S

Restated Certificate of Incorporation
of
Sears, Roebuck and Co., as amended to
March 13, 1996

1. NAME

The name of the Corporation is Sears, Roebuck and Co.

2. PURPOSES

The purposes of the Corporation are:

2.1 To manufacture, buy, sell, import, export, distribute and deal in
goods, wares, merchandise and related services of every kind, and any and all
materials or articles for, or used or useful in connection with all or any of
the objects aforesaid.

2.2 To engage in any activity which may promote the interests of the
Corporation, or enhance the value of its property, to the fullest extent
permitted by law.

3. SHARES

3.1 Authorized Shares. The total number of shares which the Corporation
may issue is 1,050,000,000, of which 1,000,000,000 shall be common shares of
a par value of $0.75 each and 50,000,000 shall be preferred shares of a par
value of $1.00 each.

3.2 Preferred Shares. The preferred shares may be issued from time to
time in series. The board of directors is authorized to establish and
designate series and to fix the number of shares and the relative rights,
preferences and limitations as between series, subject to such limitations as
may be prescribed by law. In particular, the board of directors may
establish, designate and fix the following with respect to each series of
preferred shares: establish and specify a designation of such series; fix
the dividend rights of holders of shares of each such series; fix the terms
on which shares of each such series may be redeemed if the shares of such
series are to be redeemable; fix the rights of the holders of shares of each
such series upon dissolution or any distribution of assets; fix the terms or
amount of the sinking fund, if any, to be provided for the purchase or
redemption of shares of each such series; fix the terms upon which the shares
of each such series may be converted into or exchanged for shares of any
other class or classes or of any one or more series of preferred shares if
the shares of such series are to be convertible or exchangeable; fix the
voting rights, if any, of the shares of each such series; and any other
relative rights, preferences, or limitations of shares of the series
consistent herewith and applicable law.

3.2.1 8.88% Preferred Shares, First Series.

(1) Designation. An aggregate of 3,250,000 preferred shares, par
value $1.00 per share, of the Company are hereby constituted as a series of
preferred shares designated as "8.88% Preferred Shares, First Series"
(hereinafter called "First Series Preferred Shares").

(2) Dividends. (a) The holders of First Series Preferred Shares
shall be entitled to receive a cash dividend per share (payable as set forth
below), out of funds legally available for the purpose, computed as follows
(rounded to the nearest cent):

(i) for the Initial Dividend Period (as hereinafter
defined), the product of (A) 8.88% times (B) a fraction the numerator of
which is the number of days from (and including) the date of the original
issue of the First Series Preferred Shares to (but not including) December
31, 1991, on the basis of 30-day months, and the denominator of which is 360
times (C) $100; and

(ii) for each Quarterly Dividend Period thereafter, the
product of (A) 8.88% times (B) .25 times (C) $100.

Such dividends shall be cumulative from the date of original issue
of such shares and shall be payable in arrears, when and as declared by the
Board of Directors, on February 1, May 1, August 1 and November 1 of each
year, commencing on February 1, 1992. Each such dividend shall be paid to
the holders of record of the First Series Preferred Shares as their names
shall appear on the share register of the Company on such record date, not
exceeding 50 days preceding the payment date thereof, as shall be fixed by
the Board of Directors of the Company. Dividends on account of arrears for
any past Dividend Periods (as hereinafter defined) may be declared and paid
at any time, without reference to any regular dividend payment date, to
holders of record on such date, not exceeding 50 days preceding the payment
date thereof, as may be fixed by the Board of Directors of the Company.

(b) The term:

(i) "Dividend Period" shall mean the Initial Dividend
Period or any Quarterly Dividend Period (collectively referred to as
"Dividend Periods");

(ii) "Initial Dividend Period" shall mean the period from
the date of the original issue of the First Series Preferred Shares through
December 31, 1991; and

(iii) "Quarterly Dividend Period" shall mean each of the
periods commencing on January 1, April 1, July 1 and October 1 in each year
and ending on (and including) the day next preceding the first day of the
next Quarterly Dividend Period, beginning on January 1, 1992.

(c) So long as any of the First Series Preferred Shares are
outstanding, no dividend (other than dividends or distributions paid in
common shares, or in options, warrants or rights to subscribe for or purchase
common shares or another stock ranking junior to the First Series Preferred
Shares as to dividends and other than as provided in paragraph (d) of this
Section (2)) shall be declared or paid or set aside for payment or other
distribution declared or made upon the common shares or upon any other stock
ranking junior to or on a parity with the First Series Preferred Shares as to
dividends, nor shall any common shares or any other stock of the Company
ranking junior to or on a parity with the First Series Preferred Shares as to
dividends be redeemed, purchased or otherwise acquired for any consideration
(or any monies be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Company (except by
conversion into or exchange for stock of the Company ranking junior to the
First Series Preferred Shares as to dividends) unless, in each case, the full
cumulative dividends on the outstanding First Series Preferred Shares shall
have been paid or set apart for payment for all Dividend Periods terminating
on or prior to the date of such payment or action, as the case may be.

(d) When dividends are not paid in full, as aforesaid, on the
First Series Preferred Shares and on any other preferred shares ranking on a
parity as to dividends with the First Series Preferred Shares, all dividends
declared on the First Series Preferred Shares and any other preferred shares
ranking on a parity as to dividends with the First Series Preferred Shares
shall be declared ratably in accordance with the respective dividends which
would be payable on the First Series Preferred Shares and such other
preferred shares if all accrued and unpaid dividends thereon were paid in
full. Holders of First Series Preferred Shares shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on the First Series Preferred
Shares. No interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend payment or payments on the First Series Preferred
Shares which may be in arrears.

(3) Dissolution Preference. (a) In the event of any liquidation,
dissolution, or winding up (hereinafter "Dissolution") of the Corporation,
whether voluntary or involuntary, before any payment or distribution of the
assets of the Corporation (whether capital or surplus) shall be made to or
set apart for the holders of any series or class or classes of stock of the
Company ranking junior to the First Series Preferred Shares upon Dissolution,
the holders of the First Series Preferred Shares shall be entitled to receive
for each share $100 plus an amount equal to all dividends (whether or not
earned or declared) accrued and unpaid thereon to the date of final
distribution to such holders (subject to the right of the holders of record
of any First Series Preferred Shares on a record date for payment of
dividends thereon to receive a dividend payable on the date of final
distribution), determined by adding (i) dividends accrued and unpaid for any
Dividend Period preceding the Dividend Period in which the date of final
distribution falls plus (ii) the product of (A) 8.88% times (B) a fraction,
the numerator of which is the number of days elapsed from (and including) the
first day of the Dividend Period in which the date of final distribution
falls, to (but not including) the date of final distribution, on the basis of
30-day months, and the denominator of which is 360 times (C) $100; but such
holders shall not be entitled to any further payment. If, upon any
Dissolution of the Company, the assets of the Company, or proceeds thereof,
distributable among the holders of the First Series Preferred Shares and any
other preferred shares ranking as to Dissolution on a parity with the First
Series Preferred Shares shall be insufficient to pay in full the preferential
amount aforesaid and Dissolution payments on any other such other preferred
shares, then such assets, or the proceeds thereof, shall be distributed among
the holders of First Series Preferred Shares and any such other preferred
shares ratably in accordance with the respective amounts which would be
payable on such First Series Preferred Shares and any such other preferred
shares if all amounts payable thereon were paid in full. For the purposes of
this Section (3), a sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Company, or a
consolidation or merger of the Company with one or more corporations shall
not be deemed to be a Dissolution, voluntary or involuntary.

(b) Subject to the rights of the holders of shares of any series
or class or classes of stock ranking on a parity with or prior to the First
Series Preferred Shares upon Dissolution, upon any Dissolution of the
Company, after payment shall have been made in full to the First Series
Preferred Shares as provided in this Section (3), but not prior thereto, any
other series or class or classes of stock ranking junior to the First Series
Preferred Shares upon Dissolution shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all
assets remaining to be paid or distributed, and the First Series Preferred
Shares shall not be entitled to share therein.

(4) Redemption. (a) Except as provided in paragraph (b) of this Section
4, the First Series Preferred Shares may not be redeemed prior to November 9,
1996. Thereafter, the Company, at its option, may redeem the First Series
Preferred Shares, as a whole or in part, at any time or from time to time at
redemption prices which shall be $100 per share, plus accrued and unpaid
dividends thereon to the date fixed for redemption (subject to the right of
the holders of record of any First Series Preferred Shares on a record date
for payment of dividends thereon to receive a dividend payable on the date of
redemption), determined by adding (i) dividends accrued and unpaid for any
Dividend Period preceding the Dividend Period in which the date of redemption
falls, plus (ii) the product of (A) 8.88% times (B) a fraction, the numerator
of which is the number of days elapsed from (and including) the first day of
the Dividend Period in which the date of redemption falls to (but not
including) the date of redemption, on the basis of 30-day months, and the
denominator of which is 360 times (C) $100.

(b) Prior to November 9, 1996, the Company at its option may
redeem all, but not less than all, of the outstanding First Series Preferred
Shares if the holders of the First Series Preferred Shares shall be entitled
to vote upon or consent to a merger or consolidation of the Company as
provided in Section (7) and all of the following conditions have been
satisfied: (i) the Company shall have requested the vote or consent of the
holders of the First Series Preferred Shares to the consummation of such
merger or consolidation, stating in such request that failing the requisite
favorable vote or consent the Company will have the option to redeem the
First Series Preferred Shares, (ii) the Company shall not have received the
favorable vote or consent requisite to the consummation of the transaction
within 60 days after making such written request (which shall be deemed to
have been made upon the mailing of the notice of any meeting of holders of
the First Series Preferred Shares to vote upon granting such consent), and
(iii) such transaction shall be consummated on the date fixed for such
redemption, which date shall be no more than one year after such request is
made. Any such redemption shall be on notice as aforesaid (and on an
additional notice in accordance with paragraph (c) of this Section (4), which
may be contemporaneous with, or included in, the notice provided for by this
paragraph (b)) at the redemption price of (i) $100 per share, plus (ii)
accrued and unpaid dividends thereon to the date fixed for redemption
(subject to the right of the holders of record of any First Series Preferred
Shares on a record date for payment of dividends thereon to receive a
dividend payable on the date of redemption), determined by adding (i)
dividends accrued and unpaid for any Dividend Period preceding the Dividend
Period in which the date of redemption falls, plus (ii) the product of (A)
8.88% times (B) a fraction, the numerator of which is the number of days
elapsed from (and including) the first day of the Dividend Period in which
the date of redemption falls, to (but not including) the date of redemption,
on the basis of 30-day months, and the denominator of which is 360 times (C)
$100.

(c) In the event the Company shall redeem any First Series
Preferred Shares, notice of such redemption shall be given by first class
mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the redemption date, to each holder of record of the shares to be redeemed,
at such holder's address as the same appears on the share register of the
Company. Each such notice shall state: (1) the redemption date; (2) the
number of shares to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (3) the redemption price; (4) the place or places where certificates
for such shares are to be surrendered for payment of the redemption price;
and (5) that dividends on the shares to be redeemed will cease to accrue on
such redemption date. Notice having been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Company in providing
money for the payment of the redemption price) dividends on the First Series
Preferred Shares so called for redemption shall cease to accrue, and said
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as shareholders of the Company (except the right to receive
from the Company the redemption price) shall cease. The Company's obligation
to provide monies in accordance with the preceding sentence shall be deemed
fulfilled if, on or before the redemption date, the Company shall deposit
with a bank or trust company (which may be an affiliate of the Company)
having an office in the Borough of Manhattan, The City of New York, and
having a capital and surplus of at least $50,000,000, funds necessary for
such redemption, in trust, with irrevocable instructions that such funds be
applied to the redemption of the First Series Preferred Shares so called for
redemption. Any interest accrued on such funds shall be paid to the Company
from time to time.

(d) Upon surrender in accordance with said notice of the
certificates for any shares so redeemed (properly endorsed or assigned for
transfer, if the Board of Directors of the Company shall so require and the
notice shall so state), such shares shall be redeemed by the Company at the
redemption price aforesaid. If less than all the outstanding First Series
Preferred Shares are to be redeemed, shares to be redeemed shall be selected
by the Company from outstanding shares not previously called for redemption
by lot or pro rata (as nearly as may be possible) or by any other method
determined by the Company in its sole discretion to be equitable, except that
in any redemption of fewer than all the outstanding First Series Preferred
Shares the Company may redeem all First Series Preferred Shares held by all
holders of a number of shares not to exceed 100 as may be specified by the
Company.

(e) In no event shall the Company redeem less than all the
outstanding First Series Preferred Shares unless full cumulative dividends
shall have been paid or declared and set apart for payment upon all
outstanding First Series Preferred Shares for all Dividend Periods
terminating on or prior to the date fixed for redemption.

(5) Shares to be Retired. All First Series Preferred Shares redeemed or
purchased by the Company shall be retired and cancelled and shall be restored
to the status of authorized but unissued preferred shares, without
designation as to series, and may thereafter be issued, but not as First
Series Preferred Shares.

(6) Conversion or Exchange. The holders of First Series Preferred Shares
shall not have any rights herein to convert such shares into or exchange such
shares for shares of any other class or classes or of any other series of any
class or classes of capital stock (or any other security) of the Company.

(7) Voting. (a) Except as hereinafter in this Section (7) expressly
provided or as otherwise from time to time required by law, the First Series
Preferred Shares shall have no voting rights. Whenever, at any time or
times, dividends payable on the First Series Preferred Shares shall be in
arrears in an amount equal to at least the dividends payable for six
Quarterly Dividend Periods on the First Series Preferred Shares at the time
outstanding, the holders of the outstanding First Series Preferred Shares
shall have the exclusive right, voting separately as a class with holders of
any one or more other series of preferred shares ranking on a parity with the
First Series Preferred Shares either as to dividends or the distribution of
assets upon Dissolution and upon which like voting rights have been conferred
and are exercisable, to elect two directors of the Company at the Company's
next annual meeting of shareholders and at each subsequent annual meeting of
shareholders. Such directors shall be elected for terms expiring at the next
succeeding annual meeting of shareholders or until their respective
successors are elected and qualified, unless such terms are sooner terminated
as provided in this paragraph (a) of this Section (7). At elections for such
directors, each holder of First Series Preferred Shares shall be entitled to
vote cumulatively in accordance with Article 3.5 of the Restated Certificate
of Incorporation of the Company as to the directors to be elected by such
holders voting as a class (the holders of any other series of preferred
shares ranking on a parity being entitled to such number of votes, if any,
for each share held as may be granted to them). The right of the holders of
the First Series Preferred Shares, voting separately as a class, to elect
(either alone or together with the holders of any one or more other series of
preferred shares ranking on a parity) members of the Board of Directors of
the Company as aforesaid shall continue until such time as all dividends
accumulated on the First Series Preferred Shares shall have been paid in full
or set aside for payment by the Company, at which time such right shall
terminate, except as herein or by law expressly provided, subject to
revesting in the event of each and every subsequent failure to pay dividends
in the aggregate amount specified above. Any such director may be removed
from office, with or without cause, only by vote of holders of the First
Series Preferred Shares voting as a class with holders of any one or more
other series of preferred shares ranking on a parity with the First Series
Preferred Shares either as to dividends or the distribution of assets upon
Dissolution and upon which like voting rights have been conferred and are
exercisable, and by such vote as may be required by law.

(b) Upon any termination of the right of the holders of the First
Series Preferred Shares as a class to vote for directors as herein provided,
the term of office of all directors then in office elected by the First
Series Preferred Shares voting as a class shall terminate immediately. If the
office of any director elected by the holders of the First Series Preferred
Shares voting as a class as herein provided becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office, or
otherwise, the remaining director elected by the holders of the First Series
Preferred Shares voting as a class as herein provided may choose a successor
who shall hold office for the unexpired term in respect of which such vacancy
occurred.

(c) So long as any First Series Preferred Shares remain
outstanding, the consent of the holders of at least two-thirds of the First
Series Preferred Shares outstanding at the time (voting separately as a class
together with all other series of preferred shares ranking on a parity with
First Series Preferred Shares either as to dividends or the distribution of
assets upon Dissolution and upon which like voting rights have been conferred
and are exercisable) given in person or by proxy, either in writing or at any
special or annual meeting called for the purpose, shall be necessary to
permit, effect or validate any one or more of the following:

(i) the authorization, creation or issuance, or any
increase in the authorized or issued amount, of any class or series of shares
(including any class or series of preferred shares) ranking prior (as that
term is defined in paragraph (e) of this Section (7)) to the First Series
Preferred Shares; or

(ii) the amendment, alteration or repeal of any of the
provisions of the Restated Certificate of Incorporation in any manner which
would materially and adversely affect any right, preference, privilege or
voting power of the First Series Preferred Shares or of the holders thereof;
provided, however, that any increase in the amount of authorized preferred
shares or the creation and issuance of other series of preferred shares, in
each case ranking on a parity with or junior to the First Series Preferred
Shares with respect to the payment of dividends and the distribution of
assets upon Dissolution shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers; provided,
further, that the creation of a class or series of shares entitled to vote as
a class together with the First Series Preferred Shares on the matters stated
herein and having a voting power greater than one vote for each $100 of
liquidation preference (exclusive of accrued and unpaid dividends), shall be
deemed to materially and adversely affect the voting power of the Preferred
Shares.

(d) So long as any First Series Preferred Shares remain
outstanding, the consent of the holders of at least a majority of the First
Series Preferred Shares outstanding at the time (voting separately as a class
together with all other series of preferred shares ranking on a parity with
First Series Preferred Shares either as to dividends or the distribution of
assets upon Dissolution and upon which like voting rights have been conferred
and are exercisable) given in person or by proxy, either in writing or at any
special or annual meeting called for the purpose, shall be necessary to
effect the merger or consolidation of the Company with or into any other
corporation, if and only if the plan of merger or consolidation contains any
provision which, if contained in an amendment to the Company's Restated
Certificate of Incorporation, would entitle the holders of shares of such
class or series to vote as a class thereon.

(e) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding shares of the First
Series Preferred Shares shall have been redeemed or sufficient funds shall
have been deposited in trust to effect such redemption.

(f) Any class or classes of shares of the Company shall be deemed
to rank:

(i) prior to the First Series Preferred Shares as to
dividends or as to distribution of assets upon Dissolution if the holders of
such class shall be entitled to the receipt of dividends or of amounts
distributable upon Dissolution in preference or priority to the holders of
the First Series Preferred Shares; and

(ii) on a parity with the First Series Preferred Shares
as to dividends or as to distribution of assets upon Dissolution whether or
not the dividend rates, dividend payment dates, or redemption or Dissolution
prices per share thereof be different from those of the First Series
Preferred Shares, if the holders of such class of shares and the First Series
Preferred Shares shall be entitled to the receipt of dividends or of amounts
distributable upon Dissolution in proportion to their respective dividend
rates or Dissolution prices, without preference or priority one over the
other.

3.2.2.Series A Mandatorily Exchangeable Preferred Shares

(1) Designation. An aggregate of 7,187,500 preferred shares, par
value $1.00 per share, of the Company are hereby constituted as a series of
preferred shares designated as "Series A Mandatorily Exchangeable Preferred
Shares" (hereinafter called "Series A Preferred Shares").

(2) Dividends. (a) The holders of Series A Preferred Shares
shall be entitled to receive a cash dividend per share (payable as set forth
below), out of funds legally available for the purpose, computed as follows
(rounded to the nearest cent):

(i) for the Initial Dividend Period (as hereinafter
defined), the product of (A) 8.721% times (B) a fraction the numerator of
which is the number of days from (and including) the date of the original
issuance of the Series A Preferred Shares to (but not including) April 1,
1992, on the basis of 30-day months, and the denominator of which is 360
times (C) $172.00; and

(ii) for each Quarterly Dividend Period thereafter, the
product of (A) 8.721% times (B) .25 times (C) $172.00.

Such dividends shall be cumulative from the date of original issuance
of such shares and shall be payable in arrears, when, as and if declared by
the Board of Directors, on each Dividend Payment Date (as hereinafter
defined) commencing on April 1, 1992. Each such dividend shall be paid to
the holders of record of the Series A Preferred Shares as their names shall
appear on the share register of the Company on such record date, not
exceeding 50 days preceding the payment date thereof, as shall be fixed by
the Board of Directors of the Company. Dividends on account of arrears for
any past Dividend Periods (as hereinafter defined) may be declared and paid
at any time, without reference to any regular dividend payment date, to
holders of record on such date, not exceeding 50 days preceding the payment
date thereof, as may be fixed by the Board of Directors of the Company.
Dividends on the Series A Preferred Shares shall accrue (whether or not
declared) on a daily basis from the previous Dividend Payment Date, except
that with respect to the first dividend, such dividend shall accrue from the
date of original issuance of the Series A Preferred Shares. Dividends will
cease to accrue on the Series A Preferred Shares on the Exchange Date (as
defined in paragraph (4)(h)(iii)), with respect to the Series A Preferred
Shares subject to such exchange on such Exchange Date. Dividends (or cash
amounts equal to accrued and unpaid dividends) payable on the Series A
Preferred Shares for any period shorter than a Quarterly Dividend Period
shall be computed on the basis of a 360-day year of twelve 30-day months.
All dividends paid with respect to Series A Preferred Shares pursuant to this
paragraph (2) shall be paid pro rata to the holders entitled thereto.

(b) The term:

(i) "Dividend Period" shall mean the Initial Dividend
Period or any Quarterly Dividend Period (collectively referred to as
"Dividend Periods");

(ii) "Dividend Payment Date" shall mean January 1, April
1, July 1 and October 1 of each year, unless any such date shall be or be
declared a national or New York state holiday or banking institutions in New
York shall be closed because of a banking moratorium or otherwise on such
date, in which case the Dividend Payment Date shall be the next succeeding
day on which such banks shall be open;

(iv) "Initial Dividend Period" shall mean the period from
the date of the original issuance of the Series A Preferred Shares through
(but not including) April 1, 1992; and

(v) "Quarterly Dividend Period" shall mean each of the
periods commencing on January 1, April 1, July 1 and October 1 in each year
and ending on (and including) the day next preceding the first day of the
next following Quarterly Dividend Period, beginning on April 1, 1992.

(3) Rank. (a) The Series A Preferred Shares, with respect to
dividend rights and rights upon liquidation, dissolution and winding up,
shall rank prior to the common shares, par value $.75 per share (the "common
shares") of the Company and on a parity with the First Series Preferred
Shares of the Company. All equity securities of the Company to which the
Series A Preferred Shares rank prior with respect to dividends or upon
liquidation, dissolution or winding-up, as the case may be, including the
common shares, are collectively referred to herein as "Junior Securities";
all equity securities of the Company with which the Series A Preferred Shares
rank on a parity with respect to dividends or upon liquidation, dissolution
or winding-up, as the case may be (whether or not the dividend rates,
dividend payment dates or amounts to be received upon dissolution,
liquidation or winding up are different therefrom), including the First
Series Preferred Shares, are collectively referred to herein as "Parity
Securities"; and all equity securities of the Company to which the Series A
Preferred Shares rank junior with respect to dividends or upon liquidation,
dissolution or winding-up, as the case may be, are collectively referred to
herein as "Senior Securities." The Series A Preferred Shares shall be
subject to the creation of Junior Securities, Parity Securities and Senior
Securities. The term "equity securities" excludes convertible debt
securities or debt securities redeemable or exchangeable for equity
securities.

(b) So long as any of the Series A Preferred Shares are
outstanding, no dividend (other than dividends or distributions paid in
Junior Securities which rank junior as to dividends, or in options, warrants
or rights to subscribe for or purchase such Junior Securities and other than
as provided in paragraph (3)(c)) shall be declared or paid or set aside for
payment or other distribution declared or made upon any Junior Securities
which rank junior as to dividends or Parity Securities which rank on a parity
as to dividends, nor shall any such Junior Securities or such Parity
Securities be redeemed, purchased or otherwise acquired for any consideration
(or any monies be paid to or made available for a sinking fund for the
redemption of any such securities) by the Company (except by conversion into
or exchange for Junior Securities which rank junior as to dividends) unless,
in each case, the full cumulative dividends on the Series A Preferred Shares
shall have been declared and paid or set apart for payment for all Quarterly
Dividend Periods terminating on or prior to the date of such payment or
action, as the case may be.

(c) When dividends are not paid in full on the Series A Preferred
Shares and any Parity Securities which rank on a parity with respect to
dividends, all dividends declared on the Series A Preferred Shares and such
Parity Securities shall be declared ratably in accordance with the respective
dividends which would be payable on the Series A Preferred Shares and such
Parity Securities if all accrued and unpaid dividends thereon were then to be
paid in full.

(d) Holders of Series A Preferred Shares shall not be entitled
to any dividends, whether payable in cash, property or stock, in excess of
full cumulative dividends as provided in paragraph (2)(a). No interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment which may be in arrears. Subject to the foregoing provisions of this
paragraph (3) and paragraph (4)(d), the Board of Directors may declare and
the Company may pay or set apart for payment dividends and other
distributions on any of the Junior Securities or Parity Securities, and may
redeem, purchase, exchange, convert or otherwise retire any Junior Securities
or Parity Securities, and the holders of the Series A Preferred Shares shall
not be entitled to share therein. Any dividend payment made on Series A
Preferred Shares shall first be credited against the earliest accrued but
unpaid dividend due with respect to the Series A Preferred Shares.

(4) Exchanges. (a) Mandatory Exchange on Final Exchange Date.
Unless earlier exchanged in accordance with the provisions hereof, on April
1, 1995 (the "Final Exchange Date), the Company shall be obligated to
exchange the following consideration for each outstanding Series A Preferred
Share:

(i) subject to paragraph (4)(d)(iv), a number of common
shares at the Common Equivalent Rate (determined as provided in paragraph
(4)(d)) in effect on the Final Exchange Date; and

(ii) the right to receive an amount in cash equal to all
accrued and unpaid dividends on such Series A Preferred Share to and
including such Exchange Date, whether or not declared, out of funds legally
available for the payment of dividends; provided, however, to the extent
that, on the Final Exchange Date, the Company shall (x) not have funds
legally available for the payment of such accrued and unpaid dividends in
cash, or (y) be prohibited from paying such dividends in cash by the terms of
any Senior Security, Parity Security or any then-outstanding indebtedness or
other contractual obligation of the Company, then the Company shall issue, in
lieu of such cash payment, that number of common shares determined by
dividing the amount of such accrued and unpaid dividends by the Current
Market Price (as defined in paragraph (4)(d)(vi)) of the common shares
determined as of the Trading Date immediately preceding the Final Exchange
Date.

The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued common
shares, for the purpose of effecting the exchange of the Series A Preferred
Shares pursuant to this paragraph (4)(a), the full number of common shares
required to be delivered pursuant to paragraph (4)(a)(i) upon such mandatory
exchange of all outstanding Series A Preferred Shares, and shall adjust such
reserve promptly following any adjustment in the Common Equivalent Rate.
(b) Automatic Exchange Upon the Occurrence of Certain Events. On the
business day (as defined in paragraph (4)(h)(1)) immediately prior to the
effectiveness of a merger or consolidation of the Company (other than a
merger or consolidation of the Company with or into a direct or indirect
wholly-owned subsidiary of the Company) (the "Settlement Date") that would
result in the exchange of common shares for, or the conversion of common
shares into, other securities or other property (whether of the Company or
any other entity) or the right to receive such other securities or other
property (any such merger or consolidation is referred to herein as a "Merger
or Consolidation"), the Company shall exchange the following consideration
for each outstanding Series A Preferred Share:

(i) subject to paragraphs (4)(d)(iii) and (4)(d)(iv), a
number of common shares at the Common Equivalent Rate in effect on the
Settlement Date; plus

(ii) the right to receive an amount in cash equal to all
accrued and unpaid dividends on such Series A Preferred Share to and
including the Settlement Date, whether or not declared, out of funds legally
available for the payment of dividends; plus

(iii) the right to receive an amount in cash initially equal
to $21.00, declining by $.018851 on each day following the date of original
issuance of the Series A Preferred Shares (computed on the basis of a 360-day
year of twelve 30-day months) to $1.13 on February 1, 1995, and equal to zero
thereafter, in each case determined with reference to the Settlement Date,
out of funds legally available therefor.

At the option of the Company, the Company may satisfy its obligation
with respect to some or all of the cash consideration described in clauses
(ii) and (iii) above by delivery of a number of common shares to be
determined by dividing the amount of cash consideration that the Company has
elected to pay in common shares by the Current Market Price (as defined in
paragraph (4)(d)(vi)) of the common shares determined as of the second
Trading Date (as defined in paragraph (4)(h)(vi)) immediately preceding the
Notice Date (as defined in paragraph (4)(h)(iv)) relating to such exchange.


In the event that in connection with an exchange of Series A
Preferred Shares pursuant to paragraph (4)(a) or (4)(b) the Company is
required to or elects to deliver common shares in lieu of any cash amount
required to be paid pursuant to paragraph (4)(a)(ii) or paragraphs (4)(b)(ii)
or (iii), respectively, and there shall have occurred an adjustment pursuant
to paragraph (4)(d)(iv) as a result of a merger or consolidation with or into
a direct or indirect wholly-owned subsidiary prior to the Exchange Date
relating to such exchange, the form of consideration deliverable by the
Company in lieu of such cash amount shall consist of, in lieu of common
shares, the kind of securities or other property received by the holders of
common shares as a result of such merger or consolidation (provided, however,
that if by virtue of the structure of such merger or consolidation, a holder
of common shares is required to make an election with respect to the nature
and kind of consideration to be received in such merger or consolidation,
then the form of consideration so deliverable by the Company in lieu of
common shares shall consist of the kind of securities or other property
received by a holder of common shares as a result of such merger or
consolidation if such holder of common shares had failed to exercise any such
rights of election (however, if the nature or kind of consideration is not
the same for each non-electing share, then for purposes of this proviso the
kind so receivable in lieu of common shares upon such transaction for each
non-electing share will be the kind so receivable per share by the plurality
of the non-electing shares)), in the same relative proportions (if more than
one kind of securities or other property was so received), with an aggregate
market price (determined for any security or other property, to the extent
possible, in the manner that the Current Market Price is determined for the
common shares, and otherwise determined by the Board of Directors of the
Company, whose determination shall be conclusive), determined as of the
Trading Date immediately preceeding the Final Exchange Date (in the case of
an exchange pursuant to paragraph (4)(a)) or as of the second Trading Date
immediately preceding the Notice Date relating to such exchange (in the case
of an exchange pursuant to paragraph (4)(b)), equal to the cash amount that
the Company has elected or is required to pay in such securities or other
property.

(c) Optional Exchange by the Company. At any time and from time to
time prior to the Final Exchange Date, the Company shall have the right to
exchange the consideration specified in this paragraph (4)(c) for any or all
of the outstanding Series A Preferred Shares (subject to the notice
provisions set forth in paragraph (4)(i)). Upon the Exchange Date relating
to any such optional exchange, each Series A Preferred Share to be so
exchanged shall be exchanged for (i) a number of common shares equal to the
Optional Exchange Price (as defined in paragraph (4)(h)(v)) in effect on such
Exchange Date divided by the Current Market Price of the common shares
determined as of the second Trading Date immediately preceding the Notice
Date relating to such exchange and (ii) a cash amount equal to all accrued
and unpaid dividends on such Series A Preferred Share to and including the
Exchange Date, whether or not declared, out of funds legally available for
the payment of dividends; provided that if there shall have occurred an
adjustment pursuant to paragraph (4)(d)(iv) prior to such Exchange Date, each
Series A Preferred Share so exchanged shall be exchanged for, in lieu of
common shares as described in paragraph (4)(c)(i), the kind of securities or
other property received by the holders of common shares as a result of the
merger or consolidation with or into a direct or indirect wholly-owned
subsidiary which gave rise to such adjustment (provided, however, that if by
virtue of the structure of such merger or consolidation, a holder of common
shares is required to make an election with respect to the nature and kind of
consideration to be received in such merger or consolidation, then the form
of consideration deliverable upon exercise of such option by the Company
shall consist of the kind of securities or other property received by a
holder of common shares as a result of such merger or consolidation if such
holder of common shares had failed to exercise any such rights of election
(however, if the nature or kind of consideration is not the same for each
non-electing share, then for purposes of this proviso the kind so receivable
upon such transaction for each non-electing share will be the kind so
receivable per share by the plurality of the non-electing shares)), in the
same relative proportions (if more than one kind of securities or other
property was so received) in either case with an aggregate market price
(determined, for any security or other property, to the extent possible, in
the manner that the Current Market Price is determined for the common shares,
and otherwise determined by the Board of Directors of the Company, whose
determination shall be conclusive), as of the second Trading Date immediately
preceding the Notice Date related to such exchange, equal to the Optional
Exchange Price in effect on the Exchange Date. If fewer than all the
outstanding Series A Preferred Shares are to be subject to any exchange
pursuant to this paragraph (4)(c), shares to be exchanged shall be selected
by the Company from outstanding Series A Preferred Shares not previously
exchanged by lot or pro rata (as nearly as may be practicable without
creating fractional shares) or by any other method determined by the Board of
Directors of the Company in its sole discretion to be equitable.
Notwithstanding any provision to the contrary set forth herein, the Company
may not effect an exchange of less than all of the outstanding Series A
Preferred Shares pursuant to this paragraph (4)(c) unless, on or prior to the
Exchange Date for such exchange, full cumulative dividends have been paid or
declared and set apart for payment on all outstanding Series A Preferred
Shares for all Quarterly Dividend Periods ending prior to such Exchange Date.

(d) Common Equivalent Rate; Adjustments. The Common Equivalent Rate
to be used to determined the number of common shares to be delivered on the
exchange of the Series A Preferred Shares for common shares pursuant to
paragraph (4)(a) or (b) shall be initially four common shares for each Series
A Preferred Share; provided, however, that such Common Equivalent Rate shall
be subject to adjustment from time to time as provided below in this
paragraph (4)(d). All adjustments to the Common Equivalent Rate shall be
calculated to the nearest 1/100th of a common share. Such rate in effect at
any time is herein called the "Common Equivalent Rate."

(i) If the Company shall either:

(A) pay a dividend or make a distribution with
respect to common shares in common shares,

(B) subdivide or split the outstanding common
shares into a greater number of shares,

(C) combine the outstanding common shares into a
smaller number of shares, or

(D) issue by reclassification of the common shares
any additional common shares of the Company, then, in any such event, the
Common Equivalent Rate in effect immediately prior thereto shall be adjusted
so that the holder of a Series A Preferred Share shall be entitled to
receive, on the exchange of such Series A Preferred Share, the number of
common shares of the Company which such holder would have owned or been
entitled to receive pursuant to paragraph (4)(a)(i), after the happening of
any of the events described above had such Series A Preferred Share been
exchanged pursuant to paragraph (4)(a) immediately prior to such event or any
record date with respect thereto. Such adjustment shall become effective at
the opening of business on the business day next following the record date
for determination of shareholders entitled to receive such dividend or
distribution in the case of a dividend or distribution, and shall become
effective immediately after the effective date thereof in case of a
subdivision, split, combination or reclassification; and any common shares
issuable in payment of a dividend shall be deemed to have been issued
immediately prior to the close of business on the record date for such
dividend for purposes of calculating the number of outstanding common shares
under clauses (ii) and (iii) below. Such adjustments shall be made
successively.

(ii) If the Company shall, after the date hereof, issue
rights or warrants to all holders of its common shares entitling them (for a
period not exceeding 45 days from the date of such issuance) to subscribe for
or purchase common shares at a price per share less than the Current Market
Price of the common shares (as defined in paragraph (4)(d)(vi)) on the record
date for the determination of shareholders entitled to receive such rights or
warrants, then in each case the Common Equivalent Rate shall be adjusted by
multiplying the Common Equivalent Rate in effect immediately prior thereto by
a fraction, of which the numerator shall be the number of common shares
outstanding on the date of issuance of such rights or warrants, immediately
prior to such issuance, plus the number of additional common shares offered
for subscription or purchase pursuant to such rights or warrants, and of
which the denominator shall be the number of common shares outstanding on the
date of issuance of such rights or warrants, immediately prior to such
issuance, plus the number of common shares which the aggregate offering price
of the total number of common shares so offered for subscription or purchase
pursuant to such rights or warrants would purchase at such Current Market
Price (determined by multiplying such total number of shares by the exercise
price of such rights or warrants and dividing the product so obtained by such
Current Market Price). Such adjustment shall become effective at the opening
of business on the business day next following the record date for the
determination of shareholders entitled to receive such rights or warrants.
To the extent that common shares are not delivered after the expiration of
such rights or warrants, the Common Equivalent Rate shall be readjusted to
the Common Equivalent Rate which would then be in effect had the adjustments
made upon the issuance of such rights or warrants been made upon the basis of
delivery of only the number of common shares actually delivered. Such
adjustments shall be made successively.

(iii) If the Company shall pay a dividend or make a
distribution to all holders of its common shares of evidences of its
indebtedness or other assets (including shares of capital stock of the
Company (other than common shares) but excluding any distributions and
dividends referred to in clause (i) above, or any regular quarterly cash
dividends), or shall issue to all holders of its common shares rights or
warrants to subscribe for or purchase securities (other than those rights or
warrants referred to in clause (ii) above), then in each such case, the
Common Equivalent Rate shall be adjusted by multiplying the Common Equivalent
Rate in effect on the record date mentioned below by a fraction, of which the
numerator shall be the Current Market Price of the common shares (as defined
in paragraph (4)(d)(vi)) on the record date for the determination of
shareholders entitled to receive such dividend or distribution, and of which
the denominator shall be such Current Market Price per common share less the
fair value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) as of such record date of the portion of
the assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, applicable to one common share. Such
adjustment shall become effective on the opening of business on the business
day next following the record date for the determination of shareholders
entitled to receive such dividend or distribution.

(iv) If there shall occur a merger or consolidation of the
Company with or into a direct or indirect wholly-owned subsidiary of the
Company that results in the exchange of the common shares for, or the
conversion of common shares into, other securities or other property (whether
of the Company or any other entity) or the right to receive such other
securities or other property, then the Series A Preferred Shares will
thereafter no longer be subject to exchange for common shares pursuant to
paragraphs (4)(a)(i) and (b)(i), but instead will be subject to exchange for
the kind and amount of securities or other property which the holder of such
Series A Preferred Shares would have had the right to receive as a holder of
common shares immediately after such merger or consolidation if such Series
A Preferred Shares had been exchanged for common shares pursuant to paragraph
(4)(a) immediately before the effective time of such merger or consolidation;
provided, however, that if by virtue of the structure of such merger or
consolidation, a holder of common shares is required to make an election with
respect to the nature and kind of consideration to be received in such merger
or consolidation, then the Series A Preferred Shares shall, after such merger
or consolidation, be subject to exchange for the kind and amount of
securities or other property which the holder of such Series A Preferred
Shares would have had the right to receive as a holder of common shares
immediately after such merger or consolidation if (x) such Series A Preferred
Shares had been exchanged for common shares pursuant to paragraph (4)(a)(i)
immediately before the effective time of such merger or consolidation and (y)
if such holder of common shares had failed to exercise any such rights of
election (however, if the nature or kind of consideration is not the same for
each non-electing share, then for purposes of this proviso the kind so
receivable upon such transaction for each non-electing share will be the kind
so receivable per share by the plurality of the non-electing shares). If
this paragraph (4)(d)(iv) applies, then no adjustment in respect of the same
merger or consolidation shall be made pursuant to the other provisions of
this paragraph (4)(d).

(v) Anything in this paragraph (4) notwithstanding, the
Company shall be entitled to make such upward adjustments in the Common
Equivalent Rate, in addition to those required by this paragraph (4), as the
Company in its sole discretion may determine to be advisable, in order that
any share dividends, subdivision of shares, distribution of rights to
purchase shares or securities, or a distribution of securities convertible
into or exchangeable or redeemable for shares (or any transaction which could
be treated as any of the foregoing transactions pursuant to Section 305 of
the Internal Revenue Code of 1986, as amended) hereafter made by the Company
to its shareholders shall not be taxable. If the Company determines that
such an adjustment to the Common Equivalent Rate should be made, an
adjustment shall be made effective as of such date as is determined by the
Board of Directors of the Company. The determination of the Board of
Directors of the Company as to whether such an adjustment to the Common
Equivalent Rate should be made pursuant to the foregoing provisions of this
paragraph (4)(d)(v), and, if so, as to what adjustment should be made and
when, shall be conclusive, final and binding on the Company and all
shareholders of the Company.

(vi) As used in this paragraph (4), the "Current Market
Price" of the common shares on any date shall be the average of the daily
Closing Prices (as defined in paragraph (4)(h)(ii)) for the five consecutive
Trading Dates ending on and including the date of determination of the
Current Market Price; provided, however, that, except for a determination in
connection with an exchange pursuant to paragraph 4(a), if the Closing Price
for the Trading Date next following such five-day period (the "next-day
closing price") is less than 95% of such average, then the Current Market
Price per common share on such date of determination shall be the next-day
closing price; and provided, further, that, if any event that would result in
an adjustment of the Common Equivalent Rate occurs during such five-day
period or, for the purposes of calculating the Current Market Price in
connection with any exchange of Series A Preferred Shares or any
determination of an amount in cash payable in lieu of a fraction of a common
share, if any event that would result in an adjustment of the Common
Equivalent Rate occurs during the period beginning on the first day of such
five-day period and ending on the applicable Exchange Date, the Current
Market Price as determined pursuant to the foregoing will be appropriately
adjusted to reflect the occurrence of such event.

(vii) In any case in which paragraph (4)(d) shall require
that an adjustment to the form or amount of any Exchange Consideration (as
defined in paragraph (4)(j)) become effective at the opening of business on
the business day next following a record date and an Exchange Date occurs
after such record date, but before the occurrence of the event giving rise to
such adjustment, the Company may in its sole discretion elect to defer until
after the occurrence of such event the issuance of any portion of the
Exchange Consideration the form or amount of which is affected by such
adjustment.

(viii) Before taking any action which would cause an
adjustment to the Common Equivalent Rate that would cause the Company to
issue common shares for consideration below the then par value (if any) of
the common shares upon exchange of the Series A Preferred Shares, the Company
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable common shares at such adjusted Common Equivalent Rate.

(ix) If, at any time, as a result of an adjustment made
pursuant to paragraph (4)(d)(iv) the Series A Preferred Shares shall become
exchangeable for any consideration other than common shares, thereafter the
form and amount of such other consideration so issuable upon exchange of the
Series A Preferred Shares shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the common shares contained in this paragraph (4)(d).

(e) Notice of Adjustments. Whenever the Common Equivalent Rate
and/or the kind or amount of securities or other property issuable upon
exchange of the Series A Preferred Shares is adjusted as herein provided, the
Company shall:

(i) forthwith compute such adjustment in accordance with
this paragraph (4) and prepare a certificate signed by the Chief Financial
Officer, any Vice President, the Treasurer or Controller of the Company
setting forth the terms of such adjustment, the method of calculation thereof
in reasonable detail and the facts requiring such adjustment and upon which
such adjustment is based, and file such certificate forthwith with the
transfer agent or agents for the Series A Preferred Shares and the common
shares; and

(ii) mail a notice to the holders of record of the
outstanding Series A Preferred Shares at or prior to the time the Company
mails an interim statement to its shareholders covering the fiscal quarter
during which the facts requiring such adjustment occurred, but in any event
within 45 days of the end of such fiscal quarter stating that such adjustment
has been made, the facts requiring such adjustment and the facts upon which
such adjustment is based and setting forth the terms of such adjustment.

(f) No Fractional Shares. (i) No fractional shares or scrip
representing fractional common shares shall be issued upon the exchange of
any Series A Preferred Shares. Instead of any fractional interest in a
common share which would otherwise be deliverable upon the exchange of a
Series A Preferred Share, the Company shall either (A) pay to the holder of
such share (a "Fractional Shareholder") an amount in cash (computed to the
nearest cent) equal to the same fraction of the Current Market Price of the
common share determined as of the second Trading Date immediately preceding
the relevant Notice Date or, in the case of an exchange pursuant to paragraph
(4)(a), the Trading Date immediately preceding the Final Exchange Date or (B)
follow the procedures set forth in paragraph (4)(f)(ii). If more than one
Series A Preferred Share shall be surrendered for exchange at one time by the
same holder, the number of full common shares issuable upon exchange thereof
shall be computed on the basis of the aggregate number of Series A Preferred
Shares so surrendered.

(ii) The Company may, in lieu of paying cash to
Fractional Shareholders as provided in paragraph (f)(i), issue, in full
payment of the Company's obligation with respect to such fractional
interests, common shares equal to the aggregate of such fractional interests
of such Fractional Shareholder and other Fractional Shareholders (aggregated
over a reasonable period of time, but not in any event more than 20 business
days, and rounded upwards to the nearest whole share) to an agent (the
"Transfer Agent") appointed by the Company for such Fractional Shareholders
for sale promptly by the Transfer Agent on behalf of the Fractional
Shareholders. The Transfer Agent will remit promptly to such Fractional
Shareholders their proportionate interest in the net proceeds (following the
deduction of applicable transaction costs and computed to the nearest cent)
from such sale.

(iii) In the event that, as a result of any adjustment
pursuant to paragraph (4)(d)(iv), the Series A Preferred Shares are exchanged
for securities other than common shares, the Company may treat any fractional
interests in such securities in the same manner as is provided in paragraphs
(4)(f)(i) and (ii) with respect to fractional common shares.

(g) Cancellation. Series A Preferred Shares that have been
acquired by the Company in an exchange pursuant to this paragraph (4) will
initially be held in the Company's treasury, to the extent that capital or
earned surplus at such time (calculated after any change to any surplus
account resulting from payment of cash or delivery of property by the Company
in such exchange) is at least equal to the aggregate par value of the common
shares issued in exchange for such Series A Preferred Shares. To the extent
that capital or earned surplus is not at least equal to such value at such
time, such Series A Preferred Shares will be cancelled and will assume the
status of authorized but unissued preferred shares. Shares held in the
Company's treasury may thereafter, at the option of the Company, be resold
(if consistent with the terms thereof) or cancelled. If cancelled, such
shares will assume the status of authorized but unissued preferred shares and
may thereafter be reissued in the same manner as other authorized but
unissued preferred shares.

(h) Definitions. As used in this paragraph (4):

(i) the term "business day" shall mean any day other
than a Saturday, Sunday, or a day on which banking institutions in the State
of New York are authorized or obligated by law or executive order to close;

(ii) the term "Closing Price" on any day shall mean the
closing sale price regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices
regular way, in each case on the New York Stock Exchange Consolidated Tape
(or any successor composite tape reporting transactions on national
securities exchanges), or, if the common shares are not listed or admitted to
trading on such Exchange, on the principal national securities exchange on
which the common shares are listed or admitted to trading (which shall be the
national securities exchange on which the greatest number of common shares
have been traded during the five consecutive Trading Dates ending on and
including the date of determination of the Current Market Price), or, if not
listed or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices of the common shares on the over-
the-counter market on the day in question as reported by the National
Association of Securities Dealers Automated Quotation System, or a similarly
generally accepted reporting service, or if not so available as determined in
good faith by the Board of Directors, on the basis of such relevant factors
as it in good faith considers, in the reasonable judgment of the Board of
Directors, appropriate;

(iii) the term "Exchange Date" shall mean the date upon
which an exchange of Series A Preferred Shares pursuant to paragraph (4)(a),
(4)(b) or (4)(c) shall become effective, which (x) in the case of an exchange
pursuant to paragraph (4)(a) shall be the Final Exchange Date, (y) in the
case of an exchange pursuant to paragraph (4)(b) shall be the Settlement Date
and (z) in the case of an exchange pursuant to paragraph (4)(c) shall, with
respect to the shares to be so exchanged, be the date specified as the
Exchange Date in the notice with respect thereto provided pursuant to
paragraph (4)(i), provided that in each case the Exchange Date shall not be
deemed to have occurred unless and until the Company shall have deposited
with the Exchange Agent (as hereinafter defined) common shares, funds and
such other property as may be deliverable upon such exchange sufficient to
effect such exchange as contemplated by paragraph (4)(j).

(iv) the term "Notice Date" with respect to any notice
given by the Company in connection with an exchange of any of the Series A
Preferred Shares shall be the commencement of the mailing of such notice to
the holders of Series A Preferred Shares in accordance with paragraph (4)(i);


(v) the term "Optional Exchange Price" shall mean the
per share price (payable in common shares) at which the Company may exchange
common shares (and/or other property as provided in this paragraph (4)) for
Series A Preferred Shares pursuant to paragraph (4)(c) hereof, which shall be
initially equal to $257.00, declining by $.018851 on each day following the
date of issuance of the Series A Preferred Shares (computed on the basis of
a 360-day year of twelve 30-day months) to $237.13 on February 1, 1995 and
equal to $236.00 thereafter, in each case determined with reference to the
Exchange Date for such exchange;

(vi) the term "Trading Date" shall mean a date on which the
New York Stock Exchange (or any successor to such Exchange) is open for the
transaction of business.

(i) Notice of Exchange. The Company will provide notice of any
exchange (including any potential exchange to be effected pursuant to
paragraph (4)(b) but excluding, except as provided in the last sentence of
this paragraph (4)(i), the mandatory exchange required to be effected
pursuant to paragraph (4)(a)) of Series A Preferred Shares to holders of
record of the Series A Preferred Shares to be exchanged not less than 30 nor
more than 60 days prior to the date fixed for such exchange, as the case may
be; provided, however, that if the timing of the effectiveness of a Merger or
Consolidation makes it impracticable to provide at least 30 days' notice, the
Company shall provide such notice as soon as practicable prior to such
effectiveness. Such notice shall be provided by mailing notice of such
exchange first class postage prepaid, to each holder of record of the Series
A Preferred Shares to be exchanged, at such holder's address as it appears on
the stock register of the Company; provided, however, that no failure to give
such notice nor any defect therein shall affect the validity of the
proceeding for the exchange of any Series A Preferred Shares to be exchanged.
Each such notice shall state, as appropriate, the following:

(i) the Exchange Date;

(ii) that all outstanding Series A Preferred Shares are to
be exchanged or, in the case of an exchange of fewer than all outstanding
Series A Preferred Shares pursuant to paragraph (4)(c), the number of such
shares held by such holder to be exchanged;

(iii) in the case of an exchange pursuant to paragraph
(4)(c), the Optional Exchange Price, the number of common shares deliverable
upon exchange of each Series A Preferred Share to be exchanged and the
Current Market Price used to calculate such number of common shares, subject
to any subsequent adjustments pursuant to paragraph (4)(d);

(iv) whether the Company is exercising any option to deliver
common shares in lieu of cash (and, in the case of an exchange pursuant to
paragraph (4)(b), the Current Market Price to be used to calculate the number
of such common shares) and, if the Company is exercising such option in
respect of less than all the cash that is deliverable by the Company upon
such exchange, the portion of such cash in lieu of which common shares will
be delivered;

(v) the place or places where certificates representing such
Series A Preferred Shares are to be surrendered for exchange; and

(vi) that dividends on the Series A Preferred Shares to be
exchanged will cease to accrue on such Exchange Date.

In the event that, with respect to the exchange of Series A Preferred
Shares pursuant to paragraph (4)(a), the Company determines that the accrued
and unpaid dividends on the Series A Preferred Shares that are to be paid
upon such exchange will be required to be paid in whole or in part in common
shares as provided in paragraph (4)(a)(ii), the Company shall give notice
thereof no later than ten days prior to the Final Exchange Date to the
holders of record of the Series A Preferred Shares; provided, however, that
no failure to give such notice nor any defect therein shall affect the
validity of the proceeding for the exchange of Series A Preferred Shares
pursuant to paragraph (4)(a).

(j) Deposit of Shares and Funds. The Company's obligation to
deliver common shares and provide funds (or other property, as contemplated
by paragraphs (4)(b) and (4)(d)(iv)) upon an exchange of the Series A
Preferred Shares in accordance with this paragraph (4) shall be deemed
fulfilled if, on or before the Exchange Date for such exchange, the Company
shall deposit, with a bank or trust company, or an affiliate of a bank or
trust company, having an office or agency in New York City and having a
capital and surplus of at least $50,000,000 (the "Exchange Agent"), such
number of common shares and/or such other property as are required to be
delivered by the Company pursuant to this paragraph (4) upon the occurrence
of such exchange (including any payment in respect of fractional share
amounts pursuant to paragraph (4)(f)(i)) together with funds (or, to the
extent required or permitted by paragraphs (4)(a) or (4)(b), as applicable,
common shares, other property and/or funds) sufficient to pay all accrued and
unpaid dividends (subject to the rights of any holder pursuant to paragraph
(4)(m) below) on the Series A Preferred Shares to be exchanged as required by
this paragraph (4) (the "Exchange Consideration"), in trust for the account
of the holders of the shares to be exchanged (and so as to be and continue to
be available therefor), with instructions and authority to the Exchange Agent
that such shares, funds and/or other property be applied solely to the
exchange of the Series A Preferred Shares subject to such exchange. Any
interest accrued on such funds shall be paid to the Company from time to
time. Any common shares, funds and/or other property so deposited and
unclaimed at the end of two years from such Exchange Date shall be repaid and
released to the Company, after which the holder or holders of such Series A
Preferred Shares so exchanged shall look only to the Company for delivery of
such common shares, funds and/or other property.
(k) Exchange of Certificates; Status. Upon an Exchange Date,
dividends shall cease to accrue on any Series A Preferred Shares subject to
exchange on such Exchange Date, such Series A Preferred Shares shall no
longer be deemed outstanding, all rights of the holders thereof as
shareholders of the Company shall cease and thereupon the certificate or
certificates theretofore representing such Series A Preferred Shares shall
represent only the right to receive the Exchange Consideration payable in
respect thereof. From and after the Exchange Date, each holder of a
certificate which immediately prior to the Exchange Date represented
outstanding Series A Preferred Shares subject to such exchange shall be
entitled to receive in exchange therefor, upon and only upon surrender
thereof to an Exchange Agent, a certificate or certificates representing the
number of whole common shares included in the Exchange Consideration and a
check representing any cash amount included in the Exchange Consideration
plus any cash amount payable pursuant to paragraph (4)(f) in lieu of any
fractional share included in the Exchange Consideration and any other
property included in the Exchange Consideration as a result of any adjustment
provided for in paragraph (4)(d)(iv). In the event that fewer than all
Series A Preferred Shares represented by such surrendered certificate are
subject to such exchange, a new certificate shall be issued at the expense of
the Company representing the Series A Preferred Shares not so exchanged. No
interest will be payable with respect to any Exchange Consideration. No
holder of a certificate or certificates which immediately prior to the
Exchange Date represented outstanding Series A Preferred Shares shall be a
holder of the common shares issuable in exchange therefor, or have any rights
as a holder of such common shares, including without limitation voting rights
or the right to receive any dividend or other distribution from the Company
with respect to any such common shares, until surrender of such certificate
or certificates that prior to the Exchange Date represented Series A
Preferred Shares for a certificate or certificates representing such common
shares; provided that, upon such surrender, there shall be paid to the
holder, with respect to the number of whole common shares issued upon such
surrender, an amount equal to any dividends or other distributions (without
interest) theretofore payable to the holders of common shares as of any
record date on or after the Exchange Date, but which were not paid to such
holder in respect of such common shares by reason of the failure to deliver
certificates that represented Series A Preferred Shares. The Company shall
not be liable to any holder of Series A Preferred Shares for any common
shares (or dividends or distributions with respect thereto), cash in lieu of
fractional shares or other cash amounts or any other property included in the
Exchange Consideration which is delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.

(l) Agreement of Holders. By purchasing or otherwise acquiring
Series A Preferred Shares, the holders thereof irrevocably consent to and
agree with the Company to the exchange and repurchase of such Series A
Preferred Shares upon the Final Exchange Date or any earlier Exchange Date
upon the terms and subject to the conditions set forth in this paragraph (4).
The holders of the Series A Preferred Shares further agree to accept from the
Company, as full payment, discharge and satisfaction of the obligations of
the Company with respect to the Series A Preferred Shares, the Exchange
Consideration delivered by the Company in exchange for the Series A Preferred
Shares in accordance with the terms of this paragraph (4). The foregoing
agreements of the holders of Series A Preferred Shares constitute a contract
between the Company and each holder of Series A Preferred Shares, enforceable
against the Company and each such holder in accordance with the terms hereof.

(m) Dividend Payments. The holders of Series A Preferred Shares at
the close of business on a dividend record date shall be entitled to receive
the dividend payable on such shares on the corresponding Dividend Payment
Date; provided, however, that, with respect to shares subject to exchange on
an Exchange Date occurring between such record date and the Dividend Payment
Date, that portion of the accrued and unpaid dividends on such shares which
is included in the dividend payable on such Dividend Payment Date shall be
paid on such Exchange Date to the holders of record of such shares on such
record date, and the holders of such shares on the Exchange Date which were
not holders of record of such shares on such record date shall not be
entitled to such portion of the accrued and unpaid dividends on such shares
as a part of the Exchange Consideration payable upon exchange of such shares.

(n) Payment of Taxes. The Company will pay any and all
documentary, stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of common shares or other securities on the exchange of
Series A Preferred Shares pursuant to this paragraph (4); provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any registration of transfer involved in the issue or delivery of
common shares or other securities in a name other than that of the registered
holder of Series A Preferred Shares exchanged or to be exchanged, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Company the amount of any such tax or has established,
to the satisfaction of the Company, that such tax has been paid.

(o) Allocation of Stated Capital. Upon the issuance of and
receipt of payment for the Series A Preferred Shares, the Company shall
allocate to the stated capital of the Series A Preferred Shares $2.00 per
Series A Preferred Share so issued (which amount shall be in addition to the
stated capital represented by the par value of the Series A Preferred
Shares). Upon any Exchange Date, the Company shall reserve available capital
or earned surplus for allocation to stated capital for the common shares
issuable with respect to the Series A Preferred Shares exchanged on such
Exchange Date to the extent that the stated capital of any Series A Preferred
Shares cancelled in such exchange is less than the aggregate par value of the
common shares issuable in such exchange.

(5) Dissolution Preference. (a) In the event of any liquidation,
dissolution, or winding up (hereinafter "Dissolution") of the Company,
whether voluntary or involuntary, before any payment or distribution of the
assets of the Company (whether capital or surplus) shall be made to or set
apart for the holders of any Junior Securities which rank junior with respect
to Dissolution, the holders of the Series A Preferred Shares shall be
entitled to receive for each share $172.00 plus an amount equal to all
dividends (whether or not earned or declared) accrued and unpaid thereon to
the date of final distribution to such holders (subject to the right of the
holders of record of any Series A Preferred Shares on a record date for
payment of dividends thereon to receive such dividend on the date of final
distribution), determined by adding (i) dividends accrued and unpaid for any
Dividend Period preceding the Dividend Period in which the date of final
distribution falls plus (ii) the product of (A) 8.721% times (B) a fraction,
the numerator of which is the number of days elapsed from (and including) the
first day of the Dividend Period in which the date of final distribution
falls, to (but not including) the date of final distribution, on the basis of
30-day months, and the denominator of which is 360 times (C) $172.00; but
such holders shall not be entitled to any further payment. If, upon any
Dissolution of the Company, the assets of the Company, or proceeds thereof,
distributable among the holders of the Series A Preferred Shares and any
Parity Securities which rank on a parity with respect to Dissolution shall be
insufficient to pay in full the preferential amount aforesaid and Dissolution
payments on any such Parity Securities, then such assets, or the proceeds
thereof, shall be distributed among the holders of Series A Preferred Shares
and any such Parity Securities ratably in accordance with the respective
amounts which would be payable on such Series A Preferred Shares and any such
Parity Securities if all amounts payable thereon were paid in full. For the
purposes of this paragraph (5), a sale, lease, exchange or other disposition
of all or substantially all of the property and assets of the Company, or a
consolidation or merger of the Company with one or more corporations, shall
not be deemed to be a Dissolution.

(b) Subject to the rights of the holders of Senior Securities
which rank senior with respect to Dissolution and Parity Securities which
rank on a parity with respect to Dissolution, upon any Dissolution of the
Company, after payment shall have been made in full to the Series A Preferred
Shares and any Parity Securities which rank on a parity with respect to
Dissolution as provided in this paragraph (5), but not prior thereto, any
Junior Securities which rank junior with respect to Dissolution shall,
subject to the respective terms and provisions (if any) applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed,
and the Series A Preferred Shares and any such Parity Securities shall not be
entitled to share therein.

(6) Voting Rights. (a) The holders of record of Series A Preferred
Shares shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (6) or as otherwise required by law. The holders
of Series A Preferred Shares shall be entitled to vote on all matters
submitted to a vote of the holders of common shares, voting together with the
holders of common shares (and any other securities upon which like voting
rights have been conferred and are then exercisable) as one class. Each
Series A Preferred Share shall be entitled to one vote per share, without
regard to the Common Equivalent Rate or any adjustments thereto. At
elections for directors as aforesaid, each holder of Series A Preferred
Shares shall be entitled to vote cumulatively in accordance with Article 3.5
of the Restated Certificate of Incorporation, as amended, of the Company as
to the directors to be elected by such holders voting together with the
holders of common shares and any other securities upon which like voting
rights have been conferred and are then exercisable.

(b) (i) If at any time or times dividends payable on the
Series A Preferred Shares shall be in arrears and unpaid in an amount equal
to the dividends payable for six quarterly periods, then the number of
directors constituting the Board of Directors, without further action, shall
be increased by two (2) and the holders of Series A Preferred Shares shall
have the right, voting separately as a class with holders of any Parity
Securities upon which like voting rights have been conferred and are then
exercisable, to elect the directors of the Company to fill such newly created
directorships, the remaining directors to be elected by the other class or
classes of shares entitled to vote therefor, at each meeting of shareholders
held for the purpose of electing directors. While holders of Series A
Preferred Shares are entitled to elect two directors, they shall not be
entitled to participate with the holders of common shares in the election of
any other directors, but shall continue to be entitled to vote with the
holders of common shares upon each other matter coming before any meeting of
the shareholders.

(ii) Such directors shall be elected for terms expiring
at the next succeeding annual meeting of shareholders or until their
respective successors are elected and qualified, unless such terms are sooner
terminated as provided in this paragraph (6). The right of the holders of
the Series A Preferred Shares, voting separately as a class, to elect (either
alone or together with the holders of any Parity Securities) members of the
Board of Directors of the Company as aforesaid shall continue until such time
as all dividends in arrears and unpaid on the Series A Preferred Shares shall
have been paid in full or set aside for payment by the Company, at which time
such right shall terminate, except as herein or by law expressly provided,
subject to revesting in the event of each and every subsequent failure to pay
dividends in the aggregate amount specified above. Any such director may be
removed from office, with or without cause, only by vote of holders of the
Series A Preferred Shares voting as a class with holders of any Parity
Securities upon which like voting rights have been conferred and are then
exercisable, and by such vote as may be required by law.

(iii) At elections for directors as aforesaid, each holder
of Series A Preferred Shares shall be entitled to vote cumulatively in
accordance with Article 3.5 of the Restated Certificate of Incorporation, as
amended, of the Company as to the directors to be elected by such holders
voting as a class with the holders of any Parity Securities upon which like
voting rights have been conferred and are then exercisable (the holders of
any Parity Securities being entitled to the number of votes, if any, for each
share held as may be granted to them).

(iv) Upon any termination of the right of the holders of
the Series A Preferred Shares voting as a class (together with Parity
Securities upon which like voting rights have been conferred and are then
exercisable) to vote for directors as herein provided, the term of office of
all directors then in office elected by the holders of Series A Preferred
Shares and such Parity Securities so voting shall terminate immediately.
Upon such termination the number of directors constituting the Board of
Directors shall, without further action, be reduced by two (2). If the
office of any director elected as herein provided becomes vacant by reason of
death, resignation, retirement, disqualification, removal from office, or
otherwise, the remaining director elected by the holders of the Series A
Preferred Shares voting as a class as herein provided, may choose a successor
who shall hold office for the unexpired term in respect of which such vacancy
occurred.

(c) So long as any Series A Preferred Shares remain outstanding,
the consent of the holders of at least two-thirds of the Series A Preferred
Shares outstanding at the time (voting separately as a class together with
all other Parity Securities upon which like voting rights have been conferred
and are then exercisable by the terms of such Parity Securities with respect
to such matters) given in person or by proxy, either in writing or at any
special or annual meeting called for the purpose, shall be necessary to
permit, effect or validate any one or more of the following:

(i) the authorization, creation or issuance, or any
increase in the authorized or issued amount, of any Senior Securities; or

(ii) the amendment, alteration or repeal of any of the
provisions of the Restated Certificate of Incorporation, as amended, in any
manner which would materially and adversely affect any right, preference,
privilege or voting power of the Series A Preferred Shares or of the holders
thereof; provided, however, that any increase in the amount of authorized
preferred shares or the creation and issuance of Parity Securities or Junior
Securities shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers; provided, further, that the
creation of a class or series of shares entitled to vote as a class together
with the Series A Preferred Shares on the matters stated in paragraphs 6(b)
or 6(c) and having a voting power greater than one vote for each $100 of
Dissolution preference (exclusive of accrued and unpaid dividends) shall be
deemed to materially and adversely affect the voting power of the Series A
Preferred Shares.

(d) So long as any Series A Preferred Shares remain outstanding,
the consent of the holders of at least a majority of the Series A Preferred
Shares outstanding at the time (voting separately as a class together with
all other Parity Securities upon which like voting rights have been conferred
and are then exercisable) given in person or by proxy, either in writing or
at any special or annual meeting called for the purpose, shall be necessary
to effect the merger or consolidation of the Company with or into any other
corporation, if and only if the plan of merger or consolidation contains any
provision which, if contained in an amendment to the Company's Restated
Certificate of Incorporation, as amended, would entitle the holders of shares
of such class or series to vote as a class thereon.

(e) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding shares of the Series
A Preferred Shares shall have been exchanged in accordance with paragraph (4)
hereof.

(7) Savings Provision. If any term or provision hereof is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms and provisions hereof shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

3.3 Common Shares. The holders of common shares, subject to law and to
the rights of the preferred shares, shall have the exclusive right to vote
for the election of directors and on all other matters requiring shareholder
action, each common share being entitled to one vote.

3.4 Preemptive Rights. The holders of shares of the Corporation shall
have no preemptive rights to purchase any shares or any other securities of
the Corporation.

3.5 Cumulative Voting. At all elections for directors of the
Corporation, each shareholder entitled to vote for the election of directors
shall be entitled to as many votes as shall equal the number of shares owned
by said shareholder multiplied by the number of directors to be elected. A
shareholder may cast all of such votes for a single director or may
distribute them among the number to be voted for or any two or more of them.


3.6 Share Distributions. The board of directors may from time to time
authorize the distribution of shares of any class or series to the holders of
the same or of any other class or series of shares.

4. BYLAWS

The board of directors may adopt, amend or repeal the bylaws of the
Corporation.

5. DIRECTORS

5.1 Number of Directors. The number of directors of the Corporation
shall be fixed and may from time to time be increased or decreased by the
board of directors, but in no event shall the number of directors be less
than 9 or more than 30.

5.2 Classified Directors. Notwithstanding anything to the contrary in
the by-laws, the directors shall be classified with respect to the time for
which they severally hold office into three classes, as nearly equal in
number as possible, with each director in each class to hold office until his
or her successor is elected and qualified. At the annual meeting held in
1988, the three classes of directors shall be elected to serve terms expiring
in 1989, 1990 and 1991, respectively. At each annual meeting of shareholders
beginning with the meeting to be held in 1989, 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 shareholders to be held in the
third year following the year of their election, with each director in each
such class to hold office until his or her successor is elected and
qualified. Any newly created directorship or any decrease in directorships
shall be so apportioned among the classes as to make all classes as nearly
equal in number as possible. When the number of directors is increased by
the board and any newly created directorships are filled by the board, there
shall be no classification of the additional directors until the next annual
meeting of shareholders.

5.3 Vacancies. Any vacancies on the board of directors may 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. No decrease in the
number of directors constituting the board of directors shall shorten the
term of any incumbent director.

5.4 Removal. Any director may be removed from office only for cause and
only by the affirmative vote of at least 75% of the shares entitled to vote.


5.5 Preferred Shares. Notwithstanding the foregoing, whenever the
holders of any one or more series of preferred shares issued by the
Corporation shall have the right to vote separately by series to elect
directors at an annual or special meeting of shareholders, the election,
terms of office, filling of vacancies and other features of such
directorships shall be governed by the terms of this Restated Certificate of
Incorporation applicable thereto, and such directors so elected shall not be
divided into classes pursuant to this Article 5 unless expressly provided by
such terms.

5.6 Required Vote. Notwithstanding anything contained in this
certificate to the contrary, the affirmative vote of a least 75% of the
shares entitled to vote shall be required to alter, amend or repeal, or adopt
any provision inconsistent with, this Article 5, or to fix (including by
increase or decrease) the number of directors of the Corporation by vote of
the Corporation's shareholders.

6. MISCELLANEOUS

6.1 Office. The office of the Company it to be located in the County of
Westchester of the State of New York.

6.2 Service of Process. The Secretary of State of New York is designated
as an agent of the Corporation upon whom process against the Corporation may
be served in any action or proceeding against it within the State of New
York. The post office address to which the Secretary of State shall mail a
copy of any process against the Corporation served upon him is Sears, Roebuck
and Co., 3333 Beverly Road, Hoffman Estates, Illinois 60179-0002, Attention:
Secretary.

7. LIMITATION

A director shall not be personally liable to the Corporation or its
shareholders for damages for any breach of duty in such capacity, unless a
judgement or other final adjudication adverse to him or her establishes that
his or her acts or omissions were in bad faith or involved intentional
misconduct or a knowing violation of law, or that he or she personally gained
in fact a financial profit or other advantage to which he or she was not
legally entitled, or that his or her acts violated Section 719 of the New
York Business Corporation Law. The foregoing sentence shall not eliminate or
limit the liability of any director for any act or omission occurring prior
to the adoption of this Article
7. If the New York Business Corporation Law is amended after adoption of this
Article by the shareholders to authorize corporations to further limit
director liability, this Article shall be construed to limit director
liability to the fullest extent permitted by the New York Business
Corporation Law as so amended. No amendment to or repeal of this Article 7,
and no modification to its provisions, shall apply to, or have any effect
upon, the liability or alleged liability of any director with respect to any
acts or omissions of such director prior to such amendment, repeal or
modification.