RIGHTS AGREEMENT

                                      dated

                                November 3, 1999

                                     between

                            GREKA ENERGY CORPORATION

                                       and

                   AMERICAN SECURITIES TRANSFER & TRUST, INC.







<PAGE>



                        TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                       Page

<S>              <C>                                                                                    <C>
Section 1.      Certain Definitions......................................................................1

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

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

Section 4.      Form of Rights Certificates..............................................................9

Section 5.      Countersignature and Registration.......................................................10

Section 6.      Transfer, Split Up, Combination and Exchange of Rights Certificates;
                Mutilated, Destroyed, Lost or Stolen Rights Certificates................................10

Section 7.      Exercise of Rights; Exercise Price; Expiration Date of Rights.  ........................11

Section 8.      Cancellation and Destruction of Rights Certificates.....................................13

Section 9.      Reservation and Availability of Common Shares. .........................................13

Section 10.     Record Date.............................................................................14

Section 11.     Adjustment of Exercise Price, Number of Shares or Number of Rights......................15

Section 12.     Certificate of Adjusted Exercise Price or Number of Shares .............................20

Section 13.     Consolidation, Merger or Sale or Transfer of Assets or Earning Power....................21

Section 14.     Fractional Rights and Fractional Shares. ...............................................25

Section 15.     Rights of Action.  .....................................................................25

Section 16.     Agreement of Rights Holders.  ..........................................................26

Section 17.     Rights Certificate Holder Not Deemed a Shareholder......................................26

Section 18.     Concerning the Rights Agent.............................................................26

Section 19.     Merger or Consolidation or Change of Name of Rights Agent. .............................27

Section 20.     Duties of Rights Agent..................................................................27


</TABLE>



                                        i

<PAGE>


<TABLE>

<S>            <C>                                                                                            <C>
Section 21.     Change of Rights Agent..................................................................29

Section 22.     Issuance of New Rights Certificates.  ..................................................30

Section 23.     Redemption .............................................................................31

Section 24.     Exchange................................................................................32

Section 25.     Notice of Certain Events ...............................................................33

Section 26.     Notices.................................................................................34

Section 27.      Supplements and Amendments ............................................................34

Section 28.     Successors..............................................................................35

Section 29.     Determinations and Actions by the Board of Directors, Etc...............................35

Section 30.     Benefits of this Agreement..............................................................36

Section 31.     Severability............................................................................36

Section 32.     Governing Law...........................................................................36

Section 33.     Counterparts............................................................................36

Section 34.     Descriptive Headings....................................................................36

</TABLE>





                                       ii

<PAGE>



                                RIGHTS AGREEMENT

         This  Rights  Agreement  (the  "Agreement")  is dated as of November 3,
1999, between GREKA Energy Corporation,  a Colorado corporation (the "Company"),
and American Securities Transfer & Trust, Inc. (the "Rights Agent").

         On November 3, 1999 (the "Rights Dividend Declaration Date"), the Board
of  Directors  of the Company  authorized  and declared a dividend of one Common
Share Purchase Right (a "Right") for each Common Share (as hereinafter  defined)
of the Company outstanding as of the Close of Business (as hereinafter  defined)
on November 3, 1999 (the "Record Date"), each  Right representing  the  right to
purchase one share (as such number may be adjusted pursuant to the provisions of
this  Agreement)  of the  Company's  common  stock,  no par value per share (the
"Common Stock"),  upon the terms and subject to the conditions herein set forth,
and further  authorized  and  directed the issuance of one Right (as such number
may be adjusted  pursuant to the provisions of this  Agreement)  with respect to
each Common Share that shall become outstanding  between the Record Date and the
earlier  of the  Distribution  Date and the  Expiration  Date (as such terms are
hereinafter defined), and in certain circumstances after the Distribution Date.

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

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

                  (a)  "Acquiring  Person"  shall  mean any Person who or which,
together  with  all  Affiliates  and  Associates  of such  Person,  shall be the
Beneficial Owner of 33% or more of the Common Shares then outstanding, but shall
not include the Company,  any Subsidiary of the Company or any employee  benefit
plan of the Company or of any  Subsidiary of the Company,  or any entity holding
Common Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing,  no Person shall be deemed to be an Acquiring Person as the 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 33% or more of the Common  Shares of the  Company  then
outstanding;  provided,  however,  that if a Person shall become the  Beneficial
Owner of 33% or more of the Common  Shares of the Company  then  outstanding  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 (other than pursuant to a dividend or  distribution  paid or made by
the Company on the  outstanding  Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding  Common Shares),  then such Person shall
be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of
such additional  Common Shares of the Company such Person does not  beneficially
own  33%  or  more  of  the  Common  Shares  of the  Company  then  outstanding.
Notwithstanding  the  foregoing,   (i)  if  the  Company's  Board  of  Directors
determines  in good  faith that a Person who would  otherwise  be an  "Acquiring
Person," as defined pursuant to the foregoing  provisions of this paragraph (a),





                                        1

<PAGE>



has become such inadvertently (including,  without limitation,  because (A) such
Person was unaware that it beneficially  owned a percentage of the Common Shares
that would otherwise  cause such Person to be an "Acquiring  Person," as defined
pursuant to the foregoing  provisions of this  paragraph (a), or (B) such Person
was aware of the extent of the Common  Shares it  beneficially  owned but had no
actual  knowledge of the  consequences of such  beneficial  ownership under this
Agreement) and without any intention of changing or  influencing  control of the
Company,  and if such Person  divested or 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
paragraph  (a),  then such Person shall not be deemed to be or to have become an
"Acquiring  Person" for any purposes of this  Agreement;  and (ii) if, as of the
date  hereof,  any Person is the  Beneficial  Owner of 33% or more of the Common
Shares outstanding, such Person shall not be or become an "Acquiring Person," as
defined  pursuant to the foregoing  provisions of this paragraph (a), unless and
until such time as such Person shall become the  Beneficial  Owner of additional
Common Shares (other than pursuant to a dividend or distribution paid or made by
the Company on the  outstanding  Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding  Common Shares),  unless,  upon becoming
the Beneficial Owner of such additional  Common Shares,  such Person is not then
the Beneficial Owner of 33% or more of the Common Shares then outstanding.

                  (b)    "Adjustment Fraction" shall  have the meaning set forth
in Section 11(a) hereof.

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

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

                         (i)  which  such   Person  or  any  of  such   Person's
         Affiliates or Associates beneficially owns, directly or indirectly, for
         purposes of Section 13(d) of the Exchange Act and Rule 13d-3 thereunder
         (or any comparable or successor law or regulation);

                         (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 the Rights), warrants or options, or otherwise; provided, however,
         that a Person shall not be deemed pursuant to this Section  l(d)(ii)(A)
         to be the Beneficial  Owner of, or to beneficially  own, (1) 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 (2)
         securities  which  a  Person  or any of  such  Person's  Affiliates  or
         Associates  may be deemed to have the right to acquire  pursuant to any





                                        2

<PAGE>



         merger or other  acquisition  agreement  between  the  Company and such
         Person (or one or more of its Affiliates or Associates) which agreement
         has been  approved by the Board of  Directors  of the Company  prior to
         there being an Acquiring  Person;  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  under this Section  l(d)(ii)(B)  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 (or any Affiliate or Associate thereof)
         with which such Person or any of such Person's Affiliates or Associates
         has any  agreement,  arrangement  or  understanding,  whether or not in
         writing (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 acquiring, holding, voting (except to
         the extent  contemplated  by the  proviso to  Section  l(d)(ii)(B))  or
         disposing of any securities of the Company; provided,  however, that in
         no case shall an officer or  director  of the Company be deemed (x) the
         Beneficial  Owner  of any  securities  beneficially  owned  by  another
         officer  or  director  of the  Company  solely  by  reason  of  actions
         undertaken  by such persons in their  capacity as officers or directors
         of the Company or (y) the Beneficial Owner of securities held of record
         by the  trustee  of any  employee  benefit  plan of the  Company or any
         Subsidiary  of the  Company  for the  benefit  of any  employee  of the
         Company or any  Subsidiary  of the  Company  other than the  officer or
         director,  by reason of any influence that such officer or director may
         have over the voting of the securities held in the plan.

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

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

                  (g) "Common  Shares"  when used with  reference to the Company
shall mean the shares of Common  Stock,  no par value per share.  Common  Shares
when used with  reference  to any Person  other than the Company  shall mean the
capital stock (or 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 which ultimately control such first-mentioned Person.

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





                                        3

<PAGE>



                  (i) "Company" shall mean GREKA Energy Corporation,  a Colorado
corporation, subject to the terms of Section 13(a)(iii)(C) hereof.

                  (j)  "Current  Per  Share  Market  Price" on any  security  (a
"Security" for purposes of this  definition),  for all  computations  other than
those made pursuant to Section 11(a)(ii)  hereof,  shall mean the average of the
daily closing prices per share of such Security for the thirty (30)  consecutive
Trading Days  immediately  prior to such date, and for purposes of  computations
made pursuant to Section 11(a)(ii) hereof, the Current Per Share Market Price of
any Security on any date shall be deemed to be the average of the daily  closing
prices per share of such  Security  for the ten (10)  consecutive  Trading  Days
immediately prior to such date;  provided,  however,  that in the event that the
Current Per Share  Market Price of the  Security is  determined  during a period
following the  announcement  by the issuer of such Security of (i) a dividend or
distribution  on such Security  payable in shares of such Security or securities
convertible   into  such  shares  or  (ii)  any   subdivision,   combination  or
reclassification of such Security, and prior to the expiration of the applicable
thirty (30)  Trading Day or ten (10) Trading Day period,  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 share  equivalent  of such  Security.  The closing  price for each day
shall be the last sale price,  regular way, or, in case no such sale takes place
on such day,  the average of the closing bid and asked  prices,  regular way, in
either case as  reported in the  principal  consolidated  transaction  reporting
system with respect to securities  listed or admitted to trading on the New York
Stock  Exchange  or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal  consolidated  transaction
reporting  system with respect to securities  listed on the  principal  national
securities  exchange on which the  Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national  securities
exchange,  the last sale price or, if such last sale price is not reported,  the
average of the high bid and low asked prices in the over-the-counter  market, as
reported by Nasdaq or such other  system then in use or, if on any such date the
Security is 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 Security as selected by the Board of  Directors  of the  Company.  If on any
such date no market maker is making a market in the Security,  the fair value of
such shares on such date as  determined  in good faith by the Board of Directors
of the Company  shall be used. If the Security is not publicly held or so listed
or traded, Current Per Share Market Price shall mean the fair value per share as
determined  in good  faith  by the  Board of  Directors  of the  Company,  whose
determination  shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.

                  (k)  "Current  Value"  shall  have the  meaning  set  forth in
Section 11(a)(ii) hereof.

                  (l)  "Distribution  Date"  shall  mean the  earlier of (i) the
Close of Business on the tenth day after the Shares Acquisition Date (or, if the
tenth day after the Shares  Acquisition  Date occurs before the Record Date, the
Close of Business on the Record Date) or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Company's
Board of Directors) after the date that a tender or exchange offer by any Person
(other than the Company,  any  Subsidiary of the Company,  any employee  benefit
plan of the




                                        4

<PAGE>



Company or of any Subsidiary of the Company,  or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of Rule 14d-2(a) of
the General  Rules and  Regulations  under the Exchange  Act,  if,  assuming the
successful consummation thereof, such Person would be an Acquiring Person.

                  (m) "Equivalent Shares" shall mean Common Shares and any other
class or series of capital  stock of the  Company  which is entitled to the same
rights as the Common Shares.

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

                  (o)  "Exchange  Ratio"  shall  have the  meaning  set forth in
Section 24(a) hereof.

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

                  (q) "Expiration Date" shall mean the earliest of (i) the Close
of Business on the Final Expiration Date, (ii) the Redemption Date, or (iii) the
time at which  the Board of  Directors  orders  the  exchange  of the  Rights as
provided in Section 24 hereof.

                  (r) "Final Expiration Date" shall mean November 3, 2004.

                  (s)  "Interested  Person" with respect to a Transaction  shall
mean any Person who (i) is or will become an Acquiring Person if the Transaction
were to be consummated  or an Affiliate or Associate of such a Person,  and (ii)
is, or directly or indirectly proposed,  nominated or financially  supported,  a
director  of  the  Company  in  office  at  the  time  of  consideration  of the
Transaction in question who was elected by written  consent of  shareholders  or
who was elected at a special  meeting of  shareholders  (a meeting  other than a
regularly scheduled annual meeting).

                  (t) "Nasdaq" shall mean the National Association of Securities
Dealers, Inc. Automated Quotations System.

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

                  (v)  "Post-Event Transferee" shall have the meaning  set forth
in Section 7(e) hereof.

                  (w)  "Pre-Event  Transferee" shall have the meaning  set forth
in Section 7(e) hereof.

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





                                        5

<PAGE>



                  (y)  "Record  Date"  shall have the  meaning  set forth in the
recitals at the beginning of this Agreement.

                  (z)  "Redemption  Date"  shall have the  meaning  set forth in
Section 23(a) hereof.

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

                  (bb)   "Rights Agent" shall  mean American Securities Transfer
& Trust, Inc. or its successor or replacement  as provided in Sections 19 and 21
hereof.

                  (cc)   "Rights   Certificate"   shall   mean   a   certificate
substantially in the form attached hereto as Exhibit A.

                  (dd)   "Section  13 Event"  shall mean any event  described in
clause (i), (ii) or (iii) of Section 13(a) hereof.

                  (ee)   "Securities Act" shall mean the Securities Act of 1933,
as amended.

                  (ff)  "Shares  Acquisition  Date" shall mean the first date of
public  announcement  (which,  for purposes of this  definition,  shall include,
without limitation,  a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring  Person that an Acquiring  Person has become
such;  provided  that,  if such  Person  is  determined  not to have  become  an
Acquiring  Person  pursuant to Section l(a) hereof,  then no Shares  Acquisition
Date shall be deemed to have occurred.

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

                  (hh)  "Subsidiary" of any Person shall mean any corporation or
other  entity  of which an amount of  voting  securities  sufficient  to elect a
majority  of the  directors  or  Persons  having  similar  authority  over  such
corporation or other entity is beneficially  owned,  directly or indirectly,  by
such Person,  or any  corporation or other entity  otherwise  controlled by such
Person.

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

                  (jj)  "Summary  of  Rights"  shall  mean  a  summary  of  this
Agreement substantially in the form attached hereto as Exhibit B.

                  (kk)   "Total Exercise Price" shall have the meaning set forth
in Section 4(a) hereof.

                  (ll)  "Trading  Day" shall  mean a day on which the  principal
national  securities exchange or market system on which a referenced security is
listed or admitted to trading is open for the  transaction  of business or, if a
referenced  security  is not  listed or  admitted  to  trading  on any  national
securities exchange or market system, a Business Day.




                                        6

<PAGE>



                  (mm)  "Transaction"  shall mean any merger,  consolidation  or
sale of assets  described in Section 13(a) hereof or any  acquisition  of Common
Shares which would result in a Person becoming an Acquiring Person.

                  (nn) A  "Triggering  Event"  shall be deemed to have  occurred
upon any Person becoming an Acquiring Person.

         Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof,  shall prior to the Distribution  Date also
be the holders of the Common Shares) 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  upon ten (10) days  prior  written  notice to the Rights  Agent.  The
Rights  Agent shall have no duty to  supervise,  and shall in no event be liable
for, the acts or omissions of any such co-Rights Agent.

         Section 3.     Issuance of Rights Certificates.

                  (a)  Until  the  Distribution  Date,  (i) the  Rights  will be
evidenced  (subject to the  provisions  of Sections 3(b) and 3(c) hereof) by the
certificates  for Common Shares  registered in the names of the holders  thereof
(which  certificates shall also be deemed to be Rights  Certificates) and not by
separate Rights  Certificates and (ii) the right to receive Rights  Certificates
will be  transferable  only in  connection  with the transfer of Common  Shares.
Until the earlier of the Distribution Date or the Expiration Date, the surrender
for transfer of such  certificates  for Common Shares shall also  constitute the
surrender  for  transfer  of  the  Rights  associated  with  the  Common  Shares
represented  thereby.  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,  postage-prepaid  mail,  to each record  holder of Common
Shares as of the Close of Business on the  Distribution  Date, at the address of
such holder shown on the records of the Company, a Rights Certificate evidencing
one Right for each  Common  Share so held,  subject to  adjustment  as  provided
herein. As of the Distribution Date, the Rights will be evidenced solely by such
Rights  Certificates  and  may be  transferred  by the  transfer  of the  Rights
Certificates  as  permitted  hereby,  separately  and apart from any transfer of
Common  Shares,  and the  holders of such Rights  Certificates  as listed in the
records of the Company or any transfer  agent or registrar  for the Rights shall
be the record holders thereof.

                  (b) On the Record Date or as soon as  practicable  thereafter,
the  Company  will  send a  copy  of  the  Summary  of  Rights  by  first-class,
postage-prepaid  mail, to each record holder of Common Shares as of the Close of
Business on the Record Date,  at the address of such holder shown on the records
of the Company's transfer agent and registrar.  With respect to certificates for
Common Shares  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 together with the Summary of Rights. Until the Distribution Date
(or, if  earlier,  the  Expiration  Date),  the  surrender  for  transfer of any
certificate for Common Shares  outstanding on the  Record Date,  with or without




                                        7

<PAGE>



a copy of the  Summary of Rights,  shall also  constitute  the  transfer  of the
Rights associated with the Common Shares represented thereby.

                  (c) Unless the Board of Directors of the Company by resolution
adopted at or before the time of the issuance of any Common Shares  specifies to
the  contrary,  Rights shall be issued in respect of all Common  Shares that are
issued after the Record Date but prior to the earlier of the  Distribution  Date
or the  Expiration  Date or, in  certain  circumstances  provided  in Section 22
hereof,  after the  Distribution  Date.  Certificates  representing  such Common
Shares shall also be deemed to be  certificates  for Rights,  and shall bear the
following legend:

          THIS  CERTIFICATE  ALSO  EVIDENCES  AND ENTITLES THE HOLDER  HEREOF TO
          CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN GREKA ENERGY
          CORPORATION  AND  AMERICAN  SECURITIES  TRANSFER & TRUST,  INC. AS THE
          RIGHTS AGENT, DATED AS OF NOVEMBER 3, 1999, (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 GREKA
          ENERGY CORPORATION.  UNDER CERTAIN CIRCUMSTANCES,  AS SET FORTH IN THE
          RIGHTS   AGREEMENT,   SUCH  RIGHTS  WILL  BE   EVIDENCED  BY  SEPARATE
          CERTIFICATES  AND WILL NO LONGER  BE  EVIDENCED  BY THIS  CERTIFICATE.
          GREKA ENERGY CORPORATION 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,  RIGHTS  ISSUED  TO, OR HELD BY,  ANY PERSON WHO IS, WAS OR
          BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE  THEREOF (AS
          SUCH TERMS ARE  DEFINED IN THE RIGHTS  AGREEMENT),  WHETHER  CURRENTLY
          HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT  HOLDER,  MAY
          BECOME NULL AND VOID.

With respect to such  certificates  containing the foregoing  legend,  until the
earlier of (i) the  Distribution  Date or (ii) the  Expiration  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.

                  (d) 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 canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.





                                        8

<PAGE>



         Section 4.     Form of Rights Certificates.

                  (a) The  Rights  Certificates  (and the forms of  election  to
purchase  Common Shares and of assignment to be printed on the reverse  thereof)
shall be  substantially  in the form of 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 or a national  market system,  on which
the Rights may from time to time be listed or included,  or to conform to usage.
Subject  to the  provisions  of Section  11 and  Section  22 hereof,  the Rights
Certificates,  whenever distributed, shall be dated as of the Record Date (or in
the case of Rights  issued with respect to Common  Shares  issued by the Company
after the Record Date, as of the date of issuance of such Common  Shares) and on
their face shall  entitle the holders  thereof to purchase such number of Common
Shares as shall be set forth  therein  at the  price  set  forth  therein  (such
exercise price per Common Share being  hereinafter  referred to as the "Exercise
Price" and the  aggregate  Exercise  Price of all Common  Shares  issuable  upon
exercise  of the  number of Rights  evidenced  by the Rights  Certificate  being
hereinafter  referred to as the "Total Exercise Price"), but the number and type
of securities purchasable upon the exercise of each Right and the Exercise Price
shall be subject to adjustment as provided herein.

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

         THE  RIGHTS   REPRESENTED  BY  THIS  RIGHTS  CERTIFICATE  ARE  OR  WERE
         BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
         AN AFFILIATE  OR  ASSOCIATE  OF AN ACQUIRING  PERSON (AS SUCH TERMS ARE
         DEFINED IN THE RIGHTS AGREEMENT).  ACCORDINGLY, THIS RIGHTS CERTIFICATE
         AND THE  RIGHTS  REPRESENTED  HEREBY  MAY  BECOME  NULL AND VOID IN THE
         CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.





                                        9

<PAGE>



         Section 5.     Countersignature and Registration.

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

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

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

                  (a)  Subject to the  provisions  of Sections  7(e),  14 and 24
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the Expiration Date, any Rights Certificate
or Rights  Certificates may be transferred,  split up, combined or exchanged for
another  Rights  Certificate  or Rights  Certificates,  entitling the registered
holder to purchase a like number of Common  Shares (or,  following a  Triggering
Event, other securities, cash or other assets, as the case may be) as the Rights
Certificate  or Rights  Certificates  surrendered  then  entitled such holder to
purchase.  Any  registered  holder  desiring to transfer,  split up,  combine or
exchange any Rights  Certificate or Rights  Certificates shall make such request
in  writing  delivered  to the  Rights  Agent,  and shall  surrender  the Rights
Certificate or Rights  Certificates  to be  transferred,  split up,  combined or
exchanged at the office of the Rights Agent designated for such purpose. Neither
the  Rights  Agent  nor the  Company  shall  be  obligated  to take  any  action
whatsoever  with  respect  to  the  transfer  of  any  such  surrendered  Rights
Certificate  until the  registered  holder shall have  completed  and signed the
certificate  contained  in the form of  assignment  on the reverse  side of such
Rights  Certificate  and shall have  provided  such  additional  evidence of the
identity of the Beneficial Owner (or former  Beneficial  Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Sections 7(e), 14 and 24 hereof, countersign and deliver
to the person entitled thereto a Rights Certificate or Rights  Certificates,  as





                                       10

<PAGE>



the case may be, as so  requested.  The  Company  may  require  payment of a sum
sufficient  to cover  any tax or  governmental  charge  that may be  imposed  in
connection  with any  transfer,  split up,  combination  or  exchange  of Rights
Certificates.

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

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

                  (a) Subject to Sections 7(e), 23 and 24 hereof, the registered
holder of any Rights  Certificate  may  exercise  the Rights  evidenced  thereby
(except as otherwise  provided herein) in whole or in part at any time after the
Distribution  Date and prior to the Close of Business on the Expiration  Date by
surrender  of the Rights  Certificate,  with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose,  together with payment of the Exercise
Price for each Common Share (or, following a Triggering Event, other securities,
cash or other assets as the case may be) as to which the Rights are exercised.

                  (b) The Exercise Price for the Common Share issuable  pursuant
to the exercise of a Right shall initially be sixty dollars  ($60.00),  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 paragraph (c) below.

                  (c)  Upon  receipt  of  a  Rights   Certificate   representing
exercisable  Rights,  with the  form of  election  to  purchase  duly  executed,
accompanied  by payment of the  Exercise  Price for the number of Common  Shares
(or, following a Triggering Event, other securities, cash or other assets as the
case may be) to be purchased and an amount equal to any applicable  transfer tax
required to be paid by the holder of such Rights  Certificate in accordance with
Section 9(e) hereof,  the Rights Agent shall,  subject to Section  20(k) hereof,
thereupon  promptly (i) (A)  requisition  from any transfer  agent of the Common
Shares (or make  available,  if the Rights Agent is the  transfer  agent for the
Common  Shares) a certificate  or  certificates  for the number of Common Shares
(or, following a Triggering Event, other securities, cash or other assets as the
case may be) to be purchased and the Company hereby  irrevocably  authorizes its
transfer agent to comply with all such requests or (B) if the Company shall have
elected to deposit the total number of Common Shares (or, following a Triggering
Event, other securities,  cash or other assets as the case may be) issuable upon
exercise of the Rights hereunder with a depositary  agent,  requisition from the
depositary agent depositary  receipts  representing such number of Common Shares
(or, following a Triggering Event, other securities, cash or other assets as the
case may be) as are to be purchased (in which case  certificates  for the Common





                                       11

<PAGE>



Shares (or, following a Triggering Event, other securities, cash or other assets
as the case may be)  represented  by such  receipts  shall be  deposited  by the
transfer  agent with the  depositary  agent) and the Company  hereby directs the
depositary agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional
shares in  accordance  with  Section  14  hereof,  (iii)  after  receipt of such
certificates or depositary  receipts,  cause the same to be delivered to or upon
the order of the  registered  holder of such Rights  Certificate,  registered in
such  name  or  names  as may  be  designated  by  such  holder  and  (iv)  when
appropriate,  after receipt  thereof,  deliver such cash to or upon the order of
the registered  holder of such Rights  Certificate.  The payment of the Exercise
Price (as such  amount may be reduced  (including  to zero)  pursuant to Section
11(a)(ii) hereof) and an amount equal to any applicable transfer tax required to
be paid by the holder of such Rights Certificate in accordance with Section 9(e)
hereof, may be made in cash or by certified bank check,  cashier's check or bank
draft  payable to the order of the  Company.  In the event  that the  Company is
obligated to issue securities of the Company other than Common Shares,  pay cash
and/or  distribute other property  pursuant to Sections 11(a) or 14 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 Rights  Certificate
shall  exercise  less  than  all the  Rights  evidenced  thereby,  a new  Rights
Certificate  evidencing  Rights  equivalent to the Rights remaining  unexercised
shall be issued by the  Rights  Agent to the  registered  holder of such  Rights
Certificate or to his or her duly authorized assigns,  subject to the provisions
of Section 14 hereof.

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




                                       12

<PAGE>




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

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

         Section 9.     Reservation and Availability of Common Shares.

                  (a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept  available  out of its  authorized  and
unissued  Common  Shares not reserved for another  purpose  (and,  following the
occurrence of a Triggering  Event,  out of its  authorized  and unissued  Common
Shares and/or other securities), the number of Common Shares (and, following the
occurrence of a Triggering  Event,  Common Shares and/or other  securities) that
will be sufficient to permit the exercise in full of all outstanding Rights.

                  (b) If the  Company  shall  hereafter  list any of its  Common
Shares on a national  securities  exchange,  then so long as the  Common  Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities)  issuable and deliverable  upon exercise of the Rights may be listed
on such  exchange,  the Company  shall use its best  efforts to cause,  from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such  exchange  upon  official  notice of issuance
upon such exercise.

                  (c) The  Company  shall use its best  efforts to (i) file,  as
soon as practicable  following the earliest date after the first occurrence of a
Triggering Event in which the  consideration to be delivered by the Company upon
exercise of the Rights is described in Section  11(a)  hereof,  or as soon as is
required  by law  following  the  Distribution  Date,  as the  case  may  be,  a
registration  statement  under the Securities Act with respect to the securities





                                       13

<PAGE>



purchasable upon exercise of the Rights on an appropriate  form, (ii) cause such
registration  statement to become  effective as soon as  practicable  after such
filing and (iii) cause such  registration  statement to remain effective (with a
prospectus at all times meeting the  requirements  of the Securities  Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such  securities or (B) the date of  expiration  of the Rights.  The Company may
temporarily  suspend, for a period not to exceed ninety (90) days after the date
set  forth in  clause  (i) of the  first  sentence  of this  Section  9(c),  the
exercisability  of the  Rights in order to  prepare  and file such  registration
statement  and  permit it to become  effective.  Upon any such  suspension,  the
Company shall issue a public announcement  stating, and notify the Rights Agent,
that the exercisability of the Rights has been temporarily suspended, as well as
a public  announcement  and notification to the Rights Agent at such time as the
suspension is no longer in effect. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the  exercisability of the Rights.
Notwithstanding  any  provision of this  Agreement to the  contrary,  the Rights
shall not be exercisable in any jurisdiction, unless the requisite qualification
in such jurisdiction shall have been obtained,  or an exemption  therefrom shall
be available, and until a registration statement has been declared effective.

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

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

         Section 10. Record Date.  Each Person in whose name any certificate for
a number of Common  Shares (or other  securities  of the Company) is issued upon
the  exercise  of Rights  shall for all  purposes  be deemed to have  become the
holder  of  record  of  Common  Shares  (or  other  securities  of the  Company)
represented thereby on, and such certificate shall be dated, the date upon which
the Rights  Certificate  evidencing such Rights was duly surrendered and payment
of the Total Exercise Price with respect to which the Rights have been exercised
(and any applicable  transfer taxes) was made;  provided,  however,  that if the
date of such  surrender  and payment is a date upon which the transfer  books of





                                       14

<PAGE>



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  transfer  books of the Company are open.
Prior to the exercise of the Rights  evidenced  thereby,  the holder of a Rights
Certificate shall not be entitled to any rights of a holder of Common Shares (or
other  securities  of the Company)  for which the Rights  shall be  exercisable,
including,  without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.

         Section 11. Adjustment of Exercise Price, Number of Shares or Number of
Rights.  The  Exercise  Price,  the number and kind of shares or other  property
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)    Anything   in   this    Agreement   to   the   contrary
notwithstanding,  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) subdivide the outstanding Common Shares, (C) combine the outstanding
Common  Shares (by reverse stock split or  otherwise)  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),  then,  in each such  event,  except  as  otherwise
provided in this Section 11 and Section  7(e) hereof:  (1) each Common Share (or
shares of capital stock issued in such  reclassification  of the Common  Shares)
outstanding  immediately  following such time shall have  associated with it the
number of Rights as were associated with one Common Share  immediately  prior to
the  occurrence of the event  described in clauses  (A)-(D)  above;  and (2) the
Exercise  Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification shall be
adjusted so that the Exercise Price  thereafter  shall equal the result obtained
by dividing the  Exercise  Price in effect  immediately  prior to such time by a
fraction (the "Adjustment Fraction"),  the numerator of which shall be the total
number  of  Common   Shares  (or  shares  of  capital   stock   issued  in  such
reclassification  of the Common  Shares)  outstanding  immediately  prior to the
event described in clauses (A)-(D) above,  and the denominator of which shall be
the total  number of Common  Shares  outstanding  immediately  after such event;
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 such Right.
Each Common Share that shall become  outstanding  after an  adjustment  has been
made pursuant to this Section 11(a) shall have  associated with it the number of
Rights,  exercisable  at the Exercise  Price and for the number of Common Shares
(or shares of such other capital stock) as one Common Share has associated  with
it immediately following the adjustment made pursuant to this Section 11(a).

                         (i)  Subject to Section  24 of this  Agreement,  in the
         event a Triggering Event shall have occurred,  then promptly  following
         such  Triggering  Event the  Exercise  Price for each Right,  except as
         provided in Section 7(e) hereof,  shall be adjusted to thereafter equal
         the  product of 50% of the Current  Per Share  Market  Price for Common
         Shares on the date of occurrence  of the  Triggering  Event;  provided,





                                       15

<PAGE>



         however, that the Exercise Price and the number of Common Shares of the
         Company so  receivable  upon  exercise  of a Right  shall be subject to
         further  adjustment as  appropriate  in  accordance  with Section 11(e)
         hereof to reflect any events  occurring in respect of the Common Shares
         of the Company after the occurrence of the Triggering Event.

                         (ii) In lieu of  issuing  Common  Shares in  accordance
         with  Section  11(a)  hereof,  the  Company  may,  if a majority of the
         Company's  Board of Directors  determines that such action is necessary
         or  appropriate  and not  contrary to the interest of holders of Rights
         (and,  in the  event  that  the  number  of  Common  Shares  which  are
         authorized  by  the  Company's   Articles  of  Incorporation   but  not
         outstanding  or reserved  for  issuance  for  purposes  other than upon
         exercise  of the Rights are not  sufficient  to permit the  exercise in
         full of the Rights,  or if any necessary  regulatory  approval for such
         issuance has not been obtained by the Company,  the Company shall): (A)
         determine  the  excess of (1) the value of the Common  Shares  issuable
         upon  the  exercise  of a Right  (the  "Current  Value")  over  (2) the
         Exercise Price (such excess, the "Spread") and (B) with respect to each
         Right,  make adequate  provision to substitute  for such Common Shares,
         upon exercise of the Rights,  (1) cash, (2) a reduction in the Exercise
         Price, (3) other equity securities of the Company  (including,  without
         limitation,  securities  which a  majority  of the  Company's  Board of
         Directors  has  deemed to have the same  value as Common  Shares  (such
         securities  are herein called "Common Stock  Equivalents")),  except to
         the extent that the Company has not obtained any necessary  shareholder
         or regulatory  approval for such issuance,  (4) debt  securities of the
         Company,  except to the extent that the Company  has not  obtained  any
         necessary  shareholder or regulatory  approval for such  issuance,  (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 a majority of the Company's  Board of Directors
         based upon the advice of a  nationally  recognized  investment  banking
         firm  selected  by a  majority  of the  Company's  Board of  Directors;
         provided,  however,  if  the  Company  shall  not  have  made  adequate
         provision to deliver  value  pursuant to clause (B) above within thirty
         (30)  days  following  the  later  of (x)  the  first  occurrence  of a
         Triggering  Event  or (y) the  date on  which  the  Company's  right of
         redemption  pursuant to Section  23(a) expires (the later of (x) or (y)
         being referred to herein as the "Section 11(a)(ii) Trigger Date"), then
         the Company  shall be  obligated  to deliver,  upon the  surrender  for
         exercise  of a Right and  without  requiring  payment  of the  Exercise
         Price,  Common Shares (to the extent  available),  except to the extent
         that  the  Company  has  not  obtained  any  necessary  shareholder  or
         regulatory  approval for such issuance,  and then, if necessary,  cash,
         which shares  and/or cash have an aggregate  value equal to the Spread.
         If a majority of the Company's  Board of Directors  shall  determine in
         good faith that it is likely that sufficient  additional  Common Shares
         could be authorized for issuance upon exercise in full of the Rights or
         that  any  necessary  regulatory  approval  for such  issuance  will be
         obtained, 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 or
         take action to obtain such regulatory  approval (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





                                       16

<PAGE>



         second  sentences  of this  Section  11(a)(ii),  the  Company (x) shall
         provide,  subject to Section 7(e) 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 in order to seek any authorization of additional shares, to take
         any action to obtain any required  regulatory approval 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)(ii),  the value of
         the Common  Shares  shall be the Current Per Share  Market Price 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.

                  (b) In case the Company  shall,  at any time after the date of
this  Agreement,  fix a record  date for the  issuance  of  rights,  options  or
warrants to all holders of Common  Shares  entitling  such holders (for a period
expiring  within  forty-five  (45)  calendar  days  after such  record  date) to
subscribe for or purchase  Common Shares or securities  convertible  into Common
Shares at a price  per  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 on such record date,  then, in each such case,
the Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise 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 to be offered or
issued  (and/or  the  aggregate  initial  conversion  price  of the  convertible
securities to be offered or issued) 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, that in no event shall
the  consideration  to be paid upon the  exercise  of one Right be less than the
aggregate par value 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 a majority of the
Company's  Board of  Directors,  whose  determination  shall be  described  in a
statement  filed with the Rights  Agent and shall be binding on the Rights Agent
and the holders of the Rights. 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, and in the event that such rights, options or warrants are not so
issued,  the  Exercise  Price shall be adjusted to be the  Exercise  Price which
would then be in effect if such record date had not been fixed.

                  (c) In case the Company  shall,  at any time after the date of
this  Agreement,  fix a record  date for the  making  of a  distribution  to all
holders of the Common Shares or of any class  (including  any such  distribution





                                       17

<PAGE>



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,  if any, or a dividend payable in
Common Shares) or  subscription  rights,  options or warrants  (excluding  those
referred to in Section 11(b)), then, in each such case, the Exercise Price to be
in effect after such record date shall be determined by multiplying the Exercise
Price  in  effect  immediately  prior to such  record  date by a  fraction,  the
numerator of which shall be the Current Per Share Market Price of a Common Share
on such record date,  less the fair market value per Common Share (as determined
in good faith by the Board of  Directors  of the  Company,  whose  determination
shall be described in a statement filed with the Rights Agent) of the portion of
the cash,  assets or evidences of  indebtedness  so to be distributed or of such
subscription   rights  or  warrants  applicable  to  a  Common  Share,  and  the
denominator  of which shall be such  Current Per Share  Market Price of a Common
Share  on such  record  date;  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 of the shares of capital stock of the Company  issuable upon
exercise of one Right. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such  distribution is not so made,
the Exercise  Price shall be adjusted to be the Exercise  Price which would have
been in effect if such record date had not been fixed.

                  (d)  Anything  herein  to  the  contrary  notwithstanding,  no
adjustment in the Exercise Price shall be required unless such adjustment  would
require an increase or decrease of at least 1% in the Exercise Price;  provided,
however,  that any  adjustments  which by reason of this  Section  11(d) 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  whole  Common  Share or other share,  as the
case may be.  Notwithstanding  the first  sentence of this  Section  11(d),  any
adjustment  required by this  Section 11 shall be made no later than the earlier
of (i) three (3) years  from the date of the  transaction  which  requires  such
adjustment or (ii) the Expiration Date.

                  (e) If as a result of an  adjustment  made pursuant to Section
11(a) or 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled  to receive  any  shares of capital  stock  other than  Common  Shares,
thereafter  the number of such other shares so  receivable  upon exercise of any
Right  and,  if  required,  the  Exercise  Price  thereof,  shall be  subject to
adjustment  from time to time in a manner and on terms as nearly  equivalent  as
practicable  to the  provisions  with respect to the Common Shares  contained in
Sections 11(a),  11(b),  11(c),  11(d),  11(g),  11(h),  11(i), 11(j), 11(k) and
11(l),  and the  provisions  of Sections 7, 9, 10, 13 and 14 with respect to the
Common Shares shall apply on like terms to any such other shares.

                  (f) All Rights originally issued by the Company  subsequent to
any adjustment  made to the Exercise Price hereunder shall evidence the right to
purchase,   at  the  adjusted  Exercise  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.

                  (g) Unless the Company  shall have  exercised  its election as
provided in Section  11(h),  upon each  adjustment  of the  Exercise  Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding





                                       18

<PAGE>



immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase,  at the adjusted Exercise Price, that number of Common Shares
(calculated  to the nearest  whole share)  obtained by (i)  multiplying  (x) the
number of Common Shares covered by a Right immediately prior to this adjustment,
by (y) the Exercise Price in effect  immediately prior to such adjustment of the
Exercise Price,  and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise Price.

                  (h)  The  Company  may  elect  on or  after  the  date  of any
adjustment of the Exercise Price as a result of the calculations made in Section
11(b) or (c) 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  whole  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  whole  number)  obtained  by  dividing  the
Exercise Price in effect  immediately  prior to adjustment of the Exercise Price
by the Exercise  Price in effect  immediately  after  adjustment of the Exercise
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 Exercise Price is adjusted or any day thereafter,  but,
if the Rights  Certificates  have been  issued,  shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have been
issued,  upon each  adjustment of the number of Rights  pursuant to this Section
11(h), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing,  subject to Section 14 hereof,  the additional  Rights to which such
holders shall be entitled as a result of such  adjustment,  or, at the option of
the  Company,  shall  cause to be  distributed  to such  holders  of  record  in
substitution  and replacement for the Rights  Certificates  held by such holders
prior to the date of adjustment,  and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall  be  entitled  after  such  adjustment.   Rights  Certificates  so  to  be
distributed  shall be issued,  executed and countersigned in the manner provided
for herein (and may bear,  at the option of the Company,  the adjusted  Exercise
Price) and shall be  registered  in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.

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

                  (j) Before  taking any action that would  cause an  adjustment
reducing the Exercise Price below the par or stated value, if any, of the number
of 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





                                       19

<PAGE>



order  that the  Company  may  validly  and  legally  issue  as  fully  paid and
nonassessable  shares such  number of Common  Shares at such  adjusted  Exercise
Price.

                  (k) In any case in which this Section 11 shall require that an
adjustment  in the  Exercise  Price be made  effective as of a record date for a
specified  event,  the Company may elect to defer until the  occurrence  of such
event the issuing to the holder of any Right exercised after such record date of
the number  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 Exercise 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.

                  (l)   Anything   in   this   Section   11  to   the   contrary
notwithstanding,  prior to the Distribution  Date, the Company shall be entitled
to make such reductions in the Exercise 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 (i)  consolidation
or subdivision of the Common Shares, (ii) issuance wholly for cash of any Common
Shares at less than the current market price,  (iii) issuance wholly for cash of
Common  Shares  or  securities  which by their  terms  are  convertible  into or
exchangeable for Common Shares,  (iv) stock dividends or (v) issuance of rights,
options or  warrants  referred  to in this  Section  11,  hereafter  made by the
Company  to  holders  of  its  Common  Shares  shall  not  be  taxable  to  such
shareholders.

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

         Section 12. Certificate of Adjusted Exercise 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 Rights
Certificate in accordance with Section 26 hereof.  Notwithstanding the foregoing
sentence,  the  failure of the Company to make such  certification  or give such
notice shall not affect the validity of such  adjustment  or the force or effect
of the  requirement  for  such  adjustment.  The  Rights  Agent  shall  be fully
protected in relying on any such  certificate  and on any  adjustment  contained
therein and shall not be deemed to have knowledge of such adjustment  unless and
until it shall have received such certificate.

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

                  (a) In the event that, following a Triggering Event,  directly
or indirectly:





                                       20

<PAGE>



                         (i) the Company shall  consolidate  with, or merge with
         and into, any other Person (other than a wholly owned Subsidiary of the
         Company in a transaction  the  principal  purpose of which is to change
         the state of  incorporation  of the  Company  and which  complies  with
         Sections 11(a) and 11(m) hereof);

                         (ii) any Person shall consolidate with the Company,  or
         merge with and into the Company and the Company shall be the continuing
         or  surviving  corporation  of such  consolidation  or merger  and,  in
         connection with such merger,  all or part of the Common Shares shall be
         changed into or exchanged  for stock or other  securities  of any other
         Person (or of the Company); or

                         (iii) the Company shall sell or otherwise  transfer (or
         one or more of its Subsidiaries shall sell or otherwise  transfer),  in
         one or more  transactions,  assets or earning power  aggregating 50% or
         more 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 or one or more of its wholly owned  Subsidiaries in one or more
         transactions,  each of which  individually (and together) complies with
         Section 11(m) hereof), then, concurrent with and in each such case,

                           (A) each  holder of a Right  (except as  provided  in
                  Section  7(e)  hereof)  shall  thereafter  have  the  right to
                  receive,  upon the  exercise  thereof at a price  equal to the
                  Total  Exercise  Price  applicable  immediately  prior  to the
                  occurrence  of the  Section  13 Event in  accordance  with the
                  terms of this Agreement, such number of validly authorized and
                  issued, fully paid,  nonassessable and freely tradeable Common
                  Shares of the Principal Party (as hereinafter  defined),  free
                  of any liens,  encumbrances,  rights of first refusal or other
                  adverse  claims,  as shall be equal to the result  obtained by
                  dividing such Total  Exercise  Price by 50% of the Current Per
                  Share  Market  Price of the  Common  Shares of such  Principal
                  Party on the date of  consummation  of such  Section 13 Event,
                  provided,  however,  that the Exercise Price and the number of
                  Common  Shares  of such  Principal  Party so  receivable  upon
                  exercise of a Right shall be subject to further  adjustment as
                  appropriate in accordance with Section 11(e) hereof;

                           (B) 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;

                           (C) 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;

                           (D)  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




                                       21

<PAGE>



                  ensure  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

                           (E)   upon   the   subsequent   occurrence   of   any
                  consolidation,  merger,  sale or  transfer  of assets or other
                  extraordinary  transaction in respect of such Principal Party,
                  each holder of a Right shall thereupon be entitled to receive,
                  upon  exercise  of a Right and  payment of the Total  Exercise
                  Price as provided in this Section  13(a),  such cash,  shares,
                  rights,  warrants and other  property  which such holder would
                  have been entitled to receive had such holder,  at the time of
                  such  transaction,  owned the Common  Shares of the  Principal
                  Party  receivable  upon the exercise of such Right pursuant to
                  this Section 13(a),  and such Principal  Party shall take such
                  steps (including, but not limited to, reservation of shares of
                  stock) as may be necessary to permit the  subsequent  exercise
                  of the  Rights in  accordance  with the terms  hereof for such
                  cash, shares, rights, warrants and other property.

                           (F) For purposes  hereof,  the "earning power" of the
                  Company and its Subsidiaries shall be determined in good faith
                  by the  Company's  Board  of  Directors  on the  basis  of the
                  operating  earnings of each  business  operated by the Company
                  and its  Subsidiaries  during the three fiscal years preceding
                  the  date  of  such  determination  (or,  in the  case  of any
                  business not operated by the Company or any Subsidiary  during
                  three full fiscal years preceding such date, during the period
                  such business was operated by the Company or any Subsidiary).

                  (b) For purposes of this Agreement, the term "Principal Party"
shall mean:

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

                         (ii) in the case of any transaction described in clause
         (iii) of Section 13(a) hereof,  the Person that is the party  receiving
         the  greatest  portion  of the  assets  or  earning  power  transferred
         pursuant  to such  transaction  or  transactions,  or, if more than one
         Person that is a party to such transaction or transactions receives the
         same  portion of the assets or earning  power so  transferred  and each
         such  portion  would,  were  it  not  for  the  other  equal  portions,
         constitute  the  greatest  portion of the  assets or  earning  power so
         transferred,  or if the Person  receiving  the greatest  portion of the
         assets or earning power




                                       22

<PAGE>



         cannot be determined, whichever of such Persons is the issuer of Common
         Shares   having  the   greatest   aggregate   market  value  of  shares
         outstanding;

provided,  however,  that in any such case  described  in the  foregoing  clause
(b)(i) or (b)(ii),  if the Common  Shares of such Person are not at such time or
have not been continuously  over the preceding  12-month period registered under
Section 12 of the Exchange  Act, then (1) if such Person is a direct or indirect
Subsidiary  of another  Person  the Common  Shares of which are and have been so
registered,  the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered,  the term "Principal
Party" shall refer to  whichever of such Persons is the issuer of Common  Shares
having the greatest aggregate market value of shares outstanding, or (3) if such
Person is owned,  directly or  indirectly,  by a joint venture  formed by two or
more Persons that are not owned,  directly or indirectly by the same Person, the
provisions  set forth in clauses  (1) and (2) above  shall  apply to each of the
owners  having an interest  in the  venture as if the Person  owned by the joint
venture  was a  Subsidiary  of  both  or all of such  joint  venturers,  and the
Principal  Party in each such case shall bear the  obligations set forth in this
Section in the same ratio as its  interest in such Person  bears to the total of
such interests.

                  (c) The  Company  shall not  consummate  any  Section 13 Event
unless the Principal Party shall have a sufficient  number of authorized  Common
Shares that 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 issuer  shall have  executed  and  delivered to the
Rights Agent a  supplemental  agreement  confirming  that such  Principal  Party
shall,  upon  consummation  of such Section 13 Event,  assume this  Agreement in
accordance  with  Sections  13(a) and  13(b)  hereof,  that all  rights of first
refusal or preemptive rights in respect of the issuance of Common Shares of such
Principal Party upon exercise of outstanding rights have been waived, that there
are no rights, warrants, instruments or securities outstanding or any agreements
or  arrangements  which, as a result of the  consummation  of such  transaction,
would eliminate or substantially  diminish the benefits  intended to be afforded
by the  Rights and that such  transaction  shall not result in a default by such
Principal  Party under this  Agreement,  and further  providing that, as soon as
practicable after the date of such Section 13 Event, such Principal Party will:

                         (i) prepare and file a registration statement under the
         Securities   Act  with  respect  to  the  Rights  and  the   securities
         purchasable upon exercise of the Rights on an appropriate form, use its
         best efforts to cause such  registration  statement to become effective
         as soon as  practicable  after such filing and use its best  efforts to
         cause  such   registration   statement  to  remain  effective  (with  a
         prospectus at all times meeting the requirements of the Securities Act)
         until the Expiration  Date, and similarly  comply with applicable state
         securities laws;

                         (ii) use its best  efforts  to list  (or  continue  the
         listing of) the Rights and the securities  purchasable upon exercise of
         the Rights on a national securities exchange or to meet the eligibility





                                       23

<PAGE>



         requirements  for quotation on Nasdaq and list (or continue the listing
         of) the Rights and the  securities  purchasable  upon  exercise  of the
         Rights on Nasdaq; and

                         (iii)  deliver  to  holders  of the  Rights  historical
         financial  statements  for such  Principal  Party  which  comply in all
         respects  with the  requirements  for  registration  on Form 10 (or any
         successor form) under the Exchange Act.

                  In the  event  that at any  time  after  the  occurrence  of a
Triggering  Event some or all of the Rights shall not have been exercised at the
time of a  transaction  described  in this Section 13, the Rights which have not
theretofore  been  exercised  shall  thereafter  be  exercisable  in the  manner
described in Section  13(a)  (without  taking into account any prior  adjustment
required by Section 11(a)) .

                  (d) In case the  "Principal  Party"  for  purposes  of Section
13(b)  hereof has a  provision  in any of its  authorized  securities  or in its
Articles  or  Certificate  of  Incorporation  or  by-laws  or  other  instrument
governing its corporate  affairs,  which  provision would have the effect of (i)
causing such Principal  Party to issue (other than to holders of Rights pursuant
to  Section  13  hereof),  in  connection  with,  or as a  consequence  of,  the
consummation  of a Section 13 Event,  Common Shares of such  Principal  Party at
less  than the then  Current  Per  Share  Market  Price  thereof  or  securities
exercisable for, or convertible  into,  Common Shares of such Principal Party at
less than such then Current Per Share Market  Price,  or (ii)  providing for any
special payment, tax or similar provision in connection with the issuance of the
Common Shares of such  Principal  Party pursuant to the provisions of Section 13
hereof,  then,  in such  event,  the Company  hereby  agrees with each holder of
Rights that it shall not  consummate any such  transaction  unless prior thereto
the Company and such  Principal  Party shall have  executed and delivered to the
Rights Agent a supplemental  agreement  providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized  securities shall be redeemed,  so that the applicable provision will
have no effect in connection  with or as a consequence  of, the  consummation of
the proposed transaction.

                  (e) The Company covenants and agrees that it shall not, at any
time  after the  Distribution  Date,  effect or permit to occur any  Section  13
Event,  if (i) at the time or immediately  after such Section 13 Event 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,   (ii)  prior  to,
simultaneously with or immediately after such Section 13 Event, the shareholders
of the Person who constitutes,  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 or Associates or (iii)
the form or nature of  organization  of the  Principal  Party would  preclude or
limit the exercisability of the Rights.

                  (f) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.






                                       24

<PAGE>



         Section 14.     Fractional Rights and Fractional Shares.

                  (a) The Company  shall not be required to issue  fractions  of
Rights or to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Rights  Certificates  with  regard to which  such  fractional  Rights  would
otherwise  be  issuable,  an amount in cash  equal to the same  fraction  of the
current  market value of a whole Right.  For 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,  as determined pursuant to
the second sentence of Section 1(j) hereof.

                  (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 Rights  Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current  market  value of a Common  Share.  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 1(j) 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 or her  right to  receive  any  fractional  Rights or any
fractional shares upon exercise of a Right.

         Section 15.  Rights of Action.  All rights of action in respect 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 Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares);  and any registered holder of any Rights  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 Rights  Certificate (or, prior to the
Distribution Date, of the Common Shares),  may, in his or her own behalf and for
his or her 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 or her right to exercise the Rights evidenced by such Rights  Certificate in
the manner provided in such Rights  Certificate  and in this Agreement.  Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically  acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this  Agreement and will be entitled to specific
performance of the obligations  under,  and injunctive  relief against actual or
threatened  violations  of,  the  obligations  of any  Person  subject  to  this
Agreement.

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

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




                                       25

<PAGE>




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

                  (c) subject to Sections 6(a) and 7(f) hereof,  the Company and
the  Rights  Agent  may deem and  treat  the  person  in whose  name the  Rights
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
Rights  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.

         Section 17.  Rights  Certificate  Holder Not Deemed a  Shareholder.  No
holder, as such, of any Rights  Certificate  shall be entitled to vote,  receive
dividends or be deemed for any purpose to be 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  Rights  Certificate  be  construed  to confer  upon the holder of any
Rights  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  Rights  Certificate  shall  have been  exercised  in  accordance  with the
provisions hereof.

         Section 18.     Concerning the Rights Agent.

                  (a) The Company  agrees to pay to the Rights Agent  reasonable
compensation  for all services  rendered by it hereunder and, from time to time,
on demand of the Rights  Agent,  its  reasonable  expenses  and counsel fees and
other  disbursements  incurred  in the  administration  and  execution  of  this
Agreement and the exercise and performance of its duties hereunder.  The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless  against,
any loss, liability or expense, incurred without gross negligence,  bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement,  including  the costs and expenses of defending  against any claim of
liability  in the  premises.  In no event  will the  Rights  Agent be liable for
special,  indirect,  incidental  or  consequential  loss or  damage  of any kind
whatsoever, even if the Rights Agent has been advised of the possibility of such
loss or damage.

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




                                       26

<PAGE>



document reasonably 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.

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

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

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

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

                  (b)  Whenever  in the  performance  of its  duties  under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including,  without limitation, the identity of any Acquiring Person and
the determination of Current Per Share Market Price) be proved or established by
the Company prior to taking or suffering of 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





                                       27

<PAGE>



certificate signed by any one of the Chief Executive Officer, the President, the
Chief Financial Officer, 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 gross  negligence,  bad faith or willful
misconduct.

                  (d) The Rights  Agent  shall not be liable for or by reason of
any of the statements of fact or recitals  contained in this Agreement or in the
Rights  Certificates  (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  execution  hereof by the  Rights  Agent) or in  respect of the
validity or execution  of any Rights  Certificate  (except its  countersignature
thereof);  nor shall it be  responsible  for any  breach by the  Company  of any
covenant or condition  contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the  exercisability  of the Rights
or any adjustment in the terms of the Rights  (including  the manner,  method or
amount  thereof)  provided  for  in  Sections  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 Rights
Certificates  after  receipt  by the  Rights  Agent of a  certificate  furnished
pursuant to Section 12 describing  such change or  adjustment);  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 to be issued pursuant to this
Agreement  or any Rights  Certificate  or as to whether any Common  Shares 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 Chief Executive Officer, the President,  the Chief Financial Officer,
the  Secretary or any Assistant  Secretary 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.  Any  application  by the  Rights  Agent  for  written
instructions  from the Company may, at the option of the Rights Agent, set forth
in writing any action  proposed to be taken or omitted by the Rights Agent under
this Rights  Agreement  and the date on and/or  after which such action shall be
taken or such omission shall be effective.  The Rights Agent shall not be liable
for any  action  taken or  omitted  by the  Rights  Agent in  accordance  with a
proposal included in any such application on or after the date specified in such





                                       28

<PAGE>



application  (which date shall not be less than five (5) Business Days after the
date any officer of the Company actually receives such  application,  unless any
such officer shall have  consented in writing to an earlier date) unless,  prior
to taking any such action (or the  effective  date in the case of an  omission),
the Rights Agent shall have received  written  instructions  in response to such
application specifying the action to be taken or omitted.

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

                  (i) The  Rights  Agent may  execute  and  exercise  any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through  its  attorneys  or agents,  and the Rights  Agent 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.

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

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

         Section 21. Change of Rights  Agent.  The Rights Agent or any successor
Rights Agent may resign and be discharged  from its duties under this  Agreement
upon  thirty  (30) days'  notice in writing  mailed to the  Company  and to each
transfer agent of the Common Shares by registered or certified  mail, and to the
holders of the Rights  Certificates by first-class  mail. The Company may remove
the Rights Agent or any successor  Rights Agent upon thirty (30) days' notice in
writing,  mailed to the Rights Agent or successor  Rights Agent, as the case may
be, and to each  transfer  agent of the Common Shares by registered or certified
mail, and to the holders of the Rights  Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise  become  incapable of
acting,  the Company  shall  appoint a  successor  to the Rights  Agent.  If the
Company shall fail to make such appointment  within a period of thirty (30) days
after giving  notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights  Certificate (who shall, with such notice,  submit his





                                       29

<PAGE>



or her Rights  Certificate  for inspection by the Company),  then the registered
holder  of  any  Rights   Certificate  may  apply  to  any  court  of  competent
jurisdiction  for the  appointment of a new Rights Agent.  Any successor  Rights
Agent,  whether  appointed  by the  Company  or by  such  a  court,  shall  be a
corporation  organized and doing business under the laws of the United States or
of any state of the United States,  in good standing,  which is authorized under
such laws to exercise  corporate  trust or  shareholder  services  powers and is
subject to supervision or examination by federal or state authority and which at
the time of its appointment as Rights Agent has sufficient  combined capital and
surplus as may be required by law. 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 mail a notice  thereof  in  writing  to the  registered
holders of the Rights  Certificates.  Failure to give any notice provided for in
this Section 21, however,  or any defect therein,  shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.

         Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this  Agreement or of the Rights to the contrary,  the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the  Exercise  Price  and the  number  or kind or  class of  shares  or other
securities  or  property  purchasable  under  the  Rights  Certificates  made in
accordance  with the provisions of this  Agreement.  In addition,  in connection
with the issuance or sale of Common Shares following the  Distribution  Date and
prior to the redemption or expiration of the Rights, the Company (a) shall, with
respect to Common  Shares so issued or sold  pursuant  to the  exercise of stock
options  or  under  any  employee  plan or  arrangement  or upon  the  exercise,
conversion  or exchange of other  securities of the Company  outstanding  at the
date  hereof  or  upon  the  exercise,  conversion  or  exchange  of  securities
hereinafter  issued by the Company  and (b) may,  in any other  case,  if deemed
necessary or appropriate by the Board of Directors of the Company,  issue Rights
Certificates  representing  the appropriate  number of Rights in connection with
such issuance or sale;  provided,  however,  that (i) no such Rights Certificate
shall be issued  and this  sentence  shall be null and void ab initio if, and to
the extent that, such issuance or this sentence would create a significant  risk
of or result in material  adverse tax  consequences to the Company or the Person
to whom such Rights  Certificate  would be issued or would create a  significant
risk of or result in such options' or employee plans' or  arrangements'  failing
to qualify for otherwise available special tax treatment and (ii) no such Rights
Certificate shall be issued if, and to the extent that,  appropriate  adjustment
shall otherwise have been made in lieu of the issuance thereof.

         Section 23.     Redemption.

                  (a) The Company  may,  at its option and with the  approval of
the  Board of  Directors,  at any time  prior to the  Close of  Business  on the
earlier of  (i) the tenth  day following  the Shares  Acquisition  Date (or such




                                       30

<PAGE>



later date as may be determined  by action of a majority of the Company's  Board
of  Directors  and  publicly  announced  by the  Company)  and  (ii)  the  Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of $0.01 per Right,  appropriately adjusted to reflect any
stock split,  stock  dividend or similar  transaction  occurring  after the date
hereof  (such  redemption  price being  herein  referred  to as the  "Redemption
Price") and the Company may, at its option,  pay the Redemption  Price either in
Common  Shares  (based on the Current Per Share Market Price thereof at the time
of redemption) or cash. Such redemption of the Rights by the Company 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.  The date on which the Board of
Directors  elects to make the redemption  effective  shall be referred to as the
"Redemption Date."

                  (b)  Notwithstanding  the provisions of Section 23(a),  in the
event that a majority  of the Board of  Directors  of the  Company is elected by
shareholder action by written consent or at a special meeting of shareholders (a
meeting other than a regularly scheduled annual meeting), then until the earlier
to occur of (i) the 180th day  following the  effectiveness  of such election or
(ii) the next regular annual meeting of  shareholders  of the Company  following
the  effectiveness  of such election  (including any postponement or adjournment
thereof),  the Rights  shall not be redeemed if such  redemption  is  reasonably
likely to have the  purpose  or effect of  facilitating  a  Transaction  with an
Interested Person.

                  (c)  Immediately  upon the action of the Board of Directors of
the Company ordering the redemption of the Rights,  evidence of which shall have
been filed with the Rights Agent, and without any further action and without any
notice,  the right to  exercise  the Rights  will  terminate  and the only right
thereafter  of the holders of Rights shall be to receive the  Redemption  Price.
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 ten (10) days after the action of
the Board of Directors  ordering the redemption of the Rights, the Company shall
give notice of such  redemption  to the Rights Agent and the holders of the then
outstanding  Rights by  mailing  such  notice to all such  holders 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.

         Section 24.     Exchange.

                  (a) Subject to applicable  laws,  rules and  regulations,  and
subject to Section 24(c) below, the Company may, at its option, by action of the
Board of  Directors,  at any time after the  occurrence  of a Triggering  Event,
exchange all or part of the then outstanding and exercisable Rights (which shall





                                       31

<PAGE>



not include  Rights that have become void pursuant to the  provisions of Section
7(e)  hereof)  for Common  Shares 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,  or any entity
holding  Common Shares for or pursuant to the terms of any such plan),  together
with all Affiliates and Associates of such Person,  becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.

                  (b)  Immediately  upon the  action of the  Board of  Directors
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 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  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 7(e) hereof) held by each holder of Rights.

                  (c) In the event that  there  shall not be  sufficient  Common
Shares  issued but not  outstanding  or  authorized  but  unissued to permit any
exchange of Rights as contemplated in accordance with Section 24(a), the Company
shall either take such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights or alternatively,  at the option
of a majority of the Board of Directors, with respect to each Right (i) pay cash
in an amount equal to the Current  Value (as  hereinafter  defined),  in lieu of
issuing  Common  Shares  in  exchange  therefor,  or (ii)  issue  debt or equity
securities or a combination thereof,  having a value equal to the Current Value,
in lieu of issuing  Common  Shares in exchange  for each such  Right,  where the
value  of  such  securities  shall  be  determined  by a  nationally  recognized
investment banking firm selected by majority vote of the Board of Directors,  or
(iii)  deliver any  combination  of cash,  property,  Common Shares and/or other
securities having a value equal to the Current Value in exchange for each Right.
For  purposes  of this  Section  24(c) only,  the  Current  Value shall mean the
product of the Current Per Share  Market  Price of Common  Shares on the date of
the occurrence of the event described above in Section 24(a),  multiplied by the
number of Common Shares for which the Right  otherwise  would be exchangeable if
there  were  sufficient  shares  available.  To  the  extent  that  the  Company
determines that some action need be taken pursuant to clauses (i), (ii) or (iii)
of this  Section  24(c),  the Board of  Directors  may  temporarily  suspend the
exercisability of the Rights for a period of up to sixty (60) days following the
date on which the event described in Section 24(a) shall have occurred, in order





                                       32

<PAGE>



to seek any  authorization  of  additional  Common  Shares  and/or to decide the
appropriate  form of distribution to be made pursuant to the above provision 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.

                  (d) 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,  there shall be paid to the
registered  holders  of the  Rights  Certificates  with  regard  to  which  such
fractional Common Shares would otherwise be issuable, an amount in cash equal to
the same  fraction  of the  current  market  value of a whole  Common  Share (as
determined pursuant to the second sentence of Section 1(j) hereof).

                  (e) The Company  may, at its option,  by majority  vote of the
Board of  Directors,  at any time  before any  Person  has  become an  Acquiring
Person,  exchange  all or part of the then  outstanding  Rights  for  Rights  of
substantially  equivalent  value, as determined  reasonably and in good faith by
the  Board  of  Directors,  based  upon  the  advice  of one or more  nationally
recognized investment banking firms.

                  (f)  Immediately  upon the  action of the  Board of  Directors
ordering  the exchange of any Rights  pursuant to Section  24(e) 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 Rights in exchange therefor as has been determined by the
Board of Directors in  accordance  with Section  24(e) above.  The Company shall
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  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 transfer  agent for the Common  Shares of the  Company.  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 Rights will be effected.

         Section 25.     Notice of Certain Events.

                  (a) In case the Company  shall  propose to effect or permit to
occur any  Triggering  Event or Section 13 Event,  the Company shall give notice
thereof to each holder of Rights in  accordance  with Section 26 hereof at least
twenty  (20)  days  prior to the  occurrence  of such  Triggering  Event or such
Section 13 Event.

                  (b) In case any  Triggering  Event or Section  13 Event  shall
occur,  then,  in any  such  case,  the  Company  shall  as soon as  practicable
thereafter  give to each  holder of a Rights  Certificate,  in  accordance  with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the  consequences of the event to holders of Rights under Sections
11(a)(i) and 13 hereof.





                                       33

<PAGE>



         Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights  Certificate
to or on the Company shall be sufficiently  given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                  GREKA Energy Corporation
                  630 Fifth Avenue, Suite 1501
                  New York, NY 10111
                  Attn:  Mr. Randeep S. Grewal,
                         Chairman and Chief Executive Officer

                  with a copy to:
                  Ballard Spahr Andrews & Ingersoll, LLP
                  1225 17th Street, Suite 2300
                  Denver, Colorado   80202-5596
                  Attn:  Roger V. Davidson

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
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail,  postage prepaid,  addressed (until another address
is filed in writing with the Company) as follows:

                  American Securities Transfer & Trust, Inc.

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

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

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

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

         Section 27.     Supplements and Amendments.

                  (a)  Prior  to the  occurrence  of a  Distribution  Date,  the
Company  may  supplement  or amend this  Agreement  in any  respect  without the
approval of any holders of Rights and the Rights Agent shall,  if the Company so
directs, execute such supplement or amendment.  From and after the occurrence of
a  Distribution  Date,  the Company  and the Rights  Agent may from time to time
supplement or amend this Agreement without the approval of any holders of Rights
in order to (i) cure any  ambiguity,  (ii) correct or  supplement  any provision
contained  herein  which  may  be  defective  or  inconsistent  with  any  other
provisions herein, (iii) shorten or lengthen any time period hereunder,  or (iv)
to change or supplement the provisions  hereunder in any manner that the Company
may deem  necessary  or  desirable  and that  shall  not  adversely  affect  the
interests  of the  holders  of  Rights  (other  than an  Acquiring  Person or an
Affiliate or Associate of an Acquiring Person); provided, this Agreement may not
be  supplemented  or  amended  to  lengthen,  pursuant  to clause  (iii) of this





                                       34

<PAGE>



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  (other  than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).  Upon the
delivery of a certificate from an appropriate officer of the Company that states
that the proposed  supplement  or amendment is in  compliance  with the terms of
this Section 27, the Rights Agent shall  execute such  supplement  or amendment.
Prior to the Distribution  Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares.

                  (b)  Notwithstanding  the provisions of Section 27(a),  in the
event that a majority  of the Board of  Directors  of the  Company is elected by
shareholder action by written consent or at a special meeting of shareholders (a
meeting other than a regularly scheduled annual meeting), then until the earlier
to occur of (i) the 180th day  following the  effectiveness  of such election or
(ii) the next regular annual meeting of  shareholders  of the Company  following
the  effectiveness  of such election  (including any postponement or adjournment
thereof),  this Rights  Agreement  shall not be  supplemented  or amended in any
manner  reasonably  likely  to have the  purpose  or effect  of  facilitating  a
Transaction with an Interested Person.

         Section  28.  Successors.  All the  covenants  and  provisions  of this
Agreement  by or for the benefit of the  Company or the Rights  Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

         Section 29. Determinations and Actions by the Board of Directors,  Etc.
For all  purposes of this  Agreement,  any  calculation  of the number of Common
Shares 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,  or the  Company,  or as may be necessary or
advisable  in  the   administration  of  this  Agreement,   including,   without
limitation,  the  right  and  power  to (i)  interpret  the  provisions  of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration  of this Agreement  (including a  determination  to redeem or not
redeem the Rights or to amend the  Agreement).  All such actions,  calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith,  shall (x) be final,  conclusive and binding on the Company,  the
Rights Agent,  the holders of the Rights  Certificates and all other parties and
(y) not subject the Board to any liability to the holders of the Rights.

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




                                       35

<PAGE>




         Section  31.  Severability.   If  any  term,  provision,   covenant  or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,  impaired or invalidated;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court  or  authority  to be  invalid,  void or  unenforceable  and the  Board of
Directors of the Company determines in its good faith judgment that severing the
invalid  Language  from this  Agreement  would  adversely  affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be  reinstated  and shall not expire  until the Close of  Business  on the
tenth day following the date of such determination by the Board of Directors.

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

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

         Section 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.





                                       36

<PAGE>



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

COMPANY:

GREKA ENERGY CORPORATION,
a Colorado corporation


By:   /s/ Randeep S. Grewal
      --------------------------------
      Randeep S. Grewal, Chairman and
         Chief Executive Officer

RIGHTS AGENT:

AMERICAN SECURITIES TRANSFER
   & TRUST, INC.

By:_______________________________
Name:_____________________________
Title:____________________________



                                       37

<PAGE>



                                    EXHIBIT A

                           FORM OF RIGHTS CERTIFICATE

Certificate No. R-_______                                       ________  Rights


          NOT  EXERCISABLE  AFTER THE EARLIER OF (i) NOVEMBER 3, 2004,  (ii) THE
          DATE TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES
          THE RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
          REDEMPTION,  AT THE OPTION OF THE  COMPANY,  AT $0.01 PER RIGHT ON THE
          TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES,
          RIGHTS  BENEFICIALLY  OWNED BY AN ACQUIRING  PERSON OR AN AFFILIATE OR
          ASSOCIATE  OF AN  ACQUIRING  PERSON (AS SUCH TERMS ARE  DEFINED IN THE
          RIGHTS  AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
          NULL AND VOID. [THE RIGHTS  REPRESENTED BY THIS RIGHTS CERTIFICATE ARE
          OR WERE BENEFICIALLY  OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
          PERSON OR AN AFFILIATE  OR  ASSOCIATE OF AN ACQUIRING  PERSON (AS SUCH
          TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).  ACCORDINGLY,  THIS RIGHTS
          CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
          IN  THE  CIRCUMSTANCES  SPECIFIED  IN  SECTION  7(e)  OF  SUCH  RIGHTS
          AGREEMENT.]*

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


                               RIGHTS CERTIFICATE

                            GREKA ENERGY CORPORATION

         This  certifies  that  ________________________________  or  registered
assigns,  is the registered owner of the number of Rights set forth above,  each
of which  entitles  the owner  thereof,  subject  to the terms,  provisions  and
conditions  of the Rights  Agreement  dated as of November 3, 1999 (the  "Rights
Agreement"),  between  GREKA Energy  Corporation,  a Colorado  corporation  (the
"Company"), and American Securities Transfer & Trust, Inc. (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., New York time,
on  November  3, 2004 at the  office of the  Rights  Agent  designated  for such
purpose,  or at the  office of its  successor  as Rights  Agent,  one fully paid
non-assessable  share of Common Stock, no par value, (a "Common Share"),  of the
Company, at an Exercise Price of sixty dollars ($60.00) per Common Share (the





                                       A-1

<PAGE>



"Exercise  Price"),  upon presentation and surrender of this Rights  Certificate
with the Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights  Certificate (and the number of Common
Shares  which may be  purchased  upon  exercise  hereof) set forth above are the
number and Exercise Price as of November 3, 1999,  based on the Common Shares as
constituted  at such date.  As provided in the Rights  Agreement,  the  Exercise
Price and the number and kind of Common Shares or other  securities which may be
purchased upon the exercise of the Rights  evidenced by this Rights  Certificate
are subject to modification and adjustment upon the happening of certain events.

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

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company, at its option, at
a redemption price of $0.01 per Right or (ii) may be exchanged by the Company in
whole or in part for Common  Shares,  substantially  equivalent  Rights or other
consideration as determined by the Company.

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

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

         No holder of this  Rights  Certificate,  as such,  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  Rights
Certificate shall have been exercised as provided in the Rights Agreement.




                                       A-2

<PAGE>



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

         WITNESS the facsimile  signature of the proper  officers of the Company
and its corporate seal. Dated as of November 3, 1999.


ATTEST:                                    GREKA ENERGY CORPORATION,
                                           a Colorado corporation

__________________________                 By: __________________________
_____________, Secretary                           Randeep S. Grewal, Chairman
                                                    and Chief Executive Officer



Countersigned:

AMERICAN SECURITIES TRANSFER & TRUST, INC.,
as Rights Agent


By: ________________________
____________________________
Its: _______________________






                                       A-3

<PAGE>



                   Form of Reverse Side of Rights Certificate

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

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

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



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



Dated: ___________________, _________

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

Signature Guaranteed:

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






                                       A-4

<PAGE>



             Form of Reverse Side of Rights Certificate -- Continued

                                   CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
         (1) this Rights Certificate [ ] is [ ] is not being sold,  assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person, or an
Affiliate  or  Associate  of any such  Person (as such terms are  defined in the
Rights Agreement);

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


Dated: _______________, _________

Signature ______________________________

Signature Guaranteed:

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









                                       A-5

<PAGE>



             Form of Reverse Side of Rights Certificate -- Continued

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

To: ________________________________

         The    undersigned    hereby    irrevocably    elects    to    exercise
______________________ Rights represented by this Rights Certificate to purchase
the  number of Common  Shares  issuable  upon the  exercise  of such  Rights and
requests  that  certificates  for such number of 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
Rights  Certificate,  a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:

Please insert social security or other identifying number

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

(Please print name and address)

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

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

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

Dated: ________________, ________

                                    Signature __________________________________

Signature Guaranteed:

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




                                       A-6

<PAGE>



             Form of Reverse Side of Rights Certificate -- Continued

                                   CERTIFICATE
                                   -----------


         The  undersigned  hereby  certifies by checking the  appropriate  boxes
that:

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

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


Dated: _________________, __________


                           Signature ___________________________________________


Signature Guaranteed:

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


                                     NOTICE

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





                                       A-7

<PAGE>



                                    EXHIBIT B

                             SHAREHOLDER RIGHTS PLAN

                            GREKA ENERGY CORPORATION

                                Summary of Rights


Distribution and           The Board of Directors has declared
Transfer of Rights;        a dividend of one Right for each share
Rights Certificate:        of GREKA Energy Corporation Common Stock
                           outstanding. Prior to the Distribution Date referred
                           to below, the Rights will be evidenced by and trade
                           with the certificates for the Common Stock.  After
                           the Distribution Date, GREKA Energy Corporation
                           (the "Company") will mail Rights certificates to the
                           Company's stockholders and the Rights will
                           become transferable apart from the Common Stock.

Distribution Date:         Rights will separate from the Common Stock and
                           become exercisable following (a) the tenth day after
                           a person or group acquires beneficial ownership of
                           33% or more of the Company's Common Stock or
                           (b) the tenth business day (or such later date as may
                           be determined by a majority of the Board of
                           Directors) after a person or group announces a
                           tender or exchange offer, the consummation of
                           which would result in ownership by a person or
                           group of 33% or more of the Company's Common
                           Stock.

Common Stock               After the Distribution Date, each Right
Purchasable Upon           will entitle the holder to purchase one share
Exercise of Rights:        of the Company's Common Stock for an initial
                           Exercise  Price of  $60.00,
subject to adjustment.

Flip-In:                   If an acquirer (an "Acquiring Person") obtains 40%
                           or more of the Company's Common Stock, then
                           each Right (other than Rights owned by an
                           Acquiring Person or its affiliates) will entitle the
                           holder thereof to purchase one share of the
                           Company's Common Stock at an adjusted Exercise
                           Price of 50% of the then current market value of the
                           Common Stock.




                                       B-1

<PAGE>



Flip-Over:                  If, after an Acquiring Person obtains 40% or more
                            of the Company's Common Stock, (a) the Company
                            merges into another entity, (b) an acquiring entity
                            merges into the Company or (c) the Company sells
                            more than 50% of the Company's assets or earning
                            power, then each Right (other than Rights owned by
                            an Acquiring Person or its affiliates) will entitle
                            the holder thereof to purchase, for the Exercise
                            Price, a number of shares of Common Stock of the
                            Person engaging in the transaction having a then
                            current market value of twice the Exercise Price.

Exchange Provision:         At any time after the date an Acquiring
                            Person obtains 33% or more of the
                            Company's Common Stock and prior to the
                            acquisition by the Acquiring Person of 50%
                            of the outstanding Common Stock, a
                            majority of the Board of Directors of the
                            Company may exchange the Rights (other
                            than Rights owned by the Acquiring Person
                            or its affiliates), in whole or in part, for
                            shares of Common Stock of the Company at
                            an exchange ratio of one share of Common
                            Stock per Right (subject to adjustment).





                                       B-2

<PAGE>


Redemption of                Rights will be redeemable at the Company's
the Rights:                  option for $0.01 per Right at any time on or prior
                             to the   tenth  day  (or  such later   date   as
                             may  be determined by a majority of the  Board  of
                             Directors) after  public  announcement that a
                             Person has  acquired beneficial ownership of 40%
                             or  more  of the  Company's Common Stock.

Expiration of                The Rights expire on the earliest of
the Rights:                  (a) November 3, 2004, or (b) exchange or
                             redemption of the Rights as described above.

Amendment of                 The terms of the Rights and the Rights
Terms of Rights:             Agreement may be amended in any respect without
                             the  consent  of the Rights holders  on or prior to
                             the Distribution Date; thereafter,  the  terms  of
                             the  Rights and the Rights Agreement may be amended
                             without the consent of the Rights  holders in order
                             to cure any  ambiguities or to make  changes  which
                             do not adversely affect the interests of Rights
                             holders (other  than the  Acquiring Person).

Voting Rights:               Rights will not have any voting rights.

Anti-Dilution                Rights will have the benefit of
Provisions:                  certain customary anti-dilution provisions.

Taxes:                       The Rights distribution should not be taxable for
                             federal income tax purposes.  However, following
                             an event which renders the Rights exercisable or
                             upon redemption of the Rights, shareholders may
                             recognize taxable income.

         The  foregoing  is  a  summary  of  certain   principal  terms  of  the
Shareholder  Rights Plan only and is  qualified  in its entirety by reference to
the detailed terms of the Rights Agreement dated as of November 3, 1999, between
the Company and the Rights Agent.





                                       B-3