GRC INTERNATIONAL, INC.

                                       and

                     AMERICAN STOCK TRANSFER & TRUST COMPANY

                                  Rights Agent



                              AMENDED AND RESTATED

                                RIGHTS AGREEMENT



                            Dated as of May 14, 1999

<PAGE>

                              AMENDED AND RESTATED
                                RIGHTS AGREEMENT
                                ----------------

This  Agreement,  originally  dated as of December  2, 1985 and as  subsequently
amended as of June 30,  1989,  April 1, 1994,  June 30,  1995 and May 14,  1999,
between GRC International,  Inc., a Delaware corporation  ("Company")  (formerly
Flow General Inc.), and the Company's transfer agent,  American Stock Transfer &
Trust Company, a New York trust company,  ("Rights Agent") (as successor in this
Agreement to the Company's previous transfer agent, Philadelphia National Bank).

                               W I T N E S S E T H
                               - - - - - - - - - -

WHEREAS,  the Board of  Directors of the Company has  authorized  and declared a
dividend  distribution  ("Distribution") of one Right for each outstanding share
of Common Stock, $.10 par value, of the Company  outstanding on December 6, 1985
and has  authorized the issuance of one Right in respect to each share of Common
Stock of the  Company  issued  between  December  6, 1985 and the earlier of the
Distribution  Date, the Expiration  Date or the Final  Expiration  Date (as such
terms are  hereinafter  defined),  and under certain other  circumstances,  each
Right  representing  the right to  purchase  one  share of  Common  Stock of the
Company upon the terms and subject to the conditions hereinafter set forth; and

WHEREAS, in connection with the Distribution,  the Company entered into a Rights
Agreement,  originally dated as of December 2, 1985 and as subsequently  amended
as of June 30, 1989 and April 1, 1994, with the Rights Agent; and

WHEREAS,  the  Board  of  Directors  of the  Company  deems it to be in the best
interests of the Company and its  stockholders  to amend and restate such Rights
Agreement  in its  entirety,  and to enter into this  Agreement on the terms and
conditions hereinafter set forth;

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

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

         (a)  "Acquiring  Person"  shall  mean  any  Person  (as  such  term  is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter  defined) and Associates  (as such term is  hereinafter  defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of securities of the Company  constituting a Substantial  Block (as such term is
hereinafter  defined),  but shall not include any  employee  benefit plan of the
Company.

         (b)  "Affiliate"  and  "Associate"  shall have the respective  meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations  under
the Securities  Exchange Act of 1934, as amended,  ("Exchange Act") as in effect
on June 30, 1995.

         (c) A Person  shall be deemed  the  "Beneficial  Owner" of and shall be
deemed to "beneficially own" any securities:
<PAGE>

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

             (ii)  which  such  Person  or  any  such  Person's   Affiliates  or
Associates  has (A) the right to  acquire  (whether  such  right is  exercisable
immediately  or only  after the  passage  of time)  pursuant  to any  agreement,
arrangement or understanding  (whether or not in writing),  or upon the exercise
of  conversion  rights,   exchange  rights,  rights,  warrants  or  options,  or
otherwise,  provided,  however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially  own, (x) securities  tendered pursuant to a tender
or exchange  offer made by such  Person or any of such  Person's  Affiliates  or
Associates  until such  tendered  securities  are  accepted  for  purchase,  (y)
securities  issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering  Event, or (z) securities  issuable upon exercise of Rights from
and after the  occurrence  of a Triggering  Event which Rights were  acquired by
such  Person  or any of such  Person's  Affiliates  or  Associates  prior to the
Distribution  Date or pursuant to Section  3(a) or Section 22 hereof  ("Original
Rights") or pursuant to Section  11(i) hereof in  connection  with an adjustment
made with respect to any Original Rights; or (B) the right to vote or dispose of
or has  "beneficial  ownership" of (as determined  pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding,  provided, however, that a Person shall
not be deemed the  Beneficial  Owner of, or to  beneficially  own,  any security
under this clause (B) if the  agreement,  arrangement or  understanding  to vote
such  security (1) arises  solely from a revocable  proxy given in response to a
public proxy or consent  solicitation  made pursuant to, and in accordance with,
the  applicable  rules and  regulations of the Exchange Act, and (2) is not also
then  reportable  on Schedule 13D under the Exchange Act (or any  comparable  or
successor report); or

             (iii) which are beneficially owned, directly or indirectly,  by any
other  Person  with  which such  Person or any of such  Person's  Affiliates  or
Associates has any agreement,  arrangement or  understanding  (whether or not in
writing) for the purpose of acquiring,  holding,  voting  (except  pursuant to a
revocable  proxy  as  described  in  clause  (B) of  subparagraph  (ii)  of this
paragraph (c)) or disposing of any securities of the Company, provided, however,
that nothing in this  paragraph (c) shall cause a Person  engaged in business as
an underwriter of securities to be the Beneficial  Owner of, or to  beneficially
own, any securities  acquired through such Person's  participation in good faith
in a firm commitment  underwriting until the expiration of forty (40) days after
the date of such acquisition.

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

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

         (f) "Common  Stock" when used with  reference to the Company shall mean
the Common Stock, $.10 par value, of the Company.  "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock with
the

                                       2
<PAGE>

greatest  voting power of such Person or the equity  securities  or other equity
interest having power to control or direct the management of such Person.

         (g)      (deleted)

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

         (i)  "Qualifying  Tender  Offer"  shall have the  meaning  set forth in
Section 11(a)(ii) hereof.

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

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

         (l)  "Substantial  Block" shall mean a number of shares of Common Stock
which  equals or exceeds  twenty-five  percent  (25%) of the number of shares of
Common Stock then outstanding.

         (m)  "Triggering  Event"  shall  mean any event  described  in  Section
11(a)(ii) (a "Section 11(a)(ii) Event"),  or in Section 13(a)(x),  (y) or (z) (a
"Section 13 Event"), hereof.

Section 2.  Appointment of Rights Agent.  The Company hereby appoints the Rights
Agent to act as agent for the  Company and the  holders of the Rights  (who,  in
accordance with Section 3 hereof shall,  prior to the Distribution Date, also be
the holders of the Common  Stock) in  accordance  with the terms and  conditions
hereof,  and the Rights Agent hereby accepts such appointment.  The Company may,
from time to time,  appoint such  Co-Rights  Agents as it may deem  necessary or
desirable.

Section 3. Issue of Rights  Certificate.  (a) Until the earlier of (i) the Close
of Business on the tenth Business Day after the Shares  Acquisition Date or (ii)
the Close of Business on the tenth Business Day (or such later date as the Board
shall  determine)  after the date that a tender or exchange  offer by any Person
(other than the Company,  any  Subsidiary of the Company,  any employee  benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized,  appointed or established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the General  Rules and  Regulations  under the Exchange Act, if upon
consummation  thereof,  such Person would be the beneficial owner of 25% or more
of the shares of Common Stock then outstanding (including any such date which is
after the date of this  Agreement  and prior to the issuance of the Rights;  the
earlier of such dates being herein referred to as the "Distribution  Date"), (x)
the Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the  certificates  for the Common Stock registered in the names of
the holders of the Common Stock (which  certificates  for the Common Stock shall
be deemed also to be Right Certificates) and not by separate Right

                                       3
<PAGE>

Certificates,   and  (y)  the  right  to  receive  Right  Certificates  will  be
transferable  only in connection  with the transfer of the Common Stock. As soon
as  practicable  after the  Distribution  Date,  the Rights Agent will send,  by
first-class,  insured, postage prepaid mail, to each record holder of the Common
Stock as of the Close of Business on the  Distribution  Date,  at the address of
such  holder  shown on the  records  of the  Company,  a Right  Certificate,  in
substantially the form of Exhibit A hereto,  evidencing one Right for each share
of  Common  Stock so held.  As of the  Distribution  Date,  the  Rights  will be
evidenced solely by such Right Certificates.

         (b) On  December 6, 1985,  or as soon as  practicable  thereafter,  the
Company  will send a copy of a Summary of Rights to purchase  Common  Stock,  in
substantially  the  form  attached  as  Exhibit  B  ("Summary  of  Rights"),  by
first-class,  postage prepaid mail, to each record holder of the Common Stock as
of the Close of  Business  on  December  6, 1985,  at the address of such holder
shown on the records of the Company. With respect to certificates for the Common
Stock  outstanding  as of December 6, 1985,  until the  Distribution  Date,  the
Rights will be evidenced by such certificates for the Common Stock registered in
the names of the  holders  of the  Common  Stock  with a copy of the  Summary of
Rights attached thereto.  Until the Distribution Date (or earlier  redemption or
expiration of the Rights), the surrender for transfer of any of the certificates
for the Common Stock outstanding on December 6, 1985, even without a copy of the
Summary of Rights  attached  thereto,  shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.

         (c)  Certificates  for the shares of Common Stock issued after December
6, 1985, but prior to the earlier of the Distribution  Date, the Expiration Date
or the Final  Expiration Date (as such terms are defined in Section 7) shall, as
soon as practicable  after such date,  have impressed on, printed on, written on
or otherwise affixed to them the following legend:

         This  certificate  also  evidences and entitles the holder  hereof,  to
         certain  Rights,  as  set  forth  in an  Amended  and  Restated  Rights
         Agreement between GRC International, Inc. and American Stock Transfer &
         Trust  Company  ("Rights  Agreement"),  the terms of which  are  hereby
         incorporated  herein by reference and a copy of which is on file at the
         principal  executive offices of GRC  International,  Inc. Under certain
         circumstances,  as set forth in the Rights Agreement,  such Rights will
         be evidenced by separate  certificates  and will no longer be evidenced
         by this certificate. GRC International, Inc. will mail to the holder of
         this certificate a copy of the Rights Agreement, without charge, within
         five days after receipt of a written  request  therefor.  Under certain
         circumstances set forth in the Rights  Agreement,  Rights issued to, or
         held by, any Person who is, was or becomes an  Acquiring  Person or any
         Affiliate or Associate thereof (as such terms are defined in the Rights
         Agreement),  whether currently held by, or on behalf of, such Person or
         by any subsequent holder, may become null and void.

                                       4
<PAGE>

With respect to such  certificates  containing the foregoing  legend,  until the
Distribution  Date, the Rights  associated with the Common Stock  represented by
such  certificates  shall  be  evidenced  by such  certificates  alone,  and the
surrender for transfer of any of such  certificates  shall also  constitute  the
transfer of the Rights associated with the shares of Common Stock represented by
such certificate.

Section 4.  Form of Right Certificates.
--------------------------------------

         (a) The Right  Certificates  (and the  forms of  election  to  purchase
shares  and of  assignment  to be  printed  on the  reverse  thereof)  shall  be
substantially  the  same as  Exhibit  A  hereto,  and may  have  such  marks  of
identification  or  designation  and such  legends,  summaries  or  endorsements
printed thereon, as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement,  or as may be required to comply with any
applicable law or with any rule or regulation made pursuant  thereto or with any
rule or regulation  of any stock  exchange on which the Rights may, from time to
time, be listed or to conform to usage.  Subject to the provisions of Section 11
and Section 22 hereof, the Right Certificates, when issued, shall be dated as of
December  6, 1985,  and on their  face  shall  entitle  the  holders  thereof to
purchase  such number of shares of Common Stock as shall be set forth therein at
the price per share set forth  therein  ("Purchase  Price"),  but the number and
type of securities  purchasable upon the exercise of each Right and the Purchase
Price thereof, shall be subject to adjustments, as provided herein.

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

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

                                       5
<PAGE>

Section 5.  Countersignature  and Registration.  The Right Certificates shall be
executed  on behalf of the  Company in the manner  provided in the Bylaws of the
Company  for  Common  Stock  certificates.   The  Right  Certificates  shall  be
countersigned by the Rights Agent, manually or by facsimile signature, and shall
not be valid for any purpose unless so countersigned. In case any officer of the
Company  who shall have signed any of the Right  Certificates  shall cease to be
such  officer of the Company  before  countersignature  by the Rights  Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned  by the Rights Agent,  issued and delivered with the same force
and  effect as though the Person  who  signed  such Right  Certificates  had not
ceased to be such  officer  of the  Company;  and any Right  Certificate  may be
signed on behalf of the  Company by any Person  who,  at the actual  date of the
execution of such Right Certificate, shall be a proper officer of the Company to
sign such  Right  Certificate,  although  at the date of the  execution  of this
Rights Agreement any such Person was not such an officer.

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

Section 6. Transfer,  Split Up, Combination and Exchange of Right  Certificates;
Mutilated,  Destroyed,  Lost  or  Stolen  Right  Certificates.  Subject  to  the
provisions  of Section  4(b),  Section  7(e) and Section 14 hereof,  at any time
after the Close of Business  on the  Distribution  Date,  and at or prior to the
Close of Business on the earlier of the Expiration Date or the Final  Expiration
Date,  any Right  Certificate  or  Certificates  may be  transferred,  split up,
combined or  exchanged  for another  Right  Certificate  or Right  Certificates,
entitling  the  registered  holder to purchase a like number of shares of Common
Stock (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Right Certificate or Right  Certificates  surrendered
then  entitled  such  holder to  purchase.  Any  registered  holder  desiring to
transfer,  split up, combine or exchange any right  Certificate  shall make such
request in writing, delivered to the Rights Agent, and shall surrender the Right
Certificate  or Right  Certificates  to be  transferred,  split up,  combined or
exchanged at the principal office of the Rights Agent.  Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such  surrendered  Right  Certificates  until the registered
holder shall have completed and signed the certificate  contained in the form of
assignment  on the  reverse  side of such  Right  Certificates,  and shall  have
provided such  additional  evidence of the identity of the Beneficial  Owner (or
former  Beneficial  Owner) or Affiliates or Associates  thereof,  as the Company
shall  reasonably  request.  Thereupon  the Rights Agent shall  countersign  and
deliver  to  the  person  entitled   thereto,   a  Right  Certificate  or  Right
Certificates,  as the case may be, as so  requested.  The  Company  may  require
payment of a sum sufficient to cover any tax or governmental  charge that may be
imposed in connection  with any transfer,  split up,  combination or exchange of
Right Certificates.

                                       6
<PAGE>

Upon  receipt  by the  Company  and the  Rights  Agent  of  evidence  reasonably
satisfactory  to them of the loss,  theft,  destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses  incidental thereto,  and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the Company
will make and deliver a new Right  Certificate of like tenor to the Rights Agent
for delivery to the registered  owner in lieu of the Right  Certificate so lost,
stolen, destroyed or mutilated.

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

         (a) Subject to the  provisions of Section 7(e) hereof,  the  registered
holder of any Right  Certificate  may  exercise  the  Rights  evidenced  thereby
(except  as  otherwise  provided  herein  including,   without  limitation,  the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof),  in whole or in part, at any time after the  Distribution
Date,  upon  surrender  of the Right  Certificate,  with the form of election to
purchase and the  certificate on the reverse side thereof duly executed,  to the
Rights  Agent,  together  with payment of the  Purchase  Price for each share of
Common Stock (or other securities,  cash or other assets, as the case may be) as
to which the Rights are  exercised,  at or prior to the Close of Business on the
earlier of (i) August 31, 2000 ("Final  Expiration  Date"),  or (ii) the date on
which the Rights are  redeemed,  as  provided in Section 23 (such  earlier  date
being herein referred to as the "Expiration Date").

         (b) The Purchase  Price for each share of the Common Stock  pursuant to
the exercise of a Right shall be $100, shall be subject to adjustment, from time
to time,  as  provided  in  Sections  11 and 13 hereof,  and shall be payable in
lawful money of the United  States of America in accordance  with  paragraph (c)
below.

         (c) Upon  receipt  of the Right  Certificate  representing  exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied  by  payment  of  the  Purchase  Price  for  the  shares  (or  other
securities,  cash or other  assets,  as the case may be) to be purchased  and an
amount equal to any  applicable  transfer tax in cash, or by certified  check or
bank draft payable to the order of the Company,  the Rights Agent shall (subject
to Section 20(k) hereof)  thereupon  promptly (i) requisition  from any transfer
agent of the Common Stock of the Company  certificates  for the number of shares
of Common Stock to be purchased and the Company  hereby  irrevocably  authorizes
its  transfer  agent to comply with all such  requests,  (ii) when  appropriate,
requisition  from the  Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14, (iii) promptly after receipt
of such  certificates,  cause the same to be delivered to, or upon the order of,
the  registered  holder of such Right  Certificate,  registered  in such name or
names as may be  designated  by such holder,  and (iv) when  appropriate,  after
receipt,  promptly  deliver  such cash to, or upon the order of, the  registered
holder of such Right Certificate.

         (d) In case  the  registered  holder  of any  Right  Certificate  shall
exercise less than all the Rights  evidenced  thereby,  a new Right  Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to

                                       7
<PAGE>

the  registered  holder  of such  Right  Certificate  or to his duly  authorized
assigns, subject to the provisions of Section 14 hereof.

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

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

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

Section 9.  Reservation and Availability of Shares of Common Stock.
------------------------------------------------------------------

                                       8
<PAGE>

         (a) The Company  covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued  shares of Common Stock or
its  authorized  and issued  shares of Common  Stock held in its  treasury,  the
number of shares of Common Stock that will be  sufficient to permit the exercise
in full of all outstanding Rights.

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

         (c) The  Company  shall  use its  best  efforts  to (i) file as soon as
practicable  following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the  consideration  to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement,  a
registration statement under the Securities Act of 1933 ("Act"), with respect to
the securities  purchasable upon exercise of the Rights on an appropriate  form,
(ii)  cause  such  registration   statement  to  become  effective  as  soon  as
practicable after such filing,  and (iii) cause such  registration  statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act)  until the  earlier  of (A) the date as of which the  Rights  are no longer
exercisable  for  such  securities,  and (B) the date of the  expiration  of the
Rights.  The Company will also take such action as may be appropriate  under, or
to ensure  compliance  with,  the  securities  or "blue sky" laws of the various
states in  connection  with the  exercisability  of the Rights.  The Company may
temporarily  suspend,  for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability  of the  Rights in order to  prepare  and file such  registration
statement  and  permit it to become  effective.  Upon any such  suspension,  the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended,  as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the Company shall
determine that a registration  statement is required  following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until
such  time  as  a   registration   statement   has  been   declared   effective.
Notwithstanding  any  provision of this  Agreement to the  contrary,  the Rights
shall not be exercisable in any jurisdiction,  if the requisite qualification in
such jurisdiction  shall not have been obtained,  the exercise thereof shall not
be permitted  under  applicable law or a registration  statement  shall not have
been declared effective.

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

         (e) The Company further covenants and agrees that it will pay, when due
and payable,  any and all federal and state transfer taxes and charges which may
be payable in respect to the issuance or delivery of the Right  Certificates  or
of any shares

                                       9
<PAGE>

of Common Stock upon the exercise of Rights. The Company shall not, however,  be
required to pay any transfer tax which may be payable in respect to any transfer
involved in the  transfer or delivery of Right  Certificates  or the issuance or
delivery  of  certificates  for  Common  Stock in a name  other than that of the
registered  holder of the Right Certificate  evidencing  Rights  surrendered for
exercise or to issue or deliver any certificates for shares of Common Stock upon
the exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right  Certificate at the time of surrender)
or until it has been established to the Company's  satisfaction that no such tax
is due.

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

Section 11. Adjustment of Purchase Price,  Number of Shares or Number of Rights.
The Purchase Price, the number of shares covered by each Right and the number of
Rights outstanding are subject to adjustment,  from time to time, as provided in
this Section 11.

         (a) (i) In the event the Company  shall,  at any time after the date of
this Agreement,  (A) declare a dividend on the Common Stock payable in shares of
Common Stock, (B) subdivide the outstanding  shares of Common Stock, (C) combine
the outstanding  shares of Common Stock into a smaller number of shares,  or (D)
issue any shares of its capital stock in a reclassification  of the Common Stock
(including  any such  reclassification  in connection  with a  consolidation  or
merger in which the Company is the continuing or surviving corporation),  except
as  otherwise  provided in this Section  11(a) and in Section  7(e) hereof,  the
Purchase  Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number  and kind of shares of capital  stock  issuable  on such  date,  shall be
proportionately  adjusted so that the holder of any Right  exercised  after such
time shall be  entitled to receive  the  aggregate  number and kind of shares of
capital stock which, if such Right had been exercised  immediately prior to such
date and at a time when the Common  Stock  transfer  books of the  Company  were
open,  he would have owned upon such  exercise  and been  entitled to receive by
virtue of such

                                       10
<PAGE>

dividend,  subdivision,  combination or reclassification provided, however, that
if  the  record  date  for  any  such  dividend,  subdivision,   combination  or
reclassification  shall occur prior to the Distribution  Date, the Company shall
make an  appropriate  adjustment to the Purchase  Price (taking into account any
additional Rights which may be issued as a result of such dividend, subdivision,
combination  or  reclassification  lieu of adjusting  (as  described  above) the
number of shares of Common Stock (or other  capital  stock,  as the case may be)
issuable upon exercise of the Rights.  If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section  11(a)(ii)  hereof,  the
adjustment  provided for in this Section  11(a)(i)  shall be in addition to, and
shall be made prior to, any adjustment  required  pursuant to Section  11(a)(ii)
hereof.

                  (ii) In the event any  Person  (other  than the  Company,  any
Subsidiary  of the Company,  any employee  benefit plan of the Company or of any
Subsidiary  of the  Company,  or any Person or entity  organized,  appointed  or
established by the Company for or pursuant to the terms of any such plan), alone
or together with its Affiliates  and  Associates,  shall,  at any time after the
date of the  Distribution,  become the Beneficial  Owner of twenty-five  percent
(25%) or more of the shares of Common Stock then  outstanding,  unless the event
causing the 25%  threshold to be crossed is a  transaction  set forth in Section
13(a)  hereof,  or is an  acquisition  of shares of Common  Stock  pursuant to a
tender offer or an exchange offer for all outstanding  shares of Common Stock at
a price and on terms  determined  by at least a majority  of the  members of the
Board  of  Directors  who  are  not  officers  of the  Company  and  who are not
representatives,  nominees,  Affiliates or  Associates  of an Acquiring  Person,
after receiving advice from one or more investment banking firms, to be (a) at a
price which is fair to stockholders  (taking into account all factors which such
members of the Board deem relevant including,  without limitation,  prices which
could  reasonably  be  achieved  if the  Company or its  assets  were sold on an
orderly basis designed to realize maximum value),  and (b) otherwise in the best
interests of the Company and its stockholders  (such tender offer, a "Qualifying
Tender  Offer"),  then proper  provision  shall be made so that each holder of a
Right,  except as provided below and in Section 7(e),  shall  thereafter  have a
right to receive,  upon exercise  thereof at the then current  Purchase Price in
accordance  with the terms of this  Agreement,  such  number of shares of Common
Stock of the Company as shall equal the result  obtained by (x)  multiplying the
then-current  Purchase  Price by the then  number of shares of Common  Stock for
which a Right was  exercisable  immediately  prior to the first  occurrence of a
Section  11(a)(ii) Event,  and (y) dividing that product (which,  following such
first  occurrence,  shall  thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this  Agreement) by 50% of the current market
price (determined pursuant to Section 11(d) hereof) per share of Common Stock on
the date of such  first  occurrence  (such  number of  shares,  the  "Adjustment
Shares").

                  (iii) In the event that the  number of shares of Common  Stock
which are  authorized by the Company's  certificate  of  incorporation,  but not
outstanding  or reserved for issuance for purposes  other than upon  exercise of
the Rights are not  sufficient  to permit the  exercise in full of the Rights in
accordance  with the  foregoing  subparagraph  (ii) of this Section  11(a),  the
Company shall (a) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right ("Current

                                       11
<PAGE>

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

         (b) In case the  Company  shall fix a record  date for the  issuance of
rights or  warrants  to all holders of the Common  Stock  entitling  them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Common Stock


                                       12
<PAGE>

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

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

         (d) For the purpose of any computation  hereunder,  the "current market
price"  per  share of the  Common  Stock on any date  shall be  deemed to be the
average of the daily  closing  prices  per share of the Common  Stock for the 30
consecutive Trading

                                       13
<PAGE>

Days (as such  term is  hereinafter  defined)  immediately  prior to such  date;
provided,  however, that in the event that the current market price per share of
the Common Stock is determined during a period following the announcement by the
issuer of the Common  Stock of a dividend or  distribution  on the Common  Stock
payable in shares of Common  Stock,  and prior to the  expiration  of 30 Trading
Days after the ex-dividend date for such dividend or distribution,  then, and in
each such case,  the current  market  price shall be  appropriately  adjusted to
reflect the current market price per common share equivalent.  The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes  place on such day,  the  average  of the  closing  bid and asked  prices,
regular  way,  in  either  case  as  reported  in  the  principal   consolidated
transaction  reporting  system with respect to securities  listed or admitted to
trading on the New York Stock  Exchange or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated  transaction  reporting system with respect to securities listed on
the principal national  securities  exchange on which the Common Stock is listed
or  admitted  to trading  or, if the Common  Stock is not listed or  admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market,  as reported by the National  Association  of Securities  Dealers,  Inc.
Automated  Quotations System ("NASDAQ") or such other system then in use, or, if
on any such date the Common  Stock is not quoted by any such  organization,  the
average of the  closing  bid and asked  prices as  furnished  by a  professional
market  marker  making a market in the  Common  Stock  selected  by the Board of
Directors of the Company. If on any such date no market maker is making a market
in the Common Stock, the fair value of such shares on such date as determined in
good faith by the Board of  Directors  of the  Company  shall be used.  The term
"Trading  Day"  shall  mean a day on which  the  principal  national  securities
exchange on which the Common  Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, a Business Day. If the Common Stock
is not  publicly  held or not so listed or traded,  "current  market  price" per
share  shall  mean the fair value per share as  determined  in good faith by the
Board of Directors of the Company,  whose  determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.

         (e) No adjustment in the Purchase  Price shall be required  unless such
adjustment  would  require an increase or decrease of at least 1% in such price;
provided,  however,  that any adjustments  which by reason of this Section 11(e)
are not  required to be made shall be carried  forward and taken into account in
any subsequent adjustment.  All calculations under this Section 11 shall be made
to the nearest cent or to the nearest  ten-thousandth of a share as the case may
be.  Notwithstanding  the first sentence of this Section  11(e),  any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction  which mandates such adjustment,  or (ii)
the Expiration Date.

         (f) If as a result of an  adjustment  made pursuant to Section 11(a) or
Section 13(a)  hereunder,  the holder of any Right  thereafter  exercised  shall
become entitled to receive any shares of capital stock of the Company other than
shares of Common

                                       14
<PAGE>

Stock, thereafter the number of such other shares so receivable upon exercise of
any Right shall be subject to  adjustment  from time to time, in a manner and on
terms as nearly  equivalent as practicable to the provisions with respect to the
shares  contained in Section  11(a),  (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the  provisions  of Sections 7, 9, 10, 13 and 14 hereof with respect to
the shares of Common Stock shall apply on like terms to any such other shares.

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

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

         (i) The Company may elect on or after the date of any adjustment of the
Purchase  Price  to  adjust  the  number  of  Rights,  in  substitution  for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right.  Each of the Rights  outstanding after such adjustment of the number
of Rights  shall be  exercisable  for the  number of shares of Common  Stock for
which a Right was exercisable  immediately prior to such adjustment.  Each Right
held of record  prior to such  adjustment  of the number of Rights  shall become
that number of Rights  (calculated  to the nearest  ten-thousandth)  obtained by
dividing the Purchase  Price in effect  immediately  prior to  adjustment of the
Purchase Price by the Purchase Price in effect  immediately  after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights,  indicating the record date for the  adjustment,
and, if known at the time, the amount of the adjustment to be made.  This record
date  may be the  date on  which  the  Purchase  Price  is  adjusted  or any day
thereafter,  but, if the Right Certificates have been issued,  shall be at least
10 days later than the date of the public  announcement.  If Right  Certificates
have been issued,  upon each adjustment of the number of Rights pursuant to this
Section  11(i),  the Company  shall,  as promptly  as  practicable,  cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates  evidencing,  subject to Section 14, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the  Company,  shall  cause to be  distributed  to such  holders of record in
substitution  and  replacement for the Right  Certificates  held by such holders
prior to the date of adjustment,  and upon surrender thereof, if required by the
Company, new Right Certificates  evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued,

                                       15
<PAGE>

executed and  countersigned  in the manner provided for herein (and may bear, at
the option of the Company,  the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right  Certificates  on the record date
specified in the public announcement.

         (j)  Irrespective of any adjustments or change in the Purchase Price or
the number of shares of Common Stock  issuable  upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase  Price per share and the number of shares  which were  expressed in
the initial Right Certificates issued thereunder.

         (k) Before  taking any action that would cause an  adjustment  reducing
the  Purchase  Price  below the then par  value,  if any,  of the  Common  Stock
issuable  upon  exercise of the Rights,  the  Company  shall take any  corporate
action which may, in the opinion of its counsel,  be necessary in order that the
Company may validly and  legally  issue fully paid and  nonassessable  shares of
Common Stock at such adjusted Purchase Price.

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

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

         (n) The  Company  covenants  and agrees  that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary  of the Company in a  transaction  which  complies with Section 11(o)
hereof),  (ii) merge with or into any other Person  (other than a Subsidiary  of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or  transfer  (or  permit  any  Subsidiary  to sell  or  transfer),  in one
transaction,  or a series  of  related  transactions,  assets or  earning  power
aggregating  more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the

                                       16
<PAGE>

Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof),  if (x) at the time of or immediately after
such  consolidation,  merger or sale  there are any  rights,  warrants  or other
instruments  or  securities  outstanding  or  agreements  in effect  which would
substantially  diminish  or  otherwise  eliminate  the  benefits  intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such  consolidation,  merger  or  sale,  the  shareholders  of  the  Person  who
constitutes,  or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution  of Rights  previously  owned by
such Person or any of its Affiliates and Associates.

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

Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever
an  adjustment  is made, as provided in Section 11 and 13, the Company shall (a)
promptly  prepare a  certificate  setting  forth  such  adjustment,  and a brief
statement of the facts  accounting for such  adjustment,  (b) promptly file with
the Rights  Agent and with each  transfer  agent for the Common  Stock a copy of
such  certificate,  and (c) mail a brief  summary  thereof,  to each holder of a
Right Certificate in accordance with Section 25.

Section  13.  Consolidation,  Merger or Sale or  Transfer  of Assets or  Earning
Power. (a) In the event that, following the Shares Acquisition Date, directly or
indirectly,  (x) the Company shall consolidate with, or merge with and into, any
other Person  (other than a  Subsidiary  of the Company in a  transaction  which
complies with Section 11(o) hereof) and the Company shall not be the  continuing
or surviving  corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary  of the Company in a transaction  which  complies with Section
11(o) hereof),  shall  consolidate with the Company,  or merge with and into the
Company,  and the Company shall be the  continuing or surviving  corporation  of
such  consolidation  or merger and, in  connection  with such  consolidation  or
merger,  all or part of the Common Stock shall be changed into or exchanged  for
stock or other securities of any other Person or cash or any other property,  or
(z)  the  Company  shall  sell  or  otherwise  transfer  (or  one or more of its
subsidiaries  shall sell or otherwise  transfer),  in one or more  transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its subsidiaries (taken as a whole) to any Person (other than
the Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o)  hereof),  then, and in each such case (except
as may be contemplated by Section 13(d) hereof),  proper provision shall be made
so that (i) each holder of a Right,  except as provided in Section  7(e) hereof,
shall  thereafter  have the right to receive,  upon the exercise  thereof at the
then-current Purchase Price in accordance with the terms of this agreement, such
number of validly authorized and issued,  fully paid,  non-assessable and freely
tradable shares of Common Stock of the Principal Party not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then-

                                       17
<PAGE>

current Purchase Price by the number of shares of Common Stock for which a Right
is then  exercisable  and dividing that product by (2) 50% of the current market
price per share of common  Stock of such other  Person  (determined  pursuant to
Section 11(d)) on the date of consummation of such  consolidation,  merger, sale
or transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume,  by virtue of such  consolidation,  merger,  sale or  transfer,  all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall  thereafter be deemed to refer to such Principal Party; and (iv)
such Principal Party shall take such steps  (including,  but not limited to, the
reservation of a sufficient  number of shares of its Common Stock) in connection
with such  consummation as may be necessary to assure that the provisions hereof
shall  thereafter be applicable,  as nearly as reasonably may be, in relation to
the shares of its Common Stock  thereafter  deliverable upon the exercise of the
Rights and (v) the provisions of Section  11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.

         (b)      "Principal Party" shall mean

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

                  (ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a),  the Person that is the party receiving the
greatest  portion of the assets or earning  power  transferred  pursuant to such
transaction or transactions;  provided,  however,  that in any such case, (1) if
the  Common  Stock  of  such  Person  is not at  such  time  and  has  not  been
continuously  over the  preceding  twelve  (12) month  period  registered  under
Section  12 of the  Exchange  Act,  and  such  Person  is a direct  or  indirect
Subsidiary  of  another  Person  the  Common  Stock  of which is and has been so
registered,  "Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary,  directly or  indirectly,  of more than one Person,
the  Common  Stocks  of two or more of which  are and have  been so  registered,
"Principal  Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.

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

                  (i) prepare and file a registration  statement  under the Act,
with respect to the Rights and the securities  purchasable  upon exercise of the
Rights on an  appropriate  form,  and will use its best  efforts  to cause  such
registration statement to (A)

                                       18
<PAGE>

become  effective  as soon as  practicable  after  such  filing,  and (B) remain
effective  (with a prospectus at all times meeting the  requirements of the Act)
until the Expiration Date; and

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

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

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

Section 14. Fractional Rights and Fractional  Shares.  (a) The Company shall not
be required to issue  fractions of Rights or to  distribute  Right  Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Right Certificates with regard to which
such fractional  Rights would otherwise be issuable,  an amount in cash equal to
the same fraction of the current market value of a whole Right. For the purposes
of this Section  14(a),  the current  market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such  fractional  Rights would have been otherwise  issuable.  The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day,  the average of the closing bid and asked  prices,
regular  way,  in  either  case  as  reported  in  the  principal   consolidated
transaction  reporting  system with respect to securities  listed or admitted to
trading  on the New York  Stock  Exchange  or, if the  Rights  are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated  transaction  reporting system with respect to securities listed on
the  principal  national  securities  exchange on which the Rights are listed or
admitted  to trading  or, if the Rights are not listed or admitted to trading on
any national  securities  exchange,  the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported  by NASDAQ or such other  system then in use or, if on any such date
the Rights are not quoted by any such  organization,  the average of the closing
bid and asked prices as furnished by a professional market maker making a

                                       19
<PAGE>

market in the Rights  selected by the Board of Directors  of the Company.  If on
any such date no such  market  maker is making a market in the  Rights  the fair
value of the  Rights on such date as  determined  in good  faith by the Board of
Directors of the Company shall be used.

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

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

Section 15. Rights of Action.  All rights of action in respect to this Agreement
are vested in the respective  registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered  holder of any Right  Certificate  (or, prior to the Distribution
Date,  of the Common  Stock),  without the consent of the Rights Agent or of the
holder of any other Right  Certificate (or, prior to the  Distribution  Date, of
the Common Stock), may, in his own behalf and for his own benefit,  enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce,  or  otherwise  act in  respect  to, his right to  exercise  the Rights
evidenced  by such  Right  Certificate  in the  manner  provided  in such  Right
Certificate  and in  this  Agreement.  Without  limiting  the  foregoing  or any
remedies  available to the holders of Rights,  it is  specifically  acknowledged
that the  holders  of Rights  would not have an  adequate  remedy at law for any
breach of this  Agreement  and will be entitled to specific  performance  of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.

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

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

         (b)  after  the   Distribution   Date,  the  Right   Certificates   are
transferable  only on the registry  books of the Rights Agent if  surrendered at
the principal  officer of the Rights Agent,  duly endorsed or  accompanied  by a
proper instrument of transfer;

         (c) subject to Section 6 and Section  7(f),  the Company and the Rights
Agent may deem and treat the  Person in whose  name the Right  Certificate  (or,
prior to the  Distribution  Date, the associated  Common Stock  certificate)  is
registered  as the absolute  owner thereof and of the Rights  evidenced  thereby
(notwithstanding  any notations of ownership or writing on the Right Certificate
or the associated Common

                                       20
<PAGE>

Stock certificate made by anyone other than the Company or the Rights Agent) for
all purposes  whatsoever,  and neither the Company nor the Rights Agent, subject
to Section 7(e), shall be affected by any notice to the contrary;

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

Section 17. Right  Certificate  Holder Not Deemed a Stockholder.  No holder,  as
such, of any Right Certificate  shall be entitled to vote,  receive dividends or
be deemed for any purpose the holder of Common Stock or any other  securities of
the  Company  which may at any time be  issuable  on the  exercise of the Rights
represented  thereby,  nor  shall  anything  contained  herein  or in any  Right
Certificate be construed to confer upon the holder of any Right Certificate,  as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter  submitted to  stockholders  at any
meeting thereof,  or to give or withhold consent to any corporate  action, or to
receive notice of meetings or other actions  affecting  stockholders  (except as
provided in Section 24), or to receive  dividends  or  subscription  rights,  or
otherwise,  until the Right or Rights evidenced by such Right  Certificate shall
have been exercised in accordance with the provisions hereof.

Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights
Agent  reasonable  compensation  for all services  rendered by it hereunder and,
from time to time, on demand of the Rights Agent,  its  reasonable  expenses and
counsel  fees  and  other  disbursements  incurred  in  the  administration  and
execution  of this  Agreement  and the exercise  and  performance  of its duties
hereunder.  The Company  also agrees to  indemnify  the Rights Agent for, and to
hold it harmless  against,  any loss,  liability,  or expense,  incurred without
gross  negligence,  bad faith or  willful  misconduct  on the part of the Rights
Agent,  for anything done or omitted by the Rights Agent in connection  with the
acceptance  and  administration  of this  Agreement,  including  the  costs  and
expenses of defending against any claim of liability in the premises. The Rights
Agent shall be protected  and shall incur no liability  for or in respect to any
action taken, suffered or omitted by it in connection with its administration of
this Agreement in reliance upon any Right  Certificate  or  certificate  for the
Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement,  affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine  and  to  be  signed,   executed  and,  where  necessary,   verified  or
acknowledged, by the proper person or persons.

Section  19.  Merger or  Consolidation  or Change of Name of Rights  Agent.  Any
corporation  into which the Rights  Agent or any  successor  Rights Agent may be
merged

                                       21
<PAGE>

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

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

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

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

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

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

                                       22
<PAGE>

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

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

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

         (g) The  Rights  Agent is  hereby  authorized  and  directed  to accept
instructions  with respect to the  performance of its duties  hereunder from any
one of the Chairman of the Board, the President,  the Secretary or the Treasurer
of the Company,  unless such officer  shall be deemed to be an Acquiring  Person
and to apply to such officers for advice or  instructions in connection with its
duties,  and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.

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

         (i) The Rights  Agent may  execute  and  exercise  any of the rights or
powers hereby vested in it or perform any duty hereunder  either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents  for or 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.

                                       23
<PAGE>

         (j) In the event  that any  Person  becomes an  Acquiring  Person,  the
Company  shall notify the Rights Agent of such event and of the identity of such
Person. The Rights Agent thereupon shall undertake a reasonable investigation to
ascertain which shares are held beneficially by such Acquiring Person, including
shares held by nominees of such Acquiring Person. If the Rights Agent undertakes
such reasonable  investigation on a continuing  basis after  notification by the
Company as provided herein, the Rights Agent shall not be liable for its failure
in good faith to insert the legend  provided for in Section  11(a)(iii)  of this
Agreement  into Right  Certificates  owned by or  transferred  to such Acquiring
Person or its nominees.

         (k) If, with respect to any Right Certificate surrendered to the Rights
Agent  for  exercise  or  transfer,  the  certificate  attached  to the  form of
assignment  or form of election to purchase,  as the case may be, has either not
been  completed  or  indicates  an  affirmative  response  to  clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

Section 21.  Change of Rights Agent.  The Rights Agent or any  successor  Rights
Agent may resign and be discharged  from its duties under this Agreement upon 30
days' notice in writing  mailed to the Company and to each transfer agent of the
Common Stock by  registered or certified  mail,  and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor  Rights  Agent upon 30 days'  notice in writing,  mailed to the Rights
Agent or successor  Rights Agent, as the case may be, and to each transfer agent
of the Common Stock by registered or certified  mail,  and to the holders of the
Right  Certificates by first-class  mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a  successor  to the  Rights  Agent.  If the  Company  shall  fail to make  such
appointment  within a period of 30 days after  giving  notice of such removal or
after it has been notified in writing of such  resignation  or incapacity by the
resigning or incapacitated  Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company),  then the registered  holder of any Right Certificate may apply to any
court of competent  jurisdiction  for the appointment of a new Rights Agent. Any
successor  Rights  Agent,  whether  appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of any state thereof,  which is authorized under such laws to exercise
corporate  trust powers and is subject to  supervision or examination by federal
or state  authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $10 million.  After appointment,  the
successor Rights Agent shall be vested with the same powers,  rights, duties and
responsibilities  as if it had been  originally  named as Rights  Agent  without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the  purpose.  Not later than the  effective  date of any such  appointment  the
Company shall file notice thereof in writing with the  predecessor  Rights Agent
and each  transfer  agent of the  Common  Stock,  and mail a notice  thereof  in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21,

                                       24
<PAGE>

however, or any defect therein, shall not affect the legality or validity of the
resignation  or removal of the Rights Agent or the  appointment of the successor
Rights Agent, as the case may be.

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

Section 23.  Redemption.
-----------------------

         (a) The Board of Directors  of the Company  may, at its option,  at any
time  prior  to the  earlier  of (x) the  Close of  Business  on the  tenth  day
following the Shares Acquisition Date, or (y) the Close of Business on the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption  price of $.05 per Right  appropriately  adjusted to reflect any
stock split,  stock  dividend or similar  transaction  occurring  after the date
hereof (such redemption price being  hereinafter  referred to as the "Redemption
Price").  Notwithstanding  anything contained in this Agreement to the contrary,
the Rights  shall not be  exercisable  after the first  occurrence  of a Section
11(a)(ii) Event until such time as the Company's  right of redemption  hereunder
has expired.  The Company may, at its option,  pay the Redemption Price in cash,
shares of Common  Stock  (based on the  "current  market  price",  as defined in
Section  11(d)  hereof,  of the Common Stock at the time of  redemption)  or any
other form of consideration deemed appropriate by the Board of Directors.

         (b)  Immediately  upon the  action  of the  Board of  Directors  of the
Company  ordering the  redemption of the Rights,  and without any further action
and without any notice,  the right to exercise the Rights will terminate and the
only  right  thereafter  of the  holders  of  Rights  shall  be to  receive  the
Redemption  Price.  Within 10 days  after the  action of the Board of  Directors
ordering the  redemption  of the Rights,  the Company  shall give notice of such
redemption to the holders of the then outstanding  Rights by mailing such notice
to all such holders at their last address as they appear upon the

                                       25
<PAGE>

registry books of the Rights Agent, or, prior to the  Distribution  Date, on the
registry books of the transfer  agent for the Common Stock.  Any notice which is
mailed in the manner herein  provided shall be deemed given,  whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption  Price will be made.  Neither the Company
nor any of its  Affiliates  or  Associates  may redeem,  acquire or purchase for
value any Rights at any time in any  manner  other  than that  specifically  set
forth in this Section 23, and other than in  connection  with the  repurchase of
Common Stock prior to the Distribution Date.

Section 24. Notice of Certain  Events.  In case the Company shall propose (a) to
pay any  dividend  payable  in stock of any class to the  holders  of its Common
Stock or to make any other  distribution  to the  holders  of its  Common  Stock
(other  than a regular  periodic  cash  dividend  out of  earnings  or  retained
earnings), (b) to offer to the holders of its Common Stock rights or warrants to
subscribe for or to purchase any additional  shares of Common Stock or shares of
stock of any class or any other securities, rights or options, (c) to effect any
reclassification  of its Common Stock (other than a  reclassification  involving
only the  subdivision of outstanding  shares of Common Stock,  (d) to effect any
consolidation  or merger into or with,  or to effect any sale or other  transfer
(or to  permit  one or more of its  subsidiaries  to  effect  any  sale or other
transfer),  in one or more  transactions,  of more  than  50% of the  assets  or
earning  power of the  Company and its  subsidiaries  (taken as a whole) to, any
other Person (other than the Company  and/or any of its  Subsidiaries  in one or
more transactions  each of which complies with Section 11(o) hereof),  or (e) 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 25, a notice of such  proposed  action,  which shall  specify the record
date for the purposes of such stock dividend,  distribution of rights or Rights,
or the  date  on  which  such  reclassification,  consolidation,  merger,  sale,
transfer, liquidation,  dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Stock, if any such date is
to be fixed, and such notice shall be so given in the case of any action covered
by clause (a) or (b) above at least  twenty  (20) days prior to the record  date
for determining  holders of the Common Stock for purposes of such action, and in
the case of any such other  action,  at least twenty (20) days prior to the date
of the taking of such proposed  action or the date of  participation  therein by
the holders of the Common Stock, whichever shall be the earlier.

In case any of the events set forth in Section 11(a)(ii) of this Agreement shall
occur,  then,  in any  such  case,  the  Company  shall  as soon as  practicable
thereafter  give to each holder of a Right,  in  accordance  with  Section 25, a
notice of the  occurrence  of such event,  which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii).

Section 25. Notices. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Right  Certificate  to or on
the Company shall be  sufficiently  given or made if sent by  first-class  mail,
postage  prepaid,  addressed (until another address it filed in writing with the
Rights Agent) as follows:

                                       26
<PAGE>

                                    GRC International, Inc.
                                    Plaza 1900
                                    1900 Gallows Road
                                    Vienna, Virginia  22182
                                    Attention:  Corporate Secretary

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

                                    American Stock Transfer & Trust Company
                                    99 Wall Street
                                    New York, New York  10005

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

Section 26.  Supplements and  Amendments.  The Company and the Rights Agent may,
from time to time,  supplement or amend this  Agreement  without the approval of
any holders of Right Certificates in order to cure any ambiguity,  to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions  herein,  to extend the period of redemption  provided
for in Section 23 of this Agreement,  or to make any other  provisions in regard
to matters or questions arising hereunder which the Company and the Rights Agent
may deem  necessary  or  desirable  and which  shall not  adversely  affect  the
interests of the holders of Right Certificates.

Section 27. Successors. All the covenants and provisions of this Agreement by or
for the  benefit of the  Company or the Rights  Agent shall bind an inure to the
benefit of their respective successors and assigns hereunder.

Section 28.  Determinations and Actions by the Board of Directors,  etc. For all
purposes of this  Agreement,  any  calculation of the number of shares of Common
Stock outstanding at any particular time,  including for purposes of determining
the particular  percentage of such  outstanding  shares of Common Stock of which
any Person is the Beneficial  Owner,  shall be made in accordance  with the last
sentence of Rule  13d-3(d)(1)(i)  of the General Rules and Regulations under the
Exchange  Act. The Board 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  or to the  Company,  or as may be
necessary or  advisable  in the  administration  of this  Agreement,  including,
without limitation,  the right and power to (i) interpret the provisions of this
Agreement,  and (ii) make all  determinations  deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend this Agreement).  All such actions,  calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good

                                       27
<PAGE>

faith,  shall (x) be final,  conclusive  and binding on the Company,  the Rights
Agent, the holders of the Rights and all other parties,  and (y) not subject the
Board to any liability to the holders of the Rights.

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

Section 30.  Governing  Law. This  Agreement and each Right  Certificate  issued
hereunder  shall be deemed to be a contract  made under the laws of the State of
Delaware and for all purposes  shall be governed by and  construed in accordance
with the laws of such State  applicable  to contracts  to be made and  performed
entirely within such State.

Section  31.  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts and each of such  counterparts  shall for all purposes be deemed to
be an original,  and all such counterparts shall together constitute but one and
the same instrument.

Section 32. Descriptive  Headings.  Descriptive headings of the several Sections
of this  Agreement  are inserted for  convenience  only and shall not control or
affect the meaning or construction of any of the provisions hereof.

Section 33. Severability. If any portion or provision of this Agreement shall be
held void,  illegal,  unenforceable  or in conflict with any  applicable  law or
regulation  then in effect,  the  validity or  enforceability  of the  remaining
portions or provisions shall not be affected thereby;  provided,  however,  that
notwithstanding  anything in this  Agreement to the contrary,  if any such term,
provision,  covenant or restriction is held to be invalid, void or unenforceable
and the Board of Directors of the Company  determines in its good faith judgment
that severing the invalid  language form this Agreement would  adversely  affect
the purpose or effect of this  Agreement,  the right of redemption  set forth in
Section 23 hereof  shall be  reinstated  and shall not expire until the Close of
Business on the tenth day following the date of such  determination by the Board
of Directors;  and provided,  further,  that if any provision of this  Agreement
requiring that a  determination  be made by independent  directors is held to be
invalid,  void or  unenforceable,  then this  Agreement  shall be  construed  as
providing  that  such  determination  shall  be  made  by the  entire  Board  of
Directors.

                                       28
<PAGE>

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

Attest:                                GRC INTERNATIONAL, INC.


By:                                    By:
   ----------------------------------      -------------------------------------
   Thomas E. McCabe                        Gary L. Denman
   SVP, Dir. Corp Dev't, Gen. Cnsl & Sec.  President and Chief Executive Officer

Attest:                                    AMERICAN STOCK TRANSFER &
                                             TRUST COMPANY


By:                                        By:
   ---------------------------------           ---------------------------------


Printed Name:                              Printed Name:
             ----------------------                     ------------------------


Title:                                     Title:
       ----------------------------               ------------------------------

                                       29
<PAGE>

                                                                       Exhibit A
                                                                       ---------

                           [Form of Right Certificate]

Certificate No. R-                                                        Rights
                                                                 --------

NOT  EXERCISABLE  AFTER  AUGUST 31, 2000 OR EARLIER IF NOTICE OF  REDEMPTION  IS
GIVEN.  THE RIGHTS ARE SUBJECT TO REDEMPTION,  AT THE OPTION OF THE COMPANY,  AT
$.05 PER RIGHT ON THE TERMS SET FORTH IN THE  RIGHTS  AGREEMENT.  UNDER  CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS  AGREEMENT) AND ANY  SUBSEQUENT  HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE WERE ISSUED TO
A  PERSON  WHO WAS AN  ACQUIRING  PERSON  OR AN  AFFILIATE  OR  ASSOCIATE  OF AN
ACQUIRING PERSON.  THIS RIGHT CERTIFICATE AND THE RIGHTS  REPRESENTED HEREBY MAY
BECOME  VOID IN THE  CIRCUMSTANCES  SPECIFIED  IN  SECTION  7(e)  OF THE  RIGHTS
AGREEMENT.][1]

                                Right Certificate

This  certifies  that   -------------------,   or  registered  assigns,  is  the
registered owner of the number of Rights set forth above, each of which entitles
the owner  thereof,  subject  to the terms,  provisions  and  conditions  of the
Amended  and  Restated  Rights  Agreement  dated  as of May  14,  1999  ("Rights
Agreement") between GRC International, Inc., a Delaware corporation ("Company"),
and American Stock Transfer & Trust Company,  a New York trust company  ("Rights
Agent"),  to purchase from the Company at any time after the  Distribution  Date
(as such term is defined in the Rights  Agreement)  and prior to 5:00 P.M.  (New
York City time) on August 31, 2000 at the principal  office of the Rights Agent,
or its successors as Rights Agent, one fully paid nonassessable  share of Common
Stock, $.10 par value ("Common Stock"),  of the Company,  at a purchase price of
$100 per share ("Purchase Price"), upon presentation and surrender of this Right
Certificate  with the Form of Election to Purchase duly executed.  The number of
Rights  evidenced by this Right  Certificate (and the number of shares which may
be  purchase  upon  exercise  thereof)  set forth  above,  are the  number as of
December  6,  1985,  based on the  shares  of  Common  Stock of the  Company  as
constituted  at such date.  As provided in the Rights  Agreement,  the  Purchase
Price and the number of shares of Common Stock or other  securities which may be
purchased  upon the exercise of the Rights  evidenced by this Right  Certificate
are subject to modification and adjustment upon the happening of certain events.

Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the
Rights  Agreement),  if the  Rights  evidenced  by this  Right  Certificate  are
beneficially  owned by (i) an  Acquiring  Person or an Affiliate or Associate of
any such Acquiring  Person (as such terms are defined in the Rights  Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights

------------------------------------
[1] The portion of the legend in brackets shall be inserted only if applicable.

<PAGE>

Agreement,  a  transferee  of a person  who,  after  such  transfer,  became  an
Acquiring  Person,  or an Affiliate or  Associate of an Acquiring  Person,  such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the  occurrence of such Section  11(a)(ii)
Event.

This Right Certificate is subject to all of the terms, provisions and conditions
of the Rights  Agreement,  which terms,  provisions  and  conditions  are hereby
incorporated  herein by  reference  and made a part  hereof and to which  Rights
Agreement  reference  is  hereby  made  for a full  description  of the  rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights Agent, the Company and the holders of the Right  Certificates.  Copies of
the Rights  Agreement  are on file at the  above-mentioned  office of the Rights
Agent.

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

Subject to the provisions of the Rights Agreement,  the Rights evidenced by this
Certificate  may be redeemed by the Company at its option at a redemption  price
of $.05 per Right at any time prior to the  earlier of the close of  business on
(i) the tenth day following the Shares Acquisition Date (as such time period may
be extended  pursuant to the Rights  Agreement),  and (ii) the Final  Expiration
Date. In addition, the Rights may be exchanged,  in whole or in part, for shares
of the  Common  Stock,  or  shares  of  preferred  stock of the  Company  having
essentially the same value or economic rights as such shares.  Immediately  upon
the  action  of the  Board of  Directors  of the  Company  authorizing  any such
exchange,  and without any further action or any notice,  the Rights (other than
Rights which are not subject to such  exchange)  will  terminate  and the Rights
will only enable holders to receive the shares issuable upon such exchange.

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

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

                                       2
<PAGE>

Right or Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.

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


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


Attest:                                 GRC INTERNATIONAL, INC.


By:                                     By:
   ------------------------------------    -------------------------------------
   Thomas E. McCabe                        Gary L. Denman
   SVP, Dir. Corp Dev't, Gen. Cnsl & Sec.  President and Chief Executive Officer


Countersigned:

Attest:                                 AMERICAN STOCK TRANSFER &
                                          TRUST COMPANY


By:                                     By:
   -----------------------------------     -------------------------------------


Printed Name:                           Printed Name:
             ------------------------                ---------------------------


Title:                                  Title:
       ------------------------------          ---------------------------------




                                       3
<PAGE>




                   [Form of Reverse Side of Right Certificate]

                               FORM OF ASSIGNMENT
                               ------------------
                (to be executed by the registered holder if such
               holder desires to transfer the Right Certificates.)

         FOR VALUE RECEIVED ----------------------- sells, assigns and transfers
unto -------------------------------------------.
    (Please print name and address of transferee)

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

Date:
     ---------------------------------


--------------------------------------
Signature

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

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

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

Date:
     -------------------------------


------------------------------------
Signature

Signature Guaranteed:
                                     NOTICE
                                     ------
The signature to the foregoing Assignment must correspond to the name as written
upon the face of this Right Certificate in every particular,  without alteration
on enlargement or any change whatsoever.

                                       4
<PAGE>

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------
                      (To be  executed if holder  desires to exercise  the Right
                        Certificate.)

To GRC International, Inc.

The undersigned hereby irrevocably elects to exercise ------- Rights represented
by this Right  Certificate  to purchase the shares of Common Stock issuable upon
the  exercise  of such Rights and  requests  that  certifies  for such shares be
issued in the name of: Please insert social security or other identifying number


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

(Please print name and address)

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

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

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

(Please print name and address)

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

Dated:
      -------------------------------


-------------------------------------
         Signature

(Signature  must  conform in all  respects to name of holder as specified on the
face of this Right Certificate)

Signature Guaranteed:

<PAGE>

                                   Certificate
                                   -----------


         The  undersigned  hereby  certifies by checking the  appropriate  boxes
that:

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

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



Dated:
      --------------------------------


--------------------------------------
         Signature



Signature Guaranteed:

<PAGE>

                                                                       Exhibit B
                                                                       ---------

                   SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK

On November 25, 1985,  the Board of  Directors  ("Board") of GRC  International,
Inc. ("Company") declared a dividend distribution of one Right for each share of
Common Stock,  $.10 par value,  of the Company  ("Common  Stock") which was then
outstanding or would later be issued. The distribution was originally payable to
the holders of record of the Common  Stock on  December 6, 1985.  As of June 30,
1989,  April 1, 1994, June 30, 1995 and May 14, 1999, the Rights were amended by
the Board.  As amended,  each Right entitles the  registered  holder to purchase
from the  Company  one  share  of  Common  Stock  at a price  of $100 per  share
("Purchase  Price"),  subject to adjustment.  The  description  and terms of the
Rights  are set forth in an  Amended  and  Restated  Rights  Agreement  ("Rights
Agreement")  between the Company and American Stock Transfer & Trust Company, as
Rights Agent ("Rights Agent").

Until  the  earlier  to  occur  of (i) ten  business  days  following  a  public
announcement  that a person or group of  affiliated  or  associated  persons (an
"Acquiring  Person")  acquired,  or obtained  the right to  acquire,  beneficial
ownership of twenty-five  percent (25%) or more of the outstanding Common Stock,
or (ii) ten business  days  following the  commencement  or  announcement  of an
intention to make a tender offer or exchange offer for twenty-five percent (25%)
or more of such outstanding Common Stock (the earlier of such dates being called
the "Distribution  Date"), the Rights will be evidenced,  with respect to any of
the Common Stock certificates outstanding as of December 6, 1985, by such Common
Stock  certificate,  with the legend  described  in  Section  3(c) of the Rights
Agreement  printed on the reverse of such Common Stock  certificate.  The Rights
Agreement  provides  that,  until the  Distribution  Date,  the  Rights  will be
transferred with and only with the Common Stock. Until the Distribution Date (or
earlier  redemption or expiration of the Rights),  new Common Stock certificates
issued after  December 6, 1985 upon transfer of new issuance of the Common Stock
will contain a notation  incorporating the Rights Agreement by reference.  Until
the Distribution Date (or earlier  redemption or expiration of the Rights),  the
surrender  for  transfer  of any Common  Stock  certificates  outstanding  as of
December 6, 1985,  even  without  the legend  described  in Section  3(c) of the
Rights  Agreement,  will also  constitute the transfer of the Rights  associates
with the Common Stock  represented by such  certificate.  As soon as practicable
following the  Distribution  Date,  separate  certificate  evidencing the Rights
("Right  Certificates")  will be mailed to holders of record of the Common Stock
as of the close of business on the  Distribution  Date and such  separate  Right
Certificates alone will evidence the Rights.

The Rights are not  exercisable  until the  Distribution  Date.  The Rights will
expire on August 31, 2000,  unless earlier  redeemed by the Company as described
below.

The  Purchase  Price  payable,  and the number of shares of the Common  Stock or
other securities or property  issuable,  upon exercise of the Rights are subject
to  adjustment,  from time to time,  to prevent  dilution  (i) in the event of a
stock dividend on, or a  subdivision,  combination  or  reclassification  of the
Common  Stock,  (ii) upon the grant to holders  of the  Common  Stock of certain
rights or warrants to subscribe  for Common Stock or  convertible  securities at
less than the current market price of the Common

<PAGE>

Stock,  or  (iii)  upon the  distribution  to  holders  of the  Common  Stock of
evidences of indebtedness or assets  (excluding  regular periodic cash dividends
out of earnings or retained  earnings or dividends  payable in the Common Stock)
or of subscription rights or warrants (other than those referred to above).

In the event that, at any time following the Distribution,  a person becomes the
beneficial  owner of twenty-five  percent (25%) or more of the then  outstanding
shares of Common Stock (except  pursuant to an offer for all outstanding  shares
of Common  Stock which the  independent  directors  determine  to be fair to and
otherwise  in the best  interests  of the  Company and its  shareholders),  each
holder of a Right will  thereafter  have the right to  receive,  upon  exercise,
Common Stock (or, in certain  circumstances,  cash, property or other securities
of the  Company)  having a value  equal to two times the  exercise  price of the
Right. Notwithstanding any of the foregoing,  following the occurrence of any of
the events set forth in this  paragraph,  all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring  Person  will be null and void.  However,  Rights are not  exercisable
following  the  occurrence  of the events set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.

In the  event  that  the  Company  is  acquired  in a merger  or other  business
combination  transaction or 50% or more of its assets or earning power are sold,
proper  provision  shall be made so that each holder of a Right  (except  Rights
which have been previously  voided as set forth above) shall thereafter have the
right to receive,  upon the exercise  thereof at the then current exercise price
of the Right,  that number of shares of common  stock of the  acquiring  company
which at the time of such transaction would have a market value of two times the
exercise price of the Right.

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

At any  time  prior  to the  earlier  to occur  of (i) the  tenth  business  day
following  the  public  announcement  that a person  or group of  affiliated  or
associated  persons has acquired  beneficial  ownership of  twenty-five  percent
(25%) or more of the  outstanding  Common  Stock or (ii)  August 31,  2000,  the
Company may redeem the Rights in whole,  but not in part, at a price of $.05 per
Right,  payable in cash, Common Stock or other consideration  deemed appropriate
by the Board of Directors  ("Redemption Price").  Immediately upon the action of
the Board of Directors of the Company electing to redeem the Rights, the Company
shall make announcements  thereof, and upon such election, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

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

                                       2
<PAGE>

A copy of the Rights  Agreement  will be filed with the  Securities and Exchange
Commission as an Exhibit to a Registration  Statement on Form 8-A. A copy of the
Rights  Agreement  is available  free of charge from the  Company.  This summary
description  of the Rights does not purport to be complete  and is  qualified in
its entirety by reference to the Rights Agreement,  which is hereby incorporated
herein by reference.

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