The registered office of the Corporation
shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware, 19801 and said corporation shall be the registered agent of this
Corporation in charge thereof. The Corporation may have other offices either
within or without the State of Delaware at such places as shall be determined
from time to time by the Board of Directors or the business of the Corporation
may require.

                  Section 2. Fiscal Year. The fiscal year of the Corporation
shall be determined by the Board of Directors.

                  Section 3. Corporate Seal. The seal of the Corporation shall
be circular in form and contain the name of the Corporation, and the year and
state of its incorporation. Such seal may be altered from time to time at the
discretion of the Board of Directors.

                  Section 4. Books. There shall be kept at such office of the
Corporation as the Board of Directors shall determine, within or without the
State of Delaware, correct books and records of account of all its business and
transactions, minutes of the proceedings of its stockholders, Board of Directors
and committees and such other books and records as the Board of Directors may
from time to time determine.

                  Section 5. Voting of Stock. Unless otherwise specifically
authorized by the Board of Directors, all stock owned by the Corporation, other
than stock of the Corporation, shall be voted, in person or by proxy, by the
President or any Vice President of the Corporation on behalf of the Corporation.

                                  ARTICLE VIII

                                   AMENDMENTS

                  Section 1. Amendments. The vote of the holders of at least a
majority of the shares of stock of the Corporation, issued and outstanding and
entitled to vote, shall be necessary


                                      -11-
<PAGE>   12

at any meeting of stockholders to amend or repeal these By-Laws or to adopt new
by-laws. Except as set forth in the immediately preceding sentence, these
By-Laws may also be amended or repealed, or new by-laws adopted, at any meeting
of the Board of Directors by the vote of at least a majority of the entire
Board; provided that any by-law adopted by the Board may be amended or repealed
by the stockholders in the manner set forth above.

                  Any proposal to amend or repeal these By-Laws or to adopt new
by-laws shall be stated in the notice of the meeting of the Board of Directors
or the stockholders, or in the waiver of notice thereof, as the case may be,
unless all of the directors or the holders of record of all of the shares of
stock of the Corporation, issued and outstanding and entitled to vote, are
present at such meeting.


                                      -12-