<PAGE>

                                   EXHIBIT 4.1



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                                    Form of

                     STOCKHOLDER PROTECTION RIGHTS AGREEMENT

                                   dated as of

                                  May 29, 2002

                                     between

                            VORNADO OPERATING COMPANY

                                       and

                       WACHOVIA BANK NATIONAL ASSOCIATION,

                                 as Rights Agent





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<PAGE>
                     STOCKHOLDER PROTECTION RIGHTS AGREEMENT

                                TABLE OF CONTENTS



<TABLE>
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Section                                                                                              Page
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                                                    ARTICLE I
                                                   DEFINITIONS

         1.1      Definitions .................................................................      2

                                                   ARTICLE II
                                                   THE RIGHTS

         2.1      Summary of Rights ...........................................................      13
         2.2      Ownership Prior to Separation Time; Legends .................................      13
         2.3      Exercise of Rights; Separation of Rights ....................................      15
         2.4      Adjustments to Exercise Price; Number of Rights .............................      19
         2.5      Date on Which Exercise is Effective .........................................      22
         2.6      Execution, Authentication, Delivery and Dating of Rights Certificates .......      22
         2.7      Registration, Registration of Transfer and Exchange .........................      23
         2.8      Mutilated, Destroyed, Lost and Stolen Rights Certificates ...................      25
         2.9      Persons Deemed Owners .......................................................      26
         2.10     Delivery and Cancellation of Certificates ...................................      26
         2.11     Agreement of Rights Holders .................................................      27

                                                   ARTICLE III
                                           ADJUSTMENTS TO THE RIGHTS IN
                                         THE EVENT OF CERTAIN TRANSACTIONS

         3.1      Flip-in .....................................................................      28
         3.2      Flip-over ...................................................................      31
         3.3      Other Post-Flip-in Transactions .............................................      32

                                                    ARTICLE IV
                                                 THE RIGHTS AGENT

         4.1      General .....................................................................      34
         4.2      Merger or Consolidation or Change of Name of Rights Agent ...................      35
         4.3      Duties of Rights Agent ......................................................      36
         4.4      Change of Rights Agent ......................................................      40

                                                    ARTICLE V
                                                  MISCELLANEOUS

         5.1      Redemption ..................................................................      42
         5.2      Expiration ..................................................................      42
</TABLE>


                                       -i-
<PAGE>
<TABLE>
<CAPTION>
Section                                                                                              Page
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         5.3      Issuance of New Rights Certificates .........................................      43
         5.4      Cash Offset When Exercising Rights for Cash .................................      44
         5.5      Limitations on Exercise or Exchange of Rights ...............................      44
         5.6      Supplements and Amendments ..................................................      45
         5.7      Fractional Shares ...........................................................      46
         5.8      Rights of Action ............................................................      46
         5.9      Holder of Rights Not Deemed a Stockholder ...................................      46
         5.10     Notice of Proposed Actions ..................................................      47
         5.11     Notices .....................................................................      47
         5.12     Suspension of Exercisability ................................................      48
         5.13     Costs of Enforcement ........................................................      49
         5.14     Successors ..................................................................      49
         5.15     Benefits of this Agreement ..................................................      49
         5.16     Determination and Actions by the Board of Directors, etc. ...................      49
         5.17     Descriptive Headings ........................................................      50
         5.18     GOVERNING LAW ...............................................................      50
         5.19     Counterparts ................................................................      50
         5.20     Severability ................................................................      51
</TABLE>


                                     EXHIBIT

Exhibit A         Form of Rights Certificate
                  (Together with Form of Assignment and Form of
                  Election to Exercise)




                                  -ii-
<PAGE>
                     STOCKHOLDER PROTECTION RIGHTS AGREEMENT

            STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to
time, this "Agreement"), dated as of May 29, 2002, between Vornado Operating
Company, a Delaware corporation (the "Company"), and Wachovia Bank National
Association, formerly named First Union National Bank, a national bank, as
Rights Agent (the "Rights Agent", which term shall include any successor Rights
Agent hereunder).

                                   WITNESSETH:

            WHEREAS, the Board of Directors of the Company has (a) authorized
and declared a dividend of one right ("Right") in respect of each share of
Common Stock (as hereinafter defined) held of record as of the close of business
on June 7, 2002 (the "Record Time") payable in respect of each such share upon
certification by The American Stock Exchange LLC to the Securities and Exchange
Commission that the Rights have been approved for listing and registration (the
"Payment Time"), (b) authorized the issuance of one Right in respect of each
Class A Unit (as hereinafter defined) held of record as of the Record Time
(other than Class A Units held by the Company), effective as of the time that
the dividend referred to above becomes payable and (c) as provided in Section
2.4, authorized the issuance of one Right in respect of each share of Common
Stock or Class A Unit issued after the Record Time and prior to the Separation
Time (as
<PAGE>
hereinafter defined) (other than Class A Units issued to the Company) and, to
the extent provided in Section 5.3, each share of Common Stock issued after the
Separation Time;

            WHEREAS, subject to the terms and conditions hereof, each Right
entitles the holder thereof, after the Separation Time, to receive, upon due
exercise, cash or debt or other securities pursuant to the terms and subject to
the conditions set forth herein; and

            WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;

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

                                    ARTICLE I

                                   DEFINITIONS

            1.1 Definitions. For purposes of this Agreement, the following terms
have the meanings indicated (except as otherwise provided in Section 5.5(c)):

            "Acquiring Person" shall mean any Person who is or becomes the
Beneficial Owner of 10% or more of the outstanding shares of Common Stock;
provided, however, that the term "Acquiring Person" shall not include any Person
(i) who is the Beneficial Owner of 10% or more of the outstanding shares of
Common Stock on the date of this Agreement, until such time hereafter as such
Person shall become the Beneficial Owner (other than by means of a stock
dividend or stock split or a Qualified


                                       -2-
<PAGE>
Grant, Issuance or Acquisition) of any additional shares of Common Stock while
such Person is or as a result of which such Person becomes the Beneficial Owner
of 10% or more of the outstanding shares of Common Stock, (ii) who shall become
the Beneficial Owner of 10% or more of the outstanding shares of Common Stock
solely as a result of a Qualified Grant, Issuance or Acquisition or an
acquisition by the Company of shares of Common Stock, until such time thereafter
as such Person shall become the Beneficial Owner (other than by means of a stock
dividend or stock split or a Qualified Grant, Issuance or Acquisition) of any
additional shares of Common Stock while such Person is or as a result of which
such Person becomes the Beneficial Owner of 10% or more of the outstanding
shares of Common Stock, (iii) who shall become the Beneficial Owner of 10% or
more of the outstanding shares of Common Stock but shall have done so without
any plan or intention to seek or affect control of the Company, if such Person
shall promptly divest, or promptly enter into an agreement with, and
satisfactory to, the Company, in its sole discretion, to divest (without
exercising or retaining any power, including voting power, with respect to such
shares), sufficient shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) so that such Person shall
cease to be the Beneficial Owner of 10% or more of the outstanding shares of
Common Stock; and provided further, that the term "Acquiring Person" shall not
include any Subsidiary of the Company or any employee stock ownership or other
employee benefit plan of the Company or a Subsidiary of the Company (or any
entity or trustee holding shares of Common Stock for or pursuant to the


                                       -3-
<PAGE>
terms of any such plan or for the purpose of funding any such plan or funding
other employee benefits for employees of the Company or of any Subsidiary of the
Company).

            "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act, as such Rule is in
effect on the date of this Agreement.

            "Agreement" shall have the meaning set forth in the Preamble.

            A Person shall be deemed the "Beneficial Owner" and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner pursuant to Rules 13d-3 and 13d-5 under the Exchange
Act, as such Rules are in effect on the date of this Agreement, as well as any
securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" or to have "Beneficial Ownership" of, or to "Beneficially
Own", any security (i) solely because such security has been tendered pursuant
to a tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered security is accepted for


                                       -4-
<PAGE>
payment or exchange or (ii) solely because such Person or any of such Person's
Affiliates or Associates has or shares the power to vote or direct the voting of
such security pursuant to a revocable proxy or consent given in response to a
public proxy or consent solicitation made to more than ten holders of shares of
a class of stock of the Company registered under Section 12 of the Exchange Act
and pursuant to, and in accordance with, the applicable rules and regulations
under the Exchange Act, except if such power (or the arrangements relating
thereto) is then reportable under Item 6 of Schedule 13D under the Exchange Act
(or any similar provision of a comparable or successor report). It is
acknowledged and agreed that any Beneficial Owner of Class A Units shall be
deemed pursuant to the foregoing definition to be a Beneficial Owner of the
Common Stock into which such Class A Units could be converted under the terms of
the Partnership Agreement, assuming for this purpose that such Beneficial Owner
exercised its right to require the Partnership to redeem such Class A Units and
the Company in turn exercised its right to assume the Partnership's redemption
obligation with respect to such Class A Units and deliver Common Stock in lieu
of cash upon such exercise. Notwithstanding the foregoing, no officer or
director of the Company shall be deemed to Beneficially Own any securities of
any other Person by virtue of any actions such officer or director takes in such
capacity. For purposes of this Agreement, in determining the percentage of the
out standing shares of Common Stock with respect to which a Person is the
Beneficial Owner, all shares as to which such Person is deemed the Beneficial
Owner shall be deemed outstanding.


                                       -5-
<PAGE>
            "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Charlotte, North Carolina are generally
authorized or obligated by law or executive order to close.

            "Certificate of Incorporation" shall mean the Restated Certificate
of Incorporation of the Company.

            "Class A Units" shall have the meaning given to such term in the
Partnership Agreement.

            "Close of Business" on any given date shall mean 5:00 p.m.
Charlotte, North Carolina time on such date or, if such date is not a Business
Day, 5:00 p.m. Charlotte, North Carolina time on the next succeeding Business
Day.

            "Closing Price" per share of any securities on any date shall mean
the last reported sale price, regular way, or, in case no such sale takes place
or is quoted on such date, the average of the closing bid and asked prices,
regular way, for each share of such securities, 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, Inc.
or, if such securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such securities are listed or admitted to trading
or, if such securities are not listed or admitted to trading on any national
securities exchange, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system


                                       -6-
<PAGE>
then in use, or, if on any such date such securities are not listed or admitted
to trading on any national securities exchange or 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 such securities selected by the
Board of Directors of the Company; provided, however, that if on any such date
such securities are not listed or admitted to trading on a national securities
exchange or traded in the over-the-counter market, the Closing Price per share
of such securities on such date shall mean the fair value per share of such
securities on such date as determined in good faith by the Board of Directors of
the Company, after consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights Agent.

            "Code" shall mean the Internal Revenue Code of 1986, as amended.

            "Common Stock" shall mean the shares of Common Stock, par value
$0.01 per share, of the Company.

            "Company" shall have the meaning set forth in the preamble.

            "Election to Exercise" shall have the meaning set forth in Section
            2.3(d).

            "Excess Shares" shall have the meaning given such term in the
Certificate of Incorporation.

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

            "Exchange Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 3.1(c).


                                       -7-
<PAGE>
            "Exercise Price" shall mean, as of any date, the price at which a
holder may exercise one whole Right. Until adjustment thereof in accordance with
the terms hereof, the Exercise Price shall equal $13.50.

            "Expansion Factor" shall have the meaning set forth in Section
2.4(a).

            "Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, (iii) the Close of Business on the tenth anniversary
of the date of this Agreement, unless, for purposes of this clause (iii),
extended by action of the Board of Directors of the Company (in which case the
applicable time shall be the time to which it has been so extended) and (iv)
immediately prior to the effective time of a consolidation, merger or statutory
share exchange that does not constitute a Flip-over Transaction or Event.

            "Flip-in Time" shall mean the Stock Acquisition Time or such earlier
or later date and time as the Board of Directors of the Company may from time to
time fix by resolution adopted prior to the Flip-in Time that would otherwise
have occurred.

            "Flip-over Entity," for purposes of Section 3.2, shall mean (i) in
the case of a Flip-over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other Person that is a party to such Flip-over Transaction or
Event and (ii) in the case of a Flip-over Transaction or Event referred to in
clause (ii) of the definition thereof, the Person receiving the greatest portion
of the (A) assets or (B) operating income or cash flow being transferred in such


                                       -8-
<PAGE>
Flip-over Transaction or Event, provided in all cases if such Person is a
Subsidiary of another Person, the ultimate parent entity of such Person shall be
the Flip-over Entity.

            "Flip-over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other persons similarly responsible for the direction of the business and
affairs) of the Flip-over Entity.

            "Flip-over Transaction or Event" shall mean a transaction or series
of transactions, at or after a Flip-in Time, in which, directly or indirectly,
(i) the Company shall consolidate or merge or participate in a statutory share
exchange with any other Person or (ii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer)
assets aggregating more than 50% of the assets (measured by either book value or
fair market value), or assets generating more than 50% of the operating income
or cash flow, of the Company and its Subsidiaries (taken as a whole) to any
Person (other than the Company or one or more of its wholly owned Subsidiaries)
or to two or more such Persons which are Affiliates or Associates or otherwise
acting in concert, but only if (I) at the time of consummation of the
consolidation, merger, statutory share exchange, sale or transfer or at the time
the Company enters into any agreement with respect thereto, the Acquiring Person
is the Beneficial Owner of 90% or more of the outstanding shares of Common Stock
or controls the Board of Directors of the Company and (II) the Acquiring Person
or an Affiliate or Associate of the Acquiring Person was a party to that
transaction or received consideration in connection therewith that was not
identical to the consideration generally


                                       -9-
<PAGE>
available to the other holders of the Common Stock. For purposes of the
foregoing description, the term "Acquiring Person" shall include any Acquiring
Person and its Affiliates and Associates, counted together as a single Person.
An Acquiring Person shall be deemed to control the Company's Board of Directors
when, at or following a Stock Acquisition Time, the persons who were directors
of the Company (or persons nominated and/or appointed as directors by vote of a
majority of such persons) before the Stock Acquisition Time shall cease to
constitute a majority of the Company's Board of Directors.

            "General Partner" shall have the meaning given such term in the
Partnership Agreement.

            "Market Value" per share of any securities on any date shall mean
the average of the daily Closing Prices per share of such securities on each of
the 20 consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if any event described
in Section 2.4, or any analogous event, shall have caused the Closing Prices
used to determine the Market Value on any Trading Days during such period of 20
Trading Days not to be fully comparable with the Closing Price on such date,
each such Closing Price so used shall be appropriately adjusted in order to make
it fully comparable with the Closing Price on such date.

            "Ownership Limit" shall have the meaning given such term in the
Certificate of Incorporation.


                                      -10-
<PAGE>
            "Partnership" shall mean Vornado Operating L.P., a Delaware limited
partnership.

            "Partnership Agreement" shall mean the Agreement of Limited
Partnership, dated as of October 16, 1998, of the Partnership, as amended.

            "Payment Time" shall have the meaning set forth in the Recitals.

            "Person" shall mean any individual, firm, partnership, limited
liability company, association, group (as such term is used in Rule 13d-5 under
the Exchange Act, as such Rule is in effect on the date of this Agreement),
corporation or other entity.

            "Qualified Grant, Issuance or Acquisition" shall mean (a) any grant
by the Company of options to acquire Common Stock, or any issuance by the
Company of Common Stock, in either case as compensation pursuant to the terms of
an employee or director stock-based plan, (b) any acquisition of Common Stock or
options to acquire Common Stock made in connection with, and specifically
contemplated by, an agreement to merge with or otherwise acquire the Company
approved by the Board of Directors of the Company prior to the time that the
Board of Directors of the Company becomes aware that a Person has become an
Acquiring Person and (c) any acquisition of Common Stock effected by exercising
options that were granted or acquired in a grant described in clauses (a) or (b)
hereof.

            "Record Time" shall have the meaning set forth in the Recitals.

            "Redemption Price" shall initially mean an amount equal to $0.01;
provided, however, that if the Exercise Price is ever changed pursuant to
Section 2.4, the


                                      -11-
<PAGE>
Redemption Price shall automatically and simultaneously change to an amount
equal to the Redemption Price as in effect immediately before such change times
the Exercise Price as in effect immediately after such change divided by the
Exercise Price as in effect immediately before such change.

            "Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1.

            "Right" shall have the meaning set forth in the Recitals.

            "Rights Agent" shall have the meaning set forth in the Preamble.

            "Rights Certificate" shall have the meaning set forth in Section
2.3(c).

            "Rights Register" shall have the meaning set forth in Section
2.7(a).

            "Separation Time" shall mean the earlier of (i) the Close of
Business on the tenth Business Day (or such later date as the Board of Directors
of the Company may from time to time fix by resolution adopted prior to the
Separation Time that would otherwise have occurred) after the date on which any
Person commences a tender or exchange offer which, if consummated, would result
in such Person's becoming an Acquiring Person and (ii) the Flip-in Time;
provided, that if the foregoing results in the Separation Time being prior to
the Record Time, the Separation Time shall be the Record Time and provided
further, that if any tender or exchange offer referred to in clause (i) of this
paragraph is canceled, terminated or otherwise withdrawn prior to the Separation
Time without the purchase of any shares of Common Stock pursuant thereto, such
offer shall be deemed, for purposes of this paragraph, never to have been made.


                                      -12-

<PAGE>

                  "Stock Acquisition Time" shall mean the first date on which
any Person becomes an Acquiring Person.


                  "Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity or membership interest is
Beneficially Owned, directly or indirectly, by such Person.

                  "Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day.

                                   ARTICLE II
                                   THE RIGHTS

                  2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock or Class A Units as of the Record Time, at such
holder's address as shown by the records of the Company or the Partnership.

                  2.2 Ownership Prior to Separation Time; Legends. Certificates
for the Common Stock issued on or after the Record Time but prior to the
Separation Time shall


                                      -13-
<PAGE>
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:

         Until the Separation Time (as defined in the Rights Agreement referred
         to below), this certificate also evidences and entitles the holder
         hereof to certain Rights as set forth in a Rights Agreement, dated as
         of May 29, 2002 (as such may be amended from time to time, the "Rights
         Agreement"), between Vornado Operating Company (the "Company") and
         Wachovia Bank National Association, as Rights Agent, the terms of which
         are hereby incorporated herein by reference and a copy of which is on
         file at the principal executive offices of the Company. Under certain
         circumstances, as set forth in the Rights Agreement, such Rights may be
         redeemed, may become rights to receive, upon due exercise, cash or
         securities, may at the Company's option be exchanged for cash or
         securities, may expire, may never become exercisable or exchangeable,
         may become void (if they are "Beneficially Owned" by an "Acquiring
         Person" or an Affiliate or Associate thereof, as such terms are defined
         in the Rights Agreement, or by any transferee of any of the foregoing)
         or may be evidenced by separate certificates and may no longer be
         evidenced by this certificate. The Company will mail or arrange for the
         mailing of a copy of the Rights Agreement to the holder of this
         certificate without charge after the receipt of a written request
         therefor.

Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall, together with the letter mailed pursuant to Section
2.1, evidence one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.

                  The records of the Partnership indicating ownership of Class A
Units and the registration of any uncertificated Common Stock on the stock
transfer books of the Company shall evidence one Right for each Class A Unit or
share of Common Stock evidenced thereby, and the Company shall mail to every
Person that holds Class A Units or uncertificated Common Stock a confirmation of
the ownership of such Class A Units or Common Stock as evidenced by the records
of the Partnership or the stock transfer


                                      -14-
<PAGE>
books of the Company, as the case may be, which confirmation shall have
impressed, printed, written or stamped thereon or otherwise affixed thereto the
above legend.

                  Notwithstanding anything in this Agreement to the contrary, in
the event that prior to the earlier of the Separation Time or the redemption or
expiration of the Rights, any shares of Common Stock are retired and canceled in
connection with the conversion of such shares to Excess Shares pursuant to
Article Ninth of the Certificate of Incorporation, then the associated Rights
shall be deemed to be similarly retired and canceled.

                  The Company shall mail or arrange for the mailing of a copy of
this Agreement to any Person that holds Common Stock or Class A Units, as
evidenced by the records of the Company or the Partnership, as the case may be,
without charge after the receipt of a written request therefor.

                  2.3 Exercise of Rights; Separation of Rights. (a) Subject to
Sections 3.1, 3.2, 5.1 and 5.12 and subject to adjustment as herein set forth,
each Right will entitle the holder thereof, on or after the Separation Time and
prior to the Expiration Time, to receive from the Company upon exercise in
accordance with the terms hereof, in return for the Exercise Price, cash in an
amount, or debt or other securities determined by the Board of Directors of the
Company in good faith to have a value equal to the Closing Price of a share of
Common Stock on the date of exercise; provided, however, that the Company shall
in its sole discretion have the option to deliver, in respect of the exercise of
any Right (but subject to Section 5.5), in lieu of the cash or debt or other
securities referred to above, one share of Common Stock.


                                      -15-
<PAGE>
                  (b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (or, in the case of a Right associated with an
uncertificated share of Common Stock or a Class A Unit, by the registration on
the stock transfer books of the Company or by the records of the Partnership, as
the case may be, evidencing ownership of such Common Stock or Class A Unit and
the confirmation thereof provided for in Section 2.2), together, in the case of
certificates issued prior to the Record Time, with the letter mailed to the
record holder thereof pursuant to Section 2.1, and will be transferable only
together with, and will be transferred by a transfer (whether with or without
such letter or confirmation) of, such associated share or unit.

                  (c) Subject to the terms and conditions hereof, on or after
the Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of shares of Common Stock or
Class A Units. Promptly following the Separation Time, the Rights Agent will
mail to each holder of record of Common Stock or Class A Units as of the
Separation Time (other than any Person whose Rights have become void pursuant to
Section 3.1(b)), at such holder's address as shown by the records of the Company
or the Partnership, as the case may be, (the Company hereby agreeing to furnish
or cause to be furnished copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks of
identification or designation


                                      -16-
<PAGE>
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 law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from time to
time be listed or traded, or to conform to usage, and (y) a disclosure statement
describing the Rights.

                  (d) Subject to the terms and conditions hereof, Rights may be
exercised on any Business Day on or after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check or money
order payable to the order of the Company, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of securities in a name other than that of the holder of the Rights
being exercised.

                  (e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
the terms and conditions hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from the Company or its transfer agent the cash or securities to be
delivered in connection with


                                      -17-
<PAGE>
such exercise (or, in the case of an exercise for uncertificated shares,
requisition from the Company or its transfer agent a notice setting forth such
number of shares for which registration will be made on the stock transfer books
of the Company) (the Company hereby irrevocably authorizing its transfer agents
to comply with all such requisitions), and (B) if the Company elects to deliver
shares in connection with such exercise and elects, pursuant to Section 5.7, not
to issue certificates (or effect registrations on the stock transfer books of
the Company) representing fractional shares, requisition from the Company the
amount of cash to be paid in lieu of fractional shares in accordance with
Section 5.7 and (ii) after receipt of such cash, securities or notices, deliver
the same to or upon the order of the registered holder of such Rights
Certificate, registered (in the case of securities or notices) in such name or
names as may be designated by such holder.

                  (f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.

                  (g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all securities delivered (or
evidenced by registration on the stock transfer books of the Company) upon
exercise of Rights shall, at the time of delivery (or registration) of those
securities (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered (or registered) and, in the case of
shares, fully paid and nonassessable; (ii) take all such


                                      -18-
<PAGE>
action as may be necessary to comply with any applicable requirements of the
Securities Act of 1933 or the Exchange Act, and the rules and regulations
thereunder, and any other applicable law, rule or regulation, in connection with
the issuance of any securities upon exercise of Rights; and (iii) pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the original issuance or delivery of the Rights
Certificates or of any securities issued upon the exercise of Rights, provided,
that the Company shall not be required to pay any transfer tax or charge which
may be payable in respect of any transfer involved in the transfer or delivery
of Rights Certificates or the issuance or delivery (or registration) of
securities in a name other than that of the holder of the Rights being
transferred or exercised.

                  2.4 Adjustments to Exercise Price; Number of Rights. (a) In
the event the Company shall at any time after the Record Time and prior to the
Separation Time (i) declare or pay a dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjust ment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one share of
Common Stock immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof, (y) the Company shall cause the
Partnership to make a corresponding change to the number of Class A Units so
that the Conversion Factor (as defined in the Partnership Agreement) shall
remain 1.0 and


                                      -19-
<PAGE>
(z) each Right held prior to such adjustment will become that number of Rights
equal to the Expansion Factor, and the adjusted number of Rights will be deemed
to be distributed among the shares of Common Stock or Class A Units with respect
to which the original Rights were associated (if they remain outstanding) and
the shares or units issued in respect of such dividend, subdivision or
combination, so that each such share of Common Stock or Class A Unit will have
exactly one Right associated with it (it being agreed that, if the Company is
unable to cause the Partnership to make the change required in clause (y) in
connection with any dividend, subdivision or combination, the Company shall in
lieu thereof amend this Agreement as required so that each share of Common Stock
will thereafter have exactly one Right associated with it and each Class A Unit
will thereafter have a number of Rights associated with it equal to the
Expansion Factor). Each adjustment made pursuant to this paragraph shall be made
as of the payment or effective date for the applicable dividend, subdivision or
combination.

                  In the event that at any time after the Record Time and prior
to the Separation Time the Company shall issue any shares of Common Stock or the
Partnership shall issue any Class A Units, in either case otherwise than in a
transaction referred to in the preceding paragraph, each such share of Common
Stock or Class A Unit so issued shall automatically have one new Right
associated with it, which Right shall be evidenced by the certificate for such
share (or, in the case of a Right associated with an uncertificated share of
Common Stock or a Class A Unit, by the registration on the stock transfer books
of the Company or by the records of the Partnership, as the case may be,


                                      -20-
<PAGE>
evidencing ownership of such Common Stock or Class A Unit and the confirmation
thereof provided for in Section 2.2). Rights shall be issued by the Company in
respect of shares of Common Stock or Class A Units that are issued or sold by
the Company or the Partnership after the Separation Time only to the extent
provided in Section 5.3.

                  (b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to any non-extraordinary periodic cash dividend or a dividend paid
solely in Common Stock) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a merger,
consolidation or statutory share exchange), or otherwise, the Company shall make
such adjustments, if any, in the Exercise Price, number of Rights and/or cash,
securities or other property deliverable upon exercise of Rights as the Board of
Directors of the Company, in its sole discretion, may deem to be appropriate
under the circumstances in order to adequately protect the interests of the
holders of Rights generally, and the Company and the Rights Agent shall amend
this Agreement as necessary to provide for such adjustments.

                  (c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.4, the Company shall
(i) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts


                                      -21-
<PAGE>
accounting for such adjustment and (ii) promptly file with the Rights Agent and
with each transfer agent for the Common Stock a copy of such certificate.

                  (d) Rights Certificates shall represent the right to receive
the cash or securities deliverable upon exercise under the terms of this
Agreement, including any adjustment or change in such cash or securities, even
though such certificates may not have been changed to reflect such adjustment or
change.

                  2.5 Date on Which Exercise is Effective. Each Person in whose
name any securities are issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such securities on the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the Company elects to deliver
shares in connection with such exercise and the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on
the next succeeding Business Day on which the stock transfer books of the
Company are open.

                  2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.


                                      -22-
<PAGE>
                  Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.

                  Promptly after the Separation Time, the Company will notify
the Rights Agent of such Separation Time and will deliver Rights Certificates
executed by the Company to the Rights Agent for countersignature, and, subject
to Section 3.1(b), the Rights Agent shall manually countersign and deliver such
Rights Certificates to the holders of the Rights pursuant to Section 2.3(c). No
Rights Certificate shall be valid for any purpose unless manually countersigned
by the Rights Agent.

                  (b) Each Rights Certificate shall be dated the date of
countersignature thereof.

                  2.7 Registration, Registration of Transfer and Exchange. (a)
After the Separation Time, the Company will cause to be kept a register (the
"Rights Register") in which, subject to such reasonable regulations as it may
prescribe, the Company will provide for the registration and transfer of Rights.
The Rights Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Company and registering Rights and
transfers of Rights after the Separation Time as herein provided. In the event
that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent
will have the right to examine the Rights Register at all reasonable times after
the Separation Time.


                                      -23-
<PAGE>
                  After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.

                  (b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.

                  (c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.

                  (d) The Company shall not register the transfer or exchange of
any Rights which have become void under Section 3.1(b), been exchanged under
Section 3.1(c) or been redeemed under Section 5.1.


                                      -24-
<PAGE>
                  2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent prior
to the Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the
Company shall execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.

                  (b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.

                  (c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.

                  (d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original



                                      -25-
<PAGE>
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Rights Certificate shall be at any time enforceable by anyone,
and, subject to Section 3.1(b), shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly issued
hereunder.

                  2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated shares of
Common Stock or Class A Units) for registration of transfer, the Company, the
Rights Agent and any agent of the Company or the Rights Agent may deem and treat
the person in whose name such Rights Certificate (or, prior to the Separation
Time, such shares or units) is registered as the absolute owner thereof and of
the Rights evidenced thereby for all purposes whatsoever, including the payment
of the Redemption Price, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. As used in this Agreement, unless the
context otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock or Class A Units).

                  2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly canceled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any


                                      -26-
<PAGE>
manner whatsoever, and all Rights Certificates so delivered shall be promptly
canceled by the Rights Agent. No Rights Certificates shall be countersigned in
lieu of or in exchange for any Rights Certificates canceled as provided in this
Section 2.10, except as expressly permitted by this Agreement. The Rights Agent
shall return canceled Rights Certificates to the Company, unless the Company
instructs the Rights Agent in writing to destroy the canceled Rights
Certificates, in which case the Rights Agent shall destroy all canceled Rights
Certificates and deliver a certificate of destruction to the Company.

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

                  (a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock or Class A Unit;

                  (b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;

                  (c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated shares of Common Stock or Class A
Units) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name the Rights Certificate (or, prior to the Separation Time, such shares or
units) is registered as the absolute owner


                                      -27-
<PAGE>
thereof and of the Rights evidenced thereby for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary;

                  (d) Rights Beneficially Owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become void; and

                  (e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.6.

                                   ARTICLE III

                          ADJUSTMENTS TO THE RIGHTS IN
                        THE EVENT OF CERTAIN TRANSACTIONS

                  3.1 Flip-in. (a) Subject to Section 5.12, in the event that
prior to the Expiration Time a Flip-in Time shall occur, except as provided in
this Section 3.1, each Right will entitle the holder thereof to receive from the
Company upon exercise thereof in accordance with the terms hereof, in return for
the Exercise Price, cash in an amount, or debt or other securities determined by
the Board of Directors of the Company in good faith to have a value, equal to
(i) the Closing Price of a share of Common Stock on the date of exercise times
(ii) that number of shares of Common Stock having an aggregate Market Value on
the date on which the Flip-in Time occurred equal to twice the Exercise Price;
provided, however, that the Company shall in its sole discretion have the option
to deliver, in respect of the exercise of any Right (but subject to Section
5.5), in lieu of the cash or debt or other securities referred to above, the
number of shares of Common Stock described in clause (ii) above.


                                      -28-
<PAGE>
                  (b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned at or after the Stock Acquisition Time by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the forego ing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be void and not transferable or exercisable.

                  (c) The Board of Directors of the Company may, at its option,
at any time after a Flip-in Time and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Common Stock elect to exchange all (but not less than all) the then outstanding
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 3.1(b)) for cash in an amount, or debt or other securities
determined by the Board of Directors of the Company in good faith to have a
value, per exchanged Right equal to the Market Value of a share of


                                      -29-
<PAGE>
Common Stock on the date on which the notice of such exchange is mailed to
holders of Rights; provided, however, that the Company shall in its sole
discretion have the option to deliver, in respect of the exchange of any Right
(but subject to Section 5.5), in lieu of the cash or debt or other securities
referred to above, one share of Common Stock.

                  Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right
(other than Rights that have become void pursuant to Section 3.1(b)), whether or
not previously exercised, will thereafter represent only the right to receive
the exchange consideration described above. Promptly after the action of the
Board of Directors of the Company electing to exchange the Rights, the Company
shall give notice thereof (specifying the steps to be taken to receive the
exchange consideration in exchange for Rights) to the Rights Agent and the
holders of the Rights (other than Rights that have become void pursuant to
Section 3.1(b)) outstanding immediately prior thereto by mailing such notice in
accordance with Section 5.11.

                  Each Person in whose name any securities are issued upon the
exchange of Rights pursuant to this Section 3.1(c) shall for all purposes be
deemed to have become the holder of record of those securities on the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of any applicable taxes and other governmental charges payable by the
holder was made; provided, however, that if the Company elects to deliver shares
in connection with such exercise and the date of


                                      -30-
<PAGE>
such surrender and payment is a date upon which the stock transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares on the next succeeding Business Day on which the stock transfer
books of the Company are open.

                  3.2 Flip-over. (a) Prior to the Expiration Time, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event unless and until it shall have entered
into a supplemental agreement with the Flip-over Entity, for the benefit of the
holders of the Rights, providing that, upon consummation or occurrence of the
Flip-over Transaction or Event (i) each Right shall thereafter entitle the
holder thereof to receive from the Flip-over Entity upon exercise thereof in
accordance with the terms hereof, in return for the Exercise Price, cash in an
amount, or debt or other securities determined by the Board of Directors of the
Flip-over Entity in good faith to have a value, equal to (x) the Closing Price
of a share of Flip-over Stock on the date of exercise times (y) that number of
shares of Flip-over Stock having an aggregate Market Value on the date of
consummation or occurrence of such Flip-over Transaction or Event equal to twice
the Exercise Price; provided, however, that the Flip- over Entity shall in its
sole discretion have the option to deliver, in respect of the exercise of any
Right (but subject to Section 5.5), in lieu of the cash or debt or other
securities referred to above, the number of shares of Flip-over Stock described
in clause (y) above; and (ii) the Flip-over Entity shall thereafter be liable
for, and shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations


                                      -31-
<PAGE>
and duties of the Company pursuant to this Agreement. The provisions of this
Section 3.2 shall apply to successive Flip-over Transactions or Events.

                  (b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 pursuant to an agreement entered into by the
Company prior to a Flip-in Time, the Company shall not enter into any agreement
with respect to, consummate or permit to occur any Flip-over Transaction or
Event if at the time thereof there are any rights, warrants or securities
outstanding or any other arrangements, agreements or instruments that would
eliminate or otherwise diminish in any material respect the benefits intended to
be afforded by this Rights Agreement to the holders of Rights upon consummation
of such transaction.

                  3.3 Other Post-Flip-in Transactions. (a) After a Flip-in Time,
the Company shall not pay a stock dividend on its Common Stock, subdivide or
combine its shares of Common Stock into a different number of shares of Common
Stock, pay any other dividend or make any distribution to holders of Common
Stock or make an issuer tender offer for shares of Common Stock unless, in
connection therewith, it shall (i) determine appropriate and customary
adjustments to the Exercise Price, the number of Rights and the consideration
receivable on exercise or exchange of Rights that shall, in the good faith and
reasonable view of the Board of Directors of the Company, be adequate to prevent
such transaction from diluting the aggregate value of the Rights, (ii) obtain
written advice from a nationally recognized independent financial advisor to the
effect that such adjustments are at least as favorable to the holders of Rights
as would be


                                      -32-
<PAGE>
the customary adjustments to convertible securities that are made as a result of
transactions like such transaction and (iii) amend this Agreement to implement
such adjustments. In determining what are 'customary' adjustments to convertible
securities, any de minimis thresholds that might prevent an adjustment from
being made or that might lessen the amount of that adjustment shall be ignored
even if such thresholds are in fact customary.

                  (b) After a Flip-in Time, if the Company consolidates, merges
or participates in a statutory share exchange with any other Person, or
reclassifies its Common Stock, or sells or otherwise transfers all or
substantially all of its assets (other than any consolidation, merger, statutory
share exchange, reclassification, sale or transfer that constitutes a Flip-over
Transaction or Event or that does not change any outstanding shares of Common
Stock), then each Right will thereafter entitle the holder to receive from the
surviving company (or, in the case of a sale or transfer, the transferee), upon
exercise thereof in accordance with the terms hereof, in return for the Exercise
Price, cash in an amount, or debt or other securities determined by the Board of
Directors of the surviving company (or, in the case of a sale or transfer, the
transferee) in good faith to have a value, equal to (i) the value on the date of
exercise of the cash, securities or assets which a holder of one share of Common
Stock immediately before such transaction would hold immediately thereafter as a
result thereof times (ii) that number of shares of Common Stock having an
aggregate Market Value on the date on which the Flip-in Time occurs equal to
twice the Exercise Price; provided, however, that the surviving company


                                      -33-
<PAGE>
(or, in the case of a sale or transfer, the transferee) shall in its sole
discretion have the option to deliver, in respect of the exercise of any Right
(but subject to Section 5.5), in lieu of the cash or debt or other securities
referred to above, the actual cash, securities or assets which a holder of a
number of shares of Common Stock described in clause (ii) above immediately
before such transaction would hold immediately thereafter as a result thereof.
The surviving company (or, in the case of a sale or transfer, the transferee) in
any such transaction shall execute an instrument that assumes the obligations of
the Company hereunder and that appropriately amends this Agreement to adjust the
Rights in the manner provided in this Section and to provide for adjustments
which, for events subsequent to consummation of such transaction, shall be as
nearly equivalent as may be practicable to the adjustments provided for herein,
and the Company agrees that it will not be a party to or permit such transaction
to occur unless such provisions are so made as a part of the terms thereof. The
substance of this paragraph shall similarly apply to successive transactions of
the type covered hereby.

                                   ARTICLE IV
                                THE RIGHTS AGENT

                  4.1 General. (a) 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 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


                                      -34-
<PAGE>
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
to be done 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.

                  (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
certificate for securities, Rights Certificate, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, written
direction, consent, certificate, written 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.

                  4.2 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
is a party, or any Person succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, will 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


                                      -35-
<PAGE>
parties hereto, provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 4.4. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will 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 is
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.

                  4.3 Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by


                                      -36-
<PAGE>
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 will 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 deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice President (whether or
not designated by a number or a word or words added before or after the title
"Vice President") and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate will 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 will be liable hereunder only for its own
negligence, bad faith or willful misconduct.


                                      -37-
<PAGE>
                  (d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in any
certificates for any securities deliverable upon exercise of the Rights or the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.

                  (e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificates for any
securities deliverable upon exercise of the Rights or the Rights Certificates
(except its countersignature thereof); nor will it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b)) or any adjustment required under the provisions of Section 2.4,
3.1 or 3.2 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 after receipt of
the certificate contemplated by Section 2.4 describing any such adjustment); nor
will it by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any securities deliverable upon exercise
of Rights or any Rights or as to whether any securities deliverable upon
exercise of Rights will, when issued, be duly and validly


                                      -38-
<PAGE>
authorized, executed, issued and delivered and, in the case of shares, 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 oral or written instructions with respect to the performance of its
duties hereunder from any person believed by the Rights Agent to be the Chairman
of the Board, the President or any Vice President (whether or not designated by
a number or a word or words added before or after the title "Vice President") or
the Secretary or any Assistant Secretary or the Treasurer or any Assistant
Treasurer of the Company, and to apply to such persons for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with oral or written
instructions of any such person.

                  (h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, 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 Agree-


                                      -39-
<PAGE>
ment. 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 will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.

                  4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.11. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.11. If the
Rights Agent shall resign or be removed or otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company fails
to make such appointment within a period of 30 days after 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 any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by


                                      -40-
<PAGE>
the Company), then the holder of any Rights 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 Person
organized and doing business under the laws of the United States or any state of
the United States, in good standing, which is authorized under such laws to
exercise the powers of the Rights Agent contemplated by this Agreement and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. After appointment, the successor Rights Agent
will 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 will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, 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.


                                      -41-
<PAGE>
                                    ARTICLE V
                                  MISCELLANEOUS

                  5.1 Redemption. (a) The Board of Directors of the Company may,
at its option, at any time prior to the Flip-in Time, elect to redeem all (but
not less than all) the then outstanding Rights at a price per Right equal to the
Redemption Price, payable at the Company's option in cash or in debt or other
securities determined by the Board of Directors of the Company in good faith to
have a value equal to the Redemption Price.

                  (b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right,
whether or not previously exercised, will thereafter represent only the right to
receive the Redemption Price in cash or securities, as determined by the Board
of Directors. Promptly after the Rights are redeemed, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice in accordance with Section 5.11.

                  5.2 Expiration. The Rights and this Agreement shall expire at
the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1 or 5.1, respectively.


                                      -42-
<PAGE>
                  5.3 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 its Board of Directors to reflect any adjustment
or change in the cash, debt or other securities deliverable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of Common Stock
(including without limitation shares of Common Stock issued at the option of the
Company in connection with the exercise by a holder of Class A Units of its
right to require the Partnership to redeem such units but excluding any
securities issued or issuable in connection with the exercise or exchange of
Rights) or upon the exercise of options, in each case issued or granted prior
to, and outstanding at, the Separation Time, the Company shall issue to the
holders of such shares of Common Stock, Rights Certificates representing the
appropriate number of Rights in connection with the issuance or sale of such
shares of Common Stock; provided, however, in each case, (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 to the Person to whom such
Rights Certificates would be issued, (ii) no such Rights Certificates shall be
issued if, and to the extent that, appropriate adjustment shall have otherwise
been made in lieu of the issuance thereof,


                                      -43-
<PAGE>
and (iii) the Company shall have no obligation to distribute Rights Certificates
to any Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.

                  5.4 Cash Offset When Exercising Rights for Cash. Anything in
this Agreement to the contrary notwithstanding, if the Company determines to
deliver cash rather than debt or securities upon the exercise of a Right held by
any holder, that holder's obligation to pay the Exercise Price in respect of
such Right shall be offset by the Company's obligation to pay cash to the holder
in respect of such Right. Accordingly, in that case, (a) the holder shall not
pay, but shall be deemed, for purposes of determining whether the holder validly
exercised such Right, to have paid, the Exercise Price in respect of such Right
and (b) the Company shall upon exercise pay the holder in respect of such Right
a net amount equal to (i) the amount that would have been payable by the Company
on exercise of such Right if the holder had in fact paid the full Exercise Price
in respect of such Right and this Section 5.4 did not exist minus (ii) the
Exercise Price.

                  5.5 Limitations on Exercise or Exchange of Rights. (a) In no
event may the Company deliver Shares upon the exercise or exchange of any
particular Rights if such exercise or exchange would result in any Person
becoming the Beneficial Owner of Shares in excess of the Ownership Limit or
would result in the designation of any Shares as Excess Shares. If because of
the foregoing restriction the Company is not permitted to deliver Shares of any
class upon exercise or exchange of any particular


                                      -44-
<PAGE>
Rights, the Company shall be required to deliver to the holder the cash or debt
or other securities (other than Shares) deliverable upon such exercise as
provided elsewhere herein.

                  (b) As a condition to the exercise or exchange of any Right,
the Company may require the exercising or exchanging Person to certify as to
whether or not, if the Company were to deliver Shares in respect of the exercise
or exchange, that would cause any Person to become the Beneficial Owner of
Shares in excess of the Ownership Limit or any Shares to be designated as Excess
Shares.

                  (c) As used in this Section 5.5, the terms "Beneficial
Ownership," "Person" and "Shares" have the meanings specified in Article Ninth
of the Certificate of Incorporation rather than those specified in Section 1.1.

                  5.6 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) prior to the Flip-in Time, in any respect,
and (ii) at or after the Flip-in Time, (x) to make any changes that the Company
may deem necessary or desirable and which shall not materially adversely affect
the interests of the holders of Rights generally, (y) in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be inconsistent with any other provisions herein or otherwise defective or (z)
as contemplated by Section 3.3 hereof. The Rights Agent will duly execute and
deliver any supplement or amendment hereto requested by the Company that
satisfies the terms of the preceding sentence, provided that any such supplement
or


                                      -45-
<PAGE>
amendment shall become effective immediately upon execution by the Company,
whether or not also executed by the Rights Agent.

                  5.7 Fractional Shares. If the Company elects to deliver shares
of Common Stock upon exercise or exchange of Rights but elects not to issue
fractional shares, the Company shall, in lieu thereof, pay to the exercising
holder the appropriate fraction of the Closing Price per share in cash.

                  5.8 Rights of Action. Any holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Rights, may, on such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's rights under this
Agreement and the Rights. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.

                  5.9 Holder of Rights Not Deemed a Stockholder. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of any securities which may at any time be issuable
on the exercise of such Rights, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights, as
such, any of the rights of a stockholder of the


                                      -46-
<PAGE>
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders of the Company 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 5.10), or to
receive dividends or subscription rights, or otherwise.

                  5.10 Notice of Proposed Actions. In case the Company shall
propose on or after the Separation Time and prior to the Expiration Time (i) to
effect or permit a Flip-over Transaction or Event or (ii) 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 Right, in accordance with Section
5.11, a notice of such proposed action, which shall specify the date on which
such Flip-over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.

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

                           Vornado Operating Company
                           888 Seventh Avenue
                           New York, New York 10019

                           Attention: Secretary


                                      -47-
<PAGE>
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:

                           Wachovia Bank National Association
                           Attn: Corporate Trust Reorg Department NC-1153
                           1525 West W.T. Harris Blvd.--3C3
                           Charlotte, North Carolina 28288-1153

                           Attention:

Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, in
the records of the Company or the Partnership. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice.

                  5.12 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action needs to be taken to authorize
any securities that it may choose to deliver upon exercise of Rights or to
comply with federal or state securities laws, the Company may suspend the
exercisability of the Rights for a reasonable period in order to take such
action or comply with such laws. In the event of any such suspension, the
Company shall issue as promptly as practicable a public


                                      -48-
<PAGE>
announcement stating that the exercisability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.11 shall not be required.

                  Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.

                  5.13 Costs of Enforcement. The Company agrees that if the
Company fails to fulfill any of its obligations pursuant to this Agreement, then
the Company will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce such
holder's rights pursuant to any Rights or this Agreement.

                  5.14 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.

                  5.15 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.

                  5.16 Determination and Actions by the Board of Directors, etc.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to the Company, or as may be
necessary or advisable in the


                                      -49-
<PAGE>
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. All such actions, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) done
or made by the Board, 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 of Directors of the Company to any liability to the holders of
the Rights.

                  5.17 Descriptive Headings. Descriptive headings appear herein
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof. Where a reference in this Agreement is made to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated.

                  5.18 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT 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 TO BE MADE AND PERFORMED
ENTIRELY WITHIN SUCH STATE.

                  5.19 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



                                      -50-
<PAGE>
original, and all such counterparts shall together constitute but one and the
same instrument.

                  5.20 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.


                                      -51-
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.

                                           VORNADO OPERATING COMPANY



                                           By:
                                              --------------------------
                                              Name:
                                              Title:


                                           WACHOVIA BANK NATIONAL ASSOCIATION

                                           By:
                                              --------------------------
                                              Name:
                                              Title:




                                      -52-
<PAGE>
                                                                       EXHIBIT A

                          [Form of Rights Certificate]

Certificate No. W-                                            _______ Rights

         THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE
         OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
         RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR
         ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
         OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.

                               Rights Certificate

                            VORNADO OPERATING COMPANY

                  This certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Stockholder Protection Rights Agreement, dated
as of May 29, 2002 (as amended from time to time, the "Rights Agreement"),
between Vornado Operating Company, a Delaware corporation (the "Company"), and
Wachovia Bank National Association, a national bank, as Rights Agent (the
"Rights Agent", which term shall include any successor Rights Agent under the
Rights Agreement), to receive from the Company, upon presentation and surrender
of this Rights Certificate with the Form of Election to Exercise duly executed
at the principal office of the Rights Agent in Charlotte, North Carolina and
upon taking of any other actions required for due exercise in accordance with
the terms of the Rights Agreement, in return for the Exercise Price referred to
below, cash in an amount, or debt
<PAGE>
or other securities determined by the Board of Directors of the Company in good
faith to have a value, equal to the Closing Price of a share of Common Stock on
the date of exercise; provided, however, that the Company shall in its sole
discretion have the option to deliver, in respect of the exercise of any Right
(but subject to Section 5.5 of the Rights Agreement), in lieu of the cash or
debt or other securities referred to above, one share of Common Stock. The terms
described in the preceding sentence are subject to adjustment in certain
circumstances as described in the Rights Agreement. The Exercise Price shall
initially be $13.50 per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.

                  In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to receive
cash or securities of an entity other than the Company, all as provided in the
Rights Agreement.

                  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.
Copies of the Rights Agreement are on file at the principal office of the
Company and are available without cost upon written request.

                  This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be


                                       -2-
<PAGE>
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered 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, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right (subject
to adjustment in certain events as provided in the Rights Agreement and payable
at the Company's option in cash or in debt or other securities determined by the
Board of Directors of the Company in good faith to have a value equal to the
redemption price) or (b) exchanged by the Company under certain circumstances
for cash or debt or other securities as specified in the Rights Agreement.

                  No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
any securities 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


                                       -3-
<PAGE>
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise.

                  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.

Date:  ____________


ATTEST:                                              VORNADO OPERATING COMPANY



___________________________                          By______________________
             Secretary


Countersigned:

WACHOVIA BANK NATIONAL ASSOCIATION



By____________________________
      Authorized Signature




                                       -4-
<PAGE>
                                   [Form of Reverse Side of Rights Certificate]


                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
              holder desires to transfer this 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 Guaranteed:                  _________________________
                                         Signature
                                         (Signature must correspond to name
                                         as written upon the face of this
                                         Rights Certificate in every particular,
                                         without alteration or enlargement or
                                         any change whatsoever)

                  Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to Exchange Act Rule 17Ad- 15.

________________________________________________________________________________
                            (To be completed if true)

The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).

                                                      _________________________
                                                      Signature

________________________________________________________________________________
                                     NOTICE

                  In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the
<PAGE>
foregoing and accordingly will deem the Rights evidenced by such Rights
Certificate to be void and not transferable or exercisable.



                                       -2-
<PAGE>
                                    [To be attached to each Rights Certificate]



                          FORM OF ELECTION TO EXERCISE

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

TO:  VORNADO OPERATING COMPANY

                  The undersigned hereby irrevocably elects to exercise
___________ whole Rights represented by the attached Rights Certificate and
requests that, if the Company issues securities upon such exercise, such
securities be issued in the name of:

                  ___________________________________
                  Address:
                  ___________________________________
                  ___________________________________
                  Social Security or Other Taxpayer
                  Identification Number:
                  ___________________________________

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

                  ___________________________________
                  Address:
                  ___________________________________
                  ___________________________________
                  Social Security or Other Taxpayer

                  Identification Number:
                  ___________________________________

Dated: _____________, ____



Signature Guaranteed:                 _________________________
                                          Signature
                                          (Signature must correspond to name
                                          as written upon the face of the
                                          attached Rights Certificate in every
                                          particular, without alteration or
                                          enlargement or any change
                                          whatsoever)

                  Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to Exchange Act Rule 17Ad- 15.
<PAGE>
________________________________________________________________________________
                            (To be completed if true)

                  The undersigned hereby represents, for the benefit of all
holders of Rights and Common Stock, that the Rights evidenced by the attached
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).

                  In addition, the undersigned hereby represents that the
following statement is TRUE_____ FALSE_____ (check one): If the Company were to
deliver Shares (as defined in the Company's restated certificate of
incorporation) in respect of the exercise of any Rights evidenced by the
attached Rights Certificate, that would not cause any Person (as so defined) to
become the Beneficial Owner (as so defined) of Shares in excess of the Ownership
Limit (as so defined) or any Shares to be designated as Excess Shares (as so
defined).

                                                    ________________________
                                                    Signature

________________________________________________________________________________

                                     NOTICE

                  In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.


                                       -1-