CERTIFICATE OF AMENDMENT

 

                                     TO THE

 

                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

                                       OF

 

                              METRIS COMPANIES INC.

 

 

 

                             Pursuant to Section 242

 

                         of the General Corporation Law

 

                            of the State of Delaware

 

 

 

                  Pursuant to Section 242 of the General Corporation Law of the

 

State of Delaware, Metris Companies Inc., a Delaware corporation

 

("Corporation"), DOES HEREBY CERTIFY:

 

 

 

                  1.       That Section 1 of Article V of the Corporation's

 

Amended and Restated Certificate of Incorporation ("Certificate") is hereby

 

amended to read in its entirety as follows:

 

 

 

                  SECTION 1. Term of Director. Except as otherwise provided by

 

         the terms of any series of Preferred Stock or any other securities of

 

         the Corporation, the number of directors of the Corporation shall be

 

         fixed from time to time by or pursuant to the By-laws of the

 

         Corporation. The term of each director of the Corporation shall expire

 

         at the next annual meeting of stockholders following such director's

 

         election and until such director's successor shall have been elected

 

         and qualified. The election of directors need not be by written ballot.

 

 

 

                  2.       That the first sentence of Section 1 of Article VII

 

of the Corporation's Certificate is hereby amended to read in its entirety as

 

follows:

 

 

 

                  SECTION 1. Threshold Time. The provisions of Sections 2, 3 and

 

         4 of this Article VII shall become effective at such time, but only

 

         from and after such time (the "Threshold Time"), as the Permitted

 

         Stockholder and Permitted Transferees, taken together, shall no longer

 

         beneficially own in the aggregate 51% or more of the combined Voting

 

         Power (as defined herein) of the then outstanding shares of Voting

 

         Stock (as defined herein) and shall continue to be effective from and

 

         after the Threshold Time.

 

 

 

                  3.       That Section 3 of Article VII of the Corporation's

 

Certificate is hereby deleted in its entirety and the remaining Sections in

 

Article VII are hereby renumbered accordingly.

 

 

 

<PAGE>

 

 

 

                  4.       That Article IX of the Corporation's Certificate is

 

hereby amended to read in its entirety as follows:

 

 

 

                                   ARTICLE IX

 

 

 

                                   Amendments

 

 

 

                  Subject to the provisions of this Certificate of Incorporation

 

         (including Section 4 of Article VII, Section 3 of Article X, and

 

         Section 2 of Article XII) the Corporation reserves the right to amend,

 

         alter or repeal any provision contained in this Certificate of

 

         Incorporation, in the manner now or hereafter prescribed by the laws of

 

         Delaware, and all rights and powers conferred on directors and

 

         stockholders herein are granted subject to this reservation.

 

 

 

                  5.       That, in accordance with Section 242(b) of the

 

General Corporation Law of the State of Delaware, the Board of Directors of the

 

Corporation has duly adopted a resolution approving the foregoing amendment to

 

the Certificate ("Amendment") and directing that the Amendment be submitted to

 

the holders of the outstanding capital stock of the Corporation entitled to vote

 

thereon for its consideration and approval.

 

 

 

                  6.       That, in accordance with the Corporation's

 

Certificate and Section 242(b) of the General Corporation Law of the State of

 

Delaware, the Amendment has been duly approved by the affirmative vote of the

 

holders of (i) at least 80% of the combined voting power of all the outstanding

 

shares of voting stock of the Corporation, voting together as a single class,

 

and (ii) at least a majority of the combined voting power of all the outstanding

 

shares of voting stock of the Corporation that are held by Disinterested

 

Stockholders, voting together as a single class.

 

 

 

                  IN WITNESS WHEREOF, the Corporation has caused this

 

Certificate of Amendment to be duly executed and acknowledged this 4th day of

 

June, 2003.

 

 

 

                                          METRIS COMPANIES INC.

 

 

 

                                          By: ________________________________

 

                                              Richard G. Evans

 

                                              Secretary

 

CERTIFICATE OF AMENDMENT

                                     TO THE

                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                              METRIS COMPANIES INC.

 

 

 

                             Pursuant to Section 242

                         of the General Corporation Law

                            of the State of Delaware

 

 

 

                  Pursuant to Section 242 of the General  Corporation Law of the

State  of  Delaware,   Metris  Companies  Inc.,  a  Delaware   corporation  (the

"Corporation"), DOES HEREBY CERTIFY:

 

                  1. That  Sections 1 and 2 of Article III of the  Corporation's

Amended and Restated Certificate of Incorporation (the "Certificate") are hereby

deleted and Article III is hereby amended to read in its entirety as follows:

 

                  The purpose of the  Corporation is to engage in any lawful act

         or activity and to exercise any powers permitted to corporations  under

         the General Corporation Law of Delaware.

 

                  2. That Article XIII of the  Certificate  is hereby deleted in

its entirety.

 

                  3. That,  in  accordance  with  Section  242(b) of the General

Corporation  Law of the  State  of  Delaware,  the  Board  of  Directors  of the

Corporation has duly adopted a resolution  approving the foregoing  amendment to

the Certificate (the  "Amendment") and directing that the Amendment be submitted

to the holders of the outstanding  capital stock of the Corporation  entitled to

vote thereon for its consideration and approval.

 

                  4. That,  in  accordance  with  Section  242(b) of the General

Corporation  Law of the State of Delaware,  the Amendment has been duly approved

by the affirmative vote of the holders of a majority of the outstanding  capital

stock of the Corporation entitled to vote thereon.

 

                  IN  WITNESS   WHEREOF,   the   Corporation   has  caused  this

Certificate of Amendment to be duly executed and  acknowledged  this 24th day of

March, 1999.

 

                                         METRIS COMPANIES INC.

 

                                         By: /s/Z. Jill Barclift

                                             Z. Jill Barclift

                                             Secretary

 

 

<PAGE>

 

 

 

                              AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

 

                                       OF

 

                              METRIS COMPANIES INC.

                (adopted in accordance with Sections 245 and 242

            of the General Corporation Law of the State of Delaware)

 

 

 

                                    ARTICLE I

 

                                      Name

 

              The name of the Corporation is Metris Companies Inc.

 

 

                                   ARTICLE II

 

                     Registered Office and Registered Agent

 

         The  address  of the  Corporation's  registered  office in the State of

Delaware is 1013 Centre Road, in the City of Wilmington,  New Castle County. The

name of its registered  agent at such address is The  Prentice-Hall  Corporation

System, Inc.

 

 

                                   ARTICLE III

 

                                     Purpose

 

                  SECTION  1.   Permitted   Activities.   The   purpose  of  the

Corporation  is to engage in any  business,  and in any activity and to exercise

any powers  permitted to corporations  under the General  Corporation Law of the

State of Delaware  except as set forth in this  Section 1 of Article III. At any

time  prior to the date  immediately  following  the  third  annual  meeting  of

stockholders to be held after FCI no longer  beneficially  owns in the aggregate

50% or more of the  combined  Voting  Power of the then  outstanding  shares  of

Voting Stock, the Corporation shall not, without the consent of FCI, directly or

indirectly  (through  a  Subsidiary  of  the  Corporation  or any  other  person

controlled by the  Corporation  or its  Subsidiaries  or  controlled  persons by

contract,  lease or other  arrangement)  for its own account or that of another,

engage in managing, selling, distributing,  marketing, administering, leasing or

otherwise  providing  products or services other than the financial products and

services listed in the following paragraphs (a) through (l):

 

              (a)  general   purpose   payment  cards   including   without

         limitation bank credit cards, secured bank credit cards, prepaid cards,

         debit cards, co-branded cards, and affinity bank credit cards;

 

              (b) extended service plans and warranties;

 

              (c) credit card registration;

 

              (d) car buying services,  shopping club memberships and dining

         club memberships;

 

              (e)   insurance   products;   provided,   however,   that  the

         Corporation  shall not offer any insurance product within the Fingerhut

         Corporation  closed-end  installment  loan  coupon  book or any  credit

         insurance  that is directly  tied to a revolving  credit  balance  owed

         directly to Fingerhut Corporation, its wholly owned subsidiaries or the

         wholly owned subsidiaries of Fingerhut Companies,  Inc., other than the

         Corporation;

 

              (f)   mailing   lists  and  other  lists  of   prospects   for

         solicitation;

 

              (g) advertising on or accompanying  monthly billing statements

         sent to customers of the Corporation;

 

              (h) tax preparation services;

 

              (i)  investment   products  and  services   including  without

         limitation deposit products,  certificates of deposit,  annuities,  and

         mutual funds;

 

              (j) investment and other brokerage services;

 

              (k) consumer  loans and leases  including  without  limitation

         mobile home financing, automobile lending and leasing, equity loans and

         mortgages,  and student loans; provided,  however, that the Corporation

         shall not offer any closed end installment or revolving credit loans to

         Fingerhut Corporation customers for the exclusive purchase of Fingerhut

         Corporation merchandise; and

 

              (l) mail-grams,  travelers  checks,  money orders,  and travel

         services.

 

                  SECTION 2. Other  Activities  Authorized by  Shareholders.  In

addition to the activities  permitted under Section 1 of this Article [III], the

Corporation may engage in any business or activity authorized by the affirmative

vote of a majority of the combined Voting Power of the then  outstanding  shares

of all classes and series of Voting Stock voting  together as a single class. No

person shall be liable for breach of any fiduciary duty, as a stockholder of the

Corporation  or controlling  person of a stockholder or otherwise,  by reason of

such person  authorizing,  or not authorizing,  the Corporation to engage in any

business or activity.

 

                                   ARTICLE IV

 

                                Authorized Shares

 

                  SECTION 1. Number of Shares. The total number of shares of all

classes  of  stock  which  the  Corporation  shall  have  authority  to issue is

110,000,000  shares,  consisting of 100,000,000  shares of Common Stock with par

value $.01 per share ("Common Stock"),  and 10,000,000 shares of Preferred Stock

with par value $.01 per share ("Preferred Stock").

 

                  SECTION 2. Dividends. Subject to the provisions of law and the

rights  of the  Preferred  Stock and any  other  class or  series of stock  then

outstanding having a preference as to dividends over the Common Stock, dividends

may be paid on the Common  Stock at such times and in such  amounts as the Board

of Directors shall determine.

 

                  SECTION  3.  Relative   Rights  of   Shareholders.   Upon  the

liquidation,  dissolution or winding up of the Corporation, whether voluntary or

involuntary,  after any preferential amounts to be distributed to the holders of

the  Preferred  Stock and any other  class or series of stock  then  outstanding

having a  preference  over the Common  Stock have been paid or declared  and set

apart for payment,  the holders of the Common Stock shall be entitled to receive

all of the remaining assets of the Corporation available for distribution to its

stockholders.

 

                  SECTION 4. Rights and Terms of Preferred  Stock.  The Board of

Directors  is  hereby  authorized  to  provide,  out of the  unissued  shares of

Preferred Stock, for one or more series of Preferred Stock. Before any shares of

any such  series are issued,  the Board of  Directors  shall fix,  and hereby is

expressly  empowered to fix, by the adoption and filing in  accordance  with the

Delaware  General  Corporation  Law  of  an  amendment  or  amendments  to  this

Certificate of  Incorporation,  the terms of such  Preferred  Stock or series of

Preferred Stock, including the following terms:

 

             (a) the  designation  of such series,  the number of shares to

         constitute  such series and the stated value thereof if different  from

         the par value thereof;

 

             (b)  whether  the  shares of such  series  shall  have  voting

         rights,  in addition to any voting rights  provided by law, and, if so,

         the terms of such voting rights,  which may be special,  conditional or

         limited or no voting rights except as required by law;

 

             (c) the dividends, if any, payable on such series, whether any

         such dividends  shall be cumulative,  and, if so, from what dates,  the

         conditions  and dates upon which such dividends  shall be payable,  the

         preference or relation which such dividends shall bear to the dividends

         payable on any shares of stock of any other  class or any other  series

         of Preferred Stock;

 

             (d)  whether  the  shares of such  series  shall be subject to

         redemption by the Corporation  and, if so, the times,  prices and other

         conditions of such redemption;.

 

             (e) the amount or amounts  payable  upon shares of such series

         upon, and the rights of the holders of such series in, the voluntary or

         involuntary  liquidation,  dissolution  or  winding  up,  or  upon  any

         distribution of the assets, of the Corporation;

 

             (f) whether the shares of such series  shall be subject to the

         operation of a retirement or sinking fund and, if so, the extent to and

         manner in which any such retirement or sinking fund shall be applied to

         the purchase or redemption of the shares of such series for  retirement

         or other  corporate  purposes and the terms and provisions  relative to

         the operation thereof;

 

             (g)  whether the shares of such  series  shall be  convertible

         into, or  exchangeable  for,  shares of stock of any other class or any

         other series of Preferred Stock or any other securities (whether or not

         issued by the  Corporation)  or other property and, if so, the price or

         prices or the rate or rates of  conversion  or exchange and the method,

         if any, of adjusting  the same,  and any other terms and  conditions of

         conversion or exchange;

 

             (h) the limitations and restrictions,  if any, to be effective

         while any shares of such  series are  outstanding  upon the  payment of

         dividends  or the  making  of  other  distributions  on,  and  upon the

         purchase,  redemption or other  acquisition by the  Corporation of, the

         Common  Stock or shares of stock of any other class or any other series

         of Preferred Stock;

 

             (i) the conditions or restrictions,  if any, upon the creation

         of  indebtedness  of  the  Corporation  or  upon  the  issuance  of any

         additional stock,  including additional shares of such series or of any

         other series of Preferred Stock or of any other class of stock; and

 

             (j) any other powers,  preferences and relative participating,

         optional and other special rights, and any qualifications,  limitations

         and restrictions thereof.

 

Except  to the  extent  otherwise  expressly  required  by law,  (i) no share of

Preferred  Stock  shall have any voting  rights  other than those which shall be

fixed by the Board of Directors  pursuant to this Section 4 and (ii) no share of

Common  Stock shall have any voting  rights with  respect to an amendment to the

terms of any series of Preferred Stock;  provided,  however, that in the case of

this  clause (ii) the terms of such series of  Preferred  Stock,  as so amended,

could have been established without any vote of any shares of Common Stock.

 

                  SECTION  5.  Redemption   Related  to  License  or  Franchise.

Notwithstanding  any other provision of these Restated Articles of Incorporation

to the  contrary,  but subject to the  provisions  of an amendment or amendments

adopted  pursuant to this Article IV creating  any series of Preferred  Stock or

any other class or series of stock having a preference  over the Common Stock as

to dividends or upon liquidation,  outstanding shares of Common Stock, Preferred

Stock or any other class or series of stock of the  Corporation  shall always be

subject to redemption by the  Corporation,  by action of the Board of Directors,

if in the  judgment  of the  Board of  Directors  such  action  should be taken,

pursuant to any applicable  provision of law, to the extent necessary to prevent

the loss or secure  the  reinstatement  of any  license  or  franchise  from any

governmental  agency held by the  Corporation or such  Subsidiary to conduct any

portion of the  business  of the  Corporation  or such  Subsidiary  (as  defined

herein),  which  license or  franchise  is  conditional  upon some or all of the

holders of the Corporation's stock of any class or series possessing  prescribed

qualifications. The terms and conditions of such redemption shall be as follows:

 

                  (a) the redemption price of the shares to be redeemed pursuant

         to this  Section 5 shall be equal to the Fair Market  Value (as defined

         herein) of such shares;

 

                  (b) the  redemption  price of such shares may be paid in cash,

         Redemption Securities (as defined herein) or any combination thereof;

 

                  (c) if less than all the shares held by  Disqualified  Holders

         (as defined herein) are to be redeemed, the shares to be redeemed shall

         be  selected  in such  manner  as shall be  determined  by the Board of

         Directors,  which  may  include  selection  first of the most  recently

         purchased  shares  thereof,  selection by lot or selection in any other

         manner determined by the Board of Directors;

 

                  (d) at least 30 days' written  notice of the  Redemption  Date

         shall be given to the  record  holders  of the  shares  selected  to be

         redeemed  (unless waived in writing by such holder),  provided that the

         Redemption  Date may be the date on which written notice shall be given

         to record  holders if the cash or  Redemption  Securities  necessary to

         effect  the  redemption  shall  have  been  deposited  in trust for the

         benefit of such record  holders and subject to immediate  withdrawal by

         them upon  surrender of the stock  certificates  for their shares to be

         redeemed;

 

                  (e) from and after the Redemption  Date, any and all rights of

         whatever nature, which may be held by the owners of shares selected for

         redemption   (including  without  limitation  any  rights  to  vote  or

         participate in dividends  declared on stock of the same class or series

         as such shares), shall cease and terminate and they shall henceforth be

         entitled only to receive the cash or Redemption Securities payable upon

         redemption; and

 

                  (f)  such  other  terms  and  conditions  as the  Board  shall

         determine.

 

 For purposes of this Section 5:

 

                  (i)  "Disqualified  Holder" shall mean any holder of shares of

         stock of the  Corporation  of any class or series whose holding of such

         stock  may  result in the loss of any  license  or  franchise  from any

         governmental  agency  held  by the  Corporation  or any  Subsidiary  to

         conduct  any  portion  of  the  business  of  the  Corporation  or  any

         Subsidiary.

 

                   (ii) "Redemption Date" shall mean the date fixed by the Board

         of  Directors  for  the  redemption  of  any  shares  of  stock  of the

         Corporation pursuant to this Section 5.

 

                  (iii)  "Redemption  Securities"  shall mean any debt or equity

         securities of the Corporation, any Subsidiary or any other corporation,

         or any combination  thereof,  having such terms and conditions as shall

         be approved by the Board of Directors and which, together with any cash

         to be paid  as part of the  redemption  price,  in the  opinion  of any

         nationally  recognized investment banking firm selected by the Board of

         Directors (which may be a firm which provides other investment banking,

         brokerage or other services to the  Corporation),  has a value,  at the

         time notice of  redemption  is given  pursuant to paragraph (d) of this

         Section 5, at least equal to the Fair Market  Value of the shares to be

         redeemed  pursuant  to  this  Section  5  (assuming,  in  the  case  of

         Redemption Securities to be publicly traded, such Redemption Securities

         were fully distributed and subject only to normal trading activity).

 

                  SECTION 6. Assessability. Upon receipt by the Corporation of

the consideration for which the Board of Directors authorized the issuance of

stock, the stock issued therefor shall be fully paid and nonassessable.

 

                  SECTION  7.  Subscription  Rights.  No  holder of stock of the

Corporation  shall, as such holder,  have any right to purchase or subscribe for

any  shares  of  stock  of the  corporation  of  any  class,  now  or  hereafter

authorized, or any obligations or instruments which the corporation may issue or

sell that shall be convertible  into or exchangeable  for or entitle the holders

thereof to subscribe for or purchase any shares of stock of the  Corporation  of

any class, now or hereafter  authorized,  other than such rights, if any, as the

Board of Directors, in its sole discretion, may determine.

 

                                    ARTICLE V

 

                     Term of Directors and Vacancy on Board

 

                  SECTION 1. Term of Director.  Except as otherwise  provided by

the  terms of any  series of  Preferred  Stock or any  other  securities  of the

Corporation, the number of directors of the Corporation shall be fixed from time

to time by or pursuant to the By-laws of the Corporation. Prior to the Threshold

Time (as defined in Article VII),  the term of each director of the  Corporation

shall  expire  at  the  next  annual  meeting  of  stockholders  following  such

director's election and until such director's  successor shall have been elected

and qualified. The election of directors need not be by written ballot.

 

                  SECTION 2. Vacancy.  Except as otherwise provided by the terms

of any series of Preferred  Stock or any other  securities  of the  Corporation,

newly  created  directorships  resulting  from any  increase  in the  number  of

directors may be filled by the Board of Directors,  or as otherwise  provided in

the By-laws,  and any vacancies on the Board of Directors  resulting from death,

resignation, removal or other cause shall only be filled by the affirmative vote

of a majority of the remaining directors then in office, even though less than a

quorum  of the  Board  of  Directors,  or by a sole  remaining  director,  or as

otherwise provided in the By-laws.

 

                                   ARTICLE VI

 

                              Provisions of By-Laws

 

                  The  Board of  Directors  of the  Corporation  shall  have the

power,  without the assent or vote of the stockholders,  to adopt, repeal, alter

or amend the By-laws of the Corporation  pursuant to a resolution adopted by the

vote  of a  majority  of  the  entire  Board  of  Directors  including,  without

limitation,  provisions  governing  the conduct  of, and the  matters  which may

properly  be  brought  before,  meetings  of  the  stockholders  and  provisions

specifying  the manner and extent to which  prior  notice  shall be given of the

submission  of proposals to be  submitted at any meeting of  stockholders  or of

nominations or elections of directors to be held at any such meeting.

 

                                   ARTICLE VII

 

                      Provisions Relating to Threshold Time

 

                  SECTION 1. Threshold  Time. The provisions of Sections 2, 3, 4

and 5 of this Article VII shall become effective at such time, but only from and

after  such  time (the  "Threshold  Time"),  as the  Permitted  Stockholder  and

Permitted Transferees,  taken together,  shall no longer beneficially own in the

aggregate  51% or more of the combined  Voting Power (as defined  herein) of the

then  outstanding  shares of Voting Stock (as defined herein) and shall continue

to be  effective  from  and  after  the  Threshold  Time.  The  term  "Permitted

Stockholder"  shall  mean FCI or any  subsidiary  of FCI.  The  term  "Permitted

Transferee"shall mean each of the following:

 

                  (a) a trust or trustee, guardian,  custodian or similar entity

         established or acting for the benefit of the Permitted Stockholder;

 

                  (b) any  corporation  or other entity 100% of the voting stock

         (or equivalent interests) of which is owned, directly or indirectly, by

         the Permitted Stockholder and/or any other person or entity referred to

         in clause (a); and

 

                  (c) a trust or trustee, guardian,  custodian or similar entity

         established or acting for the benefit of any person or entity  referred

         to in clause (b).

 

                  SECTION  2.  Change  in  Control.   (a)  In  addition  to  any

affirmative vote required by law or by this Amended and Restated  Certificate of

Incorporation  or the  terms of any  series  of  Preferred  Stock  or any  other

securities of the  Corporation,  and except as otherwise  expressly  provided in

subsection (c) of this Section 2:

 

                  (i) any merger or  consolidation  of the Corporation  with (1)

         any Interested Stockholder or (2) any other corporation (whether or not

         it is itself an Interested  Stockholder) which is, or after such merger

         or  consolidation  would be, an  Affiliate  or  Associate  (as  defined

         herein) of an Interested Stockholder (as defined herein); or

 

                  (ii) any sale, lease, exchange,  mortgage, pledge, transfer or

         other  disposition (in one transaction or a series of  transactions) to

         or with any Interested Stockholder or any Affiliate or Associate of any

         Interested  Stockholders of (1) all or substantially  all the assets of

         the  Corporation  or  (2)  assets  of  the  Corporation  or  any of its

         Subsidiaries  representing  in the aggregate more than 75% of the total

         value  of  the  assets  of  the   Corporation   and  its   consolidated

         Subsidiaries as reflected on the most recent consolidated balance sheet

         of the  Corporation  and  its  consolidated  Subsidiaries  prepared  in

         accordance  with  generally  accepted  accounting  principles  then  in

         effect; or

 

                  (iii)  (1)  any  sale,  lease,  exchange,   mortgage,  pledge,

         transfer  or other  disposition  (in one  transaction  or a  series  of

         transactions) to or with any Interested Stockholder or any Affiliate or

         Associate  of  any   Interested   Stockholder  of  any  assets  of  the

         Corporation or of any Subsidiary of the Corporation having an aggregate

         Fair  Market  Value of  $10,000,000  or more,  but less than the amount

         referred to in clause (2) of paragraph (ii) of this  subsection (a), or

         (2) any merger or  consolidation  of any Subsidiary of the  Corporation

         having  assets with an aggregate  Fair Market Value of  $10,000,000  or

         more in a transaction  not covered by paragraph (ii) of this subsection

         (a) with (x) any Interested  Stockholder  or (y) any other  corporation

         (whether or not it is itself an  Interested  Stockholder)  which is, or

         after such merger or consolidation  would be, an Affiliate or Associate

         of an Interested Stockholder; or

 

                  (iv)  the  issuance  or  transfer  by the  Corporation  or any

         Subsidiary  of the  Corporation  (in one  transaction  or a  series  of

         transactions)  to  any  Interested  Stockholder  or  any  Affiliate  or

         Associate  of  any  Interested  Stockholder  of any  securities  of the

         Corporation or any Subsidiary of the  Corporation in exchange for cash,

         securities  or other  property  (or a  combination  thereof)  having an

         aggregate  Fair Market  Value of  $10,000,000  or more,  other than the

         issuance of securities upon the conversion of convertible securities of

         the  Corporation  or any Subsidiary of the  Corporation  which were not

         acquired  by  such   Interested   Stockholder  (or  such  Affiliate  or

         Associate) from the Corporation or a Subsidiary of the Corporation; or

 

                  (v) the adoption of any plan or proposal  for the  liquidation

         or  dissolution  of the  Corporation  proposed  by or on  behalf of any

         Interested  Stockholder or any Affiliate or Associate of any Interested

         Stockholder; or

 

                  (vi) any reclassification of securities (including any reverse

         stock split) or recapitalization  of the Corporation,  or any merger or

         consolidation of the Corporation with any of its  Subsidiaries,  or any

         other transaction  (whether or not with or into or otherwise  involving

         any  Interested  Stockholder),  which in any such case has the  effect,

         directly or indirectly,  of increasing the  proportionate  share of the

         outstanding  shares  of any  class or  series  of  stock or  securities

         convertible  into stock of the  Corporation  or any  Subsidiary  of the

         Corporation which is directly or indirectly  beneficially  owned by any

         Interested  Stockholder or any Affiliate or Associate of any Interested

         Stockholder;

 

shall not be consummated  without (1) the affirmative  vote of the holders of at

least 80% of the  combined  Voting Power of the then  outstanding  shares of all

classes and series of Voting Stock and (2) the affirmative vote of a majority of

the  combined  Voting  Power of the then  outstanding  shares of all classes and

series of Voting Stock held by  Disinterested  Stockholders (as defined herein),

in each case voting together as a single class.  Such  affirmative vote shall be

required notwithstanding the fact that no vote may be required, or that a lesser

percentage may be specified,  by law or by this  Certificate of Incorporation or

the  terms of any  series of  Preferred  Stock or any  other  securities  of the

Corporation  or in any  agreement  with  any  national  securities  exchange  or

otherwise.

 

                  (b) The term "Business  Combination" as used in this Section 2

shall mean any transaction which is referred to in any one or more of paragraphs

(i) through (vi) of subsection (a) of this Section 2.

 

                  (c) The  provisions of subsection  (a) of this Section 2 shall

not be  applicable to any  particular  Business  Combination,  and such Business

Combination  shall require only such  affirmative vote as is required by law and

any other provision of this  Certificate of  Incorporation  and the terms of any

series of Preferred Stock or any other securities of the Corporation, if all the

conditions  specified in any of the following paragraphs (i), (ii),(iii) or (iv)

are met:

 

                  (i) (1) such Business  Combination shall have been approved by

         a majority of the  Disinterested  Directors (as defined herein) and (2)

         the Interested  Stockholder  involved in such Business  Combination has

         (x)  acquired  such  status as an  Interested  Stockholder  in a manner

         substantially   consistent   with  an   agreement  or   memorandum   of

         understanding approved by the Board of Directors prior to the time such

         Interested   Stockholder  became  an  Interested  Stockholder  and  (y)

         complied with all requirements  imposed by such agreement or memorandum

         of understanding; or

 

                  (ii) in the  case of any  Business  Combination  described  in

         paragraph  (i) of  subsection  (a) of this Section 2, (1) such Business

         Combination shall have been approved by a majority of the Disinterested

         Directors,  (2) such  Business  Combination  shall  not have  resulted,

         directly  or  indirectly,  in an increase of more than 10% in the total

         amount  of  shares  of any  class or  series  of  stock  or  securities

         convertible  into stock of the Corporation or any Subsidiary  which was

         directly or indirectly beneficially owned by any Interested Stockholder

         and all Affiliates and Associates of such Interested Stockholder at the

         time of the approval of such Business  Combination by a majority of the

         Disinterested  Directors,  and (3) such Business  Combination shall not

         have  been  consummated   within  a  period  of  two  years  after  the

         consummation of any other Business  Combination  described in paragraph

         (i), (ii), (iii), (iv), (v) or (vi) of subsection (a) of this Section 2

         (whether  or not  such  other  Business  Combination  shall  have  been

         approved by a majority of the  Disinterested  Directors)  which had the

         effect,  directly or indirectly,  of increasing the proportionate share

         of the outstanding shares of any class or series of stock or securities

         convertible  into stock of the  Corporation  or any  Subsidiary  of the

         Corporation which was directly or indirectly beneficially owned by such

         Interested Stockholder or any Affiliate or Associate of such Interested

         Stockholder; or

 

                  (iii) in the case of any  Business  Combination  described  in

         paragraph (iii), (iv) or (vi) of subsection (a) of this Section 2, such

         Business  Combination  shall have been  approved  by a majority  of the

         Disinterested Directors; or

 

                  (iv)  all of the six  conditions  specified  in the  following

         clauses (1) through (6) shall have been met:

 

                           (1)  the   transaction   constituting   the  Business

                  Combination  shall provide for a consideration  to be received

                  by  holders  of each then  existing  class of Common  Stock in

                  exchange for all their  shares of each class of Common  Stock,

                  and the aggregate amount of the cash and the Fair Market Value

                  as of the date of the consummation of the Business Combination

                  of any consideration  other than cash to be received per share

                  by  holders  of each  class of Common  Stock in such  Business

                  Combination  shall be at least  equal  to the  highest  of the

                  following:

 

                                    (A) (if  applicable)  the  highest per share

                           price (including any brokerage commissions,  transfer

                           taxes and soliciting  dealers' fees) paid in order to

                           acquire any shares of the particular  class of Common

                           Stock   in   question   beneficially   owned  by  the

                           Interested Stockholder which were acquired (i) within

                           the  two-year   period   immediately   prior  to  the

                           Announcement Date or (ii) in the transaction in which

                           it became an  Interested  Stockholder,  whichever  is

                           higher; and

 

                                    (B) the Fair  Market  Value per share of the

                           class of Common Stock in question on the Announcement

                           Date (as defined herein) or on the Determination Date

                           (as defined herein), whichever is higher; and

 

                           (2)  if the  transaction  constituting  the  Business

                  Combination  shall provide for a consideration  to be received

                  by holders of any class or series of outstanding  Voting Stock

                  other than Common Stock,  the aggregate amount of the cash and

                  the Fair Market  Value as of the date of the  consummation  of

                  the Business  Combination of any consideration other than cash

                  to be  received  per share by holders of shares of such Voting

                  Stock shall be at least equal to the highest of the  following

                  (the  requirements  of this  clause  (iv) (2) must be met with

                  respect to every class and series of such  outstanding  Voting

                  Stock, whether or not the Interested Stockholder  beneficially

                  owns any  shares  of a  particular  class or  series of Voting

                  Stock):

 

                                    (A) (if  applicable)  the  highest per share

                           price (including any brokerage commissions,  transfer

                           taxes and soliciting  dealers' fees) paid in order to

                           acquire  any shares of such class or series of Voting

                           Stock    beneficially   owned   by   the   Interested

                           Stockholder   which  were  acquired  (i)  within  the

                           two-year period immediately prior to the Announcement

                           Date or (ii) in the transaction in which it became an

                           Interested Stockholder, whichever is higher;

 

                                    (B) (if applicable) the highest preferential

                           amount  per share to which the  holders  of shares of

                           such class or series of Voting  Stock are entitled in

                           the   event   of   any   voluntary   or   involuntary

                           liquidation,   dissolution   or  winding  up  of  the

                           Corporation; and

 

                                    (C) the Fair Market  Value per share of such

                           class or series of Voting  Stock on the  Announcement

                           Date  or on  the  Determination  Date,  whichever  is

                           higher; and

 

                           (3) the  consideration to be received by holders of a

                  particular  class  or  series  of  outstanding   Voting  Stock

                  (including  any class of Common  Stock) shall be in cash or in

                  the same  form as was  previously  paid in  order  to  acquire

                  shares  of such  class or series  of  Voting  Stock  which are

                  beneficially  owned by the Interested  Stockholder and, if the

                  Interested  Stockholder  beneficially owns shares of any class

                  or series of Voting  Stock which were  acquired  with  varying

                  forms  of  consideration,  the  form  of  consideration  to be

                  received  by holders  of such class or series of Voting  Stock

                  shall be either  cash or the form used to acquire  the largest

                  number  of shares  of such  class or  series  of Voting  Stock

                  beneficially  owned by it; the prices determined in accordance

                  with  clauses  (1) and (2) of this  paragraph  (iv)  shall  be

                  appropriately  adjusted  in the event of any  stock  dividend,

                  stock split or  subdivision  or  combination  of shares or any

                  similar event; and

 

                            (4) after such Interested  Stockholder has become an

                  Interested  Stockholder and prior to the  consummation of such

                  business Combination:

 

                                     (A) except as approved by a majority of the

                           Disinterested  Directors,  there  shall  have been no

                           failure  to  declare  and  pay at the  regular  dates

                           therefor the full amount of any dividends (whether or

                           not cumulative) payable on the Preferred Stock or any

                           class or series of stock having a preference over the

                           Common Stock as to dividends or upon liquidation;

 

                                    (B) there  shall have been (x) no  reduction

                           in the annual rate of dividends  paid on any class of

                           Common  Stock  (except as  necessary  to reflect  any

                           subdivision of such class of Common Stock), except as

                           approved   by  a   majority   of  the   Disinterested

                           Directors, and (y) an increase in such annual rate of

                           dividends   (as   necessary   to  prevent   any  such

                           reduction)  in  the  event  of  any  reclassification

                           (including      any     reverse     stock     split),

                           recapitalization,   reorganization   or  any  similar

                           transaction  which  has the  effect of  reducing  the

                           number of  outstanding  shares of the  Common  Stock,

                           unless the failure so to increase such annual rate is

                           approved   by  a   majority   of  the   Disinterested

                           Directors; and

 

                                    (C) such  Interested  Stockholder  shall not

                           have become the  beneficial  owner of any  additional

                           shares  of  Voting   Stock  except  as  part  of  the

                           transaction   in  which  it  became   an   Interested

                           Stockholder; and

 

                           (5) after such  Interested  Stockholder has become an

                  Interested Stockholder,  such Interested Stockholder shall not

                  have  received the  benefit,  directly or  indirectly  (except

                  proportionately  as  a  stockholder)  of  any  loan,  advance,

                  guarantee,   pledge  or  other  arrangement  provided  by  the

                  Corporation or any  Subsidiary,  whether in anticipation of or

                  in connection with such Business Combination or otherwise; and

 

                           (6) a proxy or information  statement  describing the

                  proposed   Business   Combination   and  complying   with  the

                  requirements  of the  Securities  Exchange  Act of  1934  (the

                  "Exchange Act") and the rules and  regulations  thereunder (or

                  any  subsequent   provisions  replacing  such  Act,  rules  or

                  regulations)  shall be mailed to  public  stockholders  of the

                  Corporation at least 30 days prior to the consummation of such

                  Business Combination (whether or not such proxy or information

                  statement  is  required  to be mailed  pursuant to such Act or

                  subsequent provisions).

 

                  (d)  A  majority  of  the   Disinterested   Directors  of  the

Corporation  shall  have  the  power  and  duty to  determine,  on the  basis of

information  known to them after  reasonable  inquiry,  all facts  necessary  to

determine  compliance with this Section 2, including,  without  limitation,  (i)

whether a person is an Interested Stockholder, (ii) the number of shares of each

class or series of Voting Stock beneficially owned by any person,  (iii) whether

a person is an  Affiliate  or  Associate  of another  person,  (iv)  whether the

requirements  of subsection  (c) of this Section 2 have been met with respect to

any Business Combination and (v) whether the assets which are the subject of any

Business  Combination have, or the consideration to be received for the issuance

or  transfer  of  securities  by  the  Corporation  or  any  Subsidiary  of  the

Corporation in any Business  Combination  has, an aggregate Fair Market Value of

$10,000,000 or more or whether such assets or consideration, as the case may be,

represent in the aggregate more than 75% of the total value of the assets of the

Corporation  and its  consolidated  Subsidiaries as reflected on the most recent

consolidated balance sheet of the Corporation and its consolidated  Subsidiaries

prepared in accordance  with generally  accepted  accounting  principles then in

effect;  and the good faith  determination  of a majority  of the  Disinterested

Directors on such matters  shall be  conclusive  and binding for all purposes of

this Section 2.

 

                  (e) Nothing  contained in this Section 2 shall be construed to

relieve any Interested Stockholder from any fiduciary obligation imposed by law.

 

                  SECTION  3.  Staggered   Board.   (a)  The  directors  of  the

Corporation,  other than those who may be elected  pursuant  to the terms of any

series of Preferred Stock or any other securities of the  Corporation,  shall be

classified,  with respect to the time for which they severally hold office, into

three  classes,  as nearly equal in number as possible,  as shall be provided in

the By-laws of the Corporation, one class whose term expires at the first annual

meeting of stockholders to be held after the Threshold Time, another class whose

term expires at the second annual meeting of  stockholders  to be held after the

Threshold Time, and another class whose term expires at the third annual meeting

of  stockholders  to be held after the Threshold  Time,  with each class to hold

office until its  successors  are elected and  qualified.  The classes  shall be

initially  comprised  of  directors  serving  on the Board of  Directors  at the

Threshold  Time, and the membership of each class shall be initially  determined

by the  Board  of  Directors  at  such  time.  At  each  annual  meeting  of the

stockholders of the Corporation, the date of which shall be fixed by or pursuant

to the By-laws of the  Corporation,  the  successors  of the class of  directors

whose term  expires at that  meeting  shall be elected to hold office for a term

expiring at the annual meeting of stockholders  held in the third year following

the year of their election. No decrease in the number of directors  constituting

the Board of Directors  shall  shorten the term of any incumbent  director.  Any

director  elected to fill a newly  created  directorship  or any  vacancy on the

Board of Directors resulting from any death, resignation, removal or other cause

shall hold office for the  remainder  of the full term of the class of directors

in which the new directorship was created or the vacancy occurred and until such

director's successor shall have been elected and qualified.

 

                  (b) Except as otherwise provided by the terms of any series of

Preferred Stock or any other securities of the Corporation,  any director of the

Corporation  may  be  removed  from  office  only  for  cause  and  only  by the

affirmative  vote of the holders of a majority of the  combined  Voting Power of

the then outstanding shares of Voting Stock,  voting together as a single class.

For  purposes  of this  subsection  (b),  "cause"  shall  mean the  willful  and

continuous failure of a director to substantially perform such director's duties

to the Corporation (other than any such failure resulting from incapacity due to

physical  or mental  illness)  or the  willful  engaging  by a director in gross

misconduct materially and demonstrably injurious to the Corporation.

 

                  SECTION  4.  Special  Meetings.  Subject  to the  terms of any

series of Preferred Stock or any other  securities of the  Corporation,  special

meetings of  stockholders  of the Corporation may be called only by the Board of

Directors pursuant to a resolution approved by a majority of the entire Board of

Directors or as otherwise provided in the By-laws of the Corporation.

 

                  SECTION 5.  Amendments  of  Certificate.  In  addition  to any

requirements   of  law  and  any  other   provisions  of  this   Certificate  of

Incorporation  or the  terms of any  series  of  Preferred  Stock  or any  other

securities  of the  Corporation  (and  notwithstanding  the  fact  that a lesser

percentage  may be specified by law, this  Certificate of  Incorporation  or the

terms  of  any  series  of  Preferred  Stock  or  any  other  securities  of the

Corporation),  the  affirmative  vote of (i) the  holders  of 80% or more of the

combined Voting Power of the then outstanding  shares of Voting Stock and (ii) a

majority of the combined Voting Power of the then  outstanding  shares of Voting

Stock held by the Disinterested Stockholders,  in each case voting together as a

single  class,  shall be  required  to  amend,  alter or  repeal,  or adopt  any

provision  inconsistent  with,  this  Article VII or Article VIII insofar as the

definitions set forth in Article VIII relate to this Article VII.

 

                                  ARTICLE VIII

 

                               Certain Definitions

 

             For purposes of this Certificate of Incorporation:

 

                  "Affiliate" and "Associate" shall have the respective meanings

ascribed to such terms in Rule 12b-2 of the General Rules and Regulations  under

the Exchange Act, as in effect on the date this Certificate of Incorporation are

filed.

 

                  "Announcement  Date"  shall  mean  the  date of  first  public

announcement of the proposed Business Combination.

 

                  A person shall be a "beneficial  owner" of any Voting Stock or

other security or interest:

 

                  (a) which such person or any of its Affiliates or Associates

         beneficially owns, directly or indirectly; or

 

                  (b) which such person or any of its  Affiliates  or Associates

         has (i) the  right  to  acquire  (whether  such  right  is  exercisable

         immediately  or only  after  the  passage  of  time),  pursuant  to any

         agreement,  arrangement  or  understanding  or  upon  the  exercise  of

         conversion rights,  exchange rights, warrants or options, or otherwise,

         or (ii)  the  right  to vote or to  direct  the  vote  pursuant  to any

         agreement, arrangement or understanding; or

 

                  (c) which are beneficially owned,  directly or indirectly,  by

         any other  person  with which such person or any of its  Affiliates  or

         Associates has any  agreement,  arrangement  or  understanding  for the

         purpose of  acquiring,  holding,  voting or  disposing of any shares of

         Voting Stock or such other security or interest.

 

                  "Determination  Date"  means the date on which the  Interested

Stockholder became an Interested Stockholder.

 

                  "Disinterested  Director"  means  any  member  of the Board of

Directors of the Corporation who is unaffiliated  with, and not a nominee of, an

Interested  Stockholder  or  any  Affiliate  or  Associate  of  such  Interested

Stockholder  and was a member of the Board of  Directors  prior to the time that

such Interested Stockholder became an Interested Stockholder,  and any successor

of a Disinterested  Director who is unaffiliated  with, and not a nominee of, an

Interested  Stockholder  or  any  Affiliate  or  Associate  of  such  Interested

Stockholder  and who is  recommended  for  election  or  elected  to  succeed  a

Disinterested  Director by a majority  of  Disinterested  Directors  then on the

Board of Directors.

 

                  "Disinterested  Stockholder"  shall mean a stockholder  of the

Corporation who is not an Interested Stockholder or an Affiliate or an Associate

of an Interested Stockholder.

 

                  "Equity Interest" shall mean (i) in the case of a corporation,

capital  stock,  beneficially  owned directly or  indirectly,  representing  any

portion of, or, where a specified  percentage of Equity Interest is referred to,

the  specified  percentage  of,  either  (x) the  total  common  equity  of such

corporation or (y) the total outstanding Voting Power in respect of the election

of directors and (ii) in the case of a partnership or other person,  partnership

or  other  ownership  interests,  beneficially  owned  directly  or  indirectly,

representing any portion of, or, where a specified percentage of Equity Interest

is referred to, the specified percentage of, either (x) the total partnership or

other ownership  interests in such  partnership or other person or (y) the total

outstanding  Voting  Power in respect of any matter  submitted  to a vote of all

partners or other owners.

 

                  "Fair  Market  Value"  means:  (a) in the case of  stock,  the

highest  closing sale price during the 30-day period  immediately  preceding the

date in  question  of a share of such  stock  as  reported  in the  consolidated

transaction reporting system for the principal United States securities exchange

registered  under the  Exchange  Act on which such stock is listed,  or, if such

stock is not listed on any such exchange, the highest closing sales price or bid

quotation  with  respect  to a share of such  stock  during  the  30-day  period

preceding  the  date in  question  on the  National  Association  of  Securities

Dealers,  Inc. Automated  Quotations System or any system then in use, or, if no

such quotations are available,  the fair market value on the date in question of

a share of such stock as determined by a majority of the Disinterested Directors

in good faith;  and (b) in the case of stock of any class or series which is not

traded on any securities  exchange or in the  over-the-counter  market or in the

case of property  other than cash or stock,  the fair market value of such stock

or  property,  as the case may be, on the date in  question as  determined  by a

majority of the Disinterested Directors in good faith.

 

                  "Interested Stockholder" shall mean any person who or which:

 

                  (a) is the beneficial owner, directly or indirectly, of 20% or

         more of the  combined  Voting Power of the then  outstanding  shares of

         Voting Stock; or

 

                  (b) is an Affiliate of the  Corporation and at any time within

         the two-year period  immediately  prior to the date in question was the

         beneficial  owner,  directly  or  indirectly,  of  20% or  more  of the

         combined Voting Power of the then  outstanding  shares of Voting Stock;

         or

 

                  (c)  is an  assignee  of or  has  otherwise  succeeded  to the

         beneficial  ownership  of any shares of Voting  Stock which were at any

         time  within  the  two-year  period  immediately  prior  to the date in

         question  beneficially  owned by any  Interested  Stockholder,  if such

         assignment  or  succession  shall  have  occurred  in the  course  of a

         transaction or series of  transactions  not involving a public offering

         within  the  meaning  of the  Securities  Act of 1933 or  other  public

         distribution regardless of whether registered under such Act.

 

                  Notwithstanding the foregoing, "Interested Stockholder" shall

not include:

 

                  (a) the Corporation or any Subsidiary of the Corporation;

 

                  (b) any  employee  benefit plan of the  Corporation  or of any

         Subsidiary of the Corporation or any person holding any class or series

         of Voting  Stock  for or  pursuant  to the  terms of any such  employee

         benefit plan;

 

                  (c) the Permitted Stockholder or any Permitted Transferee; or

 

                  (d) any transferee of the Permitted Stockholder or a Permitted

         Transferee  that  would  not  absent  such  transfer  be an  Interested

         Stockholder.

 

                  For  the  purposes  of  determining  whether  a  person  is an

Interested  Stockholder,  the  number of shares  of  Voting  Stock  deemed to be

outstanding shall include shares of which such person is the beneficial owner as

defined in this  Article  VIII but shall not include any other  shares of Voting

Stock  which  may be  issuable  to  other  persons  pursuant  to any  agreement,

arrangement or understanding,  or upon exercise of conversion  rights,  exchange

rights, warrants or options, or otherwise.

 

                  A  "person"  shall  mean any  individual,  firm,  corporation,

partnership, trust or other entity.

 

                  "Subsidiary"  shall  mean a person,  a  majority  of the total

outstanding Voting Power of which is owned,  directly or indirectly,  by another

person or by one or more  other  Subsidiaries  of such  other  person or by such

person  and one or more  other  Subsidiaries  of such  other  person;  provided,

however,  that for the purposes of the definition of Interested  Stockholder set

forth in this Article VIII, the term  "Subsidiary"  shall mean only a person,  a

majority  the  total  outstanding   Voting  Power  of  which  is  owned  by  the

Corporation, by a Subsidiary of the Corporation or by the Corporation and one or

more of its Subsidiaries.

 

                  "Voting Power",  when used with reference to the capital stock

of, or units of equity  interests  in, any  person,  shall mean the power  under

ordinary  circumstances  (and not  merely  as a result  of the  occurrence  of a

contingency) to vote in the election of directors of such person (if such person

is a corporation) or to participate in the management and control of such person

(if such person is not a corporation).

 

                  "Voting  Stock" means capital stock of the  Corporation of all

classes and series  entitled to vote  generally  in the election of directors of

the Corporation.

 

                                   ARTICLE IX

 

                                   Amendments

 

                  Subject to the provisions of this Certificate of Incorporation

(including  Section 5 of Article  VII,  Section 3 of Article X, and Section 2 of

Article XII) the  Corporation  reserves the right to amend,  alter or repeal any

provision  contained in this Certificate of Incorporation,  in the manner now or

hereafter  prescribed  by the  laws of  Delaware,  and  all  rights  and  powers

conferred  on  directors  and  stockholders  herein are granted  subject to this

reservation.

 

                                    ARTICLE X

 

                     Director Liability and Indemnification

 

                   SECTION  1. No  Liability.  To the  fullest  extent  that the

Delaware  General  Corporation  Law as it exists on the date hereof or as it may

hereafter be amended  permits the  limitation or elimination of the liability of

directors,  no director of the Corporation shall be liable to the Corporation or

its  stockholders  for  monetary  damages  for  breach  of  fiduciary  duty as a

director.  No  amendment  to this  Certificate  of  Incorporation,  directly  or

indirectly by merger, consolidation or otherwise, having the effect of amending,

altering,  changing or repealing  any of the  provisions of this Section 1 shall

apply to or have  any  effect  on the  liability  or  alleged  liability  of any

director of the Corporation for or with respect to any acts or omissions of such

director  occurring  prior to such  amendment or repeal,  unless such  amendment

shall have the effect of further limiting or eliminating such liability.

 

                  SECTION 2. Indemnification.  (a) The Corporation shall, to the

fullest  extent  permitted by  applicable  law as then in effect,  indemnify any

person  (the  "indemnitee")  who was or is  involved  in any manner  (including,

without limitation,  as a party or a witness) or was or is threatened to be made

so  involved  in any  threatened,  pending or  completed  investigation,  claim,

action,  suit  or  proceeding,   whether  civil,  criminal,   administrative  or

investigative (including,  without limitation, any action, suit or proceeding by

or in the right of the  Corporation  to  procure  a  judgment  in its  favor) (a

"proceeding")  by reason of the fact that he is or was a director  or officer of

the  Corporation,  or is or was serving at the request of the  Corporation  as a

director or officer of another corporation, or of a partnership,  joint venture,

trust or other enterprise (including,  without limitation,  service with respect

to any  employee  benefit  plan),  whether the basis of any such  proceeding  is

alleged action in an official  capacity as a director or officer or in any other

capacity  while  serving  as  a  director  or  officer,  against  all  expenses,

liabilities and loss (including, without limitation, attorneys' fees, judgments,

fines,  ERISA  excise  taxes  or  penalties  and  amounts  paid or to be paid in

settlement)  actually and  reasonably  incurred by him in  connection  with such

proceeding. Such indemnification shall continue as to a person who has ceased to

be a director  or officer  and shall inure to the benefit of his heirs and legal

representatives.  The right to indemnification conferred in this Article X shall

include the right to receive payment in advance of any expenses  incurred by the

indemnitee in connection with such proceeding, consistent with applicable law as

then in effect, and shall be a contract right. The Corporation may, by action of

its Board of Directors, provide indemnification for employees, agents, attorneys

and  representatives  of the Corporation with up to the same scope and extent as

herein  above  provided  for  officers  and  directors.  No  amendment  to  this

Certificate of Incorporation having the effect of amending,  altering,  changing

or repealing any of the  provisions  of this Section 2 shall remove,  abridge or

adversely  affect  any right to  indemnification  or other  benefits  under this

Section  2 with  respect  to any  acts  or  omissions  occurring  prior  to such

amendment or repeal.

 

                  (b) The  right  of  indemnification,  including  the  right to

receive payment in advance of expenses, conferred in this Article X shall not be

exclusive of any other rights to which any person  seeking  indemnification  may

otherwise be entitled under any provisions of the Certificate of  Incorporation,

By-laws, agreement, or otherwise.

 

                  (c) In any  action  or  proceeding  relating  to the  right to

indemnification  conferred  in this  Article X, the  Corporation  shall have the

burden of proof  that the  indemnitee  has not met any  standard  of  conduct or

belief which may be required by applicable law to be applied in connection  with

a determination of whether the indemnitee is entitled to indemnity, or otherwise

is not entitled to indemnity,  and neither a failure to make such  determination

nor an adverse  determination  of entitlement to indemnity shall be a defense of

the Corporation in such an action or proceeding or create any  presumption  that

the  indemnitee  has not met any  such  standard  of  conduct  or  belief  or is

otherwise not entitled to  indemnity.  If successful in whole or in part in such

an action or proceeding,  the indemnitee  shall be entitled to be indemnified by

the  Corporation  for the expenses  actually and  reasonably  incurred by him in

connection with such action or proceeding.

 

                  SECTION 3.  Amendments  of  Certificate.  No amendment to this

Certificate of Incorporation, directly or indirectly by merger, consolidation or

otherwise,  shall amend,  alter,  change or repeal any of the provisions of this

Article X, unless the amendment effecting such amendment,  alteration, change or

repeal shall receive the affirmative  vote of the holders of at least 80% of the

outstanding shares of stock of the Corporation  entitled to vote in elections of

directors, provided that this Section 3 shall not apply to any such amendment if

such amendment is submitted to the  stockholders for adoption with the unanimous

recommendation of the entire Board of Directors.

 

                                   ARTICLE XI

 

                            Compromise or Arrangement

 

                  Whenever a compromise or arrangement  is proposed  between the

Corporation  and  its  creditors  or  any  class  of  them  and/or  between  the

Corporation  and its  stockholders  or any class of them, any court of equitable

jurisdiction  within the State of Delaware may, on the  application in a summary

way of the  Corporation  or of any  creditor  or  stockholder  thereof or on the

application  of any receiver or receivers  appointed for the  Corporation  under

Section 291 of Title 8 of the Delaware Code or on the application of trustees in

dissolution or of any receiver or receivers  appointed for the Corporation under

Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or

class of creditors,  and/or of the  stockholders or class of stockholders of the

Corporation, as the case may be, to be summoned in such manner as the said court

directs.  If a majority  in number  representing  three-fourths  in value of the

creditors  or  class  of  creditors,  and/or  of the  stockholders  or  class of

stockholders of the Corporation,  as the case may be, agree to any compromise or

arrangement  and to any  reorganization  of the  Corporation as a consequence of

such compromise or arrangement,  the said compromise or arrangement and the said

reorganization  shall, if sanctioned by the court to which said  application has

been made, be binding on all the creditors or class of creditors,  and/or on all

the stockholders or class of stockholders,  of the Corporation,  as the case may

be, and also on the Corporation.

 

                                   ARTICLE XII

 

                            Meetings of Stockholders

 

                  SECTION 1. Meetings  Required.  No action required to be taken

or which may be taken at any annual or special  meeting of  stockholders  of the

Corporation may be taken without a meeting,  except on written consent,  setting

forth the  action so taken,  signed by the  holders of record of at least 80% of

the outstanding shares entitled to vote thereon.

 

                  SECTION 2.  Amendments  of  Certificate.  No amendment to this

Certificate of Incorporation, directly or indirectly by merger, consolidation or

otherwise,  shall amend,  alter,  change or repeal any of the provisions of this

Article XII, unless the amendment effecting such amendment,  alteration,  change

or repeal shall receive the  affirmative  vote of the holders of at least 80% of

the outstanding shares of stock of the Corporation entitled to vote in elections

of directors; provided that this Section 2 shall not apply to any such amendment

if such  amendment  is  submitted  to the  stockholders  for  adoption  with the

unanimous recommendation of the entire Board of Directors.

 

                                  ARTICLE XIII

 

                             Corporate Opportunities

 

                  No opportunity, transaction, agreement or other arrangement to

which Fingerhut  Companies,  Inc. (FCI), or any other person in which FCI has or

acquires a financial interest, is or shall become a party, shall be the property

or a corporate  opportunity  of the  Corporation,  unless (a) such  opportunity,

transaction,  agreement or other  arrangement is offered to the  Corporation for

its benefit before it is offered to FCI or such other person, and (b) either (i)

the Corporation  has an enforceable  contractual  interest in such  opportunity,

transaction,  agreement or other  arrangement or (ii) the subject matter of such

opportunity,  transaction,  agreement  or  other  arrangement  is a  constituent

element of an activity in which the Corporation is then actively engaged.

 

                  In the event an opportunity,  transaction,  agreement or other

arrangement  shall be offered to (a) FCI or any other person in which FCI has or

acquires a financial  interest or (b) an officer or director of the Corporation,

after it has been offered to the  Corporation,  the existence or presence of one

or more  of the  conditions  set  forth  in  clauses  (b)  (i)  and  (ii) in the

immediately  preceding paragraph shall not be deemed to conclusively entitle the

Corporation to the benefit of such opportunity,  transaction, agreement or other

arrangement.