Orion Capital Corporation


                                       and


                     First Chicago Trust Company of New York


                                 as Rights Agent








                                Rights Agreement

                         Dated as of September 11, 1996







<PAGE>



                                TABLE OF CONTENTS
Section                                                                     Page

1.  Certain Definitions......................................................  2

2.  Appointment of Rights Agent..............................................  7

3.  Issuance of Rights Certificates..........................................  7

4.  Form of Rights Certificates.............................................. 10

5.  Countersignature and Registration........................................ 11

6.  Transfer,  Split  Up,  Combination  and  Exchange  of  Rights  Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates                      12

7.  Exercise of Rights; Purchase Price; Expiration Date of Rights             13

8.  Cancellation and Destruction of Rights Certificates                       16

9.  Reservation and Availability of Capital Stock............................ 17

10.  Preferred Stock Record Date............................................. 19

11.  Adjustment of Purchase Price, Number and Kind of Shares or 
Number of Rights 

12.  Certificate of Adjusted Purchase Price or Number of Shares............ 32

13.  Consolidation, Merger or Sale or Transfer of Assets or Earning Power     32

14.  Fractional Rights and Fractional Shares................................. 36

15.  Rights of Action........................................................ 38

16.  Agreement of Rights Holders............................................. 38

17.  Rights Certificate Holder Not Deemed a Stockholder                       39

18.  Concerning the Rights Agent............................................. 40

19.  Merger or Consolidation or Change of Name of Rights Agent................40

20.  Duties of Rights Agent.................................................. 41

21.  Change of Rights Agent.................................................. 44

22.  Issuance of New Rights Certificates..................................... 45

23.  Redemption and Termination.............................................. 46

24.  Exchange................................................................ 47

25.  Notice of Certain Events................................................ 49

26.  Notices................................................................. 50

27.  Supplements and Amendments.............................................. 51

28.  Successors.............................................................. 52

29.  Determinations and Actions by the Board, etc............................ 52

30.  Benefits of this Agreement.............................................. 52

31.  Severability............................................................ 52

32.  Governing Law........................................................... 53

33.  Counterparts............................................................ 53

34.  Descriptive Headings.................................................... 53





<PAGE>



                                    EXHIBITS

Exhibit A --          Form of Certificate of Designation

Exhibit B --          Form of Rights Certificate

Exhibit C --          Form of Summary of Rights





<PAGE>


                                RIGHTS AGREEMENT


                  RIGHTS  AGREEMENT,  dated  as  of  September  11,  1996  (this
"Agreement"),  between Orion Capital  Corporation,  a Delaware  corporation (the
"Company"),  and First  Chicago  Trust  Company  of New York,  a New York  trust
company, as Rights Agent (the "Rights Agent").

                               W I T N E S S E T H

                  WHEREAS,   on  March  15,  1989  (the  "1989  Rights  Dividend
Declaration  Date"),  the  Board  of  Directors  of the  Company  (the  "Board")
authorized the Rights Agreement, dated as of March 15, 1989, between the Company
and  Manufacturers  Hanover Trust Company (the "1989  Agreement") and declared a
dividend  distribution  of one right (a "1989  Right")  for each share of common
stock,  par  value  $1.00  per  share,  of  the  Company  (the  "Common  Stock")
outstanding at the close of business on March 27, 1989 (the "1989 Record Date").
Each 1989 Right represents the right to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock of the Company;

                  WHEREAS,  on  September  11,  1996  the  Board  determined  it
desirable and in the best interests of the Company and its  stockholders for the
Company to redeem the 1989 Rights upon the close of  business on  September  16,
1996 and adopt a new rights plan which would provide  benefits  similar to those
afforded by the 1989 Agreement;

                  WHEREAS,   on  September   11,  1996  (the  "Rights   Dividend
Declaration Date"), the Board authorized and declared a dividend distribution of
one Right (as  hereinafter  defined) for each share of Common Stock  outstanding
upon the close of business on September  16, 1996 (the "Record  Date"),  and has
authorized the issuance of one Right (as such number may hereinafter be adjusted
pursuant to the  provisions  of Section  11(p)  hereof) for each share of Common
Stock issued  between the Record Date  (whether  originally  issued or delivered
from the Company's treasury) and the Distribution Date (as hereinafter defined),
each Right initially  representing the right to purchase one  two-hundredth of a
share of Series B Junior  Participating  Preferred Stock (the "Preferred Stock")
having the rights,  powers and  preferences set forth in the form of Certificate
of Designation, Preferences and Rights of the Company attached hereto as Exhibit
A, upon the terms and  subject  to the  conditions  hereinafter  set forth  (the
"Rights");

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

     1. Certain Definitions. For purposes of this Agreement, the following terms
have the meanings indicated: -------------------

     (a)  "Acquiring  Person" shall mean any Person who or which,  together with
all Affiliates and Associates of such Person,  shall be the Beneficial  Owner of
fifteen  percent  (15%) or more of the shares of Common Stock then  outstanding,
but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii)
any employee  benefit plan of the Company or of any  Subsidiary  of the Company,
(iv) any Person or entity organized, appointed or established by the Company for
or  ----------------  pursuant to the terms of any such plan, (v) any Person who
becomes the Beneficial  Owner of fifteen  percent (15%) or more of the shares of
Common Stock then outstanding as a result of a reduction in the number of shares
of Common Stock  outstanding  due to the repurchase of shares of Common Stock by
the Company unless and until such Person,  after becoming aware that such Person
has become the  Beneficial  Owner of fifteen  percent  (15%) or more of the then
outstanding shares of Common Stock,  acquires beneficial ownership of additional
shares of Common  Stock  representing  one percent (1%) or more of the shares of
Common  Stock then  outstanding  or (vi) any such Person who has  reported or is
required to report such  ownership (but less than 20%) on Schedule 13G under the
Exchange Act (or any  comparable  or successor  report) or on Schedule 13D under
the Exchange Act (or any comparable or successor report) which Schedule 13D does
not state any  intention  to or reserve  the right to control or  influence  the
management or policies of the Company or engage in any of the actions  specified
in Item 4 of such Schedule (other than the disposition of the Common Stock) and,
within 10 Business Days of being requested by the Company to advise it regarding
the same,  certifies to the Company that such Person  acquired  shares of Common
Stock in excess of 14.9%  inadvertently or without knowledge of the terms of the
Rights and who, together with all Affiliates and Associates, thereafter does not
acquire  additional  shares of Common Stock while the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding;  provided, however, that if
the Person  requested to so certify fails to do so within 10 Business Days, then
such Person shall become an Acquiring Person  immediately after such 10 Business
Day Period.


     (b) "Act" shall mean the Securities Act of 1933.

     (c) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such  terms in Rule  12b-2 of the  General  Rules and  Regulations  under the
Securities  Exchange  Act of 1934,  as amended and in effect on the date of this
Agreement (the "Exchange Act"). --------- ---------

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

     (i) which such Person or any of such  Person's  Affiliates  or  Associates,
directly  or  indirectly,  has the  right  to  acquire  (whether  such  right is
exercisable  immediately  or only  after the  passage of time)  pursuant  to any
agreement,  arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights,  exchange rights, rights, warrants or options, or
otherwise;  provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to  "beneficially  own," (A)  securities  tendered  pursuant  to a
tender or exchange offer made by such Person or any of such Person's  Affiliates
or  Associates  until such  tendered  securities  are  accepted  for purchase or
exchange,  (B) securities  issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event or (C) securities issuable upon exercise of
Rights from and after the  occurrence  of a  Triggering  Event which Rights were
acquired by such Person or any of such Person's  Affiliates or Associates  prior
to the  Distribution  Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original  Rights") or pursuant to Section  11(i) hereof in  connection  with an
adjustment made with respect to any Original Rights;

     (ii) which such Person or any of such Person's  Affiliates  or  Associates,
directly or indirectly,  has the right to vote or dispose of or has  "beneficial
ownership"  of (as  determined  pursuant to Rule 13d-3 of the General  Rules and
Regulations  under the  Exchange  Act),  including  pursuant  to any  agreement,
arrangement or understanding, whether or not in writing; provided, however, that
a Person  shall not be deemed the  "Beneficial  Owner"  of, or to  "beneficially
own," any security  under this  subparagraph  (ii) as a result of an  agreement,
arrangement  or   understanding   to  vote  such  security  if  such  agreement,
arrangement or understanding:  (A) arises solely from a revocable proxy given in
response to a public  proxy or consent  solicitation  made  pursuant  to, and in
accordance with, the applicable  provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or

     (iii) which are beneficially  owned,  directly or indirectly,  by any other
Person (or any Affiliate or Associate thereof) with which such Person (or any of
such Person's  Affiliates  or  Associates)  has any  agreement,  arrangement  or
understanding  (whether  or not in  writing),  for  the  purpose  of  acquiring,
holding,  voting  (except  pursuant to a  revocable  proxy as  described  in the
proviso to  subparagraph  (ii) of this paragraph (d)) or disposing of any voting
securities of the Company;

provided,  however,  that  nothing in this  paragraph  (d) shall  cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to  "beneficially  own," any  securities  acquired  through such Person's
participation  in  good  faith  in a  firm  commitment  underwriting  until  the
expiration of forty (40) days after the date of such acquisition.

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

     (f) "Close of  business"  on any given date shall mean 5:00 P.M.,  New York
time, on such date; provided,  however,  that if such date is not a Business Day
it shall mean 5:00 P.M.,  New York time,  on the next  succeeding  Business Day.
----------------- -------- -------

     (g) "Common  Stock"  shall have the meaning set forth in the first  WHEREAS
clause at the beginning of this Agreement,  except that "Common Stock" when used
with reference to any Person other than the Company shall mean the capital stock
of such Person with the greatest voting power, or the equity securities or other
equity  interest  having  power to  control or direct  the  management,  of such
Person. ------------

     (h) "Common Stock  Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof. ------------------------

     (i)  "Current  Market  Price"  shall have the  meaning set forth in Section
11(d)(i) hereof. --------------------

     (j) "Current Value" shall have the meaning set forth in Section  11(a)(iii)
hereof. -------------

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

     (l) "Exchange Act" shall have the meaning set forth in Section 1(c) hereof.

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

     (n) "Final  Expiration  Date" shall mean the close of business on September
11, 2006.

     (o) "Person" shall mean any individual,  firm, corporation,  partnership or
other entity.

     (p)  "Preferred  Stock" shall mean shares of Series B Junior  Participating
Preferred  Stock,  par value $1.00 per share,  of the Company and, to the extent
that  there  are  not  a  sufficient   number  of  shares  of  Series  B  Junior
Participating  Preferred  Stock  authorized  to permit the full  exercise of the
Rights,  any other series of preferred stock of the Company  designated for such
purpose  containing  terms  substantially  similar  to the terms of the Series B
Junior Participating Pre --------------- ferred Stock.

     (q)  "Principal  Party"  shall have the meaning set forth in Section  13(b)
hereof. ---------------

     (r)  "Purchase  Price"  shall have the  meaning  set forth in Section  4(a)
hereof.

     (s) "Record  Date"  shall have the  meaning set forth in the third  WHEREAS
clause at the beginning of this Agreement. -----------

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

     (u) "Rights"  shall have the meaning set forth in the third WHEREAS  clause
at the beginning of the Agreement. ------

     (v) "Rights  Agent" shall have the meaning set forth in the parties  clause
at the beginning of this Agreement. ------------

     (w) "Rights  Certificates" shall have the meaning set forth in Section 3(a)
hereof.

     (x) "Rights Dividend  Declaration Date" shall have the meaning set forth in
the   third   WHEREAS    clause   at   the   beginning   of   this    Agreement.
--------------------------------

     (y) "Section  11(a)(ii)  Event"  shall mean any event  described in Section
11(a)(ii) hereof. -----------------------

     (z) "Section  11(a)(ii)  Trigger  Date" shall have the meaning set forth in
Section 11(a)(iii) hereof. ------------------------------

     (aa) "Section 13 Event" shall mean any event described in clauses (x), (y),
or (z) of Section 13(a) hereof. ----------------

     (bb)  "Spread"  shall  have the  meaning  set forth in  Section  11(a)(iii)
hereof.

     (cc)  "Stock  Acquisition  Date"  shall  mean  the  first  date  of  public
announcement  (which,  for purposes of this definition,  shall include,  without
limitation,  a report  filed or  amended  pursuant  to Section  13(d)  under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such. ----------------------

     (dd) "Subsidiary" shall mean, with reference to any Person, any corporation
of which an amount of voting securities  sufficient to elect at least a majority
of the  directors  of  such  corporation  is  beneficially  owned,  directly  or
indirectly, by such Person, or otherwise controlled by such Person. ----------

     (ee)  "Substitution  Period"  shall have the  meaning  set forth in Section
11(a)(iii) hereof.

     (ff)  "Summary of Rights"  shall have the meaning set forth in Section 3(b)
hereof.

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

     (hh)  "Triggering  Event"  shall mean any  Section  11(a)(ii)  Event or any
Section 13 Event. ----------------

     2.  Appointment  of Rights Agent.  The Company  hereby  appoints the Rights
Agent  to act as  agent  for the  Company  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.  3.  Issuance  of Rights  Certificates.  (a) Until the
earlier  of (i)  the  close  of  business  on the  tenth  day  after  the  Stock
Acquisition  Date (or, if the tenth day after the Stock  Acquisition Date occurs
before the Record  Date,  the close of business on the Record  Date) or (ii) the
close of  business  on the tenth  Business  Day (or such later date as the Board
shall  determine)  after the date that a tender or exchange  offer by any Person
(other than the Company,  any Subsidiary of the Company, or any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized,  appointed or established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the General  Rules and  Regulations  under the Exchange Act, if upon
consummation  thereof,  such  Person  would be the  Beneficial  Owner of fifteen
percent  (15%) or more of the  shares  of Common  Stock  then  outstanding  (the
earlier of (i) and (ii) being herein  referred to as the  "Distribution  Date"),
(x) the Rights will be evidenced  (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for the Common Stock registered in the names
of the holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate  certificates and
(y) the Rights will be transferable  only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company). As soon
as  practicable  after the  Distribution  Date,  the  Rights  Agent will send by
first-class,  insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the  Distribution  Date,  at the address of
such holder shown on the records of the Company, one or more right certificates,
in  substantially  the form of  Exhibit B hereto  (the  "Rights  Certificates"),
evidencing  one  Right  for each  share of  Common  Stock  so held,  subject  to
adjustment as provided herein.  In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p) hereof,
at the time of  distribution of the Right  Certificates,  the Company shall make
the necessary and appropriate  rounding  adjustments (in accordance with Section
14(a)  hereof) so that Rights  Certificates  representing  only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional  Rights. As of
and after the  Distribution  Date,  the Rights will be evidenced  solely by such
Rights Certificates.

     (b) The  Company  will make  available  a copy of a Summary of  Rights,  in
substantially  the form attached  hereto as Exhibit C (the "Summary of Rights"),
to any holder of Rights who may so request  from time to time.  With  respect to
certificates  for the Common  Stock  outstanding  as of the Record Date or which
were issued  subsequent  to the Record Date,  unless and until the  Distribution
Date shall  occur,  the Rights will be evidenced  by such  certificates  for the
Common  Stock and the  registered  holders of the Common Stock shall also be the
registered  holders  of  the  associated  Rights.   Until  the  earlier  of  the
Distribution Date or the Expiration Date (as hereinafter defined),  the transfer
of any  certificates  representing  shares of Common  Stock in  respect of which
Rights  have been  issued  shall  also  constitute  the  transfer  of the Rights
associated with such shares of Common Stock.

     (c) Rights  shall be issued in respect of all shares of Common  Stock which
are issued (whether  originally issued or from the Company's treasury) after the
Record Date but prior to the earlier of the Distribution  Date or the Expiration
Date. Certificates representing such shares of Common Stock shall also be deemed
to be  certificates  for  Rights,  and shall bear the  following  legend (or the
legend required under the 1989 Agreement):

     This  certificate  also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights  Agreement  between Orion Capital  Corporation
(the "Company") 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 offices of the Company. 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.  The Company
will mail to the holder of this certificate a copy of the Rights  Agreement,  as
in effect on the date of mailing,  without  charge,  promptly after receipt of a
written request  therefor.  Under certain  circumstances set forth in the Rights
Agreement,  Rights  issued  to, or held by, any Person who is, was or becomes an
Acquiring  Person or any  Affiliate  or  Associate  thereof  (as such  terms are
defined in the Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.

With respect to such certificates containing the foregoing legend (or the legend
required under the 1989  Agreement),  until the earlier of (i) the  Distribution
Date or (ii) the Expiration  Date, the Rights  associated  with the Common Stock
represented by such certificates  shall be evidenced by such certificates  alone
and registered  holders of Common Stock shall also be the registered  holders of
the associated  Rights,  and the transfer of any of such certificates shall also
constitute  the  transfer  of  the  Rights  associated  with  the  Common  Stock
represented by such certificates.

4. Form of Rights Certificates.

     (a) The Rights  Certificates  (and the forms of election to purchase and of
assignment to be printed on the reverse  thereof) shall each be substantially in
the form set forth in Exhibit B hereto and may have such marks of identification
or designation and such legends,  summaries or  endorsements  printed thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this  Agreement,  or as may be required to comply with any  applicable law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates,  whenever distributed,  shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase such number
of one  two-hundredths  of a share of  Preferred  Stock  as  shall be set  forth
therein  at  the  price  set  forth  therein  (such   exercise   price  per  one
two-hundredth  of a share,  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.

     (b) Any Rights  Certificate  issued pursuant to Section 3(a), Section 11(i)
or  Section  22 hereof  that  represents  Rights  beneficially  owned by: (i) an
Acquiring  Person or any Associate or Affiliate of an Acquiring  Person,  (ii) a
transferee of an Acquiring  Person (or of any such  Associate or Affiliate)  who
becomes  a  transferee  after  the  Acquiring  Person  becomes  such or  (iii) a
transferee of an Acquiring  Person (or of any such  Associate or Affiliate)  who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer  (whether or not
for  consideration)  from the Acquiring Person to holders of equity interests in
such Acquiring  Person or to any Person with whom such Acquiring  Person has any
continuing  agreement,  arrangement or  understanding  regarding the transferred
Rights or (B) a  transfer  which the  Board  has  determined  is part of a plan,
arrangement or understanding  which has as a primary purpose or effect avoidance
of Section 7(e) hereof,  and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer,  exchange,  replacement or adjustment of any
other Rights  Certificate  referred to in this  sentence,  shall contain (to the
extent feasible) the following legend:

         The  Rights   represented  by  this  Rights  Certificate  are  or  were
beneficially  owned by a Person  who was or  became  an  Acquiring  Person or an
Affiliate or Associate of an Acquiring  Person (as such terms are defined in the
Rights  Agreement).   Accordingly,   this  Rights  Certificate  and  the  Rights
represented  hereby may become null and void in the  circumstances  specified in
Section 7(e) of the Rights Agreement.

5. Countersignature and Registration.

     (a) The Rights  Certificates  shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President,  either manually
or by facsimile signature,  and shall have affixed thereto the Company's seal or
a facsimile  thereof  which shall be attested by the  Secretary  or an Assistant
Secretary  or the  Treasurer or an  Assistant  Treasurer of the Company,  either
manually or by facsimile  signature.  The Rights  Certificates shall be manually
countersigned  by the Rights Agent and shall not be valid for any purpose unless
so  countersigned.  In case any officer of the Company who shall have signed any
of the Rights  Certificates shall cease to be such officer of the Company before
countersignature  by the Rights  Agent and issuance and delivery by the Company,
such Rights 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 Rights Certificates had not ceased to be such officer
of the  Company;  and any  Rights  Certificates  may be  signed on behalf of the
Company by any person who, at the actual  date of the  execution  of such Rights
Certificate,  shall be a proper  officer  of the  Company  to sign  such  Rights
Certificate,  although at the date of the execution of this Rights Agreement any
such person was not such an officer.

     (b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices  designated as the appropriate place
for  surrender  of Rights  Certificates  upon  exercise or  transfer,  books for
registration  and transfer of the Rights  Certificates  issued  hereunder.  Such
books shall show the names and addresses of the respective holders of the Rights
Certificates,  the number of Rights  evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.



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

     (a) Subject to the provisions of Section 4(b),  Section 7(e) and 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 Expiration Date, any Rights Certificate
or  Certificates  (other than Rights  Certificates  that may have been exchanged
pursuant to Section 24) may be transferred,  split up, combined or exchanged for
another Rights  Certificate or Certificates,  entitling the registered holder to
purchase a like number of one  two-hundredths of a share of Preferred Stock (or,
following a Triggering  Event,  Common Stock,  other  securities,  cash or other
assets,  as  the  case  may  be)  as  the  Rights  Certificate  or  Certificates
surrendered  then  entitles  such  holder  (or  former  holder  in the case of a
transfer) to purchase.  Any registered  holder  desiring to transfer,  split up,
combine or  exchange  any Rights  Certificate  or  Certificates  shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates  to be transferred,  split up, combined or exchanged
at the  principal  office or  offices of the Rights  Agent  designated  for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action  whatsoever with respect to the transfer of any such  surrendered  Rights
Certificate  until the  registered  holder shall have  completed  and signed the
certificate  contained  in the form of  assignment  on the reverse  side of such
Rights  Certificate  and shall have  provided  such  additional  evidence of the
identity of the Beneficial Owner (or former  Beneficial  Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent  shall,  subject  to Section  4(b),  Section  7(e) and  Section 14 hereof,
countersign and deliver to the Person entitled  thereto a Rights  Certificate or
Rights  Certificates,  as the case may be,  as so  requested.  The  Company  may
require payment of a sum sufficient to cover any tax or governmental charge that
may be  imposed  in  connection  with any  transfer,  split up,  combination  or
exchange of Rights Certificates.

     (b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss,  theft,  destruction or mutilation of a Rights
Certificate,  and,  in case of  loss,  theft or  destruction,  of  indemnity  or
security  reasonably  satisfactory to them, and 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 Rights  Certificate  if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for  countersignature  and delivery to the  registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.

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

     (a) Subject to Section 7(e)  hereof,  the  registered  holder of any Rights
Certificate  may  exercise  the Rights  evidenced  thereby  (except as otherwise
provided   herein   including,   without   limitation,   the   restrictions   on
exercisability  set forth in Section 9(c),  Section 11(a)(iii) and Section 23(a)
hereof)  in  whole or in part at any  time  after  the  Distribution  Date  upon
surrender of the Rights  Certificate,  with the form of election to purchase and
the  certificate on the reverse side thereof duly executed,  to the Rights Agent
at the  principal  office or  offices of the Rights  Agent  designated  for such
purpose,  together with payment of the aggregate  Purchase Price with respect to
the total number of one two-hundredths of a share (or other securities,  cash or
other assets,  as the case may be) as to which such surrendered  Rights are then
exercisable,  at or  prior  to the  earlier  of (i) the  close  of  business  on
September 11, 2006 (the "Final Expiration  Date"), or (ii) the time at which the
Rights are  redeemed or  exchanged as provided in Sections 23 and 24 hereof (the
earlier of (i) and (ii) being herein referred to as the "Expiration Date").

     (b) The Purchase Price for each one  two-hundredth  of a share of Preferred
Stock pursuant to the exercise of a Right shall  initially be $200, and shall be
subject to  adjustment  from time to time as  provided in Section 11 and Section
13(a) hereof and shall be payable in accordance with paragraph (c) below.

     (c) Upon receipt of a Rights Certificate  representing  exercisable Rights,
with the  form of  election  to  purchase  and the  certificate  duly  executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one  two-hundredths  of a share of Preferred  Stock (or other  shares,
securities,  cash or other  assets,  as the case may be) to be  purchased as set
forth below and an amount equal to any applicable transfer tax, the Rights Agent
shall,  subject to Section 20(k) hereof,  thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available,  if
the Rights Agent is the transfer  agent for such  shares)  certificates  for the
total number of one two-hundredths of a share of Preferred Stock to be purchased
and the Company hereby irrevocably  authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to deposit the total
number of  shares of  Preferred  Stock  issuable  upon  exercise  of the  Rights
hereunder  with a  depositary  agent,  requisition  from  the  depositary  agent
depositary receipts representing such number of one two-hundredths of a share of
Preferred  Stock as are to be  purchased  (in which  case  certificates  for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer  agent with the  depositary  agent)  and the  Company  will  direct the
depositary agent to comply with such request,  (ii) requisition from the Company
the  amount  of  cash,  if any,  to be paid in  lieu  of  fractional  shares  in
accordance with Section 14 hereof,  (iii) 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 Rights  Certificate,  registered in such name or names
as may be designated by such holder,  and (iv) after  receipt  thereof,  deliver
such cash, if any, to or upon the order of the registered  holder of such Rights
Certificate.  The payment of the  Purchase  Price (as such amount may be reduced
pursuant to Section  11(a)(iii)  hereof)  shall be made in cash or by  certified
bank check or bank draft payable to the order of the Company.  In the event that
the Company is obligated to issue other securities  (including  Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof,  the Company  will make all  arrangements  necessary  so that such other
securities,  cash and/or other  property are available for  distribution  by the
Rights Agent, if and when appropriate. The Company reserves the right to require
prior to the occurrence of a Triggering Event that, upon any exercise of Rights,
a number of Rights be exercised  so that only whole  shares of  Preferred  Stock
would be issued.

     (d) In case the registered holder of any Rights  Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate  evidencing
Rights  equivalent to the Rights  remaining  unexercised  shall be issued by the
Rights Agent and  delivered to, or upon the order of, the  registered  holder of
such Rights  Certificate,  registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.

     (e)  Notwithstanding  anything in this Agreement to the contrary,  from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an  Acquiring  Person or an  Associate or Affiliate of an Acquiring
Person,  (ii) a transferee of an Acquiring  Person (or of any such  Associate or
Affiliate) who becomes a transferee  after the Acquiring Person becomes such, or
(iii)  a  transferee  of an  Acquiring  Person  (or of  any  such  Associate  or
Affiliate) who becomes a transferee prior to or concurrently  with the Acquiring
Person  becoming such and receives such Rights pursuant to either (A) a transfer
(whether  or not for  consideration)  from the  Acquiring  Person to  holders of
equity  interests  in such  Acquiring  Person  or to any  Person  with  whom the
Acquiring  Person has any continuing  agreement,  arrangement  or  understanding
regarding  the  transferred  Rights  or  (B) a  transfer  which  the  Board  has
determined  is part of a  plan,  arrangement  or  understanding  which  has as a
primary purpose or effect the avoidance of this Section 7(e),  shall become null
and void without any further  action and no holder of such Rights shall have any
rights  whatsoever  with respect to such Rights,  whether under any provision of
this  Agreement or otherwise.  The Company shall use all  reasonable  efforts to
insure that the  provisions  of this  Section  7(e) and Section  4(b) hereof are
complied with, but shall have no liability to any holder of Rights  Certificates
or other  Person  as a result of its  failure  to make any  determinations  with
respect to an Acquiring  Person or its  Affiliates,  Associates  or  transferees
hereunder.

     (f) 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 (i)
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 (ii) provided such additional evidence of the identity of the
Beneficial  Owner (or  former  Beneficial  Owner) or  Affiliates  or  Associates
thereof as the Company shall reasonably request.

8. Cancellation and Destruction of Rights. All Rights  Certificates  surrendered
for the purpose of exercise,  transfer, split up, combination or exchange shall,
if surrendered  to the Company or 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 Rights  Certificates shall be issued in
lieu thereof  except as expressly  permitted  by any of the  provisions  of this
Agreement.  The Company shall deliver to the Rights Agent for  cancellation  and
retirement,  and the Rights  Agent shall so cancel and retire,  any other Rights
Certificate  purchased  or  acquired  by the  Company  otherwise  than  upon the
exercise   thereof.   The  Rights  Agent  shall  deliver  all  cancelled  Rights
Certificates  to the Company,  or shall,  at the written request of the Company,
destroy such  cancelled  Rights  Certificates,  and in such case shall deliver a
certificate of destruction thereof to the Company.

9. Reservation and Availability of Capital Stock.

     (a) The Company  covenants and agrees that it will cause to be reserved and
kept  available out of its  authorized  and unissued  shares of Preferred  Stock
(and,  following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and,  following the occurrence of a Triggering Event, Common Stock and/or other
securities)  that, as provided in this Agreement  including  Section  11(a)(iii)
hereof,  will be  sufficient  to permit the exercise in full of all  outstanding
Rights.

     (b) So long as the shares of Preferred Stock (and, following the occurrence
of a  Triggering  Event,  Common Stock  and/or  other  securities)  issuable and
deliverable  upon the  exercise  of the  Rights  may be listed  on any  national
securities  exchange,  the Company shall use its best efforts to cause, from and
after such time as the Rights become  exercisable,  all shares reserved for such
issuance to be listed on such  exchange  upon  official  notice of issuance upon
such exercise.

     (c) The  Company  shall  use  its  best  efforts  to (i)  file,  as soon as
practicable  following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the  consideration  to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof,  a registration  statement under the Act, with respect to the securities
purchasable upon exercise of the Rights on an appropriate  form, (ii) cause such
regis tration  statement to become  effective as soon as practicable  after such
filing and (iii) cause such  registration  statement to remain effective (with a
prospectus at all times meeting the  requirements  of the Act) until the earlier
of (A) the  date as of which  the  Rights  are no  longer  exercisable  for such
securities  and (B) the date of the  expiration of the Rights.  The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various  states in connection  with the
exercisability of the Rights. The Company may temporarily  suspend, for a period
of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first  sentence of this Section 9(c),  the  exercisability  of the Rights in
order to prepare and file such  registration  statement  and permit it to become
effective.  Upon  any  such  suspension,   the  Company  shall  issue  a  public
announcement  stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer  in  effect.  In  addition,   if  the  Company  shall  determine  that  a
registration  statement is required following the Distribution Date, the Company
may temporarily  suspend the  exercisability  of the Rights until such time as a
registration   statement  has  been  declared  effective.   Notwithstanding  any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite  qualification in such jurisdiction has not
been obtained,  the exercise  thereof is not permitted under applicable law or a
registration statement has not been declared effective.

     (d) The Company  covenants  and agrees that it will take all such action as
may be necessary to ensure that all one  two-hundredths  of a share of Preferred
Stock (and,  following the occurrence of a Triggering Event, Common Stock and/or
other  securities)  delivered  upon  exercise  of Rights  shall,  at the time of
delivery of the certificates for such shares (subject to payment of the Purchase
Price),  be  duly  and  validly   authorized  and  issued  and  fully  paid  and
nonassessable.

     (e) 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 Rights Certificates and of
any  certificates  for a number of one  two-hundredths  of a share of  Preferred
Stock (or Common  Stock 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
Rights  Certificates  to a Person  other than,  or the issuance or delivery of a
number of one  two-hundredths  of a share of  Preferred  Stock (or Common  Stock
and/or  other  securities,  as the case may be) in  respect of a name other than
that of, the  registered  holder of the Rights  Certificates  evidencing  Rights
surrendered for exercise or to issue or deliver any certificates for a number of
one  two-hundredths  of a share of Preferred Stock (or Common Stock and/or other
securities,  as the case may be) in a name  other  than  that of the  registered
holder upon the  exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights  Certificate  at the time of
surrender) or until it has been established to the Company's  satisfaction  that
no such tax is due.

10. Preferred Stock Record Date. Each person in whose name any certificate for a
number of one  two-hundredths  of a share of  Preferred  Stock (or Common  Stock
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
such  fractional  shares  of  Preferred  Stock (or  Common  Stock  and/or  other
securities,  as the case may be)  represented  thereby on, and such  certificate
shall be dated the date upon which the Rights Certificate evidencing such Rights
was duly  surrendered  and  payment of the  Purchase  Price (and all  applicable
transfer taxes) was made; provided,  however, that if the date of such surrender
and payment is a date upon which the  Preferred  Stock (or Common  Stock  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  shares
(fractional  or otherwise)  on, and such  certificate  shall be dated,  the next
succeeding  Business  Day on which the  Preferred  Stock (or Common Stock 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 Rights
Certificate  shall not be entitled to any rights of a stockholder of the Company
with  respect to shares for which the Rights  shall be  exercisable,  including,
without   limitation,   the  right  to  vote,  to  receive  dividends  or  other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.

11. Adjustment of Purchase Price, Number and Kind 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.

     (a) (i) In the event the  Company  shall at any time after the date of this
Agreement  (A) declare a dividend on the  Preferred  Stock  payable in shares of
Preferred Stock, (B) subdivide the outstanding  Preferred Stock, (C) combine the
outstanding  Preferred  Stock  into a smaller  number of shares or (D) issue any
shares  of its  capital  stock  in a  reclassification  of the  Preferred  Stock
(including  any such  reclassification  in connection  with a  consolidation  or
merger in which the Company is the continuing or surviving corporation),  except
as  otherwise  provided in this  Section  11(a) and  Section  7(e)  hereof,  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 Preferred  Stock or capital stock,  as the case may
be, issuable on such date, shall be proportionately  adjusted so that the holder
of any Right  exercised  after  such time shall be  entitled  to  receive,  upon
payment of the Purchase Price then in effect,  the aggregate  number and kind of
shares of Preferred  Stock or capital stock,  as the case may be, which, if such
Right had been exercised  immediately  prior to such date and at a time when the
Preferred  Stock 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. If an event occurs which
would  require  an  adjustment  under both this  Section  11(a)(i)  and  Section
11(a)(ii) hereof, the adjustment  provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment  required pursuant to
Section 11(a)(ii) hereof.

     (ii) In the event any Person,  alone or together  with its  Affiliates  and
Associates,  shall,  at any time after the  Rights  Dividend  Declaration  Date,
become an Acquiring  Person,  unless the event  causing such Person to become an
Acquiring  Person is a transaction  set forth in Section 13(a) hereof,  or is an
acquisition  of shares of Common Stock pursuant to a tender offer or an exchange
offer  for all  outstanding  shares  of  Common  Stock  at a price  and on terms
determined  by at least a  majority  of the  members  of the  Board  who are not
officers of the Company and who are not representatives, nominees, Affiliates or
Associates  of an  Acquiring  Person,  after  receiving  advice from one or more
investment  banking firms,  to be (a) at a price that is not inadequate  (taking
into account all factors that such members of the Board deem relevant including,
without  limitation,  prices that could reasonably be achieved if the Company or
its assets were sold on an orderly basis designed to realize  maximum value) and
(b) otherwise in the best interests of the Company and its  stockholders,  then,
promptly following the occurrence of such event,  proper provision shall be made
so that each  holder of a Right  (except as provided  below and in Section  7(e)
hereof) shall thereafter have the right to receive, upon exercise thereof at the
then current  Purchase Price in accordance with the terms of this Agreement,  in
lieu of a number  of one  two-hundredths  of a share of  Preferred  Stock,  such
number of  shares  of Common  Stock of the  Company  as shall  equal the  result
obtained by (x) multiplying  the then current  Purchase Price by the then number
of one  two-hundredths  of a share of  Preferred  Stock  for  which a Right  was
exercisable  immediately  prior to the first  occurrence of a Section  11(a)(ii)
Event,  and (y) dividing that product (which,  following such first  occurrence,
shall  thereafter be referred to as the "Purchase  Price" for each Right and for
all purposes of this  Agreement) by fifty  percent  (50%) of the Current  Market
Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on
the date of such  first  occurrence  (such  number of  shares,  the  "Adjustment
Shares").

     (iii) In the event  that the  number of  shares  of Common  Stock  that are
authorized  by the  Company's  Restated  Certificate  of  Incorporation  but not
outstanding  or reserved for issuance for purposes  other than upon  exercise of
the Rights are not  sufficient  to permit the  exercise in full of the Rights in
accordance  with the  foregoing  subparagraph  (ii) of this Section  11(a),  the
Company shall (A) determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the  "Current  Value"),  and (B) with respect to each Right
(subject to Section 7(e) hereof),  make adequate provision to substitute for the
Adjustment  Shares,  upon the exercise of a Right and payment of the  applicable
Purchase  Price,  (1) cash,  (2) a reduction in the Purchase  Price,  (3) Common
Stock or other equity securities of the Company (including,  without limitation,
shares,  or units of shares,  of preferred  stock,  such as the Preferred Stock,
which the Board has deemed to have essentially the same value or economic rights
as shares of Common Stock (such shares of preferred  stock being  referred to as
"Common Stock  Equivalents")),  (4) debt  securities  of the Company,  (5) other
assets or (6) any combination of the foregoing,  having an aggregate value equal
to the Current Value (less the amount of any  reduction in the Purchase  Price),
where  such  aggregate  value has been  determined  by the Board  based upon the
advice of a nationally recognized investment banking firm selected by the Board;
provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section  11(a)(ii) Event and (y) the date
on which the  Company's  right of  redemption  pursuant to Section 23(a) expires
(the later of (x) and (y) being  referred  to herein as the  "Section  11(a)(ii)
Trigger  Date"),  then the  Company  shall be  obligated  to  deliver,  upon the
surrender for exercise of a Right and without  requiring payment of the Purchase
Price,  shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread.  For
purposes of the preceding  sentence,  the term "Spread" shall mean the excess of
(i) the Current Value over (ii) the Purchase Price.  If the Board  determines in
good faith that it is likely that sufficient  additional  shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section  11(a)(ii)  Trigger  Date, in order
that the Company may seek  stockholder  approval for the  authorization  of such
additional shares (such thirty (30) day period, as it may be extended, is herein
called the  "Substitution  Period").  To the extent  that  action is to be taken
pursuant to the first and/or third  sentences  of this Section  11(a)(iii),  the
Company (1) shall  provide,  subject to Section  7(e)  hereof,  that such action
shall  apply  uniformly  to all  outstanding  Rights  and  (2) may  suspend  the
exercisability of the Rights until the expiration of the Substitution  Period in
order to seek such  stockholder  approval for such  authorization  of additional
shares and/or to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value  thereof.  In the event of any
such suspension,  the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this  Section  11(a)(iii),  the value of each  Adjustment  Share shall be the
current  market  price per share of the Common  Stock on the  Section  11(a)(ii)
Trigger Date and the per share or per unit value of any Common Stock  Equivalent
shall be deemed to equal the current  market price per share of the Common Stock
on such date.

     (b) In case the Company shall fix a record date for the issuance of rights,
options  or  warrants  to all  holders  of  Preferred  Stock  entitling  them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date)  Preferred Stock (or shares having the same rights,
privileges  and  preferences  as the  shares  of  Preferred  Stock  ("Equivalent
Preferred Stock")) or securities  convertible into Preferred Stock or Equivalent
Preferred  Stock  at a price  per  share  of  Preferred  Stock  or per  share of
Equivalent  Preferred  Stock  (or  having a  conversion  price per  share,  if a
security  convertible  into Preferred Stock or Equivalent  Preferred Stock) less
than the Current Market Price (as  determined  pursuant to Section 11(d) hereof)
per share of Preferred  Stock 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 fra  tion,  the
numerator of which shall be the number of shares of Preferred Stock  outstanding
on such  record  date,  plus the  number of shares of  Preferred  Stock that the
aggregate offering price of the total number of shares of Preferred Stock and/or
Equivalent  Preferred  Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of
additional  shares of Preferred  Stock and/or  Equivalent  Preferred Stock 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 by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration  shall be as determined in good faith
by the Board, whose  determination  shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights.  Shares  of  Preferred  Stock  owned by or held for the  account  of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights or warrants  are not so issued,  the  Purchase
Price shall be adjusted to be the Purchase Price that would then be in effect if
such record date had not been fixed.

     (c) In case the Company shall fix a record date for a  distribution  to all
holders of Preferred Stock (including any such  distribution  made in connection
with  a  consolidation  or  merger  in  which  the  Company  is  the  continuing
corporation) of evidences of indebtedness,  cash (other than a regular quarterly
cash dividend out of the earnings or retained  earnings of the Company),  assets
(other than a dividend  payable in Preferred  Stock,  but including any dividend
payable in stock other than Preferred Stock) 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 Current Market Price (as determined  pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the cash,  assets or evidences of  indebtedness  so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price (as determined  pursuant
to Section 11(d) hereof) per share of Preferred Stock. 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 be adjusted to be the
Purchase  Price which would have been in effect if such record date had not been
fixed.

     (d)  (i)  For  the  purpose  of  any  computation  hereunder,   other  than
computations  made pursuant to Section  11(a)(iii)  hereof,  the "Current Market
Price" per share of Common  Stock on any date shall be deemed to be the  average
of the daily  closing  prices per share of such Common Stock for the thirty (30)
consecutive  Trading Days (as  hereinafter  defined)  immediately  prior to such
date,  and for  purposes of  computations  made  pursuant to Section  11(a)(iii)
hereof,  the Current Market Price per share of Common Stock on any date shall be
deemed to be the  average of the daily  closing  prices per share of such Common
Stock for the ten (10) consecutive Trading Days immediately following such date;
provided,  however, that in the event that the Current Market Price per share of
the Common Stock is determined during a period following the announcement by the
issuer of such  Common  Stock of (A) a dividend or  distribution  on such Common
Stock  payable in shares of such Common  Stock or  securities  convertible  into
shares of such Common  Stock (other than the  Rights),  or (B) any  subdivision,
combination or  reclassification  of such Common Stock, and the ex-dividend date
for such  dividend or  distribution,  or the record  date for such  subdivision,
combination   or   reclassification   shall  not  have  occurred  prior  to  the
commencement  of the  requisite  thirty (30) Trading Day or ten (10) Trading Day
period,  as set forth above,  then,  and in each such case,  the Current  Market
Price shall be properly adjusted to take into account ex-dividend  trading.  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 shares of Common
Stock 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
shares of Common  Stock are listed or  admitted  to trading or, if the shares of
Common  Stock 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 the
National  Association of Securities  Dealers,  Inc.  Automated  Quotation System
("NASDAQ")  or such other system then in use, or, if on any such date the shares
of Common  Stock 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  Common  Stock  selected  by the  Board.  If on any such date no
market  maker is making a market in the  Common  Stock,  the fair  value of such
shares on such date as determined in good faith by the Board shall be used.  The
term "Trading Day" shall mean a day on which the principal  national  securities
exchange  on which the shares of Common  Stock are listed or admitted to trading
is open for the  transaction  of business  or, if the shares of Common Stock are
not listed or  admitted  to  trading  on any  national  securities  exchange,  a
Business  Day.  If the  Common  Stock is not  publicly  held or not so listed or
traded,  Current  Market  Price per share shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in
a  statement  filed  with the  Rights  Agent  and  shall be  conclusive  for all
purposes.

     (ii) For the purpose of any computation hereunder, the Current Market Price
per share of Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this  Section  11(d) (other than the
last sentence thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner  provided above or if the Preferred  Stock is
not  publicly  held or listed or traded in a manner  described  in clause (i) of
this Section 11(d),  the Current Market Price per share of Preferred Stock shall
be  conclusively  deemed to be an  amount  equal to 200 (as such  number  may be
appropriately  adjusted for such events as stock  splits,  stock  dividends  and
recapitalizations  with respect to the Common Stock  occurring after the date of
this  Agreement)  multiplied by the Current Market Price per share of the Common
Stock.  If neither the Common Stock nor the Preferred  Stock is publicly held or
so listed or traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as  determined  in good faith by the Board,  whose
determination  shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.

     (e) Anything herein to the contrary  notwithstanding,  no adjustment in the
Purchase  Price  shall be  required  unless  such  adjustment  would  require an
increase  or  decrease  of at least  one  percent  (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 ten-thousandth of a share
of Common Stock or other share or  one-millionth  of a share of Preferred Stock,
as the case may be.  Notwithstanding  the first  sentence of this Section 11(e),
any  adjustment  required  by this  Section  11 shall be made no later  than the
earlier of (i) three (3) years from the date of the  transaction  that  mandates
such adjustment or (ii) the Expiration Date.

     (f) If as a result of an adjustment  made pursuant to Section  11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter  exercised shall become
entitled to receive  any shares of capital  stock  other than  Preferred  Stock,
thereafter  the number of such other shares so  receivable  upon exercise of any
Right and the Purchase Price thereof 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 Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the  provisions of Sections 7, 9,
10, 13 and 14 hereof  with  respect to the  Preferred  Stock shall apply on like
terms to any such other shares.

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

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

     (i) The  Company  may elect on or after the date of any  adjustment  of the
Purchase Price to adjust the number of Rights,  in lieu of any adjustment in the
number of one  two-hundredths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights  outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one  two-hundredths of a
share of Preferred Stock for which a Right was exercisable  immediately prior to
such  adjustment.  Each Right  held of record  prior to such  adjustment  of the
number of Rights shall become that number of Rights  (calculated  to the nearest
one   ten-thousandth)   obtained  by  dividing  the  Purchase  Price  in  effect
immediately  prior to adjustment of the Purchase  Price by the Purchase Price in
effect  immediately  after  adjustment of the Purchase Price.  The Company shall
make a public  announcement  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  Rights
Certificates  have been  issued,  shall be at least ten (10) days later than the
date of the public  announcement.  If Rights 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  Rights   Certificates  on  such  record  date  Rights   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 Rights  Certificates  held by such holders
prior to the date of adjustment,  and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall  be  entitled  after  such  adjustment.   Rights  Certificates  so  to  be
distributed  shall be issued,  executed and countersigned in the manner provided
for herein (and may bear,  at the option of the Company,  the adjusted  Purchase
Price) and shall be  registered  in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.

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

     (k) Before  taking any action that would cause an  adjustment  reducing the
Purchase  Price  below  the then  stated  value,  if any,  of the  number of one
two-hundredths  of a share of  Preferred  Stock  issuable  upon  exercise of the
Rights,  the Company shall take any corporate action that may, in the opinion of
its  counsel,  be  necessary  in order that the  Company may validly and legally
issue fully paid and nonassessable  such number of one two-hundredths of a share
of Preferred Stock at such adjusted Purchase Price.

     (l) In any case in which this Section 11 shall  require that an  adjustment
in the  Purchase  Price be made  effective  as of a record  date for a specified
event,  the Company may elect to defer  until the  occurrence  of such event the
issuance  to the holder of any Right  exercised  after such  record  date of the
number of one  two-hundredths  of a share of Preferred  Stock and other  capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one  two-hundredths  of a share of Preferred Stock and other
capital stock or securities of the Company,  if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however,  that the  Company  shall  deliver  to such  holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares  (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.

     (m)  Anything  in this  Section  11 to the  contrary  notwithstanding,  the
Company  shall be entitled to make such  reductions  in the Purchase  Price,  in
addition to those adjustments  expressly  required by this Section 11, as and to
the extent that in their good faith  judgment  the Board shall  determine  to be
advisable in order that any (i)  consolidation  or  subdivision of the Preferred
Stock,  (ii) issuance  wholly for cash of any shares of Preferred  Stock at less
than the  Current  Market  Price,  (iii)  issuance  wholly for cash of shares of
Preferred  Stock or  securities  which by their  terms are  convertible  into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this Section 11, hereafter made by
the  Company  to  holders of its  Preferred  Stock  shall not be taxable to such
stockholders.

     (n) The Company  covenants  and agrees that it shall not, at any time after
the  Distribution  Date,  (i)  consolidate  with any other Person  (other than a
Subsidiary  of the Company in a  transaction  that  complies  with Section 11(o)
hereof),  (ii) merge with or into any other Person  (other than a Subsidiary  of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or  transfer  (or  permit  any  Subsidiary  to sell  or  transfer),  in one
transaction,  or a series  of  related  transactions,  assets or  earning  power
aggregating  more than fifty percent (50%) of the assets or earning power of the
Company and its  Subsidiaries  (taken as a whole) to any other Person or Persons
(other  than  the  Company  and/or  any of  its  Subsidiaries  in  one  or  more
transactions  each of which complies with Section 11(o)  hereof),  if (x) at the
time of or immediately  after such  consolidation,  merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would  substantially  diminish or otherwise  eliminate the benefits
intended to be afforded  by the Rights or (y) prior to,  simultaneously  with or
immediately  after such  consolidation,  merger or sale, the stockholders of the
Person who constitutes,  or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights  previously
owned by such Person or any of its Affiliates and Associates.

     (o) The Company covenants and agrees that, after the Distribution  Date, it
will not,  except as  permitted  by Section  23 or  Section 26 hereof,  take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is  reasonably  foreseeable  that such action  will  diminish  substantially  or
otherwise eliminate the benefits intended to be afforded by the Rights.

     (p)  Anything in this  Agreement to the  contrary  notwithstanding,  in the
event that the Company shall at any time after the Rights  Dividend  Declaration
Date  and  prior  to  the  Distribution  Date  (i)  declare  a  dividend  on the
outstanding  shares of Common  Stock  payable  in shares of Common  Stock,  (ii)
subdivide  the  outstanding   shares  of  Common  Stock  or  (iii)  combine  the
outstanding  shares of Common Stock into a smaller number of shares,  the number
of Rights associated with each share of Common Stock then outstanding, or issued
or  delivered   thereafter  but  prior  to  the  Distribution   Date,  shall  be
proportionately adjusted so that the number of Rights thereafter associated with
each  share of Common  Stock  following  any such event  shall  equal the result
obtained  by  multiplying  the  number of Rights  associated  with each share of
Common Stock  immediately  prior to such event by a fraction the numerator which
shall be the total  number of shares  of Common  Stock  outstanding  immediately
prior to the  occurrence of the event and the  denominator of which shall be the
total number of shares of Common Stock  outstanding  immediately  following  the
occurrence of such event.

12.  Certificate  of Adjusted  Purchase  Price or Number of Shares.  Whenever an
adjustment is made as provided in Section 11 and Section 13 hereof,  the Company
shall (a) promptly  prepare a certificate  setting forth such  adjustment  and a
brief statement of the facts accounting for such  adjustment,  (b) promptly file
with the Rights Agent,  and with each transfer agent for the Preferred Stock and
the Common Stock, a copy of such certificate and (c) if a Distribution  Date has
occurred, mail a brief summary thereof to each holder of a Rights Certificate in
accordance with Section 27 hereof.  The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.

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

     (a) In the event that,  following the Stock Acquisition  Date,  directly or
indirectly,  (x) the Company shall consolidate with, or merge with and into, any
other Person  (other than a  Subsidiary  of the Company in a  transaction  which
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving  corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary  of the Company in a transaction  which  complies with Section
11(o) hereof) shall  consolidate  with, or merge with or into, the Company,  and
the  Company  shall  be  the   continuing  or  surviving   corporation  of  such
consolidation  or merger and, in connection with such  consolidation  or merger,
all or part of the  outstanding  shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its  Subsidiaries  shall sell or  otherwise  transfer) in one  transaction  or a
series of related  transactions,  assets or earning power  aggregating more than
fifty  percent  (50%) of the  assets or  earning  power of the  Company  and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any  Subsidiary  of the  Company  in one or more  transactions  each of which
complies with Section 11(o) hereof),  then, and in each such case (except as may
be  contemplated  by Section 13(d) hereof),  proper  provision  shall be made so
that:  (i) each holder of a Right,  except as provided in Section  7(e)  hereof,
shall  thereafter  have the right to receive,  upon the exercise  thereof at the
then current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued,  fully paid,  non-assessable and freely
tradeable  shares  of  Common  Stock of the  Principal  Party  (as such  term is
hereinafter defined),  not subject to any liens,  encumbrances,  rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one  two-hundredths
of a share of Preferred Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if a Section  11(a)(ii) Event
has occurred  prior to the first  occurrence of a Section 13 Event,  multiplying
the  number  of such  one  two-hundredths  of a  share  for  which  a Right  was
exercisable  immediately  prior to the first  occurrence of a Section  11(a)(ii)
Event  by  the  Purchase  Price  in  effect  immediately  prior  to  such  first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event,  shall be referred to as the "Purchase Price" for each Right
and for all  purposes  of this  Agreement)  by (2)  fifty  percent  (50%) of the
Current Market Price (determined  pursuant to Section 11(d)(i) hereof) per share
of the Common Stock of such Principal  Party on the date of consummation of such
Section 13 Event;  (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and duties
of the  Company  pursuant  to this  Agreement;  (iii) the term  "Company"  shall
thereafter be deemed to refer to such  Principal  Party,  it being  specifically
intended  that the  provisions  of  Section 11 hereof  shall  apply only to such
Principal Party following the first occurrence of a Section 13 Event;  (iv) such
Principal  Party  shall  take such steps  (including,  but not  limited  to, the
reservation of a sufficient  number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions  hereof shall  thereafter be applicable,  as nearly as reasonably
may be, in relation to its shares of Common Stock  thereafter  deliverable  upon
the exercise of the Rights;  and (v) the provisions of Section  11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.

     (b) "Principal Party" shall mean:

     (i) in the case of any  transaction  described  in clause (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted in such merger or
consolidation,  and if no securities are so issued, the Person that is the other
party to such merger or consolidation; and

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

provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect  Subsidiary of another  Person the Common Stock of which is
and has been so registered,  "Principal Party" shall refer to such other Person;
and (2) in case such Person is a  Subsidiary,  directly or  indirectly,  of more
than one Person,  the Common Stocks of two or more of which are and have been so
registered,  "Principal  Party"  shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.

     (c) The Company shall not consummate any such  consolidation,  merger, sale
or  transfer  unless  the  Principal  Party  shall have a  sufficient  number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the  exercise in full of the Rights in  accordance  with this
Section 13 and unless prior thereto the Company and such  Principal  Party shall
have  executed  and  delivered  to the  Rights  Agent a  supplemental  agreement
providing for the terms set forth in  paragraphs  (a) and (b) of this Section 13
and  further  providing  that,  as soon as  practicable  after  the  date of any
consolidation,  merger  or sale of assets  mentioned  in  paragraph  (a) of this
Section 13, the Principal Party will:

     (i) 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,  and will use its best  efforts  to cause  such  registration
statement to (A) become  effective as soon as practicable  after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date; and

     (ii) will deliver to holders of the Rights historical  financial statements
for the Principal Party and each of its Affiliates  which comply in all respects
with the requirements for registration on Form 10 under the Exchange Act.

     The  provisions  of this  Section 13 shall  similarly  apply to  successive
mergers  or  consolidations  or sales or other  transfers.  In the event  that a
Section  13 Event  shall  occur at any time  after the  occurrence  of a Section
11(a)(ii)  Event,  the Rights which have not  theretofore  been exercised  shall
thereafter become exercisable in the manner described in Section 13(a).

     (d) Notwithstanding anything in this Agreement to the contrary,  Section 13
shall not be applicable to a transaction  described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
who acquired shares of Common Stock pursuant to a tender offer or exchange offer
for all outstanding shares of Common Stock which complies with the provisions of
Section  11(a)(ii)  hereof (or a wholly owned  subsidiary  of any such Person or
Persons),  (ii) the price per share of Common Stock offered in such  transaction
is not less than the price per share of  Common  Stock  paid to all  holders  of
shares of Common Stock whose shares were purchased pursuant to such tender offer
or  exchange  offer and (iii) the form of  consideration  being  offered  to the
remaining  holders of shares of Common Stock pursuant to such transaction is the
same as the form of consideration paid pursuant to such tender offer or exchange
offer.  Upon  consummation of any such transaction  contemplated by this Section
13(d), all Rights hereunder shall expire.

14. Fractional Rights and Fractional Shares.

     (a) The Company shall not be required to issue fractions of Rights,  except
prior to the  Distribution  Date as  provided  in Section  11(p)  hereof,  or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional  Rights,  there shall be paid to the registered holders of the Rights
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 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 of the Rights 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 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.
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
shall be used.

     (b) The  Company  shall not be  required  to issue  fractions  of shares of
Preferred  Stock  (other  than  fractions  that are  integral  multiples  of one
two-hundredth  of a share of Preferred  Stock) upon exercise of the Rights or to
distribute  certificates  which evidence  fractional  shares of Preferred  Stock
(other than  fractions  that are integral  multiples of one  two-hundredth  of a
share of Preferred  Stock). In lieu of fractional shares of Preferred Stock that
are not integral  multiples of one  two-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights 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  two-hundredth  of a  share  of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one  two-hundredth  of a share of Preferred Stock shall be one  two-hundredth of
the  closing  price of a share of  Preferred  Stock (as  determined  pursuant to
Section  11(d)(ii)  hereof) for the Trading Day immediately prior to the date of
such exercise.

     (c) Following the occurrence of a Triggering  Event,  the Company shall not
be required to issue  fractions of shares of Common  Stock upon  exercise of the
Rights or to distribute  certificates which evidence fractional shares of Common
Stock. In lieu of fractional  shares of Common Stock, the Company may pay to the
registered holders of Rights  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 (1) share of Common  Stock.  For  purposes of this  Section
14(c),  the  current  market  value of one  share of Common  Stock  shall be the
closing  price of one share of Common Stock (as  determined  pursuant to Section
11(d)(i)  hereof)  for the  Trading  Day  immediately  prior to the date of such
exercise.

     (d) The holder of a Right by the acceptance of the Rights  expressly waives
his right to  receive  any  fractional  Rights  or any  fractional  shares  upon
exercise of a Right, except as permitted by this Section 14.

15.  Rights of Action.  All rights of action in  respect of this  Agreement  are
vested in the respective  registered  holders of the Rights  Certificates  (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered  holder of any Rights  Certificate (or, prior to the Distribution
Date,  of the Common  Stock),  without the consent of the Rights Agent or of the
holder of any other Rights  Certificate (or, prior to the Distribution  Date, of
the Common Stock), 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  Rights  Certificate  in the manner  provided  in such Rights
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 shall be entitled to specific  performance  of the
obligations  hereunder  and  injunctive  relief  against  actual  or  threatened
violations of the obligations hereunder of any Person subject to this Agreement.

16.  Agreement of Rights Holders.  Every holder of a Right by accepting the same
consents  and agrees with the Company and the Rights  Agent and with every other
holder of a Right that: ----------------------------

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

     (b) after the Distribution  Date, the Rights  Certificates are transferable
only on the registry  books of the Rights Agent if  surrendered at the principal
office or  offices  of the  Rights  Agent  designated  for such  purposes,  duly
endorsed  or  accompanied  by a  proper  instrument  of  transfer  and  with the
appropriate forms and certificates fully executed;

     (c) subject to Section 6(a) and Section  7(f)  hereof,  the Company and the
Rights  Agent may deem and treat the person in whose  name a Rights  Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered  as the absolute  owner thereof and of the Rights  evidenced  thereby
(notwithstanding   any   notations   of  ownership  or  writing  on  the  Rights
Certificates  or the associated  Common Stock  certificate  made by anyone other
than the Company or the Rights Agent) for all purposes  whatsoever,  and neither
the Company nor the Rights  Agent,  subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and

     (d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights  Agent shall have any  liability to any holder of a Right
or other Person as a result of its  inability to perform any of its  obligations
under this  Agreement by reason of any  preliminary  or permanent  injunction or
other order, decree or ruling issued by a court of competent  jurisdiction or by
a  governmental,  regulatory  or  administrative  agency or  commission,  or any
statute,  rule,  regulation  or executive  order  promulgated  or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.

17. Rights Certificate  Holder Not Deemed a Stockholder.  No holder, as such, of
any Rights Certificate shall be entitled to vote, receive dividends or be deemed
for any  purpose  the holder of the number of one  two-hundredths  of a share of
Preferred  Stock or any other  securities of the Company that may at any time be
issuable on the exercise of the Rights represented  thereby,  nor shall anything
contained  herein or in any Rights  Certificate  be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a stockholder of
the  Company  or any right to vote for the  election  of  directors  or upon any
matter submitted to stockholders at any meeting thereof,  or to give or withhold
consent to any  corporate  action,  or to receive  notice of  meetings  or other
actions affecting  stockholders (except as provided in Section 25 hereof), or to
receive  dividends or  subscription  rights,  or  otherwise,  until the Right or
Rights  evidenced  by such  Rights  Certificate  shall  have been  exercised  in
accordance with the provisions hereof.

18. Concerning the Rights Agent.

     (a) The Company agrees to pay to the Rights Agent  reasonable  compensation
for all services  rendered by it hereunder  and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and
other  disbursements  incurred  in the  administration  and  execution  of  this
Agreement and the exercise and performance of its duties hereunder.  The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless  against,
any loss,  liability,  or expense,  incurred  without  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.

     (b) 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 Rights  Certificate  or
certificate for Common Stock 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.

19. Merger or Consolidation or Change of Name of Rights Agent.

     (a) 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
corporate trust or stock transfer  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,  however,  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 Rights  Certificates  shall
have been  countersigned but not delivered,  any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates  so  countersigned;  and in  case at that  time  any of the  Rights
Certificates shall not have been  countersigned,  any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the  successor  Rights  Agent;  and in all such  cases  such  Rights
Certificates  shall have the full force provided in the Rights  Certificates and
in this Agreement.

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

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

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

     (b)  Whenever in the  performance  of its duties under this  Agreement  the
Rights  Agent  shall  deem it  necessary  or  desirable  that any fact or matter
(including,  without  limitation,  the identity of any Acquiring  Person and the
determination  of Current  Market Price) 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 the
Chairman of the Board,  the President,  any Vice President,  the Treasurer,  any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full  authorization
to the Rights  Agent for any action  taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.

     (c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.

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


     (e) The Rights  Agent shall not be under any  responsibility  in respect of
the validity of this Agreement or the execution and delivery  hereof (except the
due  execution  hereof by the Rights  Agent) or in respect  of the  validity  or
execution of any Rights 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 Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or  responsible  for the manner,  method or amount of any such
adjustment or the  ascertaining of the existence of facts that would require any
such  adjustment  (except with  respect to the  exercise of Rights  evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall it by
any act  hereunder  be deemed to make any  representation  or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights  Certificate or as to whether
any shares of Common Stock or Preferred Stock will,  when so issued,  be validly
authorized and issued, fully paid and nonassessable.

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

     (g)  The  Rights  Agent  is  hereby   authorized  and  directed  to  accept
instructions  with respect to the  performance of its duties  hereunder from the
Chairman of the Board,  the President,  any Vice President,  the Secretary,  any
Assistant  Secretary,  the Treasurer or any Assistant  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 to be taken
by it in good faith in accordance with instructions of any such officer.

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

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

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

     (k) 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  or  indicates  an  affirmative  response  to  clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

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 thirty (30)
days' notice in writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred  Stock,  by registered or certified  mail, and to the
holders of the Rights  Certificates by first-class  mail. The Company may remove
the Rights Agent or any successor  Rights Agent upon thirty (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 Common  Stock and  Preferred  Stock,  by
registered or certified  mail, and to the holders of the Rights  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 thirty (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 Rights Certificate (who shall,
with such notice,  submit his Rights Certificate for inspection by the Company),
then any registered  holder of any Rights  Certificate may apply to any court of
competent  jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent,  whether appointed by the Company or by such a court, shall be (a)
a legal  business  entity  organized  and doing  business  under the laws of the
United States or of any State  thereof,  in good  standing,  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  $25,000,000 or (b) an affiliate of a legal business  entity
described in clause (a) of this  sentence.  After ap  pointment,  the  successor
Rights  Agent  shall  be  vested  with  the  same  powers,  rights,  duties  and
responsibilities  as if it had been  originally  named as Rights  Agent  without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose.  Not later than the  effective  date of any such  appointment,  the
Company shall file notice thereof in writing with the  predecessor  Rights Agent
and each transfer agent of the Common Stock and the Preferred  Stock, and mail a
notice thereof in writing to the registered holders of the Rights  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.

22. Issuance of New Rights  Certificates.  Notwithstanding any of the provisions
of this  Agreement  or of the Rights to the  contrary,  the Company  may, at its
option,  issue new Rights Certificates  evidencing Rights in such form as may be
approved by the Board 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 Rights Certificates made in accordance with the provisions
of this  Agreement.  In  addition,  in  connection  with the issuance or sale of
shares  of  Common  Stock  following  the  Distribution  Date  and  prior to the
redemption or expiration of the Rights,  the Company (a) shall,  with respect to
shares of  Common  Stock so issued or sold  pursuant  to the  exercise  of stock
options or under any employee plan or arrangement,  granted or awarded as of the
Distribution  Date, or upon the  exercise,  conversion or exchange of securities
hereinafter  issued by the  Company,  and (b) may, in any other case,  if deemed
necessary or appropriate by the Board,  issue Rights  Certificates  representing
the  appropriate  number of Rights in  connection  with such  issuance  or sale;
provided,  however,  that (i) no such Rights Certificate shall be issued if, and
to the extent that,  the Company  shall be advised by counsel that such issuance
would create a  significant  risk of material  adverse tax  consequences  to the
Company or the Person to whom such Rights  Certificate would be issued, and (ii)
no  such  Rights  Certificate  shall  be  issued  if,  and to the  extent  that,
appropriate  adjustment  shall  otherwise have been made in lieu of the issuance
thereof.

23. Redemption and Termination.

     (a) The Board may, at its  option,  at any time prior to the earlier of (i)
the close of business on the tenth day following the Stock Acquisition Date (or,
if the Stock  Acquisition Date shall have occurred prior to the Record Date, the
close of business on the tenth day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a  redemption  price of $.01 per  Right,  as such  amount  may be  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").  Notwithstanding  anything contained in
this Agreement to the contrary,  the Rights shall not be  exercisable  after the
first  occurrence of a Section  11(a)(ii) Event until such time as the Company's
right of redemption  hereunder has expired.  The Company may, at its option, pay
the  Redemption  Price in cash,  shares of Common  Stock  (based on the  Current
Market Price, as defined in Section 11(d)(i) hereof,  of the Common Stock at the
time of redemption) or any other form of consideration deemed appropriate by the
Board.

     (b) Immediately upon the action of the Board ordering the redemption of the
Rights,  evidence  of which  shall have been  filed  with the  Rights  Agent 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 for each Right so held.  Promptly after
the action of the Board ordering the redemption of the Rights, the Company shall
give notice of such  redemption  to the Rights Agent and the holders of the then
outstanding  Rights by mailing such notice to all such holders at each  holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the  Distribution  Date, on the registry  books of the transfer agent for the
Common Stock.  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.


24. Exchange.

     (a) The Board 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 7(e) hereof) for Common Stock at an exchange  ratio of one
share of Common  Stock per Right,  appropriately  adjusted  to reflect any stock
split,  stock dividend or similar  transaction  occurring  after the date hereof
(such exchang  ratio being  hereinafter  referred to as the  "Exchange  Ratio").
Notwithstanding  the foregoing,  the Board 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 Stock for or pursuant to the terms of any such plan),
together  with  all  Affiliates  and  Associates  of such  Person,  becomes  the
Beneficial Owner of 50% or more of the Common Stock then outstanding.

     (b)  Immediately  upon the action of the Board ordering the exchange of any
Rights  pursuant to  subsection  (a) of this  Section 24 and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right  thereafter  of a holder of such  Rights  shall be to receive
that number of shares of Common Stock 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  Stock 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 7(e) hereof) held
by each holder of Rights.

     (c) In any  exchange  pursuant  to this  Section  24, the  Company,  at its
option, may substitute  Preferred Stock (or Equivalent  Preferred Stock, as such
term is  defined in  paragraph  (b) of  Section  11  hereof)  for  Common  Stock
exchangeable for rights,  at the initial rate of one two-hundredth of a share of
Preferred Stock (or Equivalent  Preferred Stock) for each share of Common Stock,
as  appropriately  adjusted to reflect stock splits,  stock  dividends and other
similar transactions after the date hereof.

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

     (e) The Company shall not be required to issue fractions of Common Stock or
to distribute  certificates  which evidence  fractional Common Stock. In lieu of
such fractional Common Stock,  there shall be paid to the registered  holders of
the Right  Certificates  with regard to which such fractional Common Stock would
otherwise  be  issuable,  an amount in cash  equal to the same  fraction  of the
current market value of a whole share of Common Stock.  For the purposes of this
subsection  (e), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (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.

25. Notice of Certain Events.

     (a) In case the Company shall propose,  at any time after the  Distribution
Date,  (i) to pay any  dividend  payable in stock of any class to the holders of
Preferred  Stock or to make any other  distribution  to the holders of Preferred
Stock (other than a regular  quarterly cash dividend out of earnings or retained
earnings of the  Company),  or (ii) to offer to the holders of  Preferred  Stock
rights or warrants to  subscribe  for or to purchase  any  additional  shares of
Preferred Stock or shares of stock of any class or any other securities,  rights
or  options,  or (iii) to effect any  reclassification  of its  Preferred  Stock
(other than a  reclassification  involving  only the  subdivision of outstanding
shares of Preferred  Stock),  or (iv) to effect any consolidation or merger into
or  with  any  other  Person  (other  than  a  Subsidiary  of the  Company  in a
transaction which complies with Section 11(o) hereof),  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 transaction or a series of related transactions,  of
more than fifty  percent (50%) of the assets or earning power of the Company and
its  Subsidiaries  (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more  transactions  each of
which  complies with Section 11(o)  hereof),  or (v) to effect the  liquidation,
dissolution  or winding up of the Company,  then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and 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, 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 shares of Preferred
Stock, 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 twenty (20) days
prior to the record  date for  determining  holders  of the shares of  Preferred
Stock for purposes of such action,  and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such  proposed  action
or the date of  participation  therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.

     (b) In case any of the events set forth in Section  11(a)(ii)  hereof shall
occur,  then,  in any such case,  (i) the Company  shall as soon as  practicable
thereafter give to each holder of a Rights  Certificate,  to the extent feasible
and in  accordance  with Section 25 hereof,  a notice of the  occurrence of such
event,  which  shall  specify  the  event and the  consequences  of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding  paragraph to Preferred  Stock shall be deemed  thereafter to refer to
Common Stock and/or, if appropriate, other securities.

26. Notices. Notices or demands authorized by this Agreement to be given or made
by the  Rights  Agent or by the holder of any  Rights  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: -------

                            Orion Capital Corporation
                               9 Farm Springs Road
                              Farmington, CT 06032
                         Attention: Corporate Secretary

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

                     First Chicago Trust Company of New York
                        525 Washington Blvd. - Suite 4660
                              Jersey City, NJ 07310
                   Attention: Corporate Actions Administration

Notices  or  demands  authorized  by this  Agreement  to be given or made by the
Company or the Rights  Agent to the holder of any  Rights  Certificate  (or,  if
prior to the  Distribution  Date,  to the  holder of  certificates  representing
shares  of  Common  Stock)  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.

27. Supplements and Amendments.  Prior to the Distribution Date, the Company and
the Rights  Agent  shall,  if the  Company so directs,  supplement  or amend any
provision of this Agreement  without the approval of any holders of certificates
representing  shares of Common Stock. From and after the Distribution  Date, the
Company and the Rights Agent  shall,  if the Company so directs,  supplement  or
amend this Agreement without the approval of any holders of Rights  Certificates
in order (i) to cure any ambiguity,  (ii) to correct or supplement any provision
contained  herein  which  may  be  defective  or  inconsistent  with  any  other
provisions  herein,  (iii) to shorten or lengthen  any time period  hereunder or
(iv) to change or supplement  the  provisions  hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights  Certificates;  provided,  from and after the
Distribution Date, this Agreement may not be supplemented or amended to lengthen
any time period hereunder, pursuant to clause (iii) of this sentence unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of,  and/or the  benefits  to, the  holders of Rights.  Upon the  delivery  of a
certificate  from an  appropriate  officer of the Company  which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such  supplement  or amendment.  Prior to the
Distribution  Date,  the  interests  of the  holders  of Rights  shall be deemed
coincident  with the interests of the holders of Common  Stock.  Notwithstanding
anything contained herein to the contrary,  this Agreement may not be amended at
a time when the Rights are not redeemable.

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. ----------

29.  Determinations  and  Actions by the Board,  etc.  For all  purposes of this
Agreement,  any calculation of the number of shares of Common Stock  outstanding
at any particular  time,  including for purposes of  determining  the particular
percentage of such outstanding shares of Common Stock of which any Person is the
Beneficial  Owner,  shall be made in  accordance  with the last sentence of Rule
13d-3(d)(1)(i)  of the General Rules and Regulations under the Exchange Act. The
Board shall have the exclusive  power and authority to administer this Agreement
and to exercise  all rights and powers  specifically  granted to the Board or to
the Company,  or as may be necessary or advisable in the  administration of this
Agreement,  including,  without limitation, the right and power to (i) interpret
the  provisions  of this  Agreement,  and (ii)  make all  determinations  deemed
necessary or advisable for the  administration  of this  Agreement  (including a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions,  calculations,  interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final,  conclusive and
binding on the  Company,  the Rights  Agent,  the  holders of the Rights and all
other parties,  and (y) not subject the Board to any liability to the holders of
the Rights.

30.  Benefits of this Agreemen.  Nothing in this Agreement shall be construed to
give to any Person other than the Company,  the Rights Agent and the  registered
holders  of the  Rights  Certificates  (and,  prior  to the  Distribution  Date,
registered holders of the Common Stock) any legal or equitable right,  remedy or
claim  under  this  Agreement;  but  this  Agreement  shall  be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock).

31.  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;  provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid,  void or unenforceable and the Board determines in its good faith
judgment that severing the invalid  language from this Agreement would adversely
affect the  purpose or effect of this  Agreement,  the right of  redemption  set
forth in Section 23 hereof  shall be  reinstated  and shall not expire until the
close of business on the tenth day following the date of such  determination  by
the Board.
1.

32. Governing Law. This Agreement, each Right and each Rights Certificate issued
hereunder  shall be deemed to be a contract  made under the laws of the State of
Delaware and for all purposes  shall be governed by and  construed in accordance
with the laws of such State  applicable  to  contracts  made and to be performed
entirely within such State. -------------

33.  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. ------------

34. 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  and  their  respective  corporate  seals  to be
hereunto affixed and attested, all as of the day and year first above written.

                                                     ORION CAPITAL CORPORATION



                                                     By                      
                                                        Name:
                                                        Title:


                                                     FIRST CHICAGO TRUST COMPANY
                                                       OF NEWYORK



                                                     By                        
                                                     Name:
                                                     Title:





<PAGE>



                                                                     Exhibit A


                                     FORM OF
                     CERTIFICATE OF DESIGNATION, PREFERENCES
                          AND RIGHTS OF SERIES B JUNIOR
                          PARTICIPATING PREFERRED STOCK
                                       OF
                            ORION CAPITAL CORPORATION


             Pursuant to Section 151 of the General Corporation Law
                                         of the State of Delaware


     I, Michael P. Maloney,  Vice  President,  General  Counsel and Secretary of
Orion  Capital  Corporation,  a  corporation  organized  and existing  under the
General  Corporation  Law of the  State  of  Delaware,  in  accordance  with the
provisions of Section 103 thereof, DO HEREBY CERTIFY:

     That pursuant to the authority conferred upon the Board of Directors by the
Restated Certificate of Incorporation of the said Corporation, the said Board of
Directors on September  11, 1996,  adopted the following  resolution  creating a
series of 1,000,000  shares of  Preferred  Stock  designated  as Series B Junior
Participating Preferred Stock:

     RESOLVED,  that pursuant to the authority  vested in the Board of Directors
of  this   Corporation  in  accordance  with  the  provisions  of  its  Restated
Certificate of Incorporation,  a series of Preferred Stock of the Corporation be
and it hereby is created,  and that the  designation  and amount thereof and the
voting  powers,  preferences  and  relative,  participating,  optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:

1.  Designation  and Amount.  The shares of such series shall be  designated  as
"Series  B Junior  Participating  Preferred  Stock"  and the  number  of  shares
constituting such series shall be 1,000,000. ----------------------

2. Dividends and Distributions.

     (a) Subject to the prior and  superior  rights of the holders of any shares
of any series of  Preferred  Stock  ranking  prior and superior to the shares of
Series B Junior  Participating  Preferred  Stock with respect to dividends,  the
holders  of shares of Series B Junior  Participating  Preferred  Stock  shall be
entitled to receive,  when,  as and if declared by the Board of Directors out of
funds legally available for the purpose,  quarterly dividends payable in cash on
the first  business day of January,  April,  July and October in each year (each
such date being  referred to herein as a  "Quarterly  Dividend  Payment  Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or  fraction  of a share of Series B Junior  Participating  Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the  provision  for  adjustment  hereinafter  set
forth,  200 times the aggregate per share amount of all cash divi dends, and 200
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other  distributions  other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by  reclassification
or otherwise),  declared on the Common Stock,  par value $1.00 per share, of the
Corporation  (the "Common  Stock")  since the  immediately  preceding  Quarterly
Dividend Payment Date, or, with respect to the first Quarterly  Dividend Payment
Date,  since the first  issuance of any share or fraction of a share of Series B
Junior Participating  Preferred Stock. In the event the Corporation shall at any
time after  September 11, 1996 (the "Rights  Declaration  Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock,  (ii)  subdivide the
outstanding  Common Stock, or (iii) combine the outstanding  Common Stock into a
smaller number of shares,  then in each such case the amount to which holders of
shares  of  Series  B  Junior   Participating   Preferred  Stock  were  entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by  multiplying  such amount by a fraction the numerator of which is
the number of shares of Common Stock  outstanding  immediately  after such event
and the  denominator  of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  (b) The  Corporation  shall declare a dividend or distribution
on the Series B Junior  Participating  Preferred  Stock as provided in Paragraph
(A) above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);  provided that,
in the event no dividend or distribution  shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series B Junior  Participating  Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.

                  (c)  Dividends  shall  begin to accrue  and be  cumulative  on
outstanding  shares of Series B Junior  Participating  Preferred  Stock from the
Quarterly  Dividend Payment Date next preceding the date of issue of such shares
of Series B Junior  Participating  Preferred Stock,  unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such  shares,  or unless the date of issue is a  Quarterly  Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series B Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such  dividends  shall begin to accrue and be cumulative  from such
Quarterly  Dividend  Payment Date.  Accrued but unpaid  dividends shall not bear
interest.  Dividends  paid  on the  shares  of  Series  B  Junior  Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time  accrued  and  payable  on such  shares  shall be  allocated  pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors  may fix a record date for the  determination  of holders of shares of
Series B Junior  Participating  Preferred Stock entitled to receive payment of a
dividend or distribution  declared  thereon,  which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.

3.  Voting  Rights.  The  holders  of shares  of  Series B Junior  Participating
Preferred Stock shall have the following voting rights: -------------

     (a) Subject to the provision for  adjustment  hereinafter  set forth,  each
share of Series B Junior Participating  Preferred Stock shall entitle the holder
thereof to 200 votes on all matters  submitted to a vote of the  stockholders of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration  Date (i) declare any dividend on Common Stock  payable in shares of
Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstandin Common Stock into a smaller number of shares,  then in each such case
the  number  of votes per  share to which  holders  of shares of Series B Junior
Participating  Preferred  Stock were  entitled  immediately  prior to such event
shall be adjusted by  multiplying  such number by a fraction  the  numerator  of
which is the number of shares of Common Stock outstanding immediately after such
event and the  denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

     (b) Except as otherwise provided herein or by law, the holders of shares of
Series B Junior  Participating  Preferred  Stock  and the  holders  of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.

     (c)(i)  If at any time  dividends  on any  Series  B  Junior  Participating
Preferred  Stock  shall be in  arrears in an amount  equal to six (6)  quarterly
dividends  thereon,  the occurrence of such contingency shall mark the beginning
of a period  (herein  called a "default  period")  which shall extend until such
time when all accrued and unpaid dividends for all previous  quarterly  dividend
periods and for the current quarterly  dividend period on all shares of Series B
Junior  Participating  Preferred Stock then outstanding shall have been declared
and paid or set apart for payment.  During each default  period,  all holders of
Preferred  Stock  (including  holders  of  the  Series  B  Junior  Participating
Preferred  Stock)  with  dividends  in  arrears  in an  amount  equal to six (6)
quarterly dividends thereon,  voting as a class,  irrespective of series,  shall
have the right to elect two (2) Directors. (a)

     (ii) During any default period,  such voting right of the holders of Series
B Junior  Participating  Preferred Stock may be exercised initially at a special
meeting  called  pursuant to  subparagraph  (iii) of this Section 3(c) or at any
annual  meeting  of   stockholders,   and  thereafter  at  annual   meetings  of
stockholders,  provided that such voting right shall not be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock  outstanding
shall be present in person or by proxy.  The  absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred  Stock
of such voting  right.  At any meeting at which the holders of  Preferred  Stock
shall exercise such voting right  initially  during an existing  default period,
they shall have the right,  voting as a class,  to elect  Directors to fill such
vacancies,  if any,  in the Board of  Directors  as may then exist up to two (2)
Directors or, if such right is exercised at an ann al meeting,  to elect two (2)
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such  increase in the number of Directors as shall be necessary to
permit the  election by them of the  required  number.  After the holders of the
Preferred  Stock  shall have  exercised  their right to elect  Directors  in any
default  period and  during the  continuance  of such  period,  the number of Di
rectors  shall not be increased  or  decreased  except by vote of the holders of
Preferred  Stock as herein  provided  or  pursuant  to the  rights of any equity
securities   ranking   senior  to  or  pari  passu  with  the  Series  B  Junior
Participating Preferred Stock.

     (iii)  Unless the  holders of  Preferred  Stock  shall,  during an existing
default period,  have previously  exercised their right to elect Directors,  the
Board of Directors may order, or any  stockholder or stockholders  owning in the
aggregate  not less  than ten  percent  (10%) of the  total  number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
special meeting of the holders of Preferred Stock, which meeting shall thereupon
be  called  by  the  President,   a  Vice-President  or  the  Secretary  of  the
Corporation.  Notice of such meeting and of any annual  meeting at which holders
of Preferred  Stock are  entitled to vote  pursuant to this  Paragraph  (c)(iii)
shall be given to each holder of record of Preferred  Stock by mailing a copy of
such notice to him at his last  address as the same  appears on the books of the
Corporation.  Such  meeting  shall be called for a time not earlier than 20 days
and not later  than 60 days  after  such  order or  request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the
aggregate  not less  than ten  percent  (10%) of the  total  number of shares of
Preferred Stock  outstanding.  Notwithstanding  the provisions of this Paragraph
(C)(iii),  no such special  meeting  shall be called during the period within 60
days  immediately  preceding  the date fixed for the next annual  meeting of the
stockholders.

     (iv) In any default period,  the holders of Common Stock, and other classes
of stock of the  Corporation  if  applicable,  shall  continue to be entitled to
elect the whole number of Directors  until the holders of Preferred  Stock shall
have exercised their right to elect two (2) Directors  voting as a class,  after
the  exercise  of which  right (x) the  Directors  so elected by the  holders of
Preferred Stock shall continue in office until their  successors shall have been
elected by such holders or until the expiration of the default  period,  and (y)
any vacancy in the Board of  Directors  may  (except as  provided  in  Paragraph
(c)(ii)  of this  Section 3) be filled by vote of a  majority  of the  remaining
Directors theretofore elected by the holders of the class of stock which elected
the Director whose office shall have become vacant. References in this Paragraph
(c) to  Directors  elected by the holders of a  particular  class of stock shall
include  Directors  elected by such  Directors to fill  vacancies as provided in
clause (y) of the foregoing sentence.



     (v) Immediately  upon the expiration of a default period,  (x) the right of
the holders of Preferred Stock as a class to elect  Directors  shall cease,  (y)
the term of any Directors  elected by the holders of Preferred  Stock as a class
shall terminate,  and (z) the number of Directors shall be such number as may be
provided for in the certificate of incorporation or by-laws  irrespective of any
increase made pursuant to the provisions of Paragraph  (c)(ii) of this Section 3
(such number being subject, however, to change thereafter in any manner provided
by law or in the certificate of incorporation or by-laws).  Any vacancies in the
Board of  Directors  effected  by the  provisions  of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining Directors.

     (d) Except as set forth  herein,  holders of Series B Junior  Participating
Preferred  Stock shall have no special voting rights and their consent shall not
be  required  (except to the extent they are  entitled  to vote with  holders of
Common Stock as set forth herein) for taking any corporate action.

4. Certain Restrictions.

     (a)  Whenever  quarterly  dividends  or other  dividends  or  distributions
payable on the Series B Junior  Participating  Preferred  Stock as  provided  in
Section 2 are in arrears,  thereafter and until all accrued and unpaid dividends
and  distributions,  whether  or not  declared,  on  shares  of  Series B Junior
Participating  Preferred  Stock  outstanding  shall have been paid in full,  the
Corporation shall not

     (i) declare or pay dividends on, make any other distributions on, or redeem
or purchase or otherwise  acquire for  consideration any shares of stock ranking
junior (either as to dividends or upon  liquidation,  dissolution or winding up)
to the Series B Junior Participating Preferred Stock;

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

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

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

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


5.  Reacquired  Shares.  Any shares of Series B Junior  Participating  Preferred
Stock  purchased  or  otherwise  acquired  by  the  Corporation  in  any  manner
whatsoever  shall be  retired  and  cancelled  promptly  after  the  acquisition
thereof.  All such shares shall upon their  cancellation  become  authorized but
unissued  shares of Preferred  Stock and may be reissued as part of a new series
of Preferred  Stock to be created by resolution or  resolutions  of the Board of
Directors,  subject to the  conditions  -----------------  and  restrictions  on
issuance set forth herein.

6. Liquidation,  Dissolution or Winding Up. (a) Upon any liquidation  (voluntary
or otherwise),  dissolution or winding up of the  Corporation,  no  distribution
shall be made to the  holders of shares of stock  ranking  junior  (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B Junior
Participating  Preferred Stock unless,  prior thereto,  the holders of shares of
Series B Junior  Participating  Preferred  Stock  shall have  received  $100 per
share,  plus an amount equal to accrued and unpaid  dividends and  distributions
thereon,  whether or not  declared,  to the date of such  payment (the "Series B
Liquidation Preference"). Following the payment of the full amount of the Series
B  Liquidation  Preference,  no  additional  distributions  shall be made to the
holders of shares of Series B Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an amount per
share (the "Common  Adjustment")  equal to the quotient obtained by dividing (i)
the Series B Liquidation  Preference by (ii) 200 (as  appropriately  adjusted as
set forth in  subparagraph  (c) below to reflect  such  events as stock  splits,
stock  dividends and  recapitalizations  with respect to the Common Stock) (such
number in clause (ii), the  "Adjustment  Number").  Following the payment of the
full amount of the Series B Liquidation  Preference and the Common Adjustment in
respect of all  outstanding  shares of Series B Junior  Participating  Preferred
Stock and Common Stock,  respectively,  holders of Series B Junior Participating
Preferred  Stock and  holders  of shares of Common  Stock  shall  receive  their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the  Adjustment  Number to 1 with respect to such  Preferred  Stock and
Common Stock, on a per share basis, respectively.

                  (b) In the  event,  however,  that  there  are not  sufficient
assets  available  to  permit  payment  in  full  of the  Series  B  Liquidation
Preference  and the  liquidation  preferences  of all other  series of preferred
stock,  if any,  which rank on a parity  with the Series B Junior  Participating
Preferred Stock, then such remaining assets shall be distributed  ratably to the
holders of such parity  shares in  proportion  to their  respective  liquidation
preferences.  In the  event,  however,  that  there  are not  sufficient  assets
available  to  permit  payment  in  full of the  Common  Adjustment,  then  such
remaining assets shall be distributed ratably to the holders of Common Stock.

                  (c) In the event the  Corporation  shall at any time after the
Rights  Declaration  Date (i) declare any  dividend on Common  Stock  payable in
shares of Common Stock,  (ii) subdivide the  outstanding  Common Stock, or (iii)
combine the  outstanding  Common Stock into a smaller number of shares,  then in
each such case the Adjustment  Number in effect  immediately prior to such event
shall be  adjusted  by  multiplying  such  Adjustment  Number by a fraction  the
numerator  of  which  is the  number  of  shares  of  Common  Stock  outstanding
immediately  after  such  event and the  denominator  of which is the  number of
shares of Common Stock that were outstanding immediately prior to such event.

7.  Consolidation,  Merger,  etc. In case the  Corporation  shall enter into any
consolidation,  merger,  combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or  securities,  cash
and/or any other  property,  then in any such case the shares of Series B Junior
Participating  Preferred Stock shall at the same time be similarly  exchanged or
changed  in an  amount  per  share  (subject  to the  provision  for  adjustment
hereinafter  set  forth)  equal to 100  times  the  aggregate  amount  of stock,
securities,  cash and/or any other property  (payable in kind),  as the case may
be, into which or for which each share of Common Stock is changed or  exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding  Common Stock, or (iii) combine the outstanding Common
Stock  into a smaller  number of  shares,  then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of  Series  B  Junior  Participating   Preferred  Stock  shall  be  adjusted  by
multiplying  such amount by a fraction  the  numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

8. No Redemption.  The shares of Series B Junior  Participating  Preferred Stock
shall not be redeemable. -------------

9. Ranking. The Series B Junior Participating  Preferred Stock shall rank junior
to all other series of the  Corporation's  Preferred  Stock as to the payment of
dividends and the distribution of assets,  unless the terms of such series shall
provide otherwise. -------

10.  Amendment.  The Restated  Certificate of  Incorporation  of the Corporation
shall not be further  amended  in any manner  which  would  materially  alter or
change  the  powers,  preferences  or  special  rights  of the  Series  B Junior
Participating  Preferred  Stock  so as to  affect  them  adversely  without  the
affirmative vote of the holders of a majority or more of the outstanding  shares
of Series B Junior Participating  Preferred Stock, voting separately as a class.
---------

11.  Fractional  Shares.  Series B Junior  Participating  Preferred Stock may be
issued in fractions of a share which shall entitle the holder,  in proportion to
such holders  fractional  shares, to exercise voting rights,  receive dividends,
participate  in  distributions  and to have the  benefit of all other  rights of
holders of Series B Junior Participating Preferred Stock. -----------------


<PAGE>



IN WITNESS  WHEREOF,  we have executed and subscribed  this  Certificate  and do
affirm the  foregoing  as true  under the  penalties  of perjury  this day of --
_________________, 199_.



By:                        
Name:
Title:







<PAGE>



                                                                       Exhibit B


                          [Form of Rights Certificate]


Certificate No. R-                                              ________ Rights

NOT EXERCISABLE  AFTER SEPTEMBER 11, 2006 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION,  AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT  ON  THE  TERMS  SET  FORTH  IN  THE  RIGHTS   AGREEMENT.   UNDER  CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS  AGREEMENT) AND ANY  SUBSEQUENT  HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS  REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY  OWNED BY A PERSON WHO WAS OR BECOME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING  PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS  AGREEMENT).   ACCORDINGLY,   THIS  RIGHTS  CERTIFICATE  AND  THE  RIGHTS
REPRESENTED  HEREBY MAY BECOME NULL AND VOID IN THE  CIRCUMSTANCES  SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]1


                               Rights Certificate

                            ORION CAPITAL CORPORATION

                  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  September  11, 1996 (the "Rights  Agreement"),  between
Orion Capital  Corporation,  a Delaware  corporation (the "Company"),  and First
Chicago  Trust  Company of New York,  as Rights Agent (the "Rights  Agent"),  to
purchase  from the  Company  at any time  prior to 5:00 P.M.  (New York time) on
September 11, 2006 at the office or offices of the Rights Agent  designated  for
such purpose,  or its successors as Rights Agent,  one  two-hundredth of a fully
paid, non-assessable share of Series B Junior Participating Preferred Stock (the
"Preferred  Stock")  of the  Company,  at a  purchase  price  of  $200  per  one
two-hundredth of a share (the "Purchase Price"), upon presentation and surrender
of this Rights  Certificate  with the Form of  Election to Purchase  and rela ed
Certificate  duly  executed.  The  number of  Rights  evidenced  by this  Rights
Certificate  (and the  number of shares  which may be  purchased  upon  exercise
thereof) set forth above,  and the Purchase Price per share set forth above, are
the number and Purchase  Price as of September 11, 1996,  based on the Preferred
Stock as  constituted  at such date.  The Company  reserves the right to require
prior to the  occurrence  of a Triggering  Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only whole shares
of Preferred Stock will be issued.

                  Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights  Agreement),  if the Rights  evidenced  by this  Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring  Person (as such terms are defined in the Rights
Agreement),  (ii) a  transferee  of any  such  Acquiring  Person,  Associate  or
Affiliate  or  (iii)  under  certain  circumstances   specified  in  the  Rights
Agreement,  a  transferee  of a person  who,  after  such  transfer,  became  an
Acquiring  Person,  or an Affiliate or  Associate of an Acquiring  Person,  such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the  occurrence of such Section  11(a)(ii)
Event.

                  As provided in the Rights  Agreement,  the Purchase  Price and
the number and kind of shares of Preferred Stock or other securities,  which may
be  purchased  upon  the  exercise  of  the  Rights  evidenced  by  this  Rights
Certificate  are subject to  modification  and adjustment  upon the happening of
certain events, including Triggering Events.

                  This  Rights  Certificate  is  subject  to all  of the  terms,
provisions and conditions of the Rights Agreement,  which terms,  provisions and
conditions  are hereby  incorporated  herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights,  limitations of rights obligations,  duties and immunities hereunder
of the Rights  Agent,  the Company  and the holders of the Rights  Certificates,
which   limitations   of  rights   include  the  temporary   suspension  of  the
exercisability of such Rights under the specific  circumstances set forth in the
Rights   Agreement.   Copies  of  the  Rights  Agreement  are  on  file  at  the
above-mentioned  office of the Rights Agent and are also  available upon written
request to the Company.

                  This  Rights   Certificate,   with  or  without  other  Rights
Certificates,  upon  surrender at the principal  office or offices of the Rights
Agent  designated  for  such  purpose,  may  be  exchanged  for  another  Rights
Certificate  or Rights  Certificates  of like tenor and date  evidencing  Rights
entitling the holder to purchase a like aggregate  number of one  two-hundredths
of a share of Preferred Stock as the Rights evidenced by the Rights  Certificate
or Rights Certificates  surrendered shall have entitled such holder to purchase.
If this Rights  Certificate  shall be  exercised  in part,  the holder  shall be
entitled to receive upon surrender  hereof another Rights  Certificate or Rights
Certificates for the number of whole Rights not exercised.

                  Subject to the provisions of the Rights Agreement,  the Rights
evidenced by this  Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of the close
of business on (i) the tenth day following the Stock  Acquisition  Date (as such
time period may be extended pursuant to the Rights Agreement) and (ii) the Final
Expiration Date.


                  No  fractional  shares of Preferred  Stock will be issued upon
the exercise of any Right or Rights  evidenced  hereby (other than,  except that
the possible requirement that prior to the occurrence of a Triggering Event only
whole  shares  of  Preferred  Stock be  issued,  fractions  which  are  integral
multiples of one two-hundredth of a share of Preferred Stock,  which may, at the
election of the  Company,  be  evidenced by  depositary  receipts),  but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.

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

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

                  WITNESS the facsimile  signature of the proper officers of the
Company and its corporate seal.


Dated as of __________________


                       ATTEST: ORION CAPITAL CORPORATION



                                       By
                                Secretary Title:



                                 Countersigned:

                              FIRST CHICAGO TRUST
                               COMPANY OF NEW YORK



                                       By
                              Authorized Signature

1 The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.


<PAGE>



                  [Form of Reverse Side of Rights Certificate]


                               FORM OF ASSIGNMENT

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

FOR VALUE RECEIVED                                                              
hereby sells, assigns and transfers unto                                       

                  (Please print name and address of transferee)

this Rights  Certificate,  together with all right,  title and interest therein,
and does hereby  irrevocably  constitute and appoint  Attorney,  to transfer the
within Rights  Certificate on the books of the within-named  Company,  with full
power of substitution. -----------------


Dated: __________________




                                            Signature

Signature Guaranteed:


                                                Certificate
                  The undersigned  hereby  certifies by checking the appropriate
boxes that:

     (1) this  Rights  Certificate  [ ]is [ ] is not being  sold,  assigned  and
     transferred  by or on behalf of a Person who is or was an Acquiring  Person
     or an Affiliate or  Associate of any such  Acquiring  Person (as such terms
     are defined pursuant to the Rights Agreement);

     (2) after due inquiry and to the best knowledge of the undersigned,  it [ ]
     did [ ] did not acquire  the Rights  evidenced  by this Rights  Certificate
     from any Person who is, was or subsequently  became an Acquiring  Person or
     an Affiliate or Associate of an Acquiring Person.

Dated:                                                                          
                                                     Signature

Signature Guaranteed:



<PAGE>



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





<PAGE>



                                       FORM OF ELECTION TO PURCHASE

                  (To  be  executed  if  holder   desires  to  exercise   Rights
represented by the Rights Certificate.)


To: ORION CAPITAL CORPORATION:
                  The  undersigned   hereby   irrevocably   elects  to  exercise
_________ Rights  represented by this Rights  Certificate to purchase the shares
of  Preferred  Stock  issuable  upon the  exercise  of the Rights (or such other
securities  of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:

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 Rights  Certificate,  a new Rights  Certificate  for the balance of such
Rights shall be registered in the name of and delivered to:

Please insert social security
or other identifying number


                                      (Please print name and address)





Dated: _____________________




                                            Signature

Signature Guaranteed:


<PAGE>



                                                Certificate

                  The undersigned  hereby  certifies by checking the appropriate
boxes that:

     (3) the Rights  evidenced  by this Rights  Certificate  [ ] are [ ] are not
     being  exercised  by or on  behalf of a Person  who is or was an  Acquiring
     Person or an Affiliate or Associate of any such  Acquiring  Person (as such
     terms are defined pursuant to the Rights Agreement);

     (4) after due inquiry and to the best knowledge of the undersigned,  it [ ]
     did [ ] did not acquire  the Rights  evidenced  by this Rights  Certificate
     from any Person who is, was or became an  Acquiring  Person or an Affiliate
     or Associate of an Acquiring Person.


Dated:                                                                          
                                                     Signature


Signature Guaranteed:





<PAGE>



                                                  NOTICE
          The  signature to the foregoing  Election to Purchase and  Certificate
must correspond to the name as written upon the face of this Rights  Certificate
in every particular, without alteration or enlargement or any change whatsoever.





<PAGE>


                                                                      Exhibit C

                          SUMMARY OF RIGHTS TO PURCHASE
                                 PREFERRED STOCK


     On September 11, 1996, the Board of Directors of Orion Capital  Corporation
(the  "Company")  declared  a  dividend  distribution  of  one  Right  for  each
outstanding  share of  Common  Stock to  stockholders  of record at the close of
business on September  16, 1996 (the  "Record  Date").  Each Right  entitles the
registered  holder to purchase from the Company one  two-hundredth of a share of
Series B Junior  Participating  Preferred  Stock, par value $1.00 per share (the
"Preferred  Stock"),  at a Purchase Price of $200,  subject to  adjustment.  The
description  and terms of the  Rights are set forth in a Rights  Agreement  (the
"Rights  Agreement")  between the Company and First Chicago Trust Company of New
York, as Rights Agent.

     Initially,  the Rights will be attached  to all Common  Stock  certificates
representing  shares then outstanding,  and no separate Rights Certificates will
be  distributed.   The  Rights  will  separate  from  the  Common  Stock  and  a
Distribution  Date will occur upon the earlier of (i) ten (10) days  following a
public  announcement that a person or group of affiliated or associated  persons
(an  "Acquiring  Person")  has  acquired,  or  obtained  the  right to  acquire,
beneficial  ownership of fifteen percent (15%) or more of the outstanding shares
of Common  Stock  (the  "Stock  Acquisition  Date"),  other  than as a result of
repurchases  of  stock  by  the  Company  or  certain   inadvertent  actions  by
institutional or certain other stockholders,  or (ii) ten (10) business days (or
such later date as the Board shall  determine)  following the  commencement of a
tender  offer  or  exchange  offer  that  would  result  in a  person  or  group
beneficially  owning fifteen percent (15%) or more of such outstanding shares of
Common Stock.  Until the Distribution  Date, (i) the Rights will be evidenced by
the Common Stock  certificates  and will be transferred  with and only with such
Common Stock  certificates,  (ii) new Common Stock certificates issued after the
Record  Date will  contain a  notation  incorporating  the Rights  Agreement  by
reference and (iii) the surrender  for transfer of any  certificates  for Common
Stock  outstanding  will also  constitute the transfer of the Rights  associated
with the Common Stock  represented by such  certificate.  Pursuant to the Rights
Agreement,  the Company reserves the right to require prior to the occurrence of
a  Triggering  Event (as defined  below) that,  upon any  exercise of Rights,  a
number of Rights be exercised so that only whole shares of Preferred  Stock will
be issued.

     The Rights are not exercisable  until the Distribution Date and will expire
at the close of business on  September  11,  2006,  unless  earlier  redeemed or
exchanged by the Company as described below.

     As soon as practicable  after the Distribution  Date,  Rights  Certificates
will be mailed to  holders  of  record  of the  Common  Stock as of the close of
business  on  the  Distribution  Date  and,  thereafter,   the  separate  Rights
Certificates alone will represent the Rights.  Except as otherwise determined by
the Board,  only shares of Common Stock issued  prior to the  Distribution  Date
will be issued with Rights.

     In the event that a Person becomes an Acquiring  Person (except pursuant to
an offer  for all  outstanding  shares  of  Common  Stock  that the  independent
directors  determine  not to be  inadequate  and  to  otherwise  be in the  best
interests  of the  Company  and its  stockholders),  each holder of a Right will
thereafter  have the right to  receive,  upon  exercise,  Common  Stock (or,  in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times the exercise price of the Right.  Notwithstanding any
of the  foregoing,  following  the  occurrence  of the  event  set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were,  beneficially owned by any Acquiring Person will be null
and void.  However,  Rights are not exercisable  following the occurrence of the
event set forth above until such time as the Rights are no longer  redeemable by
the Company as set forth below.

     For example,  at an exercise price of $200 per Right,  each Right not owned
by an Acquiring  Person (or by certain related  parties)  following an event set
forth in the preceding paragraph would entitle its holder to purchase $400 worth
of Common Stock (or other consideration, as noted above) for $200. Assuming that
the Common  Stock had a per share value of $50 at such time,  the holder of each
valid Right would be entitled to purchase 8 shares of Common Stock for $200.

     In the event that, at any time  following the Stock  Acquisition  Date, (i)
the Company is acquired in a merger or other  business  combination  transaction
(other than a merger which  follows an offer  described in the second  preceding
paragraph),  or (ii)  fifty  percent  (50%) or more of the  Company's  assets or
earning  power is sold or  transferred,  each holder of a Right  (except  Rights
which  previously have been voided as set forth above) shall thereafter have the
right to receive, upon exercise,  common stock of the acquiring company having a
value equal to two times the exercise  price of the Right.  The events set forth
in this paragraph and in the second  preceding  paragraph are referred to as the
"Triggering Events."

     At any time  after a person  becomes an  Acquiring  Person and prior to the
acquisition  by such  person  or  group of  fifty  percent  (50%) or more of the
outstanding  Common Stock,  the Board 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 share of Common Stock, or one  two-hundredth of a share
of  Preferred  Stock  (or of a  share  of a class  or  series  of the  Company's
preferred stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).

     Generally,  at any time until ten (10) days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right  (payable in cash,  Common  Stock or other  consideration  deemed
appropriate  by the Board).  Immediately  upon the action of the Board  ordering
redemption  of the Rights,  the Rights will  terminate and the only right of the
holders of Rights will be to receive the $.01 redemption price.

     Until a Right is  exercised,  the  holder  thereof,  as such,  will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive  dividends.  While the distribution of the Rights will not
be taxable to stockholders or to the Company,  stockholders may,  depending upon
the circumstances,  recognize taxable income in the event that the Rights become
exercisable  for Common  Stock (or other  consideration)  of the  Company or for
common stock of the acquir ing company as set forth above.

     Any of the  provisions of the Rights  Agreement may be amended by the Board
prior to the Distribution  Date. After the Distribution  Date, the provisions of
the Rights Agreement may be amended by the Board in order to cure any ambiguity,
to make  changes  which do not  adversely  affect  the  interests  of holders of
Rights,  or to shorten or lengthen any time period  under the Rights  Agreement;
provided,  however, that no amendment may be made at such time as the Rights are
not redeemable. -------- -------

     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.  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 incorporated herein
by reference.


<PAGE>