RIGHTS AGREEMENT

                                     between

                           HEARTLAND BANCSHARES, INC.

                                       and

                            HEARTLAND COMMUNITY BANK

                                 as Rights Agent


                            Dated as of June 23, 2000





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                                      INDEX




Section 1.     Certain Definitions............................................
Section 2.     Appointment of Rights Agent....................................
Section 3.     Issuance of Right Certificates.................................
Section 4.     Form of Right Certificates.....................................
Section 5.     Countersignature and Registration..............................
Section 6.     Transfer, Split Up, Combination and Exchange of Right
               Certificates; Mutilated, Destroyed, Lost or Stolen Right
               Certificates...................................................
Section 7.     Exercise of Rights; Purchase Price; Expiration Date of Rights..
Section 8.     Cancellation and Destruction of Right Certificates.............
Section 9.     Availability of Capital Stock..................................
Section 10.    Record Date....................................................
Section 11.    Adjustment of Purchase Price, Number of Shares or Number
               of Rights.....................................................
Section 12.    Certificate of Adjusted Purchase Price or Number of Shares....
Section 13.    Consolidation, Merger or Sale or Transfer of Assets or
               Earning Power.................................................
Section 14.    Fractional Rights and Fractional Shares.......................
Section 15.    Rights of Action..............................................
Section 16.    Agreement of Right Holders....................................
Section 17.    Right Certificate Holder Not Deemed a Shareholder.............
Section 18.    Concerning the Rights Agent...................................
Section 19.    Merger or Consolidation or Change of Name of Rights Agent.....
Section 20.    Duties of Rights Agent........................................
Section 21.    Change of Rights Agent........................................
Section 22.    Issuance of New Right Certificates............................
Section 23.    Redemption....................................................
Section 24.    Exchange......................................................
Section 25.    Notice of Certain Events......................................
Section 26.    Notices.......................................................
Section 27.    Supplements and Amendments....................................
Section 28.    Successors....................................................
Section 29.    Benefits of this Agreement....................................
Section 30.    Severability..................................................
Section 31.    Governing Law.................................................
Section 32.    Counterparts..................................................
Section 33.    Descriptive Headings..........................................


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                                RIGHTS AGREEMENT


        This  Agreement is made and entered  into as of June 23,  2000,  between
Heartland  Bancshares,   Inc.,  an  Indiana  corporation  (the  "Company"),  and
Heartland Community Bank, an Indiana banking  corporation,  as rights agent (the
"Rights Agent").

                                    RECITALS

        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
(as hereinafter  defined) of the Company outstanding as of the Close of Business
on July 7,  2000 (the  "Record  Date"),  each  Right  representing  the right to
purchase one one-hundredth (.01) of a Series A Preferred Share of the Company (a
"Preferred Share Unit"), upon the terms and subject to the conditions herein set
forth,  and has further  authorized  and directed the issuance of one Right with
respect to each 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).  The Rights Agent
has  agreed to  accept  its  appointment  as such,  and to carry out the  duties
imposed on it hereunder.

        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:

(1)  "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 15% or more of the Common  Shares of the
Company then outstanding,  but shall not include the Company, any Subsidiary (as
such term is hereinafter  defined) of the Company,  any employee benefit plan of
the Company or any  Subsidiary  of the  Company,  or any entity  holding  Common
Shares  for or  pursuant  to the  terms of any such  plan.  Notwithstanding  the
foregoing,  no Person  shall  become an  "Acquiring  Person" as the result of an
acquisition  of Common  Shares by the Company  that,  by reducing  the number of
shares  outstanding,  increases the proportionate  number of shares beneficially
owned by such  Person to 15% or more of the Common  Shares of the  Company  then
outstanding;  provided,  however,  that if a person shall become the  Beneficial
Owner of 15% or more of the Common  Shares of the Company  then  outstanding  by
reason of share  purchases by the Company and shall,  after such share purchases
by the Company,  become the Beneficial Owner of any additional  Common Shares of
the Company, then such Person shall be deemed to be an "Acquiring Person".

(2) "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 such term is hereinafter defined).



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(3) A Person  shall be deemed the  "Beneficial  Owner" of and shall be deemed to
"Beneficially Own" any securities:

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

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

(3)     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(c)(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 Beneficially Own hereunder.

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



<PAGE>


(5) "Close of Business" on any given date shall mean 5:00 P.M., Eastern Standard
Time, on such date; provided,  however,  that if such date is not a Business Day
it shall mean 5:00 P.M., Eastern Standard Time, on the next succeeding  Business
Day.

(6) "Common  Shares"  when used with  reference  to the  Company  shall mean the
shares of the  Company  designated  in its  Amended  and  Restated  Articles  of
Incorporation  as "Common  Shares."  "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 of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.

(7) "Company" shall have the meaning set forth in the preamble hereof.

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

(9) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

(10) "Exchange  Date"  shall mean the time at which such  Rights are
     exchanged  as  provided  in Section 24 hereof.

(11) "Exchange Ratio" shall have the meaning set forth in Section 24(a) hereof.

(12) "Final Expiration Date" shall mean the Close of Business on June 22, 2010.

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

(14) "Preferred Share Unit" shall mean one one-hundredth (.01) of a Preferred
     Share of the Company.

(15) "Preferred  Shares" shall mean the shares of the Company  designated in the
First  Addendum to the Amended and  Restated  Articles of  Incorporation  of the
Company, as amended, as "Series A Preferred Shares".

(16) "Purchase  Price" shall  initially be $35.00 for each Preferred  Share Unit
purchasable  pursuant  to the  exercise  of a Right,  and  shall be  subject  to
adjustment  from time to time as  provided in Section 11 and 13 hereof and shall
be payable in lawful money of the United  States of America in  accordance  with
Section 7(c).

(17)  "Record  Date" shall have the  meaning  set forth in the second  paragraph
hereof.

(18)  "Redemption  Date"  shall mean the time at which the  Rights are
redeemed  as  provided  in Section 23 hereof.


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


(20)  "Right" shall have the meaning set forth in the second paragraph hereof.

(21)  "Right  Certificate"  shall have the  meaning  set forth in  Section  3(a)
hereof.

(22) "Rights Agent" shall have the meaning set forth in the preamble hereof.

(23) "Rights Agreement" shall have the meaning set forth in Section 3(c) hereof.

(24) "Security" shall have the meaning set forth in Section 11(d) hereof.

(25) "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
or such  earlier date as a majority of the  Directors  shall become aware of the
existence of an Acquiring Person.

(26)  "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 other
equity interest is owned, directly or indirectly, by such Person.

(27)    "Trading Day" shall have the meaning set forth in Section 11(d) hereof.

        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 Common 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.

 <PAGE>

Section 3.  Issuance of Right Certificates.

(28)  Until  the  earlier  of (a)  the  tenth  business  day  after  the  Shares
Acquisition  Date or (b) the tenth  business  day (or such  later date as may be
determined by action of the Board of Directors  prior to such time as any person
becomes an Acquiring  Person) after the date of the  commencement  by any Person
(other than the Company,  any  Subsidiary of the Company,  any employee  benefit
plan of the Company or of any  Subsidiary  of the Company or any entity  holding
Common Shares for or pursuant to the terms of any such plan) of, or of the first
public announcement of the intention of any Person (other than the Company,  any
Subsidiary  of the Company,  any employee  benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common 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 Common Shares  aggregating 30% or more of the then outstanding Common Shares,
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"),  (i)  the  Rights  will  be  evidenced  by  the
certificates  for Common 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 (ii)  the  Rights  Certificates  will not be
transferable except as a part of the transfer of certificates for Common Shares,
and until the  Distribution  Date (or the earlier of the Redemption  Date or the
Final Expiration Date), the surrender for transfer of any certificate for Common
Shares  outstanding on the Record Date, with or without a copy of the Summary of
Rights  attached  thereto,  shall also  constitute  the  transfer  of the Rights
associated with the Common Shares  represented  thereby.  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, send) by first-class,  insured, postage-prepaid
mail,  to each record holder of Common 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 separate Right  Certificate,  in substantially the form of Exhibit A
hereto (a "Right  Certificate"),  evidencing  one Right for each Common Share so
held.  Following the Close of Business on the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.

(29) The Company will make available,  as promptly as practicable  following the
Record Date, a Summary of Rights to Purchase  Preferred Shares, in substantially
the form of Exhibit B hereto, to any holder of Rights from time to time prior to
the Expiration Date upon the request of the holders.

(30)  Certificates  for Common  Shares issued after the Record Date but prior to
the  earliest  of the  Distribution  Date,  the  Redemption  Date  or the  Final
Expiration  Date  (whether  as an  original  issuance  of Common  Shares or as a
transfer or  re-registration  of outstanding Common Shares) shall have impressed
on, printed on, written on or otherwise affixed to them the following legend:



<PAGE>


               THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
               CERTAIN  RIGHTS  AS  SET  FORTH  IN A  RIGHTS  AGREEMENT  BETWEEN
               HEARTLAND  BANCSHARES,  INC. AND THE RIGHTS AGENT THEREUNDER (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 HEARTLAND BANCSHARES,  INC.. 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.  HEARTLAND  BANCSHARES,
               INC.  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 ANY PERSON WHO BECOMES AN ACQUIRING  PERSON (AS DEFINED
               IN THE RIGHTS AGREEMENT) SHALL BECOME NULL AND VOID.

(31) In the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution  Date, any Rights  associated with
such Common  Shares  shall be deemed  cancelled  and retired so that the Company
shall not be entitled to exercise any Rights  associated  with the Common Shares
which are no longer outstanding.

        Section 4. Form of Right  Certificates.  The Right Certificates (and the
forms of  election  to purchase  shares and of  assignment  to be printed on the
reverse  thereof) shall be  substantially  the same as Exhibit A 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 to
comply with any  applicable  law or with any rule or  regulation  made  pursuant
thereto or with any rule or regulation of the National Association of Securities
Dealers, Inc. or any stock exchange on which the Rights may from time to time be
listed or quoted, or to conform to usage.  Subject to the provisions of Sections
11, 13, and 22 hereof,  the Right Certificates shall entitle the holders thereof
to purchase  such number of Preferred  Share Units as shall be set forth therein
at the price per Preferred Share Unit set forth therein (the "Purchase  Price"),
but the amount and type of  securities  purchasable  upon the  exercise  of each
Right and the Purchase  Price thereof shall be subject to adjustment as provided
herein.

        Section 5.  Countersignature and Registration.

(32) The Right  Certificates  shall be  executed on behalf of the Company by its
Chairman of the Board,  its  President,  or any of its Vice  Presidents,  either
manually or by facsimile  signature,  shall have affixed  thereto the  Company's
seal or a  facsimile  thereof,  and shall be attested  by the  Secretary  or any
Assistant Secretary of the Company,  either manually or by facsimile  signature.
The Right Certificates  shall be manually  countersigned by the Rights Agent and
shall not be valid for any purpose unless countersigned.  In case any officer of
the Company who shall have signed any of the Right  Certificates  shall cease to
be such officer 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 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 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.



<PAGE>


(33) Following the Distribution  Date, the Rights Agent will keep or cause to be
kept, at its principal office or such other office  designated for such purpose,
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.

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

(34) 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)(ii)  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 Preferred  Share
Units (or other  securities,  as the case may be) as the  Right  Certificate  or
Right   Certificates  by  the  surrender  of  the  Right  Certificate  or  Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent  designated  for such purpose,  duly  endorsed  with  signature
guaranteed  as  provided  for in the  form of  Right  Certificate,  and with the
Certificate as to beneficial  ownership duly executed by the registered  holder.
Thereupon the Rights Agent shall  countersign and deliver to the Person entitled
thereto a Right  Certificate  or Right  Certificates,  as the case may be, as so
requested.  The  Company  or the  Rights  Agent  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.

(35) Upon receipt by 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 of the Company
and the Rights Agent  reasonably  satisfactory to the Rights Agent,  and, at the
Company's  request,  reimbursement  to the Company  and the Rights  Agent of all
reasonable expenses  incidental thereto,  and upon surrender to the Rights Agent
and  cancellation of the Right  Certificate if mutilated,  the Rights Agent will
make and  deliver a new Right  Certificate  of like  tenor for  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.

(36) 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  office of the  Rights  Agent  designated  for such
purpose,  together with payment of the Purchase Price for each  Preferred  Share
Unit (or  other  securities,  as the case may be) as to  which  the  Rights  are
exercised, at or prior to the earliest of (a) the Final Expiration Date, (b) the
Redemption Date, or (c) the Exchange Date.



<PAGE>


(37) The Purchase Price for each Preferred Share Unit (or other  securities,  as
the case may be) pursuant to the exercise of a Right shall  initially be $35.00,
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 Section 7(c) below.

(38) 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 or money order payable to the order of the Company, the Rights Agent shall
thereupon  promptly (a) (i) requisition from any transfer agent of the Preferred
Shares  certificates  for the  total  number  of  Preferred  Share  Units  to be
purchased (and the Company hereby  irrevocably  authorizes its transfer agent to
comply  with  all  such  requests),  or  (ii)  requisition  from  the  Company's
depositary  agent,  if any,  depositary  receipts  representing  such  number of
Preferred Share Units as are to be purchased, in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the  depositary  agent (and the Company hereby directs its depositary
agent to comply with such request),  (b) 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,  (c)  promptly  after  receipt of such
certificates (or depositary receipts), 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 (d) when  appropriate,
after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.

(39) 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.

(40)  Notwithstanding  anything in this  Agreement to the contrary,  neither the
Rights Agent nor the Company  shall be  obligated  to undertake  any action with
respect to a registered holder upon the occurrence of any purported  exercise as
set forth in this Section 7 unless such  registered  holder shall have completed
and signed the  certificate  contained  in the form of election to purchase  set
forth  on the  reverse  side of the  Rights  Certificate  surrendered  for  such
exercise;  and  provided  such  additional  evidence  of  the  identity  of  the
Beneficial  Owner (or  former  Beneficial  Owner) or  Affiliates  or  Associates
thereof as the Company or the Rights Agent shall reasonably request.



<PAGE>


        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 destroy
such  cancelled  Right  Certificates  in  accordance  with  applicable  laws and
regulations, and in such case shall deliver a certificate of destruction thereof
to the Company.

        Section 9.  Availability of Capital Stock.

(41) 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 authorized
and issued 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
in accordance with Section 7, and shall, to the extent  reasonably  practicable,
so reserve and keep available a sufficient number of Common Shares (and/or other
securities  which may be required to permit the  exercise in full of the Rights)
pursuant to the  Agreement.  The Company  covenants and agrees that it will take
all such action as may be necessary to ensure that all securities delivered upon
exercise of Rights shall, at the time of delivery of the  certificates  for such
securities  (subject  to payment of the  Purchase  Price),  be duly and  validly
authorized and issued and fully paid and nonassessable.

(42) 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 (or Common Shares and/or other securities,  as the case may
be) 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 (or Common Shares
and/or other  securities,  as the case may be) 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 (or Common Shares and/or other securities,  as the case may be)
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  reasonable
satisfaction that no such tax is due.



<PAGE>


(43) The Company covenants and agrees that it will (i) prepare and file, as soon
as practicable after the Distribution  Date, a registration  statement under the
Securities  Act of 1933, as amended (the  "Securities  Act"),  on an appropriate
form with respect to the securities  issuable upon exercise of the Rights,  (ii)
use its best efforts to cause the registration  statement to become effective as
soon as  practicable  after filing,  and (iii) use its best efforts to cause the
registration  statement  to remain  effective  (with a  prospectus  at all times
meeting the  requirements  of the Securities  Act and the rules and  regulations
thereunder)  until the  earlier  of the  exercise  of all of the  Rights and the
Expiration  Date. The Company will also take all actions required to comply with
the state  securities  laws  applicable to the Rights and  Preferred  Shares (or
Common  Shares  and/or  other  securities,  as the  case may be)  issuable  upon
exercise of the Rights.  The Company may  temporarily  suspend,  for a period of
time not to exceed 90 days, the exercisability of the Rights in order to prepare
and file the registration statement. Upon any such suspension, the Company shall
issue a public  announcement  and notice to the Rights  Agent  stating  that the
exercisability  of the Rights has been  temporarily  suspended,  and the Company
shall  issue a public  announcement  and  notice to the  Rights  Agent  when the
suspension  is no  longer  in  effect.  Notwithstanding  any  provision  of this
Agreement  to  the  contrary,  the  Rights  shall  not  be  exercisable  in  any
jurisdiction in which any requisite  registration or qualification  has not been
obtained or any requisite notice of exemption has not been filed.

(44) The Company  agrees to provide to the Rights Agent,  immediately  following
the later to occur of an event  described in Section  11(a)(i)(B)  or Section 13
hereof or the Distribution  Date, an opinion of counsel acceptable to the Rights
Agent  that the  Common  Stock  underlying  the  Rights  have  been or are being
properly  registered  under the  Securities Act and all securities or "blue sky"
laws of the various states, as applicable, or in the alternative, the Rights are
not subject to  registration  under the  Securities Act and/or any securities or
"blue sky" laws of the various states.

        Section 10. Record Date.  Each person in whose name any  certificate for
Preferred  Shares (or Common Shares and/or other  securities as the case may be)
is issued upon the  exercise of Rights  shall for all purposes be deemed to have
become the holder of record of the  Preferred  Shares (or Common  Shares  and/or
other  securities  as  the  case  may  be)  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  Share (or Common Share
and/or other  securities  as the case may be) transfer  books of the Company are
closed,  such person  shall be deemed to have  become the record  holder of such
succeeding  Business  Day on which the  Preferred  Share (or Common Share and/or
other  securities  as the case may be)  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
(or Common  Shares  and/or  other  securities  as the case may be) 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.

        Section 11. Adjustment of Purchase Price,  Number of Shares or Number of
Rights.  The Purchase Price, the number and kind of 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.



<PAGE>


(45)    (i) In the event the  Company  shall at any time  after the date of this
        Agreement  (1) declare a dividend  on the  Preferred  Shares  payable in
        Preferred Shares,  (2) subdivide the outstanding  Preferred Shares,  (3)
        combine  the  outstanding  Preferred  Shares  into a  smaller  number of
        Preferred  Shares or (4) issue any securities in a  reclassification  of
        the Preferred Shares (including any such  reclassification in connection
        with a consolidation or merger in which the Company is the continuing or
        surviving corporation),  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  Share  transfer  books of
        the Company were open,  such holder would have owned upon such  exercise
        and been  entitled to receive by virtue of such  dividend,  subdivision,
        combination or  reclassification.  The adjustments  provided for in this
        Section  11(a) shall be made  successively  whenever  such a dividend is
        declared or paid or such a subdivision,  combination or consolidation is
        effected.

               (ii) In the  event  (1) any  Person  alone or  together  with its
        Affiliates  and  Associates  shall  become an Acquiring  Person,  or (2)
        during  such time as there is an  Acquiring  Person,  there shall be any
        reclassification  of securities  (including  any reverse stock split) or
        recapitalization  or reorganization of the Company which has the effect,
        directly or indirectly  of increasing by more than 1% the  proportionate
        share of the outstanding shares of any class of equity securities of the
        Company or any of its Subsidiaries  beneficially  owned by any Acquiring
        Person or any  Affiliate  or Associate  thereof,  each holder of a Right
        shall, for a period of sixty (60) days after the later of the occurrence
        of any such event or the effective  date of the  registration  statement
        referred to in Section 9 hereof, have a right to receive,  upon exercise
        thereof  at a  price  equal  to  the  then  current  Purchase  Price  in
        accordance with the terms of this Agreement such number of Common Shares
        of the Company  (or, in the  discretion  of the Board,  Preferred  Share
        Units) as shall equal the result  obtained by (x)  multiplying  the then
        current  Purchase Price by the number of Preferred Share Units for which
        a Right is then  exercisable and dividing that product by (y) 50% of the
        then  current per share  market  price of the  Company's  Common  Shares
        (determined  pursuant to Section  11(d)  hereof) on the date such Person
        became an Acquiring Person. In the event that any Person shall become an
        Acquiring  Person and the Rights shall then be outstanding,  the Company
        shall not take any action which would eliminate or diminish the benefits
        intended to be afforded by the Rights.

        From and after the occurrence of the earlier of the events  described in
        clauses  (i) and (ii)  above,  any Rights  that are or were  acquired or
        beneficially  owned  by  such  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 whose Rights would be void  pursuant to the  preceding
        sentence or any  Associate or Affiliate  thereof;  no Right  Certificate
        shall be  issued  at any time  upon the  transfer  of any  Rights  to an
        Acquiring  Person whose Rights would be void  pursuant to the  preceding
        sentence or any Associate or Affiliate thereof or to any nominee of such
        Acquiring  Person,  Associate or  Affiliate;  and any Right  Certificate
        delivered to the Rights Agent for transfer to an Acquiring  Person whose
        Rights would be void pursuant to the preceding sentence or any Associate
        or Affiliate thereof shall be cancelled.



<PAGE>


        In case any event  described  in clauses (i) and (ii) above shall occur,
        then the Company shall as soon as  practicable  thereafter  give 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 such
        event and the consequences of such event to holders of Rights under this
        Section 11 (a)(ii).

               (iii) If there shall not be  sufficient  Common Shares issued but
        not  outstanding  or  authorized  but unissued to permit the exercise in
        full of the Rights in accordance with the foregoing  subparagraph  (ii),
        the Company  shall take all such action as may be necessary to authorize
        additional  Common  Shares for  issuance  upon  exercise  of the Rights,
        including  the  calling of a meeting  of  shareholders.  If the  Company
        shall, after good faith effort, be unable to take all such action as may
        be necessary to authorize such  additional  Common  Shares,  the Company
        shall substitute, for each Common Share that would otherwise be issuable
        upon  exercise  of a Right,  a number  of  Preferred  Share  Units (or a
        security with  substantially  similar rights,  privileges,  preferences,
        voting power and economic rights) such that the current per share market
        price of one Preferred  Share Unit (or such other  security) is equal to
        the current per share market price of one Common Share as of the date of
        issuance of such Preferred Share Unit (or other security).

(46) 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   preferred  shares"))  or
securities convertible into Preferred Shares or equivalent preferred shares 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.  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, options 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.

<PAGE>



(47)  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)  hereof),  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 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; 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 the Company to be issued upon
exercise of one Right. 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.



<PAGE>


(48)    (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 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 (1) a
        dividend  or  distribution  on such  Security  payable in shares of such
        Security  or  securities  convertible  into  such  shares,  or  (2)  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  of  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 quoted price or, if not so quoted,  the average of the high bid and
        low asked  prices in the  over-the-counter  market,  as  reported by the
        National  Association of Securities Dealers,  Inc. Automated  Quotations
        System ("Nasdaq") or the Over-the-Counter Bulletin Board of the National
        Association of Securities Dealers,  Inc. ("OTC BB") or such other system
        then in use,  or, if on any such date the  Security is not quoted by any
        such  organization,  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  Common  Shares  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 Common Shares
        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.

<PAGE>

(49)  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 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-hundredth of a Preferred
Share or one-  hundredth  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 (a) three
years from the date of the transaction which requires such adjustment or (b) the
date of the expiration of the right to exercise any Rights.

(50) If, as a result of an adjustment made pursuant to Section 11(a) hereof, the
holder of any Right  thereafter  exercised  shall become entitled to receive any
securities of the Company other than Preferred Shares,  thereafter the number of
such other  securities 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
Sections 11(a) through 11(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 securities.

(51) 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 Preferred  Share Units  purchasable
from time to time hereunder upon exercise of the Rights,  all subject to further
adjustment as provided herein.

<PAGE>



(52) 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 Preferred Share Units
obtained by (a) multiplying (x) the number of Preferred Share Units 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 (b) dividing the
product so  obtained  by the  Purchase  Price in effect  immediately  after such
adjustment of the Purchase Price.

(53)  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 Preferred Share Units  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 Preferred Share Units 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 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  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.

(54)  Irrespective  of any  adjustment  or change in the  Purchase  Price or the
number of Preferred  Share Units  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 Preferred  Share Units which were expressed in
the initial Right Certificates issued hereunder.

(55)  Before  taking any action  that would  cause an  adjustment  reducing  the
Purchase Price 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.


<PAGE>


(56) 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 issuance
to the holder of any Right  exercised  after such record  date of the  Preferred
Share Units,  Common Shares or other securities of the Company, if any, issuable
upon such  exercise over and above the number of Preferred  Share Units,  Common
Shares or other 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.

(57)  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 (i)  consolidation  or  subdivision of the Preferred  Shares,  (ii) issuance
wholly for cash of any Preferred  Shares at less than the current  market price,
(iii) issuance wholly for cash of Preferred  Shares or securities which by their
terms  are  convertible  into or  exchangeable  for  Preferred  Shares,  or (iv)
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to hereinabove in Section 11, hereafter made by the
Company  to  holders  of its  Preferred  Shares  shall  not be  taxable  to such
stockholders.

(58)  Anything in this  Agreement to the contrary  notwithstanding  in the event
that at any  time  after  the date of this  Rights  Agreement  and  prior to the
Distribution  Date,  the Company  shall (i)  declare or pay any  dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by  reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares,  then  in any  such  case  (A)  the  number  of  Preferred  Share  Units
purchasable  after such  event  upon  proper  exercise  of each  Right  shall be
determined by  multiplying  the number of Preferred  Share Units so  purchasable
immediately  prior to such event by a fraction,  the  numerator  of which is the
number  of Common  Shares  outstanding  immediately  before  such  event and the
denominator  of which is the  number of Common  Shares  outstanding  immediately
after such event, and (B) each Common Share  outstanding  immediately after such
event  shall have issued  with  respect to it that  number of Rights  which each
Common Share outstanding immediately prior to such event had issued with respect
to it. The  adjustments  provided for in the  preceding  sentence  shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.



<PAGE>


        Section 12.  Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an  adjustment  is made as  provided  in Sections 11 or 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  Preferred  Shares and
Common  Shares a copy of such  certificate  and (c) if a  Distribution  Date has
occurred,  mail a brief summary  thereof to each holder of a Right  Certificate.
The Rights Agent shall be fully protected in relying on such certificate,  shall
not be obligated or responsible for calculating any adjustment, and shall not be
deemed to have  knowledge  of any  adjustment  unless  and  until it shall  have
received such certificate.

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

(59) In the event,  directly or  indirectly,  (i) the Company shall  consolidate
with,  or merge  with  and  into,  any  other  Person,  (ii)  any  Person  shall
consolidate 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 Common Shares shall be changed
into or exchanged for securities of any other Person (or the Company) or cash or
any other  property,  or (iii) 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 (1) 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 Preferred Share
Units for which a Right is then  exercisable,  in  accordance  with the terms of
this  Agreement  and in lieu of  Preferred  Share  Units,  such number of freely
tradeable Common Shares of such other Person (including the Company as successor
thereto or as the surviving corporation), free and clear of any liens, rights of
call or first refusal,  encumbrances or other adverse claims, as shall equal the
result obtained by (A) multiplying the then current Purchase Price by the number
of Preferred Share Units for which a Right is then exercisable and dividing that
product  by (B) 50% of the then  current  per share  market  price of the Common
Shares of such other Person (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation,  merger,  sale or transfer;  (2) the
issuer of such Common  Shares shall  thereafter be liable for, and shall assume,
by virtue of such consolidation,  merger, sale or transfer,  all the obligations
and duties of the Company  pursuant to this  Agreement;  (3) the term  "Company"
shall  thereafter  be deemed to refer to such issuer;  and (4) such issuer shall
take such steps (including,  but not limited to, the reservation of a sufficient
number of its Common Shares in  accordance  with Section 9 hereof) 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.

(60) The Company shall not consummate any such  consolidation,  merger,  sale or
transfer  unless prior  thereto the Company and such issuer shall have  executed
and  delivered to the Rights Agent a  supplemental  agreement  providing for the
terms set forth in Section 13(a) hereof and further  providing  that, as soon as
practicable  after the date of any  consolidation,  merger,  sale or transfer of
assets mentioned in Section 13(a) hereof, such issuer at its own expense shall:



<PAGE>


(1)     prepare and file a registration  statement under the Act with respect to
        the Rights and the securities purchasable upon exercise of the Rights on
        an  appropriate   form,   will  use  its  best  efforts  to  cause  such
        registration  statement to become effective as soon as practicable after
        such  filing and will use its best  efforts  to cause such  registration
        statement to remain  effective  (with a prospectus  at all times meeting
        the  requirements of the Act and the rules and  regulations  thereunder)
        until the Expiration Date;

(2)     use  its  best  efforts  to  qualify  or  register  the  Rights  and the
        securities  purchasable  upon  exercise of the Rights under the blue sky
        laws of such jurisdictions as may be necessary or appropriate; and

(3)     deliver to holders of the Rights  historical  financial  statements  for
        such  issuer and each of its  Affiliates  which  comply in all  material
        respects with the  requirements  for  registration  on Form 10 under the
        Exchange Act.

(61) 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 provisions of this Section 13 shall  similarly  apply to successive
mergers or consolidations or sales or other transfers.

        Section 14.  Fractional Rights and Fractional Shares.

(62) 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  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
quoted  price or, if not so  quoted,  the  average of the high bid and low asked
prices in the  over-the-counter  market,  as reported by Nasdaq or the OTC BB or
such other  system then in use or, if on any such date the Rights are not quoted
by any such  organization,  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.



<PAGE>


(63) The Company  shall not be required to issue  fractions of Preferred  Shares
(other than fractions  which are integral  multiples of one  one-hundredth  of a
Preferred Share) upon exercise of the Rights or to distribute certificates which
evidence  fractional  Preferred  Shares (other than fractions which are integral
multiples of one  one-hundredth  of a Preferred  Share).  Fractions of Preferred
Shares in integral  multiples of one  one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate  agreement  between  the Company  and a  depositary  selected by it;
provided that such agreement  shall provide that the holders of such  depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled  as  Beneficial  Owners of the  Preferred  Shares  represented  by such
depositary  receipts.  In lieu  of  fractional  Preferred  Shares  that  are not
integral  multiples of one one-hundredth of a Preferred Share, 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 the 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)(ii)  hereof)  for the Trading  Day  immediately  prior to the date of such
exercise.

(64) The holder of a Right by the acceptance of the Right expressly  waives such
holder's  right to receive any fractional  Rights or any fractional  shares upon
exercise of a Right (except as expressly provided above).

        Section  15.  Rights of Action.  All rights of action in respect of this
Agreement,  except 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
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common 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 Common 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 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 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:

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



<PAGE>


(66) after the Distribution  Date, the Right  Certificates are transferable only
on the registry  books of the Rights Agent if  surrendered  at the office of the
Rights Agent  designated  for such purpose,  duly endorsed or  accompanied  by a
proper instrument of transfer; and

(67) the  Company  and the  Rights  Agent may deem and treat the person in whose
name the Right  Certificate (or, prior to the Distribution  Date, the associated
Common Share certificate) is registered on the registration books of the Company
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 Common Share 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 deemed for any purpose to be
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  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 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 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
reasonable  counsel  fees and  expenses.  The  indemnity  provided  herein shall
survive the expiration of the Rights and the termination of this Agreement.

        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 Common Shares or for other securities of
the  Company,   instrument  of  assignment  or  transfer,   power  of  attorney,
endorsement,   affidavit,  letter,  notice,  direction,   consent,  certificate,
statement,  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.


<PAGE>


        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 a party, or any  corporation  succeeding to the stock transfer or
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  in its name as 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  Certificates  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 specifically 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 and no implied duties
or obligations shall be read into this Agreement against the Rights Agent:

(68) 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.

(69) 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 Chairman of the Board, the President,
any Vice President,  the Treasurer or the 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.



<PAGE>


(70) 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.

(71) 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 countersignature  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.

(72) 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  (including the Rights becoming
void pursuant to Section 11(a)(ii) hereof) 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,  Common Shares or other  securities to be issued  pursuant to
this Agreement or any Right  Certificate or as to whether any Preferred  Shares,
Common Shares or other securities will, when issued,  be validly  authorized and
issued, fully paid and non-assessable.

(73) 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 of  performing  by the Rights  Agent of the
provisions of this Agreement.

(74) The Rights Agent is hereby  authorized and directed to accept  instructions
with  respect to the  performance  of its duties  hereunder  from any one of the
Chairman of the Board, the President,  any Vice President,  the Secretary or the
Treasurer  of the  Company,  and  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 by it in good faith in accordance with  instructions of
any  such  officer  or  for  any  delay  in  acting  while   waiting  for  those
instructions.



<PAGE>


        Any  application by the Rights Agent for written  instructions  from the
Company may, at the option of the Rights Agent,  set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Rights  Agreement
and the date on and/or after which such action  shall be taken or such  omission
shall be  effective.  The Rights  Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance  with a proposal  included in
any such application on or after the date specified in such  application  (which
date shall not be less than five  Business  Days after the date any such officer
of the Company actually receives such application, unless any such officer shall
have  consented in writing to an earlier date) unless,  prior to taking any such
action (or the  effective  date in the case of an  omission),  the Rights  Agent
shall  have  received  written  instructions  in  response  to such  application
specifying the action to be taken or omitted.

(75) 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.

(76) 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.

(77) 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  that  repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.

(78) The Rights Agent shall have no responsibility  to the Company,  any holders
of Rights,  any holders of Common  Stock or any holders of  Preferred  Stock for
interest or earnings  on any monies  held by the Rights  Agent  pursuant to this
Agreement.

(79) The Rights  Agent shall not be required to take notice or be deemed to have
notice of any fact, event or determination (including,  without limitation,  any
dates or events defined in this Agreement or the designation of any Person as an
Acquiring Person,  Affiliate or Associate) under this Agreement unless and until
the Rights  Agent  shall be  specifically  notified in writing by the Company of
such fact, event or  determination,  and all notices shall be effective if given
in  accordance  with  Section 25 hereof,  and in the  absence of such notice the
Rights Agent may conclusively assume that no such event or condition exists.

(80) If, with respect to any Rights Certificate  surrendered to the Rights Agent
for exercise or transfer,  the certificate attached to the form of assignment or
form of election to purchase,  as the case may be, has either not been completed
to certify the holder is not an  Acquiring  Person (or an Affiliate or Associate
thereof),  the Rights  Agent shall not take any further  action with  respect to
such requested  exercise of transfer without receiving  written  instructions of
the Company.



<PAGE>


        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 to each transfer agent
of the Preferred  Shares and Common 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  Preferred  Shares and Common  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 registered holder of any Right Certificate or the retiring Rights Agent
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 (i) a corporation  organized and doing business under the
laws of the United  States or the State of Indiana (or of any other state of the
United  States so long as such  corporation  is  authorized  to do business as a
banking  institution),  validly existing and which is authorized under such laws
to  exercise  corporate  trust  or  stock  transfer  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 or (ii) a subsidiary of a corporation  described in clause (i)
of this sentence. 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 and the duties and
obligations  of the  retiring  Rights Agent shall cease and  terminate;  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 Common 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 or  class of  shares  or other
securities  or  property  purchasable  under  the  Right  Certificates  made  in
accordance with the provisions of this Agreement.


<PAGE>

        Section 23.  Redemption.


(81) The Board of Directors of the Company may, at its option, at any time prior
to the tenth business day after any Person becomes an Acquiring  Person,  redeem
all but not less than all of the then  outstanding  Rights at a redemption price
of $.0001 per Right,  appropriately  adjusted 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");  provided,
however,  that during the time period in which the Rights may be  redeemed,  the
Board of  Directors  of the Company may extend the time during  which the Rights
may  be  redeemed  for a  time  period  as may be  determined  by the  Board  of
Directors. Notwithstanding anything contained in this Agreement to the contrary,
the Rights  shall not be  exercisable  after the first  occurrence  of the event
described  in  Section  11(a)(ii)  until  such  time as the  Company's  right of
redemption  hereunder has expired.  The redemption of the Rights by the Board of
Directors of the Company may be made  effective at such time,  on such basis and
with such  conditions  as the Board of  Directors  of the  Company,  in its sole
discretion,  may  establish.  The Company may, at is option,  pay the Redemption
Price in cash,  Common Shares (based on the current  market price at the time of
redemption) or any other form of consideration  deemed  appropriate by the Board
of Directors.

(82) In addition,  in the exercise of its sole discretion the Board of Directors
of the  Company  may  redeem  all but not less than all of the then  outstanding
Rights at the Redemption Price following the occurrence of a Shares  Acquisition
Date but prior to any event  described in Section 13(a) either (a) in connection
with any event  specified  in Section  13(a) in which all  holders of  Preferred
Share  Units are  treated  alike and not  involving  (other  than as a holder of
Preferred  Share Units being  treated like all other such  holders) an Acquiring
Person or an Affiliate  or Associate of an Acquiring  Person or any other Person
in which such Acquiring Person, Affiliate or such Associate has any interest, or
any other Person acting  directly or  indirectly on behalf of or in  association
with any such  Acquiring  Person,  Affiliate or Associate,  or (b) following the
occurrence  of an event set forth in, and the  expiration  of any period  during
which the holder of Rights may exercise the rights under,  Section  11(a)(ii) if
and for as long as the Acquiring  Person is not thereafter the Beneficial  Owner
15% or more of the  outstanding  Common  Shares,  and at the time of  redemption
there are no other persons who are Acquiring Persons.

(83)  Immediately  upon the  action of the  Board of  Directors  of the  Company
ordering  the  redemption  of the Rights,  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 ten days after the action of the Board of Directors  ordering the
redemption of the Rights,  the Company  shall give notice of such  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 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 redeem,  acquire or purchase for value any Rights at any time in
any manner other than that  specifically set forth in this Section 23, and other
than in connection with the purchase of Common Shares prior to the  Distribution
Date.



<PAGE>


        Section 24.  Exchange.

(84) 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)(ii)  hereof) for Common
Shares  at an  exchange  ratio of one  Common  Share  per  Right,  appropriately
adjusted  to reflect any stock  split,  stock  dividend  or similar  transaction
involving  either the Preferred  Shares or the Common Shares occurring after the
date hereof (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, any Subsidiary of the Company, any employee benefit plan of the Company
or any such  Subsidiary,  or any entity holding Common Shares for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of such
person,  becomes the Beneficial Owner of more than 50% of the Common Shares then
outstanding.

(85)  Immediately  upon the  action of the  Board of  Directors  of the  Company
ordering  the exchange of any Rights  pursuant to Section  24(a) 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 Common  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  promptly  shall 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
Common  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)(ii)  hereof)
held by each holder of Rights.

(86) In any exchange  pursuant to this  Section 24, the Company,  at its option,
may substitute  Preferred Shares (or equivalent preferred stock, as such term is
defined  in  Section  11(b)  hereof)  for  some  or  all of  the  Common  Shares
exchangeable  for Rights,  at the initial rate of one  Preferred  Share Unit (or
equivalent  preferred  stock) for each Common Share, as appropriate  adjusted to
reflect  adjustments in the voting rights of the Preferred Stock pursuant to the
terms thereof, so that each Preferred Share Unit delivered in lieu of each share
of Common Stock shall have the same voting rights as one share of Common Stock.



<PAGE>

(87) The Company  shall not be required to issue  fractions of Common  Shares or
Preferred Share Units or to distribute  certificates  which evidence  fractional
Common Shares or Preferred Share Units. In lieu of such fractional Common Shares
or Preferred Share Units, the Company shall pay to the registered holders of the
Right  Certificates  with  regard  to which  such  fractional  Common  Shares or
Preferred Share Units would otherwise be issuable an amount in cash equal to the
same  fraction of the current  market value of a whole Common Share or Preferred
Share Units. For the purposes of this Section 24(d), the current market value of
a whole Common Share or Preferred  Share Unit,  shall be the closing  price of a
Common Share (as determined  pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately  prior to the date of exchange  pursuant
to this Section 24.

        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),  (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, (iii) to effect any reclassification of its
Preferred Shares (other than a  reclassification  involving only the subdivision
of outstanding  Preferred  Shares),  (iv) to effect any  consolidation 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,  (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any  dividend  on the  Common  Shares  payable  in Common  Shares or to effect a
subdivision,   combination   or   consolidation   of  the   Common   Shares  (by
reclassification  or otherwise  than by payment of dividends in Common  Shares),
then,  in each such  case,  the  Company  shall  give 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,   merger,   sale,   transfer,   liquidation,
dissolution,  or  winding  up is to take  place  and the  date of  participation
therein by the holders of the 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 10 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 10 days prior to the date of the taking of such
proposed  action or the date of  participation  therein  by the  holders  of the
Preferred Shares, whichever shall be the earlier.

        (b) In case the event set forth in Section 11(a)(ii) hereof shall occur,
then (i) the Company shall as soon as practicable thereafter give 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  such  event and the
consequences of such event to holders of Rights under Section  11(a)(ii)  hereof
and (ii) all references in the foregoing Section 25(a) to Preferred Shares shall
be deemed thereafter to refer also, if appropriate,  to Common Shares and/or, if
appropriate, other securities of the Company.

        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:

               Heartland Bancshares, Inc.
               420 North Morton Street
               P.O. Box 469
               Franklin, Indiana 46131
               Attention: President

<PAGE>

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
upon receipt if sent by registered or certified mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:

               Heartland Community Bank, as Rights Agent
               420 North Morton Street
               P.O. Box 469
               Franklin, Indiana 46131
               Attention: President

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 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 with respect to the Rights
which the Company may deem necessary or desirable,  including but not limited to
extending  the Final  Expiration  Date,  any such  supplement or amendment to be
evidenced  by a writing  signed by the Company and the Rights  Agent;  provided,
however,  that this  Agreement  shall not be amended in any manner  which  would
adversely  affect the interests of the holders of Rights.  This Agreement  shall
not be amended in any manner which would  adversely  affect or change the duties
of the Rights  Agent or provide  any  additional  duties or  obligations  to the
Rights  Agent.  The  Company  shall  provide  Notice to the Rights  Agent of any
supplements and amendments.

     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.



<PAGE>


        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 Common Shares) any legal or equitable right,  remedy
or claim  under  this  Agreement  and 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 Common 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,  each Right and each Right
Certificate  issued  hereunder  shall be deemed to be a contract  made under the
laws of the State of  Indiana  and for all  purposes  shall be  governed  by and
construed in accordance  with the laws of such State  applicable to contracts to
be made and performed entirely within such State.

        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.



<PAGE>


        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.

                                  HEARTLAND BANCSHARES, INC.

                                  By:/S/Steve Bechman
                                  -------------------
                                  Steve Bechman
                                  President





                                 HEARTLAND COMMUNITY BANK,
                                 As Rights Agent


                                 By:/S/Steve Bechman
                                 -------------------
                                 Steve Bechman
                                 President



<PAGE>



                                                                Exhibit A


                            Form of Right Certificate


Certificate No. R-                                           _________ Rights

               NOT EXERCISABLE  AFTER JUNE 22, 2010, OR EARLIER IF REDEMPTION OR
               EXCHANGE  OCCURS.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.0001
               PER RIGHT AND TO  EXCHANGE  ON THE TERMS SET FORTH IN THE  RIGHTS
               AGREEMENT.


                                       Right Certificate

                           Heartland Bancshares, Inc.

        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 June 23,  2000  (the  "Rights  Agreement"),
between Heartland Bancshares,  Inc., an Indiana corporation (the "Company"), and
Heartland  Community Bank, as Rights Agent,  (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.,  Eastern Standard Time,
on June 22, 2010, at the office of the Rights Agent designated for such purpose,
or at the office of its successor as Rights Agent, one one-hundredth  (.01) of a
fully paid and  non-assessable  Preferred Share (the "Preferred Share Units") of
the  Company,  at a  purchase  price of $35.00  per  Preferred  Share  Unit (the
"Purchase  Price"),  upon  presentation and surrender of this Right  Certificate
with the Form of  Election  to  Purchase  duly  executed.  The  number of Rights
evidenced by this Right  Certificate  (and the number of  Preferred  Share Units
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 June 23, 2000,
based on the Preferred  Share Units as  constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of Preferred Share Units
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.

        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  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.


<PAGE>


        This Right Certificate,  with or without other Right Certificates,  upon
surrender at the  principal  office of the Rights  Agent,  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 Share Units or other  securities 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 (i) may be redeemed by the Company at a redemption price of
$.0001 per Right or (ii) may be exchanged in whole or in part for the  Company's
Common Stock, without par value.

        No fractional  Preferred Share Units will be issued upon the exercise of
any Right or Rights  evidenced  hereby  (other  than  fraction  shares  that are
integral  multiples of one one-hundredth of a Preferred Share, which may, at the
election of the  Company,  be  evidenced by  depository  receipts),  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  that 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 purchase
until it shall have been countersigned by the Rights Agent.



<PAGE>


        WITNESS the facsimile  signature of the proper  officers of the Company,
and its corporate seal. Dated as of ___________________, 20__.

ATTEST:                                        Heartland Bancshares, Inc.

                                               By

Countersigned:



By
   Authorized Signature


<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:__________________, 20___




                                               Signature

Signature Guaranteed:

        Signatures must be guaranteed by 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.

                                   CERTIFICATE

        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



<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 Heartland Bancshares, Inc.:

        The  undersigned  hereby  irrevocably  elects to exercise  ______ Rights
represented by this Right Certificate to purchase the Preferred  Shares,  Common
Shares or such other  securities  issuable  upon the exercise of such Rights and
requests that  certificates  for such  Preferred  Shares,  Common Shares or such
other securities 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: _________________, 20____




                                               Signature

Signature Guaranteed:



<PAGE>


        Signatures must be guaranteed by 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.

                                   CERTIFICATE

        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.


<PAGE>



                                                                     Exhibit B


                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

        On June 23, 2000, the Board of Directors of Heartland  Bancshares,  Inc.
(the  "Company")  adopted a  Shareholder  Rights Plan (the "Rights  Plan").  The
purposes of the Rights Plan are to deter certain  coercive  takeover tactics and
to enable the Board of  Directors  to  represent  effectively  the  interests of
shareholders and other  constituencies of the Company in the event of a takeover
attempt.  The  Rights  Plan  does  not  deter  negotiated  mergers  or  business
combinations  that the Board of Directors  determines to be in the best interest
of the Company and its shareholders.

        To implement the Rights Plan the Board of Directors  declared a dividend
of one preferred  share purchase right (a "Right") for each  outstanding  common
share  of the  Company  (the  "Common  Shares").  The  dividend  is  payable  to
shareholders of record on July 7, 2000 (the "Record Date").  One Right will also
be issued with respect to each Common  Share issued after the Record Date.  Each
Right  entitles  the  registered   holder  to  purchase  from  the  Company  one
one-hundredth  of a Preferred Share (the "Preferred  Share Units") at a price of
$35.00 per Preferred Share Unit (the "Purchase  Price"),  subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement (the
"Rights  Agreement") between the Company and Heartland Community Bank, as Rights
Agent (the "Rights Agent").

Rights Attach to Common Shares Initially

        Initially and until a Distribution  Date (as defined below) occurs,  the
Rights are  attached to all Common  Shares and no separate  Rights  certificates
will be issued. During this initial period,

         - the Rights are not exercisable;
         - the  Rights  are  transferred  with  the  Common  Shares  and are not
         - transferable  separately  from the Common  Shares;  new Common Shares
         - certificates  or book entry  shares  issued  will  contain a notation
         - incorporating the Rights Agreement by reference;  and the transfer of
         - any Common  Shares will also  constitute  the  transfer of the Rights
         - associated with those Common Shares.

Distribution of Rights

        Separate certificates evidencing the Rights will be mailed to holders of
record of the Common Shares on the "Distribution Date." The Distribution Date is
the earlier to occur of the  following  two events (or such later date as may be
determined by the Board of Directors):



<PAGE>


         - 10 business  days  following a public  announcement  that a person or
           group of  affiliated or associated  persons (an  "Acquiring  Person")
           have acquired beneficial  ownership of 15% or more of the outstanding
           Common Shares; or

         - 10 business  days (or such later date as may be  determined by action
           of the Board of Directors prior to such time as any Person becomes an
           Acquiring  Person) after the  commencement  of, or announcement of an
           intention to make, a tender offer or exchange offer the  consummation
           of which  would  result in the  beneficial  ownership  by a person or
           group of 30% or more of such outstanding Common Shares.

        Acquisitions  by the  following  persons  will not  result in the person
becoming an Acquiring  Person:  the Company,  any subsidiary or employee benefit
plan of the  Company,  or any other  person  approved in advance by the Board of
Directors.

        After the  Distribution  Date,  the Rights will be tradeable  separately
from the Common  Shares.  After the  Distribution  Date and after the  Company's
right to redeem (as described below) has expired, the Rights will be exercisable
in two different ways depending on the circumstances as set forth below.

Right to Purchase Company Stock

        After the Distribution Date and after the Company's redemption right has
expired,  each holder of a Right (except those held by the Acquiring  Person and
its affiliates and associates)  will have the right to purchase,  upon exercise,
that  number of Common  Shares (or, in certain  circumstances,  Preferred  Share
Units or other similar  securities of the Company in lieu of such Common Shares)
having a market value of two times the exercise  price of the Right,  subject to
the availability of a sufficient number of authorized but unissued Common Shares
(such right being called the "Subscription  Right"). The Subscription Right will
be  exercisable  for a 60-day period after the effective  date of a registration
statement  under the  Securities  Act of 1933,  as amended,  covering the Common
Shares (or Preferred Share Units or other securities).

Right to Purchase Acquiring Person Stock

        Alternatively,  if the Company is acquired in a merger or other business
combination  transaction  or 50% or more of its  consolidated  assets or earning
power  are  sold,  each  holder  of a Right  will  thereafter  have the right to
receive,  upon the exercise  thereof at the then current  exercise  price of the
Right,  that number of shares of common stock of the acquiring  company which at
the time of such  transaction will have a market value of two times the exercise
price of the Right (such right being called the "Merger Right").  Each holder of
a Right (other than an Acquiring  Person) will continue to have the Merger Right
whether or not such holder exercises the Subscription Right.

Exchange of Company Stock for Rights



<PAGE>


        At any time after the  acquisition by a person or group of affiliated or
associated  persons of  beneficial  ownership of 15% or more of the  outstanding
Common Shares or the announcement of a tender or exchange offer resulting in the
beneficial  ownership  by a Person  or  group of 30% or more of the  outstanding
Common Shares and prior to the  acquisition by such Person or group of more than
50%  outstanding  Common  Shares,  the Board of  Directors  of the  Company  may
exchange the Rights  (other than Rights owned by such person or group which have
become void),  in whole or in part, at an exchange ratio of one Common Share per
Right (subject to adjustment).

        With certain  exceptions,  no adjustment  in the Purchase  Price will be
required until  cumulative  adjustments  require an adjustment of at least 1% in
such Purchase Price.  No fractional  Common Shares or Preferred Share Units will
be issued and in lieu  thereof,  an adjustment in cash will be made based on the
market price of the Common  Shares or Preferred  Share Units on the last trading
day prior to the date of exercise.

Adjustment of Shares

        The Purchase Price payable,  and the number of Preferred  Share Units or
other securities issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent  dilution (i) in the event of a stock  dividend on,
or a subdivision, combination or reclassification of, the Preferred Shares, (ii)
upon the grant to holders of the Preferred  Shares of certain rights or warrants
to  subscribe  for or  purchase  Preferred  Shares  at a  price,  or  securities
convertible  into Preferred Shares with a conversion  price,  less than the then
current market price of the Preferred  Shares or (iii) upon the  distribution to
holders  of  the  Preferred  Shares  of  evidences  of  indebtedness  or  assets
(excluding  regular  periodic  cash  dividends  paid out of earnings or retained
earnings or dividends payable on Preferred Shares) or of subscription  rights or
warrants (other than those referred to above).

        The Purchase Price payable,  and the number of Preferred  Share Units or
other  securities  issuable,  upon  exercise  of the Rights are also  subject to
adjustment  in the  event of a stock  split  of the  Common  Shares,  or a stock
dividend  on the  Common  Shares  payable  in Common  Shares,  or  subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.


<PAGE>

Redemption

        At any time prior to the close of  business  on the tenth  business  day
following  the  acquisition  by a person or group of  affiliated  or  associated
persons of beneficial  ownership of 15% or more of the outstanding Common Shares
or the  announcement  of a tender or exchange offer  resulting in the beneficial
ownership by a Person or group of 30% or more of the  outstanding  Common Shares
and subject to extension of the redemption period by the Board of Directors, the
Board of  Directors  of the Company  may redeem the Rights in whole,  but not in
part, at a price of $.0001 per Right (the "Redemption Price"). The redemption of
the  Rights  may be made  effective  at such  time,  on such basis and with such
conditions  as the Board of  Directors  in its sole  discretion  may  establish.
Additionally  the Company  may,  following  the time that a person has become an
Acquiring Person,  redeem the then outstanding Rights in whole, but not in part,
at the Redemption  Price provided that such redemption is (i) in connection with
a merger or other business  combination  transaction  or series of  transactions
involving  the Company in which all holders of Common  Shares are treated  alike
but not involving an Acquiring  Person or any person who was an Acquiring Person
or (ii)  following an event giving rise to, and the  expiration  of the exercise
period for, the Subscription Right if and for as long as no person  beneficially
owns securities  representing  15% or more of the Company's  outstanding  Common
Shares. Immediately upon any redemption of the Rights, the right to exercise the
Rights  will  terminate  and the only right of the  holders of Rights will be to
receive the Redemption Price.

Expiration of Rights

        The Rights will expire on June 22, 2010,  unless the expiration  date is
extended by amendment  as  described  below or unless the Rights are redeemed or
exchanged by the Company as described above.

Amendments

        As long as the  Rights  are  redeemable,  the terms of the Rights may be
amended by the Board of  Directors  of the  Company  without  the consent of the
holders of the Rights,  except that no such  amendment may adversely  affect the
interests of the holders of the Rights.

Miscellaneous

        The number of outstanding Rights and the number of Preferred Share Units
issuable  upon  exercise of each Right are subject to  adjustment  under certain
circumstances.

        Because of the nature of the Preferred Shares' dividend, liquidation and
voting  rights,  the value of a Preferred  Share Unit that may be purchased upon
exercise of each Right should approximate the value of one Common Share.

        Until a Right is exercised,  the holder  thereof,  as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.

        A copy of the Rights  Agreement has been filed with the  Securities  and
Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of the
Rights  Agreement is  available  free of charge from the Company upon request to
the Corporate Secretary of the Company.

        This summary  description  of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement,  which is
hereby incorporated herein by reference.