ORION ENERGY SYSTEMS,
INC. 






and 



WELLS FARGO BANK, N.A. 



Rights Agent 



     _________________ 



RIGHTS AGREEMENT 



Dated as of January 7,
2009 












TABLE OF CONTENTS 



	1. 	Certain Definitions 	  1 
	
2. 	Appointment of Rights Agent 	  3 
	
3. 	Issue of Right Certificates 	  4 
	
4. 	Form of Right Certificates 	  5 
	
5. 	Countersignature and Registration 	  5 
	
6. 	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen 
		Right Certificates 	  6 
	
7. 	Exercise of Rights; Purchase Price; Expiration Date of Rights 	  6 
	
8. 	Cancellation and Destruction of Right Certificates 	  8 
	
9. 	Reservation and Availability of Common Shares 	  8 
	
10. 	Common Shares Record Date 	  9 
	
11. 	Adjustment of Purchase Price, Number of Shares or Number of Rights 	  9 
	
12. 	Certificate of Adjusted Purchase Price or Number of Shares 	15 
	
13. 	Consolidation, Merger, Share Exchange or Sale or Transfer of Assets or Earning Power 	15 
	
14. 	Fractional Rights and Fractional Shares 	17 
	
15. 	Rights of Action 	18 
	
16. 	Agreement of Right Holders 	19 
	
17. 	Right Certificate Holder Not Deemed a Shareholder 	19 
	
18. 	Concerning the Rights Agent 	19 
	
19. 	Merger or Consolidation or Change of Name of Rights Agent 	20 
	
20. 	Duties of Rights Agent 	20 
	
21. 	Change of Rights Agent 	22 
	
22. 	Issuance of New Right Certificates 	23 
	
23. 	Redemption 	23 




-i- 













	 	 	 
	
24. 	Exchange 	24 
	
25. 	Notice of Certain Events 	25 
	
26. 	Notices 	25 
	
27. 	Supplements and Amendments 	26 
	
28. 	Determinations and Actions by the Board of Directors 	27 
	
29. 	Successors 	27 
	
30. 	Benefits of this Agreement 	27 
	
31. 	Severability 	27 
	
32. 	Governing Law 	28 
	
33. 	Counterparts 	28 
	
34. 	Descriptive Headings 	28 








Exhibit A — Form of
Right Certificate 



Exhibit B — Summary of
Common Share Purchase Rights 









-ii- 










RIGHTS AGREEMENT 



        THIS
AGREEMENT, dated as of January 7, 2009, between ORION ENERGY SYSTEMS,
INC., a Wisconsin corporation (the “Company”), and WELLS FARGO BANK,
N.A., a national banking association (the “Rights Agent”). 



        WHEREAS,
the Board of Directors of the Company has authorized and declared a dividend of one common
share purchase right (a “Right”) for each Common Share (as hereinafter defined)
of the Company outstanding upon the close of business on February 1, 2009 (the
“Record Date”) payable upon the close of business on February 15, 2009 (the
“Payment Date”), and has authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are hereinafter defined), each Right representing the right to purchase one
Common Share of the Company upon the terms and subject to the conditions hereinafter set
forth; 



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



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



        (a)                 “Acquiring
Person” shall mean any Person (as such term is hereinafter           defined) who or
which, together with all Affiliates and Associates (as such           terms are
hereinafter defined) of such Person, shall be the Beneficial Owner (as           such
term is hereinafter defined) of 20% or more of the Common Shares of the           Company
then outstanding, but shall not include the Company, any Subsidiary (as           such
term is hereinafter defined) of the Company, any employee benefit plan of           the
Company or any Subsidiary of the Company, any entity holding Common Shares           for
or pursuant to the terms of any such plan, or any trustee, administrator or
          fiduciary of such a plan. Notwithstanding the foregoing, no Person who, at the
          close of business on the date hereof, shall be the Beneficial Owner of 20% or
          more of the Common Shares of the Company then outstanding shall be deemed an
          “Acquiring Person”; provided, however, that if a Person is, at
          the close of business on the date hereof, the Beneficial Owner of 20% or more
of           the Common Shares of the Company then outstanding and shall thereafter
become           the Beneficial Owner of additional Common Shares of the Company at any
time that           the Person is or thereby becomes the Beneficial Owner of 20% or more
of the           Common Shares of the Company then outstanding (other than Common Shares
acquired           solely as a result of corporate action of the Company not caused,
directly or           indirectly, by such Person), then such Person shall be deemed to be
an           “Acquiring Person”; and no Person shall become an “Acquiring
          Person” as a result of an acquisition of Common Shares by the Company
          which, by reducing the number of shares outstanding, increases the
proportionate           number of shares beneficially owned by such Person to 20% or more
of the Common           Shares of the Company then outstanding; provided, however, that
if a           Person would, but for the foregoing, become an Acquiring Person by reason
of           share purchases by the Company and shall, after such share purchases by the
          Company, become the Beneficial Owner of any additional Common Shares of the
          Company at any time that the Person is or thereby becomes the Beneficial Owner
          of 20% or more of the Common Shares of the Company then outstanding (other than
          Common Shares acquired solely as a result of corporate action of the Company
not           caused, directly or indirectly, by such Person), then such Person shall be
          deemed to be an “Acquiring Person”. Notwithstanding the foregoing, if
          the Board of Directors of the Company determines in good faith that a Person
who           would otherwise be an “Acquiring Person”, as defined pursuant to
the           foregoing provisions of this Section 1(a), has become such inadvertently,
and           such Person divests as promptly as practicable a sufficient number of
Common           Shares so that such Person would no longer be an “Acquiring Person,”          as
defined pursuant to the foregoing provisions of this Section 1(a), then
          such Person shall not be deemed to be an “Acquiring Person” for any
          purposes of this Agreement.  













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




        (c)                 A
Person shall be deemed the “Beneficial Owner” of and shall be deemed
          to “beneficially own” any securities:  




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




            (ii)              which
such Person or any of such Person’s Affiliates or Associates has (A)           the
right to acquire (whether such right is exercisable immediately or only           after
the passage of time) pursuant to any agreement, arrangement or           understanding
(other than customary agreements with and between underwriters and           selling
group members with respect to a bona fide public offering of           securities), or
upon the exercise of conversion rights, exchange rights, rights           (other than
these Rights), warrants or options, or otherwise; provided,           however, that
a Person shall not be deemed the Beneficial Owner of, or to           beneficially own,
securities tendered pursuant to a tender or exchange offer           made by or on behalf
of such Person or any of such Person’s Affiliates or           Associates until such
tendered securities are accepted for purchase or exchange;           or (B) the right to
vote pursuant to any agreement, arrangement or           understanding; provided,
however, that a Person shall not be deemed the           Beneficial Owner of, or to
beneficially own, any security if the agreement,           arrangement or understanding
to vote such security (1) arises solely from a           revocable proxy or consent given
to such Person in response to a public proxy or           consent solicitation made
pursuant to, and in accordance with, the applicable           rules and regulations of
the Exchange Act and (2) is not also then reportable on           Schedule 13D under
the Exchange Act (or any comparable or successor           report); or  




            (iii)              which
are beneficially owned, directly or indirectly, by any other Person with           which
such Person or any of such Person’s Affiliates or Associates has any
          agreement, arrangement or understanding (other than customary agreements with
          and between underwriters and selling group members with respect to a bona fide
          public offering of securities) for the purpose of, or with respect to,
          acquiring, holding, voting (except to the extent contemplated by the proviso to
          Section 1(c)(ii)(B)) or disposing of any securities of the Company.  




        Notwithstanding
anything in this definition of Beneficial Ownership to the contrary, the phrase “then
outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder. 




2 









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




            (e)                 “Close
of business” on any given date shall mean 5:00 P.M., Plymouth,           Wisconsin
time, on such date; provided, however, that if such date is not           a
Business Day it shall mean 5:00 P.M., Plymouth, Wisconsin time, on the next
          succeeding Business Day.  




            (f)                 “Common
Shares” when used with reference to the Company shall mean the           shares of
common stock, no par value, of the Company, or shares having           equivalent rights,
privileges and preferences to common stock. “Common           Shares” when used
with reference to any Person other than the Company shall           mean the capital
stock (or equivalent equity interest) with the greatest voting           power of such
other Person or, if such other Person is a Subsidiary of another           Person, the
Person or Persons that ultimately control such first-mentioned           Person.  




            (g)                 “Distribution
Date” shall have the meaning set forth in           Section 3(a) hereof.  




            (h)                 “Final
Expiration Date” shall have the meaning set forth in           Section 7
hereof.  




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




            (j)                 “Redemption
Date” shall have the meaning set forth in Section 7           hereof.  




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




            (l)                 “Subsidiary” of
any Person shall mean any corporation or other entity           of which a majority of
the voting power of the voting equity securities or           equity interest is owned,
directly or indirectly, by such Person.  




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




3 









    3.        Issue
of Right Certificates. 



        (a)                 Until
the earlier of (i) the Shares Acquisition Date or (ii) the tenth Business           Day
(or such later date as may be determined by action of the Company’s           Board
of Directors prior to such time as any Person becomes an Acquiring Person)
          after the date of the commencement of, or of the first public announcement of
          the intention of any Person to commence, a tender or exchange offer the
          consummation of which would result in any Person (other than the Company, any
          Subsidiary of the Company, any employee benefit plan of the Company or of any
          Subsidiary of the Company, any entity holding Common Shares for or pursuant to
          the terms of any such plan, or any trustee, administrator, or fiduciary of such
          a plan) becoming the Beneficial Owner of Common Shares of the Company
          aggregating 20% or more of the then outstanding Common Shares (including in
          either case any such date which is after the date of this Agreement and prior
to           the Payment Date; the earlier of such dates being herein referred to as the
          “Distribution Date”; provided, however, that if the Shares
Acquisition           Date or the tenth Business Day after the commencement or
announcement, as the           case may be, occurs before the Record Date, “Distribution
Date” shall           mean the Record Date), (x) the Rights will be evidenced
(subject to the           provisions of Section 3(b) hereof) by the certificates for
Common Shares of           the Company registered in the names of the holders thereof
(which certificates           shall also be deemed to be Right Certificates) and not by
separate Right           Certificates, and (y) the right to receive Right Certificates
will be           transferable only in connection with the transfer of Common Shares of
the           Company. As soon as practicable after the Distribution Date, the Company
will           prepare and execute, the Rights Agent will countersign, and the Company
will           send or cause to be sent (and the Rights Agent will, if requested, send)
by           first-class, insured, postage-prepaid mail, to each record holder of Common
          Shares of the Company as of the close of business on the Distribution Date, at
          the address of such holder shown on the records of the Company, a Right
          Certificate, in substantially the form of Exhibit A hereto (a “Right
          Certificate”), evidencing one Right for each Common Share so held. As of
          the Distribution Date, the Rights will be evidenced solely by such Right
          Certificates.  




        (b)                 The
Company has prepared a Summary of Rights to Purchase Common Shares, attached           as
Exhibit B hereto (the “Summary of Rights”), a copy of which is
          available free of charge from the Company. With respect to certificates for
          Common Shares of the Company outstanding as of the Record Date, until the
          Distribution Date, the Rights will be evidenced by such certificates registered
          in the names of the holders thereof. Until the Distribution Date (or the
earlier           of the Redemption Date or Final Expiration Date), the surrender for
transfer of           any certificate for Common Shares of the Company outstanding on the
Record Date,           with or without a copy of the Summary of Rights attached thereto,
shall also           constitute the transfer of the Rights associated with the Common
Shares           represented thereby.  




        (c)                 Certificates
for Common Shares of the Company that become outstanding           (including, without
limitation, certificates for reacquired Common Shares           referred to in the last
sentence of this Section 3(c) and certificates issued on           the transfer of Common
Shares) after the Record Date but prior to the earliest           of the Distribution
Date, the Redemption Date or the Final Expiration Date shall           have impressed on,
printed on, written on or otherwise affixed to them a legend           in substantially
the following form:  




4 










	 	        This
certificate also evidences and entitles the holder hereof to certain rights as set forth
in a Rights Agreement between Orion Energy Systems, Inc. and Wells Fargo Bank, N.A.,
dated as of January 7, 2009, and as such agreement may be amended (the “Rights
Agreement”), the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices of Orion Energy Systems, Inc.
Under certain circumstances set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this certificate.
Orion Energy Systems, Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, such Rights issued to, or held
by, an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement), whether held by such person or any subsequent holder, shall
become null and void.  







With respect to such certificates
containing the foregoing legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In the event
that the Company purchases or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Shares shall be deemed
cancelled and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding. 



    4.       Form
of Right Certificates. The Right Certificates (and the           forms of
election to purchase Common Shares and of assignment to be printed on           the
reverse thereof) shall be substantially the same as Exhibit A hereto and may
          have such marks of identification or designation and such legends, summaries or
          endorsements printed thereon as the Company may deem appropriate and as are not
          inconsistent with the provisions of this Agreement, or as may be required to
          comply with any applicable law or with any rule or regulation made pursuant
          thereto or with any rule or regulation of any stock exchange on which the
Rights           may from time to time be listed, or to conform to usage. Subject to the
          provisions of Section 22 hereof, the Right Certificates shall entitle the
          holders thereof to purchase such number of Common Shares as shall be set forth
          therein at the purchase price per Common Share set forth therein, but the
amount           and type of securities purchasable upon exercise of each Right and such
purchase           price shall be subject to adjustment as provided herein.  



    5.        Countersignature
and Registration. 



        (a)                 The
Right Certificates shall be executed on behalf of the Company by its Chief
          Executive Officer or President or any Vice President either manually or by
          facsimile signature, shall have affixed thereto the Company’s seal or a
          facsimile thereof, and shall be attested by the Treasurer, an Assistant
          Treasurer, the Secretary or an Assistant Secretary of the Company, either
          manually or by facsimile signature. The Right Certificates shall be manually
          countersigned by the Rights Agent and shall not be valid for any purpose unless
          countersigned. In case any officer of the Company who shall have signed any of
          the Right Certificates shall cease to be such officer of the Company before
          countersignature by the Rights Agent and issuance and delivery by the Company,
          such Right Certificates, nevertheless, may be countersigned by the Rights Agent
          and issued and delivered by the Company with the same force and effect as
though           the individual who signed such Right Certificates had not ceased to be
such           officer of the Company; and any Right Certificate may be signed on behalf
of the           Company by any individual who, at the actual date of the execution of
such Right           Certificate, shall be a proper officer of the Company to sign such
Right           Certificate, although at the date of the execution of this Rights
Agreement any           such individual was not such an officer.  




5 










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




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



        (a)                 Subject
to the provisions of Section 14 hereof, at any time after the close           of
business on the Distribution Date, and at or prior to the close of business           on
the earlier of the Redemption Date or the Final Expiration Date, any Right
          Certificate or Right Certificates (other than Right Certificates representing
          Rights that have become void pursuant to Section 11(a)(ii) hereof or that
          have been exchanged pursuant to Section 24 hereof) may be transferred,
          split up, combined or exchanged for another Right Certificate or Right
          Certificates, entitling the registered holder to purchase a like number of
          Common Shares as the Right Certificate or Right Certificates surrendered then
          entitled such holder to purchase. Any registered holder desiring to transfer,
          split up, combine or exchange any Right Certificate or Right Certificates shall
          make such request in writing delivered to the Rights Agent, and shall surrender
          the Right Certificate or Right Certificates to be transferred, split up,
          combined or exchanged at the principal office of the Rights Agent. Thereupon
the           Rights Agent shall countersign and deliver to the person entitled thereto a
          Right Certificate or Right Certificates, as the case may be, as so requested.
          The Company may require payment of a sum sufficient to cover any tax or
          governmental charge that may be imposed in connection with any transfer, split
          up, combination or exchange of Right Certificates.  




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




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



        (a)                 As
provided herein, each Right shall be exercisable to purchase one Common           Share,
subject to further adjustment. The registered holder of any Right           Certificate
may exercise the Rights evidenced thereby (except as otherwise           provided herein)
in whole or in part at any time after the Distribution Date           upon surrender of
the Right Certificate, with the form of election to purchase           on the reverse
side thereof duly executed, to the Rights Agent at the principal           office of the
Rights Agent, together with payment of the Purchase Price for each           Common Share
as to which the Rights are exercised, at or prior to the earliest           of (i) the
close of business on January 7, 2019, subject to extension (the           “Final
Expiration Date”), (ii) the time at which the Rights are           redeemed as
provided in Section 23 hereof (the “Redemption           Date”), and (iii)
the time at which such Rights are exchanged as provided           in Section 24
hereof; provided, however, that if the number of           Rights exercised would
entitle the holder thereof to receive any fraction of a           Common Share, then the
holder thereof shall not be entitled to exercise such           Rights unless such holder
concurrently purchases from the Company (and in such           event the Company shall
sell to such holder), at a price in proportion to the           Purchase Price, an
additional fraction of a Common Share which, when added to           the number of Common
Shares to be received upon such exercise, will equal an           integral number of
Common Shares.  




6 










    (b)                        The
Purchase Price for each Common Share pursuant to the exercise of a Right           shall
initially be $30.00, shall be subject to adjustment from time to time as
          provided in Sections 11 and 13 hereof and shall be payable in lawful money
          of the United States of America in accordance with Section 7(c) below.  



    (c)                        Upon
receipt of a Right Certificate representing exercisable Rights, with the           form
of election to purchase duly executed, accompanied by payment of the           Purchase
Price for the Common Shares to be purchased and an amount equal to any
          applicable transfer tax required to be paid by the holder of such Right
          Certificate in accordance with Section 9 hereof, as set forth below, the
          Rights Agent shall thereupon promptly (i) requisition from any transfer agent
of           the Common Shares certificates for the number of Common Shares to be
purchased           and the Company hereby irrevocably authorizes its transfer agent to
comply with           all such requests, (ii) when appropriate, requisition from the
Company the           amount of cash to be paid in lieu of issuance of fractional Common
Shares in           accordance with Section 14 hereof, (iii) after receipt of such
          certificates, cause the same to be delivered to or upon the order of the
          registered holder of such Right Certificate, registered in such name or names
as           may be designated by such holder and (iv) when appropriate, after receipt,
          deliver such cash to or upon the order of the registered holder of such Right
          Certificate. The payment of the Purchase Price (as such amount may be reduced
          pursuant to Section 11(a)(iii) hereof) shall be made by certified check,
          cashier’s check, bank draft or money order payable to the order of the
          Company, except that, if so provided by the Board of Directors of the Company,
          the payment of the Purchase Price following the occurrence of a
          Section 11(a)(ii) Event (as hereinafter defined) and until the first
          occurrence of a Section 13 Event (as hereinafter defined) may be made
          wholly or in part by delivery of a certificate or certificates (with
appropriate           stock powers executed in blank attached thereto) evidencing a
number of Common           Shares of the Company equal to the then Purchase Price divided
by the closing           price (as determined pursuant to Section 11(d) hereof) per
Common Share on           the Trading Day (as such term is hereinafter defined)
immediately preceding the           date of such exercise. If the Company is obligated to
issue other securities of           the Company, pay cash and/or distribute other
property pursuant to           Section 11(a) hereof, the Company will make all
arrangements necessary so           that such other securities, cash and/or other
property are available for           distribution by the Rights Agent, if and when
appropriate.  



    (d)                        In
case the registered holder of any Right Certificate shall exercise less than
          all the Rights evidenced thereby, a new Right Certificate evidencing Rights
          equivalent to the Rights remaining unexercised shall be issued by the Rights
          Agent to the registered holder of such Right Certificate or to his duly
          authorized assigns, subject to the provisions of Section 14 hereof.  



7 










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




              8.       Cancellation
and Destruction of Right Certificates. All           Right Certificates
surrendered for the purpose of exercise, transfer, split up,           combination or
exchange shall, if surrendered to the Company or to any of its           agents, be
delivered to the Rights Agent for cancellation or in cancelled form,           or if
surrendered to the Rights Agent, shall be cancelled by it, and no Right
          Certificates shall be issued in lieu thereof except as expressly permitted by
          any of the provisions of this Rights Agreement. The Company shall deliver to
the           Rights Agent for cancellation and retirement, and the Rights Agent shall so
          cancel and retire, any other Right Certificate purchased or acquired by the
          Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver           all cancelled Right Certificates to the Company or shall, at the
written request           of the Company, destroy such cancelled Right Certificates, and
in such case           shall deliver a certificate of destruction thereof to the Company.
Subject to           applicable law and regulation, the Rights Agent shall maintain in a
retrievable           database electronic records of all cancelled or destroyed Right
Certificates           which have been canceled or destroyed by the Rights Agent. The
Rights Agent           shall maintain such electronic records or physical records for the
time period           required by applicable law and regulation. Upon written request of
the Company           (and at the expense of the Company), the Rights Agent shall provide
to the           Company or its designee copies of such electronic records or physical
records           relating to Right Certificates cancelled or destroyed by the Rights
Agent.  



    9.        Reservation
and Availability of Common Shares. 



        (a)                 The
Company covenants and agrees that it will cause to be reserved and kept
          available out of its authorized and unissued Common Shares or any authorized
and           issued Common Shares held in its treasury the number of Common Shares that
will           be sufficient to permit the exercise in full of all outstanding Rights in
          accordance with Section 7.  




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




        (c)                 The
Company covenants and agrees that it will take all such action as may be
          necessary to ensure that all Common Shares delivered upon exercise of Rights
          shall, at the time of delivery of the certificates for such shares (subject to
          payment of the Purchase Price), be duly and validly authorized and issued and
          fully paid and nonassessable shares (except as otherwise provided by any
          corporation law applicable to the Company).  




8 










        (d)                 The
Company further covenants and agrees that it will pay when due and payable           any
and all federal and state transfer taxes and charges which may be payable in
          respect of the issuance or delivery of the Right Certificates or of any Common
          Shares upon the exercise of Rights. The Company shall not, however, be required
          to pay any transfer tax which may be payable in respect of any transfer or
          delivery of Right Certificates to a person other than, or the issuance or
          delivery of certificates for the Common Shares in a name other than that of,
the           registered holder of the Right Certificate evidencing Rights surrendered
for           exercise or to issue or to deliver any certificates for Common Shares upon
the           exercise of any Rights until any such tax shall have been paid (any such
tax           being payable by the holder of such Right Certificate at the time of
surrender)           or until it has been established to the Company’s reasonable
satisfaction           that no such tax is due.  




              10.       Common
Shares Record Date. Each Person in whose name any           certificate for
Common Shares is issued upon the exercise of Rights shall for           all purposes be
deemed to have become the holder of record of the Common Shares           represented
thereby on, and such certificate shall be dated, the date upon which           the Right
Certificate evidencing such Rights was duly surrendered and payment of           the
Purchase Price (and any applicable transfer taxes) was made; provided,
          however, that if the date of such surrender and payment is a date upon
which           the Common Shares transfer books of the Company are closed, such Person
shall be           deemed to have become the record holder of such shares on, and such
certificate           shall be dated, the next succeeding Business Day on which the
Common Shares           transfer books of the Company are open.  



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



        (a)                 (i)       
In the event the Company shall at any time after the date of this Agreement           (A)
declare a dividend on the Common Shares payable in Common Shares, (B) split           or
subdivide the outstanding Common Shares, (C) combine the outstanding Common
          Shares into a smaller number of Common Shares or (D) issue any shares of its
          capital stock in a reclassification of the Common Shares (including any such
          reclassification in connection with a consolidation or merger in which the
          Company is the continuing or surviving corporation), except as otherwise
          provided in this Section 11(a), the Purchase Price in effect at the time
of           the record date for such dividend or of the effective date of such
subdivision,           combination or reclassification, and the number and kind of shares
of capital           stock issuable on such date, shall be proportionately adjusted so
that the           holder of any Right exercised after such time shall be entitled to
receive the           aggregate number and kind of shares of capital stock which, if such
Right had           been exercised immediately prior to such date and at a time when the
Common           Shares transfer books of the Company were open, such holder would have
owned           upon such exercise and been entitled to receive by virtue of such
dividend,           subdivision, combination or reclassification; provided, however, that
in           no event shall the consideration to be paid upon the exercise of one Right
be           less than the aggregate par value, if any, of the shares of capital stock of
the           Company issuable upon exercise of one Right. If an event occurs which would
          require an adjustment under both Section 11(a)(i) and           Section 11(a)(ii),
the adjustment provided for in this           Section 11(a)(i) shall be in addition
to, and shall be made prior to, any           adjustment required pursuant to Section 11(a)(ii).  













            (ii)                 Subject
to Section 24, in the event any Person shall become an Acquiring           Person,
other than pursuant to any transaction set forth in Section 13(a),           each
holder of a Right shall thereafter have a right to receive, upon exercise
          thereof at a price equal to two times the then current Purchase Price per full
          Common Share multiplied by the number of Common Shares for which a Right is
then           exercisable, in accordance with the terms of this Agreement, such number
of           Common Shares of the Company as shall equal the result obtained by (x)
          multiplying two times the then current Purchase Price per full Common Share by
          the number of Common Shares for which a Right is then exercisable and dividing
          that product by (y) 50% of the then current per share market price of the
Common           Shares of the Company (determined pursuant to Section 11(d)) on the
date           the Person became an Acquiring Person (such number of shares, the
          “Adjustment Shares”).  




        From
and after such time as a Person becomes an Acquiring Person (a
“Section 11(a)(ii) Event”), any Rights that are or were acquired or
beneficially owned by such Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) shall be void and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement. No Right Certificate
shall be issued pursuant to Section 3 that represents Rights beneficially owned by an
Acquiring Person whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to
the preceding sentence shall be cancelled. The Company shall use all reasonable efforts to
ensure that the provisions of this paragraph are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. 



            (iii)                 In
the event that there shall not be sufficient Common Shares of the Company
          issued but not outstanding or authorized but unissued (and not reserved for
          issuance for purposes other than upon exercise of the Rights) to permit the
          exercise in full of the Rights in accordance with the foregoing subparagraph
          (ii), the Company shall: (A) determine the excess of (1) the value of the
          Adjustment Shares issuable upon the exercise of a Right (the “Current
          Value”) over (2) the Purchase Price (such excess, the “Spread”),
          and (B) with respect to each Right, make adequate provision to substitute for
          the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash,
          (2) a reduction in the Purchase Price, (3) equity securities of the Company
          (including, without limitation, shares, or units of shares, of preferred stock,
          if any, which the Board of Directors of the Company has deemed to have the same
          value as Common Shares (such shares of preferred stock, hereinafter referred to
          as “common stock equivalents”)), (4) debt securities of the Company,
          (5) other assets or (6) any combination of the foregoing, having an aggregate
          value equal to the Current Value, where such aggregate value has been
determined           by the Board of Directors of the Company based upon the advice of a
nationally           recognized investment banking firm selected by the Board of
Directors of the           Company; provided, however, if the Company shall not
have made adequate           provision to substitute for the Adjustment Shares pursuant
to clause (B) above           within thirty (30) days following the occurrence of a
Section 11(a)(ii)           Event (the “Section 11(a)(ii) Trigger Date”),
then the Company           shall be obligated to deliver, upon the surrender for exercise
of a Right and           without requiring payment of any portion of the Purchase Price,
Common Shares           (to the extent available) and then, if necessary, cash, which
shares and/or cash           have an aggregate value equal to the Spread. If the Board of
Directors of the           Company shall determine in good faith that it is likely that
sufficient           additional Common Shares might be authorized for issuance for
exercise in full           of the Rights, the thirty (30) day period set forth above may
be extended to the           extent necessary, but not more than ninety (90) days after
the           Section 11(a)(ii) Trigger Date, in order that the Company may seek
          shareholder approval for the authorization of such additional shares (such
          period, as it may be extended, the “Substitution Period”). To the
          extent that the Company determines that some action need be taken pursuant to
          the first and/or second sentences of this Section 11(a)(iii), the Company
          (x) shall provide, subject to the last paragraph of Section 11(a)(ii)
          hereof, that such action shall apply uniformly to all outstanding Rights, and
          (y) may suspend the exercisability of the Rights until the expiration of the
          Substitution Period to seek any authorization of additional shares and/or to
          decide the appropriate form of distribution to be made pursuant to such first
          sentence and to determine the value thereof. In the event of any such
          suspension, the Company shall issue a public announcement stating that the
          exercisability of the Rights has been temporarily suspended, as well as a
public           announcement at such time as the suspension is no longer in effect. For
purposes           of this Section 11(a)(iii), the value of the Common Shares shall
be the           current per share market price (as determined pursuant to Section 11(d)
          hereof) of the Common Shares on the Section 11(a)(ii) Trigger Date and the
          value of any “common stock equivalent” shall be deemed to have the
          same value as the Common Shares on such date.  



10 











        (b)                 In
case the Company shall fix a record date for the issuance of rights, options           or
warrants to all holders of Common Shares entitling them (for a period           expiring
within 45 calendar days after such record date) to subscribe for or           purchase
Common Shares (or securities convertible into Common Shares) at a price           per
Common Share (or having a conversion price per share, if a security           convertible
into Common Shares) less than the then current per share market           price of the
Common Shares (as defined in Section 11(d)) on such record date,           the Purchase
Price to be in effect after such record date shall be determined by           multiplying
the Purchase Price in effect immediately prior to such record date           by a
fraction, the numerator of which shall be the number of Common Shares
          outstanding on such record date plus the number of Common Shares which the
          aggregate offering price of the total number of Common Shares so to be offered
          (and/or the aggregate initial conversion price of the convertible securities so
          to be offered) would purchase at such current market price and the denominator
          of which shall be the number of Common Shares outstanding on such record date
          plus the number of additional Common Shares to be offered for subscription or
          purchase (or into which the convertible securities so to be offered are
          initially convertible); provided, however, in no event shall the
          consideration to be paid upon the exercise of one Right be less than the
          aggregate par value, if any, of the shares of capital stock of the Company
          issuable upon exercise of one Right. In case such subscription price may be
paid           in a consideration part or all of which shall be in a form other than
cash, the           value of such consideration shall be as determined in good faith by
the Board of           Directors of the Company, whose determination shall be described
in a statement           filed with the Rights Agent. Common Shares owned by or held for
the account of           the Company shall not be deemed outstanding for the purpose of
any such           computation. Such adjustment shall be made successively whenever such
a record           date is fixed. In the event that such rights, options or warrants are
not so           issued, the Purchase Price shall be adjusted to be the Purchase Price
which           would then be in effect if such record date had not been fixed.  





11 









        (c)                 In
case the Company shall fix a record date for the making of a distribution to
          all holders of the Common Shares (including any such distribution made in
          connection with a consolidation or merger in which the Company is the
continuing           or surviving corporation) of evidences of indebtedness or assets
(other than a           regular quarterly cash dividend or a dividend payable in Common
Shares) or           subscription rights or warrants (excluding those referred to in
          Section 11(b)), the Purchase Price to be in effect after such record date
          shall be determined by multiplying the Purchase Price in effect immediately
          prior to such record date by a fraction, the numerator of which shall be the
          then current per share market price of the Common Shares (as defined in
          Section 11(d)) on such record date, less the fair market value (as
          determined in good faith by the Board of Directors of the Company, whose
          determination shall be described in a statement filed with the Rights Agent) of
          the portion of the assets or evidences of indebtedness so to be distributed or
          of such subscription rights or warrants applicable to one Common Share and the
          denominator of which shall be such current per share market price of the Common
          Shares; provided, however, in no event shall the consideration to be
paid           upon the exercise of one Right be less than the aggregate par value, if
any, of           the shares of capital stock of the Company to be issued upon exercise
of one           Right. Such adjustments shall be made successively whenever such a
record date           is fixed. In the event that such distribution is not so made, the
Purchase Price           shall again be adjusted to be the Purchase Price which would
then be in effect           if such record date had not been fixed.  




        (d)                 For
the purpose of any computation hereunder, the “current per share market
          price” of the Common Shares on any date shall be deemed to be the average
          of the daily closing prices per Common Share for the 30 consecutive Trading
Days           (as such term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market           price of the
Common Shares is determined during a period following the           announcement by the
issuer of such Common Shares of (i) a dividend or           distribution on such Common
Shares payable in Common Shares or securities           convertible into Common Shares,
or (ii) any subdivision, combination or           reclassification of Common Shares and
prior to the expiration of 30 Trading Days           after the ex-dividend date for such
dividend or distribution, or the record date           for such subdivision, combination
or reclassification, then, and in each such           case, the current per share market
price shall be appropriately adjusted to           reflect the current market price per
Common Share. The closing price for each           Trading Day shall be the last sale
price, regular way, or, in case no such sale           takes place on such day, the
average of the closing bid and asked prices,           regular way, in either case as
reported in the principal consolidated           transaction reporting system with
respect to securities listed or admitted to           trading on the principal national
securities exchange on which the Common Shares           are listed or admitted to
trading or, if the Common Shares are not listed or           admitted to trading on any
national securities exchange, the last quoted price           or, if not so quoted, the
average of the high bid and low asked prices in the           over-the-counter market, as
reported by the OTC Bulletin Board or such other           system then in use, or, if on
any such date the Common Shares are not quoted by           any such organization, the
average of the closing bid and asked prices as           furnished by a professional
market maker making a market in the Common Shares           selected by the Board of
Directors of the Company. The term “Trading           Day” shall mean a day on
which the principal national securities exchange           on which the Common Shares are
listed or admitted to trading is open for the           transaction of business or, if
the Common Shares are not listed or admitted to           trading on any national
securities exchange, a Business Day.  




12 










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




        (f)                 If,
as a result of an adjustment made pursuant to Section 11(a), the holder           of
any Right thereafter exercised shall become entitled to receive any shares of
          capital stock of the Company other than Common Shares, thereafter the number of
          such other shares so receivable upon exercise of any Right shall be subject to
          adjustment from time to time in a manner and on terms as nearly equivalent as
          practicable to the provisions with respect to the Common Shares contained in
          Section 11(a) through (c), inclusive, and the provisions of
          Sections 7, 9, 10 and 13 with respect to the Common Shares shall apply on
          like terms to any such other shares.  




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




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




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




13 










        (j)                 Irrespective
of any adjustment or change in the Purchase Price or the number of           Common
Shares issuable upon the exercise of the Rights, the Right Certificates
          theretofore and thereafter issued may continue to express the Purchase Price
and           the number of Common Shares which were expressed in the initial Right
          Certificates issued hereunder.  




        (k)                 Before
taking any action that would cause an adjustment reducing the Purchase           Price
below the par value, if any, of the Common Shares issuable upon exercise           of the
Rights, the Company shall take any corporate action which may, in the           opinion
of its counsel, be necessary in order that the Company may validly and           legally
issue fully paid and nonassessable (except as otherwise provided by any
          corporation law applicable to the Company) Common Shares at such adjusted
          Purchase Price.  




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




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




14 










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




        (o)                 The
Company covenants and agrees that, after the Distribution Date, it will not,
          except as permitted by Section 23, Section 24 or Section 27
          hereof, take (or permit any Subsidiary to take) any action if at the time such
          action is taken it is reasonably foreseeable that such action will diminish
          substantially or otherwise eliminate the benefits intended to be afforded by
the           Rights.  




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



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




15 









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




        (b)
       “Principal Party” shall mean  




            (i)                 in
the case of any transaction described in clause (x) or (y) of the first
          sentence of Section 13(a), the Person that is the issuer of any securities
          into which Common Shares of the Company are converted in such merger,
          consolidation or share exchange, and if no securities are so issued, (A) the
          Person that is the other party to the merger, consolidation or share exchange
          and that survives such merger or consolidation, or, if there is more than one
          such Person, the Person the Common Shares of which have the greatest aggregate
          market value of shares outstanding or (B) if the Person that is the other party
          to the merger or consolidation does not survive the merger or consolidation,
the           Person that does survive the merger or consolidation (including the Company
if           it survives); and  




16 










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




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



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




            (i)                 prepare
and file a registration statement under the Securities Act of 1933, as           amended
(the “Act”), with respect to the Rights and the securities
          purchasable upon exercise of the Rights on an appropriate form, and will use
its           best efforts to cause such registration statement to (A) become effective
as           soon as practicable after such filing and (B) remain effective (with a
          prospectus at all times meeting the requirements of the Act) until the Final
          Expiration Date; and  




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




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



    14.        Fractional
Rights and Fractional Shares. 



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



17 











        (b)                 The
Company shall not be required to issue fractions of Common Shares upon           exercise
of the Rights or to distribute certificates which evidence fractional           Common
Shares. In lieu of fractional Common Shares, the Company shall pay to the
          registered holders of Right Certificates at the time such Rights are exercised
          as herein provided an amount in cash equal to the same fraction of the current
          market value of one Common Share. Any exercise of Rights that would entitle the
          holder thereof to receive any fraction of a Common Share shall be governed by
          Section 7(a) hereof. For purposes of this Section 14(b), the current
market           value of a Common Share shall be the closing price of a Common Share (as
          determined pursuant to the second sentence of Section 11(d) hereof) for
the           Trading Day immediately prior to the date of such exercise.  




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



                
          15. Rights of Action. All rights of action in respect of this
          Agreement, excepting the rights of action given to the Rights Agent under
          Section 18 hereof, are vested in the respective registered holders of the
          Right Certificates (and, prior to the Distribution Date, the registered holders
          of the Common Shares); and any registered holder of any Right Certificate (or,
          prior to the Distribution Date, of the Common Shares), without the consent of
          the Rights Agent or of the holder of any other Right Certificate (or, prior to
          the Distribution Date, of the Common Shares), may, in his own behalf and for his
          own benefit, enforce, and may institute and maintain any suit, action or
          proceeding against the Company to enforce, or otherwise act in respect of, his
          right to exercise the Rights evidenced by such Right Certificate in the manner
          provided in such Right Certificate and in this Agreement. Without limiting the
          foregoing or any remedies available to the holders of Rights, it is specifically
          acknowledged that the holders of Rights would not have an adequate remedy at law
          for any breach of this Agreement and will be entitled to specific performance of
          the obligations under, and injunctive relief against actual or threatened
          violations of the obligations of any Person subject to, this Agreement. 




18 









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



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




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




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




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




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



    18.        Concerning
the Rights Agent. 



        (a)                 The
Company agrees to pay to the Rights Agent reasonable compensation for all
          services rendered by it hereunder and, from time to time, on demand of the
          Rights Agent, its reasonable expenses incurred in the administration and
          execution of this Agreement and the exercise and performance of its duties
          hereunder. The Company also agrees to indemnify the Rights Agent for, and to
          hold it harmless against, any loss, liability, or expense, incurred without
          negligence, bad faith or willful misconduct on the part of the Rights Agent,
for           anything done or omitted by the Rights Agent in connection with the
acceptance           and administration of this Agreement, including the costs and
expenses of           defending against any claim of liability in the premises.  




19 










        (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 Right Certificate or
          certificate for the Common Shares or for other securities of the Company,
          instrument of assignment or transfer, power of attorney, endorsement,
affidavit,           letter, notice, direction, consent, certificate, statement, or other
paper or           document believed by it to be genuine and to be signed, executed and,
where           necessary, verified or acknowledged, by the proper person or persons, or
          otherwise upon the advice of counsel as set forth in Section 20 hereof.  




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



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




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




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



20 










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




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




        (c)                 The
Rights Agent shall be liable hereunder to the Company and any other Person           only
for its own negligence, bad faith or willful misconduct.  




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




        (e)                 The
Rights Agent shall not be under any responsibility in respect 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 Right Certificate (except its
          countersignature thereof); nor shall it be responsible for any breach by the
          Company of any covenant or condition contained in this Agreement or in any
Right           Certificate; nor shall it be responsible for any change in the
exercisability of           the Rights (including the Rights becoming void pursuant to
          Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
          (including the manner, method or amount thereof) provided for in Section 3,
          11, 13, 23 or 24, or the ascertaining of the existence of facts that would
          require any such change or adjustment (except with respect to the exercise of
          Rights evidenced by Right Certificates after actual notice that such change or
          adjustment is required); nor shall it by any act hereunder be deemed to make
any           representation or warranty as to the authorization or reservation of any
Common           Shares or other securities to be issued pursuant to this Agreement or
any Right           Certificate or as to whether any Common Shares or other securities
will, when           issued, be validly authorized and issued, fully paid and
nonassessable.  




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




        (g)                 The
Rights Agent is hereby authorized and directed to accept instructions with
          respect to the performance of its duties hereunder from any one of the Chief
          Executive Officer, the President, any Vice President, the Secretary, any
          Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
          and to apply to such officers for advice or instructions in connection with its
          duties, and it shall not be liable for any action taken or suffered by it in
          good faith in accordance with instructions of any such officer or for any delay
          in acting while waiting for those instructions.  





21 









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




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




              21.       Change
of Rights Agent. The Rights Agent or any successor           Rights Agent may
resign and be discharged from its duties under this Agreement           upon 30 days’ notice
in writing mailed to the Company and to each transfer           agent of the Common
Shares by registered or certified mail, and, if separate           Right Certificates
have been issued as of the date of such notice as           contemplated by Section 3, to
the holders of the Right Certificates by           first-class mail. The Company may
remove the Rights Agent or any successor           Rights Agent upon 30 days’ notice
in writing, mailed to the Rights Agent or           successor Rights Agent, as the case
may be, and to each transfer agent of the           Common Shares by registered or
certified mail, and, if separate Right           Certificates have been issued as of the
date of such notice as contemplated by           Section 3, to the holders of the Right
Certificates by first-class mail. If the           Rights Agent shall resign or be
removed or shall otherwise become incapable of           acting, the Company shall
appoint a successor to the Rights Agent. If the           Company shall fail to make such
appointment within a period of 30 days after           giving notice of such removal or
after it has been notified in writing of such           resignation or incapacity by the
resigning or incapacitated Rights Agent or by           the holder of a Right Certificate
(who shall, with such notice, submit his Right           Certificate for inspection by
the Company), then the registered holder of any           Right Certificate may apply to
any court of competent jurisdiction for the           appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed           by the Company or by such a
court, shall be (a) a corporation organized and           doing business under the
laws of the United States or of any state of the United           States so long as such
corporation is authorized to do business as a banking           institution in the State
of New York or the State of Wisconsin, in good           standing, having an office or
agency in the State of Wisconsin or the State of           New York, which is authorized
under such laws to exercise corporate trust or           stock transfer powers and is
subject to supervision or examination by federal or           state authority and which
has at the time of its appointment as Rights Agent a           combined capital and
surplus of at least $50 million, or (b) an Affiliate           of a corporation
described in clause (a) of this sentence. After appointment,           the successor
Rights Agent shall be vested with the same powers, rights, duties           and
responsibilities as if it had been originally named as Rights Agent without
          further act or deed; but the predecessor Rights Agent shall deliver and
transfer           to the successor Rights Agent any property at the time held by it
hereunder, and           execute and deliver any further assurance, conveyance, act or
deed necessary for           the purpose. Not later than the effective date of any such
appointment the           Company shall file notice thereof in writing with the
predecessor Rights Agent           and each transfer agent of the Common Shares, and, if
separate Right           Certificates have been issued as of the date of such notice as
contemplated by           Section 3, mail a notice thereof in writing to the registered
holders of the           Right Certificates. Failure to give any notice provided for in
this           Section 21, however, or any defect therein, shall not affect the
legality           or validity of the resignation or removal of the Rights Agent or the
appointment           of the successor Rights Agent, as the case may be.  




22 









              22.       Issuance
of New Right Certificates. Notwithstanding any of           the provisions of
this Agreement or of the Rights to the contrary, the Company           may, at its
option, issue new Right Certificates evidencing Rights in such form           as may be
approved by its Board of Directors to reflect any adjustment or change           in the
Purchase Price and the number or kind or class of shares or other           securities or
property purchasable under the Right Certificates made in           accordance with the
provisions of this Agreement.  



    23.        Redemption. 



        (a)                 The
Rights may be redeemed by action of the Board of Directors pursuant to           Section 23(b)
and shall not be redeemed in any other manner.  




        (b)                 The
Board of Directors of the Company may, at its option, at any time prior to           such
time as any Person becomes an Acquiring Person, redeem all but not less           than
all the then outstanding Rights at a redemption price of $0.001 per Right,
          appropriately adjusted to reflect any stock split, stock dividend or similar
          transaction occurring after the date hereof (such redemption price being
          hereinafter referred to as the “Redemption Price”). The redemption of
          the Rights by the Board of Directors may be made effective at such time on such
          basis and with such conditions as the Board of Directors in its sole discretion
          may establish. Notwithstanding anything contained in this Agreement to the
          contrary, the Rights shall not be exercisable after the first occurrence of a
          Section 11(a)(ii) Event until such time as the Company’s right of
          redemption hereunder has expired.  




        (c)                 Immediately
upon the effectiveness of the action of the Board of Directors of           the Company
ordering the redemption of the Rights pursuant to           Section 23(b), and
without any further action and without any notice, the           right to exercise the
Rights will terminate and the only right thereafter of the           holders of Rights
shall be to receive the Redemption Price. The Company shall           promptly give
public notice of any such redemption; provided, however,          that the failure
to give, or any defect in, any such notice shall not affect the           validity of
such redemption. Within 10 days after the effectiveness of the           action of the
Board of Directors ordering the redemption of the Rights pursuant           to Section
23(b), the Company shall mail a notice of redemption to all the           holders of the
then outstanding Rights at their last addresses as they appear           upon the
registry books of the Rights Agent or, prior to the Distribution Date,           on the
registry books of the transfer agent for the Common Shares. Any notice           which is
mailed in the manner herein provided shall be deemed given, whether or           not the
holder receives the notice. Each such notice of redemption will state           the
method by which the payment of the Redemption Price will be made. Neither           the
Company nor any of its Affiliates or Associates may redeem, acquire or           purchase
for value any Rights at any time in any manner other than that           specifically set
forth in this Section 23 or in Section 24 hereof, and           other than in
connection with the purchase of Common Shares prior to the           Distribution Date.  





23 









    24.        Exchange. 



        (a)                 The
Board of Directors of the Company may, at its option, at any time after any
          Person becomes an Acquiring Person, exchange all or part of the then
outstanding           and exercisable Rights (which shall not include Rights that have
become void           pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares           of the Company at an exchange ratio of one Common Share per
Right, appropriately           adjusted to reflect any stock split, stock dividend or
similar transaction           occurring after the date hereof (such exchange ratio being
hereinafter referred           to as the “Exchange Ratio”). Notwithstanding the
foregoing, the Board           of Directors shall not be empowered to effect such
exchange at any time after           any Person (other than the Company, any Subsidiary
of the Company, any employee           benefit plan of the Company or any such
Subsidiary, any entity holding Common           Shares for or pursuant to the terms of
any such plan, or any trustee,           administrator or fiduciary of such a plan),
together with all Affiliates and           Associates of such Person, becomes the
Beneficial Owner of 50% or more of the           Common Shares of the Company then
outstanding.  




        (b)                 Immediately
upon the action of the Board of Directors of the Company ordering           the exchange
of any Rights pursuant to Section 24(a) and without any           further action and
without any notice, the right to exercise such Rights shall           terminate and the
only right thereafter of a holder of such Rights shall be to           receive that
number of Common Shares equal to the number of such Rights held by           such holder
multiplied by the Exchange Ratio. The Company shall promptly give           public notice
of any such exchange; provided, however, that the failure           to give, or
any defect in, such notice shall not affect the validity of such           exchange. The
Company promptly shall mail a notice of any such exchange to all           of the holders
of such Rights at their last addresses as they appear upon the           registry books
of the Rights Agent. Any notice which is mailed in the manner           herein provided
shall be deemed given, whether or not the holder receives the           notice. Each such
notice of exchange will state the method by which the exchange           of the Common
Shares for Rights will be effected and, in the event of any           partial exchange,
the number of Rights which will be exchanged. Any partial           exchange shall be
effected pro rata based on the number of Rights (other than           Rights which have
become void pursuant to the provisions of           Section 11(a)(ii) hereof) held
by each holder of Rights.  




        (c)                 In
any exchange pursuant to this Section 24, the Company, at its option,           may
substitute common stock equivalents (as such term is defined in Section
          11(a)(iii) hereof) for some or all of the Common Shares exchangeable for
Rights.  




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



24 











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




    25.        Notice
of Certain Events. 



        (a)                 In
case the Company shall propose, after the Distribution Date, (i) to pay any
          dividend payable in stock of any class to the holders of Common Shares or to
          make any other distribution to the holders of Common Shares (other than a
          regular quarterly cash dividend), (ii) to offer to the holders of Common Shares
          rights or warrants to subscribe for or to purchase any additional Common Shares
          or shares of stock of any class or any other securities, rights or options,
          (iii) to effect any reclassification of Common Shares (other than a
          reclassification involving only the subdivision of outstanding Common Shares),
          (iv) to effect any consolidation or merger into or with (other than a merger of
          a Subsidiary into or with the Company), to effect any share exchange with or to
          effect any sale or other transfer (or to permit one or more of its Subsidiaries
          to effect any sale or other transfer), in one or more transactions, of 50% or
          more of the assets or earning power of the Company and its Subsidiaries (taken
          as a whole) to, any other Person, or (v) to effect the liquidation, dissolution
          or winding up of the Company, then, in each such case, the Company shall give
to           each holder of a Right Certificate, in accordance with Section 26
hereof, a           notice of such proposed action, which shall specify the record date
for the           purposes of such stock dividend, or distribution of rights or warrants,
or the           date on which such reclassification, consolidation, merger, share
exchange,           sale, transfer, liquidation, dissolution, or winding up is to take
place and the           date of participation therein by the holders of the Common Shares
if any such           date is to be fixed, and such notice shall be so given in the case
of any action           covered by clause (i) or (ii) above at least 10 days prior to the
record date           for determining holders of Common Shares for purposes of such
action, and in the           case of any such other action, at least 10 days prior to the
date of the taking           of such proposed action or the date of participation therein
by the holders of           the Common Shares, whichever shall be the earlier.  




        (b)                 In
case any of Section 11(a)(ii) Event or Section 13 Event shall           occur,
then, in any such case, (i) the Company shall as soon as practicable           thereafter
give to each holder of a Right Certificate, in accordance with           Section 26
hereof, a notice of the occurrence of such event, which notice           shall include a
brief summary of the Section 11(a)(ii) Event or           Section 13 Event, as
the case may be, and the consequences thereof to           holders of Rights.  




    26.        Notices. 



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



25 











	 	
Orion
Energy Systems, Inc.                   
1204 Pilgrim Road                   
Plymouth, WI
53073                   
Attention:  Secretary






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




	 	
Wells
Fargo Bank, N. A.
Shareowner Services
161 North Concord Exchange
South St. Paul, Minnesota
55075 
Attention: Orion Energy Systems, Inc. Account Manager 







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




              27.       Supplements
and Amendments. Prior to such time as any           Person becomes an Acquiring
Person and subject to the penultimate sentence of           this Section 27, the
Company may and the Rights Agent shall, if the Company           so directs, supplement
or amend any provision of this Agreement without the           approval of any holders of
certificates representing Common Shares of the           Company. Without limiting the
foregoing, the Company may at any time prior to           such time as any Person becomes
an Acquiring Person amend this Agreement to           lower the thresholds set forth in
Sections 1(a) and 3(a) hereof from 20% to           not less than 10%, with
appropriate exceptions for Persons then beneficially           owning Common Shares of
the Company constituting a percentage of the number of           Common Shares then
outstanding equal to or in excess of the new threshold. From           and after such
time as any Person becomes an Acquiring Person and subject to the           penultimate
sentence of this Section 27, the Company and the Rights Agent           shall, if
the Company so directs, supplement or amend this Agreement without the           approval
of any holders of Right Certificates in order (i) to cure any           ambiguity, (ii)
to correct or supplement any provision contained herein which           may be defective
or inconsistent with any other provision herein, (iii) to           shorten or lengthen
any time period hereunder, or (iv) to change or supplement           the provisions
hereunder in any manner which the Company may deem necessary or           desirable and
which shall not adversely affect the interests of the holders of           Right
Certificates (other than an Acquiring Person or an Affiliate or Associate           of an
Acquiring Person); provided, that from and after such time as any           Person
becomes an Acquiring Person this Agreement may not be supplemented or           amended
to lengthen, pursuant to clause (iii) of this sentence, (A) a time           period
relating to when the Rights may be redeemed at such time as the Rights           are not
then redeemable, or (B) any other time period unless such lengthening is           for
the purpose of protecting, enhancing or clarifying the rights of, and/or the
          benefits to, the holders of Rights. Upon the delivery of a certificate from an
          appropriate officer of the Company which states that the proposed supplement or
          amendment is in compliance with the terms of this Section 27, the Rights
          Agent shall execute such supplement or amendment. Notwithstanding anything
          contained in this Agreement to the contrary, no supplement or amendment shall
be           made that changes the Redemption Price or moves to an earlier date the then
          effective Final Expiration Date. Prior to the Distribution Date, the interests
          of the holders of Rights shall be deemed coincident with the interests of the
          holders of Common Shares of the Company.  



26 










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



              29.       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.  



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



              31.       Severability. If
any term, provision, covenant or           restriction of this Agreement is held by a
court of competent jurisdiction or           other authority to be invalid, void or
unenforceable, the remainder of the           terms, provisions, covenants and
restrictions of this Agreement shall remain in           full force and effect and shall
in no way be affected, impaired or invalidated.  



27 










              32.       Governing
Law. This Agreement and each Right Certificate           issued hereunder shall
be deemed to be a contract made under the laws of the           State of Wisconsin 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.  



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



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














28 









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



		ORION ENERGY SYSTEMS, INC.
	
Attest:  /s/ Eric von Estorff	/s/ Neal R. Verfuerth
	By:     Eric von Estorff	By:     Neal R. Verfuerth
	Title:  VP - Corp. Counsel & Secretary	Title:  President and Chief Executive Officer
	
 	WELLS FARGO BANK, N.A.
	
Attest:  /s/ Barbara M. Novak	/s/ Steven J. Hoffman
	By:     Barbara M. Novak	By:     Steven J. Hoffman
	Title:  Vice President	Title:  Assistant Vice President














29 













		=====================
		EXHIBIT A
		=====================





[Form of Right
Certificate] 



	Certificate No. R-	_______ Rights 







	 	
NOT
EXERCISABLE AFTER JANUARY 7, 2019 (SUBJECT TO EXTENSION) OR EARLIER IF REDEMPTION OR 
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO
EXCHANGE ON  THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. 






Right Certificate 



ORION ENERGY SYSTEMS,
INC. 



        This
certifies that ________________, or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of January 7, 2009, and
as such agreement may be amended (the “Rights Agreement”), between Orion Energy
Systems, Inc., a Wisconsin corporation (the “Company”), and Wells Fargo Bank,
N.A. (the “Rights Agent”), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M., Plymouth, Wisconsin time, on January 7, 2019, subject to extension,
at the principal office of the Rights Agent, or at the office of its successor as Rights
Agent, one fully paid nonassessable (except as otherwise provided by any corporation law
applicable to the Company) share of common stock, no par value (“Common
Shares”), of the Company at a purchase price of $30.00 per Common Share (the
“Purchase Price”) upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of Common Shares which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of February 1, 2009, based on the Common Shares as constituted at
such date. As provided in the Rights Agreement, the Purchase Price and the number of
Common Shares which may be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon the happening of certain
events. 



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




A-1 









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



        Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be
redeemed by the Company at a redemption price of $0.001 per Right. The Board of Directors
of the Company may, at its option, at any time after any Person becomes an Acquiring
Person, but prior to such Person’s acquisition of 50% or more of the outstanding
Common Shares, exchange the Rights evidenced by this Certificate for Common Shares, at an
exchange ratio of one Common Share per Right, subject to adjustment, as provided in the
Rights Agreement. 



        No
fractional Common Shares will be issued upon the exercise of any Right or Rights evidenced
hereby, but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement. No Rights may be exercised that would entitle the holder to any fraction of a
Common Share unless concurrently therewith such holder purchases an additional fraction of
a Common Share which, when added to the number of Common Shares to be received upon such
exercise, equals an integral number of Common Shares, as provided in the Rights Agreement. 



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



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



A-2 










        WITNESS
the facsimile  signature of the proper  officers of the Company and its  corporate  seal.
Dated as of ____________, ____. 











		ORION ENERGY SYSTEMS, INC.
	

__________________________________	Attest:_______________________________
	By:_______________________________	By:_______________________________
	Title:_______________________________	Title:_______________________________









Countersigned: 






	By:	_______________________________ 
Authorized
Signature














A-3 









[Form of Reverse Side
of Right Certificate] 



FORM OF ASSIGNMENT 



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






        FOR
VALUE  RECEIVED _______________________________  hereby sells,  assigns and  transfers
 unto 
___________________________________________________________ 
                    (Please print name and
address of transferee) 
_____________________________________________________________
this Right Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ___________________ Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with full power of
substitution.  




Dated: ____________, ____ 



		_____________________________________
		Signature






Signature Medallion
Guaranteed: 



        Signatures
must be guaranteed by a member firm of a registered national securities exchange, a member
of the Financial Industry Regulatory Authority, or a commercial bank or trust company
having an office or correspondent in the United States. 



        The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined
in the Rights Agreement). 


		_____________________________________
		Signature







     




A-4 









[Form of Reverse Side
of Right Certificate — continued] 



FORM OF ELECTION TO
PURCHASE 



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



To ORION ENERGY SYSTEMS, INC.: 



        The
undersigned hereby irrevocably elects to exercise __________________ Rights represented by
this Right Certificate to purchase the Common Shares issuable upon the exercise of such
Rights and requests that certificates for such Common Shares be issued in the name of: 



Please insert social security
or
other identifying number 



_________________________________________________________________________________

(Please
print name and address)  



_________________________________________________________________________________  



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



Please insert social security 
or
other identifying number 



_________________________________________________________________________________

(Please
print name and address)  



_________________________________________________________________________________  



Dated: ____________, ____ 


		_____________________________________
		Signature







Signature Medallion
Guaranteed: 



        Signatures
must be guaranteed by a member firm of a registered national securities exchange, a member
of the Financial Industry Regulatory Authority, or a commercial bank or trust company
having an office or correspondent in the United States. 




A-5 









[Form of Reverse Side
of Right Certificate — continued] 



     



        The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined
in the Rights Agreement). 


		_____________________________________
		Signature







     



NOTICE 



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



        In
the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the Rights
Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored. 











A-6 










		=====================
		EXHIBIT B
		=====================





ORION ENERGY SYSTEMS,
INC. 



SUMMARY OF COMMON SHARE
PURCHASE RIGHTS 



        On
January 7, 2009, the Board of Directors of Orion Energy Systems, Inc. (the
“Company”) declared a dividend of one common share purchase right (a
“Right”) for each outstanding share of common stock, no par value (the
“Common Shares”), of the Company. The dividend is payable on February 15,
2009 to the shareholders of record on February 1, 2009 (the “Record Date”).
Each Right entitles the registered holder to purchase from the Company one Common Share at
a price of $30.00, subject to adjustment (the “Purchase Price”). The description
and terms of the Rights are set forth in a Rights Agreement (the “Rights
Agreement”) between the Company and Wells Fargo Bank, N.A., as Rights Agent (the
“Rights Agent”). 



        Until
the earlier to occur of (i) a public announcement that a person or group of affiliated or
associated persons (other than the Company, a subsidiary of the Company or an employee
benefit plan of the Company or a subsidiary) (an “Acquiring Person”) has
acquired beneficial ownership of 20% or more of the outstanding Common Shares (the
“Shares Acquisition Date”) or (ii) 10 business days (or such later date as may
be determined by action of the Company’s Board of Directors prior to such time as any
person becomes an Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group (other than the Company, a subsidiary of
the Company or an employee benefit plan of the Company or a subsidiary) of 20% or more of
such outstanding Common Shares (the earlier of such dates being called the
“Distribution Date”), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common Share
certificate. 



        The
Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued after the
Record Date, upon transfer or new issuance of Common Shares, will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares, outstanding as of the Record Date, even without such notation, will
also constitute the transfer of the Rights associated with the Common Shares represented
by such certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (“Right Certificates”) will be mailed to
holders of record of the Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights. 












        The
Rights are not exercisable until the Distribution Date. The Rights will expire on
January 7, 2019 (the “Final Expiration Date”), subject to extension, unless
the Rights are earlier redeemed or exchanged by the Company, in each case as described
below. 



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



        In
the event that any person becomes an Acquiring Person (a “Flip-In Event”), each
holder of a Right (except as otherwise provided in the Rights Agreement) will thereafter
have the right to receive upon exercise that number of Common Shares (or, in certain
circumstances cash, property or other securities of the Company or a reduction in the
Purchase Price) having a market value of two times the then current Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of a Flip-In Event all
Rights that are, or (under certain circumstances specified in the Rights Agreement) were,
or subsequently become beneficially owned by an Acquiring Person, related persons and
transferees will be null and void. 



        In
the event that, at any time following the Shares Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction or (ii) 50% or more of its
consolidated assets or earning power are sold (the events described in clauses (i) and
(ii) are herein referred to as “Flip-Over Events”), proper provision will be
made so that each holder of a Right (except as otherwise provided in the Rights Agreement)
will thereafter have the right to receive, upon the exercise thereof at the then current
Purchase Price, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the then current
Purchase Price. 



        With
certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional
Common Shares will be issued. In lieu of fractional Common Shares, an adjustment in cash
will be made based on the market price of the Common Shares on the last trading day prior
to the date of exercise. No Rights may be exercised that would entitle the holder thereof
to any fractional Common Share unless concurrently therewith such holder purchases an
additional fraction of a Common Share which when added to the number of Common Shares to
be received upon such exercise, equals an integral number of Common Shares. 



        The
Purchase Price is payable by certified check, cashier’s check, bank draft or money
order or, if so provided by the Company, the Purchase Price following the occurrence of a
Flip-In Event and until the first occurrence of a Flip-Over Event may be paid in Common
Shares having an equivalent value. 



B-2 










        At
any time after a person becomes an Acquiring Person and prior to the acquisition by such
Acquiring Person of 50% or more of the outstanding Common Shares, the Board of Directors
of the Company may exchange the Rights (other than Rights owned by any Acquiring Person
which have become void), in whole or in part, at an exchange ratio of one Common Share per
Right (subject to adjustment). 



        At
any time prior to a person becoming an Acquiring Person, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right
(the “Redemption Price”). The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price. 



        Other
than amendments that would change the Redemption Price or move to an earlier date the
Final Expiration Date of the Rights, the terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders of the Rights, including an
amendment to lower the threshold for exercisability of the Rights from 20% to not less
than 10%, with appropriate exceptions for any person then beneficially owning a percentage
of the number of Common Shares then outstanding equal to or in excess of the new
threshold, except that from and after such time as any Person becomes an Acquiring Person
no such amendment may adversely affect the interests of the holders of the Rights. 



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



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











B-3