Document:

Exhibit 4.1

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                          STOCKHOLDER RIGHTS AGREEMENT

                                   dated as of

                                December 2, 2003

                                     between

                                 TVI CORPORATION

                                       and

                        SECURITIES TRANSFER CORPORATION,

                                 as Rights Agent

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                          STOCKHOLDER RIGHTS AGREEMENT

                               Table of Contents

                                                                            Page
                                                                            ----
Section 1.   Certain Definitions............................................. 1

Section 2.   Appointment of Rights Agent..................................... 4

Section 3.   Issuance of Right Certificates.................................. 4

Section 4.   Form of Right Certificate....................................... 6

Section 5.   Countersignature and Registration............................... 6

Section 6.   Transfer, Split-Up, Combination and Exchange of Right
             Certificates; Mutilated, Destroyed, Lost or Stolen Right
             Certificate..................................................... 7

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

Section 8.   Cancellation and Destruction of Right Certificates.............. 9

Section 9.   Reservation and Availability of Preferred Shares................ 9

Section 10.  Preferred Shares Record Date....................................10

Section 11.  Adjustment of Purchase Price, Number and Kind of Shares or
             Number of Rights................................................10

Section 12.  Certificate of Adjusted Purchase Price or Number of Shares......16

Section 13.  Consolidation, Merger or Sale or Transfer of Assets or Earning
             Power...........................................................16

Section 14.  Fractional Rights and Fractional Shares.........................
18

Section 15.  Rights of Action................................................19

Section 16.  Agreement of Right Holders......................................20

Section 17.  Right Certificate Holder Not Deemed a Stockholder...............20

Section 18.  Concerning the Rights Agent.....................................20

Section 19.  Merger or Consolidation or Change of Name of Rights Agent.......21

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Section 20.  Duties of Rights Agent..........................................21

Section 21.  Change of Rights Agent..........................................23

Section 22.  Issuance of New Right Certificates..............................24

Section 23.  Redemption and Termination......................................24

Section 24.  Exchange........................................................26

Section 25.  Notice of Certain Events........................................27

Section 26.  Notices.........................................................27

Section 27.  Supplements and Amendments......................................28

Section 28.  Determination and Actions by the Board of Directors, etc........28

Section 29.  Successors......................................................29

Section 30.  Benefits of this Agreement......................................29

Section 31.  Severability....................................................29

Section 32.  Governing Law...................................................29

Section 33.  Counterparts....................................................29

Section 34.  Descriptive Headings............................................29

                      EXHIBITS

Exhibit A    Form of Articles Supplementary of Preferred Stock

Exhibit B    Form of Rights Certificate

Exhibit C    Form of Summary of Rights

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                          STOCKHOLDER RIGHTS AGREEMENT

     STOCKHOLDER   RIGHTS   AGREEMENT,   dated  as  of  December  2,  2003  (the
"Agreement"),   between   TVI   CORPORATION,   a   Maryland   corporation   (the
"Corporation"), and Securities Transfer Corporation (the "Rights Agent").

     The Board of Directors of the  Corporation  has  authorized  and declared a
dividend of one preferred stock purchase right (a "Right") for each Common Share
(as defined herein) of the Corporation  outstanding at the Close of Business (as
defined herein) on December 3, 2003 (the "Record Date"), each Right representing
the right to  purchase  one  one-hundredth  of a  Preferred  Share  (as  defined
herein),  upon the terms and subject to the conditions herein set forth, and has
further  authorized  and directed the issuance of one Right with respect to each
Common  Share that shall  become  outstanding  between  the Record  Date and the
earliest of the  Distribution  Date, the Redemption Date or the Final Expiration
Date (as such terms are defined herein);  provided,  however, that Rights may be
issued with  respect to Common  Shares that shall become  outstanding  after the
Distribution  Date and before the earlier of the  Redemption  Date and the Final
Expiration  Date  in  accordance  with  the  provisions  of  Section  22 of this
Agreement.

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

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

     (a)  "Acquiring  Person"  shall mean any Person (as defined  herein) who or
which,  together with all Affiliates and Associates (as defined  herein) of such
Person,  shall be the Beneficial Owner (as defined herein) of 15% or more of the
then outstanding  Common Shares (other than as a result of a Permitted Offer (as
defined  herein))  or was such a  Beneficial  Owner at any time  after  the date
hereof,  whether or not such person  continues to be the Beneficial Owner of 15%
or more of the then outstanding  Common Shares.  Notwithstanding  the foregoing,
(A) the term "Acquiring Person" shall not include (i) the Corporation,  (ii) any
Subsidiary  of  the  Corporation,   (iii)  any  employee  benefit  plan  of  the
Corporation or of any Subsidiary of the Corporation,  (iv) any Person organized,
appointed or established by the  Corporation for or pursuant to the terms of any
such plan,  or (v) any Person,  who or which  together with all  Affiliates  and
Associates of such Person,  becomes the  Beneficial  Owner of 15% or more of the
then  outstanding  Common Shares as a result of the acquisition of Common Shares
directly  from the  Corporation,  and (B) no  Person  shall be  deemed  to be an
"Acquiring Person" either (X) as a result of the acquisition of Common Shares by
the  Corporation  which,  by reducing the number of Common  Shares  outstanding,
increases the proportional  number of shares  beneficially owned by such Person,
together with all Affiliates and Associates of such Person; except that if (i) a
Person would become an Acquiring Person (but for the operation of this subclause
(X) as a result of the acquisition of Common Shares by the Corporation, and (ii)
after such share acquisition by the Corporation, such Person, or an Affiliate or
Associate of such Person,  becomes the Beneficial Owner of any additional Common
Shares,  then such Person  shall be deemed an  Acquiring  Person,  or (Y) if the
Board of Directors of the Corporation determines in good faith that a Person who
would otherwise be an "Acquiring  Person," as defined  pursuant to the foregoing
provisions of this Section  1(a),  has become such,  and such Person  divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an Acquiring  Person,  as defined  pursuant to the  foregoing
provisions of this Section 1(a).

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     (b) "Act"  shall mean the  Securities  Act of 1933,  as  amended  and as in
effect on the date of this Agreement.

     (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
Securities  Exchange  Act of 1934,  as amended and in effect on the date of this
Agreement (the "Exchange Act").

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

          (i) of  which  such  Person  or any of  such  Person's  Affiliates  or
Associates directly or indirectly,  has "beneficial  ownership" as determined in
accordance  with  Rule  13d-3 of the  General  Rules and  Regulations  under the
Exchange Act;

          (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 after the passage of time) pursuant to any agreement, arrangement
or understanding,  or upon the exercise of conversion  rights,  exchange rights,
rights (other than the Rights),  warrants or options,  or  otherwise;  provided,
however,  that a Person  shall  not be  deemed  the  Beneficial  Owner of, or to
beneficially  own,  securities  tendered  pursuant to a tender or exchange offer
made by or on  behalf  of such  Person  or any of such  Person's  Affiliates  or
Associates until such tendered securities are accepted for purchase or exchange;
or (B) the right to vote or dispose of pursuant to any agreement, arrangement or
understanding;  provided,  however,  that  a  Person  shall  not be  deemed  the
Beneficial  Owner of, or to  beneficially  own, any  security if the  agreement,
arrangement  or  understanding  to vote such  security (1) arises  solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent  solicitation  made pursuant to, and in accordance  with, the applicable
rules and  regulations  promulgated  under the  Exchange Act and (2) is not also
then  reportable  on Schedule 13D or Schedule 13G 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 (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of securities)
relating to the acquisition,  holding, voting (except to the extent contemplated
by the proviso to Section  1(d)(ii)(B))  or disposing of any  securities  of the
Corporation.

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

     (e)  "Business  Day" shall mean any day other than a Saturday,  Sunday or a
day on which  banking  institutions  in the State of Maryland 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.,  prevailing
Eastern  time,  on such  date;  provided,  however,  that if such  date is not a
Business  Day it shall  mean 5:00 P.M.,  prevailing  Eastern  time,  on the next
succeeding Business Day.

                          STOCKHOLDER RIGHTS AGREEMENT

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     (g) "Common Shares" when used with reference to the Corporation  shall mean
the shares of Common Stock,  $.01 par value per share, of the Corporation or, in
the event of a subdivision,  combination or  consolidation  with respect to such
shares  of  Common  Stock,  the  shares  of  Common  Stock  resulting  from such
subdivision,  combination  or  consolidation.  "Common  Shares"  when  used with
reference to any Person other than the Corporation  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)  "Continuing  Director"  shall  mean  (i) any  member  of the  Board of
Directors  of the  Corporation  while  such  Person  is a  member  the  Board of
Directors,  who is not an  Acquiring  Person or an  Affiliate or Associate of an
Acquiring  Person,  or a  representative  of an Acquiring  Person or of any such
Affiliate or  Associate  and was a member of the Board prior to the date of this
Agreement or (ii) any Person who  subsequently  becomes a member of the Board of
Directors, while such Person is a member of the Board of Directors who is not an
Acquiring  Person or an Affiliate or  Associate  of an  Acquiring  Person,  or a
representative  of an Acquiring  Person or of any such Affiliate or Associate if
such Person's  nomination  for election or election to the Board of Directors is
recommended or approved by a majority of the Continuing Directors.

     (i)  "Distribution  Date" shall have the meaning set forth in Section  3(a)
hereof.

     (j) "Final  Expiration  Date"  shall have the  meaning set forth in Section
7(a) hereof.

     (k)  "Interested  Stockholder"  shall  mean any  Acquiring  Person,  or any
Affiliate or Associate of an Acquiring  Person, or any other Person in which any
such  Acquiring  Person,  Affiliate or Associate  has an interest,  or any other
Person  acting  directly or  indirectly on behalf of or in concert with any such
Acquiring Person, Affiliate or Associate.

     (l)  "Permitted  Offer" shall mean a tender or exchange  offer which is for
all  outstanding  Common Shares at a price and on terms  determined,  before the
purchase of shares under such tender or exchange  offer,  by at least a majority
of the members of the Board of Directors who are not officers of the Corporation
and who  are not  Acquiring  Persons  or  Affiliates,  Associates,  nominees  or
representatives  of an Acquiring Person, to be adequate (taking into account all
factors  that such members of the Board of Directors  deem  relevant  including,
without limitation,  prices that could reasonably be achieved if the Corporation
or its assets were sold on an orderly basis  designed to realize  maximum value)
and  otherwise in the best  interests of the  Corporation  and its  stockholders
(other than the Person or any Affiliate or Associate  thereof on whose basis the
offer is being made)  taking into account all factors  that such  directors  may
deem relevant.

     (m) "Person" shall mean any  individual,  firm,  partnership,  corporation,
trust,  association,  joint  venture  or other  entity,  and shall  include  any
successor (by merger or otherwise) of such entity.

     (n) "Preferred Shares" shall mean shares of Series A Preferred Stock, $0.01
par value per share, of the Corporation having the relative rights,  preferences
and limitations set forth in the Form of Articles Supplementary attached to this
Agreement as Exhibit A.

     (o) "Redemption Date" shall have the meaning set forth in Section 7 hereof.

     (p) "Section  11(a)(ii)  Event"  shall mean any event  described in Section
11(a)(ii) hereof.

                          STOCKHOLDER RIGHTS AGREEMENT

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     (q) "Section 13 Event" shall mean any event described in clause (x), (y) or
(z) of Section 13(a) hereof.

     (r)  "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 the Exchange Act) by the  Corporation 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 1(a)  hereof,  then no Shares  Acquisition  Date shall be deemed to have
occurred.

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

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

     (u) "Transaction  Person" with respect to a Transaction  shall mean (x) any
Person who (i) is or will become an Acquiring  Person if the Transaction were to
be consummated, and (ii) directly or indirectly proposed or nominated a director
of the Corporation  which director is in office at the time of  consideration of
the Transaction, or (y) an Affiliate or Associate of such a Person.

     (v)  "Triggering  Event"  shall  mean any  Section  11(a)(ii)  Event or any
Section 13 Event.

     Section 2. Appointment of Rights Agent. The Corporation hereby appoints the
Rights Agent to act as agent for the  Corporation  and the holders of the Rights
(who, in accordance with Section 3 hereof,  shall before the  Distribution  Date
also be the  holders  of  Common  Shares)  in  accordance  with  the  terms  and
conditions  hereof,  and the Rights Agent hereby accepts such  appointment.  The
Corporation  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 Right Certificates.

     (a) Until the  earlier  of (i) the tenth day after the  Shares  Acquisition
Date or (ii) the Close of Business on the tenth Business Day (or such later date
as may be determined by action of the  Corporation's  Board of Directors)  after
the date on which any Person (other than the Corporation,  any Subsidiary of the
Corporation,  any employee  benefit plan of the Corporation or of any Subsidiary
of the Corporation or any Person or entity  organized,  appointed or established
by the  Corporation  for or pursuant to the terms of any such plan) commences or
first  publicly  announces the intent to commence  (which  intention to commence
remains in effect for five Business Days after such  announcement),  a tender or
exchange offer the  consummation of which would result in any Person becoming an
Acquiring  Person  (including,  in the case of both (i) and (ii),  any such date
which is  after  the date of this  Agreement  and  before  the  issuance  of the
Rights), the earlier of such dates being herein referred to as the "Distribution
Date," (x) the Rights will be evidenced by (subject to the provisions of Section
3(b) hereof) the certificates  for Common Shares  registered in the names of the
holders  thereof  (which   certificates   shall  also  be  deemed  to  be  Right
Certificates  (as defined herein)) and not by separate Right  Certificates,  and

                          STOCKHOLDER RIGHTS AGREEMENT

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(y) the  right  to  receive  Right  Certificates  will be  transferable  only in
connection  with the  transfer of the  underlying  Common  Shares  (including  a
transfer  to the  Corporation);  provided,  however,  that if a tender  offer is
terminated  before a Distribution  Date occurs,  then no Distribution Date shall
occur as a  result  of such  tender  offer.  As soon as  practicable  after  the
Distribution  Date, the Corporation  will prepare and execute,  the Rights Agent
will  countersign,  and  the  Corporation  will  send  or  cause  to be  sent 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 Corporation,  a Right Certificate,  substantially in
the form of Exhibit B hereto (a "Right  Certificate"),  evidencing one Right for
each Common Share so held.  As of and after the  Distribution  Date,  the Rights
will be evidenced solely by such Right Certificates.

     (b) As soon as practicable  following the Record Date, the Corporation will
send  a  copy  of  a  Summary  of  Rights  to  Purchase   Preferred  Shares,  in
substantially the form of Exhibit C hereto or such other form as the Corporation
may approve (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  Corporation.
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 a copy
of the Summary of Rights attached  thereto.  Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration  Date), the surrender for
transfer of any  certificate  for Common Shares  outstanding on the Record Date,
with or without a copy of the  Summary of Rights  attached  thereto,  shall also
constitute the transfer of the Rights associated with such Common Shares.

     (c) Certificates for Common Shares,  which become  outstanding  (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this  paragraph  (c)) after the  Record  Date but  before  the  earliest  of the
Distribution  Date, the Redemption Date or the Final  Expiration  Date, shall be
deemed also 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 TVI CORPORATION AND SECURITIES
TRANSFER CORPORATION, DATED AS OF DECEMBER 2, 2003 (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 TVI 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.  TVI CORPORATION WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY
OF THE RIGHTS  AGREEMENT  WITHOUT  CHARGE  AFTER  RECEIPT  OF A WRITTEN  REQUEST
THEREFORE. 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
AN  AFFILIATE  OR  ASSOCIATE  THEREOF (AS DEFINED IN THE RIGHTS  AGREEMENT)  AND
CERTAIN RELATED PERSONS,  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 DISTRIBUTION DATE, THE
RIGHTS ASSOCIATED WITH THE COMMON SHARES  REPRESENTED BY SUCH CERTIFICATES SHALL

                          STOCKHOLDER RIGHTS AGREEMENT

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BE EVIDENCED BY SUCH  CERTIFICATES  ALONE, AND THE SURRENDER FOR TRANSFER OF ANY
SUCH  CERTIFICATE  SHALL ALSO  CONSTITUTE THE TRANSFER OF THE RIGHTS  ASSOCIATED
WITH THE COMMON SHARES  REPRESENTED  THEREBY.  IN THE EVENT THAT THE CORPORATION
PURCHASES  OR ACQUIRES  ANY COMMON  SHARES  AFTER THE RECORD DATE BUT BEFORE THE
DISTRIBUTION DATE, ANY RIGHTS ASSOCIATED WITH SUCH COMMON SHARES SHALL BE DEEMED
CANCELED AND RETIRED SO THAT THE  CORPORATION  SHALL NOT BE ENTITLED TO EXERCISE
ANY RIGHTS ASSOCIATED WITH THE COMMON SHARES THAT ARE NO LONGER OUTSTANDING.

                          STOCKHOLDER RIGHTS AGREEMENT

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     Section 4. Form of Right Certificate.

     (a) The Right  Certificates  (and the forms of election to purchase  and of
assignment to be printed on the reverse  thereof) shall be  substantially in the
form set forth in Exhibit B hereto and may have such marks of  identification or
designation and such legends,  summaries or endorsements  printed thereon as the
Corporation  may deem  appropriate  and as are consistent with the provisions of
this Agreement,  or as may be required to comply with any applicable law or with
any rule or regulation  made pursuant  thereto or with any rule or regulation of
any stock  exchange  on which the Rights may from time to time be listed,  or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Right Certificates shall entitle the holders thereof to purchase such number
of one  one-hundredths of a Preferred Share as shall be set forth therein at the
price  per one  one-hundredth  of a  Preferred  Share  set  forth  therein  (the
"Purchase  Price"),  but the amount and type of securities  purchasable upon the
exercise  of each  Right and the  Purchase  Price  thereof  shall be  subject to
adjustment as provided herein.

     (b) Any Right  Certificate  issued  pursuant to Section  3(a) or Section 22
hereof that  represents  Rights which are null and void pursuant to Section 7(e)
of this  Agreement  and any Right  Certificate  issued  pursuant to Section 6 or
Section 11 hereof upon  transfer,  exchange,  replacement  or  adjustment of any
other Right  Certificate  referred to in this  sentence,  shall  contain (to the
extent feasible) the following legend:

     The Rights  represented by this Right  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 Right  Certificate  and the  Rights  represented
hereby are null and void.

     The provisions of Section 7(e) of this Agreement shall be operative whether
or not the foregoing legend is contained on any such Right Certificate.

     Section 5. Countersignature and Registration.  The Right Certificates shall
be executed on behalf of the Corporation by its Chairman of the Board, its Chief
Executive Officer, its President, any of its Vice Presidents,  or its Treasurer,
either  manually  or by  facsimile  signature,  shall have  affixed  thereto the
Corporation's  seal  or a  facsimile  thereof,  and  shall  be  attested  by the
Secretary or an Assistant  Secretary of the  Corporation,  either manually or by
facsimile signature. The Right Certificates shall be countersigned by the Rights
Agent and shall not be valid for any  purpose  unless so  countersigned.  In the
event  that  any  officer  of  the  Corporation  who  signs  any  of  the  Right
Certificates   ceases  to  be  such  officer  of  the  Corporation  before  such
countersignature   by  the  Rights  Agent  and  issuance  and  delivery  by  the
Corporation,  such Right  Certificates  may nevertheless be countersigned by the
Rights Agent and issued and delivered by the Corporation with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer of the Corporation;  and any Right  Certificate may be signed on
behalf of the Corporation by any person who, at the actual date of the execution
of such Right Certificate,  shall be a proper officer of the Corporation to sign
such Right Certificate,  although at the date of the execution of this Agreement
any such person was not such an officer.

     Following the Distribution  Date, the Rights Agent will keep or cause to be
kept, at its principal office or offices designated as the appropriate place for
surrender  or transfer of such Right  Certificate,  books for  registration  and
transfer of the Right Certificates  issued hereunder.  Such books shall show the
names and addresses of the  respective  holders of the Right  Certificates,  the

                          STOCKHOLDER RIGHTS AGREEMENT

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<PAGE>

number of Rights evidenced on its face by each of the Right Certificates and the
certificate number and the date of each of the Right Certificates.

     Section  6.  Transfer,   Split-Up,   Combination   and  Exchange  of  Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificate. Subject to
the provisions of Section 4(b),  Section 7(e) and Section 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or before the Close
of Business on the earlier of the Redemption Date or the Final  Expiration Date,
any  Right  Certificate  or Right  Certificates  may be  transferred,  split up,
combined or  exchanged  for another  Right  Certificate  or Right  Certificates,
entitling the registered holder to purchase a like number of one  one-hundredths
of a Preferred Share (or, following a Triggering Event, other securities, as the
case may be) as the Right  Certificate or Right  Certificates  surrendered  then
entitle  such holder (or former  holder in the case of a transfer)  to purchase.
Any registered  holder  desiring to transfer,  split up, combine or exchange any
Right  Certificate  or Right  Certificates  shall  make such  request in writing
delivered to the Rights Agent and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the principal
office or offices of the Rights Agent  designated for such purpose.  Neither the
Rights  Agent  nor  the  Corporation  shall  be  obligated  to take  any  action
whatsoever  with  respect  to  the  transfer  of  any  such  surrendered   Right
Certificate until the registered holder has completed and signed the certificate
contained  in the  form  of  assignment  on  the  reverse  side  of  such  Right
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 Corporation shall reasonably  request.  Subject to Section 4(b),
Section 7(e) and Section 14 hereof, the Rights Agent shall thereupon countersign
and  deliver  to the  Person  entitled  thereto  a Right  Certificate  or  Right
Certificates,  as the case may be, as so requested.  The Corporation may require
payment of a sum sufficient to cover any tax or governmental  charge that may be
imposed in connection  with any transfer,  split up,  combination or exchange of
Right Certificates.

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

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

     (a) Subject to Section  7(e)  hereof,  the  registered  holder of any Right
Certificate  may  exercise  the Rights  evidenced  thereby  (except as otherwise
provided  herein)  in whole or in part at any time after the  Distribution  Date
upon surrender of the Right  Certificate,  with the form of election to purchase
and the  certificate  on the reverse side thereof duly  executed,  to the Rights
Agent at the principal office or offices of the Rights Agent designated for such
purpose,  together  with payment of the aggregate  Purchase  Price for the total
number of one  one-hundredths of a Preferred Share (or other securities,  as the
case may be) as to which such surrendered Rights are exercised, at or before the
earliest of (i) the Close of Business on December 1, 2013 (the "Final Expiration
Date"), (ii) the date on which the Rights are redeemed as provided in Section 23
hereof  (the  "Redemption  Date"),  or (iii)  the date on which the  Rights  are
exchanged pursuant to Section 24 hereof.

                          STOCKHOLDER RIGHTS AGREEMENT

                                       8
<PAGE>

     (b) The  Purchase  Price for each one  one-hundredth  of a Preferred  Share
pursuant  to the  exercise  of a Right  shall  initially  be $6.00,  subject  to
adjustment from time to time as provided in the next sentence and in Sections 11
and 13(a) hereof,  and shall be payable in accordance  with paragraph (c) below.
Notwithstanding anything in this Agreement to the contrary, in the event that at
any time after the date of this Agreement and before the Distribution  Date, the
Corporation  shall (i) declare or pay any dividend on the Common Shares  payable
in Common Shares or (ii) effect a subdivision,  combination or  consolidation of
the Common Shares (by reclassification or otherwise than by payment of dividends
in Common Shares) into a greater or lesser number of Common Shares,  then in any
such case, each Common Share outstanding following such subdivision, combination
or consolidation  shall continue to have a Right associated  therewith,  and the
Purchase  Price  following any such event shall be  proportionately  adjusted to
equal the result obtained by multiplying the Purchase Price  immediately  before
such event by a fraction  the  numerator  of which shall be the total  number of
Common  Shares   outstanding   immediately  before  the  event  occurs  and  the
denominator  of which  shall be the total  number of Common  Shares  outstanding
immediately  after  such  event  occurs.  The  adjustment  provided  for  in the
preceding  sentence  shall be made  successively  whenever  such a  dividend  is
declared  or  paid  or  such a  subdivision,  combination  or  consolidation  is
effected.

     (c) Upon receiving a Right  Certificate  representing  exercisable  Rights,
with the  form of  election  to  purchase  and the  certificate  duly  executed,
accompanied by payment of the Purchase Price for the Preferred  Shares (or other
securities,  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  Right
Certificate in accordance with Section 6 hereof,  by certified check,  cashier's
check or money order payable to the order of the  Corporation,  the Rights Agent
shall  thereupon  promptly  (i)(A)  requisition  from any transfer  agent of the
Preferred  Shares  certificates  for  the  number  of  Preferred  Shares  to  be
purchased,  and the Corporation hereby irrevocably authorizes its transfer agent
to  comply  with  all  such  requests,  or (B) if the  Corporation,  in its sole
discretion,  shall have elected to deposit the  Preferred  Shares  issuable upon
exercise  of the  Rights  hereunder  into a  depositary,  requisition  from  the
depositary  agent   depositary   receipts   representing   such  number  of  one
one-hundredths  of a  Preferred  Share as are to be  purchased  (in  which  case
certificates  for the Preferred  Shares  represented  by such receipts  shall be
deposited by the transfer agent with the depositary  agent), and the Corporation
will  direct  the  depositary  agent to  comply  with such  requests,  (ii) when
appropriate,  requisition  from the Corporation the amount of cash to be paid in
lieu of issuance of fractional shares, in accordance with Section 14 hereof, and
(iii) after receipt of such certificates or depositary receipts, cause the same,
together with any cash to be paid in lieu of fractional  shares, to be delivered
to,  or upon the  order of the  registered  holder  of such  Right  Certificate,
registered  in such name or names as may be designated  by, such holder.  In the
event that the  Corporation  is obligated to issue other  securities  (including
Common  Shares)  of the  Corporation  pursuant  to  Section  11(a)  hereof,  the
Corporation will make all  arrangements  necessary so that such other securities
are available for distribution by the Rights Agent, if and when appropriate.

     In addition,  in the case of an exercise of the Rights by a holder pursuant
to  Section  11(a)(ii)  hereof,   the  Rights  Agent  shall  return  such  Right
Certificate  to the  registered  holder  thereof after  imprinting,  stamping or
otherwise   indicating  thereon  that  the  rights  represented  by  such  Right
Certificate  no longer include the rights  provided by Section  11(a)(ii) of the
Rights  Agreement,  and if less than all the  Rights  represented  by such Right
Certificate  were so  exercised,  the Rights  Agent shall  indicate on the Right
Certificate the number of Rights  represented  thereby which continue to include
the rights provided by Section 11(a)(ii).

                          STOCKHOLDER RIGHTS AGREEMENT

                                       9
<PAGE>

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

     (e)  Notwithstanding  anything in this Agreement to the contrary,  from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an  Acquiring  Person or an  Affiliate or Associate of an Acquiring
Person,  (ii) a  transferee  of an  Acquiring  Person  (or of any  Affiliate  or
Associate  thereof) who becomes a transferee  after the Acquiring Person becomes
such,  or (iii) a  transferee  of an  Acquiring  Person (or of any  Affiliate or
Associate  thereof) who becomes a  transferee  before 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 a  continuing  agreement,  arrangement  or  understanding
regarding the transferred  Rights or (B) a transfer which the Board of Directors
of the Corporation,  in its sole  discretion,  has determined is part of a plan,
arrangement  or  understanding  that has as a  primary  purpose  or  effect  the
avoidance of this Section  7(e),  shall become null and void without any further
action,  and no holder of such  Rights  shall  have any rights  whatsoever  with
respect  to such  Rights,  whether  under any  provision  of this  Agreement  or
otherwise.  The Corporation shall use all reasonable  efforts to insure that the
provisions  of this Section  7(e) and Section 4(b) hereof are complied  with but
shall have no liability to any holder of Right Certificates or other Person as a
result of its failure to make any  determinations  with  respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.

     (f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Corporation shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported  exercise as
set  forth in this  Section  7 unless  such  registered  holder  shall  have (i)
completed  and signed  the  certificate  contained  in the form of  election  to
purchase set forth on the reverse side of the Right 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 Corporation shall reasonably request.

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

     Section  9.   Reservation  and  Availability  of  Preferred   Shares.   The
Corporation  covenants  and agrees that at all times before a Section  11(a)(ii)
Event  occurs  it will  cause  to be  reserved  and  kept  available  out of its
authorized and unissued Preferred Shares, or any authorized and issued Preferred
Shares  held in its  treasury,  the  number  of  Preferred  Shares  that will be
sufficient to permit the exercise in full of all outstanding  Rights and after a
Section 11(a)(ii) Event occurs, shall, to the extent reasonably practicable,  so

                          STOCKHOLDER RIGHTS AGREEMENT

                                       10
<PAGE>

reserve and keep  available a sufficient  number of Common Shares  (and/or other
securities)  which may be required to permit the  exercise in full of the Rights
pursuant to this Agreement.

     So long as the  Preferred  Shares  (and,  after a Section  11(a)(ii)  Event
occurs, Common Shares or any other securities) issuable upon the exercise of the
Rights may be listed on any national  securities exchange or on the Nasdaq Stock
Market, the Corporation shall use its best efforts to cause, from and after such
time as the Rights become exercisable,  all shares reserved for such issuance to
be listed on such exchange or on the Nasdaq Stock Market upon official notice of
issuance upon such exercise.

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

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

     The  Corporation  shall  use  its  best  efforts  to (i)  file,  as soon as
practicable  following the Shares  Acquisition  Date, a  registration  statement
under the Act on an appropriate form, with respect to the securities purchasable
upon exercise of the Rights,  (ii) cause such  registration  statement to become
effective  as soon as  practicable  after  such  filing,  and (iii)  cause  such
registration  statement  to remain  effective  (with a  prospectus  at all times
meeting the  requirements of the Act and the rules and  regulations  thereunder)
until the date of the  expiration of the rights  provided by Section  11(a)(ii).
The  Corporation  will also take such action as may be  appropriate  or required
under the blue sky laws of the various states.

     Section 10.  Preferred  Shares  Record Date.  Each person in whose name any
certificate for Preferred Shares (or Common Shares and/or other  securities,  as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have  become the holder of record of the  Preferred  Shares (or Common
Shares and/or other securities,  as the case may be) represented thereby on, and
such  certificate  shall be  dated,  the date upon  which the Right  Certificate
evidencing  such Rights was duly  surrendered  and payment of the Purchase Price
(and any applicable transfer taxes) was made;  provided,  however,  that, if the
date of such surrender and payment is a date upon which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books of the
Corporation  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 Preferred  Shares (or Common Shares and/or
other  securities,  as the case may be) transfer  books of the  Corporation  are
open.

                          STOCKHOLDER RIGHTS AGREEMENT

                                       11
<PAGE>

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

     (a)  (i) In the event the  Corporation  shall at any time after the date of
this  Agreement  (A)  declare a  dividend  on the  Preferred  Shares  payable in
Preferred Shares,  (B) subdivide the outstanding  Preferred Shares,  (C) combine
the outstanding  Preferred  Shares into a smaller number of Preferred  Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such  reclassification  in connection with a consolidation
or merger in which the Corporation is the continuing or surviving  corporation),
except as otherwise  provided in this Section 11(a) and Section 7(e) hereof, the
Purchase  Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number  and kind of shares of capital  stock  issuable  on such  date,  shall be
proportionately  adjusted so that the holder of any Right  exercised  after such
time shall be  entitled to receive  the  aggregate  number and kind of shares of
capital stock which,  if such Right had been exercised  immediately  before such
date and at a time when the Preferred  Shares  transfer books of the Corporation
were open,  such holder would have owned upon such exercise and been entitled to
receive   by   virtue   of   such   dividend,   subdivision,    combination   or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the  aggregate  par value of
the shares of capital  stock of the  Corporation  issuable  upon exercise of one
Right.  If an event occurs which would require an adjustment  under both Section
11(a)(i)  and Section  11(a)(ii),  the  adjustment  provided for in this Section
11(a)(i)  shall be in  addition  to, and shall be made  before,  any  adjustment
required pursuant to Section 11(a)(ii).

          (ii) In the event any Person,  alone or together  with its  Affiliates
and Associates, shall become an Acquiring Person, each holder of a Right (except
as provided below and in Section 7(e) hereof) shall,  for a period of sixty (60)
days after the later of the  occurrence of any such event or the effective  date
of an  appropriate  registration  statement  under the Act pursuant to Section 9
hereof,  have a right to receive,  upon exercise thereof at a price equal to the
then current  Purchase  Price,  in accordance  with the terms of this Agreement,
such number of Common  Shares (or, in the  discretion of the Board of Directors,
one  one-hundredth  of a Preferred  Share) as shall equal the result obtained by
(x)  multiplying  the then  current  Purchase  Price by the then  number  of one
one-hundredths   of  a  Preferred  Share  for  which  a  Right  was  exercisable
immediately  before  the first  occurrence  of a Section  11(a)(ii)  Event,  and
dividing  that  product by (y) 50% of the then current per share market price of
the Corporation's Common Shares (determined pursuant to Section 11(d) hereof) on
the date of such first  occurrence  (such number of shares being  referred to as
the "Adjustment Shares");  provided, however, that if the transaction that would
otherwise  give  rise  to  the  foregoing  adjustment  is  also  subject  to the
provisions of Section 13 hereof,  then only the  provisions of Section 13 hereof
shall apply, and no adjustment shall be made pursuant to this Section 11(a)(ii);

          (iii) In the event that there shall not be sufficient  treasury shares
or authorized but unissued (and unreserved) Common Shares to permit the exercise
in full of the Rights in accordance with the foregoing subparagraph (ii) and the
Rights become so  exercisable  (and the Board has  determined to make the Rights
exercisable  into  fractions of a Preferred  Share),  notwithstanding  any other
provision of this Agreement, to the extent necessary and permitted by applicable
law, each Right shall thereafter  represent the right to receive,  upon exercise
thereof at the then current  Purchase Price in accordance with the terms of this
Agreement,  (x) a number of (or  fractions  of) Common Shares (up to the maximum
number  of  Common  Shares  which  may   permissibly  be  issued)  and  (y)  one
one-hundredth  of a Preferred Share or a number of, or fractions of other equity
securities of the Corporation  (or, in the discretion of the Board of Directors,

                          STOCKHOLDER RIGHTS AGREEMENT

                                       12
<PAGE>

debt) which the Board of Directors of the Corporation has determined to have the
same aggregate current market value (determined pursuant to Section 11(d)(i) and
(ii) hereof, to the extent  applicable,) as one Common Share (such number of, or
fractions of, Preferred Shares,  debt, or other equity securities or debt of the
Corporation,  being referred to as a "capital stock  equivalent"),  equal in the
aggregate to the number of Adjustment Shares;  provided,  however, if sufficient
Common  Shares  and/or  capital  stock  equivalents  are  unavailable,  then the
Corporation  shall,  to the extent  permitted by  applicable  law, take all such
action as may be  necessary  to authorize  additional  Common  Shares or capital
stock  equivalents  for  issuance  upon  exercise of the Rights,  including,  if
necessary, the calling of a meeting of stockholders; and provided, further, that
if the  Corporation is unable to cause  sufficient  Common Shares and/or capital
stock  equivalents  to be available  for issuance  upon  exercise in full of the
Rights,  then each Right  shall  thereafter  represent  the right to receive the
Adjusted Number of Shares upon exercise at the Adjusted  Purchase Price (as such
terms are hereinafter  defined).  As used herein,  the term "Adjusted  Number of
Shares" shall be equal to that number of (or fractions of) Common Shares (and/or
capital stock  equivalents) equal to the product of (x) the number of Adjustment
Shares and (y) a fraction, the numerator of which is the number of Common Shares
(and/or capital stock  equivalents)  available for issuance upon exercise of the
Rights and the denominator of which is the aggregate number of Adjustment Shares
otherwise  issuable upon exercise in full of all Rights  (assuming  there were a
sufficient  number of Common Shares  available) (such fraction being referred to
as the "Proration Factor"). The "Adjusted Purchase Price" shall mean the product
of the Purchase Price and the Proration Factor.  The Board of Directors may, but
shall not be required to, establish  procedures to allocate the right to receive
Common  Shares and capital stock  equivalents  upon exercise of the Rights among
holders of Rights.

     (b) In case the  Corporation  shall fix a record  date for the  issuance of
rights (other than the Rights),  options or warrants to all holders of Preferred
Shares  entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares (or shares having the
same rights,  privileges and  preferences as the Preferred  Shares  ("equivalent
preferred   shares"))  or  securities   convertible  into  Preferred  Shares  or
equivalent  preferred  shares  at a price  per  Preferred  Share  or  equivalent
preferred  share  (or  having  a  conversion  price  per  share,  if a  security
convertible into Preferred Shares or equivalent  preferred shares) less than the
then  current per share  market  price of the  Preferred  Shares (as  determined
pursuant to Section 11(d) hereof) on such record date,  the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately before such record date by a fraction, the numerator
of which shall be the number of Preferred Shares outstanding on such record date
plus the number of Preferred  Shares which the aggregate  offering  price of the
total number of Preferred  Shares and/or  equivalent  preferred  shares so to be
offered  (and/or  the  aggregate  initial  conversion  price of the  convertible
securities  so to be offered)  would  purchase at such  current per share market
price,  and the  denominator  of which shall be the number of  Preferred  Shares
outstanding on such record date plus the number of additional  Preferred  Shares
and/or  equivalent  preferred  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 Corporation  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 determined in good faith by the Board of Directors of the Corporation,  whose
determination  shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent.  Preferred Shares owned by or held for the
account of the  Corporation  shall not be deemed  outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such a

                          STOCKHOLDER RIGHTS AGREEMENT

                                       13
<PAGE>

record date is fixed; and in the event that such rights, options or warrants are
not so issued,  the Purchase  Price shall be adjusted to be the  Purchase  Price
which would then be in effect if such record date had not been fixed.

     (c) In case the  Corporation  shall fix a record  date for the  making of a
distribution  to all  holders  of  the  Preferred  Shares  (including  any  such
distribution  made in  connection  with a  consolidation  or merger in which the
Corporation  is  the  continuing  or  surviving  corporation)  of  evidences  of
indebtedness  or assets  (other  than a regular  quarterly  cash  dividend  or a
dividend  payable  in  Preferred  Shares)  or  subscription  rights or  warrants
(excluding those referred to in Section 11(b) hereof),  the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately before such record date by a fraction, the numerator
of which  shall be the then  current  per  share  market  price  (as  determined
pursuant to Section 11(d)  hereof) of the Preferred  Shares on such record date,
less the  fair  market  value  (as  determined  in good  faith  by the  Board of
Directors  of the  Corporation,  whose  determination  shall be  described  in a
statement  filed with the Rights Agent and shall be binding on the Rights Agent)
of the portion of the assets or evidences of  indebtedness  so to be distributed
or of such subscription rights or warrants applicable to one Preferred Share and
the  denominator  of which shall be such  current per share  market price of the
Preferred Shares; 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 Corporation to be issued 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 Purchase
Price shall again be  adjusted to be the  Purchase  Price which would then be in
effect if such record date had not been fixed.

     (d)  (i)  For the purpose of any  computation  hereunder,  the "current per
share  market  price" of any  security  (a  "Security")  for the purpose of this
Section  11(d)(i))  on any date  shall be deemed to be the  average of the daily
closing  prices  per share of such  Security  for the  thirty  (30)  consecutive
Trading Days (as such term is hereinafter defined) immediately before 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 (A) a dividend  or  distribution  on such  Security
payable in shares of such Security or securities  convertible  into such shares,
or (B) any  subdivision,  combination or  reclassification  of such Security and
before the expiration of thirty (30) Trading Days after the ex-dividend date for
such  dividend  or  distribution,  or the  record  date  for  such  subdivision,
combination  or  reclassification,  then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current market
price per 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 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 quoted  price or, if not so quoted,  the average of the high
bid and low asked  prices in the  over-the-counter  market,  as  reported by the
National  Association of Securities  Dealers,  Inc. Automated  Quotations System
("NASDAQ")  or such  other  system  then in use,  or,  if on any  such  date the
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  selected by the Board of Directors of the  Corporation.  If on any
such date no such market maker is making market in the Security,  the fair value
of the  Security  on such  date as  determined  in good  faith  by the  Board of
Directors of the Corporation  shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the Security is
listed or admitted to trading is open for the transaction of business or, if the
Security  is not  listed or  admitted  to  trading  on any  national  securities
exchange, a Business Day.

                          STOCKHOLDER RIGHTS AGREEMENT

                                       14
<PAGE>

          (ii) For the purpose of any  computation  hereunder,  the "current per
share market  price" of the  Preferred  Shares shall be determined in accordance
with the method set forth in Section  11(d)(i).  If the Preferred Shares are not
publicly  traded,  the "current per share market price" of the Preferred  Shares
shall be  conclusively  deemed to be the current per share  market  price of the
Common  Shares  as  determined  pursuant  to  Section  11(d)(i),  (appropriately
adjusted  to reflect any stock  split,  stock  dividend  or similar  transaction
occurring  after the date  hereof),  multiplied  by one hundred.  If neither the
Common Shares nor the Preferred Shares are 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  Corporation,  whose
determination  shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent.

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

     (f) If as a result of an adjustment  made pursuant to Section  11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter  exercised shall become
entitled to receive any shares of capital  stock of the  Corporation  other than
Preferred  Shares,  thereafter  the number of other  shares so  receivable  upon
exercise  of any Right  shall be  subject to  adjustment  from time to time in a
manner and on terms as nearly  equivalent as practicable to the provisions  with
respect  to the  Preferred  Shares  contained  in  Section  11(a)  through  (c),
inclusive,  and the  provisions  of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Shares shall apply on like terms to any such other shares.

     (g) All  Rights  originally  issued by the  Corporation  subsequent  to any
adjustment  made to the Purchase  Price  hereunder  shall  evidence the right to
purchase,  at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred  Share  purchasable  from time to time  hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

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

     (i) The Corporation may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights,  in lieu of any adjustment in the
number of one  one-hundredths of a Preferred Share purchasable upon the exercise
of a Right.  Each of the Rights  outstanding after such adjustment of the number

                          STOCKHOLDER RIGHTS AGREEMENT

                                       15
<PAGE>

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

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

     (k) Before  taking any action that would cause an  adjustment  reducing the
Purchase  Price  below  the  then  par  value,  if  any,  of the  number  of one
one-hundredths  of a Preferred Share or other securities  issuable upon exercise
of the Rights, the Corporation shall take any corporate action which may, in the
opinion of its counsel,  be necessary in order that the  Corporation may validly
and   legally   issue  such  number  of  fully  paid  and   non-assessable   one
one-hundredths  of a  Preferred  Share  or  other  securities  at such  adjusted
Purchase Price.

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

     (m)  Notwithstanding  anything  in this  Section  11 to the  contrary,  the
Corporation  shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments  expressly  required by this Section 11, as and to
the extent that it in its sole  discretion  shall  determine  to be advisable in
order that (i) any  consolidation or subdivision of the Preferred  Shares,  (ii)
issuance  wholly for cash of  Preferred  Shares at less than the current  market
price, (iii) issuance wholly for cash of Preferred Shares or securities which by

                          STOCKHOLDER RIGHTS AGREEMENT

                                       16
<PAGE>

their terms are convertible  into or  exchangeable  for Preferred  Shares,  (iv)
stock  dividends or (v) issuance of rights,  options or warrants  referred to in
this Section 11,  hereafter made by the  Corporation to holders of its Preferred
Shares shall not be taxable to such stockholders.

     (n) The  Corporation  covenants  and agrees  that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the  Corporation  in a transaction  that does not violate  Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Corporation in a transaction  that does not violate Section 11(o) hereof)
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction,  or a series  of  related  transactions,  assets or  earning  power
aggregating  more than 50% of the assets or earning power of the Corporation and
its  Subsidiaries  (taken as a whole) to any other Person or Persons (other than
the Corporation  and/or any of its Subsidiaries in one or more transactions each
of which  does  not  violate  Section  11(o)  hereof),  if (x) at the time of or
immediately  after such  consolidation,  merger,  sale or transfer there are any
charter or bylaw  provisions  or any rights,  warrants or other  instruments  or
securities  outstanding  or agreements in effect or other actions  taken,  which
would  materially  diminish or otherwise  eliminate the benefits  intended to be
afforded by the Rights or (y) before,  simultaneously  with or immediately after
such  consolidation,  merger  or  sale,  the  stockholders  of  the  Person  who
constitutes,  or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution  of Rights  previously  owned by
such Person or any of its Affiliates and Associates.  The Corporation  shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the  Corporation  and such other Person shall have executed and delivered to the
Rights Agent a supplemental  agreement  evidencing  compliance with this Section
11(n).

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

     (p) The exercise of Rights under Section 11(a)(ii) shall only result in the
loss of rights under Section  11(a)(ii) to the extent so exercised and shall not
otherwise  affect the rights  represented  by the Rights  under this  Agreement,
including the rights represented by Section 13 hereof.

     Section 12.  Certificate  of Adjusted  Purchase  Price or Number of Shares.
Whenever an  adjustment  is made as  provided  in Sections 11 or 13 hereof,  the
Corporation  shall  promptly  (a)  prepare  a  certificate  setting  forth  such
adjustment,  and a brief statement of the facts  accounting for such adjustment,
(b) file  with the  Rights  Agent and with each  transfer  agent for the  Common
Shares a copy of such  certificate  and (c) mail a brief summary thereof to each
holder of a Right  Certificate in accordance with Section 26 hereof.  The Rights
Agent shall be fully  protected  in relying on any such  certificate  and on any
adjustment  therein  contained 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,  on or  following  the  Shares  Acquisition  Date,
directly or indirectly,  (x) the Corporation  shall  consolidate  with, or merge
with and into, any Person,  (y) the Corporation shall consolidate with, or merge
with,  any Person,  and the  Corporation  shall be the  continuing  or surviving
corporation  of such  consolidation  or  merger  (other  than,  in a case of any
transaction  described  in (x) or (y),  a merger or  consolidation  which  would

                          STOCKHOLDER RIGHTS AGREEMENT

                                       17
<PAGE>

result in all of the  securities  generally  entitled to vote in the election of
directors ("voting securities") of the Corporation outstanding immediately prior
thereto  continuing to represent  (either by remaining  outstanding  or by being
converted into securities of the surviving  entity) all of the voting securities
of the Corporation or such surviving entity  outstanding  immediately after such
merger or consolidation and the holders of such securities not having changed as
a result of such merger or consolidation),  or (z) the Corporation shall sell or
otherwise  transfer (or one or more of its Subsidiaries  shall sell or otherwise
transfer),  in one  transaction or a series of related  transactions,  assets or
earning  power  aggregating  more than 50% of the assets or earning power of the
Corporation  and its  Subsidiaries  (taken as a whole) to any Person (other than
the Corporation or any Subsidiary of the Corporation in one or more transactions
each of which does not violate  Section 11(n)  hereof),  then,  and in each such
case (except as provided in Section 13(d)  hereof),  proper  provision  shall be
made so that (i) each  holder of a Right,  except as  provided  in Section  7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current  Purchase  Price, in accordance with the terms
of this  Agreement  and in lieu of  Preferred  Shares,  such  number  of  freely
tradeable  Common Shares of the Principal  Party (as hereinafter  defined),  not
subject to any liens,  encumbrances,  rights of first  refusal or other  adverse
claims,  as shall equal the result  obtained by (A) multiplying the then current
Purchase  Price by the number of one  one-hundredths  of a  Preferred  Share for
which a Right is then  exercisable  (without  taking into account any adjustment
previously made pursuant to Section  11(a)(ii)) and dividing that product by (B)
50% of the then  current  per share  market  price of the Common  Shares of such
Principal  Party  (determined  pursuant to Section  11(d) hereof) on the date of
consummation  of  such  Section  13  Event;  (ii)  such  Principal  Party  shall
thereafter be liable for, and shall assume,  by virtue of such Section 13 Event,
all the obligations  and duties of the  Corporation  pursuant to this Agreement;
(iii)  the  term  "Corporation"  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;  and (iv) such Principal Party shall take such
steps (including,  but not limited to, the reservation of a sufficient number of
its Common Shares) in connection with the  consummation of any such  transaction
as may be necessary to assure that the  provisions  hereof shall  thereafter  be
applicable,  as nearly as  reasonably  may be, to the Common  Shares  thereafter
deliverable upon the exercise of the Rights.

     (b)  "Principal  Party"  shall  mean  (i) in the  case  of any  transaction
described  in clause  (x) or (y) of the first  sentence  of Section  13(a),  the
Person  that is the issuer of any  securities  into which  Common  Shares of the
Corporation are converted in such merger or consolidation,  and if no securities
are  so  issued,  the  Person  that  is  the  other  party  to  such  merger  or
consolidation (including, if applicable,  the Corporation if it is the surviving
corporation); and (ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a),  the Person that is the party receiving the
greatest  portion of the assets or earning  power  transferred  pursuant to such
transaction  or  transactions  provided,  however,  that in any of the foregoing
cases, (1) if the Common Shares of such Person are not at such time and have not
been  continuously  over the preceding twelve (12) month period registered under
Section  12 of the  Exchange  Act,  and  such  Person  is a direct  or  indirect
Subsidiary  of another  Person  the Common  Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person; (2) in case such
Person is a Subsidiary,  directly or  indirectly,  of more than one Person,  the
Common  Shares  of two or  more  of  which  are and  have  been  so  registered,
"Principal  Party" shall refer to whichever of such Persons is the issuer of the
Common Shares having the greatest  aggregate  market value; and (3) in case 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
rules  set  forth in (1) and (2)  above  shall  apply to each of the  chains  of
ownership  having an  interest  in such  joint  venture  as if such party were a
"Subsidiary" of both or all of such joint venturers,  and the Principal  Parties

                          STOCKHOLDER RIGHTS AGREEMENT

                                       18
<PAGE>

in each such chain shall bear the  obligations  set forth in this  Section 13 in
the same ratio as their direct or indirect  interests in such Person bear to the
total of such interests.

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

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

          (ii) use its best  efforts to qualify or  register  the Rights and the
securities  purchasable  upon  exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate; and

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

     The  provisions  of this  Section 13 shall  similarly  apply to  successive
mergers or  consolidations  or sales or other  transfers.  The rights under this
Section 13 shall be in addition to the rights to exercise Rights and adjustments
under Section 11(a)(ii) and shall survive any exercise thereof.

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

     In no event  shall the Rights  Agent have any  liability  in respect of any
such Principal Party transactions,  including, without limitation, the propriety
thereof.  The Rights  Agent may rely and be fully  protected  in relying  upon a
certificate  of the  Corporation  stating that the provisions of this Section 13
have been fulfilled. Notwithstanding anything in this Agreement to the contrary,
the prior  written  consent of the Rights  Agent must be obtained in  connection
with any supplemental  agreement which alters the rights or duties of the Rights
Agent.

     Section 14. Fractional Rights and Fractional Shares.

                          STOCKHOLDER RIGHTS AGREEMENT

                                       19
<PAGE>

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

     (b) The  Corporation  shall not be required to issue fractions of Preferred
Shares (other than fractions which are one  one-hundredth or integral  multiples
of one  one-hundredth  of a Preferred  Share) upon  exercise of the Rights or to
distribute  certificates which evidence fractional  Preferred Shares (other than
fractions which are one one-hundredth or integral multiples of one one-hundredth
of a Preferred  Share).  Fractions of Preferred Shares in integral  multiples of
one  one-hundredth of a Preferred Share may, at the election of the Corporation,
be  evidenced  by  depositary  receipts,  pursuant to an  appropriate  agreement
between the  Corporation  and a depositary  selected by it;  provided  that such
agreement shall provide that the holders of such depositary  receipts shall have
the rights,  privileges and preferences to which they are entitled as beneficial
owners of the Preferred Shares represented by such depositary receipts.  In lieu
of  fractional  Preferred  Shares  that are not one  one-hundredth  or  integral
multiples of one  one-hundredth of a Preferred Share, the Corporation  shall pay
to the  registered  holders of Right  Certificates  at the time such  Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current  market value of one Preferred  Share.  For the purposes of this Section
14(b),  the current market value of a Preferred Share shall be the closing price
of a Preferred Share (as determined  pursuant to Section  11(d)(ii)  hereof) for
the Trading Day immediately before the date of such exercise.

     (c) Following the occurrence of one of the transactions or events specified
in Section 11 giving rise to the right to receive Common  Shares,  capital stock
equivalents  (other than Preferred Shares) or other securities upon the exercise
of a Right,  the Corporation  shall not be required to issue fractions of shares
or units of such Common Shares,  capital stock  equivalents or other  securities
upon  exercise  of the  Rights  or to  distribute  certificates  which  evidence
fractions of such Common Shares,  capital stock equivalents or other securities.
In lieu of  fractional  shares or units of such  Common  Shares,  capital  stock
equivalents  or other  securities,  the  Corporation  may pay to the  registered
holders of Right  Certificates  at the time such Rights are  exercised as herein
provided  an amount in cash equal to the same  fraction  of the  current  market
value of a share or unit of such Common  Shares,  capital stock  equivalents  or
other  securities.  For purposes of this Section 14(c), the current market value
shall be  determined  in the manner set forth in  Section  11(d)  hereof for the
Trading Day  immediately  before the date of such  exercise and, if such capital
stock  equivalent is not traded,  each such capital stock  equivalent shall have
the value of one one-hundredth of a Preferred Share.

                          STOCKHOLDER RIGHTS AGREEMENT

                                       20
<PAGE>

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

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

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

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

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

     (c) subject to Section 6 and Section 7(f) hereof,  the  Corporation and the
Rights  Agent may deem and treat the person in whose name the Right  Certificate
(or, before the Distribution Date, the associated Common Shares  certificate) is
registered  as the absolute  owner thereof and of the Rights  evidenced  thereby
(notwithstanding  any notations of ownership or writing on the Right Certificate
or the  associated  Common  Shares  certificate  made by anyone  other  than the
Corporation  or the Rights Agent) for all purposes  whatsoever,  and neither the
Corporation  nor the Rights Agent,  subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and

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

                          STOCKHOLDER RIGHTS AGREEMENT

                                       21
<PAGE>

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

     Section 18.  Concerning the Rights Agent. The Corporation  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 Corporation also agrees to indemnify the Rights Agent for, and to
hold it harmless  against,  any loss,  liability,  or expense,  incurred without
gross  negligence,  bad faith or  willful  misconduct  on the part of the Rights
Agent,  for anything done or omitted by the Rights Agent in connection  with the
acceptance  and  administration  of this  Agreement,  including  the  costs  and
expenses  of  defending  against any claim of  liability  in the  premises.  The
indemnity provided for herein shall survive the expiration of the Rights and the
termination of this Agreement.

     The Rights Agent shall be protected and shall incur no liability for, or in
respect of, any action taken,  suffered or omitted by it in connection with, its
administration  of this  Agreement  in reliance  upon any Right  Certificate  or
certificate  for  Common  Shares or for  other  securities  of the  Corporation,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction,  consent,  certificate,  statement, or other paper or
document  believed by it to be genuine  and to be signed,  executed  and,  where
necessary, verified or acknowledged, by the proper Person or Persons.

     Section 19. Merger or  Consolidation or Change of Name of Rights Agent. Any
corporation  into which the Rights  Agent or any  successor  Rights Agent may be
merged or with which it may be consolidated,  or any corporation  resulting from
any merger or  consolidation  to which the Rights Agent or any successor  Rights
Agent shall be a party, or any  corporation  succeeding to the stock transfer or
all or substantially  all of the corporate trust business of the Rights Agent or
any  successor  Rights  Agent,  shall be the successor to the Rights Agent under
this  Agreement  without the execution or filing of any paper or any further act
on the part of any of the parties hereto,  provided that such corporation  would
be eligible for appointment as a successor  Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this  Agreement,  any of the Right  Certificates  shall
have been  countersigned but not delivered,  any such successor Rights Agent may
adopt the  countersignature of a predecessor Rights Agent and deliver such Right
Certificates  so  countersigned;  and in  case  at that  time  any of the  Right
Certificates shall not have been  countersigned,  any successor Rights Agent may
countersign such Right Certificates  either in the name of the predecessor or in
the name of the  successor  Rights  Agent;  and in all  such  cases  such  Right
Certificates shall have the full force provided in the Right Certificates and in
this  Agreement.  In case at any  time  the name of the  Rights  Agent  shall be
changed  and at  such  time  any of  the  Right  Certificates  shall  have  been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right  Certificates  so  countersigned;  and in
case  at  that  time  any  of  the  Right   Certificates  shall  not  have  been

                          STOCKHOLDER RIGHTS AGREEMENT

                                       22
<PAGE>

countersigned,  the Rights Agent may countersign such Right Certificates  either
in its prior  name or in its  changed  name;  and in all such  cases  such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.

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

     (a) The  Rights  Agent may  consult  with legal  counsel  (who may be legal
counsel for the Corporation),  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 an  Acquiring  Person and the
determination  of the  current  market  price  of any  Security)  be  proved  or
established by the Corporation  before taking or suffering any action hereunder,
such  fact or  matter  (unless  other  evidence  in  respect  thereof  be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a  certificate  signed by any one of the  Chairman  of the  Board,  the Chief
Executive  Officer,  the  President,  any Vice  President,  the Treasurer or the
Secretary  of the  Corporation  and  delivered  to the  Rights  Agent;  and such
certificate shall be full authorization to the Rights Agent for any action taken
or  suffered  in good  faith by it under the  provisions  of this  Agreement  in
reliance upon such certificate.

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

     (d) The  Rights  Agent  shall not be liable  for or by reason of any of the
statements  of fact or  recitals  contained  in this  Agreement  or in the Right
Certificates  (except its  countersignature  on such Right  Certificates)  or be
required to verify the same, but all such  statements and recitals are and shall
be deemed to have been made by the Corporation 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 Right Certificate (except its  countersignature  thereof),  nor
shall it be  responsible  for any breach by the  Corporation  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 (including the
Rights becoming void pursuant to Section 7(e) hereof) or any adjustment required
under the provisions of Section 11 or Section 13 hereof or  responsible  for the
manner,  method or  amount of any such  adjustment  or the  ascertaining  of the
existence of facts that would require any such  adjustment  (except with respect
to the exercise of Rights evidenced by Right  Certificates  after receipt of the
certificate  described in Section 12 hereof);  nor shall it by any act hereunder
be deemed to make any  representation  or  warranty as to the  authorization  or
reservation  of any Preferred  Shares or Common Shares to be issued  pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares or
Common Shares will, when issued,  be validly  authorized and issued,  fully paid
and non-assessable.

     (f) The Corporation agrees that it will perform,  execute,  acknowledge and
deliver or cause to be performed, executed,  acknowledged and delivered all such

                          STOCKHOLDER RIGHTS AGREEMENT

                                       23
<PAGE>

further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying  out or  performing  by the Rights Agent of
the provisions of this Agreement.

     (g)  The  Rights  Agent  is  hereby   authorized  and  directed  to  accept
instructions  with respect to the  performance of its duties  hereunder from any
one of the Chairman of the Board,  the Chief Executive  Officer,  the President,
any Vice President,  the Treasurer or the Secretary of the  Corporation,  and to
apply to such officers for advice or instructions in connection with its duties,
and shall not be liable for any action  taken or suffered by it in good faith or
lack of action 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 Corporation 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  Agreement and the date on 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 by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such  application  (which date shall not be less than five Business
Days  after the date any  officer  of the  Corporation  actually  receives  such
application,  unless  any such  officer  shall have  consented  in writing to an
earlier  date) unless,  before taking any such action (or the effective  date in
the  case  of an  omission),  the  Rights  Agent  shall  have  received  written
instruction in response to such application specifying the action to be taken or
omitted.

     (h) The Rights Agent and any stockholder,  director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other  securities
of the Corporation or become pecuniarily  interested in any transaction in which
the  Corporation  may be  interested,  or  contract  with or lend  money  to the
Corporation  or  otherwise  act as fully and freely as though it were not Rights
Agent under this Agreement.  Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Corporation 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 Corporation  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 not been
completed,  the Rights  Agent shall not take any further  action with respect to
such  requested   exercise  of  transfer   without  first  consulting  with  the
Corporation.

     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  Corporation  and to each
transfer  agent of the  Common  Shares  or  Preferred  Shares by  registered  or
certified  mail,  and to the holders of the Right  Certificates  by  first-class
mail. The Corporation may remove the Rights Agent or any successor  Rights Agent
upon sixty (60) 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

                          STOCKHOLDER RIGHTS AGREEMENT

                                       24
<PAGE>

Shares or Preferred  Shares by registered or certified  mail,  and to holders of
the Right  Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting,  the Corporation shall
appoint a successor to the Rights Agent. If the  Corporation  shall fail to make
such appointment  within a period of sixty (60) days after giving notice of such
removal  or  after  it has been  notified  in  writing  of such  resignation  or
incapacity by the resigning or incapacitated  Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection  by the  Corporation),  then  the  registered  holder  of  any  Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent.  Any successor  Rights  Agent,  whether  appointed by the
Corporation  or by such a  court,  shall  be a  corporation  organized,  in good
standing and doing  business under the laws of the United States or of any state
of the United States,  which is authorized under such laws to exercise corporate
trust or stock  transfer  powers and is subject to supervision or examination by
federal or state authority. 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  Corporation  shall file
notice  thereof in writing with the  predecessor  Rights Agent and each transfer
agent of the Common  Shares or Preferred  Shares,  and mail a notice  thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice  provided for in this Section 21, however,  or any defect therein,  shall
not affect the legality or validity of the  resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

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

     In  addition,  in  connection  with the  issuance or sale of Common  Shares
following the  Distribution  Date and before the earlier of the Redemption  Date
and the Final  Expiration Date, the Corporation (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
securities,  notes or debentures issued by the Corporation,  and (b) may, in any
other case, if deemed  necessary or appropriate by the Board of Directors of the
Corporation,  issue Right  Certificates  representing the appropriate  number of
Rights in connection with such issuance or sale; provided, however, that (i) the
Corporation shall not be obligated to issue any such Right  Certificates if, and
to the extent  that,  the  Corporation  shall be  advised  by counsel  that such
issuance would create a significant risk of material adverse tax consequences to
the  Corporation or the Person to whom such Right  Certificate  would be issued,
and (ii) no Right  Certificate  shall be  issued  if,  and to the  extent  that,
appropriate  adjustment  shall  otherwise have been made in lieu of the issuance
thereof.

         Section 23.  Redemption and Termination.

     (a)  (i)  The Board of  Directors  of the  Corporation  may, at its option,
redeem  all but not less than all the then  outstanding  Rights at a  redemption
price of $.01 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction  occurring after the date

                          STOCKHOLDER RIGHTS AGREEMENT

                                       25
<PAGE>

hereof (such redemption price being  hereinafter  referred to as the "Redemption
Price"),  at any time before the earlier of (x) the time that any Person becomes
an Acquiring  Person,  or (y) the Final Expiration Date. The Corporation may, at
its option,  pay the  Redemption  Price  either in Common  Shares  (based on the
"current per share market  price," as defined in Section  11(d)  hereof,  of the
Common  Shares  at the  time  of  redemption)  or  cash;  provided  that  if the
Corporation elects to pay the Redemption Price in Common Shares, the Corporation
shall not be required to issue any  fractional  Common  Shares and the number of
Common  Shares  issuable to each holder of Rights  shall be rounded  down to the
next whole share.  The redemption of the Rights by the Board of Directors may be
made effective as such time, on such basis and with such conditions as the Board
of directors in its sole discretion may establish.

          (ii) In addition,  the Board of Directors of the  Corporation  may, at
its option,  at any time following the occurrence of a Section  11(a)(ii)  Event
and the  expiration of any period during which the holder of Rights may exercise
the rights under Section  11(a)(ii) but before any Section 13 Event,  redeem all
but not less than all of the then outstanding Rights at the Redemption Price (x)
in connection with any merger,  consolidation  or sale or other transfer (in one
transaction or in a series of related  transactions)  of assets or earning power
aggregating  50% or  more  of the  earning  power  of the  Corporation  and  its
subsidiaries  (taken as a whole)  in which all  holders  of  Common  Shares  are
treated alike and not  involving  (other than as a holder of Common Shares being
treated like all other such holders) an Interested Stockholder or (y)(aa) if and
for so long as the Acquiring  Person is not thereafter  the Beneficial  Owner of
15% of the Common  Shares,  and (bb) at the time of  redemption no other Persons
are Acquiring Persons.

     (b)  Notwithstanding  the provisions of Section 23(a),  in the event that a
majority  of the Board of  Directors  of the  Corporation  is  comprised  of (i)
persons elected at a meeting of or by written  consent of stockholders  who were
not  nominated  by the Board of Directors  in office  immediately  prior to such
meeting or action by written  consent,  and/or (ii)  successors  of such persons
elected  to the Board of  Directors  for the  purpose of either  facilitating  a
Transaction with a Transaction  Person or circumventing,  directly or indirectly
the  provisions of this Section  23(b),  then (I) the Rights may not be redeemed
for a period of 180 days  following the  effectiveness  of such election if such
redemption is reasonably  likely to have the purpose or effect of facilitating a
Transaction  with a  Transaction  Person and (II) the Rights may not be redeemed
following such 180-day period,  if (x) such  redemption is reasonably  likely to
have the purpose or effect of  facilitating  a  Transaction  with a  Transaction
Person and (y)  during  such  180-day  period the  Corporation  enters  into any
agreement,  arrangement or  understanding  with any Transaction  Person which is
reasonably  likely to have the purpose or effect of  facilitating  a Transaction
with any  Transaction  Person.  If the  Board of  Directors  of the  Corporation
authorizes  redemption of the Rights in either of the circumstances set forth in
clauses 23(a)(i) or 23(a)(ii) above then there must be Continuing Directors then
in  office  and such  authorization  shall  require  only the  concurrence  of a
majority of such Continuing  Directors if: (i) such  authorization  occurs on or
after the time a Person becomes an Acquiring  Person or (ii) such  authorization
occurs  on or  after  the date of a change  (resulting  from a proxy or  consent
solicitation)  in a majority of the directors in office at the  commencement  of
such  solicitation if any Person who is a participant in such  solicitation  has
stated (or if upon the commencement of such solicitation a majority of the Board
of Directors of the  Corporation  has determined in good faith) that such Person
(or any of its Affiliates or Associates)  intends to take or may consider taking
any action  which would result in such Person  becoming an  Acquiring  Person or
which would cause the occurrence of a Triggering Event.

     (c)  In  the  case  of  a  redemption  permitted  under  Section  23(a)(i),
immediately  upon the date for redemption set forth (or determined in the manner
specified  in) in a  resolution  of the Board of  Directors  of the  Corporation
ordering the  redemption of the Rights,  evidence of which shall have been filed

                          STOCKHOLDER RIGHTS AGREEMENT

                                       26
<PAGE>

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 for each Right
so held. In the case of a redemption  permitted  only under  Section  23(a)(ii),
evidence  of which  shall have been filed  with the Rights  Agent,  the right to
exercise the Rights will  terminate and represent  only the right to receive the
Redemption  Price upon the later of ten (10) Business Days  following the giving
of such notice or the  expiration  of any period  during  which the rights under
Section  11(a)(ii) may be exercised.  The Corporation 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 such date for redemption set forth in a resolution of
the Board of Directors  ordering the redemption of the Rights,  the  Corporation
shall mail a notice of  redemption  to all the  holders of the then  outstanding
Rights at their last  addresses  as they appear upon the  registry  books of the
Rights Agent or,  before 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 Corporation nor any of
its  Affiliates  or  Associates  may redeem,  acquire or purchase  for value any
Rights at any time in any manner other than that  specifically set forth in this
Section 23 and other  than in  connection  with the  purchase  of Common  Shares
before the Distribution Date.

     (d) The  Corporation  may, at its option,  discharge all of its obligations
with respect to the Rights by (i) issuing a press release  announcing the manner
of redemption of the Rights in accordance  with this  Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
last  addresses  as they appear on the  registry  books of the Rights  Agent or,
before the Distribution Date, on the registry books of the Transfer Agent of the
Common  Shares,   and  upon  such  action,  all  outstanding  Rights  and  Right
Certificates  shall  be  null  and  void  without  any  further  action  by  the
Corporation.

     Section 24. Exchange.

     (a) The Board of Directors of the  Corporation  may, at its option,  at any
time after any Person becomes an Acquiring  Person,  exchange all or part of the
then  outstanding  and  exercisable  Rights (which shall not include Rights that
have become void  pursuant to the  provisions of Section  11(a)(ii)  hereof) for
Common Shares of the  Corporation  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  Corporation,  any  Subsidiary  of the
Corporation,   any  employee  benefit  plan  of  the  Corporation  or  any  such
Subsidiary,  or any entity holding Common Shares for or pursuant to the terms of
any such a 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  of  the
Corporation  ordering the exchange of any Rights  pursuant to subsection  (a) of
this Section 24 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  Corporation  shall  promptly  give  public  notice  of any  such  exchange;
provided, however, that the failure to give, or any defect in, such notice shall

                          STOCKHOLDER RIGHTS AGREEMENT

                                       27
<PAGE>

not affect the validity of such exchange.  The Corporation shall promptly mail a
notice of any such  exchange  to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given,  whether or
not the holder receives the notice.  Each such notice of exchange will state the
method by which the  exchange  of the Common  Shares for Rights will be effected
and, in the event of any partial  exchange,  the number of Rights  which will be
exchanged.  Any partial  exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void  pursuant to the  provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.

     (c) In any exchange  pursuant to this Section 24, the  Corporation,  at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section  11(b)  hereof) for some or all of the Common  Shares
exchangeable for Rights, at the initial rate of one one-hundredth of a Preferred
Share (or equivalent  preferred  share) for each Common Share, as  appropriately
adjusted to reflect  adjustments  in the voting rights of the  Preferred  Shares
pursuant  to the  terms  thereof,  so that the  fraction  of a  Preferred  Share
delivered in lieu of each Common Share shall have the same voting  rights as one
Common Share.

     (d) 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 this Section 24, the Corporation  shall take
all such action as may be necessary to authorize  additional  Common  Shares for
issuance upon exchange of the Rights.

     Section 25. Notice of Certain Events.

     (a) In case the Corporation  shall propose (i) to pay any dividend  payable
in stock of any  class to the  holders  of its  Preferred  Shares or to make any
other  distribution  to  the  holders  of its  Preferred  Shares  (other  than a
regularly  quarterly  cash  dividend),  (ii)  to  offer  to the  holders  of its
Preferred  Shares  rights  or  warrants  to  subscribe  for or to  purchase  any
additional  Preferred  Shares  or  shares  of  stock of any  class or any  other
securities,  rights or  options,  (iii) to effect  any  reclassification  of its
Preferred Shares (other than a  reclassification  involving only the subdivision
of outstanding  Preferred  Shares),  (iv) to effect any  consolidation or merger
into or with any other Person (other than a Subsidiary of the  Corporation  in a
transaction which does not violate Section 11(n) hereof), or to effect any sale,
or other  transfer (or to permit one or more of its  Subsidiaries  to effect any
sale  or  other  transfer)  in one or more  transactions,  of 50% or more of the
assets or earning  power of the  Corporation  and its  Subsidiaries  (taken as a
whole) to any other Person or Persons (other than the Corporation  and/or any of
its  Subsidiaries  in one or more  transactions  each of which does not  violate
Section 11(n) hereof), or (v) to effect the liquidation,  dissolution or winding
up of the  Corporation,  then, in each such case, the Corporation  shall give to
each holder of a Right  Certificate,  in  accordance  with Section 26 hereof,  a
notice of such  proposed  action to the extent  feasible and file a  certificate
with the Rights  Agent to that effect,  which shall  specify the record date for
the purposes of such stock dividend,  or distribution of rights or warrants,  or
the date on which such reclassification,  consolidation, merger, sale, transfer,
liquidation,  dissolution,  or  winding  up is to take  place  and  the  date of
participation  therein by the holders of the Preferred  Shares, if any such date
is to be  fixed,  and such  notice  shall be so given in the case of any  action
covered by clause (i) or (ii) above at least  twenty (20) days before the record
date for  determining  holders  of the  Preferred  Shares for  purposes  of such
action,  and in the case of any such other  action,  at least  twenty  (20) days
before  the  date  of  the  taking  of  such  proposed  action  or the  date  of
participation therein by the holders of the Preferred Shares, whichever shall be
the earlier.

                          STOCKHOLDER RIGHTS AGREEMENT

                                       28
<PAGE>

     (b) In case of a Section 11(a)(ii) Event, then (i) the Corporation shall as
soon as practicable  thereafter give to each holder of a Right  Certificate,  in
accordance  with Section 26 hereof,  a notice of the  occurrence  of such event,
which notice shall  describe  such event and the  consequences  of such event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding  paragraph (a) to Preferred Shares shall be deemed thereafter to refer
also  to  Common  Shares  and/or,  if  appropriate,   other  securities  of  the
Corporation.

     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 Right  Certificate  to
or on the Corporation 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:

                 TVI Corporation
                 7100 Holladay Tyler Road, Suite 300
                 Glenn Dale, MD 20768
                 Attention:  Thomas K. Plunkett, Treasurer & Assistant Secretary

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

                 Securities Transfer Corporation
                 2591 Dallas Parkway, Suite 102
                 Frisco, Texas  75034
                 Attention: Client Administration

     Notices or demands  authorized by this Agreement to be given or made by the
Corporation  or the Rights Agent to the holder of any Right  Certificate  or, if
before the Distribution Date, to the holder of certificates  representing Common
Shares 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 Corporation.

     Section 27.  Supplements and Amendments.  Before the Distribution Date, the
Corporation  and  the  Rights  Agent  shall,  if  the  Corporation  so  directs,
supplement or amend any provision of this Agreement  without the approval of any
holders  of  certificates   representing  Common  Shares.  From  and  after  the
Distribution   Date,  the  Corporation  and  the  Rights  Agent  shall,  if  the
Corporation so directs,  supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision  contained  herein which may be defective or
inconsistent with any other provisions herein,  (iii) to shorten or lengthen any
time period  hereunder or (iv) to change or supplement the provisions  hereunder
in any manner which the  Corporation  may deem  necessary or desirable and which
shall not adversely  affect the  interests of the holders of Right  Certificates
(other than an  Acquiring  Person or an  Affiliate  or Associate of an Acquiring
Person);  provided,  however,  that this  Agreement may not be  supplemented  or
amended to  lengthen,  pursuant  to clause  (iii) of this  sentence,  (A) a time
period  relating  to when the Rights may be  redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights.  Upon the delivery of a certificate  from an

                          STOCKHOLDER RIGHTS AGREEMENT

                                       29
<PAGE>

appropriate officer of the Corporation which states that the proposed supplement
or  amendment  is in  compliance  with the terms of this  Section 27, the Rights
Agent shall execute such supplement or amendment,  provided that such supplement
or amendment  does not adversely  affect the rights or obligations of the Rights
Agent under Section 18 or Section 20 of this Agreement.  Before the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares. Notwithstanding anything contained in
this Rights Agreement to the contrary, in the event that a majority of the Board
of Directors of the Corporation is comprised of (i) persons elected at a meeting
of or by written consent of stockholders  who were not nominated by the Board of
Directors  in office  immediately  prior to such  meeting  or action by  written
consent,  and/or  (ii)  successors  of such  persons  elected  to the  Board  of
Directors  for  the  purpose  of  either   facilitating  a  Transaction  with  a
Transaction  Person or  circumventing,  directly or indirectly the provisions of
this Section 27, then for a period of 180 days  following the  effectiveness  of
such action,  this Rights  Agreement shall not be amended or supplemented in any
manner  reasonably  likely  to have the  purpose  or effect  of  facilitating  a
Transaction with a Transaction Person.

     Section 28.  Determination and Actions by the Board of Directors,  etc. The
Board of  Directors  of the  Corporation  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 Corporation, 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,   without  limitation,   a
determination  to redeem or not redeem the Rights or to amend the  Agreement and
whether any proposed amendment adversely affects the interests of the holders of
Right Certificates).  For all purposes of this Agreement, any calculation of the
number of Common Shares or other securities  outstanding at any particular time,
including  for  purposes  of  determining  the  particular  percentage  of  such
outstanding  Common  Shares or any other  securities  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 as in
effect  on  the  date  of  this  Agreement.  All  such  actions,   calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith,  shall (x) be final,  conclusive and binding on the  Corporation,
the Rights Agent,  the holders of the Right  Certificates and all other parties,
and (y) not  subject  the Board to any  liability  to the  holders  of the Right
Certificates.  Unless  expressly set forth herein,  no securities will be issued
hereunder unless the securities are then registered under the Securities Act and
comparable  state  securities  laws  or,  if such  securities  are  not  then so
registered,  the Company has determined  that such issuance would be exempt from
the  registration  requirements of such acts. The Company is under no obligation
to effect any such  registrations  or take any action to secure such  exemptions
from registration.

     Section 29. Successors.  All the covenants and provisions of this Agreement
by or for the  benefit of the  Corporation  or the Rights  Agent  shall bind and
inure to the benefit of their respective successors and assigns hereunder.

     Section 30. Benefits of this Agreement.  Nothing in this Agreement shall be
construed to give to any person or corporation  other than the Corporation,  the
Rights Agent and the registered  holders of the Right  Certificates (and, before
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  Corporation,  the  Rights  Agent and the  registered
holders of the Right Certificates (and, before the Distribution Date, the Common
Shares).

                          STOCKHOLDER RIGHTS AGREEMENT

                                       30
<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.

     Section  32.  Governing  Law.  This  Agreement,  each  Right and each Right
Certificate  issued  hereunder  shall be deemed to be a contract  made under the
laws of the State of  Maryland  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
counter-parts, 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.

                          STOCKHOLDER RIGHTS AGREEMENT

                                       31
<PAGE>

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

                                                 TVI Corporation

                                                 By:____________________________
                                                 Name:
                                                 Title:

Attest:

By:____________________________
   Name:

                                                 SECURITIES TRANSFER CORPORATION

                                                 By:____________________________
                                                    Name:
                                                    Title:

Attest:

By:____________________________
   Name:

                          STOCKHOLDER RIGHTS AGREEMENT
                                 SIGNATURE PAGE

<PAGE>

                                                                       EXHIBIT A
                                     FORM OF

                             ARTICLES SUPPLEMENTARY

                                       OF

                                 PREFERRED STOCK

                                       OF

                                 TVI CORPORATION

     TVI Corporation, a corporation organized and existing under the laws of the
State of Maryland (the "Corporation"),  hereby certifies to the State Department
of Assessments and Taxation of Maryland that:

     FIRST:  Pursuant  to the  authority  granted  to and vested in the Board of
Directors of the  Corporation  (the "Board of  Directors")  in  accordance  with
Article  FOURTH of the  charter of the  Corporation,  including  these  Articles
Supplementary  (the  "Charter"),  the  Board of  Directors  adopted  resolutions
reclassifying  500,000 shares (the  "Shares") of Preferred  Stock (as defined in
the Charter) as a separate class of stock,  Series A Preferred  Stock,  $.01 par
value per share (the "Preferred  Stock"),  with the preferences,  conversion and
other rights, voting powers, restrictions,  limitations as to dividends or other
distributions,  qualifications, and terms and conditions of redemption set forth
below.

                                 Preferred Stock

         Section 1. Designation and Amount. There shall be a series of Preferred
Stock that shall be designated as "Series A Preferred Stock" (hereinafter
referred to as "Preferred Stock") and the number of shares constituting such
series shall be 500,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, however, that no decrease shall
reduce the number of shares of Preferred Stock to less than the number of shares
then issued and outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.

     Section 2. Dividends and Distributions.

     (a) Subject to the prior and  superior  rights of the holders of any shares
of any series of  Preferred  Stock  ranking  prior and superior to the shares of
Preferred  Stock with respect to  dividends,  the holders of shares of Preferred
Stock shall be entitled  to  receive,  when,  as and if declared by the Board of
Directors out of assets legally available for the purpose,  quarterly  dividends
payable in cash on the first business day of January, April, July and October in
each year (each  such date being  referred  to herein as a  "Quarterly  Dividend
Payment Date"),  commencing on the first Quarterly  Dividend  Payment Date after
the first issuance of a share or fraction of a share of Preferred  Stock,  in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment  hereinafter set forth, 100 times
the  aggregate  per  share  amount  of all cash  dividends,  and 100  times  the
aggregate per share amount (payable in kind) of all non-cash  dividends or other
distributions, other than a dividend payable in shares of Common Stock, $.01 par
value per share, of the Corporation (the "Common Stock") or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),  declared

<PAGE>

on the Common Stock since the immediately  preceding  Quarterly Dividend Payment
Date, or, with respect to the first Quarterly  Dividend  Payment Date, since the
first  issuance of any share or fraction of a share of Preferred  Stock.  In the
event the  Corporation  shall at any time after  December  3, 2003 (the  "Rights
Record  Date") (i) authorize and declare any dividend on Common Stock payable in
shares of Common Stock,  (ii) subdivide the  outstanding  Common Stock, or (iii)
combine the  outstanding  Common Stock into a smaller number of shares,  then in
each such case the  amount to which  holders of shares of  Preferred  Stock were
entitled  immediately  prior to such event  under  clause  (b) of the  preceding
sentence  shall be  adjusted  by  multiplying  such  amount  by a  fraction  the
numerator  of  which  is the  number  of  shares  of  Common  Stock  outstanding
immediately  after  such  event and the  denominator  of which is the  number of
shares of Common Stock that were outstanding immediately prior to such event.

     (b) The  Corporation  shall  declare  a  dividend  or  distribution  on the
Preferred Stock as provided in paragraph (a) above immediately after it declares
a dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or distribution
shall have been  declared  on the Common  Stock  during the period  between  any
Quarterly  Dividend  Payment  Date and the next  subsequent  Quarterly  Dividend
Payment  Date,  a  dividend  of $1.00 per  share on the  Preferred  Stock  shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

     (c) Dividends shall begin to accrue and be cumulative on outstanding shares
of Preferred Stock from the Quarterly  Dividend  Payment Date next preceding the
date of issue of such  shares of  Preferred  Stock,  unless the date of issue of
such shares is before the record date for the first Quarterly  Dividend  Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such  shares,  or unless the date of issue is a  Quarterly  Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly  Dividend  Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative  from such  Quarterly  Dividend  Payment
Date.  Accrued but unpaid  dividends shall not bear interest.  Dividends paid on
the shares of  Preferred  Stock in an amount less than the total  amount of such
dividends at the time accrued and payable on such shares shall be allocated  pro
rata on a  share-by-share  basis among all such shares at the time  outstanding.
The Board of Directors may fix a record date for the determination of holders of
shares  of  Preferred  Stock  entitled  to  receive  payment  of a  dividend  or
distribution  declared  thereon,  which record date shall be not more than sixty
(60) days before the date fixed for the payment thereof.

     Section 3. Voting  Rights.  The holders of shares of Preferred  Stock shall
have the following voting rights:

     (a) Except as provided in  paragraph  (c) of this  Section 3 and subject to
the  provision for  adjustment  hereinafter  set forth,  each share of Preferred
Stock shall entitle the holder thereof to 100 votes on all matters  submitted to
a vote of the stockholders of the Corporation.

     (b) Except as otherwise provided herein or by law, the holders of shares of
Preferred Stock and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of stockholders of the Corporation.

     (c)  (i) If, on the date used to determine  stockholders  of record for any
meeting of stockholders  for the election of directors,  a default in preference
dividends (as defined in  subparagraph  (v) below) on the Preferred  Stock shall

                                  EXHIBIT A TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       2
<PAGE>

exist,  the holders of the  Preferred  Stock  shall have the right,  voting as a
class as described in subparagraph  (ii) below, to elect two directors,  and the
holders of shares of Common  Stock  shall have the right to elect the  remaining
directors.  Such right may be exercised at any meeting of  stockholders  for the
election of directors  until all such cumulative  dividends  (referred to above)
shall  have been paid in full or until  noncumulative  dividends  have been paid
regularly for at least one year.

          (ii) The  right  of the  holders  of  Preferred  Stock  to  elect  two
directors,  as described above,  shall be exercised as a class concurrently with
the rights of holders of any other series of  Preferred  Stock upon which voting
rights to elect such directors have been conferred and are then exercisable. The
Preferred  Stock  and  any  additional  series  of  Preferred  Stock  which  the
Corporation  may  issue and  which  may  provide  for the right to vote with the
foregoing  series of  Preferred  Stock are  collectively  referred  to herein as
"Voting Preferred Stock."

          (iii)  Each  director  elected  by the  holders  of  shares  of Voting
Preferred  Stock  shall be  referred  to herein  as a  "Preferred  Director."  A
Preferred  Director so elected  shall  continue to serve as such  director for a
term of one year,  except that upon any  termination of the right of all of such
holders to vote as a class for Preferred  Directors,  the term of office of such
directors shall terminate.  Any Preferred  Director may be removed by, and shall
not be removed except by, the vote of the holders of record of a majority of the
outstanding  shares of Voting  Preferred  Stock  then  entitled  to vote for the
election of directors,  present (in person or by proxy) and voting together as a
single  class (a) at a meeting of the  stockholders,  or (b) at a meeting of the
holders of shares of such  Voting  Preferred  Stock,  called for the  purpose in
accordance with the Bylaws of the Corporation,  or (c) by written consent signed
by the holders of a majority of the then outstanding  shares of Voting Preferred
Stock then entitled to vote for the election of directors,  taken  together as a
single class.

          (iv) So long as a default in any preference dividends on the Preferred
Stock shall exist or the holders of any other series of Voting  Preferred  Stock
shall be entitled to elect Preferred Directors, (a) any vacancy in the office of
a Preferred  Director may be filled (except as provided in the following  clause
(b)) by an instrument in writing signed by the remaining  Preferred Director and
filed with the  Corporation  and (b) in the case of the removal of any Preferred
Director,  the  vacancy  may be filled  by the vote or  written  consent  of the
holders of a majority of the outstanding  shares of Voting  Preferred Stock then
entitled to vote for the election of directors,  present (in person or by proxy)
and voting  together as a single  class,  at such time as the  removal  shall be
effected.  Each  director  appointed  as aforesaid  by the  remaining  Preferred
Director shall be deemed,  for all purposes hereof, to be a Preferred  Director.
Whenever (x) no default in  preference  dividends on the  Preferred  Stock shall
exist and (y) the holders of any other Series of Voting Preferred Stock shall no
longer  be  entitled  to elect  such  Preferred  Directors,  then the  number of
directors of the Corporation shall be reduced by two.

          (v) For purposes  hereof,  a "default in preference  dividends" on the
Preferred  Stock  shall be  deemed  to have  occurred  whenever  the  amount  of
cumulative  and unpaid  dividends on the Preferred  Stock shall be equivalent to
six full quarterly  dividends or more (whether or not consecutive),  and, having
so occurred,  such default shall be deemed to exist  thereafter  until, but only
until,  all  cumulative  dividends  on all  shares of the  Preferred  Stock then
outstanding  shall have been paid through the last  Quarterly  Dividend  Payment
Date or until, but only until, non-cumulative dividends have been paid regularly
for at least one year.

                                  EXHIBIT A TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       3
<PAGE>

     (d) Except as set forth  herein (or as  otherwise  required  by  applicable
law),  holders of Preferred Stock shall have no general or special voting rights
and their consent shall not be required for taking any corporate action

     Section 4. Certain Restrictions.

     (a)  Whenever  quarterly  dividends  or other  dividends  or  distributions
payable  on the  Preferred  Stock  as  provided  in  Section  2 are in  arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared,  on shares of Preferred Stock  outstanding shall have been paid
in full, the Corporation shall not

          (i) declare or pay dividends, or make any other distributions,  on any
shares of stock  ranking  junior  (either as to dividends  or upon  liquidation,
dissolution or winding up) to the Preferred Stock;

          (ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution  or winding up) with the  Preferred  Stock,  except  dividends  paid
ratably on the Preferred  Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;

          (iii)  redeem or  purchase  or  otherwise  acquire  for  consideration
(except as provided in (iv) below) shares of any stock ranking junior (either as
to dividends or upon  liquidation,  dissolution  or winding up) to the Preferred
Stock,  provided  that the  Corporation  may at any  time  redeem,  purchase  or
otherwise  acquire shares of any such junior stock in exchange for shares of any
stock  of the  Corporation  ranking  junior  (either  as to  dividends  or  upon
dissolution, liquidation or winding up) to the Preferred Stock;

          (iv) redeem or purchase or  otherwise  acquire for  consideration  any
shares of Preferred Stock, or any shares of stock ranking on a parity (either as
to dividends or upon liquidation,  dissolution or winding up) with the Preferred
Stock,  except  in  accordance  with a  purchase  offer  made in  writing  or by
publication  (as  determined  by the Board of  Directors) to all holders of such
shares upon such terms as the Board of  Directors,  after  consideration  of the
respective  annual  dividend rates and other relative  rights and preferences of
the respective series and classes,  shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.

     (b) The  Corporation  shall not permit any subsidiary of the Corporation to
purchase  or  otherwise  acquire  for  consideration  any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.

     Section 5.  Reacquired  Shares.  Any shares of Preferred Stock purchased or
otherwise  acquired by the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition  thereof. All such shares shall upon
their cancellation  become authorized but unissued shares of Preferred Stock and
may be  reissued  as part of a new  series of  Preferred  Stock  subject  to the
conditions  and  restrictions  on issuance set forth herein,  in the Articles of
Incorporation, in any other Articles of Amendment creating a series of Preferred
Stock or as otherwise required by law.

                                  EXHIBIT A TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       4
<PAGE>

     Section 6. Liquidation, Dissolution or Winding Up.

     (a)  Subject to the prior and  superior  rights of holders of any shares of
any  series of  Preferred  Stock  ranking  prior and  superior  to the shares of
Preferred Stock with respect to rights upon liquidation,  dissolution or winding
up (voluntary or  otherwise),  no  distribution  shall be made to the holders of
shares of stock  ranking  junior  (either as to dividends  or upon  liquidation,
dissolution or winding up) to the Preferred  Stock unless,  prior  thereto,  the
holders of shares of Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,  whether
or not  declared,  to the date of such payment (the  "Liquidation  Preference").
Following  the  payment of the full  amount of the  Liquidation  Preference,  no
additional  distributions  shall be made to the  holders of shares of  Preferred
Stock unless,  prior  thereto,  the holders of shares of Common Stock shall have
received an amount per share (the  "Capital  Adjustment")  equal to the quotient
obtained by dividing (i) the Liquidation  Preference by (ii) 100 (such number in
clause (ii), the "Adjustment Number").  Following the payment of the full amount
of the  Liquidation  Preference  and the  Capital  Adjustment  in respect of all
outstanding shares of Preferred Stock and Common Stock, respectively, holders of
Preferred  Stock and holders of Common  Stock shall  receive  their  ratable and
proportionate  share of the remaining  assets to be  distributed in the ratio of
the  Adjustment  Number to 1 with  respect  to such  Preferred  Stock and Common
Stock, on a per share basis,  respectively.  The merger or  consolidation of the
corporation,  regardless of whether the  corporation is the surviving  entity in
such  merger  or  consolidation,  shall  not be  deemed  to be the  liquidation,
dissolution or winding up of the corporation.

     (b) In the event,  however,  that there are not sufficient assets available
to permit  payment in full of the  Liquidation  Preference  and the  liquidation
preferences  of all other series of  preferred  stock,  if any,  which rank on a
parity with the Preferred Stock, then such remaining assets shall be distributed
ratably to the holders of Preferred  Stock and the holders of such parity shares
in  proportion  to  their  respective  liquidation  preferences.  In the  event,
however,  that there are not  sufficient  assets  available to permit payment in
full of the Capital Adjustment,  then such remaining assets shall be distributed
ratably to the holders of Common Stock.

     (c) In the event the Corporation  shall at any time after the Rights Record
Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the  outstanding  Common Stock,  or (iii) combine the outstanding
Common  Stock  into a  smaller  number  of  shares,  then in each  such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying  such Adjustment  Number by a fraction the numerator of which is the
number of shares of Common Stock  outstanding  immediately  after such event and
the  denominator  of which is the  number of shares  of Common  Stock  that were
outstanding immediately prior to such event.

     Section 7. Consolidation,  Merger, etc. In case the Corporation shall enter
into any  consolidation,  merger,  combination or other transaction in which the
shares  of  Common  Stock are  exchanged  for or  changed  into  other  stock or
securities,  cash and/or any other property, then in any such case the shares of
Preferred  Stock shall at the same time be similarly  exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate  amount of stock,  securities,  cash and/or any
other  property  (payable in kind),  as the case may be, into which or for which
each share of Common Stock is changed or exchanged.

     Section  8. No  Redemption.  The  shares of  Preferred  Stock  shall not be
redeemable.

                                  EXHIBIT A TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       5
<PAGE>

     Section 9. Ranking.  (a) The Preferred Stock shall rank junior to all other
series of the  Corporation's  Preferred Stock as to the payment of dividends and
the  distribution  of assets,  unless the terms of any such series shall provide
otherwise.

     (b) The liquidation preference of the outstanding shares of Preferred Stock
will not be added to the  liabilities  of the  Corporation  for the  purpose  of
determining  whether under the Maryland  General  Corporation Law a distribution
may be made to stockholders of the Corporation  whose  preferential  rights upon
dissolution  of the  Corporation  are junior to those of  holders  of  Preferred
Stock.

     Section 10.  Amendment.  At any time when any shares of Preferred Stock are
outstanding,  neither  the  charter nor these  Articles  Supplementary  shall be
amended  in any  manner  which  would  materially  alter or change  the  powers,
preferences  or  special  rights of the  Preferred  Stock so as to  affect  them
adversely  without the affirmative  vote of the holders of a majority or more of
the  outstanding  shares  of  Preferred  Stock,  voting  separately  as a class;
provided that none of (i) the creation or issuance of (A)  additional  shares of
Preferred  Stock or (B) shares of any class or series of Preferred Stock ranking
junior to or on parity with the  Preferred  Stock as to the payment of dividends
and the  distribution  of assets,  (ii) a merger or  consolidation  in which the
Corporation is the surviving entity and the Preferred Stock remains  outstanding
with no material  adverse change in its powers,  preferences and special rights,
or (iii) a merger or consolidation in which the Corporation is not the surviving
entity and the holders of the  Preferred  Stock  receive in exchange  therefor a
substantially identical security of the surviving entity, shall be considered to
materially  adversely alter or change the powers,  preferences or special powers
of the Preferred Stock.

     Section 11. Fractional  Shares.  Preferred Stock may be issued in fractions
of a share  which  shall  entitle the holder,  in  proportion  to such  holder's
fractional shares, to exercise voting rights, receive dividends,  participate in
distributions  and to have  the  benefit  of all  other  rights  of  holders  of
Preferred Stock.

     SECOND:  The  Shares  have  been  reclassified  by the  Board of  Directors
pursuant to Article Seventh of the Charter.

     THIRD:  These  Articles  Supplementary  have been  approved by the Board of
Directors in the manner and by the vote required by law.

     FOURTH:  The  undersigned  Chairman of the Corporation  acknowledges  these
Articles Supplementary to be the corporate act of the Corporation and, as to all
matters or facts required to be verified under oath, the  undersigned  President
acknowledges  that to the best of his knowledge,  information and belief,  these
matters and facts are true in all material  respects and that this  statement is
made under the penalties for perjury.

                                  EXHIBIT A TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       6
<PAGE>

     IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary
to be signed in its name and on its behalf by its  Chairman  and  attested to by
its Secretary on this ____ day of December, 2003.

ATTEST:

___________________________                By:____________________________(SEAL)
Thomas K. Plunkett                            Richard V. Priddy, President
Treasurer

                                  EXHIBIT A TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       7

<PAGE>

                                                                       EXHIBIT B
                            FORM OF RIGHT CERTIFICATE

NO.  R-_______                                                ___________ RIGHTS

    NOT EXERCISABLE AFTER __________ ___, 2013 OR EARLIER IF REDEEMED BY THE
     CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT ON
         THE TERMS SET FORTH IN THE RIGHTS AGREEMENT RIGHT CERTIFICATE

                                 TVI 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 that certain Rights
Agreement,  dated as of December __, 2003 (the "Rights Agreement"),  between TVI
Corporation, a Maryland corporation (the "Corporation"), and Securities Transfer
Corporation(the  "Rights  Agent"),  to purchase from the Corporation at any time
after the  Distribution  Date (as such term is defined in the Rights  Agreement)
and before 5:00 P.M.,  prevailing  Eastern  time, on December 1, 2013 unless the
Rights evidenced hereby shall have been previously  redeemed by the Corporation,
at the  principal  office or  offices of the Rights  Agent  designated  for such
purpose, or at the office of its successor as Rights Agent, one one-hundredth of
a fully paid  non-assessable  share of Series A Preferred Stock, $0.01 par value
per share (the "Preferred Shares"),  of the Corporation,  at a purchase price of
$6.00 per one  one-hundredth  of Preferred  Share (the "Purchase  Price"),  upon
presentation  and surrender of this Right  Certificate with the Form of Election
to  Purchase  duly  executed.  The  number of  Rights  evidenced  by this  Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise  hereof) set forth above,  and the Purchase Price set
forth above,  are the number and Purchase Price as of December 3, 2003, based on
the Preferred Shares as constituted at such date.

     Upon the occurrence of a Section  11(a)(ii)  Event (as such term is defined
in the Rights Agreement),  if the Rights evidenced by this Right Certificate are
beneficially  owned by (i) an  Acquiring  Person or an Affiliate or Associate of
any such Acquiring  Person (as such terms are defined in the Rights  Agreement),
(ii) a transferee  of any such  Acquiring  Person,  Associate  or Affiliate  who
becomes a transferee  after the  Acquiring  Person  becomes such, or (iii) under
certain  circumstances  specified in the Rights  Agreement,  a transferee of any
such Acquiring Person, Associate or Affiliate who becomes a transferee before or
concurrently  with the Acquiring  Person becoming such, such Rights shall become
null and void and no holder  hereof  shall have any right  with  respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.

     As provided in the Rights  Agreement,  the Purchase Price and the number of
one  one-hundredths  of a  Preferred  Share or  other  securities  which  may be
purchased  upon the exercise of the Rights  evidenced by this Right  Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).

     This Right  Certificate  is subject  to all of the  terms,  provisions  and
conditions of the Rights Agreement,  which terms,  provisions and conditions are
hereby  incorporated  herein by  reference  and made a part  hereof and to which
Rights Agreement  reference is hereby made for a full description of the rights,

<PAGE>

limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights Agent, the Corporation and the holders of the Right  Certificates,  which
limitations of rights include the temporary  suspension of the exercisability of
such 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 Corporation and the principal office or offices of the Rights Agent.

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

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this  Certificate  may be redeemed by the  Corporation at a redemption  price of
$.01 per Right  (subject to  adjustment  as  provided  in the Rights  Agreement)
payable in cash.

     No  fractional  Preferred  Shares will be issued  upon the  exercise of any
Right  or  Rights   evidenced   hereby  (other  than  fractions  which  are  one
one-hundredth or integral  multiples of one  one-hundredth of a Preferred Share,
which may, at the  election  of the  Corporation,  be  evidenced  by  depositary
receipts),  but in lieu thereof a cash payment will be made,  as provided in the
Rights Agreement.

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

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

                                  EXHIBIT B TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       2
<PAGE>

     WITNESS the facsimile  signature of the proper  officers of the Corporation
and its corporate seal.

Dated as of ________ __, 20__.

[SEAL]

Attest:                                          TVI CORPORATION

By_____________________________                  By_____________________________
  Name:                                            Name:
  Title:                                           Title:

Countersigned:

SECURITIES TRANSFER CORPORATION

By_____________________________
  Authorized Signatory
  Name:
  Title:

                                  EXHIBIT B TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       3
<PAGE>

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

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

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

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

     The  undersigned  hereby  certifies  that (1) the Rights  evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate  thereof
(as such terms are  defined in the Rights  Agreement)  and (2) after due inquiry
and to the best knowledge of the  undersigned,  the  undersigned did not acquire
the Rights evidenced by this Right  Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).

                                             ___________________________________
                                             Signature

<PAGE>

                          FORM OF ELECTION TO PURCHASE

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

To the Rights Agent:

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

Please insert social security or other identifying number_______________________

________________________________________________________________________________
                  (Please print name and address of transferee)

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

Please insert social security or other identifying number_______________________

________________________________________________________________________________
                  (Please print name and address of transferee)

________________________________________________________________________________

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.

     The  undersigned  hereby  certifies  that (1) the Rights  evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate  thereof
(as such terms are  defined in the Rights  Agreement)  and (2) after due inquiry
and to the best knowledge of the  undersigned,  the  undersigned did not acquire
the Rights evidenced by this Right  Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).

                                                         _______________________
                                                         Signature

<PAGE>

                                     NOTICE

     The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

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

<PAGE>

                                                                       EXHIBIT C

                 SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES

     On  December  2,  2003,  the Board of  Directors  of TVI  Corporation  (the
"Corporation")  declared a dividend distribution of one preferred share purchase
right (a "Right") for each outstanding share of Common Stock, $.01 par value per
share (the  "Common  Stock"),  of the  Corporation.  The  dividend is payable to
stockholders of record on December 3, 2003 (the "Record Date"), and with respect
to Common Stock issued thereafter until the Distribution Date (as defined below)
and, in certain  circumstances,  with  respect to Common  Stock issued after the
Distribution  Date.  Except as set forth  below,  each  Right,  when it  becomes
exercisable, entitles the registered holder to purchase from the Corporation one
one-hundredth of a share of Series A Preferred Stock,  $0.01 par value per share
(the  "Preferred  Shares"),  of the  Corporation  at a price  of  $6.00  per one
one-hundredth  of  a  Preferred  Share  (the  "Purchase   Price"),   subject  to
adjustment.  The  description  and terms of the Rights are set forth in a Rights
Agreement  (the  "Rights  Agreement")  between the  Corporation  and  Securities
Transfer Corporation,  as Rights Agent (the "Rights Agent") dated as of December
2, 2003.

     Initially,  the Rights will be attached  to all  certificates  representing
Common  Stock then  outstanding,  and no  separate  Right  Certificates  will be
distributed. The Rights will separate from the Common Stock upon the earliest to
occur of (i) ten (10) days after a person or group of  affiliated  or associated
persons has acquired  beneficial  ownership of 15% or more of the  Corporation's
outstanding  Common Stock (except  pursuant to a Permitted Offer, as hereinafter
defined);  or (ii) ten (10) Business  Days (as defined in the Rights  Agreement)
(or such later date as the Board may determine)  following the  commencement of,
or  announcement  of an intention to make, a tender offer or exchange  offer the
consummation  of which would  result in a person or group  becoming an Acquiring
Person (as  hereinafter  defined)  (the  earliest of such dates being called the
"Distribution Date"). A person or group whose acquisition of Common Stock causes
a Distribution  Date pursuant to clause (i) above is an "Acquiring  Person." The
date  that a  person  or  group  becomes  an  Acquiring  Person  is the  "Shares
Acquisition Date."

     The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred  solely with the Common Stock.  Until the Distribution  Date
(or  earlier  redemption  or  expiration  of  the  Rights),   new  Common  Stock
certificates  issued  after the Record Date upon  transfer or new  issuances  of
Common  Stock will  contain a notation  incorporating  the Rights  Agreement  by
reference.  Until the Distribution Date (or earlier  redemption or expiration of
the Rights),  the  surrender for transfer of any  certificates  for Common Stock
outstanding  as of the  Record  Date,  even  if such  notation  or a copy of the
Summary of Rights is not attached thereto,  will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.

     As  soon  as  practicable   following  the  Distribution   Date,   separate
certificates  evidencing  the Rights  ("Right  Certificates")  will be mailed to
holders  of  record  of the  Common  Stock as of the  close of  business  on the
Distribution  Date (and to each initial  record  holder of certain  Common Stock
issued after the Distribution  Date), and such separate Right Certificates alone
will evidence the Rights.

     The Rights are not exercisable  until the Distribution Date and will expire
at the close of business on December  1, 2013,  unless  earlier  redeemed by the
Corporation as described below.

     If any person becomes an Acquiring  Person (except  pursuant to a tender or
exchange offer which is for all outstanding Common Stock at a price and on terms

<PAGE>

which a majority of members of the Board of Directors (who are not also officers
of the  Corporation  or an Acquiring  Person or affiliate or associate  thereof)
determines to be adequate and in the best interests of the  Corporation  and its
stockholders, other than such Acquiring Person, its affiliates and associates (a
"Permitted Offer")),  each holder of a Right will thereafter have the right (the
"Flip-In  Right") to receive upon  exercise the number of shares of Common Stock
(or, in certain circumstances, one one-hundredths of a share of Preferred Shares
or other  securities  of the  Corporation)  having a market  value  (immediately
before  such  triggering  event)  equal to two times the  exercise  price of the
Right.  At such time,  all Rights that are  beneficially  owned by the Acquiring
Person or any affiliate, associate or transferee thereof will be null and void.

     If at any time following the Shares  Acquisition  Date, (i) the Corporation
is acquired in a merger or other business  combination  transaction in which the
holders  of  all  of  the  outstanding  Common  Shares  immediately  before  the
consummation  of the  transaction  are not the  holders of all of the  surviving
corporation's voting power, or (ii) more than 50% of the Corporation's assets or
earning  power are sold or  transferred,  in either case with or to an Acquiring
Person or any affiliate or associate or any other person in which such Acquiring
Person, affiliate or associate has an interest or any person acting on behalf of
or in concert with such Acquiring Person, affiliate or associate, or, if in such
transaction all holders of Common Stock are not treated alike,  then each holder
of a Right (except Rights which  previously have been voided as set forth above)
shall  thereafter  have the right  (the  "Flip-Over  Right")  to  receive,  upon
exercise,  common  shares of the acquiring  company  having a value equal to two
times the exercise  price of the Right.  The holder of a Right will  continue to
have the  Flip-Over  Right only to the  extent  that the  Flip-In  Right has not
previously been exercised.

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

     The number of outstanding  Rights and the number of one one-hundredths of a
Preferred  Share  issuable  upon  exercise  of each  Right are also  subject  to
adjustment in the event of a stock split of the Common Stock or a stock dividend
on the Common Stock payable in Common Stock or subdivisions,  consolidations  or
combinations  of the  Common  Stock  occurring,  in any such  case,  before  the
Distribution Date.

     Preferred  Shares  purchasable  upon  exercise  of the  Rights  will not be
redeemable.  Each  Preferred  Share will be entitled  to a minimum  preferential
quarterly dividend payment of $1.00 per share but, if greater,  will be entitled
to an aggregate  dividend per share of 100 times the dividend declared per share
of Common  Stock.  In the event of  liquidation,  the  holders of the  Preferred
Shares will be entitled to a minimum preferential liquidation payment of $100.00
per share, plus accrued and unpaid dividends;  thereafter, and after the holders
of the  Common  Stock  receive  a  liquidation  payment  of $1.00  per share (as
adjusted),  the  holders of the  Preferred  Shares and the holders of the Common
Stock will share the remaining assets in the ratio of 100 to 1 (as adjusted) for
each Preferred Share and share of Common Stock so held,  respectively.  Finally,
in the event of any merger,  consolidation or other  transaction in which Common
Stock is exchanged,  each Preferred  Share will be entitled to receive 100 times

                                  EXHIBIT C TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       2
<PAGE>

the amount  received  per share of Common  Stock.  The rights are  protected  by
customary antidilution  provisions.  In the event that the amount of accrued and
unpaid  dividends on the Preferred  Shares is  equivalent to six full  quarterly
dividends or more  (whether or not  consecutive),  the holders of the  Preferred
Shares shall have the right, voting as a class, to elect two directors until all
cumulative  dividends  on the  Preferred  Shares have been paid through the last
quarterly dividend payment date or until non-cumulative dividends have been paid
regularly for at least one year.

     With  certain  exceptions,  no  adjustment  to the  Purchase  Price will be
required until  cumulative  adjustments  require an adjustment of at least 1% in
such Purchase Price. No fractional  Preferred  Shares will be issued (other than
fractions which are one one-hundredth or integral multiples of one one-hundredth
of a  Preferred  Share,  which  may,  at the  election  of the  Corporation,  be
evidenced by depository receipts) and in lieu thereof, a payment in cash will be
made based on the market price of the  Preferred  Shares on the last Trading Day
(as defined in the Rights Agreement) before the date of exercise.

     At any time  before  the  earlier  to occur  of (i) a  person  becoming  an
Acquiring  Person,  (ii) the  expiration  of the  Rights,  or  (iii) in  certain
circumstances, after the Shares Acquisition Date, the Corporation may redeem all
but  not  less  than  all of the  Rights  at a  price  of $.01  per  Right  (the
"Redemption  Price") which  redemption shall be effective upon the action of the
Board of Directors.

     All of the  provisions of the Rights  Agreement may be amended by the Board
of  Directors  of the  Corporation  before  the  Distribution  Date.  After  the
Distribution  Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity,  defect or inconsistency,  to make changes
which do not adversely affect the interests of holders of Rights  (excluding the
interests of any  Acquiring  Person),  or,  subject to certain  limitations,  to
shorten or lengthen any time period under the Rights Agreement.

     A copy of the  Rights  Agreement  has been filed  with the  Securities  and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A, dated
December __, 2003.  A copy of the Rights  Agreement is available  free of charge
from the Corporation. This summary description of the Rights does not purport to
be  complete  and is  qualified  in its  entirety  by  reference  to the  Rights
Agreement, which is hereby incorporated herein by reference.

                                  EXHIBIT C TO
                          STOCKHOLDER RIGHTS AGREEMENT

                                       3Amended and Restated Merger Agreement dated December 2, 2003

	
AMENDED AND RESTATED MERGER AGREEMENT

       THIS AMENDED AND RESTATED MERGER AGREEMENT (this “Agreement”) is dated for reference purposes December 2, 2003, among Host America Corporation, a Colorado corporation
(“Host”), Host Acquisition Corporation, a Colorado corporation (“HAC”) and GlobalNet Energy Investors, Inc., a Texas corporation (“GlobalNet”).  This Agreement amends and restates in their entirety the Merger Agreement dated
September 24, 2003 and the Amendment Agreement dated November 4, 2003 among Host, HAC and GlobalNet.

	
RECITALS

       A.       Host is desirous of entering into a merger transaction with GlobalNet, as a result of which the shareholders of GlobalNet, (the
“GlobalNet Shareholders”) will receive 550,000 shares of Host restricted Common Stock.  The transactions to be undertaken by Host and GlobalNet to accomplish this result are herein collectively referred to as the “Merger.”

       B.       In order to accomplish the Merger, Host has created HAC as a wholly owned subsidiary of Host.

       C.       It is intended that the Merger will qualify as reorganization under section 368(a) of the Internal Revenue Code of 1986, as amended (the
“Code”).

       D.       In order to accomplish the Merger, HAC will merge into GlobalNet, and GlobalNet shall be the surviving entity.  Pursuant to this
Agreement, the GlobalNet Shareholders shall receive Common Stock in Host in exchange for the cancellation of their GlobalNet Common Stock.

       E.       The respective boards of directors of Host, HAC and GlobalNet deem it advisable and in the best interest of each corporation and their
respective shareholders that the foregoing transaction be accomplished in accordance with the terms of this Agreement, and such boards of directors have authorized and approved the execution and delivery of this Agreement on behalf of such respective
corporations.

	
STATEMENT OF AGREEMENT

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

1.       THE MERGER AND RELATED TRANSACTIONS.

       1.1      The GlobalNet/HAC Merger.  Upon the terms and subject to the conditions set forth in this Agreement, HAC shall be merged with and
into GlobalNet.  Following the Merger, the separate corporate existence of HAC shall cease and GlobalNet shall continue as the surviving party in the Merger (GlobalNet is sometimes referred to as the “Surviving Corporation”).

       1.2     Effective Time of the Merger. At the Closing (as defined in Article 2) and subject to the terms and conditions hereof, HAC and GlobalNet shall
file appropriate certificates (the “Articles of Merger”) in such form as is required by and which shall be executed in accordance with Section 7-111-105 of the Colorado Business Corporation Act and with the applicable provisions of the Texas Business
Corporation Act.  The Merger shall become effective at such time as the Articles of Merger are duly filed with the Colorado Secretary of State and the Texas Secretary of State, or at such time as HAC and GlobalNet shall agree and as shall be specified in the
Articles of Merger (the “Effective Time of the Merger”).

       1.3       Articles of Incorporation, Bylaws, Board of Directors and Officers of the Surviving Corporation.

	
       

	
       (a)       The Articles of Incorporation of GlobalNet as in effect immediately prior to the Effective Time of the Merger shall be the Articles of
Incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law.

	
       

	
       

	
       

	
       (b)       At the Effective Time of the Merger, the Bylaws of GlobalNet as in effect immediately prior to the Effective Time of the Merger shall be
the Bylaws of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law.

	
       

	
       

	
       

	
       (c)       For a period of three and one half (3 1⁄2) years from the Effective Time of the Merger, the directors of the Surviving Corporation
shall be Geoff Ramsey, Eric Barger and Ronald Sparks.  The officers of the Surviving Corporation shall be the persons to be listed in Schedule 1.3(c) of the GlobalNet Disclosure Letter.  Each director shall hold his or her respective office or offices from
and after the Effective Time of the Merger until they first resign or their respective successors shall have been elected or appointed and shall have qualified, or as otherwise provided in the Bylaws of the Surviving Corporation.  Additionally, Host hereby
agrees that for a period of three and one half (3 1⁄2) years from the Effective Time of the Merger, the number of directors of the Surviving Corporation shall be set at three (3) and Host, as the sole shareholder of the Surviving Corporation, will not amend the
Surviving Corporation’s Bylaws to increase or decrease the number of directors.  However, if the Surviving Corporation does not record positive net income for the fiscal year ending June 30, 2005 as reflected on the audited financial statements of the
Surviving Corporation, Host, as the sole shareholder of the Surviving Corporation, may amend the Surviving Corporation’s Bylaws to add two (2) additional directors to the Surviving Corporation’s board of directors and such additional directors will be
chosen by Host.  Furthermore, in the event that Eric Barger and/or Ronald Sparks resign or are unable to serve as directors of the Surviving Corporation for any reason, Host hereby agrees to vote all of its shares of the Surviving Corporation for the election of
such replacement directors as are identified by the GlobalNet Shareholders.  Host acknowledges that it is making this voting agreement in accordance with Article 2.30.B of the Texas Business Corporation Act, and agrees to conspicuously legend its shares of
GlobalNet upon completion of the Merger to such effect.

       1.4       Certain Information With Respect to the Capital Stock of HAC and GlobalNet.  The respective designations and numbers of
outstanding shares of each class of outstanding capital stock of Host, HAC and GlobalNet as of the date of this Agreement are as follows:

	
       

	
       (i)       The authorized and outstanding capital stock of HAC consists of 100 shares of Common Stock, $.001 par value, of which 100 shares are issued
and outstanding (the “HAC Stock”).

	
       

	
       

	
       

	
       (ii)       The authorized capital stock of GlobalNet consists of 100,000 shares of Common Stock, $1.00 par value, of which 100,000 shares are issued
and outstanding (the “GlobalNet Stock”).

	
       

	
       

	
       

	
       (iii)       The authorized capital stock of Host consists of 80,000,000 shares of Common Stock, $.001 par value, of which 2,948,594 shares are issued
and outstanding and 2,000,000 shares of preferred stock, $.001 par value, of which 266,667 shares of Series B Convertible Preferred Stock are issued and outstanding (the “Host Stock”).

       1.5      Effect of Merger.  At the Effective Time of the Merger, the effect of the Merger shall be as provided in Section 7-111-106 of the
Colorado Business Corporation Act.

       1.6       Conversion of GlobalNet Stock. At the Effective Time of the Merger, by virtue of the Merger and without any action on the part of
the holders of the GlobalNet Stock set forth in Schedule 1.6, the issued and outstanding GlobalNet Stock shall be converted into the right to receive 550,000 shares of Host’s restricted Common Stock.  Such shares of Host Common Stock will be
“restricted securities” as such term is defined in Rule 144 of the Securities Act of 1933, as amended, and may not be sold or transferred unless there is an effective registration statement under the Securities Act of 1933, as amended, covering such
securities or an exemption from such registration is available.  For the avoidance of doubt it is acknowledged that no restrictions shall be placed on the shares to be issued under this section, except for any restrictions placed on such shares pursuant to Rule
144.

       1.7      Effect of Merger on HAC Capital Stock.  At the Effective Time of the Merger without any action on the part of the holders of HAC
Stock, each share of HAC Stock issued and outstanding immediately prior to the Effective Time of the Merger shall be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

       1.8       Delivery of Certificates.  At the Effective Time of the Merger, the GlobalNet Stock shall be canceled and the GlobalNet Shareholders
shall receive instruments evidencing the ownership of the securities of Host as set forth on Schedule 1.6.  Each GlobalNet Shareholder shall deliver to Host at the Closing the Certificates representing the shares of GlobalNet Stock owned by the GlobalNet
Shareholder (the “GlobalNet Certificates”), duly endorsed in blank by the GlobalNet Shareholder, or accompanied by blank stock powers.  Each GlobalNet Shareholder agrees promptly to cure any deficiencies with respect to the endorsement of his
GlobalNet Certificates or other documents of conveyance with respect to the GlobalNet Stock or with respect to the stock powers accompanying any GlobalNet Stock.  Until surrender as contemplated by this Section 1.8, each GlobalNet Certificate shall be deemed at
any time after the Effective Time of the Merger to represent only the Host Stock received by the shareholders of GlobalNet, as set forth in Schedule 1.6, and each holder of a GlobalNet Certificate shall cease to have any rights with respect to the GlobalNet
Stock.

2.       CLOSING.

       Subject to the terms and conditions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) will take place on the second business
day after the satisfaction or waiver (subject to applicable law) of the conditions set forth in Sections 8 and 9, unless another time or date is agreed to in writing by the parties hereto (the actual time and date of the Closing being referred to herein as the
“Closing Date”).  The Closing shall be held at the offices of Berenbaum, Weinshienk & Eason, P.C., 370 Seventeenth Street, 48th Floor, Denver, Colorado 80202, unless another place is agreed to in writing by the parties
hereto.

3.       REPRESENTATIONS AND WARRANTIES OF GLOBALNET CONCERNING GLOBALNET.

       Except as provided in the GlobalNet Disclosure Letter (as defined below) to be delivered pursuant to Section 10.7, GlobalNet represents and warrants to Host and HAC that all of the
following representations and warranties in this Section 3 are true at the date of this Agreement and shall be true at the time of Closing (except to the extent that such representation or warranty speaks of an earlier date, in which case such representation or
warranty shall be true and correct in all material respects as of such date).  As used in this Agreement, the “GlobalNet Disclosure Letter” shall mean the disclosure letter delivered by GlobalNet pursuant to this Section 3.

       3.1        Due Organization. GlobalNet is a corporation duly organized, validly existing and in good standing under the laws of the state of
Texas, and has the requisite power and authority to carry on its business as it is now being conducted.  GlobalNet is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary, except (i) as will be set forth on Schedule 3.1 to the GlobalNet Disclosure Letter or (ii) where the failure to be so authorized or qualified would not have a material adverse effect on the business,
operations, properties, assets or condition (financial or otherwise), of GlobalNet taken as a whole (as used herein with respect to GlobalNet, or with respect to any other person, a “Material Adverse Effect”). GlobalNet is not authorized nor qualified to
do business in any jurisdiction, except the State of Texas. True, complete and correct copies of the Articles of Incorporation and Bylaws, each as amended, of GlobalNet (the “GlobalNet Charter Documents”) shall be made available to Host.   The stock
records of GlobalNet as heretofore made available to Host, are correct and complete in all material respects.  GlobalNet has made all minutes available to Host.

       3.2        Subsidiaries.   As qualified in Schedule 3.4, GlobalNet does not own or control, and has not in the past owned or
controlled, directly or indirectly, a corporation, partnership, limited liability company or other business entity.  GlobalNet does not own, directly or indirectly any ownership, equity, or voting interest in any corporation, partnership, joint venture or other
entity, and has no agreement or commitment to purchase any such interest.

       3.3        Capital Structure.  The authorized capital stock of GlobalNet consists of 100,000 shares of common stock, $1.00 value, of
which 100,000 shares are issued and outstanding.  All of the outstanding shares of common stock have been duly authorized and are validly issued, fully paid and non-assessable.  GlobalNet has no common stock or other shares of capital stock reserved for or
otherwise subject to issuance.  GlobalNet has no other outstanding shares of capital stock.  The names of all of the holders of the GlobalNet Stock and the number of shares owned by each holder as of the Closing Date will be set forth in Schedule 3.3 to the
GlobalNet Disclosure Letter. There are no pre-emptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital
stock or other securities of GlobalNet or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire, any securities of GlobalNet, and no securities or obligations evidencing such rights
are authorized, issued or outstanding.  GlobalNet does not have outstanding any bonds, debentures, notes or other debt obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote). 
There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to GlobalNet. There are no voting trusts, proxies or other agreements or understandings with respect to the voting of the capital stock of
GlobalNet.

       3.4        Predecessor Status; Etc.  There shall be included in Schedule 3.4 to the GlobalNet Disclosure Letter an accurate list of all
names of all predecessor companies of GlobalNet, including the names of any entities acquired by GlobalNet (by stock purchase, merger or otherwise) or owned by GlobalNet or from whom GlobalNet previously acquired material assets, in any case, from the earliest date
upon which any person acquired his or her stock in GlobalNet.  Except as will be disclosed on Schedule 3.4 to the GlobalNet Disclosure Letter, GlobalNet has not been, within such period of time, a subsidiary or division of another corporation or a part of an
acquisition which was later rescinded.

       3.5        Spin-Off By GlobalNet.  Except as will be set forth on Schedule 3.5 to the GlobalNet Disclosure Letter, there has not been any
sale, spin-off or split-up of material assets of either GlobalNet or any other person or entity that directly, or indirectly through one or more intermediaries, is controlled by GlobalNet (“Affiliates”) since its inception.

       3.6        Financial Statements.  Schedule 3.6 to the GlobalNet Disclosure Letter will set forth the GlobalNet financial statements
Except as will be set forth on Schedule 3.6 to the GlobalNet Disclosure Letter, such financial statements present fairly in all material respects the financial position of GlobalNet as of the date indicated thereon, and present fairly in all material respects the
results of operations for the period indicated thereon, except that the unaudited interim financial statements were or are subject to normal and recurring year-end adjustments which were not or are not expected to be material in amount.

       3.7        Liabilities and Obligations.  Schedule 3.7 to the GlobalNet Disclosure Letter will include accurate lists as of
September 30, 2003 of all material liabilities, loan agreements, indemnity or guaranty agreements, bonds, mortgages, liens, pledges or other security agreements of GlobalNet which are not reflected on the interim balance sheet of GlobalNet at September 30,
2003 or otherwise reflected in the GlobalNet financial statements at September 30, 2003 which by their nature would be required in accordance with GAAP to be reflected in such balance sheet.  Since September 30, 2003, GlobalNet has not incurred any
material liabilities of any kind, character and description, whether accrued, absolute, secured or unsecured, contingent or otherwise, other than liabilities incurred in the ordinary course of business.  To the knowledge of GlobalNet, GlobalNet has no contingent
liabilities related to pending litigation or threatened litigation, or any other liability which is not fixed or otherwise accrued or reserved.

       3.8       Permits and Intangibles.  Schedule 3.8 to the GlobalNet Disclosure Letter will include an accurate list as of or on the date
hereof of (i) all licenses, franchises, permits, or other governmental authorizations GlobalNet or its Affiliates hold and (ii) any and all patents, trademarks, marks, copyrights, software, technical information, data process technology, plans and drawings or any
other intellectual property that GlobalNet or its Affiliates owns, uses, licenses or has applied for.  GlobalNet has not infringed on or misappropriated, is not now infringing on or misappropriating, and has not received any notice that it is infringing on,
misappropriating, or otherwise conflicting with the intellectual property rights of any third parties; and there is no claim pending or threatened against GlobalNet with respect to the alleged infringement or misappropriation by GlobalNet or a conflict with, any
intellectual property rights of others.

       3.9        Environmental Matters.  To the knowledge of GlobalNet, GlobalNet has complied with and is in compliance with all Federal,
state, local and foreign statutes (civil and criminal), laws, ordinances, regulations, rules, notices, permits, judgments, orders and decrees applicable to it or any of its properties, assets, operations and businesses relating to environmental protection
(collectively “Environmental Laws”) including, without limitation, Environmental Laws relating to air, water, land and the generation, storage, use, handling, transportation, treatment or disposal of Hazardous Wastes and Hazardous Substances including
petroleum and petroleum products (as such terms are defined in any applicable Environmental Laws).

       3.10       Personal Property.  Except as set forth in the balance sheet as of September 30, 2003, GlobalNet owns no personal property
with an individual value in excess of $10,000 and has entered into no leases and agreements in respect of personal property in excess of $10,000.  All material personal property used by GlobalNet in its business is owned by GlobalNet.

      3.11       Material Contracts and Commitments.  Schedule 3.11 to the GlobalNet Disclosure Letter will include an accurate list as of or on the date
hereof, of all material written or oral leases, agreements or other contracts or legally binding contractual rights or contractual obligations or contractual commitments relating to or in any way affecting the operation or ownership of the business of GlobalNet (the
“Material Contracts”), including but not limited, those of a type described below:

	
       

	
       (a)       Any consulting agreement, employment agreement, change-in-control agreement, and collective bargaining arrangements with any labor union
and any such agreements currently in negotiation or proposed;

	
       

	
       

	
       

	
       (b)       Any contract for capital expenditures or the acquisition or construction of fixed assets in excess of $10,000;

	
       

	
       

	
       

	
       (c)       Any contract for the purchase, maintenance or acquisition, or the sale or furnishing, of materials, supplies, merchandise, products,
machinery, equipment, parts or other property or services in excess of $10,000 (except if such contract is made in the ordinary course of business and requires aggregate future payments of less than $10,000);

	
       

	
       

	
       

	
       (d)       Any contract other than trade payables in the ordinary course of business relating to the borrowing of money, or the guaranty of another
person’s borrowing of money, including, without limitation, any notes, mortgages, indentures and other obligations, guarantees of performance, agreements and instruments for or relating to any lending or borrowing, including assumed indebtedness;

	
       

	
       

	
       

	
       (e)       Any contract granting any person a lien on all or any part of the assets of GlobalNet;

	
       

	
       

	
       

	
       (f)       Any contract for the cleanup, abatement or other actions in connection with hazardous materials as defined under any Environmental Laws,
the remediation of any existing environmental liabilities or relating to the performance of any environmental audit or study;

	
       

	
       

	
       

	
       (g)      Any contract granting to any person an option or a first refusal, first-offer or similar preferential right to purchase or acquire any material assets
of GlobalNet;

	
       

	
       

	
       

	
       (h)       Any contract with any agent, distributor or representative which is not terminable by GlobalNet upon ninety calendar days' or less notice
without penalty;

	
       

	
       

	
       

	
       (i)       Any contract under which GlobalNet is (1) a lessee or sublessee of any machinery, equipment, vehicle or other tangible personal property,
or (2) a lessor of any tangible personal property owned by GlobalNet, in either case having an original value in excess of $10,000;

	
       

	
       

	
       

	
       (j)       Any contract under which GlobalNet has granted or received a license or sublicense or under which it is obligated to pay or has the right
to receive a royalty, license fee or similar payment;

	
       

	
       

	
       

	
       (k)       Any contract with any Affiliates;

	
       

	
       

	
       

	
       (l)       Any contract providing for the indemnification or holding harmless of any officer, director, employee or other person, other than as
provided in the GlobalNet Charter Documents;

	
       

	
       

	
       

	
       (m)       Any contract for purchase or sale by GlobalNet or the granting of any options with respect to, or providing for any labor, services or
materials (including brokerage or management services) involving any real property on which GlobalNet conducts any aspect of its business involving aggregate future payments of more than $10,000;

	
       

	
       

	
       

	
       (n)       Any contract limiting, restricting or prohibiting GlobalNet from conducting business anywhere in the United States or elsewhere in the
world;

	
       

	
       

	
       

	
       (o)       Any joint venture or partnership agreement;

	
       

	
       

	
       

	
       (p)       Any lease, sublease or associated agreements relating to the property leased by GlobalNet;

	
       

	
       

	
       

	
       (q)       Any material contract requiring prior notice, consent or other approval upon a change of control in the equity ownership of GlobalNet,
which contracts shall be separately identified on Schedule 3.11 to the GlobalNet Disclosure Letter;

	
       

	
       

	
       

	
       (r)       Any contract with a customer of GlobalNet involving work to be performed or product to be delivered, in each case subsequent to
September 30, 2003, in excess of $10,000;

	
       

	
       

	
       

	
       (s)      Any other contract, whether or not made in the ordinary course of business, which involves future payments in excess of $10,000.

GlobalNet has provided Host a true and complete copy of each written Material Contract and a true and complete summary of each oral Material Contract, in each case including all amendments or other modifications thereto. 
Except as will be set forth on Schedule 3.11 to the GlobalNet Disclosure Letter, each Material Contract is a valid and binding obligation of, and enforceable in accordance with its terms against, GlobalNet, and the other parties thereto, and is in full force and
effect, subject only to bankruptcy, reorganization, receivership and other laws affecting creditors’ rights generally.  Except as will be set forth on Schedule 3.11 of the GlobalNet Disclosure Letter, GlobalNet has performed all obligations required to be
performed by it as of the date hereof and will have performed all obligations required to be performed by it as of the Closing Date under each Material Contract and neither GlobalNet, nor any other party to any Material Contract is in breach or default thereunder,
and there exists no condition which would, with or without the lapse of time or the giving of notice, or both, constitute a material breach or default thereunder.  GlobalNet has not been notified that any party to any Material Contract intends to cancel,
terminate, not renew, or exercise an option under any Material Contract, whether in connection with the transactions contemplated hereby or otherwise.

       3.12        Real Property.  Schedule 3.12 to the GlobalNet Disclosure Letter will set forth a correct and complete list of all real
property leases entered into by GlobalNet (the “Leased Real Property”).  Except as lessee of Leased Real Property, GlobalNet is not a lessee under or otherwise a party to any lease, sublease, license, concession or other agreement, whether written or
oral, pursuant to which another person or entity has granted to GlobalNet the right to use or occupy all or any portion of any real property.  GlobalNet does not have an ownership interest in any real property.

       GlobalNet has, assuming good title in the landlord, a valid leasehold interest in the Leased Real Property free and clear of all liens, assessments or restrictions (including, without
limitation, inchoate liens arising out of the provision of labor, services or materials to any such Leased Real Property) other than (a) mortgages shown on the GlobalNet financial statements as securing specified liabilities or obligations, with respect to which no
default (or event that, with notice or lapse of time or both, would constitute a default) exists, (b) liens for current taxes not yet due, and (c) minor imperfections of title, such as utility and access easements that do not impair the intended use of the
Leased Real Property, none of which is substantial in amount, materially detracts from the value or impairs the use of the property subject thereto, or impairs the operations of GlobalNet, and zoning laws and other land use restrictions or restrictive covenants that
do not materially impair the present use of the property subject thereto.  The Leased Real Property constitutes all the real properties reflected on the GlobalNet financial statements or used or occupied by GlobalNet in connection with its business or
otherwise.

       With respect to the Leased Real Property, except as will be reflected on Schedule 3.12 to the GlobalNet Disclosure Letter:

	
       

	
       (a)       GlobalNet is in exclusive possession thereof and to the knowledge of GlobalNet no easements, licenses or rights are necessary to conduct
business thereon in addition to those which exist as of the date hereof;

	
       

	
       

	
       

	
       (b)       To the knowledge of GlobalNet, no portion thereof is subject to any pending condemnation proceeding or proceeding by any public or
quasi-public authority materially adverse to the Leased Real Property and to the knowledge of GlobalNet there is no threatened condemnation or proceeding with respect thereto;

	
       

	
       

	
       

	
       (c)       To the knowledge of GlobalNet, the Leased Real Property is not in violation of any health, safety, building, or environmental ordinances,
laws, codes or regulations; nor has any notice of any claimed violation of any such ordinances, laws, codes or regulations been served on GlobalNet;

	
       

	
       

	
       

	
       (d)       The Leased Real Property is supplied with utilities and other third-party services, such as water, sewer, electricity, gas, roads, rail
service and garbage collection, necessary for the current operation of the business and such Leased Real Property is maintained in all material respects in accordance with all laws applicable to GlobalNet or the Leased Real Property;

	
       

	
       

	
       

	
       (e)       GlobalNet is not a party to any written or oral agreement or undertaking with owners or users of properties adjacent to the Leased Real
Property relating to the use, operation or maintenance of such facility or any adjacent real property;

	
       

	
       

	
       

	
       (f)       GlobalNet is not a party to any lease, sublease, license, concession or other agreement, whether written or oral, pursuant to which
GlobalNet has granted to any party or parties the right to use or occupy all or any portion of the Leased Real Property;

       3.13       Insurance.  Schedule 3.13 to the GlobalNet Disclosure Letter will include (i) an accurate list of all insurance policies
carried by GlobalNet that are currently in effect, and (ii) an accurate list of all insurance loss claims or workers compensation claims received since inception and complete copies of the foregoing items have been delivered to Host.  Such insurance policies
evidence all of the insurance that GlobalNet has been required to carry pursuant to all of its Material Contracts and other agreements and pursuant to all applicable laws, except for those requirements that would not have a Material Adverse Effect on GlobalNet. 
All insurance policies for the current policy periods are in full force and effect and shall remain in full force and effect through the Closing Date.

       3.14       Compensation; Employment Agreements; Organized Labor Matters.  Schedule 3.14 to the GlobalNet Disclosure Letter will include
an accurate list of (i) all officers, directors and key employees of GlobalNet, (ii) all employment agreements with such officers, directors and key employees and the rate of compensation (and the portions thereof attributable to salary, bonus and other compensation,
respectively) of each of such persons as of September 30, 2003 and the date hereof.  GlobalNet has provided to Host true, complete and correct copies of any employment agreements for persons to be listed on Schedule 3.14 to the GlobalNet Disclosure
Letter.  Since September 30, 2003, there have been no increases in the compensation payable or any special bonuses to any officer, director, key employee or other employee, except ordinary salary increases implemented on a basis consistent with past
practices.  Except as will be set forth on Schedule 3.14 to the GlobalNet Disclosure Letter, (i) GlobalNet is not bound by or subject to (and none of its assets or properties is bound by or subject to) any arrangement with any labor union, (ii) no employees of
GlobalNet are represented by any labor union or covered by any collective bargaining agreement, and (iii) there is no pending or to the knowledge of GlobalNet, threatened labor dispute involving GlobalNet and any group of its employees nor has GlobalNet experienced
any labor interruptions over the past three years.

       3.15       Employee Benefit Plans.  Schedule 3.15 to the GlobalNet Disclosure Letter shall set forth all employee benefit plans of
GlobalNet, including all employment agreements not listed in Schedule 3.14 and other agreements or arrangements containing “golden parachute” or other similar provisions, and deferred compensation agreements.  GlobalNet has delivered to Host true,
complete and correct copies of such plans, agreements and any trusts related thereto, and classifications of employees covered thereby as of September 30, 2003.  Except for the employee benefit plans, if any, to be described on Schedule 3.15 to the
GlobalNet Disclosure Letter, GlobalNet does not sponsor, maintain or contribute to any plan program, fund or arrangement that constitutes an “employee pension benefit plan,” nor has GlobalNet any obligation to contribute to or accrue or pay any benefits
under any deferred compensation or retirement funding arrangement on behalf of any employee or employees (such as, for example, and without limitation, any individual retirement account or annuity, any “excess benefit plan” (within the meaning of Section
3(36) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or any non-qualified deferred compensation arrangement). For the purposes of this Agreement, the term “employee pension benefit plan” shall have the same
meaning as is given that term in Section 3(2) of ERISA.  GlobalNet has not sponsored, maintained or contributed to any employee pension benefit plan other than the plans to be set forth on Schedule 3.15 to the GlobalNet Disclosure Letter, nor is GlobalNet
required to contribute to any retirement plan pursuant to the provisions of any collective bargaining agreement establishing the terms and conditions of employment of any employees of GlobalNet. All accrued contribution obligations of GlobalNet, as of
September 30, 2003, with respect to any plan to be listed on Schedule 3.15 to the GlobalNet Disclosure Letter have either been fulfilled in their entirety or are fully reflected on the balance sheet of the GlobalNet as of September 30, 2003.

       3.16       Compliance With ERISA.  GlobalNet has no plans that are intended to or due qualify under Section 401(a) of the Code, except as
set forth in Schedule 3.15 to the GlobalNet Disclosure Letter.

       3.17       Conformity With Law; Litigation.

	
       

	
       (a)       Except as will be set forth on Schedule 3.17 to the GlobalNet Disclosure Letter, GlobalNet is not in violation of any law or regulation or
any order of any court or Federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality having jurisdiction over it which would have a Material Adverse Effect.

	
       

	
       

	
       

	
       (b)       Except as will be set forth on Schedule 3.17 to the GlobalNet Disclosure Letter (which shall disclose the parties to, nature of and relief
sought for each matter to be disclosed), other than collection actions by GlobalNet, in the ordinary course of business on its own behalf, none of which is greater than $25,000 and which in the aggregate do not exceed $50,000:

	
       

	
       

	
       

	
       

	
       (i)       There is no suit, action, proceeding, investigation, claim or order pending or, to the knowledge of GlobalNet, threatened against GlobalNet
or pending or, to the knowledge of GlobalNet, threatened against any of the officers, directors or employees of GlobalNet with respect to the business or currently proposed business activities of GlobalNet, or to which GlobalNet is otherwise a party, which may have
or is likely to have a Material Adverse Effect, before any court, or before any governmental authority, department, commission, bureau, agency or other governmental department or arbitrator (collectively, “Claims”).

	
       

	
       

	
       

	
       

	
       

	
       (ii)       GlobalNet is not subject to any unsatisfied or continuing judgment, order or decree of any court or governmental authority which could
have a Material Adverse Effect.  Schedule 3.17 to the GlobalNet Disclosure Letter will set forth all closed litigation matters to which GlobalNet was a party since its inception, the dates such litigation was commenced and concluded, and the nature of the
resolution thereof (including amounts paid in settlement or judgment).

       3.18       Taxes.  Except as set forth in Schedule 3.18 to the GlobalNet Disclosure Schedule, GlobalNet has timely filed all requisite
federal, state and other tax returns or extension requests for all fiscal periods ended; and to the knowledge of GlobalNet, there are no examinations in progress or claims against any of them for federal, state and other Taxes (including penalties and interest) for
any period or periods prior to and including September 30, 2003 and no notice of any claim for taxes has been received. All Taxes, including interest and penalties (whether or not shown on any tax return) owed by GlobalNet, with respect to any payment made or
deemed made by GlobalNet herein have been paid. The amounts shown as accruals for Taxes on the GlobalNet financial statements are sufficient for the payment of all Taxes of the kinds indicated (including penalties and interest) for all fiscal periods ended on or
before that date. Copies of (i) any tax examinations, (ii) extensions of statutory limitations and (iii) the federal and local income tax returns and franchise tax returns of GlobalNet for the last three fiscal years, will be attached as Schedule 3.18 to the
GlobalNet Disclosure Letter.

       3.19       No Violations.  GlobalNet is not in material violation of any of its Charter Documents. GlobalNet is not in default under any
lease, instrument, agreement, license, or permit set forth on the Schedules to the GlobalNet Disclosure Letter, or any Material Contracts (the “Material Documents”); and, except as would not have a Material Adverse Effect on GlobalNet or as will be set
forth in Schedule 3.19 to the GlobalNet Disclosure Letter, (a) the rights and benefits of GlobalNet under the Material Documents will not be adversely affected by the transactions contemplated hereby and (b) the execution of this Agreement and the performance of the
obligations hereunder and the consummation of the transactions contemplated hereby will not result in any violation of, or breach of, or constitute a default under, any of the terms or provisions of the Material Documents or the Charter Documents. Except as will be
set forth on Schedule 3.19 to the GlobalNet Disclosure Letter, none of the Material Documents requires notice to, or the consent or approval of, any governmental agency or other third party with respect to any of the transactions contemplated hereby in order to
remain in full force and effect and consummation of the transactions contemplated hereby will not give rise to any right to termination, cancellation or acceleration or loss of any right or benefit. Except as will be set forth on Schedule 3.19 to the GlobalNet
Disclosure Letter, none of the Material Documents prohibits the use or publication by GlobalNet of the name of any other party to such Material Document, and none of the Material Documents prohibits or restricts GlobalNet from freely providing services to any other
customer or potential customer of GlobalNet.

       3.20       Government Contracts.  GlobalNet is not now a party to any governmental contract subject to price redetermination or
renegotiation.

        3.21       Absence of Changes.  Since September 30, 2003, except as will be set forth on Schedule 3.21 to the GlobalNet
Disclosure Letter, there has not been:

	
       

	
       (a)       Any material adverse change in the financial condition, assets, liabilities (contingent or otherwise), income or business of
GlobalNet;

	
       

	
       

	
       

	
       (b)       Any damage, destruction or loss (whether or not covered by insurance) in excess of $10,000 causing a Material Adverse Effect on
GlobalNet;

	
       

	
       

	
       

	
       (c)       Any change in the authorized capital of GlobalNet or its outstanding securities or any change in its ownership interests or any grant of
any options, warrants, calls, conversion rights or commitments (which are not reflected on Schedule 3.3);

	
       

	
       

	
       

	
       (d)       Any declaration or payment of any dividend or distribution in respect of the capital stock or any direct or indirect redemption, purchase
or other acquisition of any of the capital stock of GlobalNet;

	
       

	
       

	
       

	
       (e)       Any five (5) percent or more increase in the compensation, bonus, sales commissions or fee arrangement payable or to become payable by
GlobalNet to any of their respective officers, directors, stockholders, employees, consultants or agents, except for ordinary and customary bonuses and salary increases for such persons in accordance with past practice;

	
       

	
       

	
       

	
       (f)       Any work interruptions, labor grievances or claims filed, or any event or condition of any character, materially adversely affecting the
business of GlobalNet;

	
       

	
       

	
       

	
       (g)       Any sale or transfer, or any agreement to sell or transfer, any material assets, property or rights of GlobalNet to any person, including,
without limitation, any of the stockholders and their affiliates;

	
       

	
       

	
       

	
       (h)       Any cancellation, or agreement to cancel, any indebtedness or other obligation owing to GlobalNet, including without limitation any
indebtedness or obligation of any stockholder or any affiliate thereof;

	
       

	
       

	
       

	
       (i)       Any plan, agreement or arrangement granting any preferential rights to purchase or acquire any interest in any of the assets, property or
rights of GlobalNet or requiring consent of any party to the transfer and assignment of any such assets, property or rights;

	
       

	
       

	
       

	
       (j)       Any purchase or acquisition of, or agreement, plan or arrangement to purchase or acquire, any property, rights or assets outside of the
ordinary course of business of GlobalNet;

	
       

	
       

	
       

	
       (k)       Any waiver of any material rights or claims of GlobalNet;

	
       

	
       

	
       

	
       (l)       Any amendment or termination of any Material Documents or other right to which GlobalNet is a party;

	
       

	
       

	
       

	
       (m)       Any transaction by GlobalNet outside the ordinary course of its business;

	
       

	
       

	
       

	
       (n)       Any cancellation or termination of a Material Contract with a customer or client prior to the scheduled termination date; or

	
       

	
       

	
       

	
       (o)       Any other distribution of property or assets by GlobalNet other than in the ordinary course of business.

       3.22       Deposit Accounts; Powers of Attorney.  Schedule 3.22 to the GlobalNet Disclosure Letter will include an accurate list as of
the date of the Agreement of:  (i) the name of each financial institution in which GlobalNet has accounts or safe deposit boxes; (ii) the names in which the accounts or boxes are held;  (iii) the type of account and account number; and (iv) the name of
each person authorized to draw thereon or have access thereto.  Schedule 3.22 to the GlobalNet Disclosure Letter also sets forth the name of each person, corporation, firm or other entity holding a general or special power of attorney from GlobalNet and a
description of the terms of such power.

       3.23       Relations With Governments.  Except for political contributions made in a lawful manner which, in the aggregate, do not exceed
$10,000 per year since its inception, GlobalNet has not made, offered or agreed to offer anything of value to any governmental official, political party or candidate for government office nor has it otherwise taken any action which would cause GlobalNet to be in
material violation of the Foreign Corrupt Practices Act of 1977, as amended or any law of similar effect, with respect to political contributions.

       3.24       Disclosure.  This Agreement, including the Schedules and GlobalNet Disclosure Letter to be provided and the Schedules to be
attached thereto, together with the other information furnished to Host and HAC by GlobalNet and the GlobalNet Shareholders in connection herewith, do not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements
herein and therein, in light of the circumstances under which they were made, not misleading.

       3.25       Prohibited Activities. GlobalNet has not, between September 30, 2003 and the date hereof, taken any of the actions (Prohibited
Activities) set forth in Section 6.3, as qualified by any schedules set forth in Section 6.3.

       3.26       No Conflicts.  The execution, delivery and performance of this Agreement by GlobalNet and the consummation by GlobalNet of the
transactions contemplated hereby will not conflict with or result in a breach or violation of any term or provision of, or (with or without notice or passage of time, or both) constitute a default under, any indenture, mortgage, deed of trust, trust (constructive and
other), loan agreement or other agreement or instrument to which GlobalNet is a party or violate the provisions of any statute, or any order, rule or regulation of any governmental body or agency or instrumentality thereof, or any order, writ, injunction or decree of
any court or any arbitrator, having jurisdiction over GlobalNet or the property of GlobalNet.

       3.27       Certain Business Relationships with GlobalNet.  Except as listed in Schedule 3.27, none of the GlobalNet Shareholders nor any
relative of any GlobalNet Shareholder or Affiliate of GlobalNet has been involved in any business arrangement or relationship with GlobalNet since inception, and none of the GlobalNet Shareholders, nor any relative of any GlobalNet Shareholder or Affiliate of
GlobalNet owns any asset, tangible or intangible, which is used in GlobalNet’s operations.

        3.28       Authorization & Enforceability. GlobalNet has all necessary corporate powers and authority to execute, deliver and
perform its obligations under this Agreement and each of the certificates, instruments and documents executed or delivered by GlobalNet pursuant to the terms of this Agreement.  All corporate action on the part of the Board of Directors of GlobalNet necessary
for the authorization, execution, delivery and performance of this Agreement, the consummation of the Merger and the performance of all GlobalNet’s obligations under this Agreement to which GlobalNet is a party has been taken.  All corporate action on the
part of the Board of Directors of GlobalNet necessary for the authorization, execution, delivery and performance of documents executed by GlobalNet pursuant to the terms of this Agreement has been or will be taken prior to the Effective Time of Merger.  All
corporate action on the part of the shareholders of GlobalNet necessary for the authorization, execution, delivery and performance of this Agreement and other documents executed by it pursuant to the terms of this Agreement has been taken or will be taken as of or
prior to the Effective Time of Merger.  This Agreement has been, and each of the other documents to which GlobalNet is a party at the Closing will have been, duly executed and delivered by GlobalNet and the Agreement is, and each of the document to which
GlobalNet is a party will be at Closing, a legal, valid, and binding oblation of GlobalNet, enforceable against GlobalNet in accordance with it terms, except as to the effect, if any, of (i) applicable bankruptcy and similar laws affecting the rights of creditors
generally, or (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

4.       REPRESENTATIONS AND WARRANTIES OF HOST AND HAC.

       Except as will be provided in the Host Disclosure Letter (as defined below) to be delivered pursuant to in Section 10.7, Host and HAC jointly and severally represent and warrant to
GlobalNet that all of the following representations and warranties in this Section 4 are true at the date of this Agreement and shall be true at the time of Closing (except to the extent that such representation or warranty speaks of an earlier date, in which case
such representation or warranty shall be true and correct in all material respects as of such date).  As used in this Agreement, the “Host Disclosure Letter” shall mean the disclosure letter delivered by Host and HAC to GlobalNet regarding Host and
HAC pursuant to this Section 4.  As used in this Section 4, unless the context otherwise requires, Host refers to Host and all of its wholly-owned subsidiaries.

       4.1        Due Organization.  Each of Host and HAC is a corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and has the requisite power and authority to carry on its business as it is now being conducted.  Each of Host and HAC is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification necessary, except (i) as will be set forth on Schedule 4.1 to Host Disclosure Letter or (ii) where the failure to be so authorized or qualified would not have a material adverse
effect on the business, operations, properties, assets or condition (financial or otherwise), of Host taken as a whole (as used herein with respect to Host, or with respect to any other person, a “Material Adverse Effect”).  Schedule 4.1 to the Host
Disclosure Letter will set forth the jurisdiction in which Host and HAC are incorporated and contain a list of all jurisdictions in which Host and HAC are authorized or qualified to do business.

       4.2       Subsidiaries.  The names and jurisdiction of incorporation of the subsidiaries of Host are set forth in Schedule 4.2 to the
Host Disclosure Letter.  Except as set forth in Schedule 4.2 to the Host Disclosure Letter, (i) neither Host nor HAC owns or controls, and has not in the past owned or controlled, directly or indirectly, any corporation, partnership, limited liability company or
other business entity, and (ii) neither Host nor HAC owns, directly or indirectly any ownership, equity, or voting interest in any corporation, partnership, join venture or other entity, and does not have any agreement or commitment to purchase any such
interest

       4.3        Capital Structure.  The authorized capital stock of Host and HAC is as set forth in Section 1.4.  All of the issued and
outstanding shares of the capital stock of Host and HAC have been duly authorized and are validly issued, fully paid and non-assessable.  All of the outstanding shares of common stock have been duly authorized and are validly issued, fully paid and
non-assessable.  Schedule 4.3 to the Host Disclosure Letter sets forth a list of all outstanding options, warrants, and other securities convertible into capital stock of Host as of the Closing Date.  HAC has no options, warrants, or other securities
convertible into capital stock.

       4.4       Equity Financing.  Except as disclosed in Schedule 4.4, no equity financing is presently contemplated.

       4.5       SEC Document.  Host has made all filings with the Securities and Exchange Commission (the “SEC”) that it has been
required to make under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (collectively, the “SEC Documents”).  Host has furnished GlobalNet with true and complete copies of its Annual Report on Form 10-K for
the fiscal year ended June 30, 2002, all Forms 8-K and 10-Q’s filed after the date of the last Form 10-K and its Proxy Statement relating to its 2003 Annual Meeting of Shareholders.  As of their respective dates, each of the SEC Documents complied in
all material respects with the requirements of the Securities Exchange Act of 1934, as amended and the rules and regulations of the SEC promulgated thereunder. As of the Closing Date, none of the SEC Documents, as of their respective dates, contained any untrue
statement of a fact or omitted to state a fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.  As of the Closing Date, the financial statements included in or incorporated by
reference into the SEC Documents, including the related notes and schedules, have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby, are correct and complete in all respects, and are consistent with the books
and records of Host.

       4.6       Events Subsequent. Since the date of the financial statements set forth in Host’s most recent quarterly report, there has not
been any adverse change in the assets, liabilities, business, financial condition, operations, results of operations, or future prospects of Host taken as a whole.

       4.7       Litigation.  Host is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge or is a party or to
the knowledge of Host is threatened to be made a party to any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator.

        4.8       Disclosure.  This Agreement, including the Exhibits and Host Disclosure Letter to be provided and the Schedules to be
attached thereto, together with the other information furnished to GlobalNet by Host and HAC in connection herewith, do not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements herein and therein, in light
of the circumstances under which they were made, not misleading.

       4.9       No Conflicts.  Except as described in Schedule 4.9 to the Host Disclosure Letter concerning the Commercial Loan and Security
Agreement dated April 5, 2002 and the amendments and modifications thereto (the “Loan Agreement”) by and among Webster Bank, Host and Lindley Food Service Corporation (“Lindley”), the execution, delivery and performance of this Agreement by
Host and HAC and the consummation by Host and HAC of the transactions contemplated hereby will not conflict with or result in a breach or violation of any term or provision of, or (with or without notice or passage of time, or both) constitute a default under, any
indenture, mortgage, deed of trust, trust (constructive and other), loan agreement or other agreement or instrument to which Host is a party or violate the provisions of any statute, or any order, rule or regulation of any governmental body or agency or
instrumentality thereof, or any order, writ, injunction or decree of any court or any arbitrator, having jurisdiction over Host, HAC or any of their property.

       4.10       Authorization & Enforceability. Each of Host and HAC has all necessary corporate powers and authority to execute, deliver and
perform their obligations under this Agreement and each of the certificates, instruments and documents executed or delivered by them pursuant to the terms of this Agreement.  All corporate action on the part of each of the Board of Directors of Host and HAC
necessary for the authorization, execution, delivery and performance of this Agreement, the consummation of the Merger and the performance of all their obligations under this Agreement to which they are a parties have been taken.  All corporate action on the
part of each of the Board of Directors of Host and HAC necessary for the authorization, execution, delivery and performance of documents executed by them pursuant to the terms of this Agreement has been or will be taken prior to the Effective Time of Merger. 
All corporate action on the part of each of the shareholders of Host and HAC necessary for the authorization, execution, delivery and performance of this Agreement and other documents executed by it pursuant to the terms of this Agreement has been taken or will be
taken as of or prior to the Effective Time of Merger.  This Agreement has been, and each of the other documents to which each of Host and HAC is a party at the Closing will have been, duly executed and delivered by each of Host and HAC, and the Agreement is, and
each of the document to which each of Host and HAC is a party will be at Closing, a legal, valid, and binding oblation of each of Host and HAC, enforceable against each of Host and HAC in accordance with it terms, except as to the effect, if any, of (i) applicable
bankruptcy and similar laws affecting the rights of creditors generally, or (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

5.       CERTIFICATE OF THE GLOBALNET SHAREHOLDERS CONCERNING THE TRANSACTION.

       Prior to Closing, GlobalNet shall obtain, in writing, a Certificate from each GlobalNet Shareholder to the effect that all of the following representations and warranties in this
Section 5 are true and correct as of the date of this Agreement and as of the date of Closing. Such Certificate shall be delivered to Host and HAC at Closing.  For the avoidance of doubt, Host and HAC acknowledge that except for the representations and
warranties made in the Certificate referenced in this paragraph, the GlobalNet Shareholders make no other representations and warranties regarding any matter in this Agreement (including any schedule or exhibit thereto).

       5.1        Authorization.  All action on the part of the individual GlobalNet Shareholder executing the Certificate necessary for the
authorization, execution and delivery of this Agreement by GlobalNet has been taken.

       5.2       Title to the Shares.  Each GlobalNet Shareholder owns, and is transferring to, or a duly authorized agent of the GlobalNet
Shareholder is transferring to Host at the Closing, good, valid and marketable title to the number of Shares set forth opposite the name of the GlobalNet Shareholder in Schedule 1.6 to the GlobalNet Disclosure Letter free and clear of all liens, claims, options and
encumbrances whatsoever.  There are no outstanding options, warrants or rights to purchase or acquire any of the Shares of the GlobalNet Shareholder or any of the capital stock of GlobalNet held by such GlobalNet Shareholder.

       5.3        Purchase Entirely for His Own Account.  The Host securities will be acquired for investment for the GlobalNet
Shareholder’s own account, not as a nominee or agent, and not with the view to the resale or distribution of any part thereof, and the GlobalNet Shareholder has no present intention of selling, granting any participation in, or otherwise distributing Host
securities.  The GlobalNet Shareholder has no contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person with respect to any of the securities of Host.

       5.4        Disclosure of Information.  Each GlobalNet Shareholder has received and had the opportunity to review the reports filed by
Host with the SEC and has had the opportunity to ask questions of, and receive answers from, representatives of Host to obtain additional information regarding Host.

       5.5        Restrictions on Transfer.

	
       

	
       (a)       The securities of Host that the GlobalNet Shareholders will acquire have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”) and, accordingly, such securities will not be fully transferable except as permitted under various exemptions contained in the Securities Act or upon satisfaction of the registration and prospectus delivery requirements of the
Securities Act.  The GlobalNet Shareholders must bear the economic risk of his investment in such securities for an indefinite period of time as such securities have not been registered under the Securities Act and therefore cannot be sold unless they are
subsequently registered or an exemption from registration is available. The GlobalNet Shareholders are acquiring the securities for investment purposes only, for their own account, and not as nominee or agent for any other person, and not with the view to, or for
resale in connection with, any distribution thereof within the meaning of the Securities Act.

	
       

	
       

	
       

	
       (b)       The certificates evidencing the securities of Host the GlobalNet Shareholders will acquire pursuant to this Agreement, and each instrument
or certificate issued in transfer thereof, will bear substantially the following legend:

	
          

	
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF, AND SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.  IF THE SECURITIES ARE TO BE SOLD OR TRANSFERRED PURSUANT TO AN EXEMPTION
THE CORPORATION MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND WILL NOT VIOLATE SUCH ACT OR ANY OTHER APPLICABLE
SECURITIES LAWS.

	
          

	
       

	
       (c)       Each GlobalNet Shareholder understands a notation on the records of Host and its transfer agent will be made in order to implement the
restrictions on transfer set forth in this Section 5.5.

       5.6       Restrictions on Voting. There are no voting trusts, proxies or other agreements or understandings with respect to the voting of the
capital stock of the GlobalNet Shareholder.

6.       COVENANTS OF GLOBALNET PRIOR TO CLOSING.

       6.1        Access and Cooperation; Due Diligence.  Between the date of this Agreement and the Closing Date, GlobalNet will afford to the
officers and authorized representatives of Host and HAC reasonable access at pre-arranged times to all of the sites, properties, books and records of GlobalNet and will furnish Host and HAC such additional financial and operating data and other information as to the
business and properties of GlobalNet as Host and HAC may from time to time reasonably request.  GlobalNet will cooperate with Host and HAC, their representatives, auditors and counsel in the preparation of any documents or other material which may be required in
connection with any documents or materials required by this Agreement or necessary to complete the transactions contemplated hereunder.

       6.2        Conduct of Business Pending Closing.  Between the date of this Agreement and the Closing, GlobalNet will, except as will be
set forth on Schedule 6.2 to the GlobalNet Disclosure Letter:

	
       

	
       (a)       Carry on its business in substantially the same manner as it has heretofore and not introduce any material new method of management,
operation or accounting;

	
       

	
       

	
       

	
       (b)       Maintain its properties and facilities in as good working order and condition as at present, ordinary wear and tear excepted;

	
       

	
       

	
       

	
       (c)       Perform in all material respects all of its obligations under agreements relating to or affecting its respective assets, properties or
rights;

	
       

	
       

	
       

	
       (d)       Use all reasonable efforts to keep in full force and effect present insurance policies or other comparable insurance coverage;

	
       

	
       

	
       

	
       (e)       Use its reasonable efforts to maintain and preserve its business organization intact, retain its present key employees and maintain its
relationships with suppliers, customers and others having business relations with it;

	
       

	
       

	
       

	
       (f)       Maintain compliance with all material permits, laws, rules and regulations, consent orders, and all other orders of applicable courts,
regulatory agencies and similar governmental authorities;

	
       

	
       

	
       

	
       (g)       Maintain present debt and lease instruments and not enter into new or amended debt or lease instruments, without the knowledge and consent
of Host (which consent shall not be unreasonably withheld), provided that debt and/or lease instruments may be replaced without the consent of Host if such replacement instruments are on terms at least as favorable to GlobalNet as the instruments being replaced;
and

	
       

	
       

	
       

	
       (h)       Maintain or reduce present salaries and commission levels for all officers, directors, employees and agents except for ordinary and
customary bonus and salary increases for employees in accordance with past practices.

       6.3        Prohibited Activities.  Between the date hereof and the Closing Date, GlobalNet will not, without the prior written consent of
Host, engage in any of the following (the “Prohibited Activities’):

	
       

	
       (a)       Make any change in its Charter Documents;

	
       

	
       

	
       

	
       (b)       Issue any securities, options, warrants, calls, conversion rights or commitments relating to its securities of any kind;

	
       

	
       

	
       

	
       (c)       Declare or pay any dividend, or make any distribution in respect of its stock whether now or hereafter outstanding, or purchase, redeem or
otherwise acquire or retire for value any shares of its stock;

	
       

	
       

	
       

	
       (d)       Deliver or sell, authorize the delivery or sale of, or purchase or propose the purchase of, any shares of its stock;

	
       

	
       

	
       

	
       (e)       Except as listed in Schedule 6.3, enter into any contract or commitment or incur or agree to incur any liability or make any capital
expenditures, except if it is in the normal course of business (consistent with past practice);

	
       

	
       

	
       

	
       (f)       Create, assume or permit to exist any new mortgage, pledge or other lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except (1) with respect to purchase money liens incurred in connection with the acquisition of equipment with an aggregate cost not in excess of $50,000 necessary or desirable for the conduct of the businesses of GlobalNet, (2) (A) liens for
taxes either not yet due or being contested in good faith and by appropriate proceedings (and for which contested taxes adequate reserves have been established and are being maintained) or (B) materialmen’s, mechanics’ or other like liens arising in the
ordinary course of business (the liens set forth in clause (2) being referred to herein as “Statutory Liens”), or (3) liens to be set forth on Schedule 3.7 and/or 3.11 to the GlobalNet Disclosure Letter;

	
       

	
       

	
       

	
       (g)       Sell, assign, lease or otherwise transfer or dispose of any property or equipment except in the normal course of business;

	
       

	
       

	
       

	
       (h)       Negotiate for the acquisition of any business or the start-up of any new business;

	
       

	
       

	
       

	
       (i)       Merge or consolidate or agree to merge or consolidate with or into any other corporation;

	
       

	
       

	
       

	
       (j)       Waive any material rights or claims of GlobalNet, provided that GlobalNet may negotiate and adjust bills in the course of good faith
disputes with customers in a manner consistent with past practice;

	
       

	
       

	
       

	
       (k)       Commit a material breach or amend or terminate any Material Documents or right of GlobalNet; or

	
       

	
       

	
       

	
       (l)       Enter into any other material transaction outside the ordinary course of its business or prohibited hereunder.

       6.4       No Shop.  Neither GlobalNet, nor any agent, officer, director, trustee or any representative of any of the foregoing will,
during the period commencing on the date of this Agreement and ending with the earlier to occur of the Closing Date or the termination of this Agreement in accordance with its terms, directly or indirectly:  (i) solicit or initiate the submission of
proposals or offers from any person for; (ii) participate in any discussions pertaining to; or (iii) furnish any information to any person other than Host or their  authorized agents relating to, any acquisition or purchase of all or a material amount
of the assets of, or any equity interest in, GlobalNet or a merger, consolidation or business combination of GlobalNet; provided, however, that nothing contained in this Section 6.4 shall prohibit the Board of Directors of GlobalNet from engaging in discussions or
participating in negotiations with and furnishing information to another party making an acquisition proposal to the extent the Board of Directors of GlobalNet determines in good faith after consultation with its outside legal counsel that its fiduciary obligations
under applicable law require it to do so.

       6.5       Notification of Certain Matters.  GlobalNet shall give prompt notice to Host of (i) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any representation or warranty of GlobalNet contained herein or to be set forth in the GlobalNet Disclosure Letter to be untrue or inaccurate in any material respect at or prior to the Closing
and (ii) any material failure of GlobalNet to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such person hereunder.  The delivery of any notice pursuant to this Section 6.5 shall not be deemed to (i) modify the
representations or warranties of the party delivering such notice, (ii) modify the conditions set forth in Sections 8 and 9, or (iii) limit or otherwise affect the remedies available hereunder to the party receiving such notice.

7.       COVENANTS OF HOST AND HAC PRIOR TO CLOSING.

       7.1        Cooperation.  Between the date of this Agreement and the Closing Date, each of Host and HAC will cooperate with GlobalNet, its
representatives, and counsel in the preparation of any documents or other material which may be required in connection with any documents or materials required by this Agreement or necessary to complete the transactions contemplated hereunder.

       7.2        Notification of Certain Matters.  Host and HAC shall give prompt notice to GlobalNet and the GlobalNet Shareholders of (i) the
occurrence or non-occurrence of any event the occurrence or non-occurrence of which would be likely to cause any representation or warranty of Host contained herein or in the Host Disclosure Letter to be untrue or inaccurate in any material respect at or prior to the
Closing and (ii) any material failure of Host to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such person hereunder.  The delivery of any notice pursuant to this Section 7.2 shall not be deemed to (i) modify the
representations or warranties of the party delivering such notice, (ii) modify the conditions set forth in Sections 8 and 9, or (iii) limit or otherwise affect the remedies available hereunder to the party receiving such notice.

       7.3       Prohibited Activities.  Between the date hereof and the date on which two designees of the GlobalNet Shareholders are appointed
to the Board of Directors of Host pursuant to Section 10.2, Host will not, without the prior written consent of GlobalNet, issue any debt instruments, securities, options, warrants, calls, conversion rights or commitments relating to its securities of any kind other
than in connection with the exercise of options or warrants to be listed in Schedule 4.3 to the Host Disclosure Letter.

8.       CONDITIONS PRECEDENT TO OBLIGATIONS OF HOST AND HAC.

       The obligations of Host and HAC with respect to actions to be taken on the Closing Date are subject to the satisfaction or waiver on or prior to the Closing Date of all of the
following conditions.

       8.1        Representations and Warranties; Performance of Obligations. All representations and warranties of GlobalNet contained in this
Agreement shall be true and correct in all material respects as of the Closing Date as though such representations and warranties had been made as of that time (except to the extent that any representation or warranty speaks of an earlier date, in which case such
representation or warranty shall be true and correct in all material respects as of such date); all the terms, covenants and conditions of this Agreement to be complied with and performed by GlobalNet on or before the Closing Date shall have been duly complied with
and performed in all material respects; and certificates to the foregoing effect dated the Closing Date, and signed by GlobalNet and the GlobalNet Shareholders, as the case may be, shall have been delivered to Host.

       8.2        Satisfaction.  All actions, proceedings, instruments and documents required to carry out this Agreement or incidental hereto
and all other related legal matters shall be reasonably satisfactory to Host and its counsel.

       8.3        No Litigation.  No action or proceeding before a court or any other governmental agency or body shall have been instituted or
threatened to restrain or prohibit the transactions contemplated hereunder and no governmental agency or body shall have taken any other action or made any request of GlobalNet or the GlobalNet Shareholders as a result of which Host deems it inadvisable to proceed
with the transactions hereunder.

       8.4        Consents and Approvals.  All necessary consents and approvals as listed in Schedule 3.19 shall have been obtained.  All
necessary consent of and filings with any governmental authority or agency relating to the consummation of the transaction contemplated herein shall have been obtained and made and no action or proceeding shall have been instituted or threatened to restrain or
prohibit the transactions hereunder and no governmental agency or body shall have taken any other action or made any request of GlobalNet or the GlobalNet Shareholders as a result of which Host deems it inadvisable to proceed with the transactions
hereunder.

       8.5        Good Standing Certificates.  GlobalNet shall have delivered to Host a certificate, dated as of a date no later than ten days
prior to the Closing Date, duly issued by the Secretary of State of GlobalNet’s state of incorporation that GlobalNet is in good standing.

       8.6        No Material Adverse Change.  No event or circumstance shall have occurred with respect to GlobalNet which would constitute a
Material Adverse Effect.

       8.7        Officer’s Certificate.  Host shall have received a certificate or certificates, dated the Closing Date and signed by the
President of GlobalNet, certifying the truth and correctness of attached copies of its Articles of Incorporation (including amendments thereto) and Bylaws (including amendments thereto).

       8.8        Incumbency Certificate and Other Documents.  Host shall have received an incumbency certificate or certificates, dated the
Closing Date and signed by the Secretary of GlobalNet certifying the names, titles and signatures of the officers authorized to execute the documents referred to in this Section 8 and such additional supporting documentation and other information with respect to the
transactions contemplated hereunder as Host or their counsel may reasonably request.

       8.9        Opinion of Counsel.  Host shall have received an opinion from counsel for GlobalNet, dated the Closing Date, in form and
substance reasonably satisfactory to counsel for Host.

       8.10       Release of Obligations and Stock Options.  Host shall have obtained a release of each of the officers and directors of GlobalNet
related to all matters involving GlobalNet.  The release will exclude the GlobalNet Shareholder loans listed on Schedule 8.10 to the GlobalNet Disclosure Letter.

       8.11     Employment and Noncompetition Agreements.  Eric Barger shall have executed an employment and non-competition agreement in the form
attached hereto as Exhibit A. 

       8.12      Loan Documents.  Webster Bank shall have consented to the merger transaction as contemplated by the Agreement.  Host shall have
negotiated, and GlobalNet, Host and Lindley shall have executed such documents as may be required by Webster Bank to modify or amend the Loan Agreement, and related agreements thereto.

       8.13      GlobalNet License Agreement.  At or prior to Closing, GlobalNet shall have entered into a definitive license/distribution agreement
with Energy N Sync, Inc.

       8.14      GlobalNet Financial Statements and Related Information.  Prior to Closing, GlobalNet shall have provided financial statements and
related information to Host and its independent public accountants in a form that is satisfactory to Host and its independent public accountants and Host’s independent public accountants shall have advised Host that the GlobalNet financial statements can be
audited.

9.       CONDITIONS PRECEDENT TO OBLIGATIONS OF GLOBALNET AND THE GLOBALNET SHAREHOLDERS.

       The obligations of GlobalNet and the GlobalNet Shareholders with respect to actions to be taken on the Closing Date are subject to the satisfaction or waiver on or prior to the Closing
Date of all of the following conditions.

       9.1        Representations and Warranties; Performance of Obligations. All the representations and warranties of Host and HAC contained in
this Agreement shall be true and correct in all material respects as of the Closing Date with the same effect as though such representations and warranties had been made on and as of that time (except to the extent that any representation or warranty speaks of an
earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such date); all the terms, covenants and conditions of this Agreement to be complied with and performed by Host and HAC on or before the Closing Date
shall have been duly complied with and performed in all material respects; and certificates to the foregoing effect dated the Closing Date, and signed by Host and HAC shall have been delivered to GlobalNet.

       9.2        Satisfaction. All actions, proceedings, instruments and documents required to carry out this Agreement or incidental hereto and all
other related legal matters shall be reasonably satisfactory to GlobalNet or the GlobalNet Shareholders, and their counsel.

       9.3        No Litigation.  No action or proceeding before a court or any other governmental agency or body shall have been instituted or
threatened to restrain or prohibit the transactions hereunder and no governmental agency or body shall have taken any other action or made any request of Host as a result of which GlobalNet and the GlobalNet Shareholders deem it inadvisable to proceed with the
transactions hereunder.

       9.4        Consents and Approvals.  The GlobalNet Shareholders shall have approved this Agreement.  All necessary consents and
approvals shall have been obtained.  All necessary consent of and filings with any governmental authority or agency relating to the consummation of the transaction contemplated herein shall have been obtained and made and no action or proceeding shall have been
instituted or threatened to restrain or prohibit the transactions hereunder and no governmental agency or body shall have taken any other action or made any request of Host as a result of which GlobalNet and the GlobalNet Shareholders deem it inadvisable to proceed
with the transactions hereunder.

       9.5        No Material Adverse Change.  No event or circumstance shall have occurred with respect to Host or HAC which would constitute a
Material Adverse Effect.

       9.6        Incumbency Certificate and Other Documents.  GlobalNet and the GlobalNet Shareholders shall have received an incumbency
certificate or certificates, dated the Closing Date, and signed by the Secretary of Host, certifying the names, titles and signatures of the officers authorized to execute the documents referred to in this Section 9 and such additional supporting documentation and
other information with respect to the transactions contemplated hereunder as GlobalNet and the GlobalNet Shareholders or their counsel may reasonably request.

       9.7        Opinion of Counsel.  GlobalNet shall have received an opinion from counsel for Host and HAC, dated the Closing Date, in form
and substance reasonably satisfactory to counsel for GlobalNet.

       9.8       Officer’s Certificate.  GlobalNet shall have received a certificate or certificates, dated the Closing Date and signed by
the President of Host, certifying the truth and correctness of attached copies of its Articles of Incorporation (including amendments thereto) and Bylaws (including amendments thereto).

       9.9       Loan Documents.  Webster Bank shall have consented to the Merger transaction as contemplated by the Agreement.  Host shall
have negotiated, and GlobalNet, Host and Lindley shall have executed such documents as may be required by Webster Bank to modify or amend the Loan Agreement, and related agreements thereto.

       9.10      Nasdaq Listing.  Host shall file with the Nasdaq SmallCap Market a Notification Form for Listing of Additional Shares with regards
to the shares of Host Common Stock issuable pursuant to Section 1.6 of this Agreement, and such listing application shall have been approved.

10.       ADDITIONAL AGREEMENTS.

       10.1       Allocation of Private Placement Proceeds.  Upon execution of this Agreement, Host will cause to be deposited in GlobalNet’s
operating account, $600,000 of the currently available proceeds from Host’s private placement offering identified in Schedule 4.4 to the Host Disclosure Letter.  The $600,000 will be in the form of an unsecured non-interest bearing loan to GlobalNet that
will be evidenced by a promissory note executed between the parties.  Host hereby agrees to deposit additional proceeds received from the private placement offering into GlobalNet’s operating account only after the deduction by Host of the following: 
(i) legal expenses of up to $150,000 associated with the transactions contemplated by this Agreement; (ii) accounting expenses of up to $100,000 associated with the transactions contemplated by this Agreement; (iii) $107,572 for repayment of outstanding loans owed to
Host by GlobalNet; (iv) $100,000 for reduction of bank debt owed to Webster Bank; (v) $150,000 for expenses related to the post-effective amendment contemplated by Section 10.2 below; and (vi) $75,000 for Host working capital.  Any additional proceeds to be
deposited into GlobalNet’s operating account prior to the Effective Time of the Merger will be in the form of unsecured non-interest bearing loans to GlobalNet evidenced by promissory notes.  The promissory notes contemplated by this Section 10.1 will be
forgiven upon the Effective Time of the Merger.  Any additional proceeds to be deposited into GlobalNet’s operating account pursuant to this Section 10.1 will be deposited within fifteen (15) business days of receipt of such proceeds by Host.

       10.2       Allocation of Warrant Proceeds.  Subject to the terms and conditions of this Agreement, Host shall use its reasonable best efforts
to file a post-effective amendment to its Registration Statement, SEC Registration No. 333-50673 (“Registration Statement), thereby enabling the holders of the 1,150,000 warrants the ability to exercise their warrants at the stated exercise price of $5.50 per
warrant.  Host further agrees to allocate, on an as received basis, 80% of the net warrant exercise proceeds, after deduction of legal, accounting, printing, solicitation and related fees and expenses and transfer agent costs, to the working capital of the
Surviving Corporation in the form of an equity investment for the exclusive use by Surviving Corporation and its management in developing and marketing its product line.  Host will use its best efforts to make the equity investment in the Surviving Corporation
as contemplated by this Section 10.2 within fifteen (15) business days of receipt of the net warrant exercise proceeds.

       10.3     Appointment of Additional Host Directors.  At the Effective Time of the Merger, two designees of the GlobalNet Shareholders shall be
appointed as Class III directors of Host to serve until such time as they may first resign or their respective successors shall have been elected or appointed and shall have been qualified, or as otherwise provided in the Bylaws of Host.

       10.4     Sale of Surviving Corporation.  For a period of three and one half (3 1⁄2) years from the Effective Time of the Merger, any
subsequent sale of the assets, merger or corporate reorganization of the Surviving Corporation must be approved by a unanimous vote of the Host Board of Directors.  If after the initial three and one half (3 1⁄2) year period, the Surviving Corporation has
not achieved Net Income of $2,000,000, only a majority approval of the Host Board of Directors will be required to enter into a transaction resulting in the sale of the Surviving Corporation’s assets, a merger or other form of corporate
reorganization. 

       10.5      Lock-Up of Certain Host Shareholders.  For a period of three and one half (31⁄2) years following the Effective Time of the
Merger, Geoffrey Ramsey and David Murphy agree to execute a lock-up agreement which will limit their sales of Host Common Stock to one percent (1%) of the then issued outstanding Host Common Stock in any given ninety (90) day period in the form attached as Exhibit
B.

       10.6      Reasonable Best Efforts.  Subject to the terms and conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement as soon as practicable after the date
hereof.

       10.7       Completion of the Disclosure Letters.  GlobalNet shall use its reasonable best efforts to complete and deliver to Host and HAC the
GlobalNet Disclosure Letter on or before 30 days after the date first above written.  Host and HAC shall use their reasonable best efforts to complete and deliver to GlobalNet and the GlobalNet Shareholders the Host Disclosure letter on or before 30 days after
the date first above written.

       10.8      Public Announcements.  The initial press release of Host with respect to this Agreement shall be reviewed and approved by
GlobalNet.  Thereafter, Host shall consult with GlobalNet prior to issuing any press releases or otherwise making public announcements with respect to this Agreement and the transactions contemplated by this Agreement, except as may be required by law. 
GlobalNet shall not issue any press release or other disclosure with respect to this Agreement and the transactions contemplated by this Agreement without the consent of Host.

       10.9       Further Assurances.  Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, common, proper or advisable under applicable legal requirements, to consummate and make effective the transactions contemplated by this Agreement.   If at
any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, Host, HAC, GlobalNet and the GlobalNet Shareholders, as the case may be, shall take or cause to be taken all such necessary or convenient action and
execute, and deliver and file, or cause to be executed, delivered and filed, all necessary or convenient documentation.

       10.10       Host Acquisition Corporation.  Upon execution of this Merger Agreement, Host shall act promptly to form a Colorado corporation,
Host Acquisition Corporation (“HAC”), in accordance with Sections 1.4 and 4.3 hereof.  As soon as it has been established, Host shall cause HAC to execute this Merger Agreement.

       10.11     Audit of GlobalNet and Tax Matters.  GlobalNet agrees to pay all expenses related to the independent audit of GlobalNet.  Tax advice
provided to GlobalNet and the GlobalNet Shareholders in connection with this Agreement shall be paid for by the respective parties.

       10.12     Nasdaq Listing.  Host agrees to file with the Nasdaq SmallCap Market a Notification Form for Listing of Additional Shares with regards to
the shares of Host Common Stock issuable pursuant to this Agreement.

       10.13     Further Securities Issuances by Host.  For a period of three and one half (3 1⁄2) years from the date the two designees of the
GlobalNet Shareholders are appointed to the Host Board of Directors pursuant to Section 10.3, any issuance of debt instruments, securities, options, warrants, calls, conversion rights or commitments relating to its securities of any kind other than in connection with
the exercise of options or warrants to be listed in Schedule 4.3 to the Host Disclosure Letter shall be made with the approval of at least eighty-one percent (81%) of the Host Board of Directors and Host hereby agrees not to increase the size of its Board of
Directors over ten (10) without the approval of eighty-one percent (81%) of the Host Board of Directors.  Host acknowledges that this section shall be deemed to be an amendment to the Host Bylaws to the extent that this section conflicts with such
Bylaws.

       10.14     Further Securities Issuances by GlobalNet.  Following the Effective Time of the Merger, any issuance of debt instruments, securities,
options, warrants, calls, conversion rights or commitments relating to GlobalNet’s securities of any kind shall be made with the unanimous approval of the GlobalNet Board of Directors.  GlobalNet acknowledges that this section shall be deemed to be an
amendment to the GlobalNet Bylaws to the extent that this section conflicts with such Bylaws.

       10.15     Tax Treatment of Merger.  Host, HAC and GlobalNet shall each use reasonable efforts to cause the Merger to be treated as a reorganization
within the meaning of Section 368(a) of the Code.

11.       TERMINATION OF AGREEMENT.

       11.1       Termination. This Agreement may be terminated at any time prior to the Closing Date solely:

	
       

	
       (a)       By mutual consent of all of the parties hereto;

	
       

	
       

	
       

	
       (b)       By GlobalNet, on the one hand, or by Host and HAC on the other hand, if the transactions contemplated by this Agreement to take place at
the Closing shall not have been consummated by December 31, 2003, unless the failure of such transactions to be consummated is due to the failure of the party seeking to terminate this Agreement to perform any of its obligations under this Agreement to the extent
required to be performed by it prior to or on the Closing Date;

	
       

	
       

	
       

	
       (c)       By GlobalNet, on the one hand, or by Host and HAC, on the other hand, if a material breach of the representations or a material breach or
default shall be made by the other party in the observance or in the due and timely performance of any of the covenants or agreements contained herein, and the curing of such default shall not have been made on or before the Closing Date or by GlobalNet, if the
conditions set forth in Section 9 hereof have not been satisfied or waived (with the exception of the conditions set forth in Sections 9.3, 9.5, 9.7 and 9.9) as of the Closing Date, or by Host, if the conditions set forth in Section 8 hereof have not been satisfied
or waived (with the exception of the conditions set forth in Sections 8.3, 8.6, 8.9 and 8.12) as of the Closing Date;

	
       

	
       

	
       

	
       (d)       By Host and HAC if the GlobalNet Disclosure Letter shall not have been completed and delivered to Host and HAC on or before 30 days after
the date first above written, or if the GlobalNet Disclosure Letter contains information or omissions which causes Host and HAC to determine it would be inadvisable to proceed with the transactions hereunder, and Host and HAC has provided written notification to
GlobalNet on or before 10 days after receipt of the GlobalNet Disclosure Letter that the Agreement is terminated;

	
       

	
	
       

	
       (e)       By GlobalNet if Webster Bank conditions its consent, as contemplated by Sections 8.12 and 9.9 of this Agreement, upon the taking of certain
actions by GlobalNet or the GlobalNet Shareholders that would result in obligations of GlobalNet or the GlobalNet Shareholders that are materially different than the obligations of Host or its subsidiaries pursuant to the Loan Agreement.

       11.2      Liabilities in Event of Termination.  Termination of this Agreement will in no way limit any obligation or liability of any party
based on or arising from a breach or default by such party with respect to any of its representations, warranties, covenants or agreements contained in this Agreement or in the Schedules delivered by such party, including, but not limited to, legal and audit costs
and out of pocket expenses.

       11.3      Termination Fee.

	
       

	
       (a)       In the event that this Agreement is terminated:

	
       

	
       

	
       

	
       

	
       (i)       by Host pursuant to Section 11.1(c);

	
       

	
       

	
       

	
       

	
       

	
       (ii)      by Host or GlobalNet pursuant to Section 11.1(c) as a result of any breach of this Agreement on the part of GlobalNet and an overture from a
bona fide person or entity shall have been communicated to the GlobalNet Board of Directors at or before the time of such breach to engage in an agreement, plan or transaction to acquire or purchase all or a substantial portion of the assets of or a substantial
equity interest in, or to effect any recapitalization, liquidation or dissolution involving or a business combination or other similar transaction with, GlobalNet other than with Host; or

	
       

	
       

	
       

	
       

	
       

	
       (iii)     by GlobalNet pursuant to Section 11.1(c);

	

        

	

 then (A) GlobalNet, in the case of termination pursuant to Section 11.3(a)(i), with the exception of any termination resulting from Section 8.14 of this Agreement, or (B) Host, in the case of termination pursuant to Section 11.3(a)(iii), shall within two business
days after the occurrence of such termination, pay to the other party as compensation for the Merger not becoming effective a termination fee equal to $100,000 (the “Termination Fee”) by wire transfer of immediately available funds.  In the event the
Agreement is terminated pursuant to Section 11.3(ii), then GlobalNet shall within two (2) business days after the occurrence of such termination, pay to Host an adjusted Termination Fee of $500,000.  The Termination Fee shall be in addition to any other rights
that Host may have under this Agreement and is not intended to constitute liquidated damages or a penalty, and shall be payable without regard to any expenses to be paid pursuant to the Agreement.  Host and GlobalNet hereby agree that if termination is a result
of the failure of a condition set forth in Section 8.14 of this Agreement, no Termination Fee is payable.

	
       

	
       

	
       

	
       (b)       Each party acknowledges that the agreements contained in Section 11.3(a) are an integral part of the transactions contemplated by this
Agreement and that, without these agreements, the other party would not enter into this Agreement; accordingly, if either party fails promptly to pay any amount due pursuant to Section 11.3(a) and, in order to obtain such payment, the other party commences a suit
which results in a judgment for all or a substantial portion of the payment set forth in Section 11.3(a), the losing party shall pay to the winning party its costs and expenses (including reasonable attorneys’ fees) in connection with such suit, together with
interest on the Termination Fee from the date that payment was required to be made until the date payment is made at the prime rate of eight percent (8%), in effect on the date payment was required to be made plus two percentage points.

12.        RESERVED.

13.       GENERAL PROVISIONS.

       13.1       Survival of Representations, Warranties and Agreements.  The representations and warranties of the parties hereto contained in this
Agreement or in any writing delivered pursuant hereto or at the Closing shall survive the execution and delivery of this Agreement and the Closing and the consummation of the transactions contemplated hereby (and any examination or investigation by or on behalf of
any party hereto) until the date twelve months after the Closing Date (except for claims in respect thereof pending at such time, which shall survive until finally resolved or settled); provided, also, the representations, warranties, covenants and agreements in
Section 3.18  shall survive until the expiration of the statutory period of limitations for assessment of tax deficiencies, including any extensions thereof, for each taxable period of GlobalNet which begins before the Closing Date and the representations,
warranties, covenants and agreements in Section 5 shall survive until the expiration of the applicable period of limitations, including any extensions thereof.   No action may be commenced with respect to any representation, warranty, covenant or agreement
in this Agreement, or in any writing delivered pursuant hereto, unless written notice, setting forth in reasonable detail the claimed breach thereof, shall be delivered pursuant to Section 13.7 to the party or parties against whom liability for the claimed breach is
charged on or before the termination of the survival period specified in Section 13.1 for such representation, warranty, covenant or agreement.

       13.2       Assignment.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other parties, and any attempt to make any such assignment without such consent shall be null and void.  Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

       13.3       Entire Agreement.  This Agreement and any attachments hereto, the GlobalNet Disclosure Letter and the Schedules thereto (including
the schedules, exhibits and annexes attached hereto and thereto), the Host Disclosure Letter and the Schedules thereto (including the schedules, exhibits and annexes attached hereto and thereto) and the documents delivered pursuant hereto constitute the entire
agreement and understanding among the parties and supersede any prior agreement and understanding relating to the subject matter of this Agreement. This Agreement, upon execution, constitutes a valid and binding agreement of the parties hereto enforceable in
accordance with its terms and may be modified or amended only by a written instrument executed by all parties.

       13.4       Counterparts.  This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.

       13.5       Brokers and Agents.  Each party represents and warrants that it employed no broker or agent in connection with this transaction,
except as provided in Schedule 13.5.

       13.6       Expenses.  Except as otherwise specifically provided herein, each party to this Agreement shall bear its own direct and indirect
expenses incurred in connection with the negotiation and preparation of this Agreement and the consummation and performance of the transactions contemplated hereby, including, without limitation, all legal fees and fees of any brokers, finders or similar
agents.

       13.7       Notices.  All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of
delivery if delivered personally, or by telecopy or facsimile upon confirmation of receipt, (ii) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (iii) on the 5th business day following the date of
mailing if delivered by registered or certified mail, return receipt requested, postage prepaid.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such
notice:

	
       

	
       (a)       If to Host or HAC:

	
       

	
       

	
       

	
                   Host America Corporation

                    2 Broadway

                    Hamden, CT  06518

                    Facsimile: (203) 230-8776

                    Attention: Geoffrey Ramsey, Chief Executive Officer

	
       

	
                    

	

       

	
                   with a copy to:

	
       

	
       

	
       

	
                   Berenbaum, Weinshienk & Eason, P.C.

                    370 17th Street, 48th Floor

                    Denver, CO 80202

                    Facsimile: (303) 629-7610

                    Attention: John B. Wills, Esq.

	
       

	
       

	
       

	
       (b)       If to GlobalNet or the GlobalNet Shareholders:

	
       

	
       

	
       

	
                   GlobalNet Energy Investors, Inc.

                    1840 Hutton Drive, Suite 130

                    Carrollton, Texas 75006

                    Facsimile:  (972) 484-0888

                    Attention:  Eric Barger, President

	
       

	
       

	
       

	
                   with a copy to:

	
       

	
       

	
       

	
                   Brewer & Pritchard, P.C.

                    Three Riverway, Suite 1800

                    Houston, Texas 77056

                    Facsimile: (713) 659-5302

                    Attention: Cavas Pavri, Esq.

       13.8      Governing Law.  This Agreement shall be construed in accordance with the laws of the State of Colorado.

       13.9       Enforcement.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms.  It is accordingly agreed that the parties shall be entitled to specific performance of the terms hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

       13.10      Exercise of Rights and Remedies.  Except as otherwise provided herein, no delay of or omission in the exercise of any right, power or
remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or
default occurring later; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.

       13.11      Time.  Time is of the essence with respect to this Agreement.

       13.12      Reformation and Severability.  In case any provision of this Agreement shall be invalid, illegal or unenforceable, it shall, to the
extent possible, be modified in such manner as to be valid, legal and enforceable but so as to most nearly retain the intent of the parties, and if such modification is not possible, such provision shall be severed from this Agreement, and in either case the
validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

       13.13      Remedies Cumulative.  No right, remedy or election given by any term of this Agreement shall be deemed exclusive, but each shall be
cumulative with all other rights, remedies and elections available at law or in equity.

       13.14      Captions; Construction.  The headings of this Agreement are inserted for convenience only, and shall not constitute a part of this
Agreement or be used to construe or interpret any provision hereof.  This Agreement has been fully reviewed and negotiated by the parties and no uncertainty or ambiguity in any term or provision of this Agreement shall be construed strictly against any party
under any rule of construction or otherwise.

(the remainder of this page is intentionally left blank)

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

	
HOST AMERICA CORPORATION

	
    

	
GLOBALNET ENERGY INVESTORS, INC.

	
    

	
    

	
    

	
By:

	
  /s/ Geoffrey Ramsey             

	
    

	
By:

	
  /s/ Eric Barger                       

	
Name:

	
Geoffrey Ramsey                   

	
    

	
Name:

	
Eric Barger                             

	
Title:

	
Chief Executive Officer         

	
    

	
Title:

	
President                                 

	
    

	
    

	
    

	
    

	
	
    

	
    

	
    

	
    

	
	
    

	
    

	
    

	
    

	
	
HOST ACQUISITION CORPORATION

			
	
    

	
    

	
    

		
	
By:

	
  /s/ Geoffrey Ramsey             

	
    

		
	
Name:

	
Geoffrey Ramsey                   

	
    

		
	
Title:

	
Chief Executive Officer

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