REVISED & RESTATED

                                     BY-LAWS

                                       OF

                          ALLIANCE ENTERTAINMENT CORP.















                            Effective August 27, 1996



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                        TABLE OF CONTENTS

                                                                            Page
                             ARTICLE I

                              OFFICES

SECTION 1.     Delaware Registered Office..........................         1
SECTION 2.     Other Offices.......................................         1

                                ARTICLE II

                        MEETINGS OF STOCKHOLDERS

SECTION 1.     Annual Meeting......................................         1
SECTION 2.     Special Meetings....................................         1
SECTION 3.     Notice of Meetings..................................         1
SECTION 4.     Quorum and Adjournments.............................         2
SECTION 5.     Organization........................................         2
SECTION 6.     Proxies and Voting of Shares........................         3
SECTION 7.     Voting List of Stockholders.........................         3
SECTION 8.     Notice of Stockholder Business and
                  Nominations .....................................         4

                                   ARTICLE III

                                    DIRECTORS

SECTION 1.     Power and Duties of the Board of
                 Directors.........................................         6
SECTION 2.     Number, Tenure and Qualifications...................         7
SECTION 3.     Vacancies...........................................         7
SECTION 4.     Removal.............................................         8
SECTION 5.     Regular Meetings; Notice............................         8
SECTION 6.     Special Meetings....................................         8
SECTION 7.     Notice of Special Meetings..........................         8
SECTION 8.     Quorum..............................................         9
SECTION 9.     Organization........................................         9
SECTION 10.    Compensation of Directors...........................         9
SECTION 11.    Committees..........................................        10
SECTION 12.    Written Consents....................................        11
SECTION 13.    Conference Telephone Meetings.......................        12




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                                   ARTICLE IV

                                    OFFICERS

SECTION 1.     Number and Election.................................        12
SECTION 2.     Term of Office and Qualification....................        12
SECTION 3.     Other Officers......................................        12
SECTION 4.     The Co-Chairmen of the Board........................
SECION 5.      The Vice Chairman...................................        13
SECTION 6.     The Deputy Chairman.................................        13
SECTION 7.     The President.......................................        13
SECTION 8.     Vice Presidents.....................................        13
SECTION 9.     The Comptroller.....................................        14
SECTION 10.    Assistant Comptrollers..............................        14
SECTION 11.    The Secretary.......................................        14
SECTION 12.    Assistant Secretaries...............................        14
SECTION 13.    The Treasurer.......................................        15
SECTION 14.    Assistant Treasurers................................        15
SECTION 15.    Compensation........................................        15
SECTION 16.    Bonds...............................................        16
SECTION 17.    Removal.............................................        16
SECTION 18.    Vacancies...........................................        16

                                    ARTICLE V

                                     NOTICES

SECTION 1.     Manner of Giving....................................        16
SECTION 2.     Waiver of Notice....................................        16

                                      ARTICLE VI

                                      CAPITAL STOCK

SECTION 1.     Form and Issuance...................................        17
SECTION 2.     Transfers of Stock..................................        17
SECTION 3.     Lost, Stolen and Destroyed
               Certificates........................................        17
SECTION 4.     Fixing of Record Date...............................        18








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                             ARTICLE VII

                     NEGOTIABLE INSTRUMENTS, CONTRACTS, ETC.

SECTION 1.     Signatures on Checks, Etc.............................       18
SECTION 2.     Execution of Contracts, Deeds, Etc....................       19
SECTION 3.     Loans.................................................       19

                              ARTICLE VIII

                             CORPORATE SEAL                                 19


                              ARTICLE IX

                              FISCAL YEAR                                  19


                               ARTICLE X

                         VOTING OF STOCK HELD                              19

                               ARTICLE XI

                          INDEMNIFICATION OF OFFICERS,
                        DIRECTORS, EMPLOYEES AND AGENTS;
                                INSURANCE

SECTION 1.     Indemnification......................................       20
SECTION 2.     Insurance............................................       22

                                 ARTICLE XII


                                 AMENDMENTS                                23


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                             BY-LAWS OF

                     ALLIANCE ENTERTAINMENT CORP.

                             ARTICLE I

                              OFFICES

     SECTION  1.  Delaware  Registered  Office.  The  registered  office  of the
Corporation in the State of Delaware  shall be located at 32 Loockerman  Square,
Suite L-100, Dover, Delaware 19904.

     SECTION 2. Other Offices.  The Corporation may have an office or offices at
such other  places in the United  States or  elsewhere as the Board of Directors
may from time to time determine or the business of the Corporation may require.

                            ARTICLE II

                       MEETINGS OF STOCKHOLDERS

            SECTION 1. Annual Meeting. The annual meeting of stockholders of the
Corporation  for the election of directors and for the transaction of such other
business as may properly come before said meeting shall be held on such date and
at such hour and place,  within or without  the State of  Delaware,  as shall be
fixed by the Board of  Directors  with respect to each such meeting and as shall
be stated in the notice thereof.

            SECTION 2. Special Meetings.  Special meetings of stockholders,  for
any purpose or purposes  may,  except as otherwise  prescribed  by law or in the
Certificate of Incorporation,  be called at any time by either Co-Chairman or by
the Board of  Directors to be held on such date and at such hour and such place,
within or  without  the  State of  Delaware,  as shall be  stated in the  notice
thereof.

            SECTION 3.  Notice of  Meetings.  Except as  otherwise  provided  or
permitted by law or in the  Certificate  of  Incorporation  or in these By-laws,
written notice of all meetings of stockholders  stating the place, date and hour
of the meeting,  and in the case of a special  meeting,  the purpose or purposes
thereof,  shall be given by a Co-Chairman of the Board, the Vice Chairman of the
Board, the President, a Vice


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President, the Secretary or an Assistant Secretary to each stockholder of record
having voting power in respect of the business to be transacted thereat,  either
by serving  such notice upon him  personally  or by mailing or  telegraphing  or
telecopying  the same to him at his  address as it appears on the records of the
Corporation,  at least ten days but not more than sixty days  before the date of
the meeting,  and the Secretary or an Assistant  Secretary or the transfer agent
or agents of the  Corporation  shall  make  affidavit  as to the  giving of such
notice.

            SECTION 4. Quorum and Adjournments. The holders of a majority of the
stock issued and outstanding and entitled to vote thereat,  present in person or
by proxy,  shall be required to and shall constitute a quorum at all meetings of
the stockholders for the transaction of business,  except as otherwise  provided
by law, by the Certificate of  Incorporation  or by these By-laws.  If, however,
such  quorum  shall  not  be  present  or  represented  at  any  meeting  of the
stockholders, the stockholders entitled to vote thereat, present in person or by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than  announcement  at the meeting of the time and place of the  adjourned
meeting,  until a quorum  shall be present  or  represented.  At such  adjourned
meeting any business may be transacted  which might have been  transacted at the
original meeting.  If a quorum be present at any meeting of stockholders and the
meeting is adjourned to reconvene  either at a later time on the same date or at
a later date,  no notice need be given other than  announcement  at the meeting,
provided  that if any  adjournment,  whether a quorum is present or not,  is for
more than thirty days,  or if after the  adjournment  a new record date is fixed
for the adjourned  meeting,  a notice of the adjourned meeting shall be given to
each  stockholder  of record  entitled to vote at the meeting.  When a quorum is
present at any  meeting,  the vote of the  holders  of a  majority  of the stock
having  voting  power  present in person or by proxy shall  decide any  question
brought  before such  meeting  unless the  question is one upon which by express
provision of law or of the  Certificate of  Incorporation  or of these By-laws a
larger or different vote is required, in which case such express provision shall
govern and control the decision of such question.  The  stockholders  present or
represented  at any duly called and held meeting at which a quorum is present or
represented may continue to do business until adjournment,  notwithstanding  the
withdrawal of such number as to leave less


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than a quorum.

     SECTION 5.  Organization.  Each meeting of  stockholders  shall be presided
over by a Co-Chairman (and, as between the two Co-Chairmen,  the Co-Chairman who
shall also be the Chief Executive  Officer of the Company,  if both  Co-Chairmen
shall be present) or, in the absence of both Co-Chairmen,  by the Vice Chairman,
or in the absence of a Co-Chairman  and the Vice Chairman so designated,  by any
other person  selected to preside by a majority of the Board of  Directors.  The
Secretary,  or in his absence an Assistant Secretary,  or in the absence of both
the  Secretary and an Assistant  Secretary  any person  designated by the person
presiding at the meeting, shall act as secretary of the meeting.

     SECTION 6.  Proxies and Voting of Shares.  At any meeting of  stockholders,
each  stockholder  entitled to vote any shares on any matter to be voted upon at
such  meeting  may  exercise  such  voting  right  either  in person or by proxy
appointed by an instrument  in writing,  which shall be filed with the secretary
of the meeting  before  being  voted.  Such  proxies  shall  entitle the holders
thereof to vote at any  adjournment of such meeting (unless a new record date is
set by the  Board  of  Directors),  but  shall  not be  valid  after  the  final
adjournment  thereof.  All questions  regarding the qualification of voters, the
validity of proxies,  and the  acceptance or rejection of votes shall be decided
by two  inspectors  of election who shall be appointed by the Board of Directors
or if not so appointed,  then by the presiding officer of the meeting.  No proxy
shall be voted on after three years from its date unless said proxy provides for
a longer period.  Except as otherwise expressly required by statute, the vote on
any question need not be by written ballot.

     SECTION 7. Voting List of  Stockholders.  The officer who shall have charge
of the stock ledger of the Corporation shall prepare and make, at least ten days
before  every  meeting  of  stockholders,  a complete  list of the  stockholders
entitled to vote at said meeting, arranged in alphabetical order and showing the
address  and  the  number  of  shares  registered  in  the  name  of  each  such
stockholder.  Such list 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 said  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.  The stock ledger  shall be the only  evidence as to who are the
stockholders  entitled to examine  the stock  ledger,  the list of  stockholders
referred  to above or the books of the  corporation,  or to vote in person or by
proxy at any meeting of stockholders.

     SECTION 8. Notice of Stockholder Business and Nominations.

     (A) Annual  Meetings  of  Stockholders.  (1)  Nominations  of  persons  for
election  to the Board of  Directors  of the  Corporation  and the  proposal  of
business to be considered by the  stockholders  may be made at an annual meeting
of


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stockholders  (a)  pursuant  to the  Corporation's  notice of meeting  delivered
pursuant to Section 3 of these By-laws,  (b) by or at the direction of the Board
of Directors or (c) by any  stockholder  of the  Corporation  who is entitled to
vote at the  meeting,  who  complied  with the  notice  procedures  set forth in
clauses  (2)  and (3) of  this  paragraph  (A)  and  this  By-law  and who was a
stockholder  of record at the time such notice was delivered to the Secretary of
the Corporation.

      (2) For  nominations  or other  business to be properly  brought before an
annual  meeting by a stockholder  pursuant to clause (c) of paragraph  (A)(1) of
this By-law, the stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation.  To be timely, a stockholder's notice shall be
delivered to the Secretary at the principal executive offices of the Corporation
not less  than  seventy  days nor  more  than  ninety  days  prior to the  first
anniversary  of the preceding  year's annual  meeting  commencing  with the 1995
annual meeting,  provided however,  that in the event that the date of an annual
meeting is advanced by more than thirty  days,  or delayed by more than  seventy
days,  from the first  anniversary  date of the previous  year's annual meeting,
notice by the stockholder to be timely must be so delivered not earlier than the
ninetieth  day prior to such  annual  meeting  and not  later  than the close of
business on the later of the  seventieth day prior to such annual meeting or the
tenth day  following  the day on which public  announcement  of the date of such
meeting is first made. Such stockholder's  notice shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or reelection as a
director  all  information  relating  to  such  person  that is  required  to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required,  in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange  Act"),  including such person's  written
consent to being named in the proxy  statement  as a nominee and to serving as a
director if elected;  (b) as to any other business that the stockholder proposes
to bring before the meeting,  a brief  description of the business desired to be
brought  before the meeting,  the reasons for  conducting  such  business at the
meeting and any material  interest in such business of such  stockholder and the
beneficial  owner,  if any, on whose behalf the proposal is made;  and (c) as to
the  stockholder  giving the notice and the beneficial  owner,  if any, on whose
behalf  the  nomination  or  proposal  is made (i) the name and  address of such
stockholder,  as they appear on the Corporation's  books, and of such beneficial
owner and (ii) the class and number of shares of the Corporation which are owned
beneficially and of record by such stockholder and such beneficial owner.

      (3) Notwithstanding anything in the second sentence of paragraph (A)(2) of
this By-law to the  contrary,  in the event that the number of  directors  to be
elected to the Board of Directors of the  Corporation  is increased and there is
no


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public  announcement  naming all of the nominees for director or specifying  the
size of the increased Board of Directors made by the Corporation at least eighty
days prior to the first  anniversary of the preceding year's annual meeting (or,
in the event of the  Corporation's  first annual meeting in 1995, not later than
the  close of  business  on the  tenth  day  following  the day on which  public
announcement  is  made  of  the  meeting  and  of the  nominees  proposed  to be
nominated),  a  stockholder's  notice  required  by this  By-law  shall  also be
considered  timely,  but only with  respect to  nominees  for any new  positions
created by such  increase,  if it shall be  delivered  to the  Secretary  at the
principal  executive  offices  of the  Corporation  not later  than the close of
business on the tenth day following the day on which such public announcement is
first made by the Corporation.

      (B)  Special  Meetings  of  Stockholders.  Only  such  business  shall  be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's  notice of meeting pursuant to Section
3 of  these  By-laws.  Nominations  of  persons  for  election  to the  Board of
Directors may be made at a special  meeting of  stockholders  at which directors
are to be elected pursuant to the  Corporation's  notice of meeting (a) by or at
the  direction  of the  Board  of  Directors  or (b) by any  stockholder  of the
Corporation who is entitled to vote at the meeting, who complies with the notice
procedures  set forth in this By-law and who is a  stockholder  of record at the
time such notice is delivered to the Secretary of the  Corporation.  Nominations
by stockholders of persons for election to the Board of Directors may be made at
such a special meeting of stockholders if the  stockholder's  notice as required
by paragraph  (A)(2) of this By-law  shall be delivered to the  Secretary at the
principal  executive  offices of the  Corporation not earlier than the ninetieth
day prior to such  special  meeting  and not later than the close of business on
the later of the seventieth  day prior to such special  meeting or the tenth day
following the day on which public  announcement is first made of the date of the
special  meeting and of the  nominees  proposed by the Board of  Directors to be
elected at such meeting.

      (C) General.  (1) Only persons who are  nominated in  accordance  with the
procedures  set forth in this By-law  shall be eligible to serve as director and
only such business shall be conducted at a meeting of stockholders as shall have
been brought  before the meeting in accordance  with the procedures set forth in
this  By-law.   Except  as  otherwise   provided  by  law,  the  Certificate  of
Incorporation or these By-laws,  the Co-Chairman of the Board presiding over the
meeting, or any other person properly presiding over the meeting, shall have the
power and duty to determine  whether a nomination or any business proposed to be
brought before the meeting was made in accordance  with the procedures set forth
in this By-law and, if any proposed  nomination or business is not in compliance
with


<PAGE>



this By-law,  to declare that such  defective  proposal or  nomination  shall be
disregarded.

      (2)  For  purposes  of  this  By-law,  "public  announcement"  shall  mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange  Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.

      (3) Notwithstanding the foregoing provisions of this By-law, a stockholder
shall also comply with all applicable  requirements  of the Exchange Act and the
rules and  regulations  thereunder with respect to the matters set forth in this
By-law.  Nothing  in this  By-law  shall be  deemed  to  affect  any  rights  of
stockholders  to request  inclusion  of  proposals  in the  Corporation's  proxy
statement pursuant to Rule 14a-8 under the Exchange Act.


                               ARTICLE III

                                DIRECTORS

            SECTION 1. Power and Duties of the Board of Directors.  The business
and affairs of the Corporation shall be managed by or under the direction of the
Board of  Directors.  The Board may adopt  such rules and  regulations  for that
purpose and for the conduct of its  meetings  as it may deem  proper.  The Board
shall exercise and shall be vested with the powers of the Corporation insofar as
not inconsistent with law, the Certificate of Incorporation or these By-laws.

            SECTION 2. Number, Tenure and Qualifications.  Subject to the rights
of the  holders  of any  series  of  Preferred  Stock to elect  directors  under
specified  circumstances,  the number of  directors  shall be fixed from time to
time  exclusively  pursuant to a  resolution  adopted by a majority of the whole
Board but shall consist of not more than thirteen nor less than three directors.
The directors,  other than those who may be elected by the holders of any series
of Preferred  Stock,  shall be divided,  with respect to the time for which they
severally  hold  office,  into  three  classes,  as  nearly  equal in  number as
possible,  with the term of  office  of the  first  class to  expire at the 1996
annual meeting of stockholders, the term of office of the second class to expire
at the 1997 annual meeting of  stockholders  and the term of office of the third
class to expire at the 1998 annual meeting of stockholders.  Each director shall
hold  office  until  his or her  successor  shall  have been  duly  elected  and
qualified.  At each annual  meeting of  stockholders,  commencing  with the 1996
annual  meeting,  (i) directors  elected to succeed those  directors whose terms
then  expire  shall be  elected  for a term of  office  to  expire  at the third
succeeding  annual  meeting of  stockholders  after  their  election,  with each
director to hold office until his or her successor  shall have been duly elected
and


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qualified,  and (ii) if  authorized  by a resolution  of the Board of Directors,
directors  may be  elected  to fill  any  vacancy  on the  Board  of  Directors,
regardless of how such vacancy shall have been created.

            SECTION 3.  Vacancies.  Subject to the rights of the  holders of any
series  of  Preferred  Stock  to  elect  additional  directors  under  specified
circumstances, and unless the Board of Directors otherwise determines, vacancies
resulting from death, resignation,  retirement,  disqualification,  removal from
office  or other  cause,  and newly  created  directorships  resulting  from any
increase  in the  authorized  number of  directors,  may be  filled  only by the
affirmative vote of a majority of the remaining directors, even though less than
a quorum of the Board of  Directors,  and  directors so chosen shall hold office
for a term expiring at the annual meeting of  stockholders  at which the term of
office of the  class to which  they have been  elected  expires  and until  such
director's successor shall have been duly elected and qualified.  No decrease in
the number of authorized  directors  constituting  the whole Board shall shorten
the term of any incumbent director.

            SECTION 4.  Removal.  Subject  to the  rights of the  holders of any
series  of  Preferred  Stock  to  elect  additional  directors  under  specified
circumstances,  any director,  or the entire Board of Directors,  may be removed
from office at any time, but only for cause and only by the affirmative  vote of
the holders of at least 80 percent of the voting power then outstanding,  voting
together as a single class.

            SECTION 5. Regular Meetings;  Notice.  Regular meetings of the Board
of Directors  shall be held at such time and place  either  within or outside of
the State of Delaware,  as may be  determined  by  resolution  of the Board.  No
notice  of a  regular  meeting  need by given  (any  practice  or  custom to the
contrary  notwithstanding)  and any  business  may be  transacted  at a  regular
meeting,  held as aforesaid,  subject only to the  requirements  of Section 2 of
this Article III.

            SECTION  6.  Special  Meetings.  Special  meetings  of the  Board of
Directors may, unless otherwise  expressly  provided by law, be called from time
to time by either  Co-Chairman,  the  President or by a written call signed by a
majority  of the whole Board of  Directors  and filed with the  Secretary.  Each
special meeting of the Board shall be held at such time and place, either within
or outside of the State of  Delaware,  as shall be  designated  in the notice of
such meeting.

            SECTION 7. Notice of Special  Meetings.  Notice of a special meeting
of the Board of  Directors,  stating the place,  date and hour  thereof,  shall,
except as  otherwise  expressly  provided  by law or as provided in Section 2 of
Article VII hereof,  be given by mailing or telegraphing or telecopying the same
to each director at his residence or business address at


<PAGE>



any time on or  before  the  second  day  before  the day of the  meeting  or by
delivering the same to him personally or telephoning  the same to him personally
at his  residence  or business  address not later than the day before the day of
the meeting, unless, in case of exigency, the Co-Chairman who shall be the Chief
Executive  Officer  of the  Company,  or in such  Co-Chairman's  absence  a Vice
Chairman or the Secretary,  shall prescribe a shorter notice to each director at
his residence or business  address.  Except as otherwise  required by statute or
these By-laws,  no notice or waiver of notice of a special  meeting of the Board
need state the purpose or  purposes of such  meeting,  and any  business  may be
transacted thereat, any practice or custom to the contrary notwithstanding.

            SECTION 8.  Quorum.  A majority of the total  number of directors at
the time in office but in no event less than  one-third  of that total number or
less  than two  directors  shall  constitute  a quorum  for the  transaction  of
business at any meeting of the Board of  Directors,  except that when a Board of
one director is authorized pursuant to the Certificate of Incorporation or these
By-laws,  then one director  shall  constitute a quorum.  If less than quorum be
present at the meeting,  the  directors  present may adjourn the meeting and the
meeting may be held as adjourned  without further notice. If a quorum be present
at a meeting and the meeting is adjourned to reconvene either at a later time on
the  same  date  or at a  later  date,  no  notice  need  be  given  other  than
announcement  at the  meeting.  Except  as  otherwise  provided  by law,  by the
Certificate of  Incorporation  or by these By-laws,  when a quorum is present at
any meeting of the Board of Directors,  a majority of the  directors  present at
such  meeting  shall  decide any  question  brought  before such meeting and the
action of such majority shall be deemed to be the action of the Board.

            SECTION 9.  Organization.  Each  meeting  of the Board of  Directors
shall be presided over by a Co-Chairman (and, as between the two Co-Chairmen, by
the Co-Chairman who shall also be the Chief Executive Officer of the Company, if
both Co-Chairmen shall be present),  or in the absence of both  Co-Chairmen,  by
the Vice  Chairman,  or in the  absence of both,  by any  director  selected  to
preside by vote of a majority of the directors present. The Secretary, or in his
absence, an Assistant Secretary,  or in the absence of both the Secretary and an
Assistant  Secretary,  any person  designated by the person  presiding  over the
meeting, shall act as secretary of the meeting.

            SECTION 10.  Compensation of Directors.  The Board may, from time to
time in its discretion, by resolution or resolutions passed by a majority of the
whole Board,  fix the amounts which shall be payable to the members  thereof for
their  services  in such  capacity  and  provide  for the  reimbursement  of the
reasonable  expenses of such  members,  all of which shall be in addition to any
fees, salaries or other compensation which


<PAGE>



may be paid or payable to such members in any other capacity. Members of special
or standing  committees may be allowed like  reimbursement  and compensation for
attending committee meetings.

            SECTION  11.  Committees.   (A)  The  Board  of  Directors  may,  by
resolution or resolutions adopted by a majority of the whole Board, designate an
Executive  Committee  and one or more  other  committees.  Except  as  otherwise
provided by these  By-laws each  committee  shall  consist of one or more of the
directors of the  Corporation.  The Board may designate one or more directors as
alternate  members of any committee,  who may replace any absent or disqualified
member at any meeting of the committee.  In the absence or disqualification of a
member of a committee,  the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously  appoint  another  member  of the Board of  Directors  to act at the
meeting  in the  place of any  such  absent  or  disqualified  member.  Any such
committee, to the extent provided in said resolution or resolutions,  shall have
and may exercise the powers and authority of the Board in the  management of the
business  and  affairs of the  Corporation,  and may  authorize  the seal of the
Corporation  to be  affixed  to all  papers  which may  require  it.  Such other
committee or committees  shall have such name or names as may be determined from
time to time by  resolution  adopted by the Board.  No committee  shall have the
power or authority in reference to amending the  Certificate  of  Incorporation,
adopting  an  agreement  of  merger  or   consolidation,   recommending  to  the
stockholders  the sale,  lease or  exchange of all or  substantially  all of the
Corporation's   property  and  assets,   recommending  to  the   stockholders  a
dissolution of the Corporation or a revocation of a dissolution, or amending the
By-laws  of the  Corporation.  Unless  expressly  authorized  by  resolution  or
resolutions  adopted by a majority of the whole Board,  no such committee  shall
have the power or authority  to declare a dividend or to authorize  the issuance
of stock.  All committees  shall keep regular  minutes of their  proceedings and
report the same to the Board when required.

            (B) Finance  Committee.  Notwithstanding  the immediately  preceding
paragraph,  the Board of Directors of the  Corporation  shall  appoint a Finance
Committee.  The Finance  Committee  shall consist of the two  Co-Chairmen of the
Corporation  and two other  directors,  one of whom shall be the  nominee to the
Board of Directors of BT Capital Partners, Inc. and the other nominee shall be a
nominee of Wasserstein & Co., Inc.  ("WCI")  (provided,  that if the Co-Chairman
who is not the Chief Executive Officer shall no longer be a Co-Chairman,  at all
times thereafter the Finance  Committee shall only consist of the Co-Chairman of
the Board who is the Chief Executive Officer and the two other  directors).  The
Finance  Committee  shall  review  all  proposals  to  issue  securities  of the
Corporation and to make acquisitions or to refinance the


<PAGE>



Corporation's bank debt in whole, or to increase bank debt by more than 25%, and
the Finance  Committee shall make  recommendations  to the Board of Directors on
such proposals.  Any proposal to issue equity  securities of the Corporation for
cash or debt in an amount which,  together  with all other equity  securities of
the  Corporation  issued for cash or debt during the previous  12-month  period,
would  exceed $10 million  shall  require the  unanimous  recommendation  of the
Finance Committee prior to consideration by the Board of Directors. Any proposal
regarding a merger or acquisition (a) in which the  consideration  being paid by
the Corporation shall exceed $50 million or (b) involving the issuance of equity
securities as consideration the amount of which,  together with all other equity
securities of the Corporation  issued in connection with mergers or acquisitions
during the previous  12-month  period,  exceeds  $1,000,000 x P/.12,  where P is
equal to the greater of $6.00 or the price of the equity  security  being issued
(computed  as the  average  of the  closing  price  for the  five  trading  days
preceding such determination), shall require the unanimous recommendation of the
Finance Committee prior to consideration by the Board of Directors.

            In the event that  either (i) WCI or any direct or  indirect  wholly
owned subsidiary of WCI or any limited  partnership of which any such subsidiary
is the  general  partner  ("WCI  Entities")  hold in the  aggregate  fewer  than
3,900,000  shares  (subject to  adjustment  for stock splits,  combinations  and
recapitalization)  of the  Corporation's  Common Stock, or (ii) the WCI Entities
hold fewer than  5,800,000  shares  (subject  to  adjustment  for stock  splits,
combinations and  recapitalization)  of the Corporation's  Common Stock and such
amount  is less than 4.1% of the  fully  diluted  shares of Common  Stock of the
Company (treating all outstanding options, warrants or convertible securities as
being exercised or converted, but not taking into account the Contingent Shares)
on any subsequent  date, then the Finance  Committee shall be dissolved and this
paragraph (B) of Section 11 shall be of no further force and effect.

            SECTION 12. Written Consents. Any action required or permitted to be
taken at any meeting of the Board of Directors or by any  committee  thereof may
be taken without a meeting, if all members of the Board or of such committee, as
the case may be,  consent  thereto in writing and the  writing or  writings  are
filed with the minutes of proceedings of the Board or committee.

            SECTION 13. Conference  Telephone Meetings.  Members of the Board of
Directors or any committee designated by such Board may participate in a meeting
of such  Board  or  committee  by  means  of  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 in this manner shall
constitute presence in person at such


<PAGE>



meeting.

                                ARTICLE IV

                                 OFFICERS

            SECTION 1. Number and  Election.  The  officers  of the  Corporation
shall be elected by the Board of Directors and shall be two  Co-Chairmen  of the
Board,  one or more Vice Chairmen of the Board,  President and a Secretary.  The
Board of Directors may also elect one or more Vice  Presidents,  a Treasurer,  a
Comptroller and one or more Assistance  Comptrollers,  Assistant Secretaries and
Assistant Treasurers.  The Co-Chairmen of the Board and the Vice Chairmen of the
Board shall be chosen from the  directors.  All officers  chosen by the Board of
Directors  shall each have such powers and duties as generally  pertain to their
respective offices, subject to the specific provisions of this Article IV.

            SECTION 2. Term of Office and  Qualification.  The officers shall be
elected  annually by the Board of Directors at the first  meeting  thereof after
each annual  meeting of  stockholders.  A meeting of the  directors  may be held
without  notice for this purpose,  as well as for the  transaction  of any other
business,   immediately   after  the  annual  meeting  of  stockholders  of  the
Corporation  and at the same place.  In the event of the failure so to elect any
such officer,  such officer may be elected at any subsequent meeting (regular or
special) of the Board. Each officer, except such officers as may be appointed in
accordance  with the  provisions  of Section 3 of this  Article IV, shall holder
office until the next annual  election of officers and until his successor shall
have been duly elected and  qualified,  subject,  however,  to the provisions of
Article  IV  hereof.  None  of  the  officers  of  the  Corporation  except  the
Co-Chairmen of the Board and the Vice Chairman of the Board need be directors.

            SECTION 3. Other  Officers.  The Board of Directors may also appoint
such other officers and agents as it may deem  necessary for the  transaction of
the business of the Corporation.  Such officers and agents shall hold office for
such period,  have such authority and perform such duties as shall be determined
from time to time by the Board.

            SECTION 4. The  Co-Chairmen  of the Board.  The  Co-Chairmen  of the
Board,  (and as between the two  Co-Chairmen,  the Co-Chairman who shall also be
the  Chief  Executive  Officer  of the  Company,  if both  Co-Chairmen  shall be
present) shall preside at all meetings of the  stockholders  and of the Board of
Directors.  The Co-Chairmen shall make reports to the Board of Directors and the
Stockholders,  and shall perform all such other duties as are properly  required
of them by the Board of Directors.



<PAGE>



            SECTION  5. The Vice  Chairmen.  Each Vice  Chairman  shall,  in the
absence  of both  Co-Chairmen,  act as  chairman  of  meetings  of the  Board of
Directors.  Each Vice Chairman shall have such other powers and duties as may be
conferred upon him by the Co-Chairmen of the Board or the Board of Directors.

            SECTION 6. The Deputy Chairman.  The Deputy Chairman shall not be an
Officer of the Corporation.  The Deputy Chairman's sole duty shall be to act, in
the absence of the Co-Chairmen and the Vice Chairmen, as chairman of meetings of
the Board of Directors.

            SECTION 7. The President. The President shall be the chief executive
officer of the Corporation  and shall have general and active  management of the
business and affairs of the Corporation,  subject to the Board of Directors. The
President  shall,  in the absence of or because of the  inability  to act of the
Co-Chairmen  of the  Board or any  Vice  Chairman,  perform  all  duties  of the
Co-Chairmen  of the Board or the Vice  Chairman  and preside at all  meetings of
stockholders  and of the Board of Directors.  The  President may sign,  alone or
with the Secretary,  or an Assistant  Secretary,  or any other proper officer of
the Corporation authorized by the Board of Directors,  certificates,  contracts,
and  other  instruments  of  the  Corporation  as  authorized  by the  Board  of
Directors.

            SECTION 8. Vice  Presidents.  In the absence or  inability to act of
the  Co-Chairmen,  the  Vice  Chairman  or the  President,  any  Vice  President
designated  by the Board of  Directors  shall  perform  all the  duties  and may
exercise all the powers of the President. Each Vice President shall perform such
other  duties  as from  time to time  may be  assigned  to him by the  Board  of
Directors or the President or as may be prescribed by these By-laws.

            SECTION   9.   The   Comptroller.   The   Comptroller   shall   have
responsibility  for the accounting  procedures and practices of the  Corporation
and shall keep or cause to be kept at the principal  office of the  corporation,
and shall be responsible  for the keeping of, correct  financial  records of the
business and  transactions of the Corporation and at all reasonable  times shall
exhibit such record to any of the directors of the Corporation  upon application
at the office of the  Corporation  where such  records  are kept.  He shall also
perform  all the duties  incident  to the office of  Comptroller  and such other
duties as from time to time may be  assigned  to him by the Board of  Directors,
the President or the Vice President.

     SECTION 10. Assistant Comptrollers.  In the absence of the Comptroller,  or
in case of his  inability to act, an  Assistant  Comptroller  designated  by the
President  or by the Board of  Directors  shall  perform  all the  duties of the
Comptroller  and, when so acting,  shall have all the powers of the Comptroller.
The Assistant Comptrollers shall perform such


<PAGE>



other  duties as from  time to time  shall be  assigned  to them by the Board of
Directors, the President or the Comptroller.

            SECTION  11. The  Secretary.  The  Secretary  shall have the duty to
record or cause to be recorded in books kept for that purpose the proceedings of
the meetings of the Corporation  including those of the stockholders,  the Board
of Directors and all committees designated by the Board of Directors;  shall see
that all  notices  are duly given in  accordance  with the  provisions  of these
By-laws and as required by law;  shall be custodian  of the records  (other than
those  financial  records  kept  by the  Comptroller)  and of  the  seal  of the
Corporation  and see that the seal is affixed to all  documents the execution of
which  on  behalf  of the  Corporation  under  its  seal is duly  authorized  in
accordance  with the  provisions of these By-laws and when so affixed may attest
the same; shall see that the books,  reports,  statements,  certificates and all
other documents and records  required by law are properly kept and filed; and in
general,  the Secretary  shall perform all duties  incident to the office of the
Secretary and such other duties as may, from time to time, be assigned to him by
the Board of Directors or the President.

            SECTION 12. Assistant Secretaries.  In the absence of the Secretary,
or in case of his  inability to act, an Assistant  Secretary  designated  by the
President  or the  Board  of  Directors  shall  perform  all the  duties  of the
Secretary and, when so acting,  shall have all the powers of the Secretary.  The
Assistant Secretaries shall perform such other duties as from time to time shall
be assigned to them by the Board of Directors, the President or the Secretary.

            SECTION 13. The Treasurer.  The Treasurer  shall give such bond with
such surety or sureties for the faithful  performance of his duties as the Board
of Directors may require. He shall have charge and custody of and be responsible
for all funds and securities of the  Corporation,  deposit all such funds in the
name of the Corporation in such banks,  trust companies or other depositaries as
shall be selected in  accordance  with the  provisions of these By-laws and have
supervision  over all receipts and  disbursements of the Corporation and, in the
absence  of a  Comptroller,  have  general  responsibility  for  its  accounting
procedures and practices;  at all reasonable  times exhibit his books of account
and records to any of the directors of the Corporation upon  application  during
business hours at the place where such books and records are kept; receive,  and
give receipts  for,  monies due and payable to the  Corporation  from any source
whatsoever;  and in general,  perform  all the duties  incident to the office of
Treasurer  and such other  duties as from time to time may be assigned to him by
the Board of Directors or the President.

     SECTION 14. Assistant  Treasurers.  Each of the Assistant  Treasurers shall
give such bond for the faithful


<PAGE>



performance of his duties as the Board of Directors may require.  In the absence
of the  Treasurer,  or in case of his  inability to act, an Assistant  Treasurer
designated  by the  President  or the Board of Directors  shall  perform all the
duties of the Treasurer  and,  when so acting,  shall have all the powers of the
Treasurer. The Assistant Treasurers shall perform such other duties as from time
to time may be assigned to them by the Board of Directors,  the President or the
Treasurer.

            SECTION 15. Compensation.  The compensation of all officers,  agents
and employees of the  Corporation  shall be fixed from time to time by the Board
of Directors,  or pursuant to authority of general or special resolutions of the
Board. No officer shall be prevented from receiving such salary by reason of the
fact that he is also a director of the Corporation or a member of any committee.

            SECTION 16.  Bonds.  The Board of Directors  shall have the power to
require any officer or agent of the  Corporation to give a bond for the faithful
discharge  of his duties in such form and in such amount and with such surety or
sureties as the Board may deem advisable.

            SECTION 17.  Removal.  Any officer elected by the Board of Directors
may be removed by a majority  of the  members of the whole  Board  whenever,  in
their judgment,  the best interests of the Corporation  would be served thereby.
No elected officer shall have any contractual rights against the Corporation for
compensation  by virtue of such election  beyond the date of the election of his
successor,  his death,  his  resignation or his removal,  whichever  event shall
first  occur,  except as  otherwise  provided  in an  employment  contract or an
employee plan.

            SECTION 18.  Vacancies.  A newly created office and a vacancy in any
office because of death,  resignation,  or removal may be filled by the Board of
Directors for the  unexpired  portion of the term at any meeting of the Board of
Directors.

                                    ARTICLE V

                                     NOTICES

            SECTION 1. Manner of Giving.  Whenever  under the  provisions of the
laws of the  State  of  Delaware,  the  Certificate  of  Incorporation  or these
By-laws, notice is required to be given to any director or stockholder, it shall
not be  construed  to mean  personal  notice,  but such  notice  may be given by
mailing or  telegraphing  (including  telex or cable or other similar means) the
same to each such  director  or  stockholder  at such  address as appears on the
books or in the records of the  Corporation,  and such notice shall be deemed to
be given at the time when the same is thus mailed or telegraphed.


<PAGE>



            SECTION 2. Waiver of Notice.  Whenever under the provisions of these
By-laws,  or of the Certificate of  Incorporation,  or of any of the laws of the
State of  Delaware,  the  stockholders,  directors  or members of a committee of
directors are  authorized to hold any meeting or take any action after notice or
after the lapse of any prescribed period of time, a waiver thereof,  in writing,
signed  by the  person  or  persons  entitled  to such  notice or lapse of time,
whether before or after the time of meeting or action stated  therein,  shall be
deemed  equivalent  thereto.  Neither the business to be transacted  at, nor the
purpose of, any regular or special meeting of the  stockholders,  directors,  or
members of any committee of directors need be specified in any written waiver of
notice unless so required by the Certificate of  Incorporation or these By-laws.
The  presence at any meeting of a person or persons  entitled to notice  thereof
shall be deemed a waiver of such  notice as to such  person or  persons,  except
when such person attends a meeting for the express purpose of objecting,  at the
beginning  of the  meeting,  to the  transactions  of any  business  because the
meeting is not lawfully called or convened.

                               ARTICLE VI

                              CAPITAL STOCK

            SECTION 1. Form and Issuance.  Certificates of stock shall be issued
in such form as may be approved by the Board of  Directors  and shall be signed,
countersigned  and  registered  by,  or in the name of the  Corporation  in such
manner as the Board of Directors may by resolution prescribe.  Any of or all the
signatures  on such a  certificate  may be a  facsimile.  In case  any  officer,
transfer  agent,  or registrar who has signed or whose  facsimile  signature has
been placed upon a certificate  shall have ceased to be such  officer,  transfer
agent, or registrar before such  certificate is issued,  it may be issued by the
Corporation with the same effect as if he were such officer,  transfer agent, or
registrar  at the  date  of  issue  unless  determined  otherwise  by the  Board
generally or in particular instances.

            SECTION 2. Transfers of Stock.  Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate of stock duly endorsed or
accompanied  by proper  evidence  of  succession,  assignment  or  authority  to
transfer,  it shall be the duty of the Corporation to issue a new certificate to
the  person  entitled  thereto,  cancel  the  old  certificate  and  record  the
transaction  upon its  books.  The  Board of  Directors  shall  have  power  and
authority to make such other rules and regulations or amendments thereto as they
may  deem  expedient   concerning  the  issue,   registration  and  transfer  of
certificates of stock and may appoint transfer agents and registrars thereof.

            SECTION 3. Lost,  Stolen and  Destroyed  Certificates.  The Board of
Directors may direct a new  certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon satisfactory proof of that fact by the
person claiming the certificate or certificates for shares to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates,



<PAGE>



the Board of Directors may, at its discretion,  and as a condition  precedent to
the  issuance  thereof,  require  the owner of such  lost,  stolen or  destroyed
certificate or certificates, or his legal representative,  to publicize the same
in such manner as it shall require and/or to give the Corporation a bond in such
sum as the Board of Directors may direct as indemnity against any claim that may
be made against the Corporation  with respect to the certificate or certificates
alleged to have been  lost,  stolen or  destroyed,  or the  issuance  of the new
certificate or certificates.

            SECTION 4. Fixing of Record Date. In order that the  Corporation may
determine  the  stockholders  entitled to notice of or to vote at any meeting of
stockholders or any adjournment  thereof,  or entitled to receive payment of any
dividend  or other  distribution  or  allotment  of any  rights,  or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful  action,  the Board of Directors may fix, in
advance,  a record  date,  which  shall not be more than sixty nor less than ten
days  before  the date of such  meeting,  nor more than  sixty days prior to any
other action.  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
and any  adjournment  thereof,  or to receive  payment of such dividend or other
distribution, or to receive such allotment of rights, or to exercise such rights
in  respect  of  any  such  change,  conversion  or  exchange  of  stock,  or to
participate  in such  other  action,  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.  If no record date is fixed by the Board of  Directors,  the
record  date  shall  be  determined  as  provided  by the  laws of the  State of
Delaware.  A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.

                               ARTICLE VII

                     NEGOTIABLE INSTRUMENTS, CONTRACTS, ETC.

            SECTION 1. Signatures on Checks, Etc. All checks,  drafts,  bills of
exchange,  notes or other  instruments  or orders  for the  payment  of money or
evidences of indebtedness  shall be signed for or in the name of the Corporation
by such officer or officers,  person or persons,  as the Board of Directors  may
from time to time designate by resolution.

            SECTION  2.  Execution  of  Contracts,  Deeds,  Etc.  The  Board  of
Directors may authorize any officer or officers, agent or agents, in the name of
and on behalf of the  Corporation,  to enter into or execute and deliver any and
all deeds, bonds, mortgages, contracts and other obligations or instruments, and



<PAGE>



such authority may be general or confined to specific instances.

            SECTION  3.  Loans.  No loan  shall be  contracted  on behalf of the
Corporation and no evidences of indebtedness  shall be issued in its name unless
authorized  or  ratified  by a  resolution  of  the  Board  or  Directors.  Such
authorization or ratification may be general or confined to specific instances.

                               ARTICLE VIII

                              CORPORATE SEAL

            The seal of the Corporation shall have inscribed thereon the name of
the Corporation, the year of its organization and the word "Delaware". Said seal
may be used by causing it or a facsimile  thereof to be  impressed or affixed or
reproduced in any manner whatsoever.

                                ARTICLE IX

                                FISCAL YEAR

            The fiscal year of the Corporation  shall be determined by the Board
of Directors.

                                ARTICLE X

                           VOTING OF STOCK HELD

            Unless  otherwise  provided by resolution of the Board of Directors,
the Co-Chairmen of the Board,  the Vice Chairman of the Board,  the President or
any Vice  President  may from time to time  appoint an attorney or  attorneys or
agent  or  agents  of  the  Corporation,  in  the  name  and  on  behalf  of the
Corporation,  to cast the votes which the Corporation may be entitled to cast as
a stockholder or otherwise in any other corporation or association, any of whose
stock or securities may be held by the  Corporation,  at meetings of the holders
of the stock or other securities of such other corporations or associations,  or
to  consent  in  writing  to  any  action  by  any  such  other  corporation  or
association,  and may  instruct  the person or persons  so  appointed  as to the
manner of casting such votes or giving such consent, and may execute or cause to
be  executed  on behalf of the  Corporation  and under its  corporate  seal,  or
otherwise,  such written proxies,  consents,  waivers or other instruments as he
may deemed necessary or proper in the premises;  or any such officer may himself
attend any meeting of the holders of stock or other securities of any such other
corporation or association  and thereat vote or exercise any or all other powers
of the Corporation as the holder of such stock or other securities of such other
corporation or association,  or may consent in writing to any action by any such
other corporation or association.



<PAGE>



                                ARTICLE XI

                    INDEMNIFICATION OF OFFICERS, DIRECTORS,
                       EMPLOYEES AND AGENTS; INSURANCE

            SECTION  1.  Indemnification.   (a)  Any  person  made  a  party  or
threatened to be made a party to a threatened, pending or completed action, suit
or proceeding,  whether civil, criminal,  administrative or investigative (other
than an  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 is or was a  director,
officer,  employee  or agent of the  Corporation,  or is or was  serving  at the
request of the Corporation as a director,  officer, employee or agent of another
corporation,  partnership,  joint venture, trust or other enterprise,  including
service with respect to an employee  benefit plan,  shall be  indemnified by the
Corporation against expenses (including attorneys' fees),  judgments,  fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action,  suit or  proceeding to the fullest  extent  authorized by the
General  Corporation  Law of the  State of  Delaware  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  said  law  permitted  the  Corporation  to  provide  prior to such
amendment).  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 he  reasonably  believed to be in or not
opposed  to the best  interests  of the  Corporation,  or,  with  respect to any
criminal action or proceeding,  that the person had reasonable  cause to believe
that his conduct was unlawful.

            (b) Any person made a party or  threatened to be made a party to 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 is
or was a director,  officer, employee or agent of the Corporation,  or is or was
serving at the request of the  Corporation as a director,  officer,  employee or
agent  of  another  corporation,  partnership,  joint  venture,  trust  or other
enterprise shall be indemnified by the Corporation  against expenses  (including
attorneys' fees) actually and reasonably  incurred by him in connection with the
defense or settlement of such action or suit to the fullest extent authorized by
the General  Corporation  Law of the State of Delaware 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  said  law  permitted  the  Corporation  to  provide  prior to such
amendment), except that no indemnification shall be made hereunder in respect of
any claim, issue or matter as to which the person shall be adjudged



<PAGE>



liable  to the  Corporation  unless  and only to the  extent  that the  Court of
Chancery  of the State of Delaware 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 said Court
of Chancery or such other court shall deem proper.

            (c) To the  extent  that  any  person  referred  to  above  has been
successful  on the  merits  or  otherwise  in  defense  of any  action,  suit or
proceeding  referred to in  paragraphs  (a) and (b) above,  or in defense of any
claim,  issue or matter  therein,  he shall be  indemnified  by the  Corporation
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.

            (d) No  indemnification  shall be granted under paragraph (a) or (b)
above unless  ordered by a court or unless it shall be  specifically  determined
that indemnification of the person is proper in the circumstances because he has
met the applicable  standard of conduct set forth in the  applicable  paragraph,
which  determination  shall be made (i) by a majority  vote of the directors who
are not  parties to such  action,  suit or  proceeding,  even though less than a
quorum, or (ii) if there are no such directors,  or if such directors so direct,
by independent legal counsel in a written opinion, or (iii) by the stockholders.

            (e)   Expenses   incurred   in   defending   any  civil,   criminal,
administrative or investigative  action,  suit or proceeding by a person who may
be  entitled  to  indemnity  under  the  above  provisions  shall be paid by the
Corporation  in  advance  of the  final  disposition  of  such  action,  suit or
proceeding if authorized  under paragraph (d) above within twenty days following
receipt by the Corporation of a written request for such advance, accompanied by
a written  undertaking  by or on behalf of the  person to whom  payment is to be
made  that  he will  repay  the  amounts  advanced  if it  shall  ultimately  be
determined  that he is not  entitled to be  indemnified  by the  Corporation  in
accordance with the above provisions.

            (f) The  indemnification and advancement of expenses provided by, or
granted  pursuant to, the above  provisions shall not be deemed exclusive of any
other rights to which those indemnified or advancement  expenses may be entitled
under any provision of the Certificate of Incorporation, By-law, agreement, vote
of stockholders or disinterested  directors,  insurance agreement, or otherwise,
both as to action in his official  capacity and as to action in another capacity
while holding such office.

     (g) The  indemnification  and  advancement  of  expenses,  provided  by, or
granted pursuant to, this Section shall, unless



<PAGE>


otherwise provided when authorized or ratified,  continue as to a person who has
ceased to be a  director,  officer,  employee  or agent  and shall  inure to the
benefit of the heirs, executors and administrators of such a person.

            (h) Any  amendment or repeal of this Article XI shall not  adversely
affect  any right or  protection  existing  hereunder  in  respect of any act or
omission occurring prior to such amendment or repeal.

            SECTION 2. Insurance. The Board of Directors of the Corporation may,
in its discretion,  authorize the Corporation to purchase and maintain insurance
on behalf of any person who is or was a director,  officer, employee or agent of
the  Corporation,  or is or was serving at the request of the  Corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other enterprise  against any liability  asserted against him
and incurred by him in any such capacity,  or arising out of his status as such,
whether or not the  Corporation  would have the power to  indemnify  him against
such liability under the provisions of Section 1 of this Article XI.


                               ARTICLE XII

                                AMENDMENTS

            All  By-laws of the  Corporation  shall be subject to  amendment  or
repeal,  and new By-laws may be adopted,  either (a) by the affirmative  vote of
the holders of record of at least eighty percent (80%) of the outstanding  stock
of the  Corporation  entitled  to vote for the  election  of  directors,  voting
together as a single class, given at an annual meeting or at any special meeting
of such stockholders,  or (b) by the affirmative vote of a majority of the whole
Board of Directors of the Corporation;  provided, however, that Section 11(B) of
Article III hereof may be amended only by stockholder vote or by the affirmative
vote of 12 of 13 members of the Board of Directors and provided,  further,  that
(i) the  provisions of these By-laws  concerning the powers and authority of the
Co-Chairman who shall be the Chief Executive  Officer shall not be changed,  and
(ii) the number of directors  set forth in Section 2 of Article III shall not be
increased,  without a stockholder  vote or by the  affirmative  vote of 12 of 13
members of the Board of Directors.