ARTICLES OF AMENDMENT
                                                        TO
                                            CERTIFICATE OF DESIGNATION


         Dempsey  K. Mork  certifies  that he is the  Secretary  of  Development
Bancorp,  Ltd.,  a  Washington  corporation  (hereinafter  referred  to  as  the
"Corporation" or the "Company"); that, pursuant to the Corporation's Articles of
Incorporation,  as amended,  and Section  23B.06.020 of the Washington  Business
Corporation  Act,  the Board of Directors  of the  Corporation  duly adopted the
following  resolutions  on  December  30,  1995;  that  none  of  the  Series  B
Convertible  Preferred  Stock  has been  issued  as of that  date;  and that the
following  sets forth a correction of the  Certificate  of  Designation  for the
Series B Convertible Preferred Stock. Shareholder action was not required.

         1. Creation and  Designation of Series B Convertible  Preferred  Stock.
There is hereby created a series of preferred stock consisting of 110,000 shares
and designated as the Series B Convertible  Preferred  Stock,  having the voting
powers, preferences, relative, participating,  optional and other special rights
and the qualifications,  limitations and restrictions thereof that are set forth
below.

         2. Dividend  Provisions.  The holders of shares of Series B Convertible
Preferred Stock shall be entitled to receive,  when and as declared by the Board
of Directors out of any funds at the time legally available therefor,  dividends
at the same time and on a parity with holders of common stock, as if on the date
immediately prior to the record date for such dividend, the Series B Convertible
Preferred  Stock had been converted  into common stock at the  Conversion  Rate.
Each share of Series B Convertible  Preferred  Stock shall rank on a parity with
each  other  share of Series B  Convertible  Preferred  Stock  with  respect  to
dividends.

         3.       Redemption Provisions.  Except as otherwise expressly
provided or required by
law, the Series B Convertible Preferred Stock shall not be redeemable.

         4. Liquidation Provisions. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders of shares
of Series B  Convertible  Preferred  Stock shall be entitled to receive from the
assets of the  Corporation  such amount in cash or other property as received by
holders of common stock, as if immediately prior to such distribution the Series
B  Convertible  Preferred  Stock had been  converted  into  common  stock at the
Conversion  Rate. Each share of Series B Convertible  Preferred Stock shall rank
on a parity with each other share of Series B  Convertible  Preferred  Stock and
each  share  of  Series B  Convertible  Preferred  Stock,  with  respect  to the
respective   preferential  amounts  fixed  for  such  series  payable  upon  any
distribution of assets by way of liquidation,  dissolution, or winding up of the
Corporation.




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         5.       Conversion Provisions.  The holders of shares of Series B 
Convertible Preferred
Stock shall have conversion rights as follows (the "Conversion Rights"):

                  (a)      Right to Convert.

                           (1)      On and after the day that the  Market  Price
                                    of the Corporation's Common Stock is no less
                                    than $4.50 per share, each share of Series B
                                    Convertible   Preferred   Stock   shall   be
                                    convertible at any time at the option of the
                                    holder  into  shares  of  common  stock at a
                                    conversion rate ("Conversion Rate") equal to
                                    one share of Common Stock for each one share
                                    of Series B Preferred  Stock.  In  effecting
                                    the conversion,  the  Corporation  shall pay
                                    any cumulative  dividends accrued and unpaid
                                    on the shares being  converted in cash.  For
                                    purposes  of this  Section  5(a)(1),  Market
                                    Price  shall be the closing bid price of the
                                    common  stock as  reported  by the  National
                                    Association of Securities  Dealers Automated
                                    Quotation System ("NASDAQ"),  or the closing
                                    bid price in the over-the-counter  market if
                                    other  than  NASDAQ,  or,  in the  event the
                                    common stock is listed on a stock  exchange,
                                    the fair market value per share shall be the
                                    closing price on the  exchange,  as reported
                                    in the Wall Street Journal, as averaged over
                                    the ten trading  days  immediately  prior to
                                    the date of conversion.

                           (2)      No  fractional  shares of common stock shall
                                    be issued  upon  conversion  of the Series B
                                    Convertible  Preferred  Stock and any shares
                                    of  Series  B  Convertible  Preferred  Stock
                                    surrendered   for  conversion   which  would
                                    otherwise  result in a  fractional  share of
                                    common stock shall be rounded to the nearest
                                    whole share.

                  (b)      Adjustments to Conversion Rate.

                           (1)      Reclassification, Exchange and Substitution.
                                    If the common stock  issuable on  conversion
                                    of the Series B Convertible  Preferred Stock
                                    shall  be   changed   into  the  same  or  a
                                    different  number  of  shares  of any  other
                                    class  or  classes  of  stock,   whether  by
                                    capital reorganization, reclassification, or
                                    otherwise   (other  than  a  subdivision  or
                                    combination  of shares  provided for above),
                                    the  holders  of the  Series  B  Convertible
                                    Preferred Stock shall,  upon its conversion,
                                    be  entitled  to  receive,  in  lieu  of the
                                    common  stock which the  holders  would have
                                    become  entitled  to  receive  but for  such
                                    change,  a number of  shares  of such  other
                                    class or  classes  of stock  that would have
                                    been  subject to  receipt by the  holders if
                                    they   had   exercised   their   rights   of
                                    conversion   of  the  Series  B  Convertible
                                    Preferred  Stock  immediately   before  that
                                    change.

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                           (2)      Reorganizations,  Mergers, Consolidations or
                                    Sale of Assets.  If at any time there  shall
                                    be   a   capital   reorganization   of   the
                                    Corporation's  common  stock  (other  than a
                                    subdivision,  combination,  reclassification
                                    or exchange of shares provided for elsewhere
                                    in  this   Section  (b)  or  merger  of  the
                                    Corporation into another corporation, or the
                                    sale  of the  Corporation's  properties  and
                                    assets as, or substantially  as, an entirety
                                    to any  other  person),  then,  as a part of
                                    such reorganization,  merger or sale, lawful
                                    provision  shall be made so that the holders
                                    of the Series B Convertible  Preferred Stock
                                    shall thereafter be entitled to receive upon
                                    conversion   of  the  Series  B  Convertible
                                    Preferred  Stock,  the  number  of shares of
                                    stock or other securities or property of the
                                    Corporation, or of the successor corporation
                                    resulting from such merger, to which holders
                                    of  the  common   stock   deliverable   upon
                                    conversion   of  the  Series  B  Convertible
                                    Preferred  Stock would have been entitled on
                                    such capital reorganization,  merger or sale
                                    if the Series B Convertible  Preferred Stock
                                    had been converted  immediately  before that
                                    capital  reorganization,  merger  or sale to
                                    the  end   that  the   provisions   of  this
                                    paragraph  (b)(2)  (including  adjustment of
                                    the  Conversion  Rate  then  in  effect  and
                                    number of shares purchasable upon conversion
                                    of the Series B Convertible Preferred Stock)
                                    shall  be  applicable  after  that  event as
                                    nearly equivalently as may be practicable.

                  (c)      No Impairment.  The Corporation will not, by
                                            amendment of its
                          
                           Certificate of Incorporation or through any
                           reorganization, recapitalization,
                           transfer of assets, merger, dissolution, or any other
                           voluntary action, avoid
                           or seek to avoid the observance or performance of 
                           any of the terms to be
                           observed or performed hereunder by the Corporation,
                            but will at all times
                           in good faith assist in the carrying out of all the
                            provision of this Section
                           5 and in the taking of all such action as may be 
                           necessary or appropriate
                           in order to protect the Conversion Rights of the
                            holders of the Series B
                           Convertible Preferred Stock against impairment.

                  (d)      Certificate as to Adjustments.  Upon the occurrence 
                           of each adjustment
                          
                           or readjustment of the Conversion Rate for any shares
                           of Series B
                           Convertible Preferred Stock, the Corporation at its 
                           expense shall promptly
                           compute such adjustment or readjustment in accordance
                           with the terms
                           hereof and prepare and furnish to each holder of 
                           Series B Convertible
                           Preferred Stock effected thereby a certificate
                            setting forth such adjustment
                           or readjustment and showing in detail the facts upon
                           which  such
                           adjustment or readjustment is based.  The Corporation
                           shall, upon the
                           written request at any time of any holder of Series B
                           Convertible Preferred
                           Stock, furnish or cause to be furnished to such
                            holder a like certificate

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                           setting forth (i) such adjustments and readjustments,
                           (ii) the Conversion  Rate at the time in effect,  and
                           (iii) the  number  of shares of common  stock and the
                           amount,  if any, of other  property which at the time
                           would  be  received  upon  the   conversion  of  such
                           holder's  shares  of Series B  Convertible  Preferred
                           Stock.

                  (e)      Notices of Record Date.  In the event of the 
                           establishment by the
                           Corporation of a record of the holders of any class
                           of securities for the
                           purpose of determining the holders thereof who are
                           entitled to receive any
                           dividend (other than a cash dividend) or other 
                            distribution, the Corporation
                           shall mail to each holder of Series B Convertible
                            Preferred Stock at least
                           twenty (20) days prior to the date specified therein,
                            a notice specifying the
                           date on which any such record is to be taken for the
                           purpose of such di-
                           vidend or distribution and the amount and character
                            of such dividend or
                           distribution.

                  (f)      Reservation of Stock Issuable Upon Conversion.  The
                            Corporation shall
                           ---------------------------------------------
                           at all times reserve and keep available out of its 
                           authorized but unissued
                           shares of common stock solely for the purpose of 
                           effecting the conversion
                           of the shares of the Series B Convertible Preferred 
                           Stock such number of
                           its shares of common stock as shall from time to time
                           of the Series B
                           Convertible Preferred Stock; and if at any time the
                           number of authorized
                           but unissued shares of common stock shall not be 
                           sufficient to effect the
                           conversion of all then outstanding shares of the
                           Preferred Stock, the
                           Corporation will take such corporate action as may,
                            in the opinion of its
                           counsel, be necessary to increase its authorized but 
                           unissued shares of
                           common stock to such number of shares as shall be 
                           sufficient for such
                           purpose.

                  (g)      Notices.  Any notices  required by the  provisions of
                           this  Paragraph  (e) to be  given to the  holders  of
                           shares of  Preferred  Stock shall be deemed  given if
                           deposited in the United States mail, postage prepaid,
                           and addressed to each holder of record at its address
                           appearing on the books of the Corporation.

         6.       Registration Rights.

                           Piggyback  Rights.  The holders of shares of Series B
                           Convertible  Preferred Stock shall have the following
                           registration  rights:  (a)  If,  at  any  time  until
                           December  31,  1997  should  the  Company  propose to
                           register any of its  securities  under the Securities
                           Act of 1933  (the  "Act")  on Form  S-1,  S-2 or S-3,
                           their  successor  forms,  or any other form under the
                           Act under which the shares of Common Stock underlying
                           the Series B Convertible Preferred

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                           Stock (the "Registrable  Securities") are eligible to
                           be  registered  (either on its behalf or on behalf of
                           any selling  shareholders)  the Company shall include
                           the Registrable  Securities in one such  registration
                           statement,   at  the   Company's   cost  and  expense
                           (excluding  the costs of legal counsel to the holders
                           of the Registrable  Securities);  provided,  however,
                           that if, in the  opinion  of the  Company's  managing
                           underwriter, if any, for such offering, the inclusion
                           of  the  Registrable  Securities  when  added  to the
                           securities  being  registered  by the  Company or any
                           selling  shareholder(s),   will  exceed  the  maximum
                           amount  of  the  Company's  securities  which  can be
                           marketed (i) at a price  reasonable  related to their
                           then current market value; or (ii) without  otherwise
                           materially   and   adversely   affecting  the  entire
                           offering,  then the  Company  may  exclude  from such
                           offering  all  or  any  portion  of  the  Registrable
                           Securities  requested to be so registered;  provided,
                           further,  if  such  registration  statement  includes
                           securities of selling  shareholder(s),  the aggregate
                           number of the  Registrable  Securities to be included
                           in such registration statement shall equal the number
                           which  shall  equal the number  which  bears the same
                           ratio to the  maximum  number of  securities  that he
                           underwriter  believes may be included for all selling
                           shareholders  as the original  number of  Registrable
                           Securities proposed to be sold by the holders thereof
                           bears to the  total  original  number  of  securities
                           proposed   to  be  offered   by  the  other   selling
                           shareholders.

                           (b) Demand Registration. The Company agrees to file a
                           registration statement under the Act on demand of the
                           holders  of the  Registrable  Securities  made at any
                           time until  December 31,  1997,  at the sole cost and
                           expense of the holders of the Registrable Securities.

         7.       Voting Provisions.  Except as otherwise provided by law, the
          holders of Series B
Convertible Preferred Stock shall have the right to vote as a class with the 
       holders of common stock.

         IN  WITNESS  WHEREOF,  the  Company  has  caused  this  Certificate  of
Correction to Certificate of Designation of Series B Convertible Preferred Stock
to be duly executed by its  Secretary,  on September 30, 1996 as of December 30,
1996.




                                                     Dempsey K. Mork

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