CERTIFICATE OF DESIGNATION,
                 PREFERENCES AND RIGHTS OF SERIES B-1 CUMULATIVE
                    CONVERTIBLE PARTICIPATING PREFERRED STOCK
                                       OF
                                  ABC-NACO INC.
     ABC-NACO  Inc., a Delaware corporation (the "Corporation"), pursuant to the
provisions  of  Section  151  of  the  General  Corporation  Law of the State of
Delaware  (the  "DGCL"),  does  hereby make this Certificate of Designation (the
"Certificate") under the corporate seal of the Corporation and does hereby state
and  certify  that pursuant to the authority vested in the Board of Directors of
the  Corporation  by  the  Restated  Certificate  of Incorporation, the Board of
Directors  has  duly  adopted  the  following  resolutions:
RESOLVED,  that  pursuant to Article Fourth of the Certificate of Incorporation,
as restated (which authorizes one million (1,000,000) shares of Preferred Stock,
par value $1.00 per share ("Preferred Stock"), of which (i) one hundred thousand
(100,000)  are  designated  as  Series  A  Preferred  Stock ("Series A Preferred
Stock"), none of which are issued or outstanding and (ii) three hundred thousand
(300,000)  are  designated  as  Series B Cumulative Convertible Preferred Stock,
none  of  which  are  presently  issued and outstanding), the Board of Directors
hereby  fixes  the  designations  and  preferences  and  relative participating,
optional  and  other  special  rights  and  qualifications,  limitations  and
restrictions  of  the  Series B-1 Cumulative Convertible Participating Preferred
Stock.
Series  B-1  Cumulative  Convertible  Participating  Preferred  Stock
     RESOLVED,  that  the  holders  of  Series  B-1  Cumulative  Convertible
Participating  Preferred  Stock,  except  as  otherwise provided by law and this
Certificate,  shall  have  and  possess  the  following  rights and preferences.
A.     Series  B-1  Cumulative  Convertible  Participating  Preferred  Stock.
1.     Designation,  Number  of Shares.  This series of preferred stock shall be
designated  as  the  Series  B-1  Cumulative Convertible Participating Preferred
Stock  ("Series  B-1  Preferred  Stock"),  and  the  number of shares that shall
constitute  such  series  shall be Three Hundred Twenty-Five Thousand (325,000).
The  par  value  of  Series  B-1  Preferred  Stock  shall  be  $1.00  per share.
2.     Rank.  With respect to dividend rights and rights on liquidation, winding
up  and  dissolution  of  the Corporation, Series B-1 Preferred Stock shall rank
senior  to:
(a)     the  Common  Stock,  par  value $0.01 per share ("Common Stock"), of the
Corporation;  and
(b)     the  Series  A  Preferred Stock and each other class of capital stock or
class  or  series  of  Preferred Stock issued by the Corporation on or after the
date  hereof  (in  accordance  with  Paragraph A.7.(a)(ii) hereof), the terms of
which,  other than the Series A Preferred Stock, shall specifically provide that
such  class  or  series  shall  rank  junior to Series B-1 Preferred Stock as to
dividend  rights  or  rights  on  liquidation, winding up and dissolution of the
Corporation  (each  of  the securities in clauses (a) and (b) above collectively
referred  to  as  "Junior  Securities").
3.     Dividend  Provisions.
(a)     Each  holder of Series B-1 Preferred Stock shall be entitled to receive,
when,  as  and  if  declared  by  the  Board  of Directors, out of funds legally
available  therefor, dividends on each share of Series B-1 Preferred Stock after
the  date  of  the original issuance of the Series B-1 Preferred Stock at a rate
equal  to  ten percent (10.0%) per share per annum on One Hundred Dollars ($100)
per  share,  in  cash,  or  at  the  Corporation's  election,  in  fully  paid,
non-restricted,  fully  tradable,  non-assessable  shares of Common Stock, which
shares of such Common Stock shall be valued at one hundred percent (100%) of the
     average  closing  price  on  the  Nasdaq National Market ("NASDAQ") for the
sixty  (60)  consecutive  trading  days  immediately  prior  to  the  Dividend
Declaration  Date  (as  defined  in  Paragraph  B.  hereof). With respect to any
dividend  on the Series B-1 Preferred Stock paid by the Corporation in shares of
Common  Stock,  such  shares of Common Stock when issued shall be (i) registered
for  sale  by the holder of the Series B-1 Preferred Stock  under the Securities
Act  of 1933, as amended (and applicable state securities laws), and (ii) listed
on  NASDAQ  or  the  NYSE.
(b)     All  dividends,  whether  payable  in cash or in shares of Common Stock,
shall  be  cumulative,  whether or not earned or declared, and shall accrue on a
daily  basis  beginning  on  the  date  of  the  original issuance of Series B-1
Preferred  Stock (whether or not funds are legally available for the declaration
and/or payment of such dividends), and shall be payable semi-annually in arrears
on each Dividend Payment Date (as defined in Paragraph B. hereof), commencing on
the  first Dividend Payment Date after the date of the original issuance of such
Series  B-1  Preferred Stock.  Each dividend on Series B-1 Preferred Stock shall
be payable to the holders of record of Series B-1 Preferred Stock as they appear
on  the stock register of the Corporation on such record date as may be fixed by
the  Board  of  Directors, which record date shall not be less than ten (10) nor
more  than  sixty  (60)  calendar  days prior to the applicable Dividend Payment
Date.  Notwithstanding  the  foregoing, during the first two (2) years after the
date  of  original  issuance  of the Series B-1 Preferred Stock, the Corporation
shall  be  entitled  to  defer  payment  of  dividends  on  shares of Series B-1
Preferred Stock; provided, that during such two-year period, dividends on shares
of  Series  B-1  Preferred Stock shall cumulate and compound and any so deferred
dividends  shall  be  payable in full upon the second anniversary of the date of
original  issuance  of  the  Series  B-1  Preferred  Stock.
(c)     Dividends  shall  cease to accrue in respect of any shares of Series B-1
Preferred  Stock  on  the  date  such shares are converted into shares of Common
Stock  in  accordance  with  Paragraph  A.5.  hereof.
(d)     Accrued  dividends on the Series B-1 Preferred Stock, if not paid on the
first  or  any  subsequent  Dividend  Payment  Date  following  accrual,  shall
thereafter  accrue  additional  dividends  ("Additional  Dividends")  in respect
thereof,  compounded  semi-annually,  at  the  rate  specified  hereinabove  in
Paragraph  A.3.(a)  hereof  or  as  specified  hereinbelow  in Paragraph A.3.(g)
hereof.
(e)     All  dividends paid with respect to shares of Series B-1 Preferred Stock
pursuant  to  Paragraph  A.3.(a) shall be paid pro rata to the holders of Series
B-1  Preferred  Stock  of  record  entitled  thereto.
(f)     Dividends  on  account  of  arrears  for any past Dividend Period may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to the holders of Preferred Stock of record on any date as may be fixed by
the  Board  of  Directors, which date is not more than thirty (30) calendar days
prior  to  the  payment  of  such  dividends.
(g)     The  dividend  payable  to  holders of Series B-1 Preferred Stock as set
forth above in Paragraph A.3.(a) shall be increased to a rate of fifteen percent
(15%) per share per annum on the Series B-1 Liquidation Preference (the "Default
Dividends"),  which  Default  Dividends  shall  be  payable  in  cash  upon  the
occurrence  and  during  the continuance of any of the following events (each an
"Event of Default" and collectively the "Events of Default"), upon the giving of
written  notice  thereof  to the Corporation by the holders of a majority of the
shares  of  Series  B-1  Preferred  Stock  then  outstanding:
(i)     in  the  event  that  the  Corporation does not (A) declare the dividend
payable on the shares of Series B-1 Preferred Stock within (30) calendar days of
     the  Dividend Declaration Date, (B) fulfill its dividend payment obligation
in  full  for the Series B-1 Preferred Stock, as set forth herein, within thirty
(30)  calendar  days  after  said  dividend  payment  is due and payable, or (C)
fulfill  its  dividend payment obligation in the form of either cash or stock as
required  herein;  or
(ii)     in the event that the Corporation shall have materially breached any of
the representations and warranties contained in any of the Exchange Agreement or
the  Investors  Rights  Agreement;  or
(iii)     in  the  event that the Corporation shall have materially breached any
of the covenants or agreements contained in any of the Exchange Agreement or the
Investors  Rights  Agreement  and  such  breach shall not have been cured to the
satisfaction  of the holders of record of a majority of the shares of Series B-1
Preferred  Stock then outstanding within forty-five (45) calendar days after the
date  of  giving  of  notice  of  such  breach  to  the  Corporation;  or
(iv)     in the event that the Corporation shall (A) apply for or consent to the
appointment  of  a receiver, trustee or liquidator for the Corporation or any of
its  property;  (B)  admit in writing its inability to pay debts as they mature;
(C)  make  a general assignment for the benefit of creditors; (D) be adjudicated
bankrupt  or  insolvent; (E) file a voluntary petition in bankruptcy, a petition
or  answer  seeking  reorganization  or  an  arrangement  with creditors to take
advantage  of  any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution  or  liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it in any proceeding under any such law;
or  (F)  have failed to have an involuntary petition in bankruptcy filed against
it  dismissed  and  discharged within sixty (60) calendar days after the date of
such  filing;  corporate actions shall be taken for the purpose of effecting any
of  the  foregoing; or an order, judgment or decree shall be entered without the
application,  approval  or consent of the Corporation, by any court of competent
jurisdiction,  approving a petition seeking reorganization of the Corporation or
of  all  or a substantial part of its assets, and such order, judgment or decree
shall  continue  unstayed  and  in  effect  for  sixty  (60)  calendar  days  (a
"Bankruptcy");  or
(v)     if at any time after the date of original issuance of the first share of
Series  B-1  Preferred  Stock, shares of Common Stock are not publicly traded on
NASDAQ  or NYSE, or fail to satisfy the then current requirements for listing on
such  market  or  exchange.
(h)     So  long as any shares of Series B-1 Preferred Stock remain outstanding,
the  Corporation  shall  not declare, pay or set apart any amounts for dividends
on,  or make any other distribution in cash or other property in respect, of the
Junior  Securities  for  any  period,  nor  shall  the Corporation or any of its
Subsidiaries  redeem,  repurchase,  or  otherwise  acquire  for value any of the
Junior Securities (either pursuant to any applicable sinking fund requirement or
     otherwise) without first obtaining the prior written consent of the holders
of  at  least sixty-six and two-thirds percent (66 2/3%) of the then outstanding
shares  of  Series  B-1  Preferred  Stock.
(i)     Dividends payable on Series B-1 Preferred Stock for any period less than
one  (1)  year  shall  be  computed on the basis of a 360-day year consisting of
twelve  30-day  months  plus  the  actual number of calendar days elapsed in the
month  for  which  such  dividends  are  payable.
4.     Liquidation  Preference.  Upon  any voluntary or involuntary liquidation,
dissolution  or  winding  up  of  the  Corporation, the holders of all shares of
Series  B-1 Preferred Stock then outstanding shall be entitled to be paid out of
the  assets of the Corporation available for distribution to its stockholders an
amount in cash equal to Two Hundred Dollars ($200.00) in cash per share, plus an
     amount  equal  to full Accumulated Dividends (with such dollar amount to be
adjusted  for  any  stock  dividend,  stock  spilt,  subdivision,  combination,
reclassification  or  similar event made or taken with respect to the Series B-1
Preferred  Stock)  (such  amount, as so determined, is referred to herein as the
"Series  B-1  Liquidation Preference"), to the date of final distribution and no
more,  before  any  payment  or  distribution  is  made on account of any Junior
Securities.  Upon any liquidation, dissolution or winding up of the Corporation,
whether  voluntarily or involuntarily, after the holders of Series B-1 Preferred
Stock  shall  have  been  paid  in  full  the aggregate amount of the Series B-1
Liquidation  Preference,  the  remaining net assets of the Corporation available
for  distribution  shall  be distributed ratably among the holders of Series B-1
Preferred  Stock  and  Common  Stock  on  an as-converted to Common Stock basis.
Whenever  the  distribution provided for in this Paragraph A.4. shall be payable
in  property  other  than cash, the value of such distribution shall be the fair
market  value  of  such  property  as  determined  in good faith by the Board of
Directors  of  the  Corporation.
5.     Conversion.
(a)     Right  of Conversion.  Each share of Series B-1 Preferred Stock shall be
convertible,  at the option of the holder thereof, at any time, and from time to
time, after the date of issuance of such share, at the office of the Corporation
     or  any transfer agent for the Series B-1 Preferred Stock, into such number
of  fully  paid,  registered,  non-assessable  shares  of  Common  Stock  as  is
determined  by  dividing  (i)  One  Hundred  Dollars ($100.00) (with such dollar
amount  to  be  adjusted  for  any  stock  dividend,  stock  spilt, subdivision,
combination, reclassification or similar event made or taken with respect to the
Series  B-1  Preferred Stock) plus an amount equal to full Accumulated Dividends
by  (ii)  the  Conversion  Price.  The  "Conversion  Price"  for  the Series B-1
Preferred  Stock  shall  be  nine dollars ($9.00).  The Conversion Price for the
Series  B-1  Preferred  Stock  shall  be  subject  to adjustment as set forth in
Paragraph  A.5.(c)  hereof.
(b)     Procedures  for  Voluntary  Conversion.  Before  any holder of shares of
Series  B-1 Preferred Stock shall be entitled to convert any of such shares into
shares  of  Common  Stock,  such  holder  shall  surrender  the  certificate  or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series B-1 Preferred Stock, and shall give written notice
by  mail, postage prepaid, or hand delivery, to the Corporation at its principal
corporate  office,  of  the election to convert the same and shall state therein
the  name or names in which the certificate or certificates for shares of Common
Stock  are  to  be issued, and in the case of a partial conversion of the Series
B-1  Preferred  Stock,  the certificate or certificates for shares of the Series
B-1  Preferred  Stock  not  converted.  The  Corporation  shall,  as  soon  as
practicable  thereafter,  issue  and  deliver  at such office to such holders of
shares  of  Series  B-1  Preferred  Stock, or to the nominee or nominees of such
holders,  a certificate or certificates for the number of shares of Common Stock
to  which  such holder shall be entitled as aforesaid.  Such conversion shall be
deemed  to have been made immediately prior to the close of business on the date
of  such  surrender of the shares of Series B-1 Preferred Stock to be converted,
and  the  person  or  persons  entitled  to  receive  the shares of Common Stock
issuable  upon  such  conversion shall be treated for all purposes as the record
holder  or  holders  of  such  shares  of  Common Stock as of such date.  If the
conversion  is  in  connection  with  an  underwritten  offering  of  securities
registered  pursuant to the Securities Act, the conversion may, at the option of
any  holder  tendering  the  Series  B-1  Preferred  Stock  for  conversion,  be
conditioned  upon  the  effectiveness  of  such  offering,  in  which  event the
person(s)  entitled to receive Common Stock issuable upon such conversion of the
Series B-1 Preferred Stock shall not be deemed to have converted such Series B-1
Preferred  Stock  until  immediately prior to the effectiveness of such offering
and the Corporation shall deliver to such holders tendering Series B-1 Preferred
Stock  for  conversion  written  notice  of  the  anticipated  date  of  such
effectiveness  no  less  than  ten  (10)  calendar  days  prior  thereto.
(c)     Adjustments  of  Conversion  Price.  So long as any shares of Series B-1
Preferred  Stock  are  outstanding,  the  Conversion  Price  of  the  Series B-1
Preferred  Stock  shall  be  subject to adjustment from time to time as follows:
(i)     (A)     Upon  issuance  (or  deemed  issuance pursuant to the provisions
hereof)  by  the  Corporation  of  any Additional Stock (as defined below) after
March 8, 2000, without consideration or for an Effective Price per share, or, in
     the case of Convertible Securities, a conversion price per share, less than
the  Conversion  Price  for the Series B-1 Preferred Stock in effect immediately
prior  to  the  issuance (or deemed issuance) of such Additional Stock, then the
Conversion  Price for the Series B-1 Preferred Stock in effect immediately prior
to  each  (such  issuance  or  deemed  issuance)  shall  be  adjusted to a price
determined  by  the  following  formula: (A + B)   (C + D), where "A" equals the
number  of shares of Common Stock outstanding immediately prior to such issuance
or sale multiplied by the then applicable Conversion Price, where "B" equals the
consideration,  if  any, received by the Corporation upon such issuance or sale,
where "C" equals the total number of shares of Common Stock outstanding prior to
issuance  of  the additional shares and where "D" equals any Additional Stock or
any  conversion  shares,  or  any  other  shares reserved for issuance which are
associated  with  such  financing, immediately after such issuance or sale.  See
Annex  A  hereto  for  an  example  of  the  formula  set  forth  herein.
     (B)     No  adjustment  of  the  Conversion  Price for Series B-1 Preferred
Stock  shall  be  made  in an amount less than one-half of One Cent ($0.005) per
share, provided that any adjustments which are not required to be made by reason
of this sentence shall be carried forward and shall be taken into account in any
subsequent  adjustment to the Conversion Price.  No adjustment of the Conversion
Price  for  the Series B-1 Preferred Stock pursuant to this Paragraph A.5.(c)(i)
shall  have  the  effect  of increasing such Conversion Price for the Series B-1
Preferred  Stock  above the Conversion Price in effect immediately prior to such
adjustment.
(C)     In  the  case of the issuance of securities of the Corporation for cash,
the  amount  of  consideration  received  by the Corporation for such securities
shall  be  deemed  to  be  the amount of cash paid therefor before deducting any
discounts,  commissions  or  other  expenses  allowed,  paid  or incurred by the
Corporation  for  any  underwriting or otherwise in connection with the issuance
and  sale  thereof.
(D)     In  the  case  of  the  issuance  of securities of the Corporation for a
consideration  in whole or in part other than cash, the consideration other than
cash  shall  be  deemed to have a dollar value equal to the fair market value as
determined  by  the  Board  of  Directors  in accordance with generally accepted
accounting  principles  of  such  non-cash  consideration,  irrespective  of any
accounting  treatment  thereof.
(E)     In  the  case  of  the issuance (whether before, on or after the date of
issuance  of  Series  B-1 Preferred Stock) of Options or Convertible Securities,
the  following  provisions  shall  apply  for  all  purposes  of  this Paragraph
A.5.(c)(i)  and  Paragraph  A.5.(c)(ii)  hereof:
(1)     With  respect to Options to purchase Common Stock, the aggregate maximum
number of shares of Common Stock deliverable upon exercise of such Options shall
be  deemed  to  have  been issued at the time such Options were issued and for a
consideration  equal  to the consideration (determined in the manner provided in
Subparagraph  A.5.(c)(i)(C)  and  Subparagraph  A.5.(c)(i)(D)  hereof),  if any,
received  by  the  Corporation  for such Options plus the minimum exercise price
provided  in  such  Options  for  Common  Stock  issuable  thereunder.
(2)     With  respect  to  Convertible  Securities  and  Options  to  purchase
Convertible  Securities,  the aggregate maximum number of shares of Common Stock
deliverable  upon  the conversion or exchange of any such Convertible Securities
and  the  aggregate  maximum  number of shares of Common Stock issuable upon the
exercise  of  such Options to purchase Convertible Securities and the subsequent
conversion  or  exchange  of such Convertible Securities shall be deemed to have
been  issued at the time such Convertible Securities or such Options were issued
and  for  a  consideration  equal  to the consideration, if any, received by the
Corporation  for  any  such Convertible Securities and Options, plus the minimum
additional  consideration,  if  any,  to be received by the Corporation upon the
conversion  or  exchange  of such Convertible Securities or the exercise of such
Options  and  the  conversion or exchange of the Convertible Securities issuable
upon  exercise  of such Options (the consideration in each case to be determined
in the manner provided in Subparagraphs A.5.(c)(i)(C) and A.5.(c)(i)(D) hereof).
(3)     In  the  event  of  any  change  in the number of shares of Common Stock
deliverable,  or  in the consideration payable to the Corporation, upon exercise
of  such  Options or upon conversion or exchange of such Convertible Securities,
including,  but  not  limited  to,  a  change  resulting  from  the antidilution
provisions  thereof,  the Conversion Price of the Series B-1 Preferred Stock, to
the  extent in any way affected by or computed using such Options or Convertible
Securities,  shall  be  recomputed  to  reflect  such  change,  but  no  further
adjustment  shall be made for the actual issuance of Common Stock or any payment
of such consideration upon the exercise of any such Options or the conversion or
exchange  of  such  Convertible  Securities.
(4)     Upon  the  expiration  or  termination  of  any such Options or any such
rights  to  convert  or exchange Convertible Securities, the Conversion Price of
the Series B-1 Preferred Stock, to the extent in any way affected by or computed
using such Options or Convertible Securities, shall be recomputed to reflect the
issuance  of  only  the  number  of  shares  of  Common  Stock  (and Options and
Convertible  Securities  which  remain in effect) that were actually issued upon
the  exercise  of  such  Options  or  upon  the  conversion  or exchange of such
Convertible  Securities.
(5)     The number of shares of Common Stock deemed issued and the consideration
deemed  paid  therefor pursuant to Subparagraphs A.5.(c)(i)(E)(1) and (2) hereof
shall be appropriately adjusted to reflect any change, termination or expiration
of  the  type  described  in either Subparagraph A.5.(c)(i)(E)(3) or (4) hereof.
(ii)     "Additional  Stock"  shall mean any shares of Common Stock or shares of
Common  Stock  issuable pursuant to Convertible Securities issued or Options (or
deemed  to  have  been issued pursuant to Paragraph A.5.(c)(i)(E) hereof) by the
Corporation  after  the  date of issuance of Series B-1 Preferred Stock, except:
(A)     Common  Stock  issued  pursuant  to a transaction described in Paragraph
A.5.(c)(iii)  hereof;
(B)     Common  Stock  or  options  to  purchase  such  Common  Stock  issued to
officers,  employees  or  directors  of,  or  consultants  to,  the Corporation,
pursuant  to  any  agreement,  plan  or  arrangement  approved  by  the Board of
Directors  of  the  Corporation  (the  "Permitted  Options");  and
(C)     Common  Stock issued or issuable upon conversion of shares of Series B-1
Preferred  Stock.
(iii)     In  the  event  the Corporation at any time or from time to time after
the  date  of issuance of Series B-1 Preferred Stock fixes a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
     or  the  determination  of  holders  of  shares of Common Stock entitled to
receive  a dividend or other distribution payable in additional shares of Common
Stock  or  other  securities or rights convertible into, or entitling the holder
thereof  to  receive  directly  or indirectly, additional shares of Common Stock
(hereinafter  referred  to as "Common Stock Equivalents") without payment of any
consideration by such holder for the additional shares of Common Stock or Common
Stock Equivalents (including the additional shares of Common Stock issuable upon
conversion  or  exercise  thereof), then, as of such record date (or the date of
such  dividend,  distribution, split or subdivision if no record date is fixed),
the  Conversion  Price  of the Series B-1 Preferred Stock shall be appropriately
decreased so that the number of shares of Common Stock issuable on conversion of
each  share  of  Series  B-1 Preferred Stock shall be increased in proportion to
such  increase in the aggregate number of shares issuable with respect to Common
Stock  Equivalents,  with  the  number of shares issuable with respect to Common
Stock Equivalents determined from time to time in the manner provided for deemed
issuances  in  Subparagraph  A.5.(c)(i)(E)  hereof.
(iv)     If  the  number of shares of Common Stock outstanding at any time after
the date of issuance of Series B-1 Preferred Stock is decreased by a combination
of  the  outstanding  shares of Common Stock, then, following the record date of
such  combination, the Conversion Price for the Series B-1 Preferred Stock shall
be appropriately increased so that the number of shares of Common Stock issuable
on  conversion of each share of Series B-1 Preferred Stock shall be decreased in
proportion  to  such  decrease  in  the  outstanding  shares  of  Common  Stock.
(d)     Other  Distributions.  In  the  event  the  Corporation  shall declare a
distribution  payable  in securities of other persons, evidences of indebtedness
issued by the Corporation or other persons, assets (excluding cash dividends) or
     options  or  rights not referred to in Paragraph A.5.(c)(iii) hereof, then,
in  each  such  case  for  the purpose of this Paragraph A.5.(d), the holders of
shares  of Series B-1 Preferred Stock shall be entitled to a proportionate share
of  any such distribution as though they were holders of the number of shares of
Common  Stock  into  which  their  shares  of  Series  B-1  Preferred  Stock are
convertible  as of the record date fixed for the determination of the holders of
shares  of  Common  Stock  entitled  to  receive  such  distribution.
(e)     Recapitalization.  If  at any time or from time to time there shall be a
recapitalization  or reclassification of Common Stock (other than a subdivision,
combination  or  consolidation,  merger  or  sale of assets or stock transaction
provided  for in Paragraph A.4.(b) hereof), provision shall be made so that each
holder  of  shares of Series B-1 Preferred Stock shall thereafter be entitled to
receive, upon conversion of the Series B-1 Preferred Stock, the number of shares
of  stock  or  other  securities  or  property  of the Corporation or otherwise,
receivable  upon  such  recapitalization  or reclassification by a holder of the
number  of shares of Common Stock into which such shares of Series B-1 Preferred
Stock  could have been converted immediately prior to such recapitalization.  In
any  such  case,  appropriate adjustment shall be made in the application of the
provisions  of  this Paragraph A.5. with respect to the rights of the holders of
shares  of  Series  B-1  Preferred  Stock  after  the  recapitalization  or
reclassification  to  the  end  that  the  provisions  of  this  Paragraph  A.5.
(including  adjustments of the Conversion Price then in effect and the number of
shares  purchasable  upon conversion of the Series B-1 Preferred Stock) shall be
applicable  after  that  event  as  nearly  equivalent  as  may  be practicable.
(f)     No  Impairment.  The  Corporation  will  not,  by  amendment  of  this
Certificate  of Incorporation or through any reorganization, recapitalization or
any other voluntary action, avoid or seek to avoid the observance or performance
of  any  of  the terms to be observed or performed hereunder by the Corporation,
but  will  at  all  times  in  good  faith assist in the carrying out of all the
provisions of this Paragraph A.5. and in the taking of all such action as may be
necessary  or  appropriate  in  order  to  protect  the conversion rights of the
holders  of  shares  of  Series  B-1  Preferred  Stock  against  impairment.
(g)     No  Fractional  Shares.  No  fractional  shares  shall  be  issued  upon
conversion of the Series B-1 Preferred Stock, and the number of shares of Common
Stock to be issued shall be rounded upward to the nearest whole share, and there
shall  be no payment to a holder of shares of Series B-1 Preferred Stock for any
such  rounded  fractional  share.  Whether  or not fractional shares result from
such  conversion  shall be determined on the basis of the total number of shares
of  Series  B-1 Preferred Stock the holder is at the time converting into Common
Stock  and  the  number  of  shares of Common Stock issuable upon such aggregate
conversion.
(h)     Certificate  as  to Adjustments.  Upon the occurrence of each adjustment
or  readjustment  of  the  Conversion  Price  of  the Series B-1 Preferred Stock
pursuant to this Paragraph A.5., the Corporation, at its expense, shall promptly
compute  such adjustment or readjustment in accordance with the terms hereof and
prepare  and  furnish  to  each holder of shares of Series B-1 Preferred Stock a
certificate  setting forth such adjustment or readjustment and showing in detail
the  facts upon which such adjustment or readjustment is based, certified by the
Corporation's  Chief  Executive  Officer  or  Chief  Financial  Officer.  The
Corporation  shall, upon the written request at any time of any holder of shares
of Series B-1 Preferred Stock, furnish or cause to be furnished to such holder a
like  certificate  setting  forth (i) such adjustment and readjustment, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock  and  the  amount,  if  any,  of other property which at the time would be
received  upon  the  conversion  of  a  share  of  Series  B-1  Preferred Stock.
(i)     Notices  of  Record Date.  In the event of any taking by the Corporation
of  a  record  of  the  holders  of  any  class of securities for the purpose of
determining  the holders thereof who are entitled to receive any dividend (other
than  a  cash  dividend)  or  other  distribution,  any  right to subscribe for,
purchase  or  otherwise  acquire  any  shares of stock of any class or any other
securities  or  property,  or  to receive any other right, the Corporation shall
mail  to  each  holder  of shares of Series B-1 Preferred Stock, at least twenty
(20)  calendar days prior to the date specified therein, a notice specifying the
date  on  which any such record is to be taken for the purpose of such dividend,
distribution  or  right,  and  the  amount  and  character  of  such  dividend,
distribution  or  right.
(j)     Reservation  of  Stock  Issuable  Upon  Conversion,  Dividends.  The
Corporation  shall  at  all  times  take  appropriate  steps to reserve and keep
available  out of its authorized but unissued shares of Common Stock, solely for
the  purpose  of  (i)  effecting  the  conversion  of  the  shares of Series B-1
Preferred Stock, such number of its shares of Common Stock as shall from time to
time  be sufficient to effect the conversion of all outstanding shares of Series
B-1  Preferred  Stock,  and  (ii)  the  payment  of dividends as contemplated in
Paragraphs  A.3.(a)  and  (g).  If  at  any  time  the  number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of  all  then outstanding shares of Series B-1 Preferred Stock or the payment of
dividends,  then in addition to such other remedies as shall be available to the
holder  of  such shares of Series B-1 Preferred Stock, the Corporation will take
such  corporate  action  as  may, in the opinion of its counsel, be necessary to
increase  its  authorized  but unissued shares of Common Stock to such number of
shares  as  shall  be  sufficient  for  such  purposes.
(k)     Notices.  Any  notice  required by the provisions of this Paragraph A.5.
to  be  given  to  the  holders of shares of Series B-1 Preferred Stock shall be
deemed  given when received if delivered via courier or sent by facsimile, or by
United  States  mail, postage prepaid, and addressed to each holder of record at
its  address  appearing  on  the  books  of  the  Corporation.
(l)     Optional  Conversion.
(i)     At  any  time  after  the  third  (3rd)  anniversary  of the date of the
original  issuance  of  the  Series B-1 Preferred Stock, all or a portion of the
shares of Series B-1 Preferred Stock shall, at the option of the Corporation (as
     determined  by  the  Board  of  Directors), automatically be converted into
fully  paid,  registered and non-assessable shares of Common Stock in accordance
with Paragraph A.5.(a) above, if the following three conditions are met (each to
be  adjusted  in  the event of a combination, stock split or subdivision, as the
case  may  be):
(A)     the  Closing  Common  Stock  Market Price (as defined in Paragraph B.(d)
hereof) for sixty (60) consecutive trading days ending no more than fifteen (15)
     trading  days  beginning  after  the  third  anniversary of the date of the
original  issuance  of  the  Series  B-1 Preferred Stock prior to such mandatory
conversion,  shall be the greater of (1) $18.00 or (2) not less than two hundred
percent  (200%)  of  the  Conversion  Price  then  in  effect;
(B)     the  average  trading  volume  during such sixty (60) trading day period
shall  be  at  least  45,000  shares  per  trading  day;  and
(C)     an  effective shelf registration (in accordance with Section 4(b) of the
Investors  Rights Agreement) is then in effect for the shares of Common Stock to
be  issued  upon  conversion  of  the  shares  of  Series  B-1  Preferred Stock.
(ii)     If  the  Corporation  has elected to convert Series B-1 Preferred Stock
into  Common  Stock pursuant to Paragraph A.5.(l)(i) above, the Corporation will
provide written notice of mandatory conversion of shares of Series B-1 Preferred
     Stock  to  each holder of record of Series B-1 Preferred Stock no less than
ten  (10)  nor  more  than twenty (20) calendar days prior to the date fixed for
conversion  by  prepaid  overnight  delivery  service,  to  each  holder at such
holder's  address  as  it appears on the stock register of the Corporation.  The
Corporation's  obligation  to  deliver  shares  of  Common Stock shall be deemed
fulfilled  if,  on  the mandatory conversion date, the Corporation shall deposit
with  a  bank  or trust company in New York, New York having capital of at least
One  Hundred  Million  Dollars  ($100,000,000),  such number of shares of Common
Stock  as are required to be delivered by the Corporation upon the conversion of
the shares of Series B-1 Preferred Stock so called for conversion.  Provided the
Corporation  has  fulfilled  its obligation to deposit shares as provided in the
foregoing  sentence,  effective  on  the  mandatory conversion date fixed by the
Corporation  and  notified  to  the  holders of Series B-1 Preferred Stock, each
outstanding  share  of  Series  B-1 Preferred Stock plus an amount equal to full
cumulative  dividends  (whether  or  not  earned or declared) accrued and unpaid
thereon,  including  Default  Dividends  and  Accumulated  Dividends,  shall  be
converted  into  a  fully  paid,  registered, and non-assessable share of Common
Stock  at  the  Conversion  Price  then in effect, automatically and without any
action  on  the  part of any holder of shares of Series B-1 Preferred Stock, and
each  such  share of Common Stock shall be deemed outstanding from and after the
mandatory  conversion  date.
6.     Status  of  Converted  Stock.  In  the  event  any  shares  of Series B-1
Preferred Stock are converted to Common Stock pursuant to Paragraph A.5. hereof,
     the  shares  so  converted  or  so  redeemed shall be canceled, retired and
eliminated  and  shall  not  be  reissued  by  the  Corporation.
7.     Redemption.
(a)     Holder  Optional  Redemption.  Prior  to  the  occurrence of an event or
transaction  that  could  result  in a Change of Control (the "Change of Control
Event"),  the Corporation shall send written notice to each holder of Series B-1
Preferred  Stock,  which notice shall explain in reasonable detail the Change of
Control  Event  (the  "Change of Control Notice").  The Change of Control Notice
shall  be  sent by first class mail at least forty-five (45) Business Days prior
to the anticipated consummation of the Change of Control Event.  Upon receipt of
     a  Change  of Control Notice from the Corporation, each holder of shares of
Series B-1 Preferred Stock shall have the right, by giving written notice to the
Corporation  (the "Holder Optional Redemption Notice"), to cause the Corporation
to  redeem  all of such holder's then outstanding shares of Series B-1 Preferred
Stock,  immediately  prior  to  the  consummation  of  the Change in Control, in
exchange  for  such  number  of  shares of Common Stock as shall be equal to the
quotient of (i) the product of (A) the Holder Optional Redemption Price referred
to  below,  times  (B)  the number of shares of Series B-1 Preferred Stock being
exchanged  by such holder divided by (ii) the Value Per Common Share (as defined
below)  in connection with the Change of Control; provided, however, that if the
Corporation  does  not  then  have sufficient shares of Common Stock authorized,
unissued  and available to be issued to each holders, who has delivered a Holder
Optional  Redemption  Notice  to  the Corporation, or the Value Per Common Share
either  (x) is less than One Dollar ($1.00) or (y) cannot be readily determined,
the  Corporation  shall  pay  to each such holder cash in an amount equal to the
product  obtained  in  clause  (i)  above  in respect of such holder's shares of
Series  B-1 Preferred Stock.  In the event the Change of Control does not result
in  the  holders  of  Common  Stock  receiving  solely cash or solely Marketable
Securities  or a combination solely of cash and Marketable Securities, the Value
Per  Common  Share  shall be deemed to be zero and in that event the Corporation
shall pay to each such holder cash in an amount equal to the product obtained in
clause  (i)  above  in  respect  of such holder's shares of Series B-1 Preferred
Stock.
     All  holders  electing to redeem shares of Series B-1 Preferred Stock shall
deliver  to  the Corporation during regular business hours, at the office of any
transfer  agent  of  the  Corporation for the Series B-1 Preferred Stock, at the
principal  office of the Corporation or at such other place as may be designated
by the Corporation, the certificate or certificates for the Series B-1 Preferred
Stock to be redeemed, duly endorsed for transfer to the Corporation (if required
by  it)  on  or  before  the  date  of  the Change of Control Event (the "Holder
Optional  Redemption  Date").

(b)     Holder  Optional  Redemption  Price.  All shares of Series B-1 Preferred
Stock  to  be redeemed shall be redeemed by paying for each such share an amount
equal to (A) Two Hundred Dollars ($200.00) per share (with such dollar amount to
     be  adjusted for any stock dividend, stock spilt, subdivision, combination,
reclassification  or  similar event made or taken with respect to the Series B-1
Preferred  Stock),  plus (B) an amount equal to all Accumulated Dividends to the
Holder  Optional  Redemption  Date,  the sum of clauses (A) and (B) in each case
being  referred  to  as the "Holder Optional Redemption Price."  All payments of
the  Holder Optional Redemption Price shall be made in accordance with Paragraph
A.7.(a)  hereof.
(c)     Payment of the Holder Optional Redemption Price.  On the Holder Optional
Redemption  Date the Corporation shall pay the Holder Optional Redemption Price,
by delivery of stock certificates representing the aggregate number of shares of
Common  Stock determined in accordance with Paragraph A.7.(a), or if applicable,
in full, in cash, by wire transfer of immediately available funds, in respect of
the  shares  of  Series  B-1  Preferred Stock outstanding on the Holder Optional
Redemption Date to accounts specified by the holders of the Series B-1 Preferred
Stock  so  redeemed.
(d)     Condition  Precedent  to  Change  of  Control.  The Corporation shall be
prohibited  from  consummating  the Change of Control Event (i) unless and until
the Corporation has paid the Holder Optional Redemption Price in accordance with
Paragraph  A.7.(c)  above, and (ii) the holder of Series B-1 Preferred Stock has
received  any  shares  of  Common  Stock  to  be  received as part of the Holder
Optional  Redemption  Price  a sufficient time in advance of the consummation of
the  Change  of  Control  Event to allow such holder a reasonable opportunity to
participate  in  such  Change  of  Control.
(e)     Certain  Defined  Terms.  For purposes of Paragraph A.7.(a), the certain
terms  are  defined  as  follows:
(i)     "Fair  Market  Value"  shall  mean the average of the closing prices per
share  of the of the Marketable Securities to be issued in the Change of Control
as  reported by the NASDAQ (or on any national exchange on which Common Stock is
listed)  as  published in the Eastern Edition of The Wall Street Journal for the
twenty  (20) trading days immediately prior to the consummation of the Change of
Control.
(ii)     "Marketable  Securities" shall mean that (A) such securities are listed
for  trading  on  the  NYSE,  the American Stock Exchange or the NASDAQ; (B) the
average  closing  price  per  share  of  such securities is at least Ten Dollars
($10.00)  per  share (determined during the twenty (20) trading days immediately
preceding  the  first public announcement of the Change of Control); and (C) the
average  trading  volume  of  such  securities  is at least One Hundred Thousand
(100,000)  shares  per  trading  day, as reported by Bloomberg, during the sixty
(60)  trading  day period immediately preceding the first public announcement of
the  Change  of  Control.
(iii)     "Outstanding  Common Stock" shall mean the maximum aggregate number of
shares  of  Common  Stock  of the Corporation outstanding, determined on a fully
diluted  and  fully  converted  basis,  giving  effect  for  purposes  of  such
determination, to the exercise of any and all options, warrants and other rights
exercisable  for  or exchangeable into shares of Common Stock and the conversion
or  exchange  of  all Convertible Securities into shares of Common Stock and the
exchange  of  all  outstanding  shares  of Series B-1 Preferred Stock for Common
Stock  pursuant  to  Paragraph  A.7.(a)  hereof.
(iv)     "Value  Per  Common Share" shall mean the aggregate amount of cash paid
or  the  aggregate Fair Market Value of securities issuable in connection with a
Change  of  Control  divided  by  the  Outstanding  Common  Stock.
8.     Voting  Rights.
(a)     Class  Voting  Rights.
(i)     Except as otherwise provided below, a vote of at least a majority of the
     shares  of  the  Series  B-1  Preferred  Stock  then  outstanding  shall be
sufficient  to  take  any  action requiring the vote of the Series B-1 Preferred
Stock  as a separate class.  At any meeting where the Series B-1 Preferred Stock
shall  have the right to vote as a separate class, the presence, in person or by
proxy,  of  a  majority  of  the then outstanding shares of Series B-1 Preferred
Stock  shall  constitute  a  quorum  of  such  class.
(ii)     So  long  as  any  Series  B-1  Preferred  Stock  is  outstanding,  the
Corporation  shall  not, without the affirmative vote of the holders of at least
sixty-six  and  two-thirds percent (66 2/3%) of all outstanding shares of Series
B-1  Preferred  Stock voting separately as a class, given in person or by proxy,
either  in  writing  or  by  resolution  adopted at an annual or special meeting
called  for  this  purpose  (A)  amend,  alter  or  repeal  any provision of the
Certificate  of Incorporation or By-laws of the Corporation, each as amended, so
as  to  affect,  in  any  manner  adverse to the holders of Series B-1 Preferred
Stock,  the  relative  rights,  preferences,  qualifications,  limitations  or
restrictions  of  the Series B-1 Preferred Stock; or (B) increase the authorized
number  of  shares of Series B-1 Preferred Stock or create, authorize, designate
or  reclassify  any  authorized  stock  of the Corporation into, or increase the
authorized  amount  of, or issue any capital stock or any securities convertible
into  or  exchangeable  or  exercisable  for  any securities of the Corporation,
ranking,  either  as  to  payment  of  dividends,  distributions  of assets upon
liquidation  or  otherwise  or redemption, prior or senior to or pari passu with
the  Series  B-1  Preferred  Stock, or (C) create, authorize or issue any Junior
Securities,  which  are  required  to be redeemed by the Corporation at any time
that  any  shares  of  Series  B-1  Preferred  Stock  are  outstanding.
(b)     Board of Directors.  Notwithstanding the foregoing, each share of Series
     B-1 Preferred Stock shall be entitled to vote for the election of Directors
to  the Corporation's Board of Directors whether by annual or special meeting or
otherwise.  For  purposes  of determining the number of votes that each share of
Series  B-1  Preferred  Stock is entitled to cast for the election of Directors,
each such share of Series B-1 Preferred Stock shall be treated as if it had been
converted  into  that  number of shares of Common Stock determined in accordance
with  Paragraph  A.5.  hereof,  immediately  prior  to  the  occurrence  of such
election.  The  holders  of  shares  of  Series  B-1  Preferred Stock shall vote
together  with  the  holders of shares of Common Stock as a single class for the
purpose  of  the  election  of  Directors  pursuant  to  this Paragraph A.8.(b).
B.     Definitions.  As  used  herein,  the  following  terms  shall  have  the
following  definitions:
(a)     "Accumulated  Dividends"  means  with respect to any share of Series B-1
Preferred  Stock,  the  dividends  that  have  accrued on such shares as of such
specific date for Dividend Periods ending on or prior to such date and that have
     not  previously  been  paid  in  cash,  including  Additional Dividends and
Default  Dividends.
(b)     "Additional  Dividends"  has the meaning given to such term in Paragraph
A.3.(d).
(c)     "Additional  Stock"  has the meaning set forth in Paragraph A.5.(c)(ii).
(d)     "Business  Day"  shall mean any day other than Saturday, Sunday or other
day in which commercial money center banks in New York City, New York are closed
     for  business.
(e)     "Change  of  Control"  shall  mean  the  occurrence  of  any  one of the
following:  (1)  the consolidation or merger of the Corporation with or into any
other  Person  and  as  a  result  of  the  transaction  the stockholders of the
Corporation  immediately  prior  to  such transaction own fifty percent (50%) or
less  of  the  voting  power  or voting securities of the surviving entity after
giving  effect to such transaction; (2) the sale, conveyance or disposition of a
majority of the assets of the Corporation and its Subsidiaries on a consolidated
     basis  (other  than  to  a  wholly owned Subsidiary of the Corporation or a
pledge  or  grant  of  a  security  interest  to  a  bona  fide lender); (3) any
acquisition  in  a  transaction or series of related transactions by a Person or
"group"  (as  defined  in  Rule  13-d(5)  promulgated under the Exchange Act) of
Persons  the  result  of  which  is  that  such  Person of group of Persons owns
beneficially  fifty  percent  (50%)  or more of either (x) the voting securities
then  outstanding  or (y) the then outstanding voting power, of the Corporation;
or  (4)  the  liquidation,  dissolution  or  winding  up  of  the  Corporation.
(f)     "Closing  Common  Stock  Market  Price"  for any day means the last sale
price regular way, or, in case no such sale takes place on such day, the average
of  the  closing bid and asked prices regular way, in either case as reported on
NASDAQ,  NYSE  or any other national securities market as reported by Bloomberg.
(g)     "Common  Stock  Equivalents"  has  the  meaning  set  forth in Paragraph
A.5.(c)(iii)  hereof.
(h)     "Conversion  Price"  has  the  meaning  set  forth  in Paragraph A.5.(a)
hereof.
(i)     "Convertible  Securities"  means  any  indebtedness  or  shares of stock
convertible  into  or  exchangeable  for  Common  Stock.
(j)     "Dividend  Declaration  Date"  means  the  last  trading  day  on NASDAQ
immediately prior to June 30 and December 31 of each year in which any shares of
the  Series  B-1  Preferred  Stock  are  outstanding.
(k)     "Dividend  Payment Dates" means July 31 and January 31 of each year (or,
if  such  day  is not a Business Day, the next succeeding day that is a Business
Day).
(l)     "Dividend  Period"  means  the  Initial Dividend Period and, thereafter,
each  Semi-Annual  Dividend  Period.
(m)     "Effective  Price"  of  shares  of  Additional  Stock means the quotient
determined  by  dividing (i) the total number of such shares of Additional Stock
issued  or sold, or deemed to have been issued or sold, by the Corporation under
Paragraph  A.5.(c)  hereof,  into  (ii)  the  consideration  received  by  the
Corporation  under  Paragraph  A.5.(c) hereof for the issuance of such shares of
Additional  Stock.
(n)     "Exchange  Act"  shall  mean  the  Securities  Exchange  Act of 1934, as
amended  and  the  rules  and  regulations  promulgated  thereunder.
(o)     "Exchange  Agreement" means the Exchange Agreement dated as of April 17,
2001,  by  and  among  the  Corporation  and  the  Investors  named therein, the
Schedules  and  Exhibits thereto, and any certificate or other document required
thereby,  as  the  same  may  be  amended  from  time  to  time.
(p)     "Initial  Dividend  Period"  means the dividend period commencing on the
date  of  issuance  of  the  Series  B-1 Preferred Stock and ending on the first
Dividend  Payment  Date  to  occur  thereafter.
(q)     "Investors"  shall have the meaning set forth in the Exchange Agreement.
(r)     "Investors  Rights Agreement" means the Investors Rights Agreement dated
as  of  March  8,  2000,  by  and  among the Corporation and the Investors named
therein,  the  Schedules  and  Exhibits  thereto,  and  any certificate or other
document  required  thereby,  as  the  same  may  be  amended from time to time.
(s)     "Junior  Securities" has the meaning set forth in Paragraph A.2. hereof.
(t)     "NASDAQ"  shall  have the meaning set forth in Paragraph A.3.(a) hereof.
(u)     "NYSE"  shall  mean  the  New  York  Stock  Exchange.
(v)     "Option" means rights, options or warrants to subscribe for, purchase or
otherwise  acquire  Common  Stock  or  Convertible  Securities.
(w)     "Permitted  Options"  has  the  meaning  set  forth  in  Paragraph
A.5.(c)(ii)(B)  hereof.
(x)     "Person"  shall  mean  and  include  an  individual,  a  corporation,  a
partnership,  a  trust,  an  unincorporated organization and a government or any
department,  agency  or  political  subdivision  thereof.
(y)     "Securities  Act"  shall mean the Securities Act of 1933, as amended and
the  rules  and  regulations  promulgated  thereunder.
(z)     "Semi-Annual  Dividend  Periods"  means  the  semi-annual  periods  (1)
commencing  on  each  January 1 and ending on each June 30 and (2) commencing on
July  1  and  ending  on  each  December  31.
(aa)     "Subsidiaries"  means  when  used  with  reference  to  a  person,  a
corporation or limited liability company, the majority of the outstanding voting
securities  or membership interests of which are owned directly or indirectly by
such  person.


     IN  WITNESS  WHEREOF,  the  undersigned  has  caused this Certificate to be
signed  on  the  2nd  day  of  May,  2001.


     ABC-NACO  INC.

     By:  _________________________
     Name:  J.P.  Singsank
     Title:  Senior  Vice  President  and
     Chief  Financial  Officer




488063.3


                                     ANNEX A

     Example  of  Application  of  Formula  for  Adjustment of Conversion Price.
If,  twelve  (12) months after the original issuance of the Series B-1 Preferred
Stock,  9,000,000  shares  of  Common  Stock  were  then  outstanding  and  the
Corporation  were to issue 100,000 shares of Common Stock (the Additional Stock)
for  $8.00 per share (and thus, less than the $9 Conversion Price for Series B-1
Preferred  Stock  then  in  effect),  the  Conversion Price would be adjusted as
follows:

(A+B)          (C  +D)

(9,000,000  x  $9)  +  (100,000  x  $8)          (9,000,000)  +(100,000)

81,000,000)+($800,000  )          (9,100,000)

(81,800,000)          (9,100,000)

                                       = $8.989