<PAGE>

                                                                     Exhibit 4.2



--------------------------------------------------------------------------------

                           ORIENT-EXPRESS HOTELS LTD.



                                       and



                               FLEET NATIONAL BANK



                                 as Rights Agent



                                Rights Agreement



                            Dated as of ______, 2000

--------------------------------------------------------------------------------




<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                               PAGE
                                                                                                               ----
<S>               <C>                                                                                           <C>
Section 1.        Certain Definitions.............................................................................1

Section 2.        Appointment of Rights Agent.....................................................................5

Section 3.        Issue of Right Certificates.....................................................................5

Section 4.        Form of Right Certificates......................................................................6

Section 5.        Countersignature and Registration...............................................................7

Section 6.        Transfer, Split Up, Combination and Exchange of Right Certificates;
                  Mutilated, Destroyed, Lost or Stolen Right Certificates.........................................8

Section 7.        Exercise of Rights; Purchase Price; Expiration Date of Rights...................................8

Section 8.        Cancellation and Destruction of Right...........................................................9

Section 9.        Reservation and Availability of Preferred Shares...............................................10

Section 10.       Preferred Shares Record Date...................................................................10

Section 11.       Adjustment of Purchase Price, Redemption Price,
                  Number of Shares or Number of Rights...........................................................11

Section 12.       Certificate of Adjusted Purchase Price or Number of Shares.....................................18

Section 13.       Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........................18

Section 14.       Fractional Rights and Fractional Shares........................................................19

Section 15.       Rights of Action...............................................................................20

Section 16.       Agreement of Right Holders.....................................................................21

Section 17.       Right Certificate Holder Not Deemed a Shareholder..............................................21

Section 18.       Concerning the Rights Agent....................................................................21

</TABLE>


                                        i

<PAGE>

<TABLE>
<CAPTION>

                                                                                                               PAGE
                                                                                                               ----
<S>               <C>                                                                                           <C>
Section 19.       Merger or Consolidation or Change of Name of Rights Agent......................................22

Section 20.       Duties of Rights Agent.........................................................................22

Section 21.       Change of Rights Agent.........................................................................25

Section 22.       Issuance of New Right Certificates.............................................................25

Section 23.       Redemption.....................................................................................26

Section 24.       Exchange.......................................................................................27

Section 25.       Notice of Certain Events.......................................................................28

Section 26.       Notices........................................................................................29

Section 27.       Supplements and Amendments.....................................................................29

Section 28.       Successors.....................................................................................30

Section 29.       Benefits of this Agreement.....................................................................30

Section 30.       Severability...................................................................................30

Section 31.       Governing Law..................................................................................30

Section 32.       Counterparts...................................................................................30

Section 33.       Descriptive Headings...........................................................................30

Exhibit A  -      Form of Certificate of Designation of Terms of Series A
                  Junior Participating Preferred Shares

Exhibit B  -      Form of Right Certificate

</TABLE>


                                       ii
<PAGE>

                                RIGHTS AGREEMENT
                                ----------------

         Agreement, dated as of ______________, 2000, between Orient-Express
Hotels Ltd., a Bermuda company (the "Company"), and Fleet National Bank, a
national banking association (the "Rights Agent").

         The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each common
share, par value $0.01 each, of the Company outstanding on ___________, 2000
(the "Record Date"), each Right representing the right to purchase one
one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and
subject to the conditions herein set forth, and further authorized and directed
the issuance of one Right with respect to each such common share that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).

         In consideration of the premises and the mutual agreements herein set
forth, the parties hereby agree as follows:

         Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:

                  (a) "A Shares" shall mean the Class A Common Shares, par value
         $0.01 each, of the Company.

                  (b) "Acquiring Person" shall mean any Person (as such term is
         hereinafter defined) who or which, together with all Affiliates and
         Associates (as such terms are hereinafter defined) of such Person,
         shall be the Beneficial Owner (as such term is hereinafter defined) of
         shares carrying 20% or more of the total voting rights which may be
         cast at any general meeting of the Company, but shall not include the
         Company, SCL, any Subsidiary (as such term is hereinafter defined) of
         the Company or SCL or any employee benefit plan of the Company or any
         Subsidiary of the Company, or any entity holding shares of the Company
         for or pursuant to the terms of any such plan. Notwithstanding the
         foregoing, (i) no Person shall be or have become an "Acquiring Person"
         if such Person, together with all Affiliates and Associates of such
         Person, was on _________, 2000 the Beneficial Owner of shares carrying
         20% or more of the total voting rights which may be cast at any general
         meeting of the Company; PROVIDED, HOWEVER, that if, after notice from
         the Company of the adoption of this Agreement, such Person becomes the
         Beneficial Owner of any additional shares entitling the holder thereof
         to vote at any general meeting of the Company, then such Person shall
         be deemed an "Acquiring Person", and (ii) no Person shall become an
         "Acquiring Person" as the result of an acquisition of the Company's
         shares by the Company or a Subsidiary of the Company which, by reducing
         the number of shares outstanding, increases the proportionate voting
         rights of such Person to 20% or more of the total voting rights which
         may be cast at


                                       1
<PAGE>

         any general meeting of the Company (or, in the case of a Person
         referred to in clause (i), more than the percentage that was
         beneficially owned by such Person at the time such Person received the
         notice referred to in clause (i)); PROVIDED, HOWEVER, that if a Person
         becomes the Beneficial Owner of shares carrying 20% or more of the
         total voting rights which may be cast at any general meeting of the
         Company (or, in the case of a Person referred to in clause (i), more
         than the percentage that was beneficially owned by such Person at the
         time such Person received the notice referred to in clause (i)) by
         reason of share purchases by the Company or a Subsidiary of the Company
         and shall, after such share purchases by the Company or a Subsidiary of
         the Company, become the Beneficial Owner of any additional shares
         entitling the holder thereof to vote at any general meeting of the
         Company, then such Person shall be deemed to be an "Acquiring Person."

                  (c) "Adjustment Shares" shall have the meaning set forth in
         Section 11(a)(ii) hereof.

                  (d) "Affiliate" and "Associate" shall have the respective
         meanings ascribed to such terms in Rule 12b-2 of the General Rules and
         Regulations under the Exchange Act as in effect on ______, 2000.

                  (e) "B Shares" shall mean the Class B Common Shares, par value
         $0.01 each, of the Company.

                  (f) A Person shall be deemed the "Beneficial Owner" of and
         shall be deemed to "beneficially own" any securities:

                           (i) which such Person or any of such Person's
                  Affiliates or Associates beneficially owns, directly or
                  indirectly;

                           (ii) which such Person or any of such Person's
                  Affiliates or Associates has (A) the right to acquire (whether
                  such right is exercisable immediately or only after the
                  passage of time) pursuant to any agreement, arrangement or
                  understanding (other than customary agreements with and
                  between underwriters and selling group members with respect to
                  a bona fide public offering of securities), or upon the
                  exercise of conversion rights, exchange rights, rights (other
                  than these Rights), warrants or options, or otherwise;
                  PROVIDED, HOWEVER, that a Person shall not be deemed the
                  Beneficial Owner of, or to beneficially own, securities
                  tendered pursuant to a tender or exchange offer made by or on
                  behalf of such Person or any of such Person's Affiliates or
                  Associates until such tendered securities are accepted for
                  purchase or exchange; or (B) the right to vote pursuant to any
                  agreement, arrangement or understanding; PROVIDED, HOWEVER,
                  that a Person shall not be deemed the Beneficial Owner of, or
                  to beneficially own, any security if the agreement,
                  arrangement or understanding to vote such security (1) arises
                  solely from a revocable proxy or consent given to such Person
                  in response to a public proxy or consent solicitation made
                  pursuant to, and in accordance with, the applicable rules and



                                       2
<PAGE>

                  regulations of the Exchange Act and (2) is not also then
                  reportable on Schedule 13D under the Exchange Act (or any
                  comparable or successor report); or

                           (iii) which are beneficially owned, directly or
                  indirectly, by any other Person with which such Person or any
                  of such Person's Affiliates or Associates has any agreement,
                  arrangement or understanding (other than customary agreements
                  with and between underwriters and selling group members with
                  respect to a bona fide public offering of securities) for the
                  purpose of acquiring, holding, voting (except to the extent
                  contemplated by the proviso to Section 1(f)(ii)(B)) or
                  disposing of any securities of the Company.

                  Notwithstanding anything in this definition of Beneficial
         Ownership to the contrary, the phrase "then outstanding," when used
         with reference to a Person's Beneficial Ownership of securities of the
         Company, shall mean the number of such securities then issued and
         outstanding together with the number of such securities not then
         actually issued and outstanding which such Person would be deemed to
         own beneficially hereunder.

                  (g) "Business Day" shall mean any day other than a Saturday, a
         Sunday, or a day on which banking institutions in the Islands of
         Bermuda or the State of New York are authorized or obligated by law or
         executive order to close.

                  (h) "close of business" on any given date shall mean 5:00
         P.M., New York City time, on such date; PROVIDED, HOWEVER, that if such
         date is not a Business Day it shall mean 5:00 P.M., New York City time,
         on the next succeeding Business Day.

                  (i) "Common Shares" when used with reference to any Person
         other than the Company shall mean the capital stock (or other equity
         interest) with the greatest voting power per share of such other Person
         or, if such other Person is a Subsidiary of another Person, of the
         Person or Persons which ultimately control such first-mentioned Person.

                  (j) "Distribution Date" shall have the meaning set forth in
         Section 3(a) hereof.

                  (k) "Exchange Act" means the United States Securities Exchange
         Act of 1934, as amended.

                  (l) "Final Expiration Date" shall have the meaning set forth
         in Section 7(a) hereof.

                  (m) "Person" shall mean any individual, firm, corporation or
         other entity, and shall include any successor (by merger or otherwise)
         of such entity.

                  (n) "Preferred Shares" shall mean shares of Series A Junior
         Participating Preferred Shares, par value $.01 per share, of the
         Company having the rights and preferences set forth in the form of
         Certificate of Designation of Terms attached to this Agreement as
         Exhibit A.


                                       3
<PAGE>

                  (o) "Principal Party" shall mean

                           (i) in the case of any transaction described in
                  clause (a) or (b) of the first sentence of Section 13, the
                  Person that is the issuer of any securities into which Voting
                  Shares of the Company are converted in such merger,
                  amalgamation or consolidation, and if no securities are so
                  issued, the Person that is the other party to such merger,
                  amalgamation or consolidation (including, if applicable, the
                  Company if it is on the surviving corporation); and

                           (ii) in the case of any transaction described in
                  clause (c) of the first sentence of Section 13, the Person
                  that is the party receiving the greatest portion of the assets
                  or earning power transferred pursuant to such transaction or
                  transactions;

         PROVIDED, HOWEVER, that in any of the foregoing cases, (1) if the
         Common Shares of such Person are not at such time and have not been
         continuously over the preceding twelve (12) month period registered
         under Section 12 of the Exchange Act, and such Person is a direct or
         indirect Subsidiary of another Person the Common Shares of which are
         and have been so registered, "Principal Party" shall refer to such
         other Person; (2) in case such Person is a Subsidiary, directly or
         indirectly, of more than one Person, the Common Shares of two or more
         of which are and have been so registered, "Principal Party" shall refer
         to whichever of such Persons is the issuer of the Common Shares having
         the greatest aggregate market value; and (3) in case such Person is
         owned, directly or indirectly, by a joint venture formed by two or more
         Persons that are not owned, directly or indirectly, by the same Person,
         the rules set forth in (1) and (2) above shall apply to each of the
         chains of ownership having an interest in such joint venture as if such
         party were a "Subsidiary" of both or all of such joint venturers and
         the Principal Parties in each such chain shall bear the obligations set
         forth in Section 13 in the same ratio as their direct or indirect
         interests in such Person bear to the total of such interests.

                  (p) "Purchase Price" shall have the meaning set forth in
         Sections 4 and 7(b) hereof.

                  (q) "Redemption Date" shall have the meaning set forth in
         Section 7(a) hereof.

                  (r) "Redemption Price" shall have the meaning set forth in
         Section 23(b) hereof.

                  (s) "Securities Act" shall mean the United States Securities
         Act of 1933, as amended.

                  (t) "SCL" shall mean Sea Containers Ltd., a Bermuda company
         incorporated on June 3, 1974.

                  (u) "Shares Acquisition Date" shall mean the first date of
         public announcement by the Company or an Acquiring Person that an
         Acquiring Person has become such.



                                       4
<PAGE>

                  (v) "Subsidiary" of any Person shall mean any corporation or
         other entity of which a majority of the voting power of the voting
         equity securities or equity interest is owned, directly or indirectly,
         by such Person.

                  (w) "Voting Shares" shall mean the A Shares and the B Shares,
         collectively.

         Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Voting Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable upon 10 days prior written notice to the Rights Agent. The Rights
Agent shall have no liability for or duty to supervise any such co-Rights Agent.

         Section 3.  ISSUE OF RIGHT CERTIFICATES.

                  (a) Until the earlier of (i) the tenth day after the Shares
         Acquisition Date or (ii) the tenth day (or such later date as may be
         determined by the Board of Directors of the Company) after the date of
         the commencement of, or of the first public announcement of the
         intention of any Person (other than the Company, SCL, any Subsidiary of
         the Company or SCL, any employee benefit plan of the Company or of any
         Subsidiary of the Company or any entity holding Voting Shares for or
         pursuant to the terms of any such plan) to commence, a tender or
         exchange offer the consummation of which would result in any Person
         becoming the Beneficial Owner of shares carrying in the aggregate 30%
         or more of the total voting rights which may be cast at any general
         meeting of the Company (including any such date which is after the date
         of this Agreement and prior to the issuance of the Rights; the earlier
         of such dates being herein referred to as the "Distribution Date"), (x)
         the Rights will be evidenced (subject to the provisions of Section 3(b)
         hereof) by the certificates for Voting Shares registered in the names
         of the holders thereof (which certificates shall also be deemed to be
         Right Certificates) and not by separate Right Certificates, and (y) the
         right to receive Right Certificates will be transferable only in
         connection with the transfer of Voting Shares. The Company will give
         the Rights Agent prompt written notice of the Distribution Date. As
         soon as practicable after the Distribution Date, the Company will
         prepare and execute, the Rights Agent will countersign, and the Company
         will send or cause to be sent (and the Rights Agent will, if requested,
         at the Company's expense, send) by first-class, postage-prepaid mail,
         to each record holder of Voting Shares as of the close of business on
         the Distribution Date, at the address of such holder shown on the
         records of the Company, a Right Certificate, in substantially the form
         of Exhibit B hereto (a "Right Certificate"), evidencing one Right for
         each Voting Share so held. As of the Distribution Date, the Rights will
         be evidenced solely by such Right Certificates.

                  (b) With respect to certificates for Voting Shares outstanding
         as of the Record Date and thereafter, until the Distribution Date, the
         Rights will be evidenced by such certificates


                                       5
<PAGE>


         registered in the names of the holders thereof. Until the Distribution
         Date (or the earlier of the Redemption Date or Final Expiration Date),
         the surrender for transfer of any certificate for Voting Shares
         outstanding on the Record Date shall also constitute the transfer of
         the Rights associated with the Voting Shares represented thereby. As
         soon as practicable after the Distribution Date, and after notifying
         the Rights Agent that the Company will make the mailing described in
         this sentence, the Company will send a summary description of the
         Rights, by first-class, postage-prepaid mail, to each record holder of
         Voting Shares as of the close of business on the Distribution Date, at
         the address of such holder shown on the records of the Company.

                  (c) Certificates for Voting Shares which have and will become
         outstanding (including, without limitation, reacquired Voting Shares
         referred to in the last sentence of this paragraph (c)) after the
         Record Date but prior to the earliest of the Distribution Date, the
         Redemption Date or the Final Expiration Date shall have impressed on,
         printed on, written on or otherwise affixed to them the following
         legend:

                  This certificate also evidences and entitles the holder hereof
                  to certain rights as set forth in a Rights Agreement between
                  Orient-Express Hotels Ltd. and Fleet National Bank, dated as
                  of ______, 2000 (the "Rights Agreement"), the terms of which
                  are hereby incorporated herein by reference and a copy of
                  which is on file at the principal executive offices of
                  Orient-Express Hotels Ltd. Under certain circumstances, as set
                  forth in the Rights Agreement, such Rights will be evidenced
                  by separate certificates and will no longer be evidenced by
                  this certificate. Orient-Express Hotels Ltd. will mail to the
                  holder of this certificate a copy of the Rights Agreement
                  without charge after receipt of a written request therefor. As
                  described in the Rights Agreement, Rights issued to Acquiring
                  Persons (as defined in the Rights Agreement) shall become null
                  and void.

         With respect to such certificates containing the foregoing legend,
         until the Distribution Date, the Rights associated with the Voting
         Shares represented by such certificates shall be evidenced by such
         certificates alone, and the surrender for transfer of any such
         certificate shall also constitute the transfer of the Rights associated
         with the Voting Shares represented thereby. In the event that the
         Company purchases or acquires any Voting Shares after the Record Date
         but prior to the Distribution Date, any Rights associated with such
         Voting Shares shall be deemed cancelled and retired so that the Company
         shall not be entitled to exercise any Rights associated with the Voting
         Shares which are no longer outstanding.

         Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required


                                       6
<PAGE>

to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. The Right Certificates
shall be in machine printable format and in a form reasonably satisfactory to
the Rights Agent, and shall show the date of countersignature by the Rights
Agent. Subject to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one one-hundredths
of a Preferred Share as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth therein (the "Purchase Price"), but
the number of such one one-hundredths of a Preferred Share and the Purchase
Price shall be subject to adjustment as provided herein.

         Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company by its President, any Vice President
or a director of the Company, either manually or by facsimile signature, shall
have affixed thereto the Company's common seal or a facsimile thereof, and shall
be attested by the Secretary or Assistant Secretary or a second director of the
Company, either manually or by facsimile signature. The Right Certificates shall
be manually or by facsimile signature countersigned by an authorized signatory
of the Rights Agent and shall not be valid for any purpose unless countersigned.
In case any officer or director of the Company who shall have signed any of the
Right Certificates shall cease to be such officer or director of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer or director of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer or director of
the Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer or
director. In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificate may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such a signatory.

         Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its shareholder services office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.


                                       7
<PAGE>


         Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(iii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the designated office of the
Rights Agent or its office in New York, New York, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably require. Thereupon the Rights Agent shall countersign and deliver to
the person entitled hereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.

         Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's or the Rights
Agent's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent,
along with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably require, and cancellation of the Right Certificate
if mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

         Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.

                  (a) The registered holder of any Right Certificate may
         exercise the Rights evidenced thereby (except as otherwise provided
         herein) in whole or in part at any time after the Distribution Date
         upon surrender of the Right Certificate, with the form of election to
         purchase on the reverse side thereof duly executed, to the Rights Agent
         at the designated office of the Rights Agent, along with a signature
         guarantee and such other and further documentation as the Rights Agent
         may reasonably require, together with payment of the Purchase Price for
         each one one-hundredth of a Preferred Share as to which the Rights are
         exercised, at or prior to the earlier of (i) the close of business on
         ______, 2010 (the "Final Expiration Date"), (ii) the time at which the
         Rights are redeemed as provided in Section 23 hereof (the "Redemption
         Date"), or (iii) the time at which such Rights are exchanged as
         provided in Section 24 hereof.


                                       8
<PAGE>


                  (b) The Purchase Price for each one one-hundredth of a
         Preferred Share pursuant to the exercise of a Right shall be $ , shall
         be subject to adjustment from time to time as provided in Sections 11
         and 13 hereof and shall be payable in lawful money of the United States
         of America in accordance with paragraph (c) below.

                  (c) Upon receipt of a Right Certificate representing
         exercisable Rights, with the form of election to purchase duly
         executed, accompanied by payment of the Purchase Price for the shares
         to be purchased and an amount equal to any applicable transfer tax
         required to be paid by the holder of such Right Certificate in
         accordance with Section 9 hereof by certified check, cashier's check,
         bank draft or money order payable to the order of the Company or the
         Rights Agent, the Rights Agent shall thereupon promptly (i) requisition
         from any transfer agent of the Preferred Shares certificates for the
         number of Preferred Shares to be purchased and the Company hereby
         irrevocably authorizes its transfer agent to comply with all such
         requests, (ii) when appropriate, requisition from the Company the
         amount of cash to be paid in lieu of issuance of fractional shares in
         accordance with Section 14 hereof, (iii) after receipt of such
         certificates, cause the same to be delivered to or upon the order of
         the registered holder of such Right Certificate, registered in such
         name or names as may be designated by such holder and (iv) when
         appropriate, after receipt, deliver such cash to or upon the order of
         the registered holder of such Right Certificate. In the event that the
         Company is obligated to issue other securities (including Voting
         Shares) of the Company, pay cash and/or distribute other property
         pursuant to Section 11(a) hereof, the Company will make all
         arrangements, including determination of exchange ratios, reasonably
         necessary so that such other securities, cash or other property shall
         be available for distribution by the Rights Agent, if and when
         appropriate.

                  (d) In case the registered holder of any Right Certificate
         shall exercise less than all the Rights evidenced thereby, a new Right
         Certificate evidencing Rights equivalent to the Rights remaining
         unexercised shall be issued by the Rights Agent to the registered
         holder of such Right Certificate or to his duly authorized assigns,
         subject to the provisions of Section 14 hereof.

         Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.


                                       9
<PAGE>

         Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares or any Preferred
Shares held in its treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding Rights.

         The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.

         If the Preferred Shares issuable upon the exercise of Rights are to be
listed on any national securities exchange, the Company covenants and agrees to
use its best efforts to cause, from and after such time as the Rights become
exercisable, all Preferred Shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.

         The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax is
due.

         Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.


                                       10
<PAGE>

         Section 11. ADJUSTMENT OF PURCHASE PRICE, REDEMPTION PRICE, NUMBER OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the Redemption Price, the number
of Preferred Shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.

                           (a) (i) In the event the Company shall at any time
                  after the date of this Agreement (A) declare a dividend on the
                  Preferred Shares payable in Preferred Shares, (B) subdivide
                  the outstanding Preferred Shares, (C) combine the outstanding
                  Preferred Shares into a smaller number of Preferred Shares or
                  (D) issue any shares of its capital stock in a
                  reclassification of the Preferred Shares (including any such
                  reclassification in connection with a consolidation,
                  amalgamation or merger in which the Company is the continuing
                  or surviving corporation), except as otherwise provided in
                  this Section 11(a), the Purchase Price in effect at the time
                  of the record date for such dividend or of the effective date
                  of such subdivision, combination or reclassification, and the
                  number and kind of shares of capital stock issuable on such
                  date, shall be proportionately adjusted so that the holder of
                  any Right exercised after such time shall be entitled to
                  receive the aggregate number and kind of shares of capital
                  stock which, if such Right had been exercised immediately
                  prior to such date and at a time when the Preferred Shares
                  transfer books of the Company were open, he would have owned
                  upon such exercise and been entitled to receive by virtue of
                  such dividend, subdivision, combination or reclassification;
                  PROVIDED, HOWEVER, that in no event shall the consideration to
                  be paid upon the exercise of one Right be less than the
                  aggregate par value of the shares of capital stock of the
                  Company issuable upon exercise of one Right.

                           (ii) Subject to Sections 23(b) and 24 of this Rights
                  Agreement, in the event any Person shall become an Acquiring
                  Person, proper provision shall be made so that each holder of
                  a Right, except as provided in Section 11(a)(iii) hereof,
                  shall thereafter have a right to receive, upon exercise
                  thereof at a price equal to the then current Purchase Price
                  multiplied by the number of one one-hundredths of a Pre ferred
                  Share for which a Right is then exercisable, in accordance
                  with the terms of this Agreement and in lieu of Preferred
                  Shares, such number of A Shares (in the case of a Right which
                  prior to the Distribution Date was evidenced by a certificate
                  for A Shares) or B Shares (in the case of a Right which prior
                  to the Distribution Date was evidenced by a certificate for B
                  Shares) as shall equal the result obtained by (A) multiplying
                  the then current Purchase Price by the then number of one
                  one-hundredths of a Preferred Share for which a Right is then
                  exercisable and dividing that product by (B) 50% of the then
                  current per share market price of the A Shares or B Shares, as
                  appropriate, (determined pursuant to Section 11(d)) on the
                  date such Person became an Acquiring Person (such number of
                  shares, the "Adjustment Shares").



                                       11
<PAGE>


                           (iii) Notwithstanding the foregoing provisions of
                  subparagraph (ii), from and after the occurrence of such
                  event, any Rights that are or were acquired or beneficially
                  owned by an Acquiring Person (or any Associate or Affiliate of
                  such Acquiring Person) shall be void and any holder of such
                  Rights shall thereafter have no right to exercise such Rights
                  under any provision of this Agreement. No Right Certificate
                  shall be issued pursuant to Section 3 that represents Rights
                  beneficially owned by an Acquiring Person or any Associate or
                  Affiliate thereof and no Right Certificate shall be issued at
                  any time upon the transfer of any Rights to an Acquiring
                  Person or any Associate or Affiliate thereof or to any nominee
                  of such Acquiring Person, Associate or Affiliate. Where a
                  Right Certificate is to be issued or is delivered to the
                  Rights Agent for transfer to such an Acquiring Person and the
                  Rights Agent has received notice from the Company that the
                  beneficial owner or transferee is an Acquiring Person, that
                  Right Certificate shall be cancelled or shall not be issued.
                  The Rights Agent shall have no liability for refusing to issue
                  or cancelling such Right Certificates.

                           (iv) In the event that there shall not be sufficient
                  A Shares or B Shares issued but not outstanding or authorized
                  but not issued (and unreserved) to permit the exercise in full
                  of the Rights in accordance with the foregoing subparagraph
                  (ii), the Company shall take all action as may be necessary to
                  authorize additional A Shares or B Shares for issuance upon
                  exercise of the Rights. The Company covenants and agrees to
                  use its best efforts to (A) cause a registration statement
                  under the Securities Act on an appropriate form, with respect
                  to the A Shares and B Shares purchasable upon exercise of the
                  Rights, to remain effective (with a prospectus at all times
                  meeting the requirements of the Securities Act) until the
                  Final Expiration Date; (B) qualify or register the A Shares
                  and B Shares purchasable upon exercise of the Rights under the
                  blue sky laws of such jurisdictions as may be necessary or
                  appropriate; and (C) list the A Shares and B Shares
                  purchasable upon the exercise of the Rights on each national
                  securities exchange on which the A Shares and B Shares are
                  listed prior to the exercisability of the Rights.

                           (v) In the event that the number of A Shares or B
                  Shares which are authorized for issuance but not outstanding
                  or reserved for issuance for purposes other than upon exercise
                  of the Rights are not sufficient to permit the exercise in
                  full of the Rights in accordance with the foregoing
                  subparagraph (ii) of this Section 11(a), the Company shall:
                  (A) determine the excess of (1) the value of the Adjustment
                  Shares issuable upon the exercise of a Right (the "Current
                  Value") over (2) the Purchase Price (such excess, the
                  "Spread"), and (B) with respect to each Right, make adequate
                  provision to substitute for the Adjustment Shares, upon
                  payment of the applicable Purchase Price, (1) cash, (2) a
                  reduction in the Purchase Price, (3) A Shares or B Shares, as
                  appropriate, or other equity securities of the Company
                  (including, without limitation, preferred shares, or units of
                  preferred shares, which the Board of Directors of the Company
                  has deemed to have the same



                                       12
<PAGE>

                  value as A Shares or B Shares (such preferred shares, "common
                  stock equivalents")), (4) debt securities of the Company, (5)
                  other assets, or (6) any combination of the foregoing, having
                  an aggregate value equal to the Current Value, where such
                  aggregate value has been determined by the Board of Directors
                  of the Company with the advice of a nationally recognized
                  investment banking firm selected by the Board of Directors of
                  the Company; PROVIDED, HOWEVER, that if the Company shall not
                  have made adequate provision to deliver Current Value pursuant
                  to clause (B) above within thirty (30) days following the
                  later of (x) the first occurrence of an event des cribed in
                  Section 11(a)(ii) and (y) the date on which the Company's
                  right of redemption pursuant to Section 23 expires (the later
                  of (x) and (y) being referred to herein as the "Section
                  11(a)(ii) Trigger Date"), then the Company shall be obligated
                  to deliver, upon the surrender for exercise of a Right and
                  without requiring payment of the Purchase Price, A Shares or B
                  Shares (to the extent available) and then, if necessary, cash,
                  which shares and/or cash have an aggregate value equal to the
                  Spread. If the Board of Directors of the Company shall
                  determine in good faith that it is likely that sufficient
                  additional A Shares or B Shares could be authorized for
                  issuance upon exercise in full of the Rights, the thirty (30)
                  day period set forth above may be extended to the extent
                  necessary, but not more than ninety (90) days after the
                  Section 11(a)(ii) Trigger Date, in order that the Company may
                  seek shareholder approval for the authorization of such
                  additional shares (such period, as it may be extended, the
                  "Substitution Period"). To the extent that the Company
                  determines that some action must be taken pursuant to the
                  first and/or second sentences of this Section 11(a)(v), the
                  Company (x) shall provide, subject to Section 11(a)(iii)
                  hereof, that such action shall apply uniformly to all
                  outstanding Rights to purchase Adjustment Shares which are A
                  Shares and to all outstanding Rights to purchase Adjustment
                  Shares which are B Shares, and (y) may suspend the
                  exercisability of the Rights until the expiration of the
                  Substitution Period in order to seek any authorization of
                  additional shares and/or to decide the appropriate form of
                  distribution to be made pursuant to such first sentence and to
                  determine the aggregate value thereof. In the event of any
                  such suspension, the Company shall issue a public announcement
                  and simultaneously provide the Rights Agent with written
                  notice stating that the exercisability of the Rights has been
                  temporarily suspended, as well as a public announcement when
                  the suspension is no longer in effect. For purposes of this
                  Section 11(a)(v), the value of the A Shares and B Shares shall
                  be the current market price (as determined pursuant to Section
                  11(d) hereof) of an A Share and a B Share on the Section
                  11(a)(ii) Trigger Date and the value of any "common stock
                  equivalent" shall be deemed to have the same value as the A
                  Shares on such date.

                  (b) In case the Company shall fix a record date for the
         issuance of rights, options or warrants to all holders of Preferred
         Shares entitling them (for a period expiring within 45 calendar days
         after such record date) to subscribe for or purchase Preferred Shares
         (or shares having the same rights, privileges and preferences as the
         Preferred Shares ("equivalent pre ferred shares")) or securities
         convertible into Preferred Shares or equivalent preferred shares


                                       13
<PAGE>

         at a price per Preferred Share or equivalent preferred share (or having
         a conversion price per share, if a security convertible into Preferred
         Shares or equivalent preferred shares) less than the then current per
         share market price of the Preferred Shares (as defined in Section
         11(d)) on such record date, the Purchase Price to be in effect after
         such record date shall be determined by multiplying the Purchase Price
         in effect immediately prior to such record date by a fraction, the
         numerator of which shall be the number of Preferred Shares outstanding
         on such record date plus the number of Preferred Shares which the
         aggregate offering price of the total number of Preferred Shares and/or
         equivalent preferred shares so to be offered (and/or the aggregate
         initial conversion price of the convertible securities so to be
         offered) would purchase at such current market price and the
         denominator of which shall be the number of Preferred Shares
         outstanding on such record date plus the number of additional Preferred
         Shares and/or equivalent preferred shares to be offered for
         subscription or purchase (or into which the convertible securities so
         to be offered are initially convertible). In case such subscription
         price may be paid in a consideration part or all of which shall be in a
         form other than cash, the value of such consideration shall be as
         determined in good faith by the Board of Directors of the Company,
         whose determination shall be described in a statement filed with the
         Rights Agent and binding upon the Rights Agent and the holders.
         Preferred Shares owned by or held for the account of the Company shall
         not be deemed outstanding for the purpose of any such computation. Such
         adjustment shall be made successively whenever such a record date is
         fixed; and in the event that such rights or warrants are not so issued,
         the Purchase Price shall be adjusted to be the Purchase Price which
         would then be in effect if such record date had not been fixed.

                  (c) In case the Company shall fix a record date for the making
         of a distribution to all holders of the Preferred Shares (including any
         such distribution made in connection with a consolidation or merger in
         which the Company is the continuing or surviving corporation) of
         evidences of indebtedness or assets (other than a regular quarterly
         cash dividend or a dividend payable in Preferred Shares) or
         subscription rights or warrants (excluding those referred to in Section
         11(b)), the Purchase Price to be in effect after such record date shall
         be determined by multiplying the Purchase Price in effect immediately
         prior to such record date by a fraction, the numerator of which shall
         be the then current per share market price of the Preferred Shares (as
         defined in Section 11(d)) on such record date, less the fair market
         value (as determined in good faith by the Board of Directors of the
         Company, whose determination shall be described in a statement filed
         with the Rights Agent) of the portion of the assets or evidences of
         indebtedness so to be distributed or of such subscription rights or
         warrants applicable to one Preferred Share and the denominator of which
         shall be such current per share market price of the Preferred Shares.
         Such adjustments shall be made successively whenever such a record date
         is fixed; and in the event that such distribution is not so made, the
         Purchase Price shall again be adjusted to be the Purchase Price which
         would then be in effect if such record date had not been fixed.

                  (d) (i) For the purpose of any computation hereunder, the
         "current per share market price" of any security (a "Security" for the
         purpose of this Section 11(d)(i)) on any date shall



                                       14
<PAGE>

         be deemed to be the average of the daily closing prices per share of
         such Security for the 30 consecutive Trading Days (as such term is
         hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER,
         that in the event that the current per share market price of the
         Security is determined during a period following the announcement by
         the issuer of such Security of (A) a dividend or distribution on such
         Security payable in shares of such Security or securities convertible
         into such shares, or (B) any subdivision, combination or
         reclassification of such Security and prior to the expiration of 30
         Trading Days after the ex-dividend date for such dividend or
         distribution, or the record date for such subdivision, combination or
         reclassification, then, and in each such case, the current per share
         market price shall be appropriately adjusted to reflect the current
         market price per share equivalent of such Security. The closing price
         for each day shall be 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 in the principal
         consolidated transaction reporting system with respect to securities
         listed or admitted to trading on the New York Stock Exchange or, if the
         Security is not listed or admitted to trading on the New York Stock
         Exchange, as reported in the principal consolidated transaction
         reporting system with respect to securities listed on the principal
         national securities exchange on which the Security is listed or
         admitted to trading or, if the Security is not listed or admitted to
         trading on any national securities exchange, the last sale price or, in
         case no such sale takes place on such day, the average of the high bid
         and low asked prices in the Nasdaq Stock Market or, if on any such date
         the Security is not quoted in the Nasdaq Stock Market, the average of
         the closing bid and asked prices as furnished by a professional market
         maker making a market in the Security selected by the Board of
         Directors of the Company. The term "Trading Day" shall mean a day on
         which the principal national securities exchange on which the Security
         is listed or admitted to trading is open for the transaction of
         business or, if the Security is not listed or admitted to trading on
         any national securities exchange, a Business Day.

                  (ii) For the purpose of any computation hereunder, the
         "current per share market price" of the Preferred Shares shall be
         determined in accordance with the method set forth in Section 11(d)(i).
         If the Preferred Shares are not publicly traded, the "current per share
         market price" of the Preferred Shares shall be conclusively deemed to
         be the current per share market price of the A Shares or B Shares, as
         appropriate, as determined pursuant to Section 11(d)(i) (appropriately
         adjusted to reflect any stock split, stock dividend or similar
         transaction occurring after the date hereof), multiplied by one
         hundred. If neither the A Shares or B Shares, as appropriate, nor the
         Preferred Shares are publicly held or so listed or traded, "current per
         share market price" shall mean the fair value per share as determined
         in good faith by the Board of Directors of the Company, whose
         determination shall be described in a statement filed with the Rights
         Agent and binding upon the Rights Agent and the holders.

                  (e) No adjustment in the Purchase Price shall be required
         unless such adjustment would require an increase or decrease of at
         least 1% in the Purchase Price; PROVIDED, HOWEVER, that any adjustments
         which by reason of this Section 11(e) are not required to be


                                       15
<PAGE>

         made shall be carried forward and taken into account in any subsequent
         adjustment. All calculations under this Section 11 shall be made to the
         nearest cent or to the nearest one millionth of a Preferred Share or
         one ten-thousandth of any other share or security as the case may be.
         Notwithstanding the first sentence of this Section 11(e), any
         adjustment required by this Section 11 shall be made no later than the
         earlier of (i) three years from the date of the transaction which
         requires such adjustment or (ii) the date of the expiration of the
         right to exercise any Rights.

                  (f) If as a result of an adjustment made pursuant to Section
         11(a), the holder of any Right thereafter exercised shall become
         entitled to receive any shares of capital stock of the Company other
         than Preferred Shares, thereafter the number of such other shares so
         receivable upon exercise of any Right 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 Preferred Shares
         contained in Section 11(a) through (c), inclusive, and the provisions
         of Sections 7, 9, 10 and 13 with respect to the Preferred Shares shall
         apply on like terms to any such other shares.

                  (g) All Rights originally issued by the Company subsequent to
         any adjustment made to the Purchase Price hereunder shall evidence the
         right to purchase, at the adjusted Purchase Price, the number of one
         one-hundredths of a Preferred Share purchasable from time to time
         hereunder upon exercise of the Rights, all subject to further
         adjustment as provided herein.

                  (h) Unless the Company shall have exercised its election as
         provided in Section 11(i), upon each adjustment of the Purchase Price
         as a result of the calculations made in Sections 11(b) and (c), each
         Right outstanding immediately prior to the making of such adjustment
         shall thereafter evidence the right to purchase, at the adjusted
         Purchase Price, that number of one one-hundredths of a Preferred Share
         (calculated to the nearest one one-millionth of a Preferred Share)
         obtained by (i) multiplying (x) the number of one one-hundredths of a
         share covered by a Right immediately prior to this adjustment by (y)
         the Purchase Price in effect immediately prior to such adjustment of
         the Purchase Price and (ii) dividing the product so obtained by the
         Purchase Price in effect immediately after such adjustment of the
         Purchase Price.

                  (i) The Company may elect on or after the date of any
         adjustment of the Purchase Price to adjust the number of Rights, in
         substitution for any adjustment in the number of one one-hundredths of
         a Preferred Share purchasable upon the exercise of a Right. Each of the
         Rights outstanding after such adjustment of the number of Rights shall
         be exercisable for the number of one one-hundredths of a Preferred
         Share for which a Right was exercisable immediately prior to such
         adjustment. Each Right held of record prior to such adjustment of the
         number of Rights shall become that number of Rights (calculated to the
         nearest one ten-thousandth) obtained by dividing the Purchase Price in
         effect immediately prior to adjustment of the Purchase Price by the
         Purchase Price in effect immediately after adjustment of the Purchase
         Price. The Company shall make a public announcement and


                                       16
<PAGE>

         simultaneously provide the Rights Agent with written notice of its
         election to adjust the number of Rights, indicating the record date for
         the adjustment, and, if known at the time, the amount of the adjustment
         to be made. This record date may be the date on which the Purchase
         Price is adjusted or any day thereafter but, if the Right Certificates
         have been issued, shall be at least 10 days later than the date of the
         public announcement. If Right Certificates have been issued, upon each
         adjustment of the number of Rights pursuant to this Section 11(i), the
         Company shall, as promptly as practicable, cause to be distributed to
         holders of record of Right Certificates on such record date Right
         Certificates evidencing, subject to Section 14 hereof, the additional
         Rights to which such holders shall be entitled as a result of such
         adjustment, or, at the option of the Company, shall cause to be
         distributed to such holders of record in substitution and replacement
         for the Right Certificates held by such holders prior to the date of
         adjustment, and upon surrender thereof, if required by the Company, new
         Right Certificates evidencing all the Rights to which such holders
         shall be entitled after such adjustment. Right Certificates so to be
         distributed shall be issued, executed and countersigned in the manner
         provided for herein and shall be registered in the names of the holders
         of record of Right Certificates on the record date specified in the
         public announcement.

                  (j) Irrespective of any adjustment or change in the Purchase
         Price or the number of one one-hundredths of a Preferred Share issuable
         upon the exercise of the Rights, the Right Certificates theretofore and
         thereafter issued may continue to express the Purchase Price and the
         number of one one-hundredths of a Preferred Share which were expressed
         in the initial Right Certificates issued hereunder.

                  (k) Before taking any action that would cause an adjustment
         reducing the Purchase Price below one one-hundredth of the then par
         value, if any, of the Preferred Shares issuable upon exercise of the
         Rights, the Company shall 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 Preferred Shares
         at such adjusted Purchase Price.

                  (l) In any case in which this Section 11 shall require that an
         adjustment in the Purchase Price be made effective as of a record date
         for a specified event, the Company may elect to defer until the
         occurrence of such event the issuing to the holder of any Right
         exercised after such record date of the Preferred Shares and other
         capital stock or securities of the Company, if any, issuable upon such
         exercise over and above the Preferred Shares and other capital stock or
         securities of the Company, if any, issuable upon such exercise on the
         basis of the Purchase Price in effect prior to such adjustment;
         PROVIDED, HOWEVER, that the Company shall deliver to such holder a due
         bill or other appropriate instrument evidencing such holder's right to
         receive such additional shares upon the occurrence of the event
         requiring such adjustment and shall provide the Rights Agent with
         prompt written notice of any such election.



                                       17
<PAGE>

                  (m) Anything in this Section 11 to the contrary
         notwithstanding, the Company shall be entitled to make such reductions
         in the Purchase Price, in addition to those adjustments expressly
         required by this Section 11, as and to the extent that it in its sole
         discretion shall determine to be advisable in order that any
         consolidation or subdivision of the Preferred Shares, issuance wholly
         for cash of any Preferred Shares at less than the current market price,
         issuance wholly for cash of Preferred Shares or securities which by
         their terms are convertible into or exchangeable for Preferred Shares,
         dividends on Preferred Shares payable in Preferred Shares or issuance
         of rights, options or warrants referred to hereinabove in Section
         11(b), hereafter made by the Company to holders of its Preferred Shares
         shall not be taxable to such shareholders.

                  (n) In the event that at any time after the date of this
         Agreement and prior to the Distribution Date, the Company shall (i)
         declare or pay any dividend on the Voting Shares payable in Voting
         Shares or (ii) effect a subdivision, combination or consolidation of
         the Voting Shares (by reclassification or otherwise than by payment of
         dividends in Voting Shares) into a greater or lesser number of Voting
         Shares, then in any such case (i) the number of one one-hundredths of a
         Preferred Share purchasable after such event upon proper exercise of
         each Right shall be determined by multiplying the number of one
         one-hundredths of a Preferred Share so purchasable immediately prior to
         such event by a fraction, the numerator of which is the number of
         Voting Shares outstanding immediately before such event and the
         denominator of which is the number of Voting Shares outstanding
         immediately after such event, (ii) each Voting Share outstanding
         immediately after such event shall have issued with respect to it that
         number of Rights which each Voting Share outstanding immediately prior
         to such event had issued with respect to it and (iii) the Redemption
         Price in effect at the time of the record date for such dividend or of
         the effective date of such subdivision, combination or consolidation
         shall be adjusted so that the holder of any Right redeemed after such
         time shall be entitled to receive the aggregate payment which, if such
         Right had been redeemed immediately prior to such date, he would have
         received upon such redemption. The adjustments provided for in this
         Section 11(n) shall be made successively whenever such a dividend is
         declared or paid or such a subdivision, combination or consolidation is
         effected.

         Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Voting Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent may rely, and shall incur no liability for relying upon, the most
recent such certificate which it has received.

         Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. In the event that following the Distribution Date, directly or
indirectly, (a) the Company shall consolidate with, amalgamate with or merge
with and into, any other Person, (b) any Person shall consolidate


                                       18
<PAGE>


or amalgamate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Voting Shares shall be changed
into or exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or one or more of
its wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement, such number of Common Shares of the
Principal Party (including the Company as successor thereto or as the surviving
corporation, in which event the term "Common Shares" as used in this Section 13
shall mean A Shares (in the case of a Right which prior to the Distribution Date
was evidenced by a certificate for A Shares) and B Shares (in the case of a
Right which prior to the Distribution Date was evidenced by a certificate for B
Shares)) as shall be equal to the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (y) 50% of
the then current per share market price of the Common Shares of such Principal
Party (determined pursuant to Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
amalgamation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" herein shall
thereafter be deemed to refer to such Principal Party; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares) in connection with such consummation as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights. The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The Company shall not
consummate any such consolidation, amalgamation, merger, sale or transfer unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations, amalgamations or sales or other transfers.

         Section 14.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

                  (a) The Company shall not be required to issue fractions of
         Rights or to distribute Right Certificates which evidence fractional
         Rights. In lieu of such fractional Rights, there shall be paid to the
         registered holders of the Right Certificates with regard to which such
         fractional Rights would otherwise be issuable an amount in cash equal
         to the same fraction


                                       19
<PAGE>

         of the current market value of a whole Right. For the purposes of this
         Section 14(a), the current market value of a whole Right shall be the
         closing price of the Rights for the Trading Day immediately prior to
         the date on which such fractional Rights would have been otherwise
         issuable. The closing price for any day shall be 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 in the principal consolidated transaction reporting
         system with respect to securities listed or admitted to trading on the
         New York Stock Exchange or, if the Rights are not listed or admitted to
         trading on the New York Stock Exchange, as reported in the principal
         consolidated transaction reporting system with respect to securities
         listed on the principal national securities exchange on which the
         Rights are listed or admitted to trading or, if the Rights are not
         listed or admitted to trading on any national securities exchange, the
         last sale price or, in case no such sale takes place on such day, the
         average of the high bid and low asked prices in the Nasdaq Stock Market
         or, if on any such date the Rights are not quoted in the Nasdaq Stock
         Market, the average of the closing bid and asked prices as furnished by
         a professional market maker making a market in the Rights selected by
         the Board of Directors of the Company. If on any such date no such
         market maker is making a market in the Rights, the fair value of the
         Rights on such date as determined in good faith by the Board of
         Directors of the Company shall be used.

                  (b) The Company shall not be required to issue fractions of
         Preferred Shares upon exercise of the Rights or to distribute
         certificates which evidence fractional Preferred Shares. In lieu of
         fractional Preferred Shares, the Company shall pay to the registered
         holders of Right Certificates at the time such Rights are exercised as
         herein provided an amount in cash equal to the same fraction of the
         current market value of one Preferred Share. For purposes of this
         Section 14(b), the current market value of a Preferred Share shall be
         the closing price of a Preferred Share (as determined pursuant to the
         second sentence of Section 11(d)(i) hereof) for the Trading Day
         immediately prior to the date of such exercise or exchange.

                  (c) The holder of a Right by the acceptance of the Right
         expressly waives his right to receive any fractional Rights or any
         fractional shares upon exercise of a Right.

         Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Voting Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Voting Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Voting Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or a Principal Party to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific


                                       20
<PAGE>

performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.

         Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

                  (a) prior to the Distribution Date, the Rights will be
         transferable only in connection with the transfer of the Voting Shares;

                  (b) after the Distribution Date, the Right Certificates are
         transferable only on the registry books of the Rights Agent if
         surrendered at the principal offices of the Rights Agent or at its
         office in New York, New York, duly endorsed or accompanied by a proper
         instrument of transfer, along with a signature guarantee and such other
         and further documentation as the Rights Agent may reasonably require;
         and

                  (c) the Company and the Rights Agent may deem and treat the
         person in whose name the Right Certificates (or, prior to the
         Distribution Date, the associated Voting Shares certificate) is
         registered as the absolute owner thereof and of the Rights evidenced
         thereby (notwithstanding any notations of ownership or writing on the
         Right Certificates or the associated Voting Shares certificate made by
         anyone other than the Company or the Rights Agent) for all purposes
         whatsoever, and neither the Company nor the Rights Agent shall be
         affected by any notice to the contrary.

         Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

         Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability or
expense incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the



                                       21
<PAGE>

Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises and including reasonable counsel fees and expenses.

         The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Voting Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, instructions or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.

         Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.

         In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificate shall have the full force
provided in the Right Certificates and in this Agreement.

         Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:


                                       22
<PAGE>

                  (a) The Rights Agent may consult with legal counsel (who may
         be legal counsel for the Company), and the opinion of such counsel
         shall be full and complete authorization and protection to the Rights
         Agent as to any action taken or omitted by it in good faith and in
         accordance with such opinion.

                  (b) Whenever in the performance of its duties under this
         Agreement the Rights Agent shall deem it necessary or desirable that
         any fact or matter be proved or established by the Company prior to
         taking or suffering any action hereunder, such fact or matter (unless
         other evidence in respect thereof be herein specifically prescribed)
         may be deemed to be conclusively proved and established by a
         certificate signed by any one of the President, any Executive Vice
         President or Senior Vice President or Vice President, the Treasurer,
         the Secretary, or any Assistant Treasurer or Assistant Secretary of the
         Company and delivered to the Rights Agent; and such certificate shall
         be full authorization to the Rights Agent for any action taken or
         suffered in good faith by it under the provisions of this Agreement in
         reliance upon such certificate.

                  (c) The Rights Agent shall be liable hereunder to the Company
         and any other Person only for its own gross negligence, bad faith or
         willful misconduct.

                  (d) The Rights Agent shall not be liable for or by reason of
         any of the statements of fact or recitals contained in this Agreement
         or in the Right Certificates (except its counter signature thereof) or
         be required to verify the same, but all such statements and recitals
         are and shall be deemed to have been made by the Company only.

                  (e) The Rights Agent shall not be under any responsibility in
         respect of the validity of this Agreement or the execution and delivery
         hereof (except the due execution hereof by the Rights Agent) or in
         respect of the validity or execution of any Right Certificate (except
         its countersignature thereof); nor shall it be responsible for any
         breach by the Company of any covenant or condition contained in this
         Agreement or in any Right Certificate; nor shall it be responsible for
         any change in the exercisability of the Rights or any adjustment in the
         terms of the Rights (including the manner, method or amount thereof)
         provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
         existence of facts that would require any such change or adjustment
         (except with respect to the exercise of Rights evidenced by Right
         Certificates after actual notice that such change or adjustment is
         required); nor shall it by any act hereunder be deemed to make any
         representation or warranty as to the authorization or reservation of
         any Preferred Shares to be issued pursuant to this Agreement or any
         Right Certificate or as to whether any Preferred Shares will, when
         issued, be validly authorized and issued, fully paid and nonassessable.

                  (f) The Company agrees that it will perform, execute,
         acknowledge and deliver or cause to be performed, executed,
         acknowledged and delivered all such further and other acts, instruments
         and assurances as may reasonably be required by the Rights Agent for
         the carrying out or performing by the Rights Agent of the provisions of
         this Agreement.


                                       23
<PAGE>

                  (g) The Rights Agent is hereby authorized and directed to
         accept instructions with respect to the performance of its duties
         hereunder and certificates delivered pursuant to any provision hereof
         from the President, any Executive Vice President or Senior Vice
         President or Vice President, the Secretary, any Assistant Secretary,
         the Treasurer or any Assistant Treasurer of the Company, and is
         authorized to apply to such officers for advice or instructions in
         connection with its duties, and it shall not be liable for any action
         taken or suffered to be taken by it in good faith in accordance with
         such instructions of any such officer. An application by the Rights
         Agent for instructions may set forth in writing any action proposed to
         be taken or omitted by the Rights Agent with respect to its duties and
         obligations under this Agreement and the date on and/or after which
         such action shall be taken, and the Rights Agent shall not be liable
         for any action taken or omitted in accordance with a proposal included
         in any such application on or after the date specified therein (which
         date shall not be less than two Business Days after the Company
         receives such application) without the consent of the Company unless
         prior to taking or omitting such action, the Rights Agent has received
         written instructions in response to such application specifying the
         actions to be taken or omitted.

                  (h) The Rights Agent and any shareholder, director, officer or
         employee of the Rights Agent may buy, sell or deal in any of the Rights
         or other securities of the Company or become pecuniarily interested in
         any transaction in which the Company may be interested, or contract
         with or lend money to the Company or otherwise act as fully and freely
         as though it were not Rights Agent under this Agreement. Nothing herein
         shall preclude the Rights Agent from acting in any other capacity for
         the Company or for any other legal entity.

                  (i) The Rights Agent may execute and exercise any of the
         rights or powers hereby vested in it or perform any duty hereunder
         either itself or by or through its attorneys or agents, and the Rights
         Agent shall not be answerable or accountable for any act, default,
         neglect or misconduct of any such attorneys or agents or for any loss
         to the Company resulting from any such act, default, neglect or
         misconduct, provided reasonable care was exercised in the selection and
         continued employment thereof.

                  (j) No provision of this Agreement shall require the Rights
         Agent to expend or risk its own funds or otherwise incur any financial
         liability in the performance of any of its duties hereunder or in the
         exercise of its rights if there shall be reasonable grounds for
         believing the repayment of such funds or adequate indemnification
         against such risk or liability is not reasonably assured to it.

                  (k) In addition to the foregoing, the Rights Agent shall be
         protected and shall incur no liability for, or in respect of, any
         action taken or omitted by it in connection with its administration of
         this Agreement in reliance upon (i) the proper execution of the
         certification concerning beneficial ownership appended to the Form of
         Assignment and the Form of Election to Purchase included as part of
         Exhibit B hereto (the "Certification"), unless the Rights Agent shall
         have actual knowledge that, as executed, the Certification is untrue or
         (ii)


                                       24
<PAGE>

         the non-execution or failure to complete the Certification including,
         without limitation, any refusal to honor any otherwise permissible
         assignment or election by reason of such non-execution or failure.

         Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and, at the Company's
expense, to each transfer agent of the Voting Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Voting Shares or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the Company shall become the Rights Agent and
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of New York), in good standing, having an office in the State of New York,
which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Voting Shares or Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

         Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind of class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Voting Shares


                                       25
<PAGE>

following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to Voting Shares so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, HOWEVER, that (i) no such Right Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued, and (ii) no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.

         Section 23.  REDEMPTION.

                  (a) The Rights may be redeemed by action of the Board of
         Directors pursuant to subsection (b) of this Section 23 and shall not
         be redeemed in any other manner.

                  (b) The Board of Directors of the Company may, at its option,
         at any time prior to the close of business on the 10th day following
         such time as any Person becomes an Acquiring Person, redeem all but not
         less than all the then outstanding Rights at a redemption price of $.05
         per Right, appropriately adjusted as provided in Section 11(n) to
         reflect any stock split, stock dividend or similar transaction
         occurring after the date hereof (such redemption price being
         hereinafter referred to as the "Redemption Price"). Notwithstanding
         anything contained in this Agreement to the contrary, the Rights shall
         not be exercisable after the first occurrence of an event described in
         Section 11(a)(ii) until such time as the Company's right of redemption
         hereunder has expired. The Company may, at its option, pay the
         Redemption Price in cash, A Shares (based on the "current market
         price," as defined in Section 11(d)(i) hereof, of the A Shares at the
         time of redemption) or any other form of consideration deemed
         appropriate by the Board of Directors.

                  (c) Immediately upon the action of the Board of Directors of
         the Company ordering the redemption of the Rights pursuant to
         subsection (b) of this Section 23, and without any further action and
         without any notice, the right to exercise the Rights will terminate and
         the only right thereafter of the holders of Rights shall be to receive
         the Redemption Price. Within 10 days after such action of the Board of
         Directors ordering the redemption of the Rights pursuant to subsection
         (b), the Company shall give written notice of redemption to the Rights
         Agent and shall give notice of redemption to the holders of the then
         outstanding Rights by mailing such notice to all such holders at their
         last addresses as they appear upon the registry books of the Rights
         Agent or, prior to the Distribution Date, on the registry books of the
         transfer agent for the Voting Shares. Any notice which is mailed in the
         manner herein provided shall be deemed given, whether or not the holder
         receives the notice. Each such notice of redemption will state the
         method by which the payment of the Redemption Price will be made.
         Neither the Company nor any of its Affiliates or Associates may


                                       26
<PAGE>

         redeem, acquire or purchase for value any Rights at any time in any
         manner other than that specifically set forth in this Section 23 or in
         Section 24 hereof, and other than in connection with the purchase of
         Voting Shares prior to the Distribution Date.

         Section 24. EXCHANGE. (a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
11(a)(iii) hereof) (i) for A Shares at an exchange ratio of one A Share per
Right (in the case of Rights which prior to the Distribution Date were evidenced
by certificates for A Shares), and (ii) for B Shares at a ratio of one B Share
per Right (in the case of Rights which prior to the Distribution Date were
evidenced by certificates for B Shares), appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after __________,
2000 (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than the
Company, SCL, any Subsidiary of the Company or SCL, any employee benefit plan of
the Company or any such Subsidiary, or any entity holding Voting Shares for or
pursuant to the terms of any such a plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of shares carrying 50%
or more of the total voting rights which may be cast at any general meeting of
the Company.

         (b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24, and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of A Shares or B Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the A Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(iii) hereof) held by each holder of Rights.

         (c) In the event that there shall not be sufficient A Shares or B
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional A
Shares or B Shares for issuance upon exchange of the Rights.



                                       27
<PAGE>

         Section 25.  NOTICE OF CERTAIN EVENTS.

                   (a) In case the Company shall propose (i) to pay any dividend
         payable in stock of any class to the holders of its Preferred Shares or
         to make any other distribution to the holders of its Preferred Shares
         (other than a regular quarterly cash dividend), or (ii) to offer to the
         holders of its Preferred Shares rights or warrants to subscribe for or
         to purchase any additional Preferred Shares or shares of stock of any
         class or any other securities, rights or options, or (iii) to effect
         any reclassification of its Preferred Shares (other than a
         reclassification involving only the subdivision of outstanding
         Preferred Shares), or (iv) to effect any consolidation, amalgamation or
         merger into or with, or to effect any sale or other transfer (or to
         permit one or more of its Subsidiaries to effect any sale or other
         transfer), in one or more transactions, of 50% or more of the assets or
         earning power of the Company and its Subsidiaries (taken as a whole)
         to, any other Person, or (v) to effect the liquidation, dissolution or
         winding up of the Company, or (vi) to declare or pay any dividend on
         the Voting Shares payable in Voting Shares or to effect a subdivision,
         combination or consolidation of the Voting Shares (by reclassification
         or otherwise than by payment of dividends in Voting Shares), then, in
         each such case, the Company shall give to the Rights Agent and to each
         holder of a Right Certificate, in accordance with Section 26 hereof, a
         notice of such proposed action, which shall specify the record date for
         the purposes of such stock dividend, or distribution of rights or
         warrants, or the date on which such reclassification, consolidation,
         amalgamation, merger, sale, transfer, liquidation, dissolution, or
         winding up is to take place and the date of participation therein by
         the holders of the Voting Shares and/or Preferred Shares, if any such
         date is to be fixed, and such notice shall be so given in the case of
         any action covered by clause (i) or (ii) above at least 20 days prior
         to the record date for determining holders of the Preferred Shares for
         purposes of such action, and in the case of any such other action, at
         least 20 days prior to the date of the taking of such proposed action
         or the date of participation therein by the holders of the Voting
         Shares and/or Preferred Shares, whichever shall be the earlier.

                  (b) In case the event set forth in Section 11(a)(ii) of this
         Agreement shall occur, then, in any such case, the Company shall as
         soon as practicable thereafter give to the Rights Agent and to each
         holder of a Right Certificate, in accordance with Section 26 hereof, a
         notice of the occurrence of such event, which notice shall describe the
         event and the consequences of the event to holders of Rights under
         Section 11(a)(ii) hereof.



                                       28
<PAGE>

         Section 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                           Orient-Express Hotels Ltd.
                           41 Cedar Avenue
                           P.O. Box HM 1179
                           Hamilton HM EX, Bermuda

                           Attention:  Secretary

                           with a copy to:

                           Orient-Express Hotels Inc.
                           1155 Avenue of the Americas
                           New York, New York  10036

                           Attention:  Secretary

Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:

                           Fleet National Bank
                           c/o Boston EquiServe L.P.
                           150 Royall Street
                           Canton, Massachusetts  02021

                           Attention:  Client Administration

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

         Section 27. SUPPLEMENTS AND AMENDMENTS. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Rights Agent may deem necessary or desirable and which shall be consistent with,
and for the purpose of


                                       29
<PAGE>

fulfilling, the objectives of the Board of Directors in adopting this Agreement;
PROVIDED, HOWEVER, the Rights Agent shall not be required to consent to any
amendment which is adverse to its own interests; and PROVIDED, FURTHER, HOWEVER,
that from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect the
interests of the holders of Rights.

         Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

         Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Voting Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Voting Shares).

         Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

         Section 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
Islands of Bermuda and for all purposes shall be governed by and construed in
accordance with such laws, except that the rights, duties and obligations of the
Rights Agent shall be governed by and construed in accordance with the laws of
the State of New York.

         Section 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

         Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.


                                       30
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.



                                              ORIENT-EXPRESS HOTELS LTD.
Attest:


By:   _______________________________         By:   ____________________________
      Name:                                         Name:
      Title:                                        Title:



                                              FLEET NATIONAL BANK
Attest:


By:   _______________________________         By:   ____________________________
      Name:                                         Name:
      Title:                                        Title:




                                       31
<PAGE>

                                                                       EXHIBIT A


                                      FORM

                                       of

                       CERTIFICATE OF DESIGNATION OF TERMS

                                       of

                 SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
                           (Par Value $.01 Per Share)

                                       of

                           ORIENT-EXPRESS HOTELS LTD.

                           (Pursuant to Section 42 of
                       The Companies Act 1981 of Bermuda)

                         ------------------------------


         We, the undersigned, _______________________ and _____________________,
being respectively the __________________ and the Secretary of ORIENT-EXPRESS
HOTELS LTD., a company organized and existing under laws of the Islands of
Bermuda (hereinafter called the "Company"), DO HEREBY CERTIFY:

         FIRST: That, the Board of Directors of the Company at a meeting thereof
held and convened on ___________, at which a quorum was present and acting
throughout has duly adopted resolutions providing for the issuance of a series
of preferred shares of the Company and that there is set forth below a copy of
said resolutions:

                  RESOLVED that the Board of Directors hereby authorizes the
         issue of a series of preferred shares of the Company and hereby fixes
         the designation, preferences and the relative, participating, optional
         and other special rights and qualifications, limitations and
         restrictions thereof as follows:

                  1. NUMBER AND DESIGNATION. The number of shares to constitute
         this series of the total authorized amount of 15,000,000 preferred
         shares of the Company shall be [300,000] shares and the designation of
         such shares shall be "Series A Junior Participating Preferred Shares,"
         par value $.01 per share (hereinafter called "this Series"). All shares
         of this Series shall be identical with each other in all respects.




                                      A-1
<PAGE>

                  2. DIVIDENDS AND DISTRIBUTIONS. (a) Subject to the prior and
         superior rights of the holders of shares of any other series of
         preferred shares or other class of shares not by its terms ranking on a
         parity with, or junior to, this Series with respect to dividends, the
         holders of shares of this Series shall be entitled to receive, when, as
         and if declared by the Board of Directors, quarterly dividends payable
         in cash on the first day of March, June, September and December in each
         year (each such date being referred to herein as a "Quarterly Dividend
         Payment Date"), commencing on the first Quarterly Dividend Payment Date
         after the first issuance of a share of this Series in an amount per
         share (rounded to the nearest cent) equal to the greater of (i) $1.00
         or (ii) an amount per share equal to the Formula Number (as hereinafter
         defined) then in effect times the aggregate per share amount of all
         cash dividends declared on the A Shares since the immediately preceding
         Quarterly Dividend Payment Date or, with respect to the first Quarterly
         Dividend Payment Date, since the first issuance of any share of this
         Series. In addition, if the Company shall pay any dividend or make any
         distribution on the A Shares payable in assets, securities or other
         forms of noncash consideration (other than dividends or distributions
         solely in A Shares) then, in each such case, the Company shall
         simultaneously pay or make on each outstanding share of this Series a
         dividend or distribution in like kind of the Formula Number then in
         effect times such dividend or distribution on each A Share. As used
         herein, the "Formula Number" shall be 100; PROVIDED, HOWEVER, that if
         at any time the Company shall (i) declare or pay any dividend on the
         Voting Shares payable in Voting Shares or make any distribution on the
         Voting Shares in Voting Shares, (ii) subdivide (by a stock split or
         otherwise) the outstanding Voting Shares into a larger number of Voting
         Shares or (iii) combine (by a reverse stock split or otherwise) the
         outstanding Voting Shares into a smaller number of Voting Shares, then
         in each such event the Formula Number shall be adjusted to a number
         determined by multiplying the Formula Number in effect immediately
         prior to such event by a fraction, the numerator of which is the
         aggregate number of Voting Shares that are outstanding immediately
         after such event and the denominator of which is the aggregate number
         of Voting Shares that are outstanding immediately prior to such event
         (and rounding the result to the nearest whole number); and PROVIDED
         FURTHER, that if at any time the Company shall issue any shares of its
         capital stock in a reclassification or change of the outstanding Voting
         Shares (including any such reclassification or change in connection
         with a merger in which the Company is the surviving corporation), then
         in each such event the Formula Number shall be appropriately adjusted
         to reflect such reclassification or change.

                  (b) The Company shall declare a dividend or distribution on
         the shares of this Series as provided in paragraph (a) above
         immediately prior to or at the same time it declares a dividend or
         distribution on the A Shares (other than a dividend or distribution in
         A Shares), PROVIDED, HOWEVER, that, in the event no dividend or
         distribution (other than a dividend or distribution in A Shares) shall
         have been declared on the A Shares during the period between any
         Quarterly Dividend Payment


                                      A-2
<PAGE>

         Date and the next subsequent Quarterly Dividend Payment Date, a
         dividend of $1.00 per share on this Series shall nevertheless be
         payable on such subsequent Quarterly Dividend Payment Date. The Board
         of Directors may fix a record date for the determination of holders of
         shares of this Series entitled to receive a dividend or distribution
         declared thereon, which record date shall be the same as the record
         date for any corresponding dividend or distribution on the A Shares.

                  (c) Dividends shall begin to accrue and be cumulative on
         outstanding shares of this Series from and after the Quarterly Dividend
         Payment Date next preceding the date of original issue of such shares
         of this Series; PROVIDED, HOWEVER, that dividends on such shares which
         are originally issued after the record date for the determination of
         holders of shares of this Series entitled to receive a quarterly
         dividend and on or prior to the next succeeding Quarterly Dividend
         Payment Date shall begin to accrue and be cumulative from and after
         such Quarterly Dividend Payment Date. Notwithstanding the foregoing,
         dividends on shares of this Series which are originally issued prior to
         the record date for the first Quarterly Dividend Payment shall be
         calculated as if cumulative from and after the March 1, June 1,
         September 1 or December 1, as the case may be, next preceding the date
         of original issuance of such shares. Accrued but unpaid dividends shall
         not bear interest. Dividends paid on the shares of this Series in an
         amount less than the total amount of such dividends at the time accrued
         and payable on such shares shall be allocated pro rata on a
         share-by-share basis among all such shares at the time outstanding.

                  (d) The holders of the shares of this Series shall not be
         entitled to receive any dividends or other distributions except as
         provided herein.

                  3. VOTING RIGHTS. The holders of shares of this Series shall
         have the following voting rights:

                  (a) Each holder of this Series shall be entitled to a number
         of votes equal to the Formula Number then in effect, for each share of
         this Series held of record on each matter on which holders of the
         Voting Shares generally are entitled to vote, multiplied by the number
         of votes per share which the holders of the A Shares then have with
         respect to such matter.

                  (b) Except as otherwise provided herein or by applicable law,
         the holders of shares of this Series and the holders of Voting Shares
         shall vote together as one class for the election of directors of the
         Company and on all other matters submitted to a vote of shareholders of
         the Company.

                  (c) Without the consent of the holders of at least two-thirds
         of the number of shares of this Series at the time outstanding, given
         in person or by proxy, either


                                      A-3
<PAGE>


         in writing or by vote at a meeting called for that purpose at which the
         holders of this Series shall vote as a separate class, there shall be
         no:

                           (i) amendment, alteration or repeal of any of the
                  preferences, rights or powers of this Series, as set forth in
                  this Certificate of Designation of Terms; or

                           (ii) authorization or creation of, or increase in the
                  authorized amount of, any shares of any class or any security
                  convertible into shares of any class, ranking prior to this
                  Series.

                  (d) Without the consent of the holders of at least a majority
         of the number of shares of this Series at the time outstanding, given
         in person or by proxy, by vote at a meeting called for that purpose at
         which the holders of this Series shall vote as a separate class, there
         shall be no:

                           (i) increase in the authorized amount of this Series,
                  or the authorization or creation of, or increase in the
                  authorized amount of, any shares of any class or any security
                  convertible into shares of any class, ranking equal to or on a
                  parity with this Series unless the consolidated amounts
                  available under Bermuda law for payment of dividends during a
                  period of 12 consecutive calendar months out of the
                  immediately preceding 18 calendar months are at least two
                  times the annual pro forma dividend requirements on all shares
                  (including this Series) ranking prior to or on a parity with
                  this Series which would be outstanding thereafter; PROVIDED,
                  HOW EVER, that notwithstanding anything to the contrary
                  contained in this clause, the Company may issue up to
                  10,000,000 additional shares without any authorization or vote
                  by the holders of this Series if such shares rank on a parity
                  with this Series; or

                           (ii) consolidation or merger of the Company with
                  another corporation, unless the preferences, rights or powers
                  of the shares of this Series outstanding immediately prior to
                  the effective date of the consolidation or merger are not
                  adversely affected.

                  For the purposes hereof, annual dividend requirements of any
         outstanding shares ranking prior to or on a parity with this Series
         shall be computed by multi plying the annual dividend requirements of
         such shares by the ratio that consolidated pre-tax income bears to
         consolidated net income (after taxes) before deduction of such annual
         dividend requirements of such shares.

                  (e) Except as provided herein, or by applicable law, holders
         of this Series shall have no special voting rights and their consent
         shall not be required (except to



                                      A-4
<PAGE>

         the extent they are entitled to vote with holders of Voting Shares as
         set forth herein) for authorizing or taking any corporate action.

                  4. CERTAIN RESTRICTIONS. (a) Whenever quarterly dividends or
         other dividends or distributions payable on this Series as provided in
         Section 2 are in arrears, thereafter and until all accrued and unpaid
         dividends and distributions, whether or not declared, on shares of this
         Series outstanding shall have been paid in full, the Company shall not:

                           (i) declare or pay dividends on, make any other
                  distributions on, or redeem or purchase or otherwise acquire
                  for consideration any shares ranking junior (either as to
                  dividends or upon liquidation, dissolution or winding up) to
                  this Series;

                           (ii) declare or pay dividends on or make any other
                  distributions on any shares ranking on a parity (either as to
                  dividends or upon liquidation, dissolution or winding up) with
                  this Series except dividends paid ratably on this Series and
                  all such parity shares on which dividends are payable or in
                  arrears in proportion to the total amounts to which the
                  holders of all such shares are then entitled;

                           (iii) redeem or purchase or otherwise acquire for
                  consideration any shares ranking on a parity (either as to
                  dividends or upon liquidation, dissolution or winding up) with
                  this Series provided that the Company may at any time redeem,
                  purchase or otherwise acquire shares of any such parity shares
                  in exchange for shares of the Company ranking junior (either
                  as to dividends or upon dissolution, liquidation or winding
                  up) to this Series; or

                           (iv) purchase or otherwise acquire for consideration
                  any shares of this Series, or any shares ranking on a parity
                  with this Series, except in accordance with a purchase offer
                  made in writing or by publication (as determined by the Board
                  of Directors) to all holders of such shares upon such terms as
                  the Board of Directors, after consideration of the respective
                  annual dividend rates and other relative rights and
                  preferences of the respective series and classes, shall
                  determine in good faith will result in fair and equitable
                  treatment among the respective series or classes.

                  (b) The Company shall not permit any subsidiary of the Company
         to purchase or otherwise acquire for consideration any shares of the
         Company unless the Company could, under subsection (a) of this Section
         4, purchase or otherwise acquire such shares at such time and in such
         manner.



                                      A-5
<PAGE>

                  5. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon the
         liquidation, dissolution or winding up of the Company, whether
         voluntary or involuntary, no distribution shall be made (i) to the
         holders of shares ranking junior (either as to dividends or upon
         liquidation, dissolution, or winding up) to this Series unless, prior
         thereto, the holders of shares of this Series shall have received an
         amount equal to the accrued and unpaid dividends and distributions
         thereon, whether or not declared, to the date of such payment, plus an
         amount equal to the greater of (x) $100 per share or (y) an aggregate
         amount per share equal to the Formula Number then in effect times the
         aggregate amount to be distributed per share to holders of Voting
         Shares, or (ii) to the holders of shares ranking on a parity (either as
         to dividends or upon liquidation, dissolution or winding up) with this
         Series, except distributions made ratably on this Series and all other
         such parity shares in proportion to the total amounts to which the
         holders of all such shares are entitled upon such liquidation,
         dissolution or winding up.

                  6. CONSOLIDATION, MERGER, ETC. In case the Company shall enter
         into any consolidation, merger, combination or other transaction in
         which the Voting Shares are exchanged for or changed into other shares
         or securities, cash or any other property, then in any such case the
         then outstanding shares of this Series shall at the same time be
         similarly exchanged or changed in an amount per share equal to the
         Formula Number then in effect times the aggregate amount of shares,
         securities, cash or any other property (payable in kind), as the case
         may be, into which or for which each Voting Share is exchanged or
         changed.

                  7. REDEMPTION. The shares of this Series shall not be
         redeemable.

                  8. RANKING. The shares of this Series shall rank, with respect
         to the payment of dividends and the distribution of assets, junior to
         all series of any other preferred shares of the Company issued either
         before or after the issuance of this Series, unless such other
         preferred shares shall specifically provide otherwise.

                  9. REACQUIRED SHARES. Any shares of this Series purchased or
         otherwise acquired by the Company in any manner whatsoever shall be
         retired and cancelled promptly after the acquisition thereof. All such
         shares shall upon their cancellation become authorized but unissued
         preferred shares, without designation as to series until such shares
         are once more designated as part of a particular series by resolution
         of the Board of Directors of the Company.



                                      A-6
<PAGE>

                  10.  MISCELLANEOUS.

                  (a)      For the purposes hereof:

                           (i) the term "outstanding," when used in reference to
                  shares, shall mean issued shares, excluding shares held by the
                  Company, SCL or a subsidiary of the Company or SCL;

                           (ii) the term "subsidiary" shall mean any company a
                  majority of whose outstanding voting capital stock (other than
                  directors' qualifying shares), at the time as of which any
                  determination is being made, shall be owned by the parent of
                  such company either directly or through other subsidiaries;

                           (iii) the term "A Shares" shall mean the Class A
                  Common Shares, par value $0.01 each, of the Company;

                           (iv) the term "B Shares" shall mean the Class B
                  Common Shares, par value $0.01 each, of the Company;

                           (v) the term "Voting Shares" shall mean the A Shares
                  and the B Shares, collectively.

                           (vi) the amount of dividends "accrued" on any share
                  of this Series or on any share of the Company of any other
                  series as at any dividend date shall be deemed to be the
                  amount of any unpaid dividends accumulated thereon to and
                  including such dividend date, whether or not earned or
                  declared, and the amount of dividends "accrued" on any share
                  of this Series or of any such other series as at any date
                  other than a dividend date shall be calculated as the amount
                  of any unpaid dividends accumulated thereon to and including
                  the last preceding dividend date, whether or not earned or
                  declared, plus an amount calculated on the basis of the annual
                  dividend rate fixed for the shares of such series for the
                  period after such last preceding dividend date to and
                  including the date as of which the calculation is made, based
                  on a 360-day year of twelve 30-day months; and

                           (vii) any series or class of shares of the Company
                  shall be deemed to rank:

                           (A) prior to this Series, whether or not the dividend
                  rates, dividend payment dates or redemption or liquidation
                  prices per share thereof be different from those of this
                  Series, if the holders of such series or class shall be
                  entitled to receipt from the Company of dividends or of
                  amounts distributable upon liquidation, dissolution or winding
                  up, in preference or priority to the holders of this Series,
                  as the case may be;



                                      A-7
<PAGE>

                           (B) on a parity with or equal to this Series, whether
                  or not the dividend rates, dividend payment dates or
                  redemption or liquidation prices per share thereof be
                  different from those of this Series, if the holders of such
                  series or class shall be entitled to the receipt from the
                  Company of dividends or of amounts distributable upon
                  liquidation, dissolution or winding up, in proportion to their
                  respective dividend rates or liquidation prices, without
                  preference or priority one over the other as between the
                  holders of such series or class and the holders of this
                  Series; and

                           (C) junior to this Series, whether or not the
                  dividend rates, dividend payment dates or redemption or
                  liquidation prices per share thereof be different from those
                  of this Series, if the rights of the holders of such series or
                  class shall be subordinate to the rights of the holders of
                  this Series in respect of the receipt from the Company of
                  dividends and of amounts distributable upon liquidation,
                  dissolution or winding up, including, without limitation, the
                  A Shares and the B Shares.

                  (b) So long as any shares of this Series are outstanding, in
         the event of any conflict between the provisions of this resolution and
         the Bye-laws or any other corporate document of the Company (both as
         presently existing or hereafter amended and supplemented) the
         provisions of this resolution, as the same may be amended or
         supplemented pursuant to its provisions, shall be and remain
         controlling.

                  (c) The holders of the shares of this Series shall have no
         preemptive rights.

                  (d) All references herein to "$" mean United States dollars.

                  11. SERVICE OF PROCESS. The Company hereby irrevocably submits
         itself to the jurisdiction of the Supreme Court of the State of New
         York, New York County, of the United States of America, and to the
         jurisdiction of the United States District Court for the Southern
         District of New York, for the purposes of any suit, action or other
         proceeding brought by any holder of shares of this Series, or by his
         successors or assigns, arising out of, or relating to, the enforcement
         of any designation, preferences or other special rights set forth in
         these resolutions. The Company shall irrevocably designate and appoint
         a corporation, with offices in the State of New York, United States of
         America (hereinafter called the "Agent For Service"), as its
         attorney-in-fact, to receive service of process in any action, suit or
         proceeding with respect to any matter as to which it submits to
         jurisdiction as set forth above, and shall, upon request, furnish any
         holder of shares of this Series with the name and address of the Agent
         For Service. The Company hereby agrees that service upon the Agent for
         Service shall constitute valid service upon the Company or its
         successors or assigns. The Company agrees that: (a) the sole
         responsibilities of the Agent For Service shall be (i) to receive such
         process, (ii) to send a copy of such process so



                                      A-8
<PAGE>

         received to the Company, by registered airmail, return receipt
         requested, at its offices at 41 Cedar Avenue, P.O. Box 1179, Hamilton
         HM EX, Bermuda, Attention: Secretary, or at the last address filed in
         writing by the Company with the Agent For Service, and (iii) to give
         prompt telegraphic notice of receipt thereof to the Company at such
         address; and (b) the Agent For Service shall have no responsibility for
         the receipt or nonreceipt by the Company of such process, nor for any
         performance or nonperformance by the Company, its successors or
         assigns.

         SECOND: That said determination of the designation, preferences and the
relative participating, optional and other special rights and qualifications,
limitations and restrictions thereof relating to said Series A Junior
Participating Preferred Shares was duly made by the Board of Directors of the
Company, in accordance with the provisions of Section 42 of The Companies Act
1981 of Bermuda.


         IN WITNESS WHEREOF, this Certificate of Designation of Terms has been
signed by the ____________________ and the Secretary of ORIENT-EXPRESS HOTELS
LTD., and said company has caused its corporate seal to be hereunto affixed, all
as of the day of , 2000.



                                            ORIENT-EXPRESS HOTELS LTD.



                                            By:_______________________________
                                                  Title:

[Corporate Seal]


Attest:


________________________________
            Secretary






                                      A-9
<PAGE>

                                                                       EXHIBIT B


                            Form of Right Certificate


Certificate No. R-[A][B]                                          _______ Rights


         NOT EXERCISABLE AFTER ______ __, 2010, OR EARLIER IF REDEMPTION OR
         EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.05 PER RIGHT
         AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.


                                Right Certificate

                           ORIENT-EXPRESS HOTELS LTD.



         This certifies that ___________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of ______, 2000, (the "Rights Agreement"), between
Orient-Express Hotels Ltd., a Bermuda company (the "Company"), and Fleet
National Bank (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on ______, 2010 at the designated
office of the Rights Agent, or at the office of its successor as Rights Agent,
one two-hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Shares, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $___ per one one-hundredth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed along with
a signature guarantee and such other and further documentation as the Rights
Agent may reasonably require. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of ______, 2000, based on the
Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.



                                      B-1
<PAGE>


         PRIOR TO THE DISTRIBUTION DATE (AS DEFINED IN THE RIGHTS AGREEMENT),
THE RIGHTS EVIDENCED BY THIS CERTIFICATE WERE EVIDENCED BY ONE OR MORE
CERTIFICATES FOR THE CLASS [A][B] COMMON SHARES OF THE COMPANY.

         This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent. This Right
Certificate, with or without other Right Certificates, upon surrender at the
designated office of the Rights Agent, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably require, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Preferred Shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at a redemption price of $.05
per Right.

         No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.

         No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.

         This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.



                                      B-2
<PAGE>


         WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ___________, ____.


ATTEST:                                      ORIENT-EXPRESS HOTELS LTD.


___________________________________          By:________________________________



Countersigned:

FLEET NATIONAL BANK



By: __________________________________
         Authorized Signature

Date:



                                      B-3
<PAGE>

                    Form of Reverse Side of Right Certificate


                               FORM OF ASSIGNMENT
                               ------------------


                (To be executed by the registered holder if such
               holder desires to transfer the Right Certificate.)


         FOR VALUE RECEIVED, _____________________________ hereby sells, assigns
and transfers unto______________________________________________________________
                  (Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ________________________Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.


Dated:   ______________________, ____



                                                    ____________________________
                                                              Signature


Signature Guaranteed:

         Signatures must be guaranteed by a participant in the Security Transfer
Agents Medallion Program or the Stock Exchange Medallion Program (generally, a
member firm of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States).

--------------------------------------------------------------------------------

         The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).



                                                    ____________________________
                                                              Signature


                                      B-4
<PAGE>

              Form of Reverse Side of Right Certificate - continued

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------

                        (To be executed if holder desires
                       to exercise the Right Certificate.)

To: ORIENT EXPRESS HOTELS LTD.

         The undersigned hereby irrevocably elects to exercise__________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:

Please insert social security or other identifying number


________________________________________________________________________________
                         (Please print name and address)

________________________________________________________________________________

If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security or other identifying number

________________________________________________________________________________
                         (Please print name and address)

________________________________________________________________________________

Dated:  __________, ___


                                                      __________________________
                                                               Signature

Signature Guaranteed:

                  Signatures must be guaranteed by a participant in the Security
Transfer Agents Medallion Program or the Stock Exchange Medallion Program
(generally, a member firm of a registered national securities exchange, a member
of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States).


                                      B-5
<PAGE>

              Form of Reverse Side of Right Certificate - continued

--------------------------------------------------------------------------------


         The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).



                                                      __________________________
                                                               Signature


--------------------------------------------------------------------------------


                                     NOTICE
                                     ------


         The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.

         In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.






                                      B-6