Document:

Unassociated Document

    Exhibit
10.3

    

    

    as of
March 24, 2009

    

    
      Butler
Service Group, Inc.

    

    110
Summit Avenue

    Montvale,
NJ 07645

    

    Attn: Ron
Uyematsu

    

     

    Re:           Extension of Obligations
under Side Letter

     

    Ladies
and Gentlemen:

     

    Reference
is made to that certain (i) Third Amended and Restated Credit Agreement, dated
as of August 29, 2007 (including, all annexes, exhibits and schedules thereto,
and as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Butler Service Group, Inc. (the “Borrower”), the other
Credit Parties signatory thereto (the Credit Parties together with the Borrower,
individually and collectively “You” or “Your”), General
Electric Capital Corporation (“GECC”), as a Lender
and Agent for Lenders (in such capacity, the “Agent”), and the
other Lenders signatory thereto from time to time, (ii) Forbearance Agreement,
dated as of March 20, 2009, by and among the Borrower, the other Credit Parties
signatory thereto and Agent (as amended, supplemented or otherwise modified from
time to time, the “Forbearance
Agreement”) and (iii) Side Letter, dated March 20, 2009, by and among the
Borrower, the other Credit Parties signatory thereto and the Agent (the “Side
Letter”).  Unless otherwise defined herein, capitalized terms
used herein shall have the respective meanings provided in the Credit
Agreement.

     

    In
accordance with the Side Letter, the Agent hereby agrees, in its sole
discretion, to extend the date by which You are required to deliver to Agent a
fully executed participation agreement, in form and substance satisfactory to
Agent, by and between GECC, as seller, and Koosharem Corporation d/b/a Select
Staffing (or an Affiliate thereof), as buyer (the “Participation
Agreement”) until March 27, 2009 (or such later date as may be agreed to
by Agent in its sole discretion).

     

    This
letter shall constitute a Loan Document under the Credit
Agreement.  Failure to deliver the Participation Agreement in
accordance with the preceding paragraph shall constitute an Event of Default
under Section 9
of the Forbearance Agreement.

     

    This
letter shall be governed by, and construed and interpreted in accordance with,
the laws of the State of New York without regard to choice or conflict of law
principles thereof.  No party may assign its rights, duties or
obligations under this letter without the prior written consent of the other
parties.  This letter may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement. Any amendments to this letter shall be made in writing and signed by
the parties hereto.  The undersigned parties have signed below to
indicate their consent to be bound by the terms and conditions of this
letter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Please
indicate Your acceptance of and agreement to the foregoing by signing and
returning, by facsimile, the enclosed copy of this Agreement to General Electric
Capital Corporation, Attention: Jim Kaufman.

    
      
        
          	 	 	 
	 	 	 
	 	 	 
	 	Very
      truly yours,	 
	 	 	 
	 	GENERAL
      ELECTRIC CAPITAL CORPORATION, as Agent	 
	 	 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Jim
      Kaufman	 
	 	 	Title: Jim
      Kaufman	 
	 	 	 	 
	 	 	 	 

        

      

                                  

    

    AGREED TO
AND ACCEPTED AS OF

    THIS
26th
DAY OF MARCH, 2009.

    

    BUTLER
SERVICE GROUP, INC.

    
      
        	 	 	 	 	 	 
	By:
      	
                /s/
      Gerald
      P. Simone

              	 	 	
                 

              	 
	 	 	 	 	 	 
	Name: 	
                Gerald P. Simone

              	 	 	
                 

              	 
	 	 	 	 	 	 
	Title:	
                
                  SVP
      Finance and Accounting

                

              	 	 	
                 

              	 

      

    

     

     

     

    BUTLER
INTERNATIONAL, INC.

    BUTLER
SERVICES INTERNATIONAL, INC.

    BUTLER
TELECOM, INC.

    BUTLER
PUBLISHING, INC.

    BUTLER OF
NEW JERSEY REALTY CORP.

    BUTLER
SERVICES, INC.

    BUTLER
UTILITY SERVICE, INC.

    BUTLER
RESOURCES, LLC

    
      
        
          	 	 	 	 	 	 
	By:
      	
                  /s/
      Gerald P. Simone

                	 	 	
                   

                	 
	 	 	 	 	 	 
	Name: 	
                  Gerald P. Simone

                	 	 	
                   

                	 
	 	 	 	 	 	 
	Title:	
                  SVP
      Finance & AccountingExhibit 4.1

                                Rights Agreement

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

                          GULF ISLAND FABRICATION, INC.

                                       and

                  AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

                                 as Rights Agent

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

                           Dated as of March 25, 2009

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

<S>               <C>                                                                                  <C>
                                                                                                       Page
                                                                                                       ----

Section 1.        Certain Definitions                                                                    1

Section 2.        Appointment of Rights Agent                                                            5

Section 3.        Issue of Right Certificates                                                            6

Section 4.        Form of Right Certificates                                                             7

Section 5.        Countersignature and Registration                                                      8

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

Section 7.        Exercise of Rights; Purchase Price; Expiration Date of Rights                          9

Section 8.        Cancellation and Destruction of Right Certificates                                    11

Section 9.        Availability of Preference Shares                                                     11

Section 10.       Preference Shares Record Date                                                         12

Section 11.       Adjustment of Purchase Price, Number of Shares or Number of Rights                    12

Section 12.       Certificate of Adjusted Purchase Price or Number of Shares                            19

Section 13.       Consolidation, Merger or Sale or Transfer of Assets or Earning Power                  19

Section 14.       Fractional Rights and Fractional Shares                                               21

Section 15.       Rights of Action                                                                      22

Section 16.       Agreement of Right Holders                                                            22

Section 17.       Right Certificate Holder Not Deemed a Shareholder                                     23

Section 18.       Concerning the Rights Agent                                                           23

Section 19.       Merger or Consolidation or Change of Name of Rights Agent                             24

Section 20.       Duties of Rights Agent                                                                24

Section 21.       Change of Rights Agent                                                                26

<PAGE>

Section 22.       Issuance of New Right Certificates                                                    27

Section 23.       Redemption                                                                            27

Section 24.       Exchange                                                                              28

Section 25.       Notice of Certain Events                                                              29

Section 26.       Notices                                                                               30

Section 27.       Supplements and Amendments                                                            30

Section 28.       Successors                                                                            30

Section 29.       Benefits of this Agreement                                                            30

Section 30.       Severability                                                                          31

Section 31.       Governing Law                                                                         31

Section 32.       Counterparts                                                                          31

Section 33.       Descriptive Headings                                                                  31

Section 34.       Determinations and Actions by the Board of Directors                                  31

                                                          Exhibits
                                                          --------

Exhibit A -       Form of Articles of Amendment                                                        A-1

Exhibit B -       Form of Right Certificate                                                            B-1

Exhibit C -       Summary of Rights to Purchase Preference Shares                                      C-1

</TABLE>

<PAGE>

                                RIGHTS AGREEMENT

         This Rights Agreement  ("Agreement" or this  "Agreement"),  dated as of
March 25,  2009,  is entered  into  between  Gulf Island  Fabrication,  Inc.,  a
Louisiana  corporation  (the  "Company"),  and American  Stock  Transfer & Trust
Company,  LLC, a New York  limited  liability  trust  company,  as Rights  Agent
hereunder (the "Rights Agent").

                              W I T N E S S E T H:

         WHEREAS,  on March 24, 2009, the Board of Directors of the Company (the
"Board of  Directors")  has  authorized  and declared a dividend,  payable as of
March 25, 2009,  of one  preference  share  purchase  right (a "Right") for each
Common Share (as such term is hereinafter defined) of the Company outstanding on
March  24,  2009 (the  "Record  Date"),  each  Right  representing  the right to
purchase 1/1,000th of a Preference Share (as such term is hereinafter  defined),
upon the terms and subject to the conditions  herein set forth,  and has further
authorized  and  directed  the issuance of one Right with respect to each Common
Share that shall become outstanding  between the Record Date and the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date (as such
terms are hereinafter defined);

         NOW, THEREFORE, the parties agree as follows:

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

(a)  "Acquiring  Person"  shall  mean any  Person  (as such term is  hereinafter
defined) who or which,  together with all  Affiliates  and  Associates  (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is  hereinafter  defined)  of 15% or more of the Common  Shares of the
Company then outstanding,  but shall not include the Company, any Subsidiary (as
such term is hereinafter  defined) of the Company,  any employee benefit plan of
the  Company or any  Subsidiary  of the  Company,  or any trust or other  entity
holding  Common  Shares  for  or  pursuant  to  the  terms  of  any  such  plan.
Notwithstanding  the foregoing,  no Person shall become an "Acquiring Person" as
the result of an acquisition of Common Shares by the Company which,  by reducing
the number of shares outstanding,  increases the proportionate  number of shares
beneficially  owned by such  Person to 15% or more of the  Common  Shares of the
Company then outstanding;  provided,  however, that if a Person shall become the
Beneficial  Owner  of 15% or more  of the  Common  Shares  of the  Company  then
outstanding  by reason of share  purchases by the Company and shall  thereafter,
become the Beneficial Owner of any additional Common Shares of the Company, then
such Person shall be deemed to be an  "Acquiring  Person."  Notwithstanding  the
foregoing,  if the Board of Directors determines in good faith that a Person who
would otherwise be an "Acquiring  Person," as defined  pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient  number of Common Shares so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring  Person" for any purposes of this Agreement unless and until
the date that the Board of Directors subsequently  determines in good faith that
such Person  failed to divest  Common  Shares as described  above as promptly as
practicable.

                                       1
<PAGE>

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

         (c)  "Agreement"  shall  have the  meaning  set  forth in the  preamble
hereof.

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

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

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

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

                  (iv) in respect of which such  Person or any of such  Person's
         Affiliates or Associates has a Synthetic Long Position (as  hereinafter
         defined);  provided,  however,  that a Person  will not be  deemed  the
         Beneficial  Owner of, or to  beneficially  own,  any  security  if such
         beneficial  ownership arises solely as a result of such Person's status
         as a "clearing  agency," as defined in Section 3(a)(23) of the Exchange
         Act;  provided  further,  however,  that nothing in this Section 1 will
         cause a Person  engaged in business as an  underwriter of securities to
         be the  Beneficial  Owner of, or to  beneficially  own, any  securities
         acquired  through  such  Person's  participation  in good  faith  in an
         underwriting  syndicate  until the expiration of 40 calendar days after
         the  date of such  acquisition,  or such  later  date as the  Board  of
         Directors may determine in any specific case.

                                       2
<PAGE>

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

         (e)  "Board  of  Directors"  shall  have the  meaning  set forth in the
recitals hereto.

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

         (g) "close of business"  on any given date shall mean 5:00 P.M.,  local
time in the State of the  principal  office of the Rights  Agent,  on such date;
provided,  however,  that if such date is not a Business  Day it shall mean 5:00
P.M.,  local  time of the  principal  office of the  Rights  Agent,  on the next
succeeding Business Day.

         (h) "Common  Shares" when used with reference to the Company shall mean
the shares of common  stock,  no par value per share,  of the  Company.  "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital  stock (or equity  interest)  with the  greatest  voting  power with
respect to the  election  of  directors  of such other  Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.

         (i)  "Company"  shall have the  meaning set forth in the  preamble  and
Section 13 hereof.

         (j) "current  per share market  price" shall have the meaning set forth
in Section 11(d)(i) hereof.

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

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

         (m) "equivalent  preference shares" shall have the meaning set forth in
Section 11(b) hereof.

         (n)  "Excess  Amount"  shall  have the  meaning  set  forth in  Section
11(a)(iii) hereof.

                                       3
<PAGE>

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

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

         (q)  "Flip-In  Event"  shall  have the  meaning  set  forth in  Section
11(a)(ii) hereof.

         (r)  "NASDAQ"  shall have the  meaning  set forth in  Section  11(d)(1)
hereof.

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

         (t)  "Preference  Shares"  shall mean shares of Series A  Participating
Cumulative  Preferred Stock, no par value per share, of the Company,  having the
rights and preferences  set forth in the form of Articles of Amendment  attached
to this Agreement as Exhibit A.

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

         (v)  "Record  Date"  shall have the  meaning  set forth in the  recital
hereto.

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

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

         (y) "Right" shall have the meaning set forth in the recital hereto.

         (z) "Right  Certificate"  shall have the meaning set forth Section 3(a)
hereof.

         (aa)  "Rights  Agent"  shall have the meaning set forth in the preamble
hereof.

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

         (cc)  "Share  Acquisition  Date"  shall  mean the first  date of public
announcement by the Company or an Acquiring  Person that an Acquiring Person has
become such.

         (dd)  "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.

         (ee)  "Summary  of Rights"  shall have the meaning set forth in Section
3(b) hereof.

         (ff)  "Synthetic  Long  Position"  shall  mean  any  option,   warrant,
convertible  security,  stock  appreciation  right or other  contractual  right,
whether  or not  presently  exercisable,  which has an  exercise  or  conversion
privilege  or a settlement  payment or  mechanism  at a price  related to Common
Shares or a value  determined in whole or part with  reference to, or derived in
whole or in part from,  the market price or value of Common  Shares,  whether or
not such right is subject to  settlement  in whole or in part in Common  Shares,
and which  increases in value as the value of Common  Shares  increases or which
provides to the holder of such right an opportunity,  directly or indirectly, to
profit or share in any profit  derived  from any increase in the value of Common
Shares, but shall not include:

                                       4
<PAGE>

                  (i)  rights  of a pledgee  under a bona fide  pledge of Common
Shares;

                  (ii) rights of all holders of Common Shares to receive  Common
         Shares pro rata,  or  obligations  to dispose  of Common  Shares,  as a
         result of a merger,  exchange  offer,  or  consolidation  involving the
         Company;

                  (iii) rights or  obligations to surrender  Common  Shares,  or
         have  Common  Shares  withheld,  upon  the  receipt  or  exercise  of a
         derivative security or the receipt or vesting of equity securities,  in
         order to satisfy the exercise price or the tax withholding consequences
         of receipt, exercise or vesting;

                  (iv) interests in broad-based index options, broad-based index
         futures,  and  broad-based  publicly  traded  market  baskets of stocks
         approved for trading by the appropriate federal governmental authority;

                  (v)  interests or rights to  participate  in employee  benefit
         plans of the  Company  held by  employees  or former  employees  of the
         Company; or

                  (vi) options granted to an underwriter in a registered  public
         offering  for  the  purpose  of  satisfying   over-allotments  in  such
         offering.

                  The Common Shares in respect of which a Person has a Synthetic
         Long  Position  shall be the notional or other number of Common  Shares
         specified in a filing by such Person or any of such Person's Affiliates
         or Associates with the Securities and Exchange Commission in respect of
         which Common Shares are the "subject  security" or in the documentation
         evidencing  the Synthetic Long Position as being subject to be acquired
         upon the exercise or settlement of the applicable right or as the basis
         upon  which  the  value or  settlement  amount  of such  right,  or the
         opportunity  of the  holder  of such  right to  profit  or share in any
         profit,  is to be  calculated in whole or in part or, if no such number
         of Common  Shares is  specified  in any  filing  or  documentation,  as
         determined  by the Board of Directors in good faith to be the number of
         Common Shares to which the Synthetic Long Position relates.

         (gg) "Trading Day" shall have the meaning set forth in Section 11(d)(1)
hereof.

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

                                       5
<PAGE>

         Section 3. Issue of Right Certificates.

         (a) Until the  earlier  of (i) the tenth  calendar  day after the Share
Acquisition  Date or (ii) the  tenth  Business  Day (or such  later  date as may
hereafter be determined  by action of the Board of Directors  prior to such time
as any Person becomes an Acquiring Person) after the date of the commencement 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 trust or
other  entity  holding  Common  Shares for or  pursuant to the terms of any such
plan) of, or of the first  public  announcement  of the  intention of 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 trust or other
entity  holding  Common Shares for or pursuant to the terms of any such plan) to
commence,  a tender or exchange offer the  consummation of which would result in
any Person  becoming the Beneficial  Owner of Common Shares  aggregating  15% or
more of the then outstanding  Common Shares,  irrespective of whether any shares
are actually purchased pursuant to any such offer (including any such date which
is after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution  Date"), (x)
the Rights will be evidenced  (subject to the provisions of Section 3(b) hereof)
by the  certificates  for Common  Shares  registered in the names of the holders
thereof (which  certificates shall also be deemed to be Right  Certificates) and
not by  separate  Right  Certificates,  and  (y)  the  right  to  receive  Right
Certificates will be transferable only in connection with the transfer of Common
Shares.  As soon as practicable  after the  Distribution  Date, the Company will
prepare and  execute,  the Rights Agent will  countersign,  and the Company will
send or cause to be sent (and the Rights  Agent  will,  if  requested,  send) by
first-class,  postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the  Distribution  Date,  at the address of such holder
shown on the records of the Company, a Right  Certificate,  in substantially the
form of Exhibit B hereto (a "Right Certificate"),  evidencing one Right for each
Common Share so held.  In the event that an  adjustment  in the number of Rights
per Common  Share is made  pursuant  to  Section  11(i)  hereof,  at the time of
distribution of the Right  Certificates the Company shall make the necessary and
appropriate  rounding  adjustments  (in accordance with Section 14(a) hereof) so
that  Right   Certificates   representing  only  whole  numbers  of  Rights  are
distributed  and  cash  is paid in  lieu  of any  fractional  Rights.  As of the
Distribution   Date,  the  Rights  will  be  evidenced   solely  by  such  Right
Certificates. The Company shall promptly notify the Rights Agent in writing upon
the  occurrence  of the  Distribution  Date and, if such  notification  is given
orally,  the Company shall confirm such  notification  in writing on or prior to
the  Business  Day next  following.  Until such notice is received by the Rights
Agent,  the Rights  Agent may presume  conclusively  for all  purposes  that the
Distribution Date has not occurred.

         (b)  On  or  about  March  25,  2009,  or  as  promptly  as  reasonably
practicable  thereafter,  the Company shall send a copy of the Summary of Rights
to Purchase  Preference  Shares,  in substantially  the form of Exhibit C hereto
(the  "Summary of Rights"),  by  postage-prepaid  mail, to each record holder of
Common  Shares as of the close of business on the Record Date, at the address of
such holder  shown on the records of the Company.  With respect to  certificates
for Common  Shares  outstanding  as of the Record Date,  until the  Distribution
Date, the Rights will be evidenced by such certificates  registered in the names
of the holders thereof together with a copy of the Summary of Rights.  Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date),  the  surrender  for  transfer  of  any  certificate  for  Common  Shares
outstanding on the Record Date,  with or without a copy of the Summary of Rights
attached  thereto,  shall also constitute the transfer of the Rights  associated
with the Common Shares represented thereby.

                                       6
<PAGE>

         (c)  Certificates  for  Common  Shares  which  are  issued  and  become
outstanding (including, without limitation, reacquired Common Shares referred to
in the last sentence of this  paragraph  (c)) 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 a legend substantially in the following form:

                  This certificate also evidences and entitles the holder hereof
         to certain  Rights as set forth in the Rights  Agreement  between  Gulf
         Island  Fabrication,  Inc. (the  "Company") and American Stock Transfer
         and Trust Company (the "Rights Agent"), dated as of March 25, 2009, (as
         amended from time to time, the "Rights Agreement"),  the terms of which
         are hereby  incorporated  herein by reference and a copy of which is on
         file  at  the   principal   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, as in effect on the date of
         mailing,  without charge  promptly  after receipt of a written  request
         therefor.   Under  certain   circumstances  set  forth  in  the  Rights
         Agreement,  Rights issued to any Person who becomes an Acquiring Person
         or its  Affiliates  or  Associates  (as such  terms are  defined in the
         Rights  Agreement) and any  subsequent  holder of such Rights are null,
         void and nontransferable.

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

         Section 4. Form of Right Certificates.

         (a) The Right  Certificates  (and the  forms of  election  to  purchase
Preference  Shares and of assignment to be printed on the reverse thereof) shall
be  substantially  in the form set forth in Exhibit B hereto,  and may have such
marks  of  identification   or  designation  and  such  legends,   summaries  or
endorsements  printed thereon as the Company may deem appropriate and as are not
inconsistent  with the  provisions of this  Agreement,  or as may be required to
comply with any  applicable  law or with any rule or  regulation  made  pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may  from  time to time be  listed,  or to  conform  to  usage.  Subject  to the
provisions  of Section 22  hereof,  the Right  Certificates  shall  entitle  the
holders  thereof to purchase  such number of 1/1,000th of a Preference  Share as
shall be set forth therein at the price per 1/1,000th of a Preference  Share set
forth  therein (the  "Purchase  Price"),  but the number of such  1/1,000th of a
Preference Share or other securities purchasable and the Purchase Price shall be
subject to adjustment as provided herein.

                                       7
<PAGE>

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

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

         Section 5. Countersignature and Registration.

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

                                       8
<PAGE>

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

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

         (a) Subject to the  provisions of Section 14 hereof,  at any time after
the close of business on the Distribution  Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date, any
Right  Certificate  or  Right   Certificates   (other  than  Right  Certificates
representing  Rights that have become void pursuant to Section  11(a)(ii) hereof
or that have been exchanged  pursuant to Section 24 hereof) may be  transferred,
split  up,  combined  or  exchanged  for  another  Right  Certificate  or  Right
Certificates,  entitling  the  registered  holder to  purchase a like  number of
1/1,00ths of a Preference Share as the Right  Certificate or Right  Certificates
surrendered  then  entitled  such  holder to  purchase.  Any  registered  holder
desiring to transfer,  split up,  combine or exchange any Right  Certificate  or
Right  Certificates  shall make such request in writing  delivered to the Rights
Agent,  and shall  surrender the Right  Certificate or Right  Certificates to be
transferred,  split up,  combined or  exchanged at the  principal  office of the
Rights Agent.  Thereupon the Rights Agent shall  countersign  and deliver to the
person entitled thereto a Right Certificate or Right  Certificates,  as the case
may be, as so requested.  The Company may require payment of a sum sufficient to
cover any tax or governmental  charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

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

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

         (a) The  registered  holder of any Right  Certificate  may exercise the
Rights  evidenced  thereby (except as otherwise  provided herein) in whole or in
part at any time  after  the  Distribution  Date  upon  surrender  of the  Right
Certificate,  with the form of election to purchase on the reverse  side thereof
duly executed,  to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase  Price for each  1/1,000th of a Preference
Share as to which the Rights are  exercised,  at or prior to the earliest of (i)
the close of business on March 25, 2012 (the "Final Expiration Date"),  (ii) the
time at which the Rights are  redeemed  as  provided  in Section 23 hereof  (the
"Redemption  Date"),  or (iii) the time at which such  Rights are  exchanged  as
provided in Section 24 hereof.

                                       9
<PAGE>

         (b) The  Purchase  Price  for  each  1/1,000th  of a  Preference  Share
purchasable  pursuant to the exercise of a Right shall initially be $30.00,  and
shall be subject to adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful  money of the United  States of America in
accordance with paragraph (c) below.

         (c)  Upon  receipt  of a  Right  Certificate  representing  exercisable
Rights,  with the form of election to purchase  duly  executed,  accompanied  by
payment of the Purchase Price for the  Preference  Shares to be purchased and an
amount equal to any applicable  tax or charge  required to be paid by the holder
of such Right  Certificate  in  accordance  with  Section 9 hereof by  certified
check,  cashier's check or money order payable to the order of the Company,  the
Rights Agent shall thereupon promptly (i) requisition from any transfer agent of
the Preference  Shares  certificates  for the number of Preference  Shares to be
purchased and the Company  hereby  irrevocably  authorizes its transfer agent to
comply  with all such  requests,  (ii) as  provided  in  Section  14(b),  at the
election of the Company,  cause depositary receipts in lieu of fractional shares
to be issued, (iii) when appropriate, requisition from the Company the amount of
cash to be  paid  in  lieu  of  issuance  of  fractional  Preference  Shares  in
accordance  with Section 14 hereof,  (iv) after receipt of such  certificates or
depositary receipts,  cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be  designated  by such holder,  and (v) when  appropriate,  after  receipt,
deliver  such cash to or upon the order of the  registered  holder of such Right
Certificate.  The  payment of the  Purchase  Price may be made (x) in cash or by
certified  bank check or bank draft payable to the order of the Company,  or (y)
by delivery of a certificate  or  certificates  (with  appropriate  stock powers
executed in blank attached thereto)  evidencing a number of Common Shares of the
Company equal to the then Purchase Price divided by the current per share market
price (as  determined  pursuant to Section 11(d) hereof) per Common Share on the
date of such exercise. In the event that the Company is obligated to issue other
securities  (including  Common  Shares) of the Company,  pay cash or  distribute
property   pursuant  to  Section  11(a)  hereof,   the  Company  will  make  all
arrangements necessary so that such other securities, cash or other property are
available for distribution by the Rights Agent, if and when appropriate.

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

         (e)  Notwithstanding  anything in this  Agreement to the contrary,  any
Rights that are at any time beneficially  owned by (i) an Acquiring Person or an
Affiliate or Associate of an  Acquiring  Person,  (ii) a transferee  of any such
Acquiring  Person  (or of  any  such  Associate  or  Affiliate)  who  becomes  a
transferee after such Acquiring Person becomes such or (iii) a transferee of any
such  Acquiring  Person (or of any such  Associate or  Affiliate)  who becomes a
transferee prior to or concurrently with such Acquiring Person becoming such and
receives  such  Rights  pursuant  to either (A) a transfer  (whether  or not for
consideration) from such Acquiring Person to holders of equity interests in such
Acquiring  Person  or to any  Person  with whom such  Acquiring  Person  has any
continuing agreement,  arrangement or understanding  (whether or not in writing)
regarding the  transferred  Rights or (B) a transfer that the Board of Directors
has determined is part of a plan,  arrangement or  understanding  which has as a
primary purpose or effect the avoidance of this Section 7(e),  shall become null
and void without any further action, and no holder of such Rights shall have any
rights  whatsoever  with respect to such Rights,  whether under any provision of
this Agreement or otherwise. The Company shall notify the Rights Agent when this
Section  7(e)  applies and shall use all  reasonable  efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied  with,  but
neither the Company nor the Rights Agent shall have any  liability to any holder
of Rights  Certificates or 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.

                                       10
<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 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 Right Certificate  surrendered for
such exercise and (ii) provided such additional  evidence of the identity of the
Beneficial  Owner (or  former  Beneficial  Owner) or  Affiliates  or  Associates
thereof as the Company or the Rights Agent shall reasonably request.

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

         Section 9. Availability of Preference Shares.

         (a) The Company  covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued  Preference  Shares or any
Preference  Shares held in its treasury,  the number of  Preference  Shares that
will be sufficient to permit the exercise in full of all  outstanding  Rights in
accordance  with Section 7. The Company  covenants  and agrees that it will take
all such  action  as may be  necessary  to  ensure  that all  Preference  Shares
delivered  upon  exercise  of  Rights  shall,  at the  time of  delivery  of the
certificates  for such  Preference  Shares  (subject to payment of the  Purchase
Price),  be  duly  and  validly   authorized  and  issued  and  fully  paid  and
nonassessable shares.

                                       11
<PAGE>

         (b) So long as the  Preference  Shares  issuable  upon the  exercise of
Rights may be listed on any national securities exchange or automated quotations
system,  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 or admitted  for  trading on such  exchange  or  automated  quotations
system upon official notice of issuance upon such exercise.

         (c) The Company  covenants and agrees that it will take all such action
as may be necessary to ensure that all of the Preference Shares (and,  following
the time that a Person becomes an Acquiring  Person,  Common Shares and/or other
securities)  delivered upon exercise of Rights shall, at the time of delivery of
the  certificates  for such  (subject  to  payment  of the  Purchase  Price  and
compliance with all other applicable  provisions of the Agreement),  be duly and
validly authorized and issued and fully paid and nonassessable.

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

         Section 10.  Preference  Shares Record Date.  Each person in whose name
any  certificate  for  Preference  Shares is issued upon the  exercise of Rights
shall for all  purposes  be deemed to have  become  the  holder of record of the
Preference Shares  represented  thereby on, and such certificate shall be dated,
the date upon  which the  Right  Certificate  evidencing  such  Rights  was duly
surrendered  and  payment of the  Purchase  Price (and any  applicable  transfer
taxes)  was made;  provided,  however,  that if the date of such  surrender  and
payment is a date upon which the Preference Shares transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preference  Shares transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby,  the holder of a Right Certificate
shall not be entitled to any rights of a holder of  Preference  Shares for which
the Rights shall be exercisable,  including,  without  limitation,  the right to
vote, to receive dividends or other  distributions or to exercise any preemptive
rights,  and shall not be entitled to receive any notice of any  proceedings  of
the Company, except as provided herein.

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

                                       12
<PAGE>

         (a) (i) In the event the  Company  shall at any time  after the date of
this  Agreement  (A)  declare a dividend  on the  Preference  Shares  payable in
Preference Shares, (B) subdivide the outstanding  Preference Shares, (C) combine
the outstanding  Preference Shares into a smaller number of Preference Shares or
(D)  issue  any  shares  of  its  capital  stock  in a  reclassification  of the
Preference  Shares  (including any such  reclassification  in connection  with a
consolidation  or merger in which the  Company is the  continuing  or  surviving
corporation),  except as otherwise  provided in this Section 11(a), the Purchase
Price in  effect  at the time of the  record  date for such  dividend  or of the
effective date of such  subdivision,  combination or  reclassification,  and the
number  and kind of shares of capital  stock  issuable  on such  date,  shall be
proportionately  adjusted so that the holder of any Right  exercised  after such
time shall be  entitled to receive  the  aggregate  number and kind of shares of
capital stock which, if such Right had been exercised  immediately prior to such
date and at a time when the Preference Shares transfer books of the Company were
open,  such  holder  would have owned upon such  exercise  and been  entitled to
receive   by   virtue   of   such   dividend,   subdivision,    combination   or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the greater of the aggregate
par value of the shares of capital  stock of the Company  issuable upon exercise
of one Right or $.01 per share of capital  stock of the  Company  issuable  upon
exercise of one Right.  If an event  occurs  which would  require an  adjustment
under both this Section  11(a)(i) and Section  11(a)(ii)  below,  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) below.

                  (ii) Subject to Section 24 of this Agreement, in the event any
Person,  alone or  together  with its  Affiliates  and  Associates,  becomes  an
Acquiring  Person (a "Flip-In  Event"),  each holder of a Right shall thereafter
have a right to  receive,  upon  exercise  thereof at a price  equal to the then
current  Purchase  Price  multiplied by the number of 1/1,000ths of a Preference
Share for which the Right is then  exercisable,  in accordance with the terms of
this Agreement and in lieu of Preference Shares, such number of Common Shares of
the  Company as shall  equal the result  obtained  by (x)  multiplying  the then
current  Purchase  Price by the number of 1/1,000ths  of a Preference  Share for
which a Right is then  exercisable  and dividing  that product by (y) 50% of the
then current per share market price of the Company's  Common Shares  (determined
pursuant to Section 11(d)  hereof) on the date of the  occurrence of the Flip-In
Event.  In the event that any Person shall  become an  Acquiring  Person and the
Rights shall then be  outstanding,  the Company  shall not take any action which
would eliminate or diminish the benefits  intended to be afforded by the Rights.
Notwithstanding  anything in this Agreement to the contrary,  from and after the
time at which any Person,  alone or together with its Affiliates and Associates,
becomes  an  Acquiring  Person,   any  Rights  that  are  or  were  acquired  or
beneficially  owned by any  Acquiring  Person (or any  Associate or Affiliate of
such  Acquiring  Person)  shall be null and void and any  holder of such  Rights
shall  thereafter  have no right to exercise  such Rights under any provision of
this Agreement.  No Right Certificate shall be issued pursuant to Section 3 that
represents Rights  beneficially  owned by an Acquiring Person whose Rights would
be null  and  void  pursuant  to the  preceding  sentence  or any  Associate  or
Affiliate  thereof;  no Right  Certificate  shall be issued at any time upon the
transfer of any Rights to an  Acquiring  Person  whose  Rights would be null and
void pursuant to the preceding sentence or any Associate or Affiliate thereof or
to any nominee of such Acquiring Person,  Associate or Affiliate;  and any Right
Certificate  delivered to the Rights  Agent for transfer to an Acquiring  Person
whose Rights would be null and void pursuant to the preceding  sentence shall be
cancelled.

                                       13
<PAGE>

                  (iii) If the number of Common  Shares that are  authorized  by
the Company's  Articles of  Incorporation  but not  outstanding  or reserved for
issuance for purposes  other than upon exercise of the Rights are not sufficient
to  permit  the  exercise  in full of the  Rights  in  accordance  with  Section
11(a)(ii)  hereof,  the  Company  shall  endeavor in good faith to take all such
actions as may be necessary to authorize  additional  Common Shares for issuance
upon  exercise  of the Rights.  If the  Company,  after such good faith  effort,
determines  that it is unable to take all such  actions as may be  necessary  to
authorize  additional  Common Shares,  the Company shall (A) determine an amount
(the "Excess  Amount") equal to the excess of the value (the "Current Value") of
the aggregate  number of Common Shares that would otherwise be issuable upon the
exercise  of a Right  in  accordance  with  Section  11(a)(ii)  hereof  over the
Purchase  Price and (B) with respect to each Right,  substitute  for such Common
Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction
in the Purchase  Price,  (3) Common  Shares (to the extent  available)  or other
equity securities of the Company,  (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 (less the amount of any  reduction in the Purchase  Price),
where such aggregate value has been determined by the Board of Directors,  based
upon the advice of a nationally  recognized  investment banking firm selected by
the Board of  Directors.  To the extent that  action is to be taken  pursuant to
this  Section  11(a)(iii),  the  Company  (1)  shall  provide,  subject  to  the
exceptions  specified in Section 11(a)(ii) hereof, that such action shall to the
maximum extent possible apply uniformly to the holders of all outstanding Rights
that shall not have become null and void and (2) may suspend the  exercisability
of the Rights for up to 90 days in order to seek any  corporate  or  shareholder
authorizations,  to  decide  the  appropriate  form of  distribution  to be made
pursuant to the second sentence of this section, to determine the value thereof,
or to take any combination of such actions. 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.

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

                                       14
<PAGE>

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

         (d) (i) For the purpose of any computation hereunder,  the "current per
share  market  price" of any  security  (a  "Security"  for the  purpose of this
Section  11(d)(i)) on any  particular  date shall be deemed to be the average of
the daily  closing  prices  per share of such  Security  for the 30  consecutive
Trading Days (as such term is  hereinafter  defined)  immediately  prior to such
date;  provided,  however,  that in the event that the current per share  market
price of the Security is determined  during a period  following the announcement
by the  issuer  of such  Security  of (A) a  dividend  or  distribution  on such
Security payable in shares of such Security or securities  convertible into such
shares, or (B) any subdivision, combination or reclassification of such Security
and 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 reflect the
current market price per share  equivalent of such  Security.  The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the bid and asked  prices,  regular way,
in either case as reported in the principal  consolidated  transaction reporting
system with  respect to  securities  listed or admitted to trading on the Nasdaq
Stock Market ("NASDAQ") or, if the Security is not listed or admitted to trading
on NASDAQ,  as  reported in the  principal  consolidated  transaction  reporting
system with respect to securities  listed on the principal  national  securities
exchange  on which the  Security  is listed or  admitted  to trading  or, if the
Security  is not  listed or  admitted  to  trading  on any  national  securities
exchange,  the last quoted  price or, if not so quoted,  the average of the high
bid and low asked prices in the  over-the-counter  market, as reported by NASDAQ
or such other  system then in use,  or, if on any such date the  Security is not
quoted by any such organization, the average of the closing bid and asked prices
as  furnished  by a  professional  market  maker making a market in the Security
selected by the Board of Directors  or, if on any such date no such market maker
is making a market in the Security,  the fair value of the Security on such date
as determined  in good faith by the Board of  Directors.  The term "Trading Day"
shall mean a day on which the principal  national  securities  exchange on which
the  Security is listed or admitted  to trading is open for the  transaction  of
business  or, if the  Security  is not  listed or  admitted  to  trading  on any
national securities exchange, a Business Day.

                                       15
<PAGE>

                  (ii)  For  the  purpose  of  any  computation  hereunder,  the
"current per share market price" of the Preference Shares shall be determined in
accordance  with the  method set forth in Section  11(d)(i).  If the  Preference
Shares are not publicly  traded,  the  "current  per share market  price" of one
Preference Share shall be conclusively deemed to be the current per share market
price  of  one  Common  Share  as  determined   pursuant  to  Section   11(d)(i)
(appropriately  adjusted to reflect any stock split,  stock  dividend or similar
transaction  occurring  after the date hereof),  multiplied by one thousand.  If
neither the Common  Shares nor the  Preference  Shares are  publicly  held or so
listed or traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent.

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

                                       16
<PAGE>

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

         (g) All  Rights  originally  issued by the  Company  subsequent  to any
adjustment  made to the Purchase  Price  hereunder  shall  evidence the right to
purchase,  at the  adjusted  Purchase  Price,  the  number  of  1/1,000ths  of a
Preference  Share  purchasable  from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

         (h) Unless the Company shall have exercised its election as provided in
Section  11(i),  upon each  adjustment of the Purchase  Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding  immediately
prior to the making of such adjustment  shall  thereafter  evidence the right to
purchase,  at the  adjusted  Purchase  Price,  that  number of  1/1,000ths  of a
Preference Share (calculated to the nearest 1/1,000,000th of a Preference Share)
obtained by (i) multiplying (x) the number of 1/1,000ths of a share covered by a
Right  immediately  prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so  obtained  by the  Purchase  Price in effect  immediately  after such
adjustment of the Purchase Price.

         (i) The Company may elect on or after the date of any adjustment of the
Purchase  Price  to  adjust  the  number  of  Rights,  in  substitution  for any
adjustment in the number of 1/1,000ths of a Preference  Share  purchasable  upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights  shall be  exercisable  for the number of  1/1,000ths  of a
Preference  Share for which a Right was  exercisable  immediately  prior to such
adjustment.  Each Right held of record prior to such adjustment of the number of
Rights  shall  become  that  number of Rights  (calculated  to the  nearest  one
ten-thousandth)  obtained by dividing the Purchase  Price in effect  immediately
prior to  adjustment  of the  Purchase  Price by the  Purchase  Price in  effect
immediately  after  adjustment of the Purchase  Price.  The Company shall make a
public  announcement of its election to adjust the number of Rights,  indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment  to be made.  This record date may be the date on which the  Purchase
Price is adjusted or any day  thereafter,  but, if the Right  Certificates  have
been  issued,  shall  be at  least 10 days  later  than  the date of the  public
announcement.  If Right  Certificates have been issued,  upon each adjustment of
the number of Rights  pursuant to this  Section  11(i),  the Company  shall,  as
promptly as  practicable,  cause to be distributed to holders of record of Right
Certificates  on such  record  date Right  Certificates  evidencing,  subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right  Certificates  held by such holders prior to the date of  adjustment,  and
upon  surrender  thereof,  if required by the  Company,  new Right  Certificates
evidencing  all the Rights to which such  holders  shall be entitled  after such
adjustment.  Right  Certificates so to be distributed shall be issued,  executed
and  countersigned  in the manner provided for herein and shall be registered in
the names of the  holders of record of Right  Certificates  on the  record  date
specified in the public announcement.

                                       17
<PAGE>

         (j)  Irrespective  of any adjustment or change in the Purchase Price or
the number of 1/1,000ths of a Preference Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase  Price and the number of 1/1,000ths  of a Preference  Share
which were expressed in the initial Right Certificates issued hereunder.

         (k) Before  taking any action that would cause an  adjustment  reducing
the  Purchase  Price  below  1/1,000th  of the then par  value,  if any,  of the
Preference  Shares issuable upon exercise of the Rights,  the Company shall take
any corporate  action which may, in the opinion of its counsel,  be necessary in
order  that  the  Company   may  validly  and  legally   issue  fully  paid  and
nonassessable Preference Shares at such adjusted Purchase Price.

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

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

         (n) In the event that at any time after the date of this  Agreement and
prior to the  Distribution  Date,  the  Company  shall  (i)  declare  or pay any
dividend  on the  Common  Shares  payable  in  Common  Shares  or (ii)  effect a
subdivision,   combination   or   consolidation   of  the   Common   Shares  (by
reclassification  or otherwise  than by payment of  dividends in Common  Shares)
into a greater or lesser number of Common Shares,  then in any such case (A) the
number of  1/1,00ths  of a Preference  Share  purchasable  after such event upon
proper  exercise of each Right shall be determined by multiplying  the number of
1/1,000ths of a Preference Share so purchasable  immediately prior to such event
by a fraction, the numerator of which is the number of Common Shares outstanding
immediately  before  such  event and the  denominator  of which is the number of
Common  Shares  outstanding  immediately  after such event,  and (B) each Common
Share outstanding immediately after such event shall have issued with respect to
it that number of Rights which each Common Share  outstanding  immediately prior
to such event had issued with  respect to it. The  adjustments  provided  for in
this  Section  11(n)  shall be made  successively  whenever  such a dividend  is
declared  or  paid  or  such a  subdivision,  combination  or  consolidation  is
effected.

                                       18
<PAGE>

         Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever  an  adjustment  is made as  provided  in Section 11 or 13 hereof,  the
Company shall promptly (a) prepare a certificate  setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the  Rights  Agent and with each  transfer  agent for the  Common  Shares or the
Preference  Shares a copy of such  certificate and (c) subject to Section 25(c),
mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof.  Notwithstanding the foregoing sentence,  the failure of
the Company to give such notice shall not affect the validity of or the force or
effect of or the requirement of such adjustment.

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

         (a) In the event,  directly or  indirectly,  at any time after a Person
has become an Acquiring Person, (x) the Company shall consolidate with, or merge
with and into,  any other  Person,  (y) any Person  shall  consolidate  with the
Company,  or  merge  with  and into the  Company  and the  Company  shall be the
continuing or surviving  corporation of such merger and, in connection with such
merger,  all or part of the Common Shares shall be changed into or exchanged for
stock or other  securities  of any other  Person (or the Company) or cash or any
other property,  or (z) the Company shall sell or otherwise  transfer (or one or
more of its  Subsidiaries  shall  sell or  otherwise  transfer),  in one or more
transactions,  assets or earning power  aggregating 50% or more of the assets or
earning  power of the  Company  and its  Subsidiaries  (taken as a whole) to any
other  Person  other  than  the  Company  or one  or  more  of its  wholly-owned
Subsidiaries (any such event described in clauses (x), (y) or (z) being referred
to herein as a "Flip-Over Event"), then, and in each such case, proper provision
shall be made so that (i) each holder of a Right  (except as otherwise  provided
herein) shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current  Purchase  Price  multiplied  by the number of
1/1,000ths  of a  Preference  Share  for which a Right is then  exercisable,  in
accordance  with the terms of this  Agreement and in lieu of Preference  Shares,
such number of validly issued,  fully paid,  non-assessable  and freely tradable
Common Shares of the Principal  Party (as  hereinafter  defined)  (including the
Company as successor thereto or as the surviving corporation),  unencumbered and
not subject to any liens, encumbrances, rights of call or first refusal or other
adverse  claims,  as shall equal the result obtained by (A) multiplying the then
current  Purchase  Price by the number of 1/1,000ths  of a Preference  Share for
which a Right is  exercisable  immediately  prior to the first  occurrence  of a
Flip-Over  Event  (or,  if a  Flip-In  Event  has  occurred  prior to the  first
occurrence of a Flip-Over Event,  multiplying the number of such 1/1,000ths of a
Preference  Share  for which a Right was  exercisable  immediately  prior to the
first  occurrence  of a  Flip-Over  Event  times  the  Purchase  Price in effect
immediately  prior to such first  occurrence),  and dividing that product by (B)
50% of the then  current  per share  market  price of the Common  Shares of such
Principal  Party  (determined  pursuant to Section  11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the Principal
Party  shall  thereafter  be liable  for,  and shall  assume,  by virtue of such
consolidation,  merger, sale or transfer,  all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed  hereunder  to  refer to such  Principal  Party,  it  being  specifically
intended that the  provisions of Section 11 hereof shall apply to such Principal
Party following the first occurrence of a Flip-Over  Event;  (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient  number of its Common Shares in accordance  with Section 9 hereof) in
connection  with  such  consummation  as may be  necessary  to  assure  that the
provisions  hereof shall  thereafter be applicable,  as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise of
the Rights;  and (v) the  provisions of Section  11(a)(i)  hereof shall be of no
effect following the first occurrence of any Flip-Over Event.

                                       19
<PAGE>

         (b)      "Principal Party" shall mean

                  (i) In the case of any transaction  described in (x) or (y) of
the first  sentence  of  Section  13(a),  the  Person  that is the issuer of any
securities  into which Common Shares of the Company are converted in such merger
or  consolidation,  and if no securities  are so issued,  the Person that is the
other party to the merger or consolidation; and

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

provided,  however,  that in any such  case,  (x) if the  Common  Shares of such
Person are not at such time and have not been  continuously  over the  preceding
12-month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect  Subsidiary of another Person the Common Shares of which
are and have been so  registered,  "Principal  Party"  shall refer to such other
Person; (y) in case such Person is a subsidiary, directly or indirectly, of more
than  one  Person,  the  Common  Shares  of all of which  are and  have  been so
registered,  "Principal  Party"  shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value of shares
held  by the  public,  and  (z) in  case  such  Person  is  owned,  directly  or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly,  by the same Person,  the rules set forth in (x) and (y)
above shall apply to each of the chains of ownership  having an interest in such
joint  venture as if such party were a  Subsidiary  of both or all of such joint
venturers  and  the  Principal  Parties  in  each  such  chain  shall  bear  the
obligations  set forth in this  Section 13 in the same ratio as their  direct or
indirect interests in such Person bear to the total of such interests.

         (c) The Company shall not  consummate any such  consolidation,  merger,
sale or transfer 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  paragraphs  (a) and (b) of this Section 13
and  further  providing  that,  as soon as  practicable  after  the  date of any
consolidation,  merger or sale or transfer of assets  mentioned in paragraph (a)
of this Section 13, the Principal Party will

                                       20
<PAGE>

                  (i)  prepare  and  file a  registration  statement  under  the
Securities  Act with respect to the Rights and the securities  purchasable  upon
exercise of the Rights on an appropriate  form, will use its best efforts (A) to
cause such  registration  statement to become  effective as soon as  practicable
after such filing, (B) to cause such registration  statement to remain effective
(with a prospectus at all times meeting the  requirements of the Securities Act)
until the date of  expiration  of the Rights,  and (C) to similarly  comply with
applicable  state securities laws, and use its best efforts to list (or continue
the listing of) the rights and the securities  purchasable  upon exercise of the
rights on a national securities exchange; and

                  (ii)  will  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 (or any
successor form) under the Exchange Act.

The  Company  shall  not  consummate  any such  consolidation,  merger,  sale or
transfer  unless prior  thereto the Company and such issuer shall have  executed
and delivered to the Rights Agent a  supplemental  agreement so  providing.  The
Company  shall not enter into any  transaction  of the kind  referred to 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.  The
provisions of this Section 13 shall  similarly  apply to  successive  mergers or
consolidations or sales or other transfers.

         Section 14. Fractional Rights and Fractional Shares.

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

                                       21
<PAGE>

         (b) The Company shall not be required to issue  fractions of Preference
Shares  (other than  fractions  which are integral  multiples of 1/1,000ths of a
Preference  Share)  upon  exercise of the Rights or to  distribute  certificates
which evidence  fractional  Preference  Shares (other than  fractions  which are
integral multiples of 1/1,000th of a Preference Share).  Fractions of Preference
Shares in integral  multiples of  1/1,000th  of a  Preference  Share may, at the
election of the Company,  be evidenced by  depositary  receipts,  pursuant to an
appropriate  agreement  between  the Company  and a  depositary  selected by it;
provided,  that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as  beneficial  owners of the  Preference  Shares  represented  by such
depositary  receipts.  In lieu of  fractional  Preference  Shares  that  are not
integral  multiples of 1/1,000th of a Preference Share, the Company shall pay to
the  registered  holders  of Right  Certificates  at the time  such  Rights  are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preference  Share.  For the purposes of this Section
14(b), the current market value of a Preference Share shall be the closing price
of a Preference Share (as determined  pursuant to the second sentence of Section
11(d)(i)  hereof)  for the  Trading  Day  immediately  prior to the date of such
exercise.

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

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

         Section 16.  Agreement of Right  Holders.  Every holder of a Right,  by
accepting such Right,  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 not be evidenced by
a  Rights  Certificate  and will be  transferable  only in  connection  with the
transfer of the Common Shares;

                                       22
<PAGE>

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

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

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

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

         Section 18. Concerning the Rights Agent.

         (a)  The  Company  agrees  to  pay  to  the  Rights  Agent   reasonable
compensation  for all services  rendered by it hereunder and, from time to time,
on demand of the Rights  Agent,  its  reasonable  expenses  and counsel fees and
other  disbursements  incurred in the  administration  of this Agreement and the
exercise and  performance  of its duties  hereunder.  The Company also agrees to
indemnify  the Rights  Agent for,  and to hold it  harmless  against,  any loss,
liability,  or  expense,  incurred  without  negligence,  bad  faith or  willful
misconduct on the part of the Rights Agent,  for anything done or omitted by the
Rights  Agent in  connection  with the  acceptance  and  administration  of this
Agreement,  including  the costs and expenses of defending  against any claim of
liability in the premises. The Rights Agent shall promptly notify the Company of
any claim for which it may seek  indemnity.  The Company  shall  defend any such
claim for which the Rights Agent is entitled to  indemnification  and the Rights
Agent shall  cooperate  in the  defense.  The Rights  Agent may engage  separate
counsel to review  the  progress  of the  defense to any claim and to advise the
Rights Agent as to its obligation to cooperate in such defense,  and the Company
shall pay the reasonable fees and expenses of such counsel.

                                       23
<PAGE>

         (b) The Rights  Agent shall be  protected  and shall incur no liability
for, or in respect of any action taken,  suffered or omitted by it in connection
with,  its   administration  of  this  Agreement  in  reliance  upon  any  Right
Certificate  or certificate  for the  Preference  Shares or Common Shares or for
other securities of the Company,  instrument of assignment or transfer, power of
attorney,   endorsement,   affidavit,   letter,  notice,   direction,   consent,
certificate (including  certificates delivered under Section 12), statement,  or
other paper or document believed by it to be genuine and to be signed,  executed
and, where necessary, verified or acknowledged, by the proper person or persons,
or otherwise upon the advice of counsel as set forth in Section 20 hereof.

         (c) The Rights Agent has no duty to determine when an adjustment  under
this Agreement  should be made, how it should be made, or what it should be. The
Rights  Agent  makes  no  representation  as to the  validity  or  value  of any
securities or assets issued upon exercise of the Rights.  The Rights Agent shall
not be responsible for the Company's failure to comply with this Agreement.  Any
Co-Rights  Agent named  under  Section 2 hereof  shall have the same  protection
under this Section as the Rights Agent.

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

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

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

                                       24
<PAGE>

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

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

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

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

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

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

                                       25
<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 of Directors,  the Chief Executive Officer, the
President,  any Vice  President,  the Treasurer or the Secretary of the Company,
and to apply to such officers for advice or  instructions in connection with its
duties,  and it shall not be liable for any action  taken or  suffered  by it in
good faith in accordance with  instructions of any such officer or for any delay
in acting while waiting for those instructions.

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

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

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

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

                                       26
<PAGE>

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

         Section 23. Redemption.

         (a) The Board of  Directors  may, at its  option,  at any time prior to
such time as any Person  becomes an  Acquiring  Person,  redeem all but not less
than all of the then outstanding Rights at a redemption price of $.01 per Right,
as such amount may be appropriately  adjusted to reflect any stock split,  stock
dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter  referred to as the "Redemption  Price"). The redemption
of the Rights by the Board of Directors  may be made  effective at such time, on
such  basis  and with such  conditions  as the  Board of  Directors  in its sole
discretion may establish.

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

                                       27
<PAGE>

         Section 24. Exchange.

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

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

         (c) In the event  that  there  shall not be  sufficient  Common  Shares
issued but not  outstanding or authorized but unissued to permit any exchange of
Rights as  contemplated in accordance with this Section 24, the Company may take
any such action as may be necessary to authorize  additional  Common  Shares for
issuance upon exchange of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to authorize
such  additional  Common  Shares in a timely  manner,  the  Company  may, at its
option,  substitute, for each Common Share that would otherwise be issuable upon
exchange of a Right, a number of Preference Shares or fraction thereof such that
the current per share market price of one  Preference  Share  multiplied by such
number or fraction is equal to the current per share  market price of one Common
Share as of the date of issuance of such Preference Shares or fraction thereof.

                                       28
<PAGE>

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

         Section 25. Notice of Certain Events.

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

         (b) In case a Flip-In Event shall occur, then the Company shall as soon
as  practicable  thereafter  give to each  holder  of a  Right  Certificate,  in
accordance  with Section 26 hereof,  a notice of the  occurrence  of such event,
which notice shall  describe  such event and the  consequences  of such event to
holders of Rights under Section 11(a)(ii) hereof.

                                       29
<PAGE>

         (c) Notwithstanding  anything in this Agreement to the contrary,  prior
to the  Distribution  Date a  filing  by the  Company  with the  Securities  and
Exchange  Commission  shall  constitute  sufficient  notice  to the  holders  of
securities of the Company,  including the Rights, for purposes of this Agreement
and no other notice need be given.

         Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights  Agent or by the holder of any Right  Certificate
to or on the 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:

                  Gulf Island Fabrication, Inc.
                  583 Thompson Road
                  Houma, Louisiana  70363
                  Attention: Corporate Secretary

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

                  American Stock Transfer & Trust Company, LLC
                  59 Maiden Lane
                  New York, New York 10038
                  Attention: Corporate Trust Department

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

         Section 27.  Supplements and  Amendments.  The Company may from time to
time  supplement,  amend or restate this  Agreement  without the approval of any
holders of Rights in order to cure any  ambiguity,  to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions  herein,  to  extend  the term of the  Rights,  or to make any  other
provisions  with respect to the Rights  which the Company may deem  necessary or
desirable,  any such  supplement,  amendment or restatement to be evidenced by a
writing signed by the Company and the Rights Agent; provided, however, that from
and after such time as any Person  becomes an Acquiring  Person,  this Agreement
shall not be amended in any manner which would adversely affect the interests of
the holders of Rights.

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

                                       30
<PAGE>

         Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company,  the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date,  the Common  Shares) any legal or equitable  right,  remedy or claim under
this Agreement;  but this Agreement shall be for the sole and exclusive  benefit
of the  Company,  the  Rights  Agent  and the  registered  holders  of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).

         Section  30.  Severability.   If  any  term,  provision,   covenant  or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

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

         Section 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.

         Section 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.

         Section 34.  Determinations and Actions by the Board of Directors.  The
Board of Directors  shall have the  exclusive  power and authority to administer
this Agreement and to exercise the rights and powers specifically granted to the
Board of Directors or to the Company,  or as may be necessary  and  advisable in
the administration of this Agreement,  including,  without limitation, the right
and power to (i)  interpret the  provisions of this  Agreement and (ii) make all
determinations  deemed  necessary or advisable  for the  administration  of this
Agreement  (including,  without  limitation,  a  determination  to redeem or not
redeem the Rights or to amend or not amend this  Agreement).  All such  actions,
calculations,  interpretations  and determinations  that are done or made by the
Board of Directors in good faith shall be final,  conclusive  and binding on the
Company,  the Rights Agent,  the holders of the Rights,  as such,  and all other
parties.

                                       31
<PAGE>

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

ATTEST:                              GULF ISLAND FABRICATION, INC.

/s/ Catherine Blume                  By:      /s/ Kerry J. Chauvin
----------------------                   ---------------------------------------
                                              Name: Kerry J. Chauvin
                                              Title: Chief Executive Officer

ATTEST:                                       AMERICAN STOCK TRANSFER & TRUST
                                              COMPANY, LLC

 /s/ Joseph F. Wolf                  By:      /s/ Herbert J. Lemmer
----------------------                   ---------------------------------------
                                              Name: Herbert J. Lemmer
                                              Title: Vice President

                                       32
<PAGE>

                                                                       EXHIBIT A
                                                             To Rights Agreement

                              ARTICLES OF AMENDMENT
                                     to the
                              AMENDED AND RESTATED
                            ARTICLES OF INCORPORATION
                                       of
                          GULF ISLAND FABRICATION, INC.

         Gulf  Island   Fabrication,   Inc.,   a  Louisiana   corporation   (the
"Corporation"),  by  and  through  its  undersigned  Vice  President  and  Chief
Financial  Officer and by  authority  of its Board of  Directors  (the "Board of
Directors"), does hereby certify:

         FIRST:  Immediately prior hereto,  the authorized  capital stock of the
Corporation consisted of (i) 20,000,000 shares of Common Stock, no par value per
share; and (ii) 5,000,000 shares of Preferred Stock, no par value per share. The
Amended and Restated Articles of Incorporation of the Corporation filed with the
Louisiana  Secretary  of State on February 14,  1997,  sets forth the  authority
vested in the Board of Directors to amend the Articles of  Incorporation  to fix
the relative rights,  preferences and limitations of the shares of any class and
to establish  and fix  variations  in relative  rights as between  series of any
preferred or special class; and

         SECOND:  At a meeting of the Board of Directors held on March 24, 2009,
the  Board  of  Directors,  acting  pursuant  to  Section  33A of  the  Business
Corporation Law of Louisiana, duly adopted resolutions approving an Amendment to
Article III of the Corporation's Amended and Restated Articles of Incorporation,
as in effect prior to the date hereof,  by amending and restating Article III so
as to read in its entirety as follows:

                                   Article III
                                     Capital

         A. Authorized  Stock. The Corporation shall have the authority to issue
an aggregate of 25,000,000  shares of capital stock, of which 20,000,000  shares
shall be Common Stock,  no par value per share,  and  5,000,000  shares shall be
Preferred Stock, no par value per share.

         B. Preferred  Stock.  Shares of Preferred Stock may be issued from time
to time in one or more  series.  Authority  is  hereby  vested  in the  Board of
Directors to amend these Articles of Incorporation  from time to time to fix the
preferences,  limitations and relative rights as between the Preferred Stock and
the Common Stock,  and to fix  variations in the  preferences,  limitations  and
relative rights as between different series of Preferred Stock.

         C. Series A Preferred Stock. The  Corporation's  Series A Participating
Cumulative  Preferred  Stock shall consist of 15,000  shares of Preferred  Stock
having the  preferences,  limitations and relative rights set forth below.  Such
number of shares may be increased or  decreased  by  resolution  of the Board of
Directors; provided, however, that no decrease shall reduce the number of shares
of Series A Participating  Cumulative  Preferred Stock to a number less than the
number of shares  then  outstanding  plus the  number  of  shares  reserved  for
issuance  upon  the  exercise  of  outstanding  options  or  rights  or upon the
conversion of any outstanding  securities issued by the Corporation  convertible
into Series A Participating Cumulative Preferred Stock.

                                      A-1
<PAGE>

                  (1) The holders of Series A Participating Cumulative Preferred
Stock shall have the following dividend rights.

                           (a)  Subject  to the  rights  of the  holders  of any
shares of any series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Participating  Cumulative  Preferred Stock with respect
to  dividends,  the  holders  of  shares of  Series A  Participating  Cumulative
Preferred  Stock shall be entitled to receive,  when,  as and if declared by the
Board of Directors  out of funds legally  available  for the purpose,  quarterly
dividends  payable in cash on the  fifteenth day of March,  June,  September and
December in each year (each such date being  referred to herein as a  "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after  the  first  issuance  of a share  or  fraction  of a share  of  Series  A
Participating Cumulative Preferred Stock, in an amount per share (rounded to the
nearest  cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment hereinafter set forth, 1,000 times the aggregate per share amount
of all cash  dividends,  and 1,000 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other  distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding  shares of
Common Stock (by  reclassification or otherwise),  declared on the Common Stock,
no par value,  of the  Corporation  (the "Common  Stock") since the  immediately
preceding  Quarterly  Dividend  Payment  Date,  or,  with  respect  to the first
Quarterly  Dividend  Payment  Date,  since  the first  issuance  of any share or
fraction of a share of Series A Participating Cumulative Preferred Stock. In the
event the Corporation  shall at any time after March 25, 2009 (the  "Declaration
Date") (i)  declare or pay any  dividend  on Common  Stock  payable in shares of
Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the  amount to which  holders  of shares  of Series A  Participating  Cumulative
Preferred Stock were entitled  immediately  prior to such event under clause (b)
of the  preceding  sentence  shall be adjusted by  multiplying  such amount by a
fraction  the  numerator  of which is the  number  of  shares  of  Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

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

                                      A-2
<PAGE>

                           (c) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Participating  Cumulative Preferred Stock from
the  Quarterly  Dividend  Payment Date next  preceding the date of issue of such
shares of Series A Participating  Cumulative Preferred Stock, unless the date of
issue of such  shares  is  prior to the  record  date  for the  first  Quarterly
Dividend  Payment  Date,  in which case  dividends of such shares shall begin to
accrue from the date of issue of such  shares,  or unless the date of issue is a
Quarterly  Dividend  Payment  Date or is a date  after the  record  date for the
determination  of  holders  of  shares  of  Series  A  Participating  Cumulative
Preferred  Stock  entitled  to receive a  quarterly  dividend  and  before  such
Quarterly  Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative  from such  Quarterly  Dividend  Payment Date.
Accrued but unpaid  dividends  shall not bear  interest.  Dividends  paid on the
shares of Series A  Participating  Cumulative  Preferred Stock in an amount less
than the total amount of such  dividends at the time accrued and payable on such
shares  shall be  allocated  pro rata on a  share-by-share  basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the  determination  of  holders of shares of Series A  Participating  Cumulative
Preferred  Stock  entitled  to receive  payment of a  dividend  or  distribution
declared  thereon,  which record date shall be no more than 45 days prior to the
date fixed for the payment thereof.

                  (2) In addition  to any voting  rights  otherwise  required by
law, the holders of shares of Series A Participating  Cumulative Preferred Stock
shall have the following voting rights:

                           (a)   Subject  to  the   provision   for   adjustment
hereinafter set forth, each share of Series A Participating Cumulative Preferred
Stock shall entitle the holder  thereof to 1,000 votes on all matters  submitted
to a vote of the shareholders of the  Corporation.  In the event the Corporation
shall at any time after the Declaration  Date (i) declare or pay 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 number of votes per share to which
holders  of shares of  Series A  Participating  Preferred  Stock  were  entitled
immediately  prior to such event shall be adjusted by multiplying such number by
a  fraction  the  numerator  of which is the  number of  shares of Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

                           (b) Except as otherwise provided in the Corporation's
Articles  of  Incorporation  or by law,  the  holders  of  shares  of  Series  A
Participating  Cumulative  Preferred  Stock and the  holders of shares of Common
Stock shall vote  together as one class on all  matters  submitted  to a vote of
shareholders of the Corporation.

                           (c) Except as set forth  herein,  holders of Series A
Participating Cumulative Preferred Stock shall have no special voting rights and
their consent  shall not be required  (except to the extent they are entitled to
vote with holders of Common Stock as set forth  herein) for taking any corporate
action.

                  (3) Any shares of Series A Participating  Cumulative Preferred
Stock  purchased  or  otherwise  acquired  by  the  Corporation  in  any  manner
whatsoever  shall be  retired  and  cancelled  promptly  after  the  acquisition
thereof.  All such shares shall upon their  cancellation  become  authorized but
unissued  shares of Preferred  Stock and may be reissued as part of a new series
of  Preferred   Stock  to  be  created  by  resolution  or  resolutions  of  the
shareholders  or  the  Board  of  Directors,   subject  to  the  conditions  and
restrictions   on  issuance   set  forth  in  the   Corporation's   Articles  of
Incorporation.

                                      A-3
<PAGE>

                  (4) The Corporation shall abide by the following restrictions:

                           (a) Whenever  quarterly  dividends or other dividends
or  distributions  payable on the Series A  Participating  Cumulative  Preferred
Stock as provided for in Section 1 are in arrears or the Corporation shall be in
default  in  payment  thereof,  thereafter  and until  all  accrued  and  unpaid
dividends  and  distributions,  whether or not  declared,  on shares of Series A
Participating Cumulative Preferred Stock outstanding shall have been paid or set
aside for payment in full, and in addition to any and all other rights which any
holder of shares of Series A Participating  Cumulative  Preferred Stock may have
in such circumstances, the Corporation shall not:

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

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

                           3.       redeem or purchase or otherwise  acquire for
                                    consideration  shares of any  stock  ranking
                                    junior  (either  as  to  dividends  or  upon
                                    liquidation,  dissolution  or winding up) to
                                    the   Series  A   Participating   Cumulative
                                    Preferred    Stock,    provided   that   the
                                    Corporation may at any time redeem, purchase
                                    or  otherwise  acquire  shares  of any  such
                                    junior  stock in exchange  for shares of any
                                    stock  of  the  Corporation  ranking  junior
                                    (either as to dividends or upon liquidation,
                                    dissolution  or winding  up) to the Series A
                                    Participating Cumulative Preferred Stock; or

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

                                      A-4
<PAGE>

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

                  (5) Upon any  liquidation,  dissolution  or  winding up of the
Corporation,  the holders of Series A Participating  Cumulative  Preferred Stock
shall have the following rights:

                           (a) No distribution  shall be made (1) to the holders
of shares of stock ranking junior  (either as to dividends or upon  liquidation,
dissolution or winding up) to the Series A  Participating  Cumulative  Preferred
Stock unless,  prior  thereto,  the holders of shares of Series A  Participating
Cumulative  Preferred Stock shall have received $1,000 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon,  whether or not
declared, to the date of such payment,  provided that following such payment the
holders of Series A  Participating  Cumulative  Preferred Stock shall be further
entitled to receive an aggregate amount per share,  subject to the provision for
adjustment  hereinafter set forth,  equal to 1,000 times the aggregate amount to
be  distributed  per share to  holders  of shares of Common  Stock or (2) to the
holders of shares of stock  ranking on a parity  (either as to dividends or upon
liquidation,  dissolution  or  winding  up)  with  the  Series  A  Participating
Cumulative  Preferred Stock,  except  distributions made ratably on the Series A
Participating Cumulative Preferred Stock and all such parity stock in proportion
to the total  amounts to which the holders of all such shares are entitled  upon
such liquidation, dissolution or winding up.

                           (b)  In  the  event,  however,  that  there  are  not
sufficient  assets  available to permit  payment in full of the  above-described
liquidation preference of the Series A Participating  Cumulative Preferred Stock
and the liquidation  preferences of all other series of Preferred Stock, if any,
which rank on a parity  with the  Series A  Participating  Cumulative  Preferred
Stock, then such remaining assets shall be distributed ratably to the holders of
all  such  parity  shares  in  proportion   to  their   respective   liquidation
preferences.

                           (c) In the event the  Corporation  shall at any time,
after the  Declaration  Date,  declare  or pay a dividend  on the  Common  Stock
payable in shares of Common Stock,  or effect a subdivision  or  combination  or
consolidation of the outstanding shares of Common Stock (by  reclassification or
otherwise  than by  payment  of a  dividend  in shares of Common  Stock)  into a
greater or lesser number of shares of Common  Stock,  then in each such case the
aggregate amount to which holders of shares of Series A Participating Cumulative
Preferred Stock were entitled  immediately prior to such event under the proviso
in  clause  (1) of  paragraph  (a) of  this  Section  5  shall  be  adjusted  by
multiplying  such amount by a fraction  the  numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

                                      A-5
<PAGE>

                  (6)  In  case   the   Corporation   shall   enter   into   any
consolidation,  merger,  combination or other transaction in which the shares of
Common Stock are exchanged for or converted into other stock or securities, cash
and/or  any  other  property,  then in any such  case  the  shares  of  Series A
Participating  Cumulative  Preferred  Stock shall at the same time be  similarly
exchanged  or  converted in an amount per share  (subject to the  provision  for
adjustment  hereinafter set forth) equal to 1,000 times the aggregate  amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be,  into  which or for which  each share of Common  Stock is  converted  or
exchanged.  In the event the Corporation shall at any time after the Declaration
Date (i) declare or pay any dividend on Common Stock payable in shares of Common
Stock,  (ii)  subdivide  the  outstanding  Common  Stock,  or (iii)  combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the  preceding  sentence with respect to the exchange or
conversion of shares of Series A Participating  Cumulative Preferred Stock shall
be adjusted by  multiplying  such amount by a fraction the numerator of which is
the number of shares of Common Stock  outstanding  immediately  after such event
and the  denominator  of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  (7) The shares of Series A Participating  Cumulative Preferred
Stock shall not be redeemable.

                  (8) The  Series A  Participating  Cumulative  Preferred  Stock
shall rank,  with respect to the payment of dividends  and the  distribution  of
assets,  junior to all  shares  or  series  of shares of any other  class of the
Corporation's Preferred Stock.

                  (9) The Articles of Incorporation of the Corporation shall not
be further  amended in any manner  which  would  materially  alter or change the
powers,  preferences or special rights of the Series A Participating  Cumulative
Preferred Stock so as to affect them adversely  without the affirmative  vote of
the  holders  of at least  two-thirds  of the  outstanding  shares  of  Series A
Participating Cumulative Preferred Stock, voting separately as a class.

                  (10) Series A Participating  Cumulative Preferred Stock may be
issued in fractions of a share which shall entitle the holder,  in proportion to
such holder's  fractional shares, to exercise voting rights,  receive dividends,
participate  in  distributions  and to have the  benefit of all other  rights of
holders of Series A Participating Cumulative Preferred Stock.

                               * * * * * * * * * *

                                      A-6
<PAGE>

         IN WITNESS  WHEREOF,  the undersigned  duly authorized  officers of the
Corporation  have  executed and  delivered  these  Articles of Amendment on this
_____ day of March, 2009.

                                                 GULF ISLAND FABRICATION, INC.

                                                 By:
                                                      --------------------------
                                                 Name:   Robin A. Seibert
                                                 Title:  Vice President and
                                                         Chief Financial Officer

                                      A-7
<PAGE>

                                 ACKNOWLEDGMENT

STATE OF LOUISIANA

PARISH OF __________

                  BEFORE  ME, the  undersigned  authority,  personally  came and
appeared  Robin A.  Seibert,  to me known to be the  Vice  President  and  Chief
Financial Officer of Gulf Island Fabrication,  Inc., and the person who executed
the  foregoing  instrument  in  such  capacity,   and  who,  being  duly  sworn,
acknowledged  in my presence and in the presence of the  undersigned  witnesses,
that he was  authorized  to and did execute  the  foregoing  instrument  in such
capacity for such corporation, as its and their free act and deed.

                  IN  WITNESS  WHEREOF,  the  appearer,  witnesses  and  I  have
hereunto affixed our hands on this ______ day of March, 2009.

WITNESSES:

-------------------------------------      -------------------------------------
Name:
       ------------------------------

-------------------------------------
Name:
       ------------------------------

                    ----------------------------------------
                                  NOTARY PUBLIC

                                      A-8
<PAGE>

                                                                       EXHIBIT B
                                                             To Rights Agreement

                            Form of Right Certificate

Certificate No. R-
                                                                 ________ Rights

               NOT EXERCISABLE AFTER MARCH 25, 2012 OR EARLIER IF
              REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
                 TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
                 ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

                                Right Certificate

                          GULF ISLAND FABRICATION, INC.

         This certifies that  _________________________,  or registered assigns,
is the registered  owner of the number of Rights set forth above,  each of which
entitles the owner thereof,  subject to the terms,  provisions and conditions of
the  Rights  Agreement,  dated as of March 25,  2009 (the  "Rights  Agreement"),
between Gulf Island Fabrication,  Inc., a Louisiana corporation (the "Company"),
and  American  Stock  Transfer & Trust  Company,  LLC (the "Rights  Agent"),  to
purchase from the Company at any time after the Distribution  Date (as such term
is defined in the Rights  Agreement)  and prior to 5:00 P.M.,  local time in the
State of the  principal  office of the Rights  Agent,  on March 25,  2012 at the
principal  office of the  Rights  Agent,  or at the office of its  successor  as
Rights  Agent,  1/1,000th  of a fully  paid  non-assessable  share  of  Series A
Participating   Cumulative   Preferred  Stock,  no  par  value  per  share  (the
"Preference  Shares"),  of the  Company,  at a  purchase  price  of  $30.00  per
1/1,000th of a Preference Share (the "Purchase  Price"),  upon  presentation and
surrender of this Right  Certificate  with the Form of Election to Purchase duly
executed.  The number of Rights  evidenced  by this Right  Certificate  (and the
number of 1/1,000ths of a Preference  Share which may be purchased upon exercise
hereof) set forth above,  and the Purchase Price set forth above, are the number
and  Purchase  Price as of March 25,  2009,  based on the  Preference  Shares as
constituted as of such date. As provided in the Rights  Agreement,  the Purchase
Price and the number of 1/1,000ths of a Preference  Share (or other  securities)
which may be purchased  upon the exercise of the Rights  evidenced by this Right
Certificate  are subject to  modification  and adjustment upon the occurrence of
certain events.

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

                                      B-1
<PAGE>

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

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this  Certificate may be (i) redeemed by the Company at a redemption price of
$.01 per Right or (ii)  exchanged in whole or in part for  Preference  Shares or
shares of the Company's Common Stock, no par value.

         No fractional Preference Shares will be issued upon the exercise of any
Right or Rights  evidenced  hereby  (other  than  fractions  which are  integral
multiples of 1/1,000th of a Preference Share,  which may, at the election of the
Company,  be  evidenced  by  depositary  receipts),  but in lieu  thereof a cash
payment will be made, as provided in the Rights Agreement.

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

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

                                      B-2
<PAGE>

         WITNESS the facsimile  signature of the proper  officers of the Company
and its corporate seal. Dated as of _______________, 20__.

ATTEST:                                        GULF ISLAND FABRICATION, INC.

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

Countersigned:

AMERICAN STOCK TRANSFER &
TRUST COMPANY, LLC

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

                                      B-3
<PAGE>

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

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

           FOR VALUE RECEIVED hereby sells, assigns and transfers unto

                  (Please print name and address of transferee)

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

Dated:

                                    Signature

Signature Guaranteed:

         Signatures must be guaranteed by a bank, trust company,  broker, dealer
or other eligible institution  participating in a recognized signature guarantee
medallion program.

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

                                    Signature

                                      B-4
<PAGE>

                          FORM OF ELECTION TO PURCHASE

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

To:      GULF ISLAND FABRICATION, INC.

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

            Please insert social security or other identifying number

                         (Please print name and address)

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

            Please insert social security or other identifying number

                         (Please print name and address)

Dated:

                                    Signature

Signature Guaranteed:

         Signatures must be guaranteed by a bank, trust company,  broker, dealer
or other eligible institution  participating in a recognized signature guarantee
medallion program.

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

                                    Signature

                                     NOTICE

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

                                      B-5
<PAGE>

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

                                      B-6
<PAGE>

                                                                       EXHIBIT C
                                                             To Rights Agreement

                 SUMMARY OF RIGHTS TO PURCHASE PREFERENCE SHARES

         On March 24, 2009,  the Board of Directors of Gulf Island  Fabrication,
Inc. (the "Company")  declared a dividend of one preference share purchase right
(a  "Right")  for each  outstanding  share of common  stock,  no par value  (the
"Common Shares"),  of the Company. The dividend was payable on March 25, 2009 to
shareholders  of record at close of  business  on March  24,  2009 (the  "Record
Date").  The Company has also issued,  and will  continue to issue,  Rights with
respect to new Common Shares issued after the Record Date. The  description  and
terms of the  Rights are set forth in a Rights  Agreement  dated as of March 25,
2009 between the Company and American Stock  Transfer & Trust  Company,  LLC, as
the Rights Agent (the "Rights Agent").

         Under the Rights  Agreement,  each Right entitles the registered holder
to purchase  from the  Company  1/1,000th  of a share of Series A  Participating
Cumulative Preferred Stock, no par value per share (the "Preference Shares"), of
the  Company  at a price of $30.00  per  1/1,000th  of a  Preference  Share (the
"Purchase Price"), subject to adjustment.  The summary description of the Rights
that follows is not intended to be complete, and is qualified in its entirety by
reference  to the  Rights  Agreement,  which is  hereby  incorporated  herein by
reference.

Detachment and Transfer of Rights

         Until  the  earlier  to  occur  of  (i)  10  days  following  a  public
announcement  that a person or group of  affiliated  or  associated  persons (an
"Acquiring  Person")  have acquired  beneficial  ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors  prior to such time as any person
or group of  affiliated  persons  becomes an  Acquiring  Person)  following  the
commencement  of, or  announcement  of an  intention  to make, a tender offer or
exchange  offer  the  consummation  of  which  would  result  in the  beneficial
ownership by a person or group of 15% or more of the  outstanding  Common Shares
(the earlier of such dates being  called the  "Distribution  Date"),  the Rights
will  be  evidenced,  with  respect  to  any of the  Common  Share  certificates
outstanding as of the Record Date, by such Common Share  certificate with a copy
of this Summary of Rights attached thereto.

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

                                      C-1
<PAGE>

Exercisability of Rights

         The Rights are not exercisable until the Distribution  Date. The Rights
will expire on March 25, 2012 (the "Final  Expiration  Date"),  unless the Final
Expiration  Date is  extended  or unless  the  Rights are  earlier  redeemed  or
exchanged by the Company,  in each case,  as described  below.  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.

         The Purchase  Price  payable,  and the number of  Preference  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
Preference  Shares,  (ii) upon the grant to holders of the Preference  Shares of
certain rights or warrants to subscribe for or purchase  Preference  Shares at a
price, or securities convertible into Preference Shares with a conversion price,
less than the then-current  market price of the Preference  Shares or (iii) upon
the   distribution  to  holders  of  the  Preference   Shares  of  evidences  of
indebtedness or assets  (excluding  regular  periodic cash dividends paid out of
earnings or retained earnings or dividends  payable in Preference  Shares) or of
subscription rights or warrants (other than those referred to above).

         The number of  outstanding  Rights and the  number of  1/1,000ths  of a
Preference  Share  issuable  upon  exercise  of each  Right are also  subject to
adjustment  in the  event  of a stock  split  of the  Common  Shares  or a stock
dividend  on the  Common  Shares  payable  in  Common  Shares  or  subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.

         No adjustment in the Purchase Price will be required  until  cumulative
adjustments  require an  adjustment of at least 1% in such  Purchase  Price.  No
fractional  Preference  Shares will be issued  (other than  fractions  which are
integral  multiples  of  1/1,000th  of a  Preference  Share,  which may,  at the
election of the  Company,  be  evidenced  by  depositary  receipts)  and in lieu
thereof,  an  adjustment  in cash will be made based on the market  price of the
Preference Shares on the last trading day prior to the date of exercise.

Terms of Preference Shares

         Preference  Shares  purchasable upon exercise of the Rights will not be
redeemable.  Each  Preference  Share will be entitled to a minimum  preferential
quarterly  dividend  payment equal to the greater of $1 per share or 1,000 times
the cash and non-cash  dividend  declared per Common Share since the immediately
preceding  quarterly  dividend  payment date. In the event of  liquidation,  the
holders of the  Preference  Shares will be  entitled  to a minimum  preferential
liquidation  payment of $1,000  per share,  plus  accrued  and unpaid  dividends
thereon, and will be further entitled to an aggregate payment of 1,000 times the
payment  made per Common  Share.  Each  Preference  Share will have 1,000 votes,
voting  together with the Common  Shares.  Finally,  in the event of any merger,
consolidation  or other  transaction in which Common Shares are exchanged,  each
Preference Share will be entitled to receive 1,000 times the amount received per
Common Share. These rights are protected by customary antidilution provisions.

                                      C-2
<PAGE>

         Because of the nature of the Preference  Shares' dividend,  liquidation
and voting rights,  the value of each 1/1,000th  interest in a Preference  Share
purchasable  upon  exercise of each Right  should  approximate  the value of one
Common Share. The Preference Shares would rank junior to any other series of the
Company's preferred stock.

Flip-In and Flip-Over Rights

         In the event  that any  person  or group of  affiliated  or  associated
persons becomes an Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights  beneficially owned by the Acquiring Person
which will have become  void,  will  thereafter  have the right to receive  upon
exercise  that number of Common  Shares  having a market  value of two times the
exercise price of the Right.

         In the event that the Company is acquired in a merger or other business
combination  transaction  or 50% or more of its  consolidated  assets or earning
power are sold after a person or group has become an  Acquiring  Person,  proper
provision will be made so that each holder of a Right will  thereafter  have the
right to receive,  upon the exercise  thereof at the then current exercise price
of the Right,  that number of shares of common  stock of the  acquiring  company
which at the time of such  transaction will have a market value of two times the
exercise price of the Right.

Redemption and Exchange of Rights

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

         At any time prior to the acquisition by a person or group of affiliated
or associated persons of beneficial  ownership of 15% or more of the outstanding
Common  Shares,  the Board of  Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the  "Redemption  Price").
The  redemption of the Rights may be made  effective at such time, on such basis
and with such  conditions as the Board of Directors in its sole  discretion  may
establish.  Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

Amendment

         The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights.  However, the Board of
Directors  may not  cause a person or group to  become  an  Acquiring  Person by
lowering the threshold  below the percentage  interest that such person or group
already owns. After a person or group becomes an Acquiring Person,  the Board of
Directors may not amend the Rights  Agreement to adversely affect holders of the
Rights.

                                      C-3
<PAGE>

Additional Information

         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. A copy of the
Rights  Agreement  is available  free of charge from the  Company.  This summary
description  of the Rights does not purport to be complete  and is  qualified in
its entirety by reference to the Rights Agreement,  which is hereby incorporated
herein by reference.

                              * * * * * * * * * *

                                      C-4

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