Document:

Sundog Technologies, Inc.

                                       and

                        Atlas Stock Transfer Corporation

                                Rights Agreement

                          Dated as of December 22, 2000

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                                TABLE OF CONTENTS
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                                                                                                               Page

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1.       Certain Definitions........................................................1

2.       Appointment of Rights Agent................................................6

3.       Issue of Rights Certificates...............................................6

4.       Form of Rights Certificates................................................8

5.       Countersignature and Registration..........................................9

6.       Transfer, Split-Up, Combination and Exchange of Rights Certificates;
         Mutilated, Destroyed, Lost or Stolen Certificates..........................9

7.       Exercise of Rights; Purchase Price; Expiration Date of Rights.............10

8.       Cancellation and Destruction of Rights Certificates.......................12

9.       Reservation and Availability of Capital Stock.............................12

10.      Preferred Stock Record Date...............................................14

11.      Adjustment of Purchase Price, Number of Shares or Number of Rights........14

12.      Certificate of Adjusted Purchase Price or Number of Shares................22

13.      Consolidation, Merger or Sale or Transfer of Assets or Earning Power......23

14.      Fractional Rights and Fractional Shares...................................26
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<S>                                                                               <C>
15.      Rights of Action..........................................................27

16.      Agreement of Rights Holders...............................................27

17.      Rights Certificate Holder Not Deemed a Shareholder........................28

18.      Concerning the Rights Agent...............................................28

19.      Merger or Consolidation or Change of Name of Rights Agent.................29

20.      Duties of Rights Agent....................................................29

21.      Change of Rights Agent....................................................32

22.      Issuance of New Rights Certificates.......................................32

23.      Redemption and Waiver.....................................................33

24.      Exchange..................................................................34

25.      Notices...................................................................35

26.      Supplements and Amendments................................................36

27.      Successors................................................................37

28.      Benefits of this Agreement................................................37

29.      Severability..............................................................37

30.      Determinations and Actions by the Board of Directors, Etc.................37
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<S>                                                                               <C>
31.      Governing Law.............................................................38

32.      Counterparts..............................................................38

33.      Descriptive Headings......................................................38
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                                      iii
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                                RIGHTS AGREEMENT

         This RIGHTS AGREEMENT, dated as of December 22, 2000 (the "Agreement"),
between Sundog Technologies,  Inc., an Delaware corporation (the "Company"), and
Atlas Stock Transfer Corporation (the "Rights Agent").

                                   WITNESSETH
                                   ----------

         WHEREAS,  the Board of Directors of the Company authorized and declared
a  dividend  of one Right  for each  share of  Common  Stock (as such  terms are
hereinafter defined) of the Company outstanding on January 31, 2001 (the "Record
Date"),  and has authorized the issuance of one Right with respect to each share
of Common Stock  issued by the Company  between the Record Date and the earliest
of the  Distribution  Date, the Redemption Date or the Final Expiration Date (as
such terms are hereinafter defined),  with each Right initially representing the
right  to  purchase  one  one-hundredth  of  a  share  of  Preferred  Stock  (as
hereinafter defined) having the rights,  powers and preferences set forth in the
form of Amendment to the Company's Certificate of Incorporation  attached hereto
as Exhibit A, upon the terms and subject to the conditions herein set forth (the
"Rights");

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

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

                  (a) "Acquiring Person" shall mean (i) any Person (as such term
is  hereinafter  defined)  who  or  which,  together  with  all  Affiliates  and
Associates (as such terms are hereinafter, defined) of such Person, shall become
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
shares of Common  Stock  then  outstanding  or (ii) any Person who is an Adverse
Person  (as  such  term is  hereinafter  defined);  provided,  however,  that an
Acquiring Person shall not include the Company,  any Subsidiary (as such term is
hereinafter  defined) of the Company or any employee benefit plan of the Company
or of any  Subsidiary  of the Company,  or any entity  holding  shares of Common
Stock  for or  pursuant  to the  terms of any  such  plan.  Notwithstanding  the
foregoing,  no Person shall be deemed to be an "Acquiring  Person" either (i) as
the result of an acquisition  of Common Stock by the Company which,  by reducing
the number of shares outstanding,  increases the proportionate  number of shares
Beneficially  Owned by such  Person  to 15% or more of the  Common  Stock of the
Company then outstanding;  provided,  however, that if a Person shall become the
Beneficial  Owner of 15% or more of the Common Stock then  outstanding by reason
of share  purchases by the Company and shall,  after such share purchases by the
Company,  become the Beneficial Owner of any additional  shares of Common Stock,
then such Person shall be deemed to be an "Acquiring  Person," (ii) if the Board

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<PAGE>

of  Directors  of the Company  determines  in good faith that a Person who would
otherwise  be an  "Acquiring  Person,"  as  defined  pursuant  to the  foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares of Common Stock
so that such  Person  would no  longer  be an  "Acquiring  Person,"  as  defined
pursuant to the  foregoing  provisions  of this  paragraph  (a), or (iii) if the
transaction  in which a Person,  together with all  Affiliates and associates of
such Person,  would become the Beneficial  Owner of 15% or more of the shares of
Common Stock then outstanding involves the purchase of Common Stock or Preferred
Stock  (or  securities  convertible  into or  exercisable  for  Common  Stock of
Preferred Stock) directly from the Company and the Board of Directors  expressly
determines, in the resolution approving such transaction, that such Person shall
not become an  "Acquiring  Person" as a result of the shares of Common  Stock or
Preferred Stock (or securities  convertible into or exercisable for Common Stock
of Preferred Stock) acquired in such transaction,  provided,  however, if, after
said  transaction,  said Person,  together with all  Affiliates or Associates of
said Person,  shall acquire additional shares of Preferred Stock or Common Stock
(other than pursuant to rights or securities  acquired in such transaction) that
cause such Person,  together with the  Affiliates and Associates of such Person,
to become the  beneficial  owners of 15% or more of the  shares of Common  Stock
then outstanding, then such Person shall be deemed to be an "Acquiring Person."

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

                  (c) "Adverse  Person" shall mean any Person  declared to be an
Adverse  Person by the Board of Directors  of the Company  upon a  determination
that such Person, alone or together with its Affiliates and Associates,  has, at
any time after the date of this  Agreement,  become the  Beneficial  Owner of an
amount of Common Stock which the Board of Directors determines to be substantial
(which  amount  shall be more  than  10% of the  shares  of  Common  Stock  then
outstanding)  and a  determination  by at  least  a  majority  of the  Board  of
Directors  who are not officers of the  Company,  after  reasonable  inquiry and
investigation,  including consultation with such persons as such directors shall
deem appropriate,  that (1) such beneficial ownership by such Person is intended
to cause the Company to repurchase the Common Stock  beneficially  owned by such
Person or to cause  pressure  on the  Company  to take  action  or enter  into a
transaction  or series of  transactions  intended  to provide  such  Person with
short-term  financial  gain  under  circumstances  where the Board of  Directors
determines that the best long-term interests of the Company and its shareholders
would not be served by taking such action or entering into such  transactions at
that time, or (2) such beneficial  ownership is causing or reasonably  likely to
cause a material adverse impact  (including,  but not limited to,  impairment of
relationships  with customers or impairment of the Company's ability to maintain
its competitive position) on the business or prospects of the Company.

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

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                  (e) "Agreement" shall mean this Rights Agreement.

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

                           (i)   which  such Person  or  any  of  such  Person's
         Affiliates or Associates, directly or indirectly, has the power to vote
         or dispose of,  including  pursuant to any  agreement,  arrangement  or
         understanding, whether or not in writing;

                           (ii)  which  such  Person  or  any of  such  Person's
         Affiliates  or  Associates,  directly or  indirectly,  has the right to
         acquire  voting  or  dispositive  power  over  (whether  such  right is
         exercisable  immediately or only after the passage of time) pursuant to
         any  agreement,   arrangement  or  understanding  (whether  or  not  in
         writing),  or upon the exercise of conversion rights,  exchange rights,
         rights, warrants or options, or otherwise; or

                           (iii) which  are  beneficially  owned,   directly  or
         indirectly, by any other Person (or any Affiliate or Associate thereof)
         with  which  such  Person  (or  any  of  such  Person's  Affiliates  or
         Associates) has any agreement arrangement or understanding,  whether or
         not in  writing,  for the  purpose  of  acquiring,  holding,  voting or
         disposing of any securities of the Company;

provided, however, that nothing in this paragraph (e) shall cause a person to be
the "Beneficial Owner" of, or to "beneficially own," (A) any securities that may
be  issued  on the  exercise  of  Rights,  (B) any  security  if the  agreement,
arrangement  or  understanding  to  vote  such  security  arises  solely  from a
revocable proxy or consent given to such Person in response to a public proxy or
consent  solicitation  made pursuant to, and in accordance  with, the applicable
rules and regulations of the Exchange Act, (C) 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 (D) any securities acquired by a Person engaged in
business as an underwriter of securities through such Person's  participation in
good faith in a firm  commitment  underwriting  until the  expiration of 40 days
after the date of such  acquisition.  For all  purposes of this  Agreement,  any
calculation  of  the  number  of  shares  of  Common  Stock  outstanding  at any
particular  time for purposes of determining  the particular  percentage of such
outstanding  shares of Common Stock of which any Person is the Beneficial  Owner
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act.

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

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

                  (i) "Common  Stock"  shall mean the Common  Stock,   $.001 par
value,  of the Company.  The term "common stock" when used with reference to any
Person other than the Company shall mean the capital stock (or equity  interest)
with the greatest voting power of such other Person together with all rights and
benefits  (however  denominated  or  constituted)  relating to such common stock
(including,  without  limitation  any rights or warrants  to acquire  additional
shares of such common stock or other securities or assets,  or to participate in
any trust for the benefit of holders of such shares, or to share in the benefits
of any  agreements  or other  arrangements  for the  benefit  of such  holders),
whether or not such  rights are yet  exercisable,  and  together  with any other
securities  which are represented by the  certificates  for such common stock or
are transferred in connection with transfers of such common stock.

                  (j) "Common  Stock  Equivalents"   shall have the  meaning set
forth in Section 11(a)(iii).

                  (k) "Current  Per Share  Market  Price" shall have the meaning
set forth in Section 11(d).

                  (l) "Current  Value"   shall  have the  meaning  set  forth in
Section 11(a)(iii).

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

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

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

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

                  (q) "Preferred  Stock" means Series A Preferred  Shares of the
Company  and,  to the extent that there is not a  sufficient  number of Series A
Preferred Shares authorized to permit the full exercise of the Rights, any other
series of Preferred Shares of the Company designated for such purpose containing
terms substantially similar to the terms of the Series A Preferred Shares.

                  (r) "Preferred Stock  Equivalents"  shall have the meaning set
forth in Section 11(b).

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

                  (t) "Proposed Acquiror" shall mean any Person who has proposed
or  publicly   announced  an  intention  to  propose  a  transaction   that,  if
consummated,   would  cause  a  Stock  Acquisition  Date  (other  than  a  Stock
Acquisition Date occurring as the result of a declaration by the Company's Board
of Directors of the  existence of an Adverse  Person) or any Section 13 Event to
occur.

                  (u) "Purchase Price" shall mean the dollar amount payable upon
exercise of one Right to acquire the number of one  one-hundredths of a share of
Preferred  Stock or other  securities  or  assets  for  which  the Right is then
exercisable and shall initially be the price set forth in Section 7(b).

                  (v) "Record  Date"   shall have the  meaning  set forth in the
WHEREAS clause at the beginning of this Agreement.

                  (w) "Redemption  Date"   shall have the  meaning  set forth in
Section 7(a).

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

                  (y) "Rights"   shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.

                  (z) "Rights  Certificate"  shall have the meaning set forth in
Section 3(a).

                  (aa) "Section 11(i) Event" shall have the meaning set forth in
Section 11(i).

                  (ab) "Section  13 Event"   shall mean any event  described  in
Section 13(a).

                  (ac) "Spread"   shall  have the  meaning  set forth in Section
11(a)(iii).

                  (ad) "Stock  Acquisition  Date"   shall mean the first date of
public announcement (including,  without limitation,  the date a report is filed
pursuant to Section  13(d) of the  Exchange  Act) by the Company or an Acquiring
Person that an Acquiring Person has become an Acquiring Person.

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

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

                  (ag) "Trading Day" shall have the meaning set forth in Section
11(d).

         2. Appointment of Rights Agent.  The Company hereby appoints the Rights
Agent for the Company in accordance  with the terms and conditions  hereof,  and
the Rights Agent hereby accepts such  appointment.  The Company may from time to
time appoint such co-Rights  Agents as it may deem  necessary or desirable.  The
Rights  Agent shall have no duty to  supervise,  and in no event shall be liable
for, the acts or omissions of any such co-Rights Agent.

         3. Issue of Rights Certificates.

                  (a) Until the  earlier  of (i) the  close of  business  on the
tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date is prior to the Record Date, the Record Date) or (ii) the close
of business  on the tenth day after the date that a tender or exchange  offer by
any Person (other than the Company,  any Subsidiary of the Company, any employee
benefit plan of the Company or of any  Subsidiary of the Company,  or any entity
holding shares of Common Stock for or pursuant to the terms of any such plan) is
first  published  or sent or given  within the  meaning of Rule  14d-2(a) of the
General  Rules and  Regulations  under the  Exchange  Act, if upon  consummation
thereof,  such Person would be the Beneficial Owner of 15 percent or more of the
shares of Common  Stock then  outstanding  (the  earliest  of (i) and (ii) being
herein referred to as the "Distribution Date"), (w) the Rights will be evidenced
by the  certificates for the Common Stock registered in the names of the holders
of the Common Stock (which  certificates shall also be deemed to be certificates
for  Rights)  and not by separate  Rights  Certificates,  (x) the Rights and the
right to receive Rights  Certificates  will be  transferable  only in connection
with the  transfer of the  underlying  Common  Stock and any  transfer of Common
Stock shall also constitute the transfer of the associated Rights represented by
the same  certificate,  (y) in the event the Company  purchases  or acquires any
Common  Stock  after the Record  Date but prior to the  Distribution  Date,  any
Rights  associated  with such acquired Common Stock shall be deemed canceled and
retired  so that the  Company  shall not be  entitled  to  exercise  any  Rights
associated with shares of Common Stock that are no longer  outstanding,  and (z)
in the event the Company issues any Common Stock after the Record Date but prior
to the  earliest of the  Distribution  Date,  the  Redemption  Date or the Final
Expiration  Date,  the Company  shall issue one Right for each such newly issued
share of Common stock (subject to adjustment as provided in Section 11(h)) which
Right shall be evidenced by the certificate  for the associated  share of Common
Stock.  As soon as  practicable  after the  Distribution  Date, the Company will
prepare and  execute,  the Rights Agent will  countersign,  and the Company will
send or cause to be sent (and the Rights Agent will,  if requested  and provided
with all necessary information,  send) by first-class,  postage-prepaid mail, to
each record  holder of shares of Common Stock as of the close of business on the
Distribution  Date,  at the address of such  holder  shown on the records of the

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Company, a Rights Certificate,  in substantially the form of Exhibit B hereto (a
"Rights  Certificate"),  evidencing  one Right for each share of Common Stock so
held,  subject to adjustment as provided herein. In the event that an adjustment
in the  number of Rights  per share of Common  Stock has been made  pursuant  to
Section 11(h), at the time the Rights  Certificates  are distributed the Company
shall make the  necessary  and  appropriate  rounding  adjustments  pursuant  to
Section 14(a) so that Rights  Certificates  are  distributed  representing  only
whole numbers of Rights and cash is paid in lieu of fractional Rights. As of and
after the Distribution  Date, the Rights will be evidenced solely by such Rights
Certificates.

                  (b) As soon as  practicable  following  the Record  Date,  the
Company will send a copy of a Summary of Rights to Purchase  Preferred Stock, in
substantially  the form of Exhibit C (the "Summary of Rights"),  by first-class,
postage-prepaid  mail, to each record holder of shares of Common Stock as of the
Close of Business on the Record Date, at the address of such holder shown on the
records of the Company.

                  (c) All Common  Stock  certificates  which are issued,  either
upon an original  issuance by the Company or upon a transfer by a holder,  after
the date  hereof  but  prior  to the  earliest  of the  Distribution  Date,  the
Redemption Date or the Final  Expiration  Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:

                  Effective  January 31, 2001, this  certificate  also evidences
                  and entitles the holder hereof to certain  rights set forth in
                  a Rights  Agreement  between  Sundog  Technologies,  Inc. (the
                  "Company")  and Atlas Stock Transfer  Corporation  dated as of
                  December 22, 2000 (the "Rights Agreement"), the terms of which
                  are incorporated herein by reference and a copy of which is on
                  file at the principal executive offices of the Company.  Under
                  certain  circumstances,  as set forth in the Rights Agreement,
                  such Rights will be  evidenced  by separate  certificates  and
                  will no longer be evidenced by this  certificate.  The Company
                  will  mail to the  holder  of this  certificate  a copy of the
                  Rights  Agreement  without  charge after  receipt of a written
                  request   therefor.   Under  certain   circumstances,   Rights
                  beneficially owned by Acquiring Persons or their Affiliates or
                  Associates   (as  such   terms  are   defined  in  the  Rights
                  Agreement),  and Rights previously owned by such Persons,  may
                  become null and void.

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         4. Form of Rights Certificates.

                  (a) The  Rights  Certificates  (and  the form of  election  to
purchase and form of assignment to be printed on the reverse  thereof)  shall be
substantially  the  same  as  Exhibit  B  hereto  and may  have  such  marks  of
identification  or  designation  and such  legends,  summaries  or  endorsements
printed thereon as the Company may deem  appropriate and as are not inconsistent
with the provisions of this Agreement,  or as may be required to comply with any
applicable law or with any rule or regulation made pursuant  thereto or with any
rule or  regulation  of any stock  exchange on which the Rights may from time to
time be listed, or to conform to usage.  Subject to the provisions of Section 11
and Section 22, the Rights Certificates, whenever distributed, shall entitle the
holders  thereof  to  purchase  for  the  Purchase  Price  such  number  of  one
one-hundredths of a share of Preferred Stock as shall be set forth therein,  but
the amount and type of  securities  purchasable  upon  exercise and the Purchase
Price shall be subject to adjustment as provided herein.

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

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

provided,  however,  that the Rights Agent shall not have any  responsibility to
ascertain  the  existence  of facts that would  require the  imposition  of such

                                       8
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legend and shall be required to impose such legend only if  instructed  to do so
by the Company or if a holder fails to certify upon  transfer or exchange in the
space  provided on the Rights  Certificate  that such holder is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.

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

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

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

                  (a) Subject to the provisions of Sections  4(b),  7(e) and 14,
at any time after the Close of  Business  on the  Distribution  Date,  and at or
prior to the Close of  Business  on the  earlier of the  Redemption  Date or the
Final   Expiration   Date,  any  Rights   Certificate  or  Certificates  may  be
transferred,  split up, combined or exchanged for another Rights  Certificate or
Certificates,  entitling  the  registered  holder to  purchase a like  number of
shares  of  Preferred  Stock or  other  securities  or  property  as the  Rights
Certificate or Certificates  surrendered  then entitled such holder to purchase.
Any registered  holder  desiring to transfer,  split up, combine or exchange any
Rights  Certificate or Certificates shall make such request in writing delivered
to the Rights Agent and shall  surrender the Rights  Certificate or Certificates
to be  transferred,  split up, combined or exchanged at the office of the Rights
Agent  designated  for such  purpose.  Neither the Rights  Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered  Rights  Certificate until the registered holder shall have
completed and signed the certificate  contained in the form of assignment on the

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<PAGE>

reverse side of such Rights  Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates  or  Associates  thereof as the  Company or the  Rights  Agent  shall
reasonably request.  Thereupon the Rights Agent shall, subject to Sections 4(b),
7(e) and 14,  countersign  and deliver to the person  entitled  thereto a Rights
Certificate  or Rights  Certificates,  as the case may be, as so requested.  The
Company may require payment of a sum sufficient to cover any tax or governmental
charge  that  may  be  imposed  in  connection  with  any  transfer,   split-up,
combination or exchange of Rights  Certificates.  The Rights Agent shall have no
duty or obligation to take any action under any section of this Agreement  which
requires the payment by a Rights  holder of  applicable  taxes and  governmental
charges  unless  and until the  Rights  Agent is  satisfied  that all such taxes
and/or charges have been paid.

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

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

                  (a) At any time after the Distribution Date and at or prior to
the  earlier  of (i) the Close of  Business  on  December  1,  2010 (the  "Final
Expiration  Date") or (ii) the time at which the Rights are redeemed as provided
in Section 23 (the "Redemption  Date"),  subject to Section 7(e), the registered
holder of any Rights  Certificate  may  exercise  the Rights  evidenced  thereby
(except  as  otherwise  provided  herein  including,   without  limitation,  the
restrictions on exercisability set forth in Sections 9(c), 11(a)(iii)) and 23 in
whole or in part upon  surrender  of the  Rights  Certificate,  with the form of
election to purchase and  certificate on the reverse side thereof duly executed,
to the  Rights  Agent at the  office of the  Rights  Agent  designated  for such
purpose,  together  with  payment of the  Purchase  Price for each Right that is
exercised.

                  (b) The  Purchase  Price to be paid on  exercise of each Right
shall  initially  be $60.00 and shall be  payable in lawful  money of the United
States of America in  accordance  with  paragraph  (c) below.  Each Right  shall
initially  entitle  the  holder  to  acquire  one  one-hundredth  of a share  of
Preferred Stock upon exercise of the Right. The Purchase Price and the number of
shares of  Preferred  Stock or other  securities  or assets for which a Right is
exercisable shall be subject to adjustment as provided in Sections 11 and 13.

                  (c) Upon  receipt  of  a  Rights   Certificate    representing
exercisable  Rights,  with the  form of  election  to  purchase  duly  executed,
accompanied  by payment of the Purchase Price for the shares to be purchased and
an amount equal to any  applicable  tax or  governmental  charge in cash,  or by

                                       10
<PAGE>

certified  check or cashier's  check  payable to the order of the  Company,  the
Rights Agent shall, subject to Section 20(k), thereupon promptly (i) requisition
from any transfer agent of the Preferred Stock (or make available, if the Rights
Agent is the transfer agent)  certificates for the number of shares of Preferred
Stock to be purchased and the Company  hereby  authorizes  its transfer agent to
comply  with all such  requests,  (ii) when  appropriate,  requisition  from the
Company the amount of cash to be paid in lieu of issuance of  fractional  shares
in  accordance  with Section 14,  (iii) after  receipt of the  certificates  for
Preferred  Stock  cause  the same to be  delivered  to or upon the  order of the
registered holder of such Rights  Certificate,  registered in such name or names
as may be designated by such holder and (iv) when  appropriate,  after  receipt,
deliver such cash to or upon the order of the  registered  holder of such Rights
Certificate.  In the  event  that  the  Company  is  obligated  to  issue  other
securities  (including,  but not limited to, debt  securities)  of the  Company,
and/or  distribute other property  pursuant to Section 11, the Company covenants
that it will  make all  arrangements  necessary  so that such  other  securities
and/or property are available for  distribution by the Rights Agent, if and when
necessary to comply with this Agreement.

                  (d) In case the  registered  holder of any Rights  Certificate
shall  exercise  less  than  all the  Rights  evidenced  thereby,  a new  Rights
Certificate  evidencing  Rights  equivalent to the Rights remaining  unexercised
shall be issued by the  Rights  Agent to the  registered  holder of such  Rights
Certificate  or to his duly  authorized  assigns,  subject to the  provisions of
Section 6 and Section 14.

                  (e) Notwithstanding  any  other  provision of this  Agreement,
from  and  after  the  occurrence  of  a  Stock  Acquisition  Date,  any  Rights
beneficially  owned by (i) an Acquiring Person, or any Associate or Affiliate of
an  Acquiring  Person,  (ii) any  other  Person  if such  Rights  formerly  were
beneficially  owned by an  Acquiring  Person (or by an Associate or Affiliate of
such Acquiring Person) at a time after such Acquiring Person became an Acquiring
Person,  or (iii) a transferee  of Rights from an Acquiring  Person (or from any
Associate or Affiliate thereof) who became a transferee prior to or concurrently
with the Acquiring  Person becoming an Acquiring Person and receives such Rights
pursuant to either (A) a transfer  (whether or not for  consideration)  from the
Acquiring  Person (or its Affiliate or Associate) to holders of equity interests
in such  Acquiring  Person (or its Affiliate or Associate) or to any Person with
whom the Acquiring  Person (or its Affiliate or  Associate)  has any  continuing
agreement, arrangement or understanding regarding the transferred Rights, or (B)
a  transfer  which  the Board of  Directors  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 and any holder of
such Rights  shall  thereafter  have no right to exercise  such Rights under any
provision of this Agreement.  The Company shall promptly notify the Rights Agent
of the  applicability of this Section 7(e) and shall use all reasonable  efforts
to ensure  that the  provisions  of this  Section  7(e) and of Section  4(b) are
complied  with,  but neither  the  Company  nor the Rights  Agent shall have any
liability to any holder of Rights  Certificates  or any other Person as a result
of the Company's failure to make any determinations with respect to an Acquiring
Person, or any of its Affiliates, Associates or transferees hereunder.

                                       11
<PAGE>

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

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

         9. Reservation and Availability of Capital Stock.

                  (a) The Company  covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued  Preferred  Stock
(and,  following  the  occurrence  of a Stock  Acquisition  Date or a Section 13
Event,  out of its authorized  and unissued  shares of Common Stock and/or other
securities),  the  number of shares  of  Preferred  Stock  (and,  following  the
occurrence  of a Stock  Acquisition  Date or a Section  13 Event,  Common  Stock
and/or other securities) that, as provided in this Agreement, will be sufficient
to permit the exercise in full of all  outstanding  Rights;  provided,  however,
that shares  issuable  pursuant  to Section  11(a)(ii)  shall be  reserved  only
following the occurrence of an event described in that section.

                  (b) If any shares of Preferred  Stock are listed on a national
securities  exchange,  and so  long  as the  shares  of  Preferred  Stock  (and,
following  the  occurrence  of a Stock  Acquisition  Date or a Section 13 Event,
Common Stock and/or other securities) issuable and deliverable upon the exercise
of the Rights may be listed on that  exchange,  the  Company  shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares  reserved for such  issuance to be listed on the exchange  upon  official
notice of issuance upon exercise.

                                       12
<PAGE>

                  (c) The Company  shall use its best  efforts  (i) to file,  as
soon as practicable  following a Stock Acquisition Date and the determination by
the Company in accordance  with Section  11(a)(iii) of the  consideration  to be
delivered by the Company upon exercise of the Rights,  or as soon as is required
by law  following  the  Distribution  Date,  as the case may be, a  registration
statement under the Act with respect to the securities purchasable upon exercise
of the Rights on an appropriate form, (ii) to cause such registration  statement
to become effective as soon as practicable after such filing, and (iii) to cause
such registration  statement to remain effective (with a prospectus at all times
meeting  the  requirements  of the Act) until the  earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the date
of the  expiration of the Rights.  The Company will also take such action as may
be appropriate  under or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the  exercisability of the Rights.
The Company may  temporarily  suspend the  exercisability  of the Rights,  for a
period of time not to exceed 120 days after the date the Company  first  becomes
obligated to use its best efforts to file a registration  statement as set forth
in clause (i) of the first  sentence of this Section  9(c),  in order to prepare
and file such registration statement and permit it to become effective. Upon any
such suspension,  the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.  The Company
will notify the Rights Agent whenever it makes a public announcement pursuant to
Section 9(c) and will provide the Rights Agent with a copy of such announcement.
Notwithstanding  any  provision of this  Agreement to the  contrary,  the Rights
shall not be exercisable in any jurisdiction, unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
has been declared effective.

                  (d) The  Company  covenants  and agrees  that it will take all
such action as may be  necessary  to ensure that all shares of  Preferred  Stock
(and,  following the occurrence of a Stock Acquisition Date or Section 13 Event,
Common Stock and/or other  securities)  delivered upon exercise of Rights shall,
at the time of  delivery  of the  certificates  for such  shares of such  shares
(subject to payment of the Purchase Price),  be duly and validly  authorized and
issued and fully paid and nonassessable shares.

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

                                       13
<PAGE>

         10. Preferred  Stock  Record  Date.   Each  Person  in  whose  name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common  Stock 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 such  fractional  shares of  Preferred  Stock (or Common  Stock and/or
other  securities,  as the  case  may  be)  represented  thereby  on,  and  such
certificate  shall  be  dated,  the  date  upon  which  the  Rights  Certificate
evidencing  such Rights was duly  surrendered  and payment of the Purchase Price
(and any applicable transfer taxes or governmental  charges) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Preferred  Stock (or Common Stock and/or other  securities,  as the case may be)
transfer  books of the Company are closed,  such person  shall be deemed to have
become the record holder of such shares  (fractional  or otherwise) on, and such
certificate  shall be  dated,  the next  succeeding  Business  Day on which  the
Preferred.  Stock (or Common Stock and/or other securities,  as the case may be)
transfer  books of the  Company  are open.  Prior to the  exercise of the Rights
evidenced  thereby,  the holder of a Rights Certificate shall not be entitled to
any rights of a shareholder  of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, to receive dividends
or other  distributions or to exercise any preemptive  rights,  and shall not be
entitled  to receive any notice of any  proceedings  of the  Company,  except as
provided herein.

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

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

                                       14
<PAGE>

         shall be made successively whenever such a dividend is declared or paid
         or such a subdivision,  combination or reclassification is effected. If
         an event  occurs  which  would  require an  adjustment  under both this
         Section 11(a)(i) and Section 11(a)(ii),  the adjustment provided for in
         this Section  11(a)(i) shall be in addition to, and shall be made prior
         to, any adjustment required pursuant to Section 11(a)(ii).

                           (ii)  In the  event  that a  Stock  Acquisition  Date
         occurs,  subject to Section 23, proper  provision shall be made so that
         each holder of a Right,  except as provided  below and in Section 7(e),
         shall  thereafter  have a right to receive,  upon exercise  thereof and
         payment  of the  Purchase  Price in  accordance  with the terms of this
         Agreement,  in lieu of a  number  of one  one-hundredths  of a share of
         Preferred  Stock,  such number of shares of Common Stock as shall equal
         the result  obtained by dividing the then current  Purchase Price by 50
         percent of the  Current  Per Share  Market  Price of the  Common  Stock
         (determined  pursuant to Section 11(d)) on the Stock  Acquisition  Date
         (such number of shares being the "Adjustment Shares").

                           (iii) In the  event  the  number  of shares of Common
         Stock  which  are   authorized   by  the   Company's   Certificate   of
         Incorporation but not outstanding or reserved for issuance for purposes
         other than upon exercise of the Rights are not sufficient to permit the
         exercise  in  full of the  Rights  in  accordance  with  the  foregoing
         subparagraph  (ii)  of  this  Section  11(a),  the  Company  shall  (A)
         determine the excess of (1) the value of the Adjustment Shares issuable
         upon the  exercise of a Right (the  "Current  Value") over (2) the then
         current  Purchase  Price  (such  excess,  the  "Spread"),  and (B) with
         respect to each Right,  make adequate  provision to substitute  for the
         Adjustment Shares,  upon payment of the applicable  Purchase Price, (1)
         cash, (2) a reduction in the applicable  Purchase Price,  (3) shares of
         Common  Stock or other  equity  securities  of the Company  (including,
         without limitation, shares, or units of shares, of preferred stock that
         the Board of Directors of the Company has deemed to have the same value
         as shares of  Common  Stock  ("Common  Stock  Equivalents")),  (4) debt
         securities of the Company,  (5) other assets, or (6) any combination of
         the  foregoing,  having an aggregate  value equal to the Current Value,
         where  such  aggregate  value  has  been  determined  by the  Board  of
         Directors  of  the  Company  based  upon  the  advice  of a  nationally
         recognized  investment  banking firm selected by the Board of Directors
         of the Company;  provided,  however, if the Company shall not have made
         adequate provision to deliver value pursuant to clause (B) above within
         30 days following the Stock Acquisition Date, then the Company shall be
         obligated to deliver,  upon the  surrender  for exercise of a Right and
         without requiring payment of the Purchase Price, shares of Common Stock
         (to the extent  available) and then, if necessary,  cash,  which shares
         and/or cash have an aggregate  value equal to the Spread.  If the Board
         of  Directors of the Company  shall  determine in good faith that it is
         likely  that  sufficient  additional  shares of Common  Stock  could be
         authorized for issuance upon exercise in full of the Rights, the 30-day
         period set forth above may be extended to the extent necessary, but not
         more than 90 days after the Stock  Acquisition  Date, in order that the
         Company may seek  shareholders  approval for the  authorization of such

                                       15
<PAGE>

         additional  shares (such period, as it may be extended as so permitted,
         the "Substitution  Period").  To the extent the Company determines that
         some action must be taken pursuant to the first or second  sentences of
         this Section 11(a)(iii), the Company (x) shall provide that such action
         shall apply uniformly to all  outstanding  Rights other than those that
         are null and void as provided in Section 7(e),  and (y) may suspend the
         exercisability  of the Rights until the expiration of the  Substitution
         Period in order to seek any  authorization of additional  shares and/or
         to decide the  appropriate  form of distribution to be made pursuant to
         such first sentence and to determine the value thereof. In the event of
         any such  suspension,  the Company  shall  issue a public  announcement
         stating  that the  exercisability  of the Rights  has been  temporarily
         suspended,  as  well  as a  public  announcement  at  such  time as the
         suspension is no longer in effect (with prompt notice by the Company of
         such  announcements to the Rights Agent).  For purposes of this Section
         11(a)(iii),  the value of the Common  Stock  shall be the  Current  Per
         Share Market Price (as determined  pursuant to Section 11(d) hereof) of
         the  Common  Stock on the date of the  Stock  Acquisition  Date and the
         value of any Common Stock  Equivalent  shall be deemed to have the same
         value as the Common Stock on such date.

                  (b) In case the  Company  shall at any time  after the date of
this Agreement fix a record date for the issuance of rights, options or warrants
to all holders of Preferred  Stock  entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase  Preferred
Stock (or shares  having the same  rights,  privileges  and  preferences  as the
Preferred Stock ("Preferred Stock Equivalents")) or securities  convertible into
Preferred Stock or Preferred Stock Equivalents at a price per share of Preferred
Stock or Preferred Stock  Equivalent (or having a conversion price per share, if
a security convertible into Preferred Stock or Preferred Stock Equivalents) less
than the then Current Per Share Market Price of the Preferred  Stock (as defined
in Section 11(d)) on such record date,  the number of shares of Preferred  Stock
for  which  each  Right  shall be  exercisable  after  such  record  date  shall
determined by multiplying the number of shares of Preferred Stock for which each
Right was exercisable  immediately prior to such record date by a fraction,  the
numerator of which shall be the number of shares of Preferred Stock  outstanding
on such  record date plus the number of  additional  shares of  Preferred  Stock
and/or  Preferred Stock  Equivalents to be offered for  subscription or purchase
(or into  which  the  convertible  securities  so to be  offered  are  initially
convertible)  and the  denominator  of which  shall be the  number  of shares of
Preferred  Stock  outstanding  on such  record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred Stock and/or  Preferred Stock  Equivalents so to be offered (and/or
the  aggregate  initial  conversion  price of  convertible  securities  so to be
offered)  would  purchase at such Current Per Share Market  Price.  In case such
subscription  price may be paid in a consideration part or all of which shall be
in a form  other  than  cash,  the  value  of  such  consideration  shall  be as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Preferred Stock owned by or held for
the account of the Company  shall not be deemed  outstanding  for the purpose of
any such computation. Such adjustment shall be made successively whenever such a

                                       16
<PAGE>

record date is fixed; and in the event that such rights, options or warrants are
not so  issued,  the  number of shares of  Preferred  Stock for which each Right
shall be exercisable shall be readjusted to be the number of shares of Preferred
Stock for which each Right would then be exercisable if such record date had not
been fixed;  and to the extent such  rights,  options or warrants are issued but
not  exercised  prior to their  expiration,  the number of shares for which each
Right shall be exercisable shall be readjusted to be the number which would have
resulted  from the  adjustment  provided for in this  Section  11(b) if only the
rights or warrants that were exercised had been issued.

                  (c) (i) In case the  Company  shall at any time after the date
         of this Agreement fix a record date for the making of a distribution to
         all holders of Preferred Stock (including any such distribution made in
         connection with a  consolidation  or merger in which the Company is the
         continuing or surviving  corporation)  of evidences of  indebtedness or
         assets  (other  than a regular  quarterly  cash  dividend or a dividend
         payable in shares of Preferred Stock but including any dividend payable
         in stock other than Preferred Stock) or subscription rights or warrants
         (excluding those referred to in Section 11(b)), the number of shares of
         Preferred  Stock for which each Right shall be  exercisable  after such
         record date shall be determined by multiplying  the number of shares of
         Preferred Stock for which each Right was exercisable  immediately prior
         to such record date by a fraction,  the numerator of which shall be the
         then Current Per Share Market Price of the Preferred  Stock (as defined
         in Section  11(d)) on such record date,  and the  denominator  of which
         shall be such Current Per Share Market  Price of the  Preferred  Stock,
         less the fair market value (as determined in good faith by the Board of
         Directors,  whose determination shall be described in a statement filed
         with the Rights  Agent and shall be binding on the Rights Agent and the
         holders of the  Rights) of the  portion of the assets or  evidences  of
         indebtedness  so to be  distributed or of such  subscription  rights or
         warrants  applicable to one share of Preferred Stock.  Such adjustments
         shall be made successively whenever such a record date is fixed; and in
         the event that such  distribution  is not so made, the number of shares
         of Preferred  Stock for which each Right shall be exercisable  shall be
         readjusted to be the number of shares of Preferred Stock for which each
         Right would then be exercisable if such record date had not been fixed.

                           (ii) In case the Company  shall at any time after the
         date  of  this  Agreement  fix  a  record  date  for  the  making  of a
         distribution  to all  holders  of  Common  Stock  (including  any  such
         distribution made in connection with a consolidation or merger in which
         the Company is the continuing or surviving corporation) of evidences of
         indebtedness or assets (other than a regular quarterly cash dividend or
         a dividend payable in shares of Common Stock) or subscription rights or
         warrants (excluding those referred to in Section 11(h)(ii)), the number
         of shares of Preferred  Stock for which each Right shall be exercisable
         after such record date shall be determined by multiplying the number of
         shares  of  Preferred  Stock  for  which  each  Right  was  exercisable
         immediately  prior to such record date by a fraction,  the numerator of

                                       17
<PAGE>

         which shall be the then  Current Per Share  Market  Price of the Common
         Stock (as  defined  in  Section  11(d)) on such  record  date,  and the
         denominator  of which shall be such  Current Per Share  Market Price of
         the Common  Stock,  less the fair market value (as  determined  in good
         faith by the Board of Directors, whose determination shall be described
         in a statement  filed with the Rights Agent and shall be binding on the
         Rights  Agent and the  holders  of the  Rights)  of the  portion of the
         assets or evidences of  indebtedness  so to be  distributed  or of such
         subscription  rights  or  warrants  applicable  to one  share of Common
         Stock.  Such  adjustments  shall be made  successively  whenever such a
         record date is fixed; and in the event that such distribution is not so
         made,  the  number of shares of  Preferred  Stock for which  each Right
         shall be exercisable  shall be readjusted to be the number of shares of
         Preferred  Stock for which each Right would then be exercisable if such
         record date had not been fixed.

                  (d) (i) For the  purpose  of any  computation  hereunder,  the
         "Current Per Share  Market  Price" of common  stock  (including  Common
         Stock)  on any date  shall be  deemed  to be the  average  of the daily
         closing  sale  prices  per  share  of  the  common  stock  for  the  30
         consecutive  Trading  Days  (as  such  term  is  hereinafter   defined)
         immediately  prior to but not including such date;  provided,  however,
         that in the event the Current Per Share Market Price of common stock is
         determined  during a period following the announcement by the issuer of
         such  common  stock of (A) a dividend  or  distribution  on such common
         stock payable in such common stock or securities  convertible into such
         common stock, or (B) any subdivision,  combination or  reclassification
         of such common  stock,  and prior to the  expiration of 30 Trading Days
         after but not  including  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 take into account such
         event. The closing sale price for each day shall be the last sale price
         as reported by (W) the principal stock exchange on the which respective
         security is traded, if the security is traded on a stock exchange,  (X)
         if the security is not trade on a stock  exchange,  the Nasdaq National
         Market or Nasdaq SmallCap  Market,  if the security is quoted on either
         such  market,  or (Y) if the  security  is not  quoted on  either  such
         market,  the Nasdaq OTC  Bulletin  Board,  if the security is quoted on
         such system. If the security is not quoted on such system,  the closing
         sale price for each day shall be the  closing  bid and asked  prices as
         furnished by a professional  market maker making a market in the common
         stock  selected  by a  majority  of the  Board of  Directors.  The term
         "Trading  Day"  shall  mean  a day  on  which  the  principal  national
         securities  exchange on which the common stock is listed or admitted to
         trading is open for the transaction of business or, if the common stock
         is not  listed  or  admitted  to  trading  on any  national  securities
         exchange,  a Business  Day. If the common stock is not publicly held or
         so listed or traded for the 30-day  period,  "Current  Per Share Market
         Price" shall mean the fair value per share as  determined in good faith
         by the Board of Directors of the Company,  whose determination shall be
         described  in a  statement  filed  with the  Rights  Agent and shall be
         conclusive for all purposes.

                                       18
<PAGE>

                           (ii) For the  purpose of any  computation  hereunder,
         the  "Current  Per Share  Market  Price" of  Preferred  Stock  shall be
         determined  in the same manner as set forth above for the Common  Stock
         in clause  (i) of this  Section  11(d)  (other  than the last  sentence
         thereof).  If the Current Per Share  Market  Price of  Preferred  Stock
         cannot be determined in the manner  provided  above or if the Preferred
         Stock is not publicly held or listed or traded in a manner described in
         clause (i) of this Section 11(d),  the "Current Per Share Market Price"
         of Preferred Stock shall be  conclusively  deemed to be an amount equal
         to the Current Per Share Market Price of the Common Stock multiplied by
         the  Adjustment  Number as that  term is  defined  in  Section 2 of the
         Amendment to the Company's  Certificate of  Incorporation,  as amended,
         designating the Preferred Stock  (initially 100). If neither the Common
         Stock nor the Preferred  Stock is publicly held or so listed or traded,
         "Current Per Share Market Price" of Preferred Stock shall mean the fair
         value per share as  determined  in good faith by the Board of Directors
         of the Company,  whose  determination shall be described in a statement
         filed with the Rights Agent and shall be  conclusive  for all purposes.
         For all  purposes of this  Agreement,  the current  market price of one
         one-hundredth  of a share  of  Preferred  Stock  shall  be equal to the
         Current Per Share Market Price of one share of Preferred  Stock divided
         by 100.

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

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

                  (g) All Rights originally issued by the Company  subsequent to
any  adjustment  made to the Purchase Price or the number of shares of Preferred
Stock for which a Right is  exercisable  hereunder  shall  evidence the right to
purchase,  at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock  purchasable  from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.

                                       19
<PAGE>

                  (h) (i) In the event the Company shall, after the date of this
         Agreement and prior to the Distribution Date, (A) declare a dividend on
         the Common Stock payable in Common Stock, (B) subdivide the outstanding
         Common Stock,  (C) combine the outstanding  Common Stock into a smaller
         number of shares of  Common  Stock,  or (D) issue any  shares of Common
         Stock in a  reclassification  of the Common Stock  (including  any such
         reclassification  in connection with a consolidation or merger in which
         the Company is the continuing or surviving corporation),  the number of
         Rights associated with each share of Common Stock then outstanding, and
         the number of Rights to be  associated  with each share of Common Stock
         which may thereafter become outstanding prior to the Distribution Date,
         shall  be  proportionately  adjusted  so  that  the  number  of  Rights
         associated  with each share of Common  Stock  following  any such event
         shall  equal the result  obtained by  multiplying  the number of Rights
         associated  with each share of Common Stock  immediately  prior to such
         event by a  fraction,  the  numerator  of which  shall be the number of
         shares of Common Stock outstanding  immediately prior to such event and
         the  denominator of which shall be the number of shares of Common Stock
         outstanding immediately after such event.

                      (ii) In the event  the  Company  shall,  after the date of
         this  Agreement and prior to the  Distribution  Date, fix a record date
         for the  issuance  of rights,  options or  warrants  to all  holders of
         Common Stock  entitling them (for a period  expiring within 45 calendar
         days after such record date) to subscribe for or purchase  Common Stock
         or  securities  convertible  into Common  Stock at a price per share of
         Common  Stock (or having a  conversion  price per share,  if a security
         convertible  into Common  Stock)  less than the then  Current Per Share
         Market Price of the Common Stock (as defined in Section  11(d)) on such
         record date, the number of Rights  associated with each share of Common
         Stock then outstanding,  and the number of Rights to be associated with
         each share of Common  Stock  which may  thereafter  become  outstanding
         prior to the Distribution  Date, shall be  proportionately  adjusted so
         that the number of Rights  associated  with each share of Common  Stock
         after such record date shall be determined by multiplying the number of
         Rights  associated with each share of Common Stock immediately prior to
         such  record date by a fraction,  the  numerator  of which shall be the
         number of shares of Common Stock  outstanding  on such record date plus
         the number of shares of Common Stock which the aggregate offering price
         of the total number of shares of Common Stock so to be offered  (and/or
         the aggregate initial conversion price of the convertible securities so
         to be offered)  would  purchase at such  Current Per Share Market Price
         and the  denominator  of which  shall be the number of shares of Common
         Stock  outstanding  on such record  date plus the number of  additional
         shares of Common Stock to be offered for  subscription  or purchase (or
         into which the  convertible  securities  so to be offered are initially
         convertible).  In  case  such  subscription  price  may  be  paid  in a
         consideration  part or all of which shall be in a form other than cash,

                                       20
<PAGE>

         the value of such consideration shall be as determined in good faith by
         the Board of  Directors,  whose  determination  shall be described in a
         statement  filed with the Rights Agent and  conclusive  and binding for
         all  purposes.  Common  Stock  owned by or held for the  account of the
         Company  shall not be deemed  outstanding  for the  purpose of any such
         computation. Such adjustment shall be made successively whenever such a
         record  date is  fixed.  In the  event  that such  rights,  options  or
         warrants are not so issued,  the number of Rights  associated with each
         share of Common  Stock shall be  readjusted  to be the number of Rights
         that would have been associated with each share of Common Stock if such
         record date had not been fixed; and to the extent such rights,  options
         or warrants are issued but not exercised prior to their expiration, the
         number of Rights  associated  with each share shall be readjusted to be
         the number which would have resulted from the  adjustment  provided for
         in this Section 11(h)(ii) if only the rights,  options or warrants that
         were exercised had been issued.

                      (iii)  Notwithstanding  the  foregoing,   the  adjustments
         provided  for in this  Section  11(h)  shall not be made if the Company
         exercises its election provided for in Section 11(i).

                  (i) The  Company  may  elect on or after the date of any event
described in clauses (A) through (D) of Section 11(h)(i) or described in Section
11(h)(ii),  if such event occurs before the Distribution  Date (a "Section 11(h)
Event"),  to adjust the  Purchase  Price and the  number of shares of  Preferred
Stock  purchasable  upon  the  exercise  of a  Right  in  substitution  for  any
adjustment  under  Section  11(h) in the number of Rights  associated  with each
share of  Common  Stock.  If such  election  is made,  (i) the  number of Rights
associated  with each share of Common  Stock  prior to the  Section  11(h) Event
shall be maintained after the Section 11(h) Event, (ii) any new shares of Common
Stock issued in the Section 11(h) Event shall, as provided in Section 3(a), have
issued with it the number of Rights  associated  with each share of Common Stock
outstanding,  and (iii) any combination of shares of Common Stock into a smaller
number  of  shares  in  the  Section  11(h)  Event  shall  result  in a  similar
combination  of the  associated  Rights.  The  Purchase  Price and the number of
Shares of  Preferred  Stock  purchasable  upon  exercise  of a Right  after such
adjustment  shall be determined by multiplying the Purchase Price and the number
of Shares of Preferred Stock purchasable upon exercise of a Right, respectively,
in effect  immediately prior to such adjustment by a fraction,  the numerator of
which  shall be the number of Rights that would have been  associated  with each
share of Common  Stock  after the  Section  11(h)  Event if the  Company had not
exercised its election provided for in this Section 11(i) and the denominator of
which shall be the number of Rights  associated  with each share of Common Stock
immediately prior to the Section 11(h) Event. To the extent the number of Rights
that would have been  associated  with each share of Common Stock if the Company
had not  exercised  its  election  provided  for in this  Section  11(i)  may be
readjusted as provided in the last sentence of Section  11(h)(ii),  the Purchase
Price and number of shares of Preferred  Stock  purchasable  upon  exercise of a
Right shall be similarly readjusted.

                                       21
<PAGE>

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

                  (k) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price or the number of one  one-hundredths of a share
of Preferred  Stock for which a Right is  exercisable  be made effective as of a
record date for a specified  event,  the Company may elect to defer (with prompt
notice of such deferral to the Rights Agent) until the  occurrence of such event
the  issuance  to the holder of any Right  exercised  after such record date the
number of one  one-hundredths  of a share of Preferred  Stock and other  capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one  one-hundredths  of a share of Preferred Stock and other
capital stock or securities of the Company,  if any, issuable upon such exercise
on the basis of the  Purchase  Price and the number of one  one-hundredths  of a
share of  Preferred  Stock for which a Right is  exercisable  in effect prior to
such  adjustment;  provided,  however,  that the Company  shall  deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such  additional  shares upon the  occurrence of the event  requiring
such adjustment.

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

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

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

                                       22
<PAGE>

summary  thereof to each  holder of Rights in  accordance  with  Section 25. The
Rights Agent shall be fully protected in relying on any such  certificate and on
any  adjustment  therein  contained  and shall have no duty with  respect to and
shall not be deemed to have  knowledge  of any  adjustment  unless  and until it
shall have received such a certificate.

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

                  (a)  In the  event  that,  following  the  Distribution  Date,
directly or indirectly,

                           (i) the Company shall consolidate with, or merge with
         and into, any other Person (other than a Subsidiary of the Company in a
         transaction that complies with Section 11(m)) and the Company shall not
         be the  continuing or surviving  corporation of such  consolidation  or
         merger,

                           (ii)  any Person shall acquire shares of Common Stock
         of the Company in a share exchange,

                           (iii) any  Person  (other  than a  Subsidiary  of the
         Company in a  transaction  that  complies  with  Section  11(m))  shall
         consolidate  with the  Company,  or merge with and into the Company and
         the Company shall be the  continuing or surviving  corporation  of such
         consolidation  or merger and, in connection with such  consolidation or
         merger,  all or part of the  outstanding  Common Stock shall be changed
         into or exchanged for stock or other  securities of any other Person or
         cash or any other property, or

                           (iv) the Company shall sell or otherwise transfer (or
         one or more of its Subsidiaries shall sell or otherwise  transfer),  in
         one or more  transactions,  assets  or  earning  power  aggregating  50
         percent or more of the assets or earning  power of the  Company and its
         Subsidiaries (taken as a whole) to any Person other than the Company or
         one or more of its wholly  owned  Subsidiaries  in a  transaction  that
         complies with Section 11(m),

then,  and in each such case,  proper  provision  shall be made so that (A) each
holder  of a  Right  (except  as  otherwise  provided  in  Section  7(e))  shall
thereafter have the right to receive,  upon the exercise  thereof and payment of
the Purchase Price in accordance with the terms of this  Agreement,  such number
of validly authorized and issued, fully paid, nonassessable and freely tradeable
shares of common  stock of the  Principal  Party (as  hereinafter  defined)  not
subject to any liens,  encumbrances,  rights of first  refusal or other  adverse
claims,  as shall be equal to the result  obtained by dividing  the then current
Purchase Price by 50 percent of the Current Per Share Market Price of the common
stock of the Principal Party (determined  pursuant to Section 11(d)) on the date
of  consummation  of the  Section  13  Event,  (B)  the  Principal  Party  shall
thereafter be liable for, and shall assume,  by virtue of such Section 13 Event,
all the  obligations and duties of the Company  pursuant to this Agreement,  (C)
the term "Company" shall  thereafter be deemed to refer to the Principal  Party,

                                       23
<PAGE>

it being specifically  intended that the provisions of Section 11 shall apply to
the Principal  Party only following the first  occurrence of a Section 13 Event,
and (D) the Principal  Party shall take such steps  (including,  but not limited
to, the  reservation  of a  sufficient  number of shares of its common  stock in
accordance  with  Section  9) in  connection  with such  consummation  as may be
necessary to ensure that the  provisions of this Agreement  shall  thereafter be
applicable,  as nearly as  reasonably  may be, in relation  to the common  stock
thereafter  deliverable  upon the  exercise of the  Rights.  The  provisions  of
Section  11(a)(ii)  shall be of no effect  following the first  occurrence of an
event described in Section 13.

                  (b)      The term "Principal Party" shall mean

                           (i)  in the  case  of any  transaction  described  in
         clause  (i),  (ii) or (iii) of Section  13(a),  the Person  that is the
         issuer of any  securities  into  which  shares  of Common  Stock of the
         Company are  converted  in such merger or  consolidation,  or for which
         shares of Common Stock are exchanged in such share exchange,  and if no
         securities  are so issued,  the Person  that is the other party to such
         merger,  consolidation  or share exchange or, if there is more than one
         such  Person,  the  Person the  common  stock of which has the  highest
         aggregate  Current  Per Share  Market  Price  (determined  pursuant  to
         Section 11(d)); and

                           (ii) in the  case  of any  transaction  described  in
         clause (iv) 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;  or, if each Person that
         is a party  to such  transaction  or  transactions  receives  the  same
         portion of the assets or earning  power  transferred  pursuant  to such
         transaction  or  transactions  or if the Person  receiving  the largest
         portion of the assets or earning power cannot be determined,  whichever
         Person  the common  stock of which has the  highest  aggregate  current
         market price (determined pursuant to Section 11(d));

provided,  however, that, if the common stock of such Person is not at such time
and has not been  continuously  over the preceding  12-month  period  registered
under Section 12 of the Exchange Act or such Person is not a  corporation,  then
(A) if such Person is a direct or indirect  Subsidiary of one other Person which
has common  stock so  registered,  "Principal  Party"  shall refer to such other
Person, (B) if such Person is a direct or indirect  Subsidiary of another Person
but is not a direct or indirect  Subsidiary  of another  Person which has common
stock so registered, "Principal Party" shall refer to the ultimate parent entity
of such  first-mentioned  Person,  (C) if such Person is directly or  indirectly
controlled  by more than one Person,  and one or more of such other  persons has
common stock so registered,  "Principal  Party" shall refer to whichever of such
Persons  that is the issuer of common  stock so  registered  having the  highest
aggregate current market price (determined  pursuant to Section 11(d)),  and (D)

                                       24
<PAGE>

if such Person is directly or indirectly controlled by more than one Person, and
none of such other Persons have common stock so  registered,  "Principal  Party"
shall refer to whichever  ultimate parent entity is the  corporation  having the
greatest  shareholders'  equity  or,  if no such  ultimate  parent  entity  is a
corporation,  shall  refer to  whichever  ultimate  parent  entity is the entity
having the greatest net assets.

                  (c) The Company shall not enter into any transaction described
in this  Section  13 if at the time of such  transaction  there are any  rights,
warrants,   instruments   or  securities   outstanding   or  any  agreements  or
arrangements  which, as a result of the consummation of such transaction,  would
eliminate or substantially  diminish the benefits intended to be afforded by the
Rights.  In addition,  the Company  shall not  consummate  any such  transaction
unless the Principal Party shall have a sufficient  number of authorized  shares
of common  stock which have not been issued or reserved  for  issuance to permit
the exercise in full of the Rights in accordance with this Section 13 and unless
prior  thereto the  Company and such  Principal  Party shall have  executed  and
delivered to the Rights Agent a supplemental  agreement  providing for the terms
set forth in this Section 13 and further  providing that, as soon as practicable
after execution of such agreement, the Principal Party will

                           (i) prepare and file a registration  statement  under
         the Act with respect to the securities purchasable upon exercise of the
         Rights on an  appropriate  form, and will use its best efforts to cause
         such  registration  statement  to  (A)  become  effective  as  soon  as
         practicable after such filing,  (B) remain effective (with a prospectus
         at all  times  meeting  the  requirements  of the Act)  until the Final
         Expiration Date and, as soon as practicable  following the execution of
         such agreement,  take such action as may be required to ensure that any
         acquisition  of such  shares of common  stock upon the  exercise of the
         Rights complies with any applicable  state security or "blue sky" laws;
         and

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

                  (d) In case the  Principal  Party  which is to be a party to a
transaction  referred  to in  this  Section  13  has a  provision  in any of its
authorized  securities or in its Articles or  Certificate  of  Incorporation  or
Bylaws or other  instrument  governing its corporate  affairs,  which  provision
would  have  the  effect  of (i)  causing  such  Principal  Party to  issue,  in
connection  with,  or as a  consequence  of, the  consummation  of a transaction
referred to in this Section 13, shares of common stock of such  Principal  Party
at less than the then  Current Per Share Market  Price  (determined  pursuant to
Section 11(d)) or securities  exercisable  for, or convertible  into,  shares of
common  stock of such  Principal  Party at less than the then  Current Per Share
Market  Price  (other than to holders of Rights  pursuant to this Section 13) or
(ii) providing for any special payment,  tax or similar provisions in connection
with the issuance of the shares of common stock of such Principal Party pursuant
to the  provisions  of Section 13; then,  in such event,  the Company  shall not
consummate  any such  transaction  unless  prior  thereto  the  Company and such

                                       25
<PAGE>

Principal  Party  shall  have  executed  and  delivered  to the  Rights  Agent a
supplemental  agreement  providing  that  the  provision  in  question  of  such
Principal  Party  shall  have  been  canceled,  waived or  amended,  or that the
authorized  securities shall be redeemed,  so that the applicable provision will
have no effect in connection  with, or as a consequence of, the  consummation of
the proposed transaction.

                  (e) The provisions of this Section 13 shall similarly apply to
successive  mergers or consolidations or sales or other transfers.  In the event
that a Section  13 Event  shall  occur at any time  after the Stock  Acquisition
Date,  the Rights which have not  theretofore  been exercised  shall  thereafter
become  exercisable  in the manner  described in Section 13. The  provisions  of
Section  11(a)(ii)  shall be of no effect  following  the first  occurrence of a
Section 13 Event.

         14. Fractional Rights and Fractional Shares.

                  (a) The Company  shall not be required to issue  fractions  of
Rights or to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the  Rights  Certificates  with  regard to which  such  fractional  Right  would
otherwise  be  issuable,  an amount in cash  equal to the same  fraction  of the
current  market value of a whole Right.  For the purposes of this Section 14(a),
the current  market  value of a whole  Right  shall be the closing  price of the
Rights  for  the  Trading  Day  immediately  prior  to the  date on  which  such
fractional Rights would have been otherwise issuable.  The closing price for any
day shall be the last sale  price,  or, in case no such sale takes place on such
day,  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 Company.  If on
any such date no such market  maker is making a market in the  Rights,  the fair
value of the  Rights on such date as  determined  in good  faith by the Board of
Directors of the Company shall be used.

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

                                       26
<PAGE>

                  (c) Following the  occurrence of a Stock  Acquisition  Date or
Section 13 Event, the Company shall not be required to issue fractions of shares
of Common Stock upon exercise of the Rights or to distribute  certificates which
evidence  fractional  shares of Common Stock.  In lieu of  fractional  shares of
Common  Stock,  the  Company  may  pay  to  the  registered  holders  of  Rights
Certificates  at the time such Rights are exercised as herein provided an amount
in cash  equal to the same  fraction  of  current  market  value of one share of
Common Stock.  For purposes of this Section  14(c),  the current market value of
one  share of Common  Stock  shall be the  closing  price of one share of Common
Stock (as determined  pursuant to Section  11(d)(i)  hereof) for the Trading Day
immediately prior to the date of such exercise.

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

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

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

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

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

                                       27
<PAGE>

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

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

         17.  Rights Certificate  Holder Not Deemed a Shareholder. No holder, as
such, of any Rights  Certificate shall be entitled to vote, receive dividends or
be deemed for any  purpose the holder of the number of one  one-hundredths  of a
share of Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights  represented  thereby,  nor shall
anything  contained  herein or in any Rights  Certificate be construed to confer
upon the  holder of any  Rights  Certificate,  as such,  any of the  rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,  or to give or
withhold  consent to any corporate  action,  or to receive notice of meetings or
other actions affecting  shareholders  (except as provided in Section 23(c)), or
to receive  dividends or  subscription  rights,  or otherwise,  until the Rights
evidenced by such Rights  Certificate  shall have been  exercised in  accordance
with the provisions hereof.

         18.  Concerning the Rights Agent.

                  (a) The Company  agrees to pay to the Rights Agent  reasonable
compensation  for all services  rendered by it hereunder and, from time to time,
on demand of the Rights  Agent,  its  reasonable  expenses  and counsel fees and
other  disbursements  incurred  in the  preparation,  delivery,  administration,
execution and any amendment of this  Agreement and the exercise and  performance
of its duties  hereunder.  The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against,  any loss,  liability,  damage,  judgment,
fine,  penalty,  claim,  demand,  settlement  costs or expense  incurred without
negligence,  bad faith or willful misconduct on the part of the Rights Agent, as

                                       28
<PAGE>

determined by a court of competent jurisdiction,  for any action taken, suffered
or  omitted  by  the  Rights  Agent  in  connection   with  the  acceptance  and
administration  of this Agreement,  including  without  limitation the costs and
expenses of defending against any claim of liability.

                  (b) The Rights  Agent  shall be  protected  and shall incur no
liability  for, or in respect of any action taken,  suffered or omitted by it in
connection with its acceptance and  administration of this Agreement in reliance
upon any Rights  Certificate  or  certificate  for shares of Common Stock or for
other securities of the Company,  instrument of assignment or transfer, power of
attorney,   endorsement,   affidavit,   letter,  notice,   direction,   consent,
certificate,  statement, or other paper or document believed by it to be genuine
and to be signed,  executed and, where necessary,  verified or acknowledged,  by
the proper  person or persons,  or  otherwise  upon the advice of counsel as set
forth in Section 20.

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

                  (a) Any Person  into which the Rights  Agent or any  successor
Rights Agent may be merged or with which it may be  consolidated,  or any Person
resulting  from any merger or  consolidation  to which the  Rights  Agent or any
successor  Rights Agent shall be a party, or any Person  succeeding to the stock
transfer  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 Person  would be  eligible  for  appointment  as a successor
Rights  Agent  under  the  provisions  of  Section  21. In case at the time such
successor  Rights Agent shall succeed to the agency  created by this  Agreement,
any of the Rights  Certificates shall have been countersigned but not delivered,
any  such  successor  Rights  Agent  may  adopt  the   countersignature  of  the
predecessor Rights Agent and deliver such Rights  Certificates so countersigned;
and in case at that  time any of the  Rights  Certificates  shall  not have been
countersigned,   any  successor   Rights  Agent  may  countersign   such  Rights
Certificates  either in the name of the predecessor  Rights Agent or in the name
of the successor  Rights Agent;  and in all such cases such Rights  Certificates
shall  have the full  force  provided  in the  Rights  Certificates  and in this
Agreement.

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

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

                                       29
<PAGE>

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

                  (b) Whenever  in the  performance  of its   duties  under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking, omitting to take
or suffering any action hereunder (including,  without limitation,  the identity
of any  Acquiring  Person  and the  determination  of Current  Per Share  Market
Price),  such fact or matter (unless other evidence in respect thereof be herein
specifically   prescribed)  may  be  deemed  to  be  conclusively  provided  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 Company and delivered to the Rights Agent; and such certificate
shall be full  authorization  and  protection to the Rights Agent for any action
taken,  omitted to be taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.

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

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

                  (e) The Rights Agent shall not or be under any  responsibility
in respect of the  validity of this  Agreement  or the  execution  and  delivery
hereof  (except the due  execution  hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its countersignature
thereof);  nor shall it be  responsible  for any  breach by the  Company  of any
covenant or condition  contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the  exercisability  of the Rights
(including the Rights becoming null and void pursuant to Section 7(e) hereof) or
any  adjustment  in the terms of the Rights  (including  the  manner,  method or
amount  thereof)  provided  for in this  Agreement  or the  ascertaining  of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Rights  Certificates after actual
notice  that such change or  adjustment  is  required);  nor shall it by any act
hereunder  be  deemed  to  make  any   representation  or  warranty  as  to  the
authorization or reservation of any shares of Preferred Stock or Common Stock to
be issued  pursuant to this Agreement or any Right  Certificate or as to whether
any shares of  Preferred  Stock or Common Stock will,  when  issued,  be validly
authorized and issued, fully paid and nonassessable.

                                       30
<PAGE>

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

                  (g) The Rights  Agent is hereby  authorized  and  directed  to
accept instructions with respect to the performance of its duties hereunder from
any  one  of the  Chairman  of the  Board,  the  Chief  Executive  Officer,  the
President,  any Vice  President,  the Secretary or the Treasurer of the Company,
and to apply to such officers for advice or  instructions in connection with its
duties, and it shall not be liable for any action taken,  omitted to be taken or
suffered by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions. Any application
by the Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted to
be taken 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 or suffered  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 such officer of the Company  actually
receives  such  application,  unless any such  officer  shall have  consented in
writing  to an earlier  date)  unless,  prior to taking any such  action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken, suffered or omitted.

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

                  (i) The  Rights  Agent may  execute  and  exercise  any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through  its  attorneys  or agents,  and the Rights  Agent shall not be
answerable or  accountable  for any act,  default,  neglect or misconduct of any
such  attorneys  or agents or for any loss to the  Company  or any other  Person
resulting from any such act, default, neglect or misconduct,  absent negligence,
bad faith or  willful  misconduct  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 its believes that repayment of such funds or adequate  indemnification
against such risk or liability is not reasonably assured to it.

                                       31
<PAGE>

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

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

         22.  Issuance of New Rights  Certificates.  Notwithstanding  any of the
provisions of this Agreement or of the Rights to the contrary,  the Company may,
at its option,  issue new Rights Certificates  evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in

                                       32
<PAGE>

the Purchase Price and the number or kind or class of shares or other securities
or property  purchasable  under the Rights  Certificates made in accordance with
the provisions of this Agreement.  In addition,  in connection with the issuance
or sale of Common Stock of the Company following the Distribution Date and prior
to the Final  Expiration  Date,  the Company (a) shall,  with  respect to Common
Stock of the Company 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 issued by the Company prior to the Distribution Date, and
(b) may, in any other case, if deemed  necessary or  appropriate by the Board of
Directors,  issue Rights  Certificates  representing  the appropriate  number of
Rights in connection with such issuance or sale; provided,  however, that (i) no
such Rights  Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance  would create a significant  risk
of material  adverse tax  consequences to the Company or the person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that,  appropriate  adjustment shall otherwise have
been made in lieu of the issuance thereof.

         23.  Redemption and Waiver.

                  (a) The Board of  Directors  of the Company may at its option,
at any time prior to the  earliest of (i) the Close of Business on the tenth day
following a Stock Acquisition Date (or, if the Stock Acquisition Date shall have
occurred  prior to the  Record  Date,  the  close of  business  on the tenth day
following the Record Date),  (ii) a determination by the Board of Directors that
any Person is an Adverse  Person,  or (iii) the Close of  Business  on the Final
Expiration  Date,  (A)  redeem  all but not less  than all the then  outstanding
Rights at a  redemption  price of $.001 per  Right,  appropriately  adjusted  to
reflect any stock split, stock dividend or similar  transaction  occurring after
the date hereof  (such  redemption  price being  hereinafter  referred to as the
"Redemption  Price"), or (B) waive application of Section 11(a)(ii) with respect
to  the   respective   event(s)   described   in  (i),   (ii)  or  (iii)  above.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable as provided in Section 11(a)(ii) until such time as the
Company's right of redemption hereunder has expired.

                  (b) Immediately  upon the  action of the Board of Directors of
the  Company  ordering  the  redemption  of the Rights (or at such later time as
shall be  specified  in the  resolution  taking  such  action),  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.  Promptly  after  the  action  of the  Board of
Directors  ordering the redemption of the Rights,  the Company shall give notice
of such redemption to the holders of the then outstanding  Rights and the Rights
Agent by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date,  on the  registry  books of the  transfer  agent for the  shares of Common
Stock.  Any notice which is mailed in the manner herein provided shall be deemed

                                       33
<PAGE>

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. The Company may, at its option,  pay the Redemption Price in cash,
shares of Common Stock (based on the Current Per Share Market Price,  as defined
in Section  11(d),  of the Common Stock at the time of  redemption) or any other
form of consideration deemed appropriate by the Board of Directors.

                  (c) In case the Company  shall propose (a) to pay any dividend
payable in stock of any class to the  holders of its  Preferred  Stock or Common
Stock or to make any other distribution to the holders of its Preferred Stock or
Common Stock (other than a regular quarterly cash dividend), (b) to offer to the
holders of its  Preferred  Stock or Common Stock rights or warrants to subscribe
for or to purchase any additional  shares of Preferred  Stock or Common Stock or
shares  of stock  of any  class  or any  other  securities,  (c) to  effect  any
reclassification   of  its  Preferred  Stock  or  Common  Stock  (other  than  a
reclassification  involving  only  the  subdivision  of  outstanding  shares  of
Preferred  Stock or Common Stock),  (d) to effect any  consolidation,  merger or
share  exchange  into or with any other Person  (other than a Subsidiary  of the
Company in a transaction  which complies with Section 11(m)),  (e) 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 related  transactions,  of 50 percent
or more of the  assets or  earning  power of the  Company  and its  Subsidiaries
(taken as a whole) to any other Person (other than the Company and/or any of its
Subsidiaries  in one or more  transactions  each of which  complies with Section
11(m)),  or (f) to effect  the  liquidation,  dissolution  or  winding up of the
Company,  then,  in each such case,  the Company  shall give to each holder of a
Rights Certificate,  to the extent feasible and in accordance with Section 25, a
notice of such  proposed  action,  which  shall  specify the record date for the
purposes of such stock dividend or  distribution  of rights or warrants,  or the
date on which such  reclassification,  consolidation,  merger,  exchange,  sale,
transfer, liquidation,  dissolution, or winding up is to take place and the date
of  participation  therein by the holders of the Preferred Stock or Common Stock
if any such date is to be fixed,  and such notice  shall be so given in the case
of any  action  covered by clause (a) or (b) above at least 20 days prior to the
record date for  determining  holders of the Preferred Stock or Common Stock for
purposes of such action,  and in the case of any such other action,  at least 20
days  prior to the date of the  taking  of such  proposed  action or the date of
participation  therein by the  holders of the  Preferred  Stock or Common  Stock
whichever shall be the earlier.

         In case a Stock Acquisition Date shall occur, the Company shall as soon
as  practicable  thereafter  give to the  Rights  Agent and to each  holder of a
Rights Certificate, in accordance with Section 25, a notice of the occurrence of
such event,  which shall specify the event and the  consequences of the event to
holders of Rights under Section 11(a)(ii).

         24.  Exchange.

                  (a) The Board of  Directors of the Company may, at its option,
at any time and from time to time after a Stock Acquisition  Date,  exchange all
or part of the then outstanding and exercisable  Rights (which shall not include
Rights  that have become null and void  pursuant  to the  provisions  of Section

                                       34
<PAGE>

7(e)) for shares of Common Stock or Common Stock Equivalents, or any combination
thereof,  at an exchange  ratio of one share of Common Stock,  or such number of
Common Stock  Equivalents or units  representing  fractions  thereof as would be
deemed  to have  the  same  value  as one  share of  Common  Stock,  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").

                  (b) Immediately  upon  the action of the Board of Directors of
the Company  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 shares of Common Stock
and/or Common Stock  Equivalents equal to the number of such Rights held by such
holder  multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange  (with prompt notice  thereof to the Rights  Agent);
provided, however, that the failure to give, or any defect in, such notice shall
not affect the  validity of such  exchange.  The Company  promptly  shall mail a
notice of any such  exchange  to the Rights  Agent and 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 shares of Common
Stock and/or  Common Stock  Equivalents  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 null and void  pursuant  to the  provisions  of
Section 7(e)) held by each holder of Rights.

                  (c) In the event  that the  number  of shares of Common  Stock
which are authorized by the Company's  Certificate of  Incorporation  as amended
but not  outstanding  or reserved  for  issuance  for  purposes  other than upon
exercise  of the Rights are not  sufficient  to permit an  exchange of Rights as
contemplated in accordance with this Section 24, the Company may, at its option,
take all such  action as may be  necessary  to  authorize  additional  shares of
Common Stock for issuance upon exchange of the Rights.

                  (d) The Company  shall not be required to issue  fractions  of
shares of Common Stock or to distribute  certificates which evidence  fractional
shares of Common Stock. In lieu of such fractional  shares of Common Stock,  the
company shall pay to the registered  holders of Rights with regard to which such
fractional  shares of Common Stock would otherwise be issuable an amount in cash
equal to the same  fraction of the value of a whole share of Common  Stock.  For
purposes of this Section 24, the value of a whole share of Common Stock shall be
the closing  price (as  determined  pursuant  to the second  sentence of Section
11(d)(i) for the Trading Day immediately  prior to the date of exchange pursuant
to this Section 24, and the value of any Common Stock Equivalent shall be deemed
to have the same value as the Common Stock on such date.

                                       35
<PAGE>

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

                  Sundog Technologies, Inc.
                  10542 South Jordan Gateway, Suite 200
                  South Jordan, UT 84095
                  Attention:  Corporate Secretary
                  Facsimile: (801) 501-0701

Copy to:          Bryan T. Allen
                  Stoel Rives LLP
                  201 South Main Street, Suite 1100
                  Salt Lake City, Utah 84111
                  Facsimile: (801) 578-6999

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

                  Atlas Stock Transfer Corporation
                  5899 South State Street
                  Salt Lake City, Utah  84107
                  Facsimile: (801) 262-0907

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

         26.  Supplements and Amendments.  Prior to the  Distribution  Date, the
Company and the Rights Agent shall,  if the Board of Directors of the Company so
directs,  supplement  or amend  any  provision  of this  Agreement  without  the
approval of any holders of  certificates  representing  shares of Common  Stock.
From and after the Distribution Date, the Company and the Rights Agent shall, if
the Board of  Directors  of the  Company so  directs,  supplement  or amend this
Agreement without the approval of any holders of Right Certificates in order (i)
to cure any  ambiguity,  (ii) to correct or supplement  any provision  contained
herein which may be defective or inconsistent with any other 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 Company may deem
necessary or desirable and which shall not adversely  affect the interest of the
holders of Rights  Certificates  (other than an Acquiring Person or an Affiliate
or Associate of any such Person);  provided,  however, this Agreement may not be

                                       36
<PAGE>

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 or the benefits to, the holders of Rights. Upon the delivery of a certificate
from an  appropriate  officer of the  Company  which  states  that the  proposed
supplement or amendment is in  compliance  with the terms of this Section 26 and
provided  that such  amendment  or  supplement  does not change or increase  the
Rights Agent's  duties,  liabilities  or obligations  without the consent of the
Rights Agent (which consent will not be unreasonably withheld), the Rights Agent
shall execute such  supplement or amendment.  Prior to  Distribution  Date,  the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of shares of Common Stock.

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

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

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

         30.  Determinations  and Actions by the Board of  Directors,  Etc.  The
Board of Directors of the Company shall have the  exclusive  power and authority
to administer this Agreement and to exercise all rights and powers  specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or  advisable  in the  administration  of this  Agreement,  including,
without limitation,  the right and power to (i) interpret the provisions of this
Agreement,  and (ii) make all  determinations  deemed necessary or advisable for
the   administration  of  this  Agreement.   All  such  actions,   calculations,

                                       37
<PAGE>

interpretations and determinations (including, for purposes of clause (b) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Company in good faith,  shall (a) be final,  conclusive  and
binding on the  Company,  the Rights  Agent,  the  holders of the Rights and all
other parties,  and (b) not subject the Board of Directors of the Company to any
liability to the holders of the Rights.

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

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

         33.  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.

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

                                    Sundog Technologies, Inc.

                                    By
                                      ------------------------------
                                        Alan Rudd
                                        Its: President

                                    Atlas Stock Transfer Corporation

                                    By
                                      ------------------------------
                                    Its
                                      ------------------------------

                                       38
<PAGE>

                                    EXHIBIT A

                                     FORM OF
                            CERTIFICATE OF AMENDMENT
                                       OF
                            SUNDOG TECHNOLOGIES, INC.
                                  ESTABLISHING
                            SERIES A PREFERRED SHARES

1.       The name of the Corporation is Sundog Technologies, Inc.

2.       Article  Four of the  Corporation's  Certificate  of  Incorporation  is
amended to add a new Section D, which shall read in its entirety as follows:

         D.       Series A Preferred Stock.

         (1)      Designation  and Amount.  The shares of such  series  shall be
         designated  as  "Series A  Preferred  Shares"  and the number of shares
         constituting such series shall be 500,000.

         (2)      Dividends and Distributions.

                  (i)  The holders of shares of Series A Preferred Shares  shall
                  be entitled  to receive,  when and as declared by the Board of
                  Directors,  out of funds  legally  available  for the purpose,
                  dividends in an amount per share equal to 100 (the "Adjustment
                  Number")  multiplied  by the aggregate per share amount of all
                  cash dividends,  and the Adjustment  Number  multiplied by the
                  aggregate  per share amount  (payable in kind) of all non-cash
                  dividends or other distributions other than a dividend payable
                  in Common Stock or a  subdivision  of the  outstanding  Common
                  Stock (by  reclassification  or  otherwise),  declared  on the
                  Common Stock of the Corporation (the "Common Stock") after the
                  first issuance of any share or fraction of a share of Series A
                  Preferred Shares.

                  (ii) The Corporation  shall declare a dividend or distribution
                  on the Series A Preferred  Shares as provided in  subparagraph
                  2(i)  at  the  same  time  that  it  declares  a  dividend  or
                  distribution  on the  Common  Stock  (other  than  a  dividend
                  payable in Common Stock).

                                      A-1
<PAGE>

                  (iii)  Dividends  shall not be  cumulative.  Unpaid  dividends
                  shall  not  bear  interest.  Dividends  paid on the  Series  A
                  Preferred  Shares 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 Series A Preferred Shares at the time outstanding.

         (3)      Voting Rights.  The holders of Series A Preferred Shares shall
         have the following voting rights:

                  (i) Each  Series A Preferred  Share  shall  entitle the holder
                  thereof to the number of votes equal to the Adjustment  Number
                  then  in  effect  on all  matters  submitted  to a vote of the
                  shareholders of the Corporation.

                  (ii)  Except  as  otherwise  provided  herein  or by law,  the
                  holders of Series A Preferred Shares and the holders of Common
                  Stock  shall  vote  together  as  one  class  on  all  matters
                  submitted to a vote of shareholders of the Corporation.

         (4)      Certain Restrictions.

                  (i) Whenever dividends or distributions  payable on the Series
                  A Preferred Shares as provided in subparagraph 2 have not been
                  declared or paid for any fiscal year, until all such dividends
                  and  distributions  for such fiscal year on Series A Preferred
                  Shares  outstanding shall have been declared and paid in full,
                  the Corporation shall not in such fiscal year:

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

                           (b) purchase or otherwise  acquire for  consideration
                           any Series A Preferred  Shares or any shares of stock
                           ranking  on a  parity  with the  Series  A  Preferred
                           Shares,  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  dividend rates and

                                      A-2
<PAGE>

                           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.

                  (ii) 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 subparagraph 4(i),  purchase or otherwise acquire
                  such shares at such time and in such manner.

         (5)      Restriction  on Issuance  of Shares;  Reacquired  Shares.  The
         Corporation  shall not issue any Series A Preferred  Shares except upon
         exercise  of  rights  (the  "Rights")  issued  pursuant  to the  Rights
         Agreement  dated as of December 22, 2000,  between the  Corporation and
         Atlas Stock Transfer Corporation,  (the "Rights Agreement"),  a copy of
         which is on file with the secretary of the Corporation at its principal
         executive  office and shall be made available to shareholders of record
         without  charge upon  written  request.  Any Series A Preferred  Shares
         purchased  or  otherwise  acquired  by the  Corporation  in any  manner
         whatsoever  may be restored to the status of  authorized  but  unissued
         shares after the  acquisition  thereof.  All such shares shall upon any
         such  restoration  become  authorized but unissued  shares of Preferred
         Shares and may be reissued as part of a new series of Preferred  Shares
         to be created by the Board of Directors,  subject to the conditions and
         restrictions on issuance set forth herein.

         (6)      Liquidation, Dissolution or Winding Up.

                  (i) Upon any liquidation (voluntary or otherwise), dissolution
                  or winding up of the  Corporation,  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 Series A Preferred  Shares  unless,  prior thereto,
                  the holders of shares of Series A Preferred  Shares shall have
                  received the  Adjustment  Number  multiplied  by the per share
                  amount to be distributed  to holders of Common Stock,  plus an
                  amount   equal  to   declared   and   unpaid   dividends   and
                  distributions thereon to the date of such payment (the "Series
                  A Liquidation Preference").  Following the payment of the full
                  amount of the Series A Liquidation  Preference,  no additional
                  distributions shall be made to the holders of shares of Series
                  A Preferred Shares.

                  (ii)  In the  event  that  there  are  not  sufficient  assets
                  available   to  permit   payment  in  full  of  the  Series  A
                  Liquidation Preference and the liquidation  preferences of all
                  other series of Preferred Shares, if any, which rank senior to
                  or on a parity with the Series A Preferred Shares, then assets
                  shall  be  distributed  first  to  holders  of any  series  of
                  Preferred  Shares  ranking  senior to the  Series A  Preferred

                                      A-3
<PAGE>

                  Shares to the extent of their liquidation preferences and such
                  remaining  assets shall be distributed  ratably to the holders
                  of  Series A  Preferred  Shares  and  such  parity  shares  in
                  proportion to their respective liquidation preferences.

         (7)  Consolidation,  Merger,  etc. In case the Corporation  shall enter
         into any  consolidation,  merger,  combination or other  transaction in
         which the Common Stock is exchanged  for or changed into other stock or
         securities,  cash and/or any other property,  then in any such case the
         Series A Preferred Shares shall at the same time be similarly exchanged
         or  changed  in an amount  per  share  equal to the  Adjustment  Number
         multiplied by 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.

         (8)  Anti-Dilution  Adjustments to Adjustment  Number. In the event the
         Corporation  shall at any time  after  January  31,  2001 (the  "Rights
         Declaration  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 for all purposes
         of this  Article 2 shall be  adjusted  by  multiplying  the  Adjustment
         Number  then in effect 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.  In the
         event the  Corporation  shall at any time after the Rights  Declaration
         Date, fix a record date for the issuance of rights, options or warrants
         to all holders of Common Stock  entitling  them (for a period  expiring
         within 45 calendar  days after such record  date) to  subscribe  for or
         purchase Common Stock or securities  convertible into Common Stock at a
         price per Common  Stock (or having a conversion  price per share,  if a
         security  convertible into Common Stock) less than the then Current Per
         Share Market Price of the Common Stock (as defined in Section  11(d) of
         the Rights  Agreement) on such record date,  then in each such case the
         Adjustment  Number for all purposes of this Article 2 shall be adjusted
         by multiplying the Adjustment Number then in effect by, a fraction, the
         numerator  of which  shall be the  number of  shares  of  Common  Stock
         outstanding on such record date plus the number of additional shares of
         Common Stock to be offered for  subscription or purchase (or into which
         the convertible  securities so to be offered are initially convertible)
         and the  denominator  of which  shall be the number of shares of Common
         Stock  outstanding  on such  record  date plus the  number of shares of
         Common Stock which the aggregate  offering price of the total number of
         shares of Common Stock so to be offered  (and/or the aggregate  initial
         conversion price of the convertible  securities so to be offered) would

                                      A-4
<PAGE>

         purchase at such  Current Per Share Market Price (as defined in Section
         11(d) of the Rights Agreement).  In case such subscription price may be
         paid in a  consideration  part or all of which shall be in a form other
         than cash,  the value of such  consideration  shall be as determined in
         good faith by the Board of Directors. Common Stock 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 record date is fixed.  In the event that
         such  rights,  options or warrants  are not so issued,  the  Adjustment
         Number shall be  readjusted  as if such record date had not been fixed;
         and to the extent such  rights,  options or warrants are issued but not
         exercised  prior to their  expiration,  the Adjustment  Number shall be
         readjusted  to be  the  number  which  would  have  resulted  from  the
         adjustment provided for in this paragraph 8 if only the rights, options
         or warrants that were exercised had been issued.

         (9)      No  Redemption.  The Series A  Preferred  Shares  shall not be
         redeemable  at the option of the  Corporation  or any  holder  thereof.
         Notwithstanding  the foregoing  sentence,  the  Corporation may acquire
         Series A Preferred Shares in any other manner permitted by law.

         (10)     Amendment.  Subsequent to the Distribution Date (as defined in
         the Rights Agreement) these  Certificate of Incorporation  shall not be
         further  amended in any manner which would  materially  alter or change
         the  preferences,  limitations  and  relative  rights  of the  Series A
         Preferred Shares so as to affect them adversely without the affirmative
         vote of the holders of a majority of the outstanding Series A Preferred
         shares, voting separately as a class.

         (11)     Fractional Shares.  Series A Preferred Shares may be issued in
         fractions of a share in integral  multiples of one  one-hundredth  of a
         share,  which shall  entitle the holder,  in proportion to such holders
         fractional  shares,  to  exercise  voting  rights,  receive  dividends,
         participate  in  distributions  and to have the  benefit  of all  other
         rights of holders of Series A Preferred Shares.

3.       The amendment was adopted on December 20, 2000.

4.       Shareholder  action  was not  required  to  adopt  the  amendment.  The
amendment was adopted by the board of directors without shareholder action.

                                      A-5
<PAGE>

5.       Person to contact about this filing:

         Bryan Allen
         Stoel Rives LLP
         201 South Main Street, Suite 1100
         Salt Lake City, Utah 84111
         (801) 578-6908

         Dated: December 20, 2000

                                       Sundog Technologies, Inc.

                                       By:
                                             --------------------------------
                                       Name:
                                             --------------------------------
                                       Title:
                                             --------------------------------

                                      A-6
<PAGE>

                                    EXHIBIT B
                                    ---------

                          [Form of Rights Certificate]

Certificate No. R-                                             __________ Rights

         NOT  EXERCISABLE  AFTER  DECEMBER 1, 2010 OR EARLIER IF REDEEMED BY THE
         COMPANY.  THE RIGHTS ARE  SUBJECT TO  REDEMPTION,  AT THE OPTION OF THE
         COMPANY,  AT $.001  PER  RIGHT ON THE  TERMS  SET  FORTH IN THE  RIGHTS
         AGREEMENT.  UNDER CERTAIN  CIRCUMSTANCES,  RIGHTS BENEFICIALLY OWNED BY
         ACQUIRING PERSONS OR THEIR RESPECTIVE AFFILIATES OR ASSOCIATES (AS SUCH
         TERMS ARE DEFINED IN THE RIGHTS  AGREEMENT)  AND ANY RIGHTS  PREVIOUSLY
         OWNED BY SUCH PERSONS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED
         BY THIS RIGHTS  CERTIFICATE ARE OR WERE BENEFICIALLY  OWNED BY A PERSON
         WHO  WAS  AN  ACQUIRING  PERSON  OR AN  AFFILIATE  OR  ASSOCIATE  OF AN
         ACQUIRING  PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS  AGREEMENT).
         ACCORDINGLY,  THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
         MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
         OF THE RIGHTS AGREEMENT.]1

                               Rights Certificate

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

         This certifies that ____________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of December 22, 2000 (the "Rights Agreement") between Sundog
Technologies,  Inc., an Delaware  corporation (the  "Company"),  and Atlas Stock
Transfer  Corporation (the "Rights Agent"),  to purchase from the Company at any
time prior to 5 p.m., New York time, on December 1, 2010 (the "Final  Expiration
Date") at the office or offices of the Rights Agent designated for such purpose,
one one-hundredth of a fully paid and nonassessable  share of Series A Preferred

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

         (1)  The portion of the legend in brackets  shall be  inserted  only if
applicable and shall replace the preceding sentence.

                                      B-1
<PAGE>

Shares (the  "Preferred  Stock") of the Company,  at a purchase  price of $60.00
(the  "Purchase  Price"),   upon  presentation  and  surrender  of  this  Rights
Certificate  with the Form of Election to Purchase and related  Certificate duly
executed.  The  Purchase  Price  may be paid in cash or by  certified  check  or
cashier's  check  payable  to the  order of the  Company.  The  number of Rights
evidenced  by this Rights  Certificate,  the number of one  one-hundredths  of a
share of Preferred  Stock which may be purchased upon exercise  hereof,  and the
Purchase Price per Right set forth above are the number of Rights, the number of
one  one-hundredths  of a share and the  Purchase  Price as of January 31, 2001,
based on the Preferred Stock and Common Stock as constituted at such date.

         Upon the  occurrence  of a Stock  Acquisition  Date  (as  such  term is
defined  in the  Rights  Agreement),  if the  Rights  evidenced  by this  Rights
Certificate are  beneficially  owned by (i) an Acquiring Person or any Affiliate
or Associate of such  Acquiring  Person (as such terms are defined in the Rights
Agreement),  (ii) any other  person if such Rights  formerly  were  beneficially
owned by such  Acquiring  Person (or by an Associate or Affiliate  thereof) at a
time after such Acquiring  Person,  became an Acquiring  Person,  or (iii) under
certain circumstances  specified in the Rights Agreement, a transferee of Rights
from such  Acquiring  Person (or from any  Associate or  Affiliate  thereof) who
became a transferee prior to or concurrently with such Acquiring Person becoming
an Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with  respect to such Rights from and after the  occurrence
of such an event.

         As provided in the Rights Agreement,  the Purchase Price and the number
and kind of shares of Preferred Stock or other  securities or property which may
be obtained upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including  a Stock  Acquisition  Date or a Section  13 Event (as such  terms are
defined in the Rights Agreement).

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

         This Rights  Certificate,  with or without  other Rights  Certificates,
upon surrender at the office or offices of the Rights Agent  designated for such
purpose,  may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like

                                      B-2
<PAGE>

aggregate  number of one  one-hundredths  of a share of  Preferred  Stock as the
Rights evidenced by the Rights  Certificate or Rights  Certificates  surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights certificate or Rights Certificates for the number of whole Rights
not exercised.

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.001 per Right (and certain rights  evidenced hereby may be waived) at
any time  prior to the  earlier  of (i) the close of  business  on the tenth day
following the Stock  Acquisition Date (as such period,  may be extended pursuant
to the Rights Agreement) and (ii) the Final Expiration Date.

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

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

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

                                      B-3
<PAGE>

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

Dated as of         , 2000.
           ---------
ATTEST:                                     Sundog Technologies, Inc.

---------------------------                 -------------------------
Secretary                                   Title:

Countersigned:

By
  -------------------------
    Authorized Signature

                                      B-4
<PAGE>

                  [Form of Reverse Side of Rights Certificate]

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

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

         FOR VALUE RECEIVED
                           -----------------------------------------------------
hereby sells, assigns, and transfers unto
                                         ---------------------------------------

--------------------------------------------------------------------------------
                  (Please print name and address of transferee)

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

Dated               , 2000.
      -------------

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

Signature Guaranteed:

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

         The  undersigned  hereby  certifies by checking the  appropriate  boxes
that:

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

                                      B-5
<PAGE>

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

Dated:              , 2000.           ------------------------------------------
      --------------                                  Signature

Signature Guaranteed:

                                      B-6
<PAGE>

                                     NOTICE
                                     ------

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

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------

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

TO:  ________________

         The  undersigned  hereby  irrevocably  elects to exercise  ____________
Rights  represented  by this  Rights  Certificate  to  purchase  the  shares  of
Preferred  Stock  issuable  upon the  exercise  of the  Rights  (or  such  other
securities  of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:

--------------------------------------------------------------------------------
                         (Please print name and address)

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

Please insert social security
or other identifying number:
                              --------------------------------------------------

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

--------------------------------------------------------------------------------
                         (Please print name and address)

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

                                      B-7
<PAGE>

Please insert social security
or other identifying number:
                              --------------------------------------------------

Dated               , 2000.
      -------------

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

Signature Guaranteed:

                                      B-8
<PAGE>

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

         The undersigned  hereby  certifies by checking the,  appropriate  boxes
that:

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

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

Dated:              , 2000.        ---------------------------------------------
       ------------                               Signature

Signature Guaranteed:

                                      B-9
<PAGE>

                                    EXHIBIT C

                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

         Effective  as of January 31,  2001,  the Board of  Directors  of Sundog
Technologies,  Inc.  (the  "Company")  declared a dividend of one Right for each
outstanding  share of Common Stock of the Company to  shareholders  of record at
the close of business on January 31, 2001.  Each Right  entitles the  registered
holder to purchase  from the Company  one  one-hundredth  of a share of Series A
Preferred Shares (the "Preferred Shares") at a Purchase Price of $60.00, subject
to  adjustment.  The  description  and  terms of the  Rights  are set forth in a
Shareholder  Rights Agreement (the "Rights  Agreement")  between the Company and
Atlas Stock Transfer Corporation, as Rights Agent.

         Initially, the Rights will be attached to the certificates representing
outstanding shares of Common Stock, and no separate Rights  Certificates will be
distributed.  The Rights will separate from the Common Stock, and a Distribution
Date will occur, upon the earlier of (i) subject to certain exceptions, ten days
following  a public  announcement  that a  person  or  group  of  affiliated  or
associated  persons  has  acquired,  or  obtained  the  right  to  acquire  from
shareholders,  beneficial  ownership  of 15 percent  or more of the  outstanding
Common Stock or the Board of Directors of the Company  shall  declare any person
to be an Adverse Person (as described  below) (each,  an "Acquiring  Person") or
(ii) ten days  following the  commencement  of a tender offer or exchange  offer
that would result in a person or group beneficially owning 15 percent or more of
such outstanding  Common Stock, as such periods may be extended  pursuant to the
Rights Agreement.

         An Adverse Person is any person declared to be an Adverse Person by the
Board of Directors upon a determination that such person, alone or together with
its affiliates and associates,  has become the beneficial  owner of an amount of
Common Stock which the Board of Directors  determines to be  substantial  (which
amount  shall be more  than 10% of the  Common  Stock  then  outstanding)  and a
determination  by at least a  majority  of the  Board of  Directors  who are not
officers of the Company,  after reasonable inquiry and investigation,  including
consultation  with such persons as such directors shall deem  appropriate,  that
(i) such beneficial ownership by such person is intended to cause the Company to
repurchase  the  Common  Stock  beneficially  owned by such  person  or to cause
pressure on the Company to take action or enter into a transaction  or series of
transactions  intended to provide  such person with  short-term  financial  gain
under  circumstances  where  the  Board of  Directors  determines  that the best
long-term  interests of the Company and its shareholders  would not be served by

                                      C-1
<PAGE>

taking such action or entering into such  transactions or series of transactions
at that time or (ii) such beneficial  ownership is causing or reasonably  likely
to cause a material adverse impact (including, but not limited to, impairment of
relationships  with customers or impairment of the Company's ability to maintain
its competitive position) on the business or prospects of the Company.

         Until the  Distribution  Date,  (i) the Rights will be evidenced by and
will be transferred with and only with such Common Stock certificates,  (ii) new
Common Stock  certificates  issued after January 31, 2001, will contain a legend
incorporating  the Rights  Agreement by  reference,  and (iii) the surrender for
transfer of any  certificate  for Common Stock will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.

         The Rights are not  exercisable  until the  Distribution  Date and will
expire at the close of business on December 1, 2010,  unless earlier redeemed by
the Company as described below.

         As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to  holders  of  record  of the  Common  Stock as of the close of
business  on  the  Distribution  Date,  and  thereafter,   the  separate  Rights
Certificates alone will represent the Rights.  Except as otherwise determined by
the Board of  Directors,  only Common  Stock issued prior to the time the Rights
become  exercisable  or issued upon exercise or conversion of rights,  warrants,
options or  convertible  securities  issued prior to the time the Rights  become
exercisable will be issued with Rights.

         In the event that any person  becomes an Acquiring  Person,  subject to
the  Company's  rights of waiver and  redemption,  each  holder of a Right shall
thereafter  have the  right to  receive,  upon  exercise,  in lieu of  Preferred
Shares,  Common  Stock of the  Company  (or,  in  certain  circumstances,  cash,
property or other  securities of the Company) having a market value equal to two
times the exercise price of the Right (a "Flip-In Conversion").  However, Rights
are not exercisable as described in this paragraph until such time as the Rights
are no longer  redeemable  by the  Company as  described  below and the  Flip-In
Conversion  is no longer  subject  to waiver  by the Board as  described  below.
Notwithstanding any of the foregoing,  if any person becomes an Acquiring Person
all Rights that are, or (under  certain  circumstances  specified  in the Rights
Agreement) were,  beneficially owned by an Acquiring Person will become null and
void.

         For  example,  at an  exercise  price of $60 per Right,  each Right not
owned by the Acquiring  Person (or by certain  related  parties or  transferees)
following  the event set forth in the  preceding  paragraph  would  entitle  its
holder to purchase $120 worth of Common Stock (or other consideration,  as noted
above) for $60.  Assuming  that the Common Stock had a per share value of $10 at
such time,  the holder of each valid Right would be entitled to purchase  twelve
shares of Common Stock for $60.

                                      C-2
<PAGE>

         In the event that, at any time following the Distribution Date, (i) the
Company is acquired in a merger or other  business  combination  transaction  in
which the Company is not the surviving  corporation or in which the Common Stock
are exchanged for stock or other  securities or property,  or (ii) 50 percent or
more of the  Company's  assets or  earning  power is sold or  transferred,  each
holder of a Right (except Rights which  previously have been voided as set forth
above) shall thereafter have the right to receive,  upon exercise,  common stock
of the acquiring company having a value equal to two times the exercise price of
the Right.

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

         With certain  exceptions,  no adjustment  in the Purchase  Price or the
number of Preferred  Shares  issuable  upon exercise of a Right will be required
until cumulative adjustments would require an increase or decrease of at least 1
percent.  No fractional  Preferred  Shares will be issued (other than  fractions
which  are  integral  multiples  of one  one-hundredth  of a share of  Preferred
Shares) and, in lieu  thereof,  an  adjustment in cash will be made based on the
market price of the Preferred  Shares on the last trading date prior to the date
of exercise.

         At any time until a determination  that any person is an Adverse Person
or ten  days  (or  longer  if  extended  pursuant  to the  terms  of the  Rights
Agreement) after a person otherwise becomes an Acquiring Person, the Company may
(i) redeem the Rights in whole,  but not in part,  at a price of $.001 per Right
(payable in cash, Common Stock or other consideration),  appropriately  adjusted
to reflect any stock  split,  stock  dividend or similar  transaction  occurring
after  the  date  hereof,  or (ii)  waive  the  respective  Flip-In  Conversion.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights,  the Rights will  terminate  and the only right of the holders of Rights
will be to receive the $.001 redemption price.

         At any time after a person  becomes an Acquiring  Person,  the Board of
Directors  of the Company may  exchange  the Rights  (other than Rights owned by
such person or group which  become  void),  in whole or in part,  at an exchange
ratio of one share of Common Stock, or one one-hundredth of a share of Preferred
Shares  (or of a share of a class or series  of the  Company's  preferred  stock
having  equivalent  rights,  preferences and privileges),  per Right (subject to
adjustment).

                                      C-3
<PAGE>

         Until a Right is exercised,  the holder thereof,  as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive  dividends.  While the distribution of the Rights will not
be taxable to shareholders or to the Company,  shareholders may,  depending upon
the circumstances,  recognize taxable income in the event that the Rights become
exercisable  for Common  Stock (or other  consideration)  of the  Company or for
common stock of the acquiring company as set forth above.

         The Preferred Shares will be  non-redeemable.  The Preferred Shares may
rank on a lower  priority in respect of the  preference  as to dividends and the
distribution  of assets with other classes or series of the Company's  preferred
shares.  Each Preferred  Share will be entitled to an aggregate of 100 times the
cash and non-cash  (payable in kind)  dividends  and  distributions  (other than
dividends and distributions  payable in Common Shares) declared on the Company's
Common Stock. In the event of liquidation,  the holders of Preferred Shares will
be entitled to receive a liquidation payment in an amount equal to 100 times the
payment  made per Common  Share,  plus an amount  equal to  declared  and unpaid
dividends and distributions  thereon. 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 the amount  received  per share of Common
Stock. The dividend and liquidation  rights of the Preferred Stock are protected
by antidilution  provisions.  Each Preferred Share will be entitled to 100 votes
(subject to certain adjustments) on all matters submitted to the shareholders.

         A copy of the Rights  Agreement has been filed with the  Securities and
Exchange  Commission as an exhibit to a Current Report on Form 8-K dated January
15,  2001. A copy of the Rights  Agreement is available  free of charge from the
Rights  Agent.  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 incorporated herein by reference.

                                      C-4<PAGE>

                                                                     EXHIBIT 4.3

Mr Ravi Subrarnanian, Chairman
Silverline Technologies Ltd
53 Knightsbridge Road
Piscataway
NJ 08854
                                                                5th January 2001

Dear Mr Subramanian,

It is my pleasure to inform you that HSBC Bank USA (the "Bank") is willing to
make available to Silverline Technologies Inc. (the "Borrower") an uncommitted
Advised Line of Credit totaling USD40,000,000 (of which USD30,000,000 will be
provided by HSBC Bank USA), and also a facility for entering into interest-rate
swap arrangements with maximum weighted cash risk determined by the Bank of
USD1,000,000. Availability of all lines is at the discretion of the Bank and
subject to the fulfillment of the terms and conditions listed on the attached
Summary of Terms and Conditions.

In particular, credit availability is subject to the receipt of satisfactory
current financial and other information relating to the Borrower. This
information shall be furnished to, or requested by, the Bank from time to time
as described below. The line of credit may be used for Loan Advances and Standby
Letters of Credit, in accordance with the attached Summary of Terms and
Conditions.

Loan Advances and Standby Letters of Credit under the line of credit will be
made at our discretion from time to time and all Loan Advances and Standby
Letters of Credit are repayable according to the Bank's standard form of
Promissory Note, Continuing Letter of Credit Agreement, Continuing Acceptance
Credit Agreement and/or such other documentation required by the Bank which is
satisfactory in form and substance to the Bank's counsel. Either party may
terminate this line with respect to future extensions of credit at any time upon
notice to the other party.

In the event of termination by any party your obligations under the promissory
note(s), Letters of Credit or Bankers Acceptances shall remain in force until
the outstanding balance is paid in full. Unless the line is terminated, we will
fully review the credit basis for this non-contractual line at least annually
upon submission of appropriate financial information.

This line is scheduled to be reviewed by 31 Jan 2002. The line will
automatically expire as of that date unless renewed or extended by us in
writing.

To accept this offer of facilities, please return one original of this letter
and its attachments by the close of business on 12 Jan 2001, signed by the
undersigned on all applicable pages. Your acceptance will be effective with
payment of 20bp Agency Fee on the portion of the facility provided by HSBC Bank
USA.

Yours sincerely,                             Acknowledged by
For HSBC Bank USA                            For Silverline Technologies Inc.

Christopher M S Harrocks                     Ravi Subramanian
Relationship Manager                         Chairman

----------------
There is no signed copy of this commitment letter. The commitment was made and
accepted via an email exchange.

<PAGE>

                         Summary of Terms and Conditions
                         -------------------------------

Borrower:      Silverline Technologies Inc.

Amount:        USD30,000,000 of maximum USD 40,000,000 Advised Line of Credit.
               Availability will be subject to the lesser of this Amount or the
               eligibility under "Line Availability/Collateral Margin". Within
               the line there is a sublimit of USD2,000,000 for Standby Letters
               of Credit (SBDC).

               USD1,000,000 weighted cash risk available for USD-denominated
               interest-rate swap arrangements with maximum initial tenor of
               fifteen months and maximum combined notional principal of
               USD40,000,000. Weighted cash risk to be determined by the Bank.
               All transactions subject to terms and conditions of underlying
               documentation.

               HSBC Bank USA is to act as Funding Agent and Collateral Agent for
               the total facility, with agency functions limited exclusively to
               those detailed in the Agency Agreement executed in connection
               with this transaction. Outstandings under the Line of Credit will
               be shared pro rata between all lending banks. Notwithstanding
               these agency functions, prior funding of pro rata shares in Loan
               Advances is required by other lending banks to HSBC Bank USA.

Expiry Date:   31Jan2002.

Purpose:       To provide lines for the finance of the working capital
               requirements of the Borrower. Standby Letters of Credit to
               support the working capital needs and banking facilities of
               subsidiaries, and for other general corporate purposes.

Other Facilities:

               No other credit facilities are permitted to the Borrower or any
               majority-owned subsidiaries outside the existing arrangements
               with HSBC Bank USA, Bank of Baroda and Columbia Savings Bank; up
               to USD 100,000 of new lease financing with any parties; and/or
               new arrangements with other HSBC Group offices, without the prior
               written consent from HSBC Bank USA to the Borrower.

Corporate Guarantees:

               No new Corporate Guarantees are to be granted by the Borrower or
               any majority-owned subsidiaries without the prior written consent
               of HSBC Bank USA.

Ownership:     There is to be no material change in Director Shareholdings of
               the Parent, or the ownership structure of the Borrower and
               existing majority-owned subsidiaries of the Borrower without
               prior written notice from the Borrower to the Bank. A material
               change is a change of more than 25% (No. shares held) from
               30Sep2000.

Acquisitions:
               The Borrower is to advise the Bank in writing of any proposed
               Merger or Acquisition-related transaction relating to the
               Borrower and/or any majority-owned subsidiaries not later than
               concurrent with advice to the SEC and/or the investor community,
               and, in any case, prior to final execution of the subject
               transaction.
<PAGE>

Operating Accounts:
               All Operating Accounts to be maintained solely with members of
               the HSBC Group. Existing accounts will be transferred on an
               orderly basis.

               All Accounts Receivable proceeds of the Borrower and subsidiaries
               are to be paid into one of the aforementioned Operating Accounts.

Financial Requirements:
               The Borrower must at all times be in compliance with the
               following:

               1).  Maintain at all times a Working Capital of not less than
                    USD15,000,000

                    Working Capital to be defined as Cash & Equivalents plus net
                    Accounts Receivable less Current Liabilities (Subordinated
                    portion of Intercompany Payable excluded from Current
                    Liabilities).

               2).  Maintain at all times a Tangible Net Worth of not less than
                    USD20,000,000

                    Tangible Net Worth to be defined as Common Stock plus
                    Paid-in Capital plus Retained Earnings less Goodwill less
                    Advances to Non-Subsidiary Affiliated Companies.

Reporting Requirements:
               The Borrower must provide the Bank with the following:

               1).  Fiscal year end audited financial statements separately for
                    the Borrower and Silverline Technologies Ltd (consolidated
                    at Borrower and Parent level separately, and
                    non-consolidated for subsidiary entities of the Borrower),
                    prepared by Deloitte & Touche or another CPA acceptable to
                    the Bank, within 90 days after the respective fiscal year
                    ends.

               2).  Six-month reviewed financial statements (consolidated)
                    separately for the Borrower and Silverline Technologies Ltd,
                    prepared by Deloitte & Touche or another CPA acceptable to
                    the Bank, within 90 days after the respective period end.

               3)   Quarterly management-prepared financial statements within 30
                    days of quarter end.

               4).  Monthly Borrowing Base Certificate per the attached format.
                    To be supported by full due date and invoice date Accounts
                    Receivable Agings. To be received within 20 days of month
                    end.

               5).  Other information the Bank may reasonably request (including
                    backlog position when available).
<PAGE>

Collateral Required:
                    Perfected first position in all Accounts Receivable non-
                    encumbered equipment chattel paper and general intangibles
                    of the Borrower and majority-owned subsidiaries, to be
                    covered by security agreements and appropriate UCC-1
                    filings. Such position to be subject to Intercreditor
                    Agreement effective between HSBC Bank USA and Bank of Baroda
                    as appropriate.

                    Unlimited Cross Corporate Guarantees of all Silverline
                    Technologies Inc. majority-owned subsidiaries. Adjusted to
                    accommodate legal limitations and withholding and tax
                    considerations where appropriate.

                    Unlimited Corporate Guarantee of Silverline Technologies
                    Ltd., to be provided upon approval of Reserve Bank of India.

                    The Bank must be named additional loss-payee on all
                    Professional Liability and Errors & Omissions insurance
                    policies.

Verification of Collateral:
                    The Bank will conduct two annual audits of the collateral to
                    verify any or all collateral. The Bank reserves the right to
                    conduct additional audits of the collateral to verify any or
                    all collateral as may reasonably be required. The Borrower
                    agrees to furnish all assistance and information and to
                    perform any acts which the Bank may require in connection
                    therewith. The Borrower agrees to pay all costs and expenses
                    incurred by HSBC Bank USA in performing the audit, to a
                    maximum of USD10,000 per any twelve-month period (exc.
                    pre-funding audit).

Line Availability/Collateral Margin:
                    Based on the Borrower's domestic Accounts Receivable

                    Title held by the Borrower, and invoiced party to be located
                    in the US or Canada.

                    Eligibility to be determined, in part, by Accounts
                    Receivables aged less than 90 days past date of invoice
                    (margined at 80%), with further eligibility for Accounts
                    Receivable aged 90 - 120 days past date of invoice and with
                    original invoice payment terms of 90 days (margined at 80%).
                    All Accounts Receivable subject to a perfected security
                    interest and filing under the UCC. The whole of any Account
                    Receivable due from a single debtor will be excluded if 50%
                    or greater of the debtor's total Accounts Receivable balance
                    is more than 120 days past date of invoice.
<PAGE>

Loan Interest: Loan outstandings shall bear interest subject to the standing
               calculation base of the Bank (Actual Day Month / 360 Day Year) at
               a per annum rate set by the following grid:

<TABLE>
<CAPTION>
                  0/S less than 40% BB          40% less than 0/S less than 70% BB     70% less than 0/S less than 80% BB
                  ----------------- --          ------------------------------- --     ------------------------------- --
<S>                    <C>                      <C>                                    <C>
                            P-75 bp                            P-25 bp                                P+25 bp
                           L+2l0 bp                            L+260 bp                               L+3l0 bp
</TABLE>
               0/S - Usage under the facility, including SBDC
               BB - eligible borrowing base
               P - HSBC Bank USA Prime Interest Rate*
               L - LIBOR-pegged loan borrowings are subject to minimum amounts
               of USD500,000 and Multiples of USD100,000 thereafter with minimum
               30 day tenor, maximum 90-day tenor. Subject to applicable
               prepayment penalties.

               Rate to be applied from receipt of Borrowing Base Certificate
               forward to receipt of next monthly Borrowing Base Certificate.
               Applicable rate charged on full amount.

               If twelve-month rolling Funded Debt/EBITDA rises above 2.5, a
               25bp increase will be levied, tested quarterly and applied from
               receipt of quarterly financial statements evidencing this ratio
               until receipt of the next set of quarterly financial statements
               evidencing a reduction in this ratio to below 2.5.

               *"Prime Rate" shall mean the rate of interest announced by HSBC
               Bank USA from time to time as the Bank's Prime Rate and as a
               base rate for calculating interest on certain loans. The Prime
               Rate is subject to change when and as there occurs an announced
               rate change.

SBDC Fees:     Issuance:  1/8% per month, subject to the standing minima of the
                          Bank
               Amendment: 1/8% per month, USD50 for any amendments not
                          pertaining to amount or tenor.

Expenses:      All legal fees and other external provider fees to document and
               execute this transaction are to be undertaken at the Borrower's
               expense.

Conditions Precedent to Funding:

               1).  Documentation from the Borrower and co-lending bank;

               2).  Subordination of Intercompany Payable in a minimum amount of
                    USD10,000,000 to meet the Working Capital condition above;

               3).  Perfection of Security Interest as described above;

               4).  HSBC Bank USA named as loss payee on insurance policies
                    covering collateralized assets;

               5).  Full information regarding the likely corporate structure
                    and financial performance of the Borrower following
                    completion of the proposed Seranova transaction;

               6).  Satisfactory Tax Opinion regarding any potential liability
                    of the Borrower or corporate guarantors arising from the
                    likely structure of the proposed Seranova transaction;

               7).  Satisfactory Bank checkings;

               8).  Customer confirmations of invoice details (per Field
                    Examination requirements).
<PAGE>

Adverse Change:
               Nothing shall have occurred, and the Bank shall have become aware
               of no facts or conditions, which the Bank in its reasonable
               judgment shall determine has, or could reasonably be expected to
               have, a material adverse effect on the rights or remedies of the
               Bank, or which has, or could reasonably be expected to have, a
               materially adverse effect on the business, operations, property,
               assets, liabilities, condition (financial or otherwise) or
               prospects of the Borrower.

               The Borrower hereby agrees to immediately notify the Bank as and
               when such an occurrence, fact or condition becomes known to the
               Borrower.

Conflicts With Other Instruments:
               In the event of a conflict between the provisions of this Summary
               of Terms and Conditions, and other instruments executed between
               the Bank and the Borrower in connection with the facilities
               outlined herein, the provisions of the other instruments will
               prevail.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}]]