AMENDMENT  AND  RESTATEMENT  AGREEMENT,  dated as of January 29, 2003 (this
"Amendment   Agreement"),   between  Central  Bancorp,   Inc.,  a  Massachusetts
corporation (the "Company"),  and Registrar and Transfer  Company,  a New Jersey
corporation,  as Rights Agent, under the Rights Agreement referred to below (the
"Rights Agent").

                              W I T N E S S E T H:

     WHEREAS,  the Company has  appointed the Rights Agent as Rights Agent under
that certain  Shareholder Rights Agreement,  dated as of October 11, 2001 by and
between the Company and EquiServe Trust Company,  N.A. (the "Rights  Agreement")
and the Rights Agent has accepted such appointment;

     WHEREAS,  the Company has requested  that the Rights Agent duly execute and
deliver this Amendment Agreement;

     WHEREAS,  Section 5.4 of the Rights Agreement provides that the Company and
the Rights Agent may from time to time amend the Rights Agreement in any respect
prior to the Distribution Date (as defined in the Rights Agreement) and that the
Rights  Agent  will,  at the  request of the  Company,  execute  and deliver any
amendment to the Rights Agreement satisfying the terms of Section 5.4; and

     WHEREAS, no Distribution Date has occurred as of the date hereof;

     NOW, THEREFORE,  in consideration of the premises, the parties hereby agree
as follows:

     1. Amendment and  Restatement.  The Rights  Agreement is hereby amended and
        --------------------------
restated to read as set forth in the attached  Amended and Restated  Shareholder
Rights Agreement.

     2. Counterparts.  This Amendment 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.

     3. GOVERNING LAW. THIS AMENDMENT AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
        -------------
MADE UNDER THE LAWS OF THE  COMMONWEALTH OF  MASSACHUSETTS  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.

IN WITNESS WHEREOF,  the parties hereto have caused this Amendment  Agreement to
be executed as of the date first above written.


                                 CENTRAL BANCORP, INC.

                                 By: /s/ John D. Doherty
                                     -------------------------------------------
                                     John D. Doherty
                                     President and Chief Executive Officer



                                 REGISTRAR AND TRANSFER COMPANY

                                 By: William P. Tatler
                                     -------------------------------------------
                                     William P. Tatler
                                     Vice President

<PAGE>


================================================================================


                          SHAREHOLDER RIGHTS AGREEMENT




                                   DATED AS OF


                                OCTOBER 11, 2001


                                 BY AND BETWEEN




                              CENTRAL BANCORP, INC.



                                       AND



                         REGISTRAR AND TRANSFER COMPANY


                                 AS RIGHTS AGENT




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

                              AMENDED AND RESTATED

                                      AS OF

                                JANUARY 29, 2003

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



================================================================================

<PAGE>



                          SHAREHOLDER RIGHTS AGREEMENT



                                Table of Contents

                                                                            Page
                                                                            ----

                                    ARTICLE I
                               CERTAIN DEFINITIONS




Section 1.1       Certain Definitions....................................... 1

                                   ARTICLE II
                                   THE RIGHTS

Section 2.1       Summary of Rights ........................................ 6
Section 2.2       Legend on Common Stock Certificates....................... 6
Section 2.3       Exercise of Rights; Separation of Rights.................. 6
Section 2.4       Adjustments to Exercise Price; Number of Rights........... 8
Section 2.5       Date on Which Exercise is Effective....................... 8
Section 2.6       Execution, Authentication, Delivery and Dating of
                    Rights Certificates..................................... 8
Section 2.7       Registration, Registration of Transfer and Exchange....... 9
Section 2.8       Mutilated, Destroyed, Lost and Stolen Rights Certificates. 9
Section 2.9       Persons Deemed Owners..................................... 10
Section 2.10      Delivery and Cancellation of Certificates................. 10
Section 2.11      Agreement of Rights Holders............................... 10

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

Section 3.1       Distribution Date......................................... 10
Section 3.2       Flip-over................................................. 12

                                   ARTICLE IV
                                THE RIGHTS AGENT

Section 4.1       General................................................... 12
Section 4.2       Merger or Consolidation or Change of Name of Rights Agent. 13
Section 4.3       Duties of Rights Agent.................................... 13
Section 4.4       Change of Rights Agent.................................... 14


<PAGE>

                                    ARTICLE V
                                  MISCELLANEOUS


                                                                            Page
                                                                            ----

Section 5.1       Redemption ............................................... 15
Section 5.2       Expiration................................................ 15
Section 5.3       Issuance of New Rights Certificates....................... 15
Section 5.4       Supplements and Amendments................................ 15
Section 5.5       Fractional Shares......................................... 15
Section 5.6       Rights of Action.......................................... 15
Section 5.7       Holder of Rights Not Deemed a Shareholder................. 15
Section 5.8       Notice of Proposed Actions................................ 16
Section 5.9       Notices................................................... 16
Section 5.10      Suspension of Exercisability or Exchangeability........... 16
Section 5.11      Costs of Enforcement...................................... 17
Section 5.12      Successors................................................ 17
Section 5.13      Benefits of this Agreement................................ 17
Section 5.14      Determination and Actions by the Board of Directors, etc.. 17
Section 5.15      Descriptive Headings...................................... 17
Section 5.16      Governing Law............................................. 17
Section 5.17      Counterparts.............................................. 17
Section 5.18      Severability.............................................. 17

                                    EXHIBITS

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

<PAGE>

                          SHAREHOLDER RIGHTS AGREEMENT


     This Shareholder Rights Agreement ("Agreement") is made and entered into as
of the 11th day of October, 2001 and amended and restated as of January 29, 2003
by  and  between  Central  Bancorp,  Inc.,  a  Massachusetts   corporation  (the
"Company"),  and Registrar and Transfer Company,  a New Jersey  corporation,  as
successor  rights agent to EquiServe  Trust  Company,  N.A., a national  banking
association (the "Rights Agent").

     WHEREAS,  the  Board  of  Directors  of  the  Company  desires  to  provide
stockholders  of the Company with the  opportunity to benefit from the long-term
prospects  and value of the  Company  and to  ensure  that  stockholders  of the
Company receive fair and equal  treatment in the event of any proposed  takeover
of the Company; and

     WHEREAS,  the Board of  Directors  of the Company  previously  authorized a
Rights  Agreement,  dated as of January 8, 1999,  between  the Company and State
Street Bank and Trust  Company,  as Rights Agent (the "1999 Rights  Agreement"),
declared  a dividend  of one Right (as such term is  defined in the 1999  Rights
Agreement) for each  outstanding  share of the Company's common stock, par value
$1.00  per  share  (the  "Common  Stock"),  outstanding  as of the  date  of the
completion of the holding company  reorganization  of Central  Co-operative Bank
(the "1999  Record  Date"),  and  authorized  the issuance of one Right for each
share of Common  Stock  issued  between the 1999 Record Date and the  Separation
Time  (as such  term is  defined  in the  1999  Rights  Agreement),  each  Right
initially  representing the right to purchase one share of Common Stock upon the
terms and subject to the conditions set forth in the 1999 Rights Agreement; and

     WHEREAS,  on  October  11,  2001 the  Board  of  Directors  of the  Company
determined  that it is desirable and in the best interest of the Company and its
stockholders for the Company to extend the benefits  afforded by the 1999 Rights
Agreement and to implement such extension by executing this Agreement; and

     WHEREAS,  the Board of Directors of the Company has authorized and declared
a dividend of one right (the  "Right") in respect of each share of Common  Stock
held of record as of the close of  business  on October  24,  2001 (the  "Record
Time")  and  authorized  the  issuance  of one Right in respect of each share of
Common Stock issued after the Record Time and prior to earlier of the Separation
Time or the Expiration Time (as hereinafter defined);

     WHEREAS,  subject to the terms and conditions  hereof,  each Right entitles
the holder  thereof,  after the Separation  Time, to purchase  securities of the
Company (or, in certain cases, of certain other entities)  pursuant to the terms
and subject to the conditions set forth herein; and

     WHEREAS, the Board of Directors desires that this Agreement be effective as
of the close of business on October 24, 2001 which is the Expiration Date of the
1999 Rights Agreement; and

     WHEREAS,  in connection  with the matters  referred to herein,  the Company
desires to  appoint  the Rights  Agent to act on behalf of the  Company  for the
benefit of the holders of Rights, and the Rights Agent is willing so to act;

     NOW,  THEREFORE,  in consideration of the foregoing recitals and the mutual
agreements  set forth herein and intending to be legally  bound hereby,  and for
the benefit of the holders of the Rights,  the parties  hereto  hereby  agree as
follows:

         ARTICLE I - CERTAIN DEFINITIONS
         ---------   -------------------

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

     "Acquiring  Person" shall mean any Person who is a Beneficial  Owner of 10%
or more of the outstanding shares of Common Stock;  provided,  however, that the
                                                    ------------------
term "Acquiring Person" shall not include:
<PAGE>

             (i) any Person who shall become the Beneficial Owner of 10% or more
     of the  outstanding  shares  of  Common  Stock  solely  as a  result  of an
     acquisition  by the  Company  of shares of Common  Stock,  until  such time
     thereafter as such Person shall become the Beneficial  Owner (other than by
     means of a stock  dividend  or stock  split)  of any  additional  shares of
     Common Stock; or

              (ii)  any Person who shall become the  Beneficial  Owner of 10% or
     more of the  outstanding  shares of the Common  Stock solely as a result of
     purchasing the Common Stock directly from the Company pursuant to a written
     agreement with the Company; or

              (iii)  the Company,  a wholly owned Subsidiary of the Company,  or
     any employee stock ownership or other employee  benefit plan of the Company
     or a wholly owned Subsidiary of the Company,  or any employee stock benefit
     trust  established  by the  Company  or a wholly  owned  subsidiary  of the
     Company (an "Employee Plan Trust"); or

              (iv)  John D. Doherty and his Affiliates  and Associates  provided
     that  he  does  not  become  the  Beneficial  Owner  of 20% or  more of the
     outstanding shares of the Common Stock.

     "Adverse  Person"  shall  mean a Person  declared  as such by the  Board of
Directors of the Company,  upon (i) a determination  that such Person,  alone or
together with its Affiliates and Associates,  has become the Beneficial Owner of
10% or more of the  outstanding  shares of Common Stock and (ii) a determination
by the Board of  Directors,  including at least a majority of the  Disinterested
Directors,   after  reasonable   inquiry  and   investigation,   including  such
consultation  with such persons as such directors shall deem  appropriate,  that
(A) such Beneficial Ownership by such Person is intended to cause, is reasonably
likely  to cause or will  cause the  Company  to  repurchase  the  Common  Stock
beneficially  owned by such  Person or to cause  pressure on the Company to take
action or enter into a transaction or series of transactions which would provide
such Person with short-term  financial gain under  circumstances where the Board
of Directors determines that the best long-term interests of the Company and its
stockholders, but for the actions and possible actions of such Person, would not
be served by taking such action or entering into such  transactions or series of
transactions  at that  time or (B) such  Beneficial  Ownership  is  having or is
reasonably likely to have a material adverse impact (including,  but not limited
to,  impairment of  relationships  with customers or impairment of the Company's
ability to maintain  its  competitive  position) on the business or prospects of
the Company;  provided,  however, that the Board of Directors of the Company may
determine not to declare a Person to be an Adverse  Person if, prior to the time
that  such  Person  acquired  10% or more of the  shares of  Common  Stock  then
outstanding  (or, in the case of a Person who is the Beneficial  Owner of 10% or
more of the outstanding Common Stock as of the date of this Agreement, within 90
days following adoption of this Agreement), such Person provided to the Board of
Directors  in writing a statement of such  Person's  purpose and  intentions  in
connection  with the proposed  acquisition  of Common  Stock,  together with any
other information reasonably requested of such Person by the Board of Directors,
and the Board of Directors,  based on such statement and reasonable  inquiry and
investigation,  including  consultation with such persons as the directors shall
deem appropriate,  determines to notify and notifies such Person in writing that
it will not declare such Person to be an Adverse Person;  provided further, that
the  Board of  Directors,  with the  concurrence  of a least a  majority  of the
Disinterested  Directors,  may expressly condition in any manner a determination
not to declare a Person an  Adverse  Person on such  conditions  as the Board of
Directors may select, including without limitation,  such Person's not acquiring
more than a specified amount of stock and/or on such Person's not taking actions
inconsistent  with the purposes and  intentions  disclosed by such Person in the
statement  provided  to the Board of  Directors.  In the event that the Board of
Directors   should  at  any  time  determine,   upon   reasonable   inquiry  and
investigation,  including  consultation with such Persons as the directors shall
deem  appropriate,  that such Person has not met or complied  with any condition
specified  by  the  Board  of  Directors,  the  Board  of  Directors,  with  the
concurrence of at least a majority of the  Disinterested  Directors,  may at any
time  thereafter  declare  such Person to be an Adverse  Person  pursuant to the
provisions hereof. Notwithstanding the foregoing, the Board may not declare John
D.  Doherty  to be an Adverse  Person  until  such time as he,  either  alone or
together with his Affiliates and Associates,  has become the Beneficial Owner of
20% or more of the outstanding shares of the Common Stock.

     "Affiliate"  is a Person that directly,  or indirectly  through one or more
intermediaries,  controls, or is controlled by, or is under common control with,
the Person specified.

                                      -2-
<PAGE>

     "Associate"  means (i) any  corporation  or  organization  (other  than the
Company or a  majority-owned  subsidiary of the Company) of which such Person is
an officer or partner or is, directly or indirectly, the Beneficial Owner of 10%
or more of any  class of  equity  securities,  (ii)  any  trust  (other  than an
Employee  Plan  Trust) or other  estate in which such  Person has a  substantial
Beneficial interest or as to which such Person serves as trustee or in a similar
fiduciary capacity,  and (iii) any relative or spouse of such Person who has the
same home as such Person.

     A Person shall be deemed the  "Beneficial  Owner," and to have  "Beneficial
Ownership," of and to "Beneficially Own":

              (i) any  securities  which  such  Person  or any of such  Person's
     Affiliates or Associates  beneficially  owns,  directly or indirectly,  for
     purposes  of Section  13(d) of the  Exchange  Act or Rules  13d-3 and 13d-5
     promulgated  thereunder (or any comparable or successor law or regulation),
     in each case as in effect on the date hereof;

              (ii) any  securities  which  such  Person or any of such  Person's
     Affiliates  or Associates  has the right to acquire  (whether such right is
     exercisable immediately, or only after the passage of time, compliance with
     regulatory  requirements,  the  fulfillment  of a condition,  or otherwise)
     pursuant  to any  agreement,  arrangement  or  understanding,  or upon  the
     exercise of  conversion  rights,  exchange  rights,  rights (other than the
     Rights),  warrants or options,  or otherwise,  provided that a Person shall
     not  under  this  clause  (ii) be  deemed  the  Beneficial  Owner of, or to
     Beneficially  Own,  securities  tendered  pursuant  to a  tender  offer  or
     exchange  offer made by or on behalf of such Person or any of such Person's
     Affiliates or Associates  until such tendered  securities  are accepted for
     purchase or exchange;

              (iii)  any  securities  which  such  Person  or any such  Person's
     Affiliates  or Associates  has the right to vote,  alone or in concert with
     others, pursuant to any agreement,  arrangement or understanding,  provided
     that a Person  shall not under this clause  (iii) be deemed the  Beneficial
     Owner  of,  or  to  Beneficially   Own,  any  security  if  the  agreement,
     arrangement or understanding to vote such security (A) arises solely from a
     revocable proxy given to such Person or any of such Person's  Affiliates or
     Associates in response to a public proxy  solicitation made pursuant to and
     in accordance  with the  applicable  rules and  regulations of the Exchange
     Act,  and (B) is not also  then  reportable  on  Schedule  13D or under the
     Exchange Act (or any comparable or successor report);

               (iv) any securities which are 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  for the
     purpose of  acquiring,  holding,  voting  (other than voting  pursuant to a
     revocable  proxy as  described  in the proviso to clause  (iii)  hereof) or
     disposing of any securities of the Company; and

              (v) on any day on or after a  Distribution  Date,  all Rights that
     prior to such date were  represented by certificates  for Common Stock that
     such Person owns on such day.

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

     "Close of  Business"  on any given  date  shall  mean  5:00  p.m.,  eastern
standard  time,  on such  date;  provided,  however,  that if such date is not a
Business  Day,  it shall  mean 5:00 p.m.,  eastern  standard  time,  on the next
succeeding Business Day.

     "Common Stock" shall mean the common stock,  par value $1.00 per share,  of
the Company.

     "Disinterested  Director"  shall mean (i) any member of the Company's Board
of  Directors  who is not an officer or  employee  of the  Company or any of its
Subsidiaries and is not an Acquiring  Person,  an Adverse Person or an Affiliate
or Associate of any such Person or a  representative  or nominee of an Acquiring
Person, an Adverse Person or any such Affiliate or Associate and was a member of
the Company's Board of Directors  prior to the date of this Agreement,  and (ii)
any Person who subsequently becomes a member of the Company's Board of Directors
who is not an Acquiring  Person,  an Adverse Person or an Affiliate or Associate
of any such Person or a


                                      -3-
<PAGE>
representative  or nominee of an Acquiring  Person,  an Adverse Person or of any
such  Affiliate or Associate,  if such Person's  nomination  is  recommended  or
approved by a majority of the Disinterested Directors.

     "Distribution Date" shall mean (i) the first date of public announcement by
the  Company  (by any  means) or by an  Acquiring  Person  (by means of filing a
Schedule  13D under the Exchange Act or any  comparable  or successor  report or
schedule or an amendment  thereto)  that an Acquiring  Person has become such or
(ii) the first date of public announcement by the Company (by any means) that an
Adverse Person has become such.

     "Exchange Act" shall mean the Securities  Exchange Act of 1934, as amended,
or any successor statute.

     "Exercise  Price" shall mean,  as of any date,  the price at which a holder
may purchase the  securities  issuable upon  exercise of one whole Right.  Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $60.

     "Expiration Time" shall mean the earlier of (i) the Redemption Time or (ii)
the close of business on October 24, 2011.

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

     "Flip-over  Stock" of any Person  shall mean the capital  stock (or similar
equity  interest)  with the greatest  voting power in respect of the election of
directors  (or other  Persons  similarly  responsible  for the  direction of the
business and affairs) of such Person or, if such other Person is a Subsidiary of
another  Person,   the  Person  or  Persons  which   ultimately   controls  such
first-mentioned Person.

     "Flip-over  Transaction  or Event"  shall mean a  transaction  or series of
transactions in which, directly or indirectly, (i) the Company shall consolidate
with or merge with or into an Acquiring  Person, an Adverse Person, or any other
Person acting together in any respect with such Person,  or an Acquiring  Person
or Adverse  Person or any other Person acting  together in any respect with such
Person  shall merge with or into the  Company,  (ii) the  Company  shall sell or
otherwise  transfer (or one or more of its Subsidiaries  shall sell or otherwise
transfer) assets (A) aggregating more than 50% of the assets (measured by either
book  value  or fair  market  value)  or (B)  generating  more  than  50% of the
operating income or cash flow, of the Company and its  Subsidiaries  (taken as a
whole) to an  Acquiring  Person or  Adverse  Person or any other  Person  acting
together in any respect with such Person  (provided that for purposes of clauses
(i) and (ii),  but  without  limitation,  a Person  shall be deemed to be acting
together  in any  respect  with an  Acquiring  Person or Adverse  Person if such
Person enters into any  transaction  of the type described in clause (i) or (ii)
within one year after the time the Acquiring Person or Adverse Person has become
such,  unless (x) such  transaction  was  initiated  by the  Company and (y) the
Acquiring  Person or Adverse Person or any Person acting together in any respect
with such  Person  has not  acquired  control of the Board of  Directors  of the
Company), (iii) any Acquiring Person or Adverse Person shall (A) sell, purchase,
lease, exchange,  mortgage, pledge, transfer or otherwise acquire or dispose of,
to, from, or with,  as the case may be, the Company or any of its  Subsidiaries,
over any period of 12 consecutive  calendar  months,  assets or liabilities  (x)
having an aggregate  fair market value of more than  $15,000,000 or (y) on terms
and  conditions  less favorable to the Company than the Company would be able to
obtain through  arm's-length  negotiations with an unaffiliated third party, (B)
receive  any   compensation  for  services  from  the  Company  or  any  of  its
Subsidiaries,  other than  compensation  for  full-time  employment as a regular
employee at rates in accordance with the Company's (or its  Subsidiaries')  past
practices,   or  (C)  receive  the  benefit,   directly  or  indirectly  (except
proportionately  as a shareholder),  over any period of 12 consecutive  calendar
months, of any loans, advances, guarantees,  pledges, insurance,  reinsurance or
other financial assistance or any tax credits or other tax advantage provided by
the Company or any of its Subsidiaries  involving an aggregate  principal amount
in excess of  $5,000,000  or an aggregate  cost or transfer of benefits from the
Company or any of its  Subsidiaries  in excess of $5,000,000 or, in any case, on
terms and  conditions  less  favorable to the Company than the Company  would be
able to obtain through arm's length  negotiations with a third party, or (iv) as
a result of any  reclassification  of  securities  (including  any reverse stock
split), or  recapitalization,  of the Company, or any merger or consolidation of
the Company with any of its  Subsidiaries or any other  transaction or series of
transactions  (whether or not with or into or  otherwise  involving an Acquiring
Person or Adverse Person),  the proportionate share of the outstanding shares of
any class of equity  or  convertible  securities  of the  Company  or any of its
Subsidiaries  which is directly or indirectly  owned by any Acquiring  Person or
Adverse  Person is increased by more than 1%. The terms  "Acquiring  Person" and
"Adverse  Person" shall include any Acquiring  Person and/or any Adverse  Person
and its  Affiliates  and

                                      -4-
<PAGE>
Associates (other than the Company,  a wholly owned Subsidiary of the Company or
any employee stock ownership or other employee  benefit plan of the Company or a
wholly owned Subsidiary of the Company), counted together as a single Person.

     "Market  Price" per share of any  security on any date (the  "Determination
Date") shall mean the  arithmetic  average of the daily closing prices per share
of such security  (determined as described  below) on each of the 20 consecutive
Trading Days through and  including  the Trading Day  immediately  preceding the
Determination Date; provided,  however,  that if an event of a type analogous to
                    --------   -------
any of the events  described in Section 2.4 hereof shall have caused the closing
price on one or more  Trading  Days during such period of 20 Trading Days not to
be fully comparable with the closing price on the Determination  Date, each such
closing price so used shall be appropriately  adjusted in order to make it fully
comparable with the closing price on the  Determination  Date. The closing price
per share of any  security  on any date shall be the last  reported  sale price,
regular  way,  or, in case no such sale takes place or is reported on such date,
the average of the closing bid and asked prices, regular way, for such security,
in either case as reported in the principal  consolidated  transaction reporting
system with respect to securities  listed or admitted to trading on the New York
Stock  Exchange,  Inc. or, if such security is not listed or admitted to trading
on the New York Stock Exchange,  Inc., as reported in the principal consolidated
transaction  reporting system with respect to securities listed on the principal
national  securities  exchange  on which such  security is listed or admitted to
trading  or, if such  security  is not  listed or  admitted  to  trading  on any
national  securities  exchange,  as  reported  by the  National  Association  of
Securities  Dealers,  Inc.  Automated  Quotation System ("NASDAQ") or such other
self-regulatory  organization or registered securities information processor (as
such terms are used under the Exchange Act) as then reports trading  information
concerning such security, or, if on any such date such security is not listed or
admitted to trading on any  national  securities  exchange or quoted by any such
organization,  the average of the closing bid and asked  prices as  furnished by
any  registered  securities  dealer that is a market maker (as such term is used
under the Exchange  Act) in such  security and which is selected by the Board of
Directors  of the  Company;  provided,  however,  that if on any such  date such
                             --------   -------
security is not listed or admitted to trading on a national  securities exchange
or traded in the over-the-counter  market, the closing price of such security on
such date shall mean the fair value of such  security on such date as determined
in good faith by the Board of Directors of the Company,  after consultation with
a nationally  recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.

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

     "Redemption  Price"  shall mean an amount  (calculated  to the  nearest one
one-hundredth  of a cent)  equal to the  Exercise  Price,  as in  effect  at the
Redemption Time, divided by 6000 (i.e., initially $0.01).

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

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

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

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

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

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

     "Separation  Time"  shall mean the close of  business on the earlier of (i)
the later of (A) the tenth day,  after the date on which any Person  (other than
the Company,  a  majority-owned  Subsidiary of the Company or an employee  stock
ownership  or other  employee  benefit  plan of the Company or a  majority-owned
Subsidiary  of the  Company)  commences a tender or  exchange  offer  which,  if
consummated,  would result in such Person's becoming an Acquiring Person and (B)
such later date as the Board of  Directors  of the Company may from time to time
fix by resolution  adopted prior to the  Separation  Time and (ii) the tenth day
after a  Distribution  Date;  provided  that,  if the
                              --------

                                      -5-
<PAGE>

foregoing  results in the  Separation  Time being prior to the Record Time,  the
Separation  Time shall be the Record  Time and  provided  further  that,  if any
                                                --------  -------
tender or  exchange  offer  referred  to in  clause  (i) of this  definition  is
cancelled,  terminated or otherwise withdrawn prior to the Separation Time, such
offer shall be deemed, for purposes of this definition, never to have been made.

     "Subsidiary"  of any Person shall mean any  corporation  or other entity of
which  equity  securities  or equity  interests  representing  a majority of the
voting  power  are  Beneficially  Owned,  directly  or  indirectly,  or which is
effectively controlled, by such Person.

     "Trading Day" shall mean, as to any stock or other security, a day on which
the  principal  national  securities  exchange  or NASDAQ on which such stock or
other  security  is  listed,  quoted  or  admitted  to  trading  is open for the
transaction  of  business  or, if such stock or other  security  is not  listed,
quoted or admitted to trading on any national  securities  exchange or NASDAQ, a
Business Day.

         ARTICLE II - THE RIGHTS
         ----------   ----------

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

     2.2 Legend on Common  Stock  Certificates.  Certificates  for shares of the
         -------------------------------------
Common Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented  thereby and shall
have  impressed  on,  printed on,  written on or  otherwise  affixed to them the
following legend:

          Until the Separation Time (as defined in the Rights Agreement referred
          to below),  this  certificate  also  evidences and entitles the holder
          hereof  to  certain  Rights  as  set  forth  in a  Shareholder  Rights
          Agreement,  dated as of October 11, 2001 (as such may be amended  from
          time to time, the "Rights Agreement"),  between Central Bancorp,  Inc.
          (the "Company") and Registrar and Transfer Company,  the Rights Agent,
          the terms of which are hereby  incorporated  herein by reference and a
          copy of which is on file at the  principal  executive  offices  of the
          Company.  Under  certain  circumstances,  as set  forth in the  Rights
          Agreement, such Rights may be redeemed, may be exchanged for shares of
          Common Stock or other securities or assets of the Company, may expire,
          may become  void (if they are  "Beneficially  Owned" by an  "Acquiring
          Person" or "Adverse Person" or an Affiliate or Associate  thereof,  as
          such terms are defined in the Rights  Agreement,  or by any transferee
          of any of the foregoing) or may be evidenced by separate  certificates
          and may no longer be evidenced by this  certificate.  The Company will
          mail or arrange for the mailing of a copy of the Rights  Agreement  to
          the holder of this  certificate  without charge within five days after
          the receipt of a written request therefor.

Until the Separation Time, certificates representing shares of Common Stock that
are issued and  outstanding at the Record Time shall evidence one Right for each
share of Common  Stock  evidenced  thereby  notwithstanding  the  absence of the
foregoing legend.

     2.3 Exercise of Rights;  Separation of Rights. (a) Subject to adjustment as
         -----------------------------------------
herein  set  forth,  each  Right will  entitle  the  holder  thereof,  after the
Separation Time and prior to the Expiration Time, to purchase,  for the Exercise
Price, one share of the Common Stock at the Exercise Price.

          (b) Until the Separation  Time, (i) no Right may be exercised and (ii)
each Right will be  evidenced by the  certificate  for the  associated  share of
Common  Stock  and  will  be  transferable  only  together  with,  and  will  be
transferred by a transfer of, such associated share.  Notwithstanding  any other
provision  of this  Agreement,  any  Rights  held by the  Company  or any of its
Subsidiaries other than in fiduciary capacity shall not be exercisable.  Nothing
in the  preceding  sentence  shall be  construed  as  limiting  the right of the
Company and its Subsidiaries to acquire or transfer Rights.

                                      -6-
<PAGE>

          (c) Subject to the terms and  conditions  herein set forth,  after the
Separation  Time  and  prior  to the  Expiration  Time,  the  Rights  (i) may be
exercised,  and (ii) may be  transferred  independently  of the shares of Common
Stock in respect of which they were originally  issued.  Promptly  following the
Separation  Time,  the Rights Agent will mail to each holder of record of Common
Stock  as of the  Separation  Time,  at such  holder's  address  as shown by the
records of the Company (the Company  hereby  agreeing to furnish  copies of such
records to the Rights  Agent for this  purpose),  (x) a  certificate  (a "Rights
Certificate")  in  substantially  the form of  Exhibit  A  hereto  appropriately
completed,  representing  the  number  of  rights  held  by such  holder  at the
Separation Time and having such marks of  identification or designation and such
legends,  summaries  or  endorsements  printed  thereon as the  Company may deem
appropriate and as are not  inconsistent  with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation made
pursuant  thereto  or with any rule or  regulation  of any  national  securities
exchange or other self-regulatory organization (as such terms are used under the
Exchange  Act) on which the  Rights  may from time to time be listed or  through
which the Rights may from time to time be  traded,  or to conform to usage,  and
(y) a disclosure statement describing the Rights.

          (d) Subject to Sections  2.3(b) and 5.10,  Rights may be  exercised on
any Business Day after the Separation  Time and prior to the Expiration  Time by
submitting  to the Rights Agent the Rights  Certificate  evidencing  such Rights
with an election to exercise (an  "Election to Exercise")  substantially  in the
form attached to the Rights  Certificate duly completed,  accompanied by payment
in cash,  or by certified or official  bank check or money order  payable to the
order of the Company,  of a sum equal to the Exercise  Price  multiplied  by the
number of Rights being  exercised  together  with a sum  sufficient to cover any
transfer tax or charge which may be payable in respect of any transfer  involved
in the transfer or delivery of Rights  Certificates  or the issuance or delivery
of certificates for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.

          (e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d) above,  and subject to the
conditions set forth in this Agreement, the Rights Agent will thereupon promptly
(i)(A)  requisition  from a  transfer  agent for the  stock or other  securities
purchasable upon exercise of the Rights  certificates  evidencing such number of
shares or other  securities  to be  purchased  (the Company  hereby  irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company  elects  pursuant  to Section  5.5 hereof not to issue  certificates
representing fractional shares,  requisition from the depositary selected by the
Company depositary  receipts  representing the fractional shares to be purchased
or  requisition  from  the  Company  the  amount  of  cash to be paid in lieu of
fractional  shares in accordance  with Section 5.5 hereof and (ii) after receipt
of such  certificates,  depositary  receipts and/or cash, deliver the same to or
upon the order of the registered holder of such Rights  Certificate,  registered
(in the case of  certificates  or depositary  receipts) in such name or names as
may be designated by such holder.

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

          (g) The Company covenants and agrees that it will (i) cause to be kept
available until the Expiration Time out of its authorized and unissued shares of
capital  stock a number of shares of Common  Stock  that will be  sufficient  to
permit the exercise in full of all outstanding Rights; (ii) immediately upon the
occurrence of the Separation  Time,  take all such action as may be necessary to
obtain the approval of such regulatory  agency or agencies as may be required by
law for the  issuance of shares of the Common  Stock upon the exercise of Rights
hereunder, if required by law; (iii) take all such action as may be necessary to
ensure that all shares  delivered upon exercise of Rights shall,  at the time of
delivery thereof (subject to payment of the Exercise Price), be duly and validly
authorized,  executed,  issued and delivered  and fully paid and  nonassessable;
(iv) take all such  action as may be  necessary  to ensure  that all  securities
other than  shares  delivered  upon  exercise  of Rights  shall,  at the time of
delivery thereof (subject to payment of the Exercise Price), be duly and validly
authorized,  executed, issued and delivered and valid and binding obligations of
the issuer thereof;  (v) take all such action as may be necessary to comply with
any applicable requirements of the General Laws of Massachusetts, the Securities
Act of 1933 or the Exchange Act, and the rules and regulations  thereunder,  and
any other applicable law, rule or regulation, in connection with the issuance of
any  shares  upon  exercise  of Rights;  (vi) use its best  efforts to cause all
shares and other  securities  issued  upon  exercise of Rights to be listed on a
national  securities  exchange  or traded  in the  over-the-counter  market,  as
reported  by  NASDAQ  or  another  self-regulatory  organization  or  registered
securities

                                      -7-
<PAGE>

information  processor  (as such terms are used under the  Exchange  Act),  upon
issuance;  and  (vii) pay when due and  payable  any and all  federal  and state
transfer  taxes and  charges  which may be payable  in  respect of the  original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights,  provided  that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer  involved
in the transfer or delivery of Rights  Certificates  or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.

     2.4 Adjustments to Exercise Price;  Number of Rights.  (a) In the event the
         ------------------------------------------------
Company shall at any time after the Record Time and prior to the Separation Time
(i)  declare or pay a dividend on Common  Stock  payable in Common  Stock,  (ii)
subdivide the outstanding  Common Stock or (iii) combine the outstanding  Common
Stock into a smaller  number of shares of Common  Stock,  then (x) the  Exercise
Price in effect after such  adjustment  will be equal to the  Exercise  Price in
effect  immediately prior to such adjustment  divided by the number of shares of
Common Stock (the "Expansion Factor") that a holder of one share of Common Stock
immediately  prior to such  dividend,  subdivision  or  combination  would  hold
thereafter as a result thereof and (y) each Right held prior to such  adjustment
will become that number of Rights  equal to the  Expansion  Factor,  and (z) the
adjusted  number of Rights will be deemed to be distributed  among the shares of
Common Stock with respect to which the original  Rights were associated (if they
remain  outstanding)  and  the  shares  issued  in  respect  of  such  dividend,
subdivision  or  combination,  so that each such share of Common Stock will have
exactly one Right  associated  with it. Each  adjustment  made  pursuant to this
paragraph  shall be made as of the payment or effective  date for the applicable
dividend, subdivision or combination.

     In the event the Company  shall at any time after the Record Time and prior
to the  Separation  Time issue any shares of Common  Stock  otherwise  than in a
transaction  referred to in the preceding  paragraph,  each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share.

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

          (c) Each  adjustment  to the  Exercise  Price  made  pursuant  to this
Section 2.4 shall be calculated  to the nearest cent.  Whenever an adjustment to
the Exercise  Price is made  pursuant to this Section 2.4, the Company shall (i)
promptly  prepare  a  certificate  setting  forth  such  adjustment  and a brief
statement of the facts accounting for such  adjustment,  (ii) promptly file with
the Rights  Agent and with each  transfer  agent for the Common  Stock a copy of
such  certificate  and (iii)  mail a brief  summary  thereof  to each  holder of
Rights.

          (d)  Irrespective  of any  adjustment  or  change  in  the  securities
purchasable upon exercise of the Rights, the Rights Certificates theretofore and
thereafter  issued may continue to express the securities so  purchasable  which
were expressed in the initial Rights Certificates issued hereunder.

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

                                      -8-
<PAGE>

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

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

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

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

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

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

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

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

          (d) The Company  shall not be required  to  register  the  transfer or
exchange of any Rights after the Rights have been  redeemed  pursuant to Section
5.1 hereof or become void pursuant to Section 3.1(b) hereof.

     2.8 Mutilated,  Destroyed, Lost and Stolen Rights Certificates.  (a) If any
         ----------------------------------------------------------
mutilated  Rights  Certificate  is  surrendered to the Rights Agent prior to the
Expiration   Time,  the  Company  shall  execute  and  the  Rights  Agent  shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so surrendered.

          (b) If there shall be  delivered  to the Company and the Rights  Agent
prior  to  the  Expiration  Time  (i)  evidence  to  their  satisfaction  of the
destruction,  loss or theft of any Rights  Certificate and (ii) such security or
indemnity  as may be  required  by them to save  each of them  and any of  their
agents  harmless,  then,  in the  absence

                                      -9-
<PAGE>

of notice to the Company or the Rights  Agent that such Rights  Certificate  has
been acquired by a bona fide  purchaser,  the Company shall execute and upon its
request the Rights  Agent shall  countersign  and  deliver,  in lieu of any such
destroyed,  lost  or  stolen  Rights  Certificate,   a  new  Rights  Certificate
evidencing the same number of Rights as did the Rights Certificate so destroyed,
lost or stolen.

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

          (d) Every new Rights  Certificate  issued pursuant to this Section 2.8
in lieu of any mutilated,  destroyed,  lost or stolen Rights  Certificate  shall
evidence an original additional contractual  obligation of the Company,  whether
or not the mutilated,  destroyed,  lost or stolen Rights Certificate shall be at
any time  enforceable  by anyone,  and shall be entitled to all the  benefits of
this Agreement  equally and  proportionately  with any and all other Rights duly
issued hereunder.

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

     2.10 Delivery and  Cancellation of  Certificates.  All Rights  Certificates
          -------------------------------------------
surrendered  upon  exercise  or for  redemption,  registration  of  transfer  or
exchange  shall,  if surrendered  to any person other than the Rights Agent,  be
delivered to the Rights Agent and, in any case,  shall be promptly  cancelled by
the Rights  Agent.  The Company may at any time  deliver to the Rights Agent for
cancellation  any Rights  Certificates  previously  countersigned  and delivered
hereunder which the Company may have acquired in any manner whatsoever,  and all
Rights  Certificates  so  delivered  shall be promptly  cancelled  by the Rights
Agent. No Rights  Certificates  shall be countersigned in lieu of or in exchange
for any Rights  Certificates  cancelled as provided in this Section 2.10, except
as  expressly  permitted  by this  Agreement.  The Rights Agent shall return all
cancelled Rights Certificates to the Company.

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

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

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

          (c) prior to due presentment of a Rights Certificate (or, prior to the
Separation  Time, the associated  Common Stock  certificate) for registration of
transfer,  the  Company,  the Rights  Agent and any agent of the  Company or the
Rights Agent may deem and treat the person in whose name the Rights  Certificate
(or, prior to the Separation time, the associated  Common Stock  certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes  whatsoever,  and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;

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

          (e) This  Agreement may be  supplemented  or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.

                                      -10-
<PAGE>

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

     3.1 Distribution Date. (a) In the event that prior to the Expiration Time a
         -----------------
Distribution Date shall occur,  then, if applicable law does not preclude Rights
owned by certain  Persons  referred to in Section  3.1(b)  hereof to become void
pursuant to the provisions thereof,  the Company shall take such action as shall
be necessary to ensure and provide that,  except as provided  below,  each Right
shall  constitute the right to purchase from the Company,  upon exercise thereof
in  accordance  with the terms  hereof  (but  subject to  Sections  5.1 and 5.10
hereof),  that number of shares of Common Stock having an aggregate Market Price
on the Distribution Date equal to twice the Exercise Price for an amount in cash
equal to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such  Distribution  Date an event of a type analogous to any of the events
described  in Section  2.4(a) or (b) shall  have  occurred  with  respect to the
Common Stock).

          (b)  Notwithstanding  the  foregoing,   to  the  extent  permitted  by
applicable law, any Rights that are or were  Beneficially  Owned on or after the
Distribution  Date by an Acquiring Person, an Adverse Person, or an Affiliate or
Associate  thereof  or by a  transferee,  direct  or  indirect,  of  any  of the
foregoing   shall  become  void  and  any  holder  of  such  Rights   (including
transferees)  shall  thereafter  have no rights to  exercise  or  transfer  such
Rights.  For purposes of the  preceding  sentence,  a transferee of an Acquiring
Person,  Adverse  Person or Affiliate or Associate  thereof shall include only a
Person who (i) becomes a transferee after the Acquiring Person or Adverse Person
becomes  such or (ii)  becomes a transferee  prior to or  concurrently  with the
Acquiring  Person or Adverse  Person  becoming  such and  receives  such  Rights
pursuant to either (A) a transfer  (whether or not for  consideration)  from the
Acquiring  Person or  Adverse  Person to  holders  of equity  interests  in such
Acquiring  Person or  Adverse  Person or to any Person  with whom the  Acquiring
Person  or  Adverse  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  3.1(b).  If any Rights  Certificate  is  presented  for  assignment  or
exercise and the Person  presenting the same does not complete the certification
set forth at the end of the form of assignment or notice of election to exercise
and provide such additional evidence of the identity of the Beneficial Owner and
its Affiliates and Associates (or former  Beneficial Owners and their Affiliates
and Associates) as the Company shall reasonably request,  then the Company shall
be entitled to conclusively deem the Beneficial Owner thereof to be an Acquiring
Person  or an  Adverse  Person,  or  an  Affiliate  or  Associate  thereof  or a
transferee of any of the foregoing and accordingly will, to the extent permitted
by  applicable  law,  deem  the  Rights  evidenced  thereby  to be void  and not
transferable or exercisable.

          (c) The Board of Directors  of the Company may, at its option,  at any
time after a Distribution Date and prior to the time that an Acquiring Person or
an  Adverse  Person  becomes  the  Beneficial  Owner  of  more  than  50% of the
outstanding shares of Common Stock, but only if applicable law does not preclude
Rights owned by certain  Persons  referred to in Section 3.1(b) hereof to become
void  pursuant to the  provisions  thereof,  elect to exchange all (but not less
than all) of the then  outstanding  Rights (which shall not include  Rights that
have become void  pursuant to the  provisions  of Section  3.1(b)) for shares of
Common  Stock at an  exchange  ratio of one  share of Common  Stock  per  Right,
appropriately  adjusted in order to protect the  interests  of holders of Rights
generally  in the  event  that  after  the  Separation  Time an  event of a type
analogous  to any of the events  described  in Section  2.4(a) or (b) shall have
occurred with respect to the Common Stock (such exchange ratio, as adjusted from
time to time, being hereinafter referred to as the "Exchange Ratio").

          Immediately  upon the action of the Board of  Directors of the Company
electing to  exchange  the  Rights,  without any further  action and without any
notice,  the right to  exercise  the Rights will  terminate  and each Right will
thereafter  represent  only the  right to  receive  a number of shares of Common
Stock equal to the  Exchange  Ratio.  Promptly  after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying  the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the then  outstanding  Rights
by mailing such notice in accordance with Section 5.9.

          Each Person in whose name any shares are issued  upon the  exchange of
Rights  pursuant to this Section 3.1(c) shall for all purposes be deemed to have
become  the  holder  of  record  of  the  shares  on,  and  any  certificate  or
confirmation or advice of issuance  relating to such shares shall be dated,  the
date  upon  which  the  Rights  Certificates  evidencing  such  Rights  was duly
surrendered and payment of any applicable taxes and other

                                      -11-
<PAGE>

governmental charges payable by the holder was made; provided,  however, that if
the date of such  surrender and payment is a date upon which the stock  transfer
books of the Company are closed,  such Person shall be deemed to have become the
record  holder  of  such  shares  on,  and  any  such  certificate,   advice  or
confirmation shall be dated, the next succeeding Business Day on which the stock
transfer books of the Company are open.

          (d) In the event that there shall not be sufficient treasury shares or
authorized  but  unissued  shares of Common  Stock of the  Company to permit the
exercise or exchange in full of the Rights in accordance  with Section 3.1(a) or
(c),  the  Company  shall take such action as shall be  necessary  to ensure and
provide,  to the  extent  permitted  by  applicable  law and any  agreements  or
instruments in effect on the Distribution Date to which it is a party, that each
Right shall  thereafter  constitute  the right to receive,  (x) at the Company's
option,  either (A) in return for the Exercise Price,  debt or equity securities
or other assets (or a  combination  thereof)  having a fair value equal to twice
the Exercise Price, or (B) without payment of consideration (except as otherwise
required by  applicable  law),  debt or equity  securities or other assets (or a
combination  thereof) having a fair value equal to the Exercise Price, or (y) if
the  Board of  Directors  of the  Company  elects  to  exchange  the  Rights  in
accordance with Section 3.1(c),  debt or equity securities or other assets (or a
combination  thereof)  having a fair  value  equal to the  product of the Market
Price of a share of Common  Stock on the  Distribution  Date times the  Exchange
Ratio in effect on the Distribution  Date, where in any case set forth in (x) or
(y) above the fair value of such debt or equity securities or other assets shall
be as determined  in good faith by the Board of Directors of the Company,  after
consultation with a nationally recognized investment banking firm.

     3.2  Flip-over.  (a) Prior to the  Expiration  Time,  the Company shall not
          ---------
enter into any agreement  with any Acquiring  Person,  any Adverse Person or any
Affiliate or Associate of an Acquiring Person or Adverse Person with respect to,
or consummate or permit to occur, any Flip-over Transaction or Event, unless and
until it shall  have  entered  into a  supplemental  agreement  with the  Person
engaging in such Flip-over  Transaction or Event (the "Flip-over  Entity"),  for
the benefit of the holders of the Rights,  providing that, upon  consummation or
occurrence of the Flip-over Transaction or Event (i) each Right shall thereafter
constitute  the right to  purchase  from the  Flip-over  Entity,  upon  exercise
thereof in accordance with the terms hereof,  that number of shares of Flip-over
Stock of the Flip-over  Entity  having an aggregate  Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price (such right
to be appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that after such date of consummation or occurrence
an event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall  have  occurred  with  respect  to the  Flip-over  Stock) and (ii) the
Flip-over Entity shall thereafter be liable for, and shall assume,  by virtue of
such Flip-over  Transaction or Event and such  supplemental  agreement,  all the
obligations and duties of the Company pursuant to this Agreement. The provisions
of this Section 3.2 shall apply to successive Flip-over Transactions or Events.

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

     ARTICLE IV - THE RIGHTS AGENT
     ----------   ----------------

     4.1  General.  (a) The Company  hereby  appoints the Rights Agent to act as
          -------
agent for the Company in accordance  with the terms and conditions  hereof,  and
the Rights Agent hereby accepts such  appointment.  The Company agrees to pay to
the Rights Agent  reasonable  compensation as shall be agreed to in writing from
time to time for all services  rendered by it hereunder  and, from time to time,
on demand of the Rights  Agent,  its  reasonable  expenses  (including  expenses
incurred by the Rights  Agent  under  Section  4.4) 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.

                                      -12-
<PAGE>

          (b) The Rights Agent shall be  protected  and shall incur no liability
for or in respect of any action  taken,  suffered or omitted by it in connection
with its  administration  of this Agreement in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate,  certificate
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.

     4.2  Merger or  Consolidation  or Change of Name of Rights  Agent.  (a) Any
          ------------------------------------------------------------
corporation  into which the Rights  Agent or any  successor  Rights Agent may be
merged or with which it may be consolidated,  or any corporation  resulting from
any merger or  consolidation  to which the Rights Agent or any successor  Rights
Agent is a party,  or any  corporation  succeeding to the  shareholder  services
business  of the  Rights  Agent  or any  successor  Rights  Agent,  will  be the
successor  to the Rights  Agent under this  Agreement  without the  execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation  would be eligible for appointment as a successor
Rights Agent under the  provisions  of Section 4.4 hereof.  In case, at the time
such successor  Rights Agent  succeeds to the agency created by this  Agreement,
any of the Rights  Certificates have been  countersigned but not delivered,  any
such successor  Rights Agent may adopt the  countersignature  of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned;  and in case
at that time any of the Rights  Certificates  have not been  countersigned,  any
successor  Rights Agent may countersign such Rights  Certificates  either in the
name of the  predecessor  Rights  Agent or in the name of the  successor  Rights
Agent; and in all such cases such Rights  Certificates  will have the full force
provided in the Rights Certificates and in this Agreement.

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

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

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

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

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

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

          (e) The Rights Agent will not be under any  responsibility  in respect
of the validity of this  Agreement or the execution and delivery  hereof (except
the due authorization,  execution and delivery hereof by the Rights Agent) or in
respect  of  the  validity  or  execution  of  any  certificate  for  securities
purchasable  upon  exercise  of

                                      -13-
<PAGE>

Rights or Rights Certificate (except its countersignature  thereof); nor will it
be  responsible  for any breach by the  Company  of any  covenant  or  condition
contained  in  this  Agreement  or in any  Rights  Certificate;  nor  will it be
responsible for any change in the  exercisability  of the Rights  (including the
Rights  becoming  void  pursuant  to Section  3.1(b)  hereof) or any  adjustment
required  under the  provisions of Section 2.4, 3.1 or 3.2 hereof or responsible
for the manner,  method or amount of any such adjustment or the  ascertaining of
the  existence  of facts that would  require any such  adjustment  (except  with
respect to the exercise of Rights after receipt of the certificate  contemplated
by Section 2.4 describing any such adjustment); nor will it by any act hereunder
be deemed to make any  representation  or  warranty as to the  authorization  or
reservation of any securities  purchasable upon exercise of Rights or any Rights
or as to whether any securities  purchasable  upon exercise of Rights will, when
issued, be duly and validly authorized, executed, issued and delivered and 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
person  believed  by the  Rights  Agent to be the  Chairman  of the  Board,  the
President or any Vice President or the Secretary or any Assistance  Secretary or
the  Treasurer or any Assistant  Treasurer of the Company,  and to apply to such
persons for advice or instructions  in connection with its duties,  and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with  instructions  of any such person.  Any application by the Rights Agent for
written  instructions  from the Company may, at the option of the Rights  Agent,
set forth in writing  any action  proposed  to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such action
shall be taken or such omission  shall be effective.  Until the Rights Agent has
received  written  instructions in response to such  application  specifying the
action to be taken or  omitted,  the  Rights  Agent  shall not be liable for any
inaction or omission related to the subject of the proposal included in any such
application.

          (h)  The  Rights  Agent  and any  shareholder,  director,  officer  or
employee of the Rights Agent may buy,  sell or deal in Common  Stock,  Rights or
other  securities  of  the  Company  or  become  pecuniarily  interested  in any
transaction  in which the Company may be  interested,  or contract  with or lend
money to the Company or otherwise  act as fully and freely as though it were not
the 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 will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the  Company  resulting  from any such  act,  default,
neglect or misconduct,  provided  reasonable care was exercised in the selection
and continued employment thereof.

     4.4 Change of Rights  Agent.  The Rights Agent may resign and be discharged
         -----------------------
from its duties under this Agreement upon 60 days' notice (or such lesser notice
as is  acceptable  to the Company) in writing  mailed to the Company and to each
transfer  agent of Common  Stock by  registered  or certified  mail,  and to the
holders of the Rights in accordance with Section 5.9. The Company may remove the
Rights Agent upon 60 days' notice in writing,  mailed to the Rights Agent and to
each transfer agent of the Common Stock by registered or certified  mail, and to
the holders of the Rights in  accordance  with  Section 5.9. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the Company
will appoint a successor to the Rights Agent.  If the Company fails to make such
appointment  within a period of 30 days after such  removal or after it has been
notified  in writing of such  resignation  or  incapacity  by the  resigning  or
incapacitated  Rights Agent or by the holder of any Rights  (which holder shall,
with such notice,  submit such holder's Rights Certificate for inspection by the
Company),  then the holder of any  Rights or the  Rights  Agent may apply to any
court of competent  jurisdiction  for the appointment of a new Rights Agent. Any
successor  Rights  Agent,  whether  appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or any other state of the United  States which is  authorized  under such
laws to exercise the powers of the Rights Agent  contemplated  by this Agreement
and is subject to  supervision  or  examination  by federal or state  authority.
After  appointment,  the  successor  Rights  Agent will be vested  with the same
powers,  rights,  duties and responsibilities as if it had been originally named
as Rights

                                      -14-
<PAGE>

Agent  without  further  act or deed;  but the  predecessor  Rights  Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance,  conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment,   the  Company  will  file  notice  thereof  in  writing  with  the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail a
notice  thereof  in writing to the  holders of the  Rights.  Failure to give any
notice provided for in this Section 4.4, however,  or any defect therein,  shall
not affect the legality or validity of the  resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.


     ARTICLE V - MISCELLANEOUS
     ---------   -------------

     5.1  Redemption.  (a) The Board of  Directors  of the  Company  may, at its
          ----------
option,  at any time prior to the  Distribution  Date,  or ten days  thereafter,
subject to extension by a vote of two-thirds of the Board of Directors, elect to
redeem all (but not less than all) the then outstanding Rights at the Redemption
Price.

          (b)  Immediately  upon the  action  of the Board of  Directors  of the
Company  electing to redeem the Rights,  without any further  action and without
any notice,  the right to exercise the Rights will terminate and each Right will
thereafter  represent  only the right to receive the  Redemption  Price in cash.
Promptly  after the action of the Board of  Directors  electing  to redeem,  and
thereby redeeming,  the Rights, the Company shall give notice of such redemption
to the Rights  Agent and the holders of the then  outstanding  Rights by mailing
such notice in accordance with Section 5.9.

     5.2 Expiration.  No Person shall have any rights pursuant to this Agreement
         ----------
or any Right after the Expiration Time,  except, if the Rights are redeemed,  as
provided in Section 5.1 hereof.

     5.3  Issuance  of  New  Rights  Certificates.  Notwithstanding  any  of the
          ---------------------------------------
provisions of this Agreement or of the Rights to the contrary,  the Company may,
at its option,  issue new Rights Certificates  evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the  number or kind or class of shares of stock  purchasable  upon  exercise  of
Rights made in accordance with the provisions of this Agreement.

     5.4 Supplements  and Amendments.  The Company and the Rights Agent may from
         ---------------------------
time to time  supplement  or amend this  Agreement  without the  approval of any
holder of Rights (i) in any respect prior to the Separation  Time,  (ii) to make
any changes  following  the close of business on the  Separation  Time which the
Company may deem necessary or desirable and which shall not materially adversely
affect the  interests  of the holders of Rights  generally  or (iii) in order to
cure any ambiguity or to correct or supplement  any provision  contained  herein
which  may be  inconsistent  with  any  other  provisions  herein  or  otherwise
defective.  The Rights  Agent will duly  execute and deliver any  supplement  or
amendment  hereto  requested  by the Company  which  satisfies  the terms of the
preceding sentence.

     5.5  Fractional  Shares.  If the Company  elects not to issue  certificates
          ------------------
representing  fractional  shares upon exercise of Rights,  the Company shall, in
lieu thereof,  (a) evidence such fractional shares by depositary receipts issued
pursuant to an  appropriate  agreement  between  the  Company  and a  depositary
selected by it, provided that such agreement shall provide that each holder of a
depositary  receipt shall have all of the rights,  privileges and preferences to
which such holder  would be entitled as a  beneficial  owner of such  fractional
share,  or (b) pay to the registered  holder of such Rights the same fraction of
the Market  Price  (determined  as of the date of  exercise) of one share of the
stock issuable upon such exercise.

     5.6 Rights of Action.  Subject  to the terms of this  Agreement,  rights of
         ----------------
action in respect of this  Agreement,  other than rights of action vested solely
in the Rights Agent, are vested in the respective holders of the Rights; and any
holder of any Rights,  without the consent of the Rights  Agent or of the holder
of any other  Rights,  may on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights,  enforce,  and may institute
and maintain any suit, action or proceeding  against the Company to enforce,  or
otherwise  act in respect of, such  holder's  right to  exercise  such  holder's
Rights in the manner  provided in such holder's  Rights  Certificate and in this
Agreement.  Without  limiting the  foregoing  or any  remedies  available to the
holders of Rights,

                                      -15-
<PAGE>

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

     5.7 Holder of Rights Not Deemed a Shareholder.  No holder,  as such, of any
         -----------------------------------------
Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other  securities  which may at any time be issuable
on the exercise of such Rights,  nor shall anything  contained  herein or in any
Rights  Certificate  be  construed  to confer upon the holder of any Rights,  as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter  submitted to  shareholders  at any
meeting thereof,  or to give or withhold consent to any corporate  action, or to
receive notice of meetings or other actions  affecting  shareholders  (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised in accordance with the
provisions hereof.

     5.8 Notice of Proposed Actions. In case the Company shall propose after the
         --------------------------
Separation  Time and prior to the  Expiration  Time (i) to effect or permit  (in
cases where the Company's permission is required) occurrence of any Distribution
Date or  Flip-over  Transaction  or Event  or (ii) to  effect  the  liquidation,
dissolution  or winding up of the Company,  then, in each such case, the Company
shall give to each holder of a Right, in accordance  with Section 5.9 hereof,  a
notice of such proposed action, which shall specify the Distribution Date or the
date on which such Flip-over Transaction or Event, liquidation,  dissolution, or
winding  up is to take  place,  and  such  notice  shall be so given at least 20
Business Days prior to the date of the taking of such proposed action.

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

            Central Bancorp, Inc.
            399 Highland Avenue
            Somerville, Massachusetts  02144
            Attention: John D. Doherty, President and Chief Executive Officer

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

            Registrar and Transfer Company
            10 Commerce Drive
            Cranford, New Jersey  07016
            Attention: Account Executive

Notices or demands  authorized or required by this Agreement to be given or made
by the  Company or the Rights  Agent to or on the holder of any Rights  shall be
sufficiently  given or made if delivered or sent by  first-class  mail,  postage
prepaid,  addressed  to such  holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, 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.

     5.10 Suspension of  Exercisability or  Exchangeability.  To the extent that
          -------------------------------------------------
the Company  determines in good faith that some action need be taken pursuant to
Section  3.1(c) or (d) or to comply with federal or state  securities  laws, the
General  Laws  of  Massachusetts  or any  conditions  imposed  by the  Board  of
Governors of the Federal  Reserve System in connection  with its approval of the
issuance of Common Stock upon the exercise of the Rights hereunder,  the Company
may  suspend  the  exercisability  of  the  Rights  following  the  date  of the
occurrence of the Separation Time or the Distribution Date in order to take such
action  or comply  with such  laws.  In the  event of any such  suspension,  the
Company  shall issue as promptly as  practicable a public  announcement  stating
that the  exercisability or  exchangeability  of the Rights has been temporarily
suspended.  Failure to give notice  pursuant to this Agreement  shall not affect
the validity of any action taken hereunder.

                                      -16-
<PAGE>

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

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

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

     5.14 Determination and Actions by the Board of Directors, etc. The Board of
          --------------------------------------------------------
Directors  of the  Company  shall  have the  exclusive  power and  authority  to
administer  this  Agreement  and to exercise all rights and powers  specifically
granted to the Board or to the  Company,  or as may be necessary or advisable in
the administration of this Agreement,  including, without limitation, the rights
and power to (i)  interpret the  provisions of this  Agreement and (ii) make all
determinations  deemed  necessary or advisable  for the  administration  of this
Agreement.  All such actions,  calculations,  interpretations and determinations
(including,  for purposes of clause (y) below, all omissions with respect to the
foregoing)  which  are done or made by the  Board in good  faith,  shall  (x) be
final,  conclusive and binding on the Company,  the Rights Agent, the holders of
the Rights and all other  parties and (y) not subject the Board of  Directors of
the Company to any liability to the holders of the Rights.

     5.15  Descriptive   Headings.   Descriptive   headings  appear  herein  for
           ----------------------
convenience  only and shall not control or affect the meaning or construction of
any of the provisions hereof.

     5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER SHALL BE
          -------------
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
AND FOR ALL PURPOSES  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE
LAWS OF SUCH STATE  APPLICABLE  TO CONTRACTS TO BE MADE AND  PERFORMED  ENTIRELY
WITHIN SUCH STATE.

     5.17  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.

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

                                      -17-
<PAGE>


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

                                CENTRAL BANCORP, INC.




                                By /s/ John D. Doherty
                                   ---------------------------------------------
                                   John D. Doherty
                                   Title:  President and Chief Executive Officer



                                REGISTRAR AND TRANSFER COMPANY


                                By /s/ William P. Tatler
                                   ---------------------------------------------
                                   Name:  William P. Tatler
                                   Title: Vice President


                                      -18-
<PAGE>
                                                                       Exhibit A
                                                                       ---------

                           FORM OF RIGHTS CERTIFICATE


     Certificate No. R-                                 _______ Rights

     NOT  EXERCISABLE  AFTER  OCTOBER 24, 2011 OR EARLIER IF REDEEMED.
     THE RIGHTS ARE  SUBJECT  TO  REDEMPTION  AT $.01 PER RIGHT ON THE
     TERMS  SET  FORTH  IN  THE  RIGHTS   AGREEMENT.   UNDER   CERTAIN
     CIRCUMSTANCES,  RIGHTS  BENEFICIALLY  OWNED BY ACQUIRING PERSONS,
     ADVERSE  PERSONS OR AFFILIATES  OR  ASSOCIATES  THEREOF (AS THOSE
     TERMS ARE DEFINED IN THE RIGHTS  AGREEMENT) OR TRANSFEREES OF ANY
     OF THE FOREGOING MAY BECOME NULL AND VOID.

                               Rights Certificate

                              CENTRAL BANCORP, INC.

     This  certifies  that  __________________________________,   or  registered
assigns,  is the registered owner of the number of Rights set forth above,  each
of which  entitles  the owner  thereof,  subject  to the terms,  provisions  and
conditions of the  Shareholder  Rights  Agreement,  dated as of October 11, 2001
(the "Rights Agreement"),  by and between Central Bancorp, Inc., a Massachusetts
corporation  (the  "Company"),  and Registrar and Transfer  Company (the "Rights
Agent"),  to purchase from the Company at any time after the Separation Time and
prior to the  earlier  of the  Redemption  Time (as such  terms are  defined  or
referred to in the Rights  Agreement) or 5:00 p.m.,  eastern  standard  time, on
October 24, 2011 at the office of the Rights Agent  designated  for such purpose
or at the  office  of its  successors  as  Rights  Agent,  one  fully  paid  and
nonassessable  share of Common Stock,  $1.00 par value per share, of the Company
(the  "Common  Stock"),  at a purchase  price of $____ per share of Common Stock
(the  "Exercise  Price"),  subject  to  adjustment  as  provided  in the  Rights
Agreement upon  presentation  and surrender of this Right  Certificate  with the
Form of Election to Exercise duly executed.  The number of Rights represented by
this Rights  Certificate  (and the number of shares of Common Stock which may be
purchased  upon exercise  thereof) set forth above,  and the Exercise  Price per
share set forth above, are the number of Rights and the Exercise Price as of the
Separation Time, based upon the Common Stock as constituted at such date.

     As provided in the Rights  Agreement,  the Exercise Price and the number of
shares of Common Stock,  which may be purchased  upon the exercise of the Rights
represented  by  this  Rights   Certificate  are  subject  to  modification  and
adjustment  upon the  occurrence  of certain  events.  In certain  circumstances
described in the Rights  Agreement,  the Rights evidenced hereby may entitle the
registered  holder  thereof to purchase  securities  of an entity other than the
Company or securities  or assets of the Company other than Common Stock,  all as
provided in the Rights Agreement.

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

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

                                      -19-
<PAGE>

exercised.  Subject  to the  provisions  of the  Rights  Agreement,  the  Rights
represented by this Rights  Certificate  may be redeemed by the Company,  at its
option, at a redemption price of $.01 per Right.

     No  fractional  shares  will be issued  upon the  exercise  of any Right or
Rights  represented  hereby (at the option of the  Company,  be  represented  by
depositary  receipts),  but in lieu  thereof,  a cash payment  shall be made, as
provided in the Rights Agreement.

     No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the 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
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,  or to give or
withhold  consent to any corporate  action,  or to receive notice of meetings or
other  actions  affecting   stockholders  (except  as  provided  in  the  Rights
Agreement), or to receive dividends or subscription rights, or otherwise,  until
the  Right or Rights  represented  by the  Rights  Certificate  shall  have been
exercised as provided in the Rights Agreement.

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

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


Attest:                                 CENTRAL BANCORP, INC.




By:_____________________________        By:_______________________________
   Secretary                               Title:


Countersigned:

REGISTRAR AND TRANSFER COMPANY




By______________________________
     Authorized Signatory

<PAGE>

                  [Form of Reverse Side of Rights Certificate]




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

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


     FOR  VALUE  RECEIVED   ___________________________________________   hereby
sells, assigns and transfer unto _______________________________________________
                                 (Please print name and address of transferee)

this Rights  Certificate,  together with all right,  title and interest therein,
and does  hereby  irrevocably  constitute  and  appoint_________________________
attorney,  to transfer this Rights  Certificate on the books of Central Bancorp,
Inc. with full power of substitution.


Dated:______________________              ______________________________________
                                                       Signature


Signature Guaranteed:


Signatures  must be guaranteed  by an eligible  guarantor  institution  (a bank,
stockbroker,  savings and loan association or credit union with membership in an
approved signature  guarantee  medallion program) pursuant to Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended.


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

                           (to be completed, if true)

     The undersigned hereby certifies that the Rights represented by this Rights
Certificate are not Beneficially Owned by an Acquiring Person, Adverse Person or
an Affiliate or  Associate  of an  Acquiring  Person or Adverse  Person (as such
capitalized terms are defined in the Rights Agreement).



Dated:______________________              ______________________________________
                                                       Signature

Signature Guaranteed:



<PAGE>

                  Form of Reverse Side of Rights Certificate --
                                    continued


                                     NOTICE

     The signature to the foregoing Assignment and the foregoing Certificate, if
applicable,  must  correspond to the name as written upon the face of the Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever, and must be guaranteed by an eligible guarantor institution (a bank,
stockbroker,  savings and loan association or credit union with membership in an
approved signature  guarantee  medallion program) pursuant to Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended.

     In the event that the  foregoing  Certificate  is not duly  executed,  with
signature  guaranteed,  the Company  shall deem the Rights  represented  by this
Rights  Certificate to be  Beneficially  Owned by an Acquiring  Person,  Adverse
Person or an Affiliate or Associate of an Acquiring Person or Adverse Person (as
such capitalized terms are defined in the Rights  Agreement),  and shall affix a
legend to that  effect on any Rights  Certificate  issued in  exchange  for this
Rights Certificate.


<PAGE>

                  Form of Reverse Side of Rights Certificate --
                                    continued

                          FORM OF ELECTION TO EXERCISE
                          ----------------------------

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

TO CENTRAL BANCORP, INC.

     The undersigned  hereby  irrevocably  elects to exercise  __________  whole
Rights  represented by this Rights  Certificate to purchase shares of the Common
Stock  issuable upon the exercise of such Rights and requests a certificate  for
such Common Stock 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  represented  by this
Rights  Certificate,  a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

          ____________________________________________________________

          ____________________________________________________________
                     (Please print name and address)




Dated:______________________              ______________________________________
                                                       Signature



Signature Guaranteed:


<PAGE>

                  Form of Reverse Side of Rights Certificate--
                                    continued

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

                           (to be completed, if true)

     The undersigned hereby certifies that the Rights represented by this Rights
Certificate are not Beneficially Owned by an Acquiring Person, Adverse Person or
an Affiliate or  Associate  of an  Acquiring  Person or Adverse  Person (as such
capitalized terms are defined in the Rights Agreement).


Dated:______________________              ______________________________________
                                                       Signature



Signature Guaranteed:


                                     NOTICE

     The signatures to the foregoing  Assignment and the foregoing  Certificate,
if  applicable,  must  correspond  to the name as written  upon the face of this
Rights Certificate in every particular, without alteration or enlargement or any
change whatsoever,  and must be guaranteed by an eligible guarantor  institution
(a bank,  stockbroker,  savings  and  loan  association  or  credit  union  with
membership in an approved  signature  guarantee  medallion  program) pursuant to
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.

     In the event that the  foregoing  Certificate  is not duly  executed,  with
signature  guaranteed,  the Company  shall deem the Rights  represented  by this
Rights  Certificate to be  Beneficially  Owned by an Acquiring  Person,  Adverse
Person or an Affiliate or Associate of an Acquiring Person or Adverse Person (as
such capitalized terms are defined in the Rights Agreement).
<PAGE>

                               AMENDMENT NO. 1 TO
                               ------------------
                      AMENDED AND RESTATED RIGHTS AGREEMENT
                      -------------------------------------

     THIS  AMENDMENT  NO. 1 TO  AMENDED  AND  RESTATED  RIGHTS  AGREEMENT  (this
"Amendment")  is made as of February  11, 2003 by and between  Central  Bancorp,
Inc., a Massachusetts  corporation  (the  "Company'),  and Register and Transfer
Company, a New Jersey  corporation (the "Rights Agent").  Capitalized terms used
and not otherwise defined herein shall have the meanings ascribed thereto in the
Rights Agreement referenced below.

                                   BACKGROUND
                                   ----------

     WHEREAS,  the Company and the Rights Agent entered into a Rights  Agreement
dated as of October 11, 2001, as amended and restated as of January 29, 2003 (as
amended and restated,  the "Rights  Agreement"),  pursuant to which the Board of
Directors  of the Company  authorized  and  declared a dividend of one Right for
each share of Common  Stock  outstanding  at the close of business on the Record
Date,  and  authorized  the  issuance of one Right with respect to each share of
Common  Stock that has or will  become  outstanding  between the Record Date and
prior to the Separation  Time,  upon the terms and subject to the conditions set
forth in the Rights Agreement;

     WHEREAS,  pursuant to Section 5.4 of the Rights Agreement,  the Company and
the Rights Agent may from time to time supplement or amend the Rights  Agreement
in any respect prior to the Separation  Time without any approval of the holders
of the Rights; and

     WHEREAS, the Separation Time has not occurred;

     NOW,  THEREFORE,  the parties hereto,  in consideration of the premises and
agreements  contained  herein,  intending to be legally bound  hereby,  agree as
follows:

     1. The  following  new  definition  is added to  Section  1.1 of the Rights
Agreement to read as follows:

          "PL   Capital-Stilwell-Seidman-Reichenbach   Group"  shall  mean,
     collectively,  PL Capital LLC, Richard Lashley, Richard Fates, Garrett
     Goodbody,  Financial Edge Fund,  L.P.,  Financial Edge Strategic Fund,
     L.P.,  Goodbody/PL  Capital  L.P.,  Goodbody/PL  Capital LLC,  John W.
     Palmer,  Joseph Stilwell,  Stilwell  Associates,  L.P., Stilwell Value
     Partners I, L.P.,  Stilwell Value  Partners III, L.P.,  Stilwell Value
     Partners  IV,  L.P.,  Lawrence B.  Seidman,  Seidman  and  Associates,
     L.L.C.,  Seidman  Investment  Partnership,  L.P.,  Seidman  Investment
     Partnership  II,  L.P.,  Kerrimatt,  L.P.,  Federal  Holdings  L.L.C.,
     Pollack   Investment   Partnership,   L.P.,  Dennis  Pollack,   Robert
     Williamson and Robert Reichenbach.

<PAGE>
     2. A new  Section  5.19 shall be added to the Rights  Agreement  to read as
follows:

     5.19 PL Capital-Stilwell-Seidman-Reichenbach Group Litigation.
          --------------------------------------------------------

          Notwithstanding   any   other   provision   hereof,   no   public
     announcement or statement made by the Company (by any means) regarding
     the  determination of the Board of Directors made on January 28, 2003,
     that the PL Capital-Stilwell-Seidman-Reichenbach  Group constitutes an
     Acquiring Person shall be deemed to constitute a Distribution  Date or
     in any other way trigger or attempt to trigger this Agreement prior to
     such time as no court order  precludes  announcement of a Distribution
     Date or other triggering of this Agreement.

     3. Full Force and Effect.  This Amendment shall be effective as of the date
        ---------------------
hereof. Except as expressly amended hereby, the Rights Agreement shall remain in
full force and effect and shall be otherwise unaffected hereby.

     4.  Governing  Law.  This  Amendment  shall be deemed to be a contract made
         --------------
under the laws of the Commonwealth of  Massachusetts  and for all purposes shall
be governed by and  construed in accordance  with the laws of such  Commonwealth
applicable  to  contracts  to  be  made  and  performed   entirely  within  such
Commonwealth.

     5.  Counterparts.   This  Amendment  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.

                         (signatures on following page)


                                       2
<PAGE>

     IN WITNESS  WHEREOF,  the  Company  and the Rights  Agent have  caused this
Amendment to be duly executed as of the day and year first above written.

                              CENTRAL BANCORP, INC.



                              By:/s/ John D. Doherty
                                ---------------------------------------------
                              Name:  John D. Doherty
                              Title: President and Chief Executive Officer




                              REGISTRAR AND TRANSFER COMPANY



                              By:/s/ William P. Tatler
                                ---------------------------------------------
                              Name:  William P. Tatler
                              Title: Vice President


                                       3
<PAGE>
                               AMENDMENT NO. 2 TO
                               ------------------
                      AMENDED AND RESTATED RIGHTS AGREEMENT
                      -------------------------------------

     THIS  AMENDMENT  NO. 2 TO  AMENDED  AND  RESTATED  RIGHTS  AGREEMENT  (this
"Amendment No. 2") dated May 22, 2003 by and between  Central  Bancorp,  Inc., a
Massachusetts  corporation (the "Company"),  and Register and Transfer  Company,
N.A., a New Jersey corporation (the "Rights Agent").  Capitalized terms used and
not otherwise  defined  herein shall have the meanings  ascribed  thereto in the
Rights Agreement referenced below.

                                   BACKGROUND
                                   ----------

     WHEREAS,  the  Company  and the Rights  Agent  entered  into an Amended and
Restated Rights Agreement, dated as of January 29, 2003 (as amended, the "Rights
Agreement"), as amended by Amendment No. 1, dated as of February 11, 2003;

     WHEREAS,  in  connection  with a settlement  made  pursuant to that certain
Settlement  Agreement and Mutual Release,  dated as of February 26, 2003, by and
among the Company,  Nancy D. Neri,  Gregory W. Boulos,  Paul E. Bulman,  John D.
Doherty,  Joseph R.  Doherty and Terrence D. Kenney and Robert  Reichenbach,  on
behalf of himself and his  related  entities  (the  "Settlement  Parties"),  the
Settlement Parties sold 37,951 shares of Common Stock (the "Settlement  Shares")
and the associated Rights attached thereto;

     WHEREAS,  pursuant to Section 5.4 of the Rights Agreement,  the Company and
the Rights Agent may from time to time supplement or amend the Rights  Agreement
in any respect prior to the Separation  Time without any approval of the holders
of the Rights; and

     WHEREAS, the Separation Time has not occurred;

     NOW,  THEREFORE,  the parties hereto,  in consideration of the premises and
agreements  contained  herein,  intending to be legally bound  hereby,  agree as
follows:

     1. A new  Section  5.20 shall be added to the Rights  Agreement  to read as
follows:

          5.20 Rights of Settlement Agreement Shares.
               -------------------------------------

               Notwithstanding  any other provision hereof,  the Rights attached
          to the shares of Common  Stock sold in  connection  with that  certain
          settlement  made  pursuant to that certain  Settlement  Agreement  and
          Mutual  Release,  dated as of  February  26,  2003,  by and  among the
          Company,  Nancy D. Neri,  Gregory W. Boulos,  Paul E. Bulman,  John D.
          Doherty,   Joseph  R.  Doherty  and  Terrence  D.  Kenney  and  Robert
          Reichenbach,  on behalf of himself and his related  entities

<PAGE>

          shall not be  voidable  or void and any  holder of such  Rights  shall
          hereafter have the right to exercise or transfer such Rights.

     2. Full Force and Effect. This Amendment No. 2 shall be effective as of the
        ---------------------
date hereof.  Except as expressly  amended  hereby,  the Rights  Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.

     3.  Governing  Law.  This  Amendment No. 2 shall be deemed to be a contract
         --------------
made under the laws of the  Commonwealth of  Massachusetts  and for all purposes
shall  be  governed  by and  construed  in  accordance  with  the  laws  of such
Commonwealth  applicable to contracts to be made and performed  entirely  within
such Commonwealth.

     4.  Counterparts.  This  Amendment  No. 2 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.

                         (signatures on following page)

                                       2
<PAGE>

     IN WITNESS  WHEREOF,  the  Company  and the Rights  Agent have  caused this
Amendment No. 2 to be duly executed as of the day and year first above written.

                                CENTRAL BANCORP, INC.


                                By:/s/ John D. Doherty
                                   -----------------------------------------
                                   Name: John D. Doherty
                                   Title: President and Chief Executive Officer


                                REGISTRAR AND TRANSFER COMPANY


                                By:/s/ William P. Tatler
                                   -----------------------------------------
                                   Name:  William P. Tatler
                                   Title: Vice President


                                       3
<PAGE>
                               AMENDMENT NO. 3 TO
                               ------------------
                      AMENDED AND RESTATED RIGHTS AGREEMENT
                      -------------------------------------

Amendment No. 3, dated as of July 24, 2003  ("Amendment No. 3"), between Central
Bancorp,  Inc., a Massachusetts  corporation (the  "Company"),  and Register and
Transfer  Company as rights agent (the "Rights Agent").  Capitalized  terms used
and not otherwise defined herein shall have the meanings ascribed thereto in the
Rights Agreement referenced below.

          WHEREAS,  the  Company  and the  Rights  Agent  entered  into a Rights
Agreement,  dated as of October 11, 2001 (as restated  and amended to date,  the
"Rights Agreement"); and

          WHEREAS,  the  Company  desires  to  amend  the  Rights  Agreement  in
accordance with Section 5.4.

          NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth in the Rights  Agreement and this  Amendment No. 3, the parties hereby
agree as follows:

     1. Definition of Acquiring Person. The definition of "Acquiring Person" set
        ------------------------------
forth in Section 1.1 of the Rights Agreement shall be revised in its entirety to
read as follows:

     "Acquiring  Person" shall mean any Person who is a Beneficial  Owner of 10%
or  more  of the  outstanding  shares  of the  Common  Stock.  In  addition,  an
"Acquiring Person" shall include:

          (i) Any present or future interested stockholder (as defined by M.G.L.
Chapter 110F) or filer of a Schedule 13G (as referenced in such Chapter 110F) or
a Schedule  13D with  respect to shares of Common  Stock who,  without the prior
approval of the Board of  Directors  of the Company:  (a)  increases,  after the
later of the date of this  amendment  and the date on which  such  Person  first
became an interested  stockholder or first filed a Schedule 13G or Schedule 13D,
its  beneficial  ownership  of  Common  Stock  by one  percent  or  more  of the
outstanding Common Stock within any twelve month period; or (b) takes, after the
date of this amendment and during the three year period  following the date such
Person first became an interested  stockholder or a Schedule 13G or Schedule 13D
filer,  any public  action  which,  in the good faith  judgment  of the Board of
Directors,  has the purpose or effect of advocating that the Company pursue,  or
otherwise  seeking to cause the Company to pursue, a potential sale, unless such
Person has made a bona fide  proposal  to effect a business  combination  of the
Company  with such Person or with  another  entity  compliant  with such Chapter
110F.

          (ii) Jewelcor  Management,  Inc. and any Affiliate thereof,  if, after
the date of this  amendment and prior to May 7, 2006,  any such Person,  without
the prior
<PAGE>

approval of the Board of Directors of the Company:  (a) increases its beneficial
ownership  of Common  Stock by more than one percent of the  outstanding  Common
Stock within any twelve month period; or (b) takes any action which, in the good
faith  judgment  of the  Board  of  Directors,  has the  purpose  or  effect  of
influencing  control of the  Company,  unless  such  Person has made a bona fide
proposal  to effect a  business  combination  of the  Company  with such  Person
compliant with such Chapter 110F.

          Notwithstanding  the foregoing,  the term "Acquiring Person" shall not
include:

          (i) any Person who would  otherwise  have become an  Acquiring  Person
solely as a result of an  acquisition  by the Company of shares of Common Stock,
until such time  thereafter  as such Person  shall become the  Beneficial  Owner
(other  than by means of a stock  dividend  or stock  split)  of any  additional
shares of Common Stock; or

          (ii) any Person who would  otherwise  have become an Acquiring  Person
solely as a result of  purchasing  the Common  Stock  directly  from the Company
pursuant to a written agreement with the Company; or

          (iii) the Company,  a wholly owned  Subsidiary of the Company,  or any
employee  stock  ownership  or other  employee  benefit plan of the Company or a
wholly owned  Subsidiary  of the Company,  or any employee  stock  benefit trust
established  by the  Company or a wholly  owned  subsidiary  of the  Company (an
"Employee Plan Trust"); or

          (iv) John D. Doherty and his Affiliates  and Associates  provided that
he does not become the Beneficial Owner of 20% or more of the outstanding shares
of the Common Stock.

     2. Full Force and Effect. This Amendment No. 3 shall be effective as of the
        ---------------------
date hereof.  Except as expressly  amended  hereby,  the Rights  Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.

     3.  Governing  Law.  This  Amendment No. 3 shall be deemed to be a contract
         --------------
made under the laws of the  Commonwealth of  Massachusetts  and for all purposes
shall  be  governed  by and  construed  in  accordance  with  the  laws  of such
Commonwealth  applicable to contracts to be made and performed  entirely  within
such Commonwealth.

     4.  Counterparts.  This  Amendment  No. 3 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.

                         (signatures on following page)

                                       2
<PAGE>


     IN WITNESS  WHEREOF,  the  Company  and the Rights  Agent have  caused this
Amendment No. 3 to be duly executed as of the day and year first above written.

                              CENTRAL BANCORP, INC.


                              By:/s/ John D. Doherty
                                 ------------------------------------
                                 Name:  John D. Doherty
                                 Title: Chairman, President and Chief
                                           Executive Officer


                              REGISTRAR AND TRANSFER COMPANY


                              By:/s/ William P. Tatler
                                 ------------------------------------
                                 Name:  William P. Tatler
                                 Title: Vice President



                                       3

<PAGE>

                               AMENDMENT NO. 4 TO
                      AMENDED AND RESTATED RIGHTS AGREEMENT

Amendment No. 4, dated as of August 4, 2003 ("Amendment No. 4"), between Central
Bancorp,  Inc., a Massachusetts  corporation (the  "Company"),  and Register and
Transfer  Company as rights agent (the "Rights Agent").  Capitalized  terms used
and not otherwise defined herein shall have the meanings ascribed thereto in the
Rights Agreement referenced below.

     WHEREAS,  the Company and the Rights Agent entered into a Rights Agreement,
dated as of October  11,  2001 (as  restated  and  amended to date,  the "Rights
Agreement"); and

     WHEREAS,  the Company  desires to amend the Rights  Agreement in accordance
with Section 5.4.

     NOW, THEREFORE,  in consideration of the premises and mutual agreements set
forth in the Rights Agreement and this Amendment No. 4, the parties hereby agree
as follows:

     1. Definition of Acquiring Person.

     (a)The  definition  of  "Acquiring  Person" set forth in Section 1.1 of the
Rights  Agreement  shall be amended  by  inserting  in  paragraph  (i)  thereof,
following the words "with respect to shares of Common Stock":

     (other than PL Capital,  LLC,  Financial  Edge Fund,  L.P.,  Financial-Edge
     Strategic Fund, L.P.,  Goodbody/PL Capital, L.P., Goodbody/PL Capital, LLC,
     Richard Lashley, John W. Palmer, Richard J. Fates and the Estate of Garrett
     Goodbody  during the  Standstill  Period as defined in the Agreement  dated
     August 4, 2003 among PL Capital, LLC, the Company and others)

     (b) The  definition of  "Acquiring  Person" set forth in Section 1.1 of the
Rights  Agreement  shall be amended  by  inserting  in  paragraph  (i)  thereof,
following then words "during the three year period":

     (which  three year  period  shall be tolled  during the  Standstill  Period
     referenced above for those persons and entities subject to it)

     2. Full Force and Effect. This Amendment No. 4 shall be effective as of the
date hereof.  Except as expressly  amended  hereby,  the Rights  Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.

     3.  Governing  Law.  This  Amendment No. 4 shall be deemed to be a contract
made under the laws of the  Commonwealth of  Massachusetts  and for all purposes
shall  be  governed  by and  construed  in  accordance  with  the  laws  of such
Commonwealth  applicable to contracts to be made and performed  entirely  within
such Commonwealth.

     4.  Counterparts.  This  Amendment  No. 4 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.


                         (signatures on following page)


     IN WITNESS  WHEREOF,  the  Company  and the Rights  Agent have  caused this
Amendment No. 4 to be duly executed as of the day and year first above written.

                                            CENTRAL BANCORP, INC.


                                            By:/s/John D. Doherty
                                               --------------------------------
                                            Name:John D. Doherty
                                            Title:Chairman, President and
                                            Chief Executive Officer


                                            REGISTRAR AND TRANSFER COMPANY


                                            By:/s/William P. Tatler
                                               --------------------------------
                                            Name:William P. Tatler
                                            Title:Vice President