Document:

NUI CORPORATION

                                       and

                     AMERICAN STOCK TRANSFER & TRUST COMPANY

                                 as Rights Agent

                                Rights Agreement

                            Dated as of March 2, 2001

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                                TABLE OF CONTENTS

                                                                            Page

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

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

Section 3.    Issue of Rights Certificates.....................................4

Section 4.    Form of Rights Certificates......................................5

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

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

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

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

Section 9.    Reservation and Availability of Capital Stock; Registration
              of Securities...................................................10

Section 10.   Capital Stock Record Date.......................................11

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

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

Section 13.   Consolidation, Merger or Sale or Transfer of Assets or
              Earning Power...................................................20

Section 14.   Fractional Rights and Fractional Shares.........................23

Section 15.   Rights of Action................................................24

Section 16.   Agreement of Rights Holders.....................................24

Section 17.   Rights Certificate Holder Not Deemed a Stockholder..............25

Section 18.   Concerning the Rights Agent.....................................25

Section 19.   Merger or Consolidation or Change of Name of Rights Agent.......26

Section 20.   Duties of Rights Agent..........................................26

Section 21.   Change of Rights Agent..........................................28

Section 22.   Issuance of New Rights Certificates.............................29

Section 23.   Redemption and Termination......................................29

Section 24.   Notice of Certain Events........................................30

Section 25.   Notices.........................................................30

Section 26.   Supplements and Amendments......................................31

Section 27.   Successors......................................................32

Section 28.   Determinations and Actions by the Board of Directors, etc.......32

                                        i

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Section 29.   Benefits of this Agreement......................................32

Section 30.   Severability....................................................32

Section 31.   Governing Law...................................................33

Section 32.   Counterparts....................................................33

Section 33.   Descriptive Headings............................................33

Exhibit A  -  Form of Certificate of Amendment of Amended and Restated
              Certificate of Incorporation

Exhibit B  -  Form of Rights Certificate

Exhibit C  -  Form of Summary of Rights

                                       ii

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                                RIGHTS AGREEMENT

     RIGHTS AGREEMENT, dated as of March 2, 2001 (the "Agreement"),  between NUI
Corporation,  a New Jersey  corporation (the "Company"),  and the American Stock
Transfer & Trust Company, a New York corporation (the "Rights Agent").

                              W I T N E S S E T H :

     WHEREAS,  on March 2, 2001 (the "Rights Dividend  Declaration  Date"),  the
Board  of  Directors  of  the  Company   authorized   and  declared  a  dividend
distribution  of one Right for each share of common  stock,  no par value of the
Company (the "Common  Stock")  outstanding  at the Close of Business on March 2,
2001 (the "Record Date"),  and has authorized the issuance of one Right (as such
number may be hereinafter  adjusted  pursuant to the provisions of Section 11(p)
hereof)  for each  share of Common  Stock of the  Company  issued  or  delivered
(whether  originally  issued or delivered from treasury) between the Record Date
and the Distribution Date (as such term is hereinafter defined) and as otherwise
provided  herein,  each Right initially  representing  the right to purchase one
one-hundredth  of a share of Preferred Stock (as  hereinafter  defined) upon the
terms and  subject  to the  conditions  hereinafter  set forth  (individually  a
"Right" and collectively the "Rights");

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

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

     (a)  "Acquiring  Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is hereinafter
defined) and Associates  (as such term is  hereinafter  defined) of such Person,
shall be the Beneficial  Owner (as such term is  hereinafter  defined) of 15% or
more of the shares of Common Stock then  outstanding,  but shall not include (i)
the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan
or employee  stock plan of the Company or of any  Subsidiary of the Company (iv)
any  dividend  reinvestment  plan of the  Company  or (v) any  Person  or entity
organized,  appointed or established by the Company 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  Stock by the
Company  which,  by reducing the number of shares  outstanding,  in- creases the
proportionate  number of shares beneficially owned by such Person to 15% or more
of the Common Stock of the Company then outstanding;  provided, however, that if
a Person shall become the Beneficial Owner of 15% or more of the Common Stock of
the Company then  outstanding by reason of such an acquisition and shall,  after
such acquisition, become the Beneficial Owner of any additional shares of Common
Stock, then such Person shall be deemed to be an "Acquiring Person".

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

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

          (i)  which  such  Person  or  any  of  such  Person's   Affiliates  or
     Associates,  directly or indirectly, has the right or obligation to acquire
     (whether such right is exercisable immediately or only after the passage of
     time) pursuant to any agreement,  arrangement or understanding  (whether or
     not in writing) or upon the exercise of conversion rights, exchange rights,
     rights warrants or options, or otherwise;  provided, however, that a person
     shall not be deemed the "Beneficial  Owner" of, or to  "beneficially  own,"
     (A) securities tendered pursuant to a tender or exchange offer made by such
     Person or any of such Person's Affiliates or Associates until such tendered
     securities are accepted for purchase or exchange,  or (B) at any time prior
     to the occurrence of a Triggering Event,  securities issuable upon exercise
     of the Rights or (C) from and after the  occurrence of a Triggering  Event,
     securities  issuable  upon  exercise of Rights which were  acquired by such
     person  or any of such  Person's  Affiliates  or  Associates  prior  to the
     Distribution  Date or  pursuant  to Section  3(a) or Section 22 hereof (the
     "Original  Rights") or pursuant to Section 11(i) hereof in connection  with
     an adjustment made with respect to any Original Rights;

          (ii)  which  such  Person  or  any  of  such  Person's  Affiliates  or
     Associates,  directly or indirectly, has the right to vote or dispose of or
     has "beneficial  ownership" of (as determined pursuant to Rule 13d-3 of the
     General  Rules and  Regulations  under the Exchange  Act and any  successor
     provision  thereof),  including  pursuant to any agreement,  arrangement or
     understanding,  whether or not in writing; provided, however, that a Person
     shall not be deemed the "Beneficial  Owner" of, or to  "beneficially  own,"
     any  security  under this  subparagraph  (ii) as a result of an  agreement,
     arrangement  or  understanding  to vote such  security  if such  agreement,
     arrangement  or  understanding:  (A) arises  solely from a revocable  proxy
     given in response to a public proxy or consent  solicitation  made pursuant
     to, and in accordance with, the applicable  provisions of the General Rules
     and Regulations under the Exchange Act, and (B) is not also then reportable
     by such Person on Schedule 13D under the Exchange Act (or any comparable or
     successor report); or

          (iii) which are  beneficially  owned,  directly or indirectly,  by any
     other Person (or any Affiliate or Associate thereof) with which such Person
     (or any of such  Person's  Affiliates  or  Associates)  has any  agreement,
     arrangement  or  understanding  (whether or not in writing),  but excluding
     customary  agreements  with and  between  underwriters  and  selling  group
     members with respect to a bona fide public offering of securities until the
     expiration  of  forty  days  after  the date of such  acquisition,  for the
     purpose of acquiring, holding, voting (except pursuant to a revocable proxy
     as described in the proviso to subparagraph  (ii) of this paragraph (c)) or
     disposing of any voting securities of the Company.

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

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

     (f)  "Common  Stock"  shall  mean the  common  stock,  no par  value of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital  shares of such Person with the greatest
voting power, or the equity  securities or other equity interest having power to
control or direct the management, of such Person.

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

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

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

     (j) "Person" shall mean any individual,  firm, corporation,  partnership or
other entity.

     (k)  "Preferred  Stock" shall mean shares of Series A Junior  Participating
Preferred  Stock, no par value, of the Company having the rights and preferences
set forth in the form of Certificate of Designations  attached to this Agreement
as Exhibit A.

     (l) "Preferred  Stock Fraction" shall mean one  one-hundredth of a share of
Preferred Stock.

     (m) "Record  Date"  shall have the  meaning set forth in the first  Whereas
clause.

     (n) "Section  11(a)(ii)  Event"  shall mean the event  described in Section
11(a)(ii) hereof.

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

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

     (q)  "Subsidiary"  shall mean,  with  reference  to any other  Person,  any
corporation  or other entity of which  securities or other  ownership  interests
having ordinary voting power, in the absence of contingencies, to elect at least
a majority of the directors or other  persons  performing  similar  functions is
beneficially  owned,  directly  or  indirectly,  by such  Person,  or  which  is
otherwise controlled by such Person.

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

     Unless  otherwise  specified,  where reference is made in this Agreement to
sections of, and the General Rules and Regulations under, the Exchange Act, such
reference  shall mean such  sections  and rules as amended from time to time and
any successor provisions thereto.

     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 Stock) 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.

     Section 3. Issue of Rights Certificates. (a) Until Close of Business on the
earlier  of (i)  the  Close  of  Business  on the  tenth  day  after  the  Stock
Acquisition  Date (or, if the tenth day after the Stock  Acquisition Date occurs
before the Record  Date,  the Close of Business on the Record  Date) or (ii) the
Close of  Business  on the  tenth  Business  Day (or such  later  date as may be
determined by the Company's  Board of Directors prior to such time as any Person
becomes an Acquiring  Person) after the date that a tender or exchange  offer by
any Person (other than the Company,  any Subsidiary of the Company, any employee
benefit plan or employee  stock plan of the Company or of any  Subsidiary of the
Company,  or any Person or entity  organized,  appointed or  established  by the
Company  for or pursuant  to the terms of any such plan) is first  published  or
sent or given  within the  meaning of Rule  14d-2(a)  of the  General  Rules and
Regulations  under the Exchange Act, if upon consummation  thereof,  such Person
would be the Beneficial  Owner of 15% or more of the shares of Common Stock then
outstanding  (the  earlier  of (i) and  (ii)  being  herein  referred  to as the
"Distribution  Date"),  (x)  the  Rights  will  be  evidenced  (subject  to  the
provisions  of  paragraph  (b) of this  Section 3) by the  certificates  for the
Common Stock  registered  in the names of the holders of the Common Stock (which
certificates  for  Common  Stock  shall be deemed  also to be  certificates  for
Rights)  and  not  by  separate  certificates,   and  (y)  the  Rights  will  be
transferable  only in connection  with the transfer of the underlying  shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the  Distribution  Date,  the  Rights  Agent will send by  first-class,  postage
prepaid  mail,  to each  record  holder of the  Common  Stock as of the Close of
Business on the  Distribution  Date,  at the address of such holder shown on the
records of the Company,  one or more Rights  Certificates,  in substantially the
form of Exhibit B hereto  (individually a "Rights  Certificate" and collectively
the "Rights Certificates"),  evidencing one Right for each share of Common Stock
so held,  subject  to  adjustment  as  provided  herein.  In the  event  that an
adjustment  in the  number  of Rights  per  share of Common  Stock has been made
pursuant to Section  11(p)  hereof,  at the time of  distribution  of the Rights
Certificates,  the Company  shall make the necessary  and  appropriate  rounding
adjustments   (in   accordance   with  Section  14(a)  hereof)  so  that  Rights
Certificates  representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by Rights Certificates.

     (b) As promptly as practicable  following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Preferred Stock, in substantially
the form attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage  prepaid  mail, to each record holder of Common Stock as of the Close of
Business on the Record Date,  at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Stock outstanding on
or after the Record  Date,  until the  Distribution  Date,  the  Rights  will be
evidenced  by such  certificates  for the Common Stock with or without a copy of
the Summary of Rights attached thereto and the registered  holders of the Common
Stock shall also be the registered holders of the associated  Rights.  Until the
earlier of the  Distribution  Date or the  Expiration  Date, the transfer of any
certificates  representing  shares of Common Stock with or without a copy of the
Summary of Rights  attached  thereto in respect of which Rights have been issued
shall also  constitute  the transfer of the Rights  associated  with such Common
Stock.

     (c) Rights  shall be issued in respect of all shares of Common  Stock which
are issued  after the Record Date but prior to the  earlier of the  Distribution
Date or the  Expiration  Date.  Certificates  issued after the Record Date,  but
prior to the earlier of the Distribution Date or the Expiration Date, shall also
be deemed to be Certificates for Rights and shall bear the following legend:

          This  certificate  also  evidences  and entitles the holder  hereof to
     certain Rights as set forth in the Rights Agreement between NUI Corporation
     and American Stock Transfer & Trust Company,  dated as of March 2, 2001 (as
     it may be amended,  modified or supplemented 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 NUI Corporation.
     Under certain  circumstances,  as set forth in the Rights  Agreement,  such
     Rights will be  evidenced  by separate  certificates  and will no longer be
     evidenced  by this  certificate.  The  Rights  will  expire on the Close of
     Business on March 2, 2011 unless  redeemed prior thereto.  NUI  Corporation
     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, or held by, any person who is, was or
     becomes an Acquiring Person or any Affiliate or Associate  thereof (as such
     terms are defined in the Rights Agreement), whether currently held by or on
     behalf of such  person or by any  subsequent  holder,  may become  null and
     void.

With respect to such  certificates  containing the foregoing  legend,  until the
earlier of (i) the  Distribution  Date or (ii) the  Expiration  Date, the Rights
associated  with the Common  Stock  represented  by such  certificates  shall be
evidenced  by such  certificates  alone and  registered  holders of Common Stock
shall also be the registered  holders of the associated Rights, and the transfer
of any of such  Certificates  shall also  constitute  the transfer of the Rights
associated with the Common Stock represented by such Certificates.

     Section 4. Form of Rights  Certificates.  (a) The Rights  Certificates (and
the forms of election to purchase and of assignment to be printed on the reverse
thereof) shall each 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 11 and Section 22 hereof,  the Rights  Certificates,
whenever  distributed,  shall be dated as of the Record Date (or, in the case of
Rights  issued with  respect to Common  Stock  issued by the  Company  after the
Record Date,  as of the date of issuance of such Common  Stock),  shall note the
date of issuance and on their face shall entitle the holders thereof to purchase
such number of Preferred  Stock  Fractions as shall be set forth  therein at the
price set forth therein (such exercise price per Preferred Stock  Fraction,  the
"Purchase  Price"),  but the amount and type of securities  purchasable upon the
exercise  of each  Right and the  Purchase  Price  thereof  shall be  subject to
adjustment as provided herein.

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

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

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

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

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

     Section  6.  Transfer,   Split  Up,  Combination  and  Exchange  of  Rights
Certificates;  Mutilated,  Destroyed,  Lost or Stolen Rights  Certificates.  (a)
Subject to the  provisions of Section 4(b),  Section 7(e) and Section 14 hereof,
at any time after the Close of  Business  on the  Distribution  Date,  and at or
prior to the Close of Business on the Expiration Date, any Rights Certificate or
Certificates  may be  transferred,  split up,  combined or exchanged for another
Rights Certificate or certificates,  entitling the registered holder to purchase
(or  receive) a like  number of  Preferred  Stock  Fractions  (or,  following  a
Triggering Event,  Common Stock, other securities,  cash or other assets, as the
case  may  be) as the  Rights  Certificate,  or  Certificates  surrendered  then
entitled  such  holder or  holders in the case of a transfer  to  purchase.  Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates  shall make such request in writing delivered to the
Rights Agent,  and shall surrender the Rights  Certificate or Certificates to be
transferred,  split up, combined or exchanged at the principal office or offices
of the Rights Agent  designated  for such purpose.  Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered  Rights Certificate until the registered holder
shall  have  completed  and  signed  the  certificate  contained  in the form of
assignment  set forth on the reverse  side of each such Rights  Certificate  and
shall have provided such  additional  evidence of the identity of the Beneficial
Owner (or former  Beneficial  Owner) or Affiliates or Associates  thereof as the
Company shall reasonably request.  Thereupon the Rights Agent shall,  subject to
Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the case
may be, as so requested.  The Company may require payment from the holder of the
Right of a sum  sufficient to cover any tax or  governmental  charge that may be
imposed in connection  with any transfer,  split up,  combination or exchange of
Rights Certificates.

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

     Section 7. Exercise of Rights;  Purchase Price;  Expiration Date of Rights.
(a)  Subject  to  Section  7(e)  hereof,  the  registered  holder of any  Rights
Certificate  may  exercise  the Rights  evidenced  thereby  (except as otherwise
provided   herein   including,   without   limitation,   the   restrictions   on
exercisability  set forth in Section 9(c),  Section 11(a)(iii) and Section 23(a)
hereof)  in  whole or in part at any  time  after  the  Distribution  Date  upon
surrender of the Rights  Certificate,  with the form of election to purchase set
forth on the reverse side  thereof and the  certificate  contained  therein duly
executed,  to the Rights Agent at the principal  office or offices of the Rights
Agent  designated  for such  purpose,  together  with  payment of the  aggregate
Purchase  Price  (except as  provided  in  Section  11(q))  with  respect to the
surrendered  Rights for the total number of the  Preferred  Stock  Fractions (or
Common Stock, other securities or property, as the case may be) as to which such
surrendered Rights are exercisable,  at or prior to the earlier of (i) the Close
of Business on March 2, 2011 (the "Final  Expiration  Date") or (ii) the time at
which the Rights are  redeemed as provided in Section 23 hereof (the  earlier of
(i) or (ii) being herein referred to as the "Expiration Date").

     (b) The Purchase  Price for each Preferred  Stock Fraction  pursuant to the
exercise of a Right shall  initially be $50, and shall be subject to  adjustment
from time to time as provided in Section 11 and Section  13(a)  hereof and shall
be payable in accordance with paragraph (c) below.

     (c) Upon receipt of a Rights Certificate  representing  exercisable Rights,
with the form of election to purchase  set forth on the reverse side thereof and
the certificate contained therein duly executed,  accompanied by payment (except
as provided in Section 11(q)),  with respect to each Right so exercised,  of the
Purchase Price per Preferred Stock Fraction (or Common Stock,  other  securities
or  property,  as the case may be) to be  purchased  as set  forth  below and an
amount equal to any applicable transfer tax, the Rights Agent shall,  subject to
Section 20(k) and Section 14(b) hereof,  thereupon  promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available,  if
the  Rights  Agent is the  transfer  agent for the  shares of  Preferred  Stock)
certificates  for the total number of Preferred  Stock Fractions to be purchased
and the Company hereby irrevocably  authorizes its transfer agent to comply with
all such requests  subject to  applicable  law, or (B) if the Company shall have
elected to deposit the total number of shares of Preferred  Stock  issuable upon
exercise of the Rights hereunder with a depositary  agent,  requisition from the
depositary agent depositary receipts representing such number of Preferred Stock
Fractions as are to be purchased (in which case  certificates  for the shares of
Preferred Stock  represented by such receipts shall be deposited by the transfer
agent with the  depositary  agent) and the Company  will  direct the  depositary
agent to comply with such request,  (ii) requisition from the Company the amount
of cash,  if any, to be paid in lieu of  fractional  shares in  accordance  with
Section 14  hereof,  (iii)  after  receipt of such  certificates  or  depositary
receipts,  cause the same to be delivered to or upon the order of the registered
holder of such Rights  Certificate,  registered  in such name or names as may be
designated by such holder and (iv) after receipt thereof,  deliver such cash, if
any, to or upon the order of the registered  holder of such Rights  Certificate.
The payment of the  Purchase  Price (as such  amount may be reduced  pursuant to
Section  11(a)(iii) hereof) shall be made (x) in cash or by certified bank check
or money  order  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 shares of Common  Stock equal to the
then Purchase Price divided by the current market price (as determined  pursuant
to Section 11(d) hereof) per share of Common Stock on the date of such exercise.
In the event that the Company is obligated to issue other securities  (including
Common Stock) of the Company, pay cash and/or distribute other property pursuant
to Section 11(a)  hereof,  the Company will make all  arrangements  necessary so
that such other  securities,  cash  and/or  other  property  are  available  for
distribution by the Rights Agent, if and when appropriate.

     (d) In case the registered holder of any Rights  Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate  evidencing
Rights  equivalent to the Rights  remaining  unexercised  shall be issued by the
Rights Agent and  delivered to, or upon the order of, the  registered  holder of
such Rights  Certificate,  registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.

     (e)  Notwithstanding  anything in this Agreement to the contrary,  from and
after the first occurrence of a Section 11(a)(ii) Event, any 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 the
Acquiring   Person  has  any   continuing   plan,   agreement,   arrangement  or
understanding regarding the transferred Rights or (B) a transfer which the Board
of  Directors  of the  Company  has  determined  is part of an plan,  agreement,
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 use all  reasonable  efforts to insure  that the
provisions of this Section 7(e) and Section 4(b) hereof are complied  with,  but
shall have no liability to any holder of Rights  Certificates or other Person as
a result of its failure to make any determinations  with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.

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

     Section 8. Cancellation and Destruction of Rights Certificates.  All Rights
Certificates  surrendered  for the  purpose  of  exercise,  transfer,  split up,
combination  or  exchange  shall,  if  surrendered  to the Company or 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 Rights
Certificates  shall be issued in lieu thereof  except as expressly  permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement,  and the Rights Agent shall so cancel and
retire,  any other  Rights  Certificate  purchased  or acquired by the  Company,
otherwise  than upon the exercise  thereof.  The Rights Agent shall  deliver all
cancelled Rights  Certificates to the Company,  or shall, at the written request
of the Company,  destroy such cancelled  Rights  Certificates,  and in such case
shall deliver a certificate of destruction thereof to the Company.

     Section 9. Reservation and  Availability of Capital Stock;  Registration of
Securities.  (a) The  Company  covenants  and  agrees  that it will  cause to be
reserved  and kept  available  out of its  authorized  and  unissued  shares  of
Preferred Stock (and following the occurrence of a Triggering  Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its  authorized  and issued  shares  held in  treasury)  the number of shares of
Preferred  Stock (and  following the  occurrence of a Triggering  Event,  Common
Stock  and/or  other  securities)  that,  except as provided  in this  Agreement
including Section 11(a)(iii)  hereof,  will be sufficient to permit the exercise
in full of all outstanding Rights.

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

     (c) The  Company  shall  use  its  best  efforts  to (i)  file,  as soon as
practicable  following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the  consideration  to be delivered by the Company upon
exercise of the Rights has been determined pursuant to this Agreement (including
in accordance with Section 11(a)(iii)  hereof), or as soon as is required by law
or  regulation   following  the  Distribution  Date,  as  the  case  may  be,  a
registration  statement  or  statements  under the  Securities  Act of 1933 (the
"Securities  Act"),  with  respect  to the  shares  of  Common  Stock  or  other
securities  purchasable  upon exercise of the Rights on an  appropriate  form or
forms, (ii) cause such registration  statement or statements to become effective
as soon as  practicable  after  such  filing and (iii)  cause such  registration
statement or  statements  to remain  effective  (with a prospectus  at all times
meeting the  requirements  of the  Securities  Act) until the earlier of (A) the
date as of which the Rights are no longer  exercisable for such securities,  and
(B) the date of the  expiration  of the Rights.  The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities
or blue sky laws of the various states in connection with the  exercisability of
the Rights.  The Company may  temporarily  suspend,  for a period of time not to
exceed  ninety  (90) days  after  the date set forth in clause  (i) of the first
sentence of this  Section  9(c),  the  exercisability  of the Rights in order to
prepare and file such registration  statement and permit it to become effective.
Upon any such suspension,  the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a public  announcement  et such time as the  suspension  is no longer in effect.
Notwithstanding  any  provision of this  Agreement to the  contrary,  the Rights
shall not be exercisable in any  jurisdiction if the requisite  qualification in
such jurisdiction  shall not have been obtained or the exercise thereof would be
in violation of applicable law.

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

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

     Section  10.  Capital  Stock  Record  Date.  Each  person in whose name any
certificate  for a number of Preferred  Stock  Fractions (or Common Stock and/or
other  securities,  as the case may be) is issued  upon the  exercise  of Rights
shall for all  purposes  be deemed to have  become  the holder of record of such
Preferred Stock Fractions (or Common Stock and/or other securities,  as the case
may be) represented  thereby on, and such  certificate  shall be dated, the date
upon which the Rights  Certificate  evidencing such Rights was duly  surrendered
and payment of the Purchase Price (and all applicable  transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock Fraction (or Common Stock and/or other securities,  as
the case may be) transfer books of the Company are closed,  such Person shall be
deemed to have become the record holder of such shares (fractional or otherwise)
on, and such  certificate  shall be dated,  the next succeeding  Business Day on
which the Preferred Stock Fraction (or Common Stock and/or other securities,  as
the case may be) transfer  books of the Company are open.  Prior to the exercise
of the Rights evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a  stockholder  of the Company  with respect to shares
(fractional or otherwise) 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 and Kind of Shares or
Number of Rights.  The Purchase Price,  the number and kind of shares covered by
each Right and the number of Rights  outstanding  are subject to adjustment from
time to time as provided in this Section 11.

     (a) (i) In the event the  Company  shall at any time after the date of this
Agreement  (A) declare a dividend on the  Preferred  Stock  payable in shares of
Preferred Stock or other capital stock, (B) subdivide the outstanding  Preferred
Stock,  (C) combine the  outstanding  Preferred  Stock into a smaller  number of
shares, or (D) issue any share of its capital stock in a reclassification of the
Preferred  Stock  (including  any such  reclassification  in  connection  with a
consolidation  or merger in which the  Company is the  continuing  or  surviving
corporation), except as otherwise provided in Section 11(a)(ii) and Section 7(e)
hereof,  the  Purchase  Price in effect at the time of the record  date for such
dividend  or of the  effective  date of  such  subdivision,  combination  or re-
classification,  and the number and kind of shares of Preferred Stock or capital
stock,  as the case may be,  issuable  on such  date,  shall be  proportionately
adjusted  so that the  holder of any Right  exercised  after  such time shall be
entitled to receive,  upon  payment of the  Purchase  Price then in effect,  the
aggregate  number and kind of shares of Preferred Stock or capital stock, as the
case may be, which, if such Right had been exercised  immediately  prior to such
date and at a time when the Preferred Stock (or other capital stock, as the case
may be) transfer  books of the Company were open,  he would have owned upon such
exercise and been entitled to receive by virtue of such  dividend,  subdivision,
combination  or  reclassification.  If an event  occurs  which would  require an
adjustment under both this Section 11(a)(i) and Section  11(a)(ii)  hereof,  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)
hereof.

          (ii) In the event any Person (other than the Company,  any  Subsidiary
     of the  Company,  any employee  benefit plan or employee  stock plan of the
     Company or of any Subsidiary of the Company, any dividend reinvestment plan
     of the Company, or any Person or entity organized, appointed or established
     by the  Company  for or  pursuant  to the terms of any such plan)  alone or
     together with its Affiliates and  Associates,  shall, at any time after the
     date hereof,  becomes an Acquiring  Person,  unless the event  causing such
     threshold to be crossed is a transaction set forth in Section 13(a) hereof,
     or is an acquisition of Common Stock pursuant to a tender offer or exchange
     offer for all  outstanding  shares of Common  Stock at a price and on terms
     determined  by at least a majority of the members of the Board of Directors
     who are  not  officers  of the  Company  and  who are not  representatives,
     nominees,  Affiliates or Associates of an Acquiring Person, after receiving
     advice  from one or more  investment  banking  firms,  to be (a) at a price
     which is fair to  stockholders  (taking into account all factors which such
     members of the Board  deem  relevant  including,  without  limitation,  the
     long-term  prospects  and value of the Company  and the prices  which could
     reasonably be achieved if the Company or its assets were sold on an orderly
     basis  designed to realize  maximum  value) and (b)  otherwise  in the best
     interests  of  (1)  the  Company  and  its   stockholders   (including  the
     possibility  that  these  interests  may best be  served  by the  continued
     independence  of the  Company),  (2) the  Company's  employees,  suppliers,
     creditors,  customers and (3) the community in which the Company  operates,
     then,  promptly  following the first  occurrence of the event  described in
     Section  11(a)(ii)  hereof,  proper  provision  shall be made so that  each
     holder of a Right (except as provided in Section 11(a)(iii), and in Section
     7(e) hereof)  shall  thereafter  have the right to receive,  upon  exercise
     thereof at the then current  Purchase Price in accordance with the terms of
     this  Agreement,  in lieu of a number of Preferred  Stock  Fractions,  such
     number of shares of Common  Stock of the  Company as shall equal the result
     obtained by (x)  multiplying  the then current  Purchase  Price by the then
     number of Preferred  Stock  Fractions for which a Right was  exercisable by
     such  holder  immediately  prior  to  the  first  occurrence  of a  Section
     11(a)(ii)  Event,  and (y) dividing that product (such  product,  following
     such first  occurrence,  shall  thereafter  be referred to as the  Purchase
     Price for each Right and for all purposes of this  Agreement) by 50% of the
     current  market price  (determined  pursuant to Section  11(d)  hereof) per
     share of Common Stock on the date of such first  occurrence (such number of
     shares of Common Stock is herein called the "Adjustment Shares").

          (iii) In the event that the number of shares of Common Stock which are
     authorized but not  outstanding or reserved for issuance for purposes other
     than upon  exercise of the Rights is not  sufficient to permit the exercise
     in full of the Rights in accordance with the foregoing subparagraph (ii) of
     this Section 11(a),  the Company shall: (A) determine the excess of (1) the
     value of the Adjustment  Shares  issuable upon the exercise of a Right (the
     "Current  Value") over (2) the Purchase Price (such excess,  the "Spread"),
     and (B) with respect to each Right,  make adequate  provision to substitute
     for the Adjustment Shares,  upon payment of the applicable  Purchase Price,
     (1) cash, (2) a reduction in the Purchase Price,  (3) Common Stock or other
     equity securities of the Company (including, without limitation,  preferred
     shares, or Preferred Stock Fractions),  which the Board of Directors of the
     Company  has deemed to have the same value as shares of Common  Stock (such
     shares,  "common stock equivalents")),  (4) debt securities of the Company,
     (5)  other  assets  or (6) any  combination  of the  foregoing,  having  an
     aggregate value equal to the Current Value,  where such aggregate value has
     been  determined  by the Board of Directors  of the Company  based upon the
     advice of a nationally  recognized  investment banking firm selected by the
     Board of Directors of the Company; provided,  however, if the Company shall
     not have made adequate  provision to deliver  value  pursuant to clause (B)
     above  within  thirty (30) days  following  the first  occurrence  of (x) a
     Section  11(a)(ii)  Event or (y) the date on which the  Company's  right of
     redemption  pursuant  to Section  23(a)  expires  (the later of (x) and (y)
     being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the
     Company shall be obligated to deliver, upon the surrender for exercise of a
     Right and without requiring payment of the Purchase Price, Common Stock (to
     the extent  available)  and then, if necessary,  cash,  which shares and/or
     cash have an aggregate value equal to the Spread. If the Board of Directors
     of the  Company  shall  determine  in good  faith  that it is  likely  that
     sufficient  additional  shares  of Common  Stock  could be  authorized  for
     issuance  upon  exercise in full of the Rights,  the thirty (30) day period
     set forth above may be extended by  resolution of the Board of Directors of
     the  Company to the extent  necessary,  but not more than  ninety (90) days
     following  the first  occurrence  of a Section  11(a)(ii)  Trigger Date, in
     order that the Company may seek stockholder  approval for the authorization
     of  such  additional  shares  (such  period,  as it  may be  extended,  the
     "Substitution Period"). To the extent that the Company determines that some
     action need be taken pursuant to the first and/or second  sentences of this
     Section  11(a)(iii),  the Company (x) shall provide subject to Section 7(e)
     hereof,  that such action shall apply uniformly to all  outstanding  Rights
     and (y) may suspend the  exercisability  of the Rights until the expiration
     of the Substitution Period in order to seek any authorization of additional
     shares,  to take any  action to obtain  any  required  regulatory  approval
     and/or to decide the  appropriate  form of distribution to be made pursuant
     to such first sentence and to determine the value thereof.  In the event of
     any such suspension,  the Company shall issue a public announcement stating
     that the  exercisability of the Rights has been temporarily  suspended,  as
     well as a public  announcement  at such time as the suspension is no longer
     in effect. For purposes of this Section 11(a)(iii), the value of the Common
     Stock shall be the current market price (as determined  pursuant to Section
     11(d)  hereof) per share of Common Stock on the Section  11(a)(ii)  Trigger
     Date and the value of any common stock  equivalents shall be deemed to have
     the same value as the Common Stock on such date.

          (iv) If the rules of the national securities  exchange,  registered as
     such  pursuant  to  Section  6 of the  Exchange  Act,  or of  the  national
     securities  association,  registered as such pursuant to Section 15A of the
     Exchange  Act, on which the shares of Common Stock are  principally  traded
     would prohibit such exchange or  association  from listing or continuing to
     list, or from authorizing for or continuing  quotation  and/or  transaction
     reporting through an inter-dealer  quotation  system,  the shares of Common
     Stock or other  equity  securities  of the Company if the Rights were to be
     exercised for shares of Common Stock in accordance with  subparagraph  (ii)
     of this Section  11(a)  because such issuance  would  nullify,  restrict or
     disparately  reduce  the per share  voting  rights of  holders of shares of
     Common Stock or for any other reason,  the Company shall: (A) determine the
     Spread and (B) with  respect to each  Right,  make  adequate  provision  to
     substitute  for the  Adjustment  Shares,  upon  payment  of the  applicable
     Purchase Price, (1) cash, (2) equity securities of the Company,  including,
     without limitation, "common stock equivalents," other than securities which
     would have the effect of nullifying,  restricting  or disparately  reducing
     the per share  voting  rights  of  holders  of  shares  of Common  Stock or
     otherwise cause the prohibition described above, (3) debt securities of the
     Company, (4) other assets, or (5) any combination of the foregoing,  having
     an aggregate  value equal to the Current Value,  where such aggregate value
     has been determined by the Board of Directors of the Company based upon the
     advice of a nationally  recognized  investment banking firm selected by the
     Board of Directors of the Company; provided,  however, if the Company shall
     not have made adequate  provision to deliver  value  pursuant to clause (B)
     above within thirty (30) days following the Section 11(a)(ii) Trigger Date,
     then the Company  shall be obligated  to deliver,  upon the  surrender  for
     exercise of a Right and without  requiring  payment of the Purchase  Price,
     cash having an aggregate value equal to the Spread.  To the extent that the
     Company  determines  that an action needs to be taken pursuant to the first
     sentence of this Section 11(a)(iv),  the Company (x) shall provide, subject
     to Section 7(e),  that such action shall apply uniformly to all outstanding
     Rights and (y) may suspend the exercisability of the Rights, but not longer
     than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order to
     decide the  appropriate  form of  distribution  to be made pursuant to such
     first sentence and to determine the value thereof. In the event of any such
     suspension,  the Company shall issue a public announcement stating that the
     exercisability of the Rights has been temporarily  suspended,  as well as a
     public  announcement at such time as the suspension is no longer in effect.
     For purposes of this Section 11(a)(iv), the value of the Common Stock shall
     be the  current  market  price (as  determined  pursuant  to Section  11(d)
     hereof) per share of Common Stock on the Section 11(a)(ii) Trigger Date and
     the value of any "common stock equivalent" shall be deemed to have the same
     value as the Common Stock on such date.

     (b) In case the Company  shall fix a record date for the issuance of rights
(other than the Rights),  options or warrants to all holders of Preferred  Stock
entitling  them to  subscribe  for or  purchase  (for a period  expiring  within
forty-five  (45)  calendar  days after such record date)  Preferred  Stock,  (or
shares having the same rights, privileges and preferences as the Preferred Stock
("equivalent  Preferred Stock")) or securities  convertible into Preferred Stock
or  equivalent  Preferred  Stock  at a price  per  share of  Preferred  Stock or
equivalent  Preferred  Stock  (or  having a  conversion  price per  share,  if a
security  convertible  into Preferred Stock or equivalent  Preferred Stock) less
than the current market price (as  determined  pursuant to Section 11(d) hereof)
per share of Preferred  Stock 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 shares of Preferred Stock  outstanding
on such  record  date,  plus the number of shares of  Preferred  Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
equivalent  Preferred  Stock so to be  offered  (and/or  the  aggregate  initial
conversion price of the convertible  securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
shares of Preferred  Stock  outstanding on such record date,  plus the number of
additional  shares of Preferred  Stock and/or  equivalent  Preferred Stock to be
offered for  subscription or purchase (or onto which the convertible  securities
to be offered are initially convertible). In case such subscription price may be
paid by  delivery of  consideration  part or all of which may be in a form other
than cash, the value of such consideration  shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a  statement  filed with the Rights  Agent and shall be binding on the Rights
Agent and the  holders of the Rights.  Preferred  Stock owned by or held for the
account of the Company  shall not be deemed  outstanding  for the purpose of any
such  computation.  Such adjustment shall be made  successively  whenever such a
record date is fixed;  and in the event that such rights or warrants  are not so
issued,  the  Purchase  Price shall be adjusted to be the  Purchase  Price which
would then be in effect if such record date had not been fixed.

     (c) In case the Company shall fix a record date for a  distribution  to all
holders of Preferred Stock (including any such  distribution  made in connection
with  a  consolidation  or  merger  in  which  the  Company  is  the  continuing
corporation) of evidences of indebtedness,  cash (other than a regular quarterly
cash  dividend  paid out of the earnings or retained  earnings of the  Company),
assets  (other than a dividend  payable in Preferred  Stock,  but  including any
dividend  payable in capital stock other than Preferred  Stock) 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 current  market  price (as
determined  pursuant to Section  11(d)  hereof) per share of Preferred  Stock on
such record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company,  whose  determination shall be described in a
statement  filed with the Rights  Agent) of the  portion of the cash,  assets or
evidences of  indebtedness to be distributed or of such  subscription  rights or
warrants  applicable to a share of Preferred  Stock and the denominator of which
shall be such current  market  price (as  determined  pursuant to Section  11(d)
hereof)  per  share  of  Preferred  Stock.   Such  adjustments   shall  be  made
successively  whenever  such a record date is fixed,  and in the event that such
distribution  is not  made,  the  Purchase  Price  shall be  adjusted  to be the
Purchase  Price which would have been in effect if such record date had not been
fixed.

     (d)  (i)  For  the  purpose  of  any  computation  hereunder,   other  than
computations  made pursuant to Section  11(a)(iii)  hereof,  the "current market
price" per share of Common  Stock on any date shall be deemed to be the  average
of the  daily  closing  price per share of  Common  Stock  for the  thirty  (30)
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such  date,  and for  purposes  of  computations  made  pursuant  to  Section
11(a)(iii)  hereof,  the current  market  price per share of Common Stock on any
date shall be deemed to be the average of the daily  closing  price per share of
Common Stock for the ten (10)  consecutive  Trading Days  immediately  following
such date;  provided,  however,  that in the event that the then current  market
price per share of Common  Stock is  determined  during a period  following  the
announcement  by the  issuer  of  such  Common  Stock  of (i)  any  dividend  or
distribution  on such Common  Stock  payable in such  shares of Common  Stock or
securities convertible into shares of Common Stock (other than the Rights), (ii)
any subdivision, combination or reclassification of such shares of Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period,  as set forth  above,  after the  ex-dividend  date for such
dividend or distribution,  or the record date for such subdivision,  combination
or reclassification,  then, in each such case, the current market price shall be
properly adjusted to take into account  ex-dividend  trading.  The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes  place on such day,  the  average  of the  closing  bid and asked  prices,
regular  way,  in  either  case  as  reported  in  the  principal   consolidated
transaction  reporting  system with respect to securities  listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal  consolidated  transaction reporting system with respect to securities
listed on the  principal  national  securities  exchange  on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities  exchange,  the
last quoted sale price or, if not so quoted, the average of the high bid and low
asked  prices  in the  over-the-counter  market,  as  reported  by the  National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such  other  system  then in use,  or, if on any such date the  shares of Common
Stock are not quoted by any such  organization,  the  average of the closing bid
and asked prices as furnished by a professional  market maker making a market in
the Common Stock  selected by the Board of  Directors of the Company.  If on any
such date no market maker is making a market in the Common Stock, the fair value
of such  shares  on such  date as  determined  in good  faith  by the  Board  of
Directors of the Company shall be used and shall be conclusive for all purposes.
The  term  "Trading  Day"  shall  mean a day on  which  the  principal  national
securities  exchange on which the shares of Common  Stock are listed or admitted
to trading is open for the  transaction  of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange,
a Business  Day. If the Common  Stock is not  publicly  held or not so listed or
traded,  current  market  price per share shall mean the fair value per share as
determined  in good  faith  by the  Board of  Directors  of the  Company,  whose
determination  shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.

          (ii) For the purpose of any computation hereunder, the "current market
     price" per share of Preferred  Stock shall be determined in the same manner
     as set forth above for the Common Stock in Section 11(d)(i) (other than the
     last sentence thereof).  If the current market price per share of Preferred
     Stock cannot be determined in the manner provided above or if the Preferred
     Stock is not  publicly  held or listed or traded in a manner  described  in
     Section  11(d)(i),  the "current market price" per share of Preferred Stock
     shall be  conclusively  deemed to be an amount equal to 100 (as such number
     may be  appropriately  adjusted  for such  events  as stock  splits,  stock
     dividends and recapitalizations  with respect to the Common Stock occurring
     after the date of this  Agreement)  multiplied by the current  market price
     per share of Common  Stock.  If neither the Common Stock nor the  Preferred
     Stock is publicly held or so listed or traded,  "current  market price" per
     share of Preferred  Stock shall mean the fair value per share as determined
     in good faith by the Board of Directors of the Company, whose determination
     shall be described in a statement  filed with the Rights Agent and shall be
     conclusive  for all  purposes.  For all  purposes  of this  Agreement,  the
     "current  market price" of a Preferred Stock Fraction shall be equal to the
     "current market price" of one share of Preferred Stock divided by 100.

     (e) Anything  herein to the  contrary  notwithstanding,  adjustment  in the
Purchase  Price  shall be  required  unless  such  adjustment  would  require an
increase  or  decrease  of at least  one  percent  (1%) to 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-thousandth  of a share of Common
Stock or other share or one  one-millionth of a share of Preferred Stock, as the
case may be.  Notwithstanding  the first  sentence of this  Section  11(e),  any
adjustment  required by this  Section 11 shall be made no later than the earlier
of (i) three (3) years  from the date of the  transaction  which  mandates  such
adjustment or (ii) the Expiration Date.

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

     (g)  All  Rights  originally  issued  by  the  Company  subsequent  to  any
adjustment  made to the Purchase  Price  hereunder  shall  evidence the right to
purchase,  at the  adjusted  Purchase  Price,  the  number  of  Preferred  Stock
Fractions (or other consideration,  as the case may be) 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  Preferred  Stock
Fractions  (calculated  to  the  nearest  one  one-millionth)  obtained  by  (i)
multiplying  (x) the  number of  Preferred  Stock  Fractions  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  Preferred  Stock  Fractions  purchasable  upon the
exercise of a Right. Each of the Rights  outstanding after the adjustment in the
number  of  Rights  shall be  exercisable  for the  number  of  Preferred  Stock
Fractions  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 Rights  Certificates  have
been  issued,  shall be at least ten (10) days later than the date of the public
announcement.  If Rights  Certificates have been issued, upon each adjustment of
the number of Rights  pursuant to this  Section  11(i),  the Company  shall,  as
promptly as practicable,  cause to be distributed to holders of record of Rights
Certificates  on such  record date Rights  Certificates  evidencing,  subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights  Certificates  held by such holders prior to the date of adjustment,  and
upon  surrender  thereof,  if required by the Company,  new Rights  Certificates
evidencing  all the Rights to which such  holders  shall be entitled  after such
adjustment.  Rights Certificates so to be distributed shall be issued,  executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company,  the adjusted  Purchase  Price) and shall be  registered  in the
names of the  holders  of record  of  Rights  Certificates  on the  record  date
specified in the public announcement.

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

     (k) Before  taking any action that would cause an  adjustment  reducing the
Purchase Price below one  one-hundredth of the then stated value, if any, of the
number of Preferred  Stock Fractions  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 Preferred Stock Fractions 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 the number
of Preferred  Stock  Fractions  and other  capital  shares or  securities of the
Company,  if any,  issuable  upon such  exercise  over and  above the  number of
Preferred  Stock  Fractions  and other  capital  shares  and  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  (fractional or otherwise)
of Common Stock and other capital  shares or securities  upon the  occurrence of
the event requiring such adjustment.

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

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

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

     (p)  Anything in this  Agreement to the  contrary  notwithstanding,  in the
event that the Company  shall at any time after the date of this  Agreement  and
prior to the Distribution Date (i) declare a dividend on the outstanding  shares
of  Common  Stock  payable  in  shares  of  Common  Stock,  (ii)  subdivide  the
outstanding  shares of Common Stock or (iii) combine the  outstanding  shares of
Common Stock into a smaller  number of shares,  the number of Rights  associated
with each  share of  Common  Stock  then  outstanding,  or  issued or  delivered
thereafter but prior to the Distribution Date, shall be proportionately adjusted
so that the  number of Rights  thereafter  associated  with each share of Common
Stock  following any such event shall equal the result  obtained by  multiplying
the  number of Rights  associated  with each share of Common  Stock  immediately
prior to such event by a fraction the numerator  which shall be the total number
of shares of Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event.

     (q) In the event that the Rights  become  exercisable  following  a Section
11(a)(ii)  Event, the Company by action of a majority of the Board of Directors,
at its option,  may provide that each Right,  subject to section 7(e),  shall be
exchanged  for one share of Common Stock (or cash or other  securities or assets
to be substituted for the Adjustment  Shares pursuant to subsection  11(a)(iii))
appropriately  adjusted to reflect any stock  split,  stock  dividend or similar
transaction  occurring after the date hereof,  in consideration of the surrender
to the  Company of the Rights so  exercised  and  without  other  payment of the
Purchase Price.  Upon the Company's  election to provide for such exchange,  all
Rights shall be  terminated  and the only right  thereafter  of a holder of such
Rights shall be to receive the above described  securities.  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  wholly  owned
Subsidiary of the Company,  any employee benefit plan of the Company or any such
Subsidiary,  or any entity holding shares of Common Stock 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  shares of Common
Stock then outstanding.

     Section 12.  Certificate  of Adjusted  Purchase  Price or Number of Shares.
Whenever an  adjustment  is made as provided in Section 11 or Section 13 hereof,
the  Company  shall  (a)  promptly  prepare a  certificate  setting  forth  such
adjustment and a brief  statement of the facts  accounting for such  adjustment,
(b) promptly  file with the Rights Agent,  and with each transfer  agent for the
Preferred Stock and the Common Stock, a copy of such  certificate and (c) mail a
brief summary  thereof to each holder of a Rights  Certificate  (or, if prior to
the Distribution  Date, to each holder of a certificate  representing  shares of
Common  Stock) in accordance  with Section 25 hereof.  The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.

     Section 13. Consolidation,  Merger or Sale or Transfer of Assets or Earning
Power. (a) In the event that,  following the Stock Acquisition Date, directly or
indirectly,  (x) the Company shall consolidate with, or merge with and into, any
other Person  (other than a  Subsidiary  of the Company in a  transaction  which
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving  corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary  of the Company in a transaction  which  complies with Section
11(o) hereof) shall  consolidate  with, or merge with or into, the Company,  and
the  Company  shall  be  the   continuing  or  surviving   corporation  of  such
consolidation  or merger and, in connection with such  consolidation  or merger,
all or part of the  outstanding  shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its  Subsidiaries  shall sell or otherwise  transfer),  in one  transaction or a
series of related  transactions,  assets or earning power  aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any Person or Persons  (other than the Company or any  Subsidiary of
the Company in one or more  transactions  each of which  complies  with  Section
11(o)  hereof),  then,  and in each such case and except as set forth in Section
13(d) hereof, proper provision shall be made so that:

          (i) each holder of a Right, except as provided in Section 7(e) hereof,
     shall  thereafter have the right to receive,  upon the exercise  thereof at
     the then  current  Purchase  Price  in  accordance  with the  terms of this
     Agreement,  such  number of validly  authorized  and  issued,  fully  paid,
     nonassessable  and freely tradeable shares of Common Stock of the Principal
     Party (as such term is  hereinafter  defined),  not  subject  to any liens,
     encumbrances,  rights of first refusal or other adverse claims, as shall be
     equal to the result obtained by (1)  multiplying the then current  Purchase
     Price by the  number  of  Preferred  Stock  Fractions  for which a Right is
     exercisable by such holder  immediately  prior to the first occurrence of a
     Section 13 Event (or, if a Section  11(a)(ii)  Event has occurred  prior to
     the Section 13 Event,  multiplying the Purchase Price in effect immediately
     prior to the first occurrence of such Section 11(a)(ii) Event by the number
     of Preferred Stock Fractions for which a Right was exercisable  immediately
     prior to such first  occurrence)  and dividing that product (such  product,
     following the first occurrence of a Section 13 Event,  shall be referred to
     as the  "Purchase  Price"  for  each  Right  and for all  purposes  of this
     Agreement) by (2) 50% of the current market price  (determined  pursuant to
     Section  11(d)(i)  hereof  with  respect to the Common  Stock) per share of
     Common Stock of such Principal  Party on the date of  consummation  of such
     Section 13 Event;

          (ii) such  Principal  Party shall  thereafter be liable for, and shall
     assume,  by virtue of such Section 13 Event, all the obligations and duties
     of the Company pursuant to this Agreement;

          (iii) the term "Company"  shall  thereafter be deemed to refer to such
     Principal  Party,  it being  specifically  intended that the  provisions of
     Section 11 hereof shall apply only to such  Principal  Party  following the
     first occurrence of a Section 13 Event;

          (iv) such Principal  Party shall take such steps  (including,  but not
     limited to, the reservation of a sufficient  number of shares of its Common
     Stock) in connection with the  consummation of any such  transaction as may
     be  necessary to insure that the  provisions  hereof  shall  thereafter  be
     applicable, as nearly as reasonably may be, in relation to its Common Stock
     thereafter deliverable upon the exercise of the Rights; and

          (v) the provisions of Section  11(a)(ii)  hereof shall be of no effect
     following the first occurrence of any Section 13 Event.

     (b) "Principal Party" shall mean

          (i) in the case of any  transaction  described in clause (x) or (y) of
     the first sentence of Section  13(a),  the Person that is the issuer of any
     securities  into which shares of Common Stock 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 such merger or consolidation; and

          (ii) in the case of any  transaction  described  in clause  (z) of the
     first sentence of Section 13(a), the Person that is the party receiving the
     greatest  portion of the assets or earning  power  transferred  pursuant to
     such transaction or transactions; provided, however, that in any such case,
     (1) if the Common Stock of such Person is not at such time and has not been
     continuously  over the preceding twelve (12) month period  registered under
     Section 12 of the  Exchange  Act,  and such  Person is a direct or indirect
     Subsidiary  of another  Person the Common Stock of which is and has been so
     registered, "Principal Party" shall refer to such other Person; (2) in case
     such  Person is a  Subsidiary,  directly  or  indirectly,  of more than one
     Person,  the  Common  Stock  of two or more of which  are and have  been so
     registered,  "Principal  Party" shall refer to whichever of such Persons is
     the issuer of the Common Stock having the greatest  aggregate market value;
     and (3) in case such Person is owned,  directly or  indirectly,  by a joint
     venture  formed by two or more  Persons  that are not  owned,  directly  or
     indirectly,  by the same  Person,  the rules set forth in (1) and (2) above
     shall apply to each of the chains of  ownership  having an interest in such
     joint venture as if such party were a  "Subsidiary"  of both or all of such
     joint ventures 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  the  Principal  Party  shall have a  sufficient  number of
authorized  shares of Common  Stock which have not been  issued or reserved  for
issuance to permit the  exercise in full of the Rights in  accordance  with this
Section 13 and unless prior thereto the Company and such  Principal  Party shall
have  executed  and  delivered  to the  Rights  Agent a  supplemental  agreement
providing for the terms set forth in  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 of assets  mentioned  in  paragraph  (a) of this
Section 13, the Principal Party at its own expense will:

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

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

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

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

     (d) Notwithstanding anything in this Agreement to the contrary,  Section 13
shall not be applicable to a transaction  described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
who acquired shares of Common Stock pursuant to a tender offer or exchange offer
for all outstanding  shares of Common Stock that complies with the provisions of
Section  11(a)(ii)  hereof (or a  wholly-owned  Subsidiary of any such Person or
Persons),  (ii) the price per Common Share  offered in such  transaction  is not
less than the price per share of  Common  Stock  paid to all  holders  of Common
Stock whose shares were purchased  pursuant to such tender offer or exchange and
(iii) the form of consideration being offered to the remaining holders of Common
Stock pursuant to such transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer.  Upon  consummation of any such
transaction  contemplated  by this Section  13(d),  all Rights  hereunder  shall
expire.

     Section 14. Fractional Rights and Fractional  Shares. (a) The Company shall
not be required to issue fractions of Rights,  except prior to the  Distribution
Date as provided in Section 11(p) hereof, or to distribute  Rights  Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the  registered  holders of the Rights  Certificates  with  regard to
which such  fractional  Rights would  otherwise  be issuable,  an amount in cash
equal to the same  fraction of the current  market value of a whole  Right.  For
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 of the Rights 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 the New York Stock  Exchange  or, if the Rights
are not  listed or  admitted  to  trading  on the New York  Stock  Exchange,  as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national  securities exchange on which the
Rights are listed or  admitted  to  trading,  or if the Rights are not listed or
admitted to trading on any national securities  exchange,  the last quoted price
or, if not so quoted,  the  average of the high bid and low asked  prices in the
over-the-counter  market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization,  the
average of the  closing  bid and asked  prices as  furnished  by a  professional
market maker making a market in the Rights selected by the Board of Directors of
the Company.  If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as  determined in good faith by
the Board of Directors of the Company shall be used and shall be conclusive  for
all purposes.

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

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

     (d) The holder of a Right by the acceptance of the Rights  expressly waives
his right to  receive  any  fractional  Rights  or any  fractional  shares  upon
exercise of a Right, except as permitted by this Section 14.

     Section  15.  Rights of  Action.  All  rights of action in  respect of this
Agreement,  except those rights of action vested in the Rights Agent pursuant to
Sections  18  through 20  inclusive,  are  vested in the  respective  registered
holders of the Rights  Certificates  (and, prior to the  Distribution  Date, the
registered holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution  Date, of the Common Stock),  without
the consent of the Rights Agent or of the holder of any other Rights Certificate
(or,  prior to the  Distribution  Date,  of the Common  Stock),  may, in his own
behalf and for his own  benefit,  enforce,  and may  institute  and maintain any
suit, action or proceeding  against the Company to enforce,  or otherwise act in
respect  of,  his  right  to  exercise  the  Rights  evidenced  by  such  Rights
Certificate  in the  manner  provided  in such  Rights  Certificate  and in this
Agreement.  Without  limiting the  foregoing  or any  remedies  available to the
holders of Rights,  it is specifically  acknowledged  that the holders of Rights
would not have an adequate  remedy at law for any breach of this  Agreement  and
shall be entitled to  specific  performance  of the  obligations  hereunder  and
injunctive  relief  against actual or threatened  violations of the  obligations
hereunder of any Person  subject to this  Agreement.  Holders of Rights shall be
entitled to recover the  reasonable  costs and  expenses,  including  attorneys'
fees,  incurred  by  them  in any  action  to  enforce  the  provisions  of this
Agreement.

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

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

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

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

     (d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights  Agent shall have any  liability to any holder of a Right
or other Person as a result of its  inability to perform any of its  obligations
under this  Agreement by reason of any  preliminary  or permanent  injunction or
other order, decree or ruling issued by a court 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. Rights Certificate Holder Not Deemed a Stockholder.  No holder,
as such, of any Rights  Certificate shall be entitled to vote, receive dividends
or be deemed  for any  purpose  the  holder of the  number  of  Preferred  Stock
Fractions  or any  other  securities  of the  Company  which  may at any time be
issuable on the exercise of the Rights represented  thereby,  nor shall anything
contained  herein or in any Rights  Certificate  be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a stockholder of
the  Company  or any right to vote for the  election  of  directors  or upon any
matter submitted to stockholders at any meeting thereof,  or to give or withhold
consent to any  corporate  action,  or to receive  notice of  meetings  or other
actions affecting  stockholders (except as provided in Section 24 hereof), or to
receive  dividends or  subscription  rights,  or  otherwise,  until the Right or
Rights  evidenced  by such  Rights  Certificate  shall  have been  exercised  in
accordance with the provisions hereof.

     Section 18.  Concerning the Rights Agent.  (a) The Company agrees to pay to
the  Rights  Agent  reasonable  compensation  for all  services  rendered  by it
hereunder and, from time to time, on demand of the Rights Agent,  its reasonable
expenses and counsel fees and disbursements and other disbursements  incurred in
the  administration  and  execution  of  this  Agreement  and the  exercise  and
performance  of its duties  hereunder.  The Company also agrees to indemnify the
Rights  Agent for,  and to hold it harmless  against,  any loss,  liability,  or
expense,  incurred without  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.  (b) The Rights Agent shall be protected  and shall incur no liability
for or in respect of any action  taken,  suffered or omitted by it in connection
with  its   administration  of  this  Agreement  in  reliance  upon  any  Rights
Certificate  or  certificate  for Common  Stock or for other  securities  of the
Company,  instrument of assignment or transfer, power of attorney,  endorsement,
affidavit, letter, notice, direction, consent, certificate,  statement, or other
paper or document  believed by it to be genuine and to be signed,  executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.

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

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

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

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

     (b)  Whenever in the  performance  of its duties under this  Agreement  the
Rights  Agent  shall  deem it  necessary  or  desirable  that any fact or matter
(including,  without  limitation,  the identity of any Acquiring  Person and the
determination  of current market prices) be proved or established by the Company
prior to taking or suffering any action  hereunder,  such fact or matter (unless
other  evidence in respect  thereof be herein  specifically  prescribed)  may be
deemed to be conclusively  proved and established by a certificate signed by the
Chairman of the Board, 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 only for its own negligence,
bad faith or willful misconduct.

     (d) The  Rights  Agent  shall not be liable  for or by reason of any of the
statements  of fact or recitals  contained  in this  Agreement  or in the Rights
Certificates   or  be   required   to  verify   the  same   (except  as  to  its
countersignature  on such  Rights  Certificates),  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  and  delivery  hereof by the Rights  Agent) or in respect of the
validity or execution  of any Rights  Certificate  (except its  countersignature
thereof);  nor shall it be  responsible  for any  breach by the  Company  of any
covenant or condition  contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment  required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner,  method or amount
of any such adjustment or the  ascertaining of the existence of facts that would
require  any such  adjustment  (except  with  respect to the  exercise of Rights
evidenced by Rights  Certificates  after actual notice of any such  adjustment);
nor  shall it by any act  hereunder  be  deemed  to make any  representation  or
warranty as to the authorization or reservation of any Common Stock or Preferred
Stock to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any Common Stock or  Preferred  Stock will,  when so issued,  be validly
authorized and issued, fully paid and nonassessable.

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

     (g)  The  Rights  Agent  is  hereby   authorized  and  directed  to  accept
instructions with respect to the performance of its duties hereunder from any of
the Chairman of the Board, the President,  any Vice President, the Treasurer and
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  to be taken by it in good faith in  accordance  with
instructions of any such officer.

     (h) The Rights Agent and any stockholder,  director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other  securities
of the 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,  however, reasonable care was exercised in the
selection and continued employment thereof.

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

     (k) If, with  respect to any Right  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 and/or 2  thereof,  the  Rights  Agent  shall not take any
further action with respect to such requested exercise of transfer without first
consulting with the Company.

     Section  21.  Change of Rights  Agent.  The Rights  Agent or any  successor
Rights Agent may resign and be discharged  from its duties under this  Agreement
upon  thirty (30) days'  notice in writing  mailed to the  Company,  and to each
transfer  agent of the  Common  Stock and  Preferred  Stock,  by  registered  or
certified  mail,  and to the holders of the Rights  Certificates  by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days'  notice in writing,  mailed to the Rights  Agent or  successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred  Stock, by registered or certified mail, and to the holders of the
Rights  Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a  successor  to the  Rights  Agent.  If the  Company  shall  fail to make  such
appointment  within a period of thirty  (30) days  after  giving  notice of such
removal  or  after  it has been  notified  in  writing  of such  resignation  or
incapacity by the resigning or  incapacitated  Rights Agent or by any registered
holder of a Rights  Certificate (who shall, with such notice,  submit his Rights
Certificate  for inspection by the Company),  then any registered  holder of any
Rights  Certificate  may apply to any court of  competent  jurisdiction  for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation  organized,  doing
business  and in good  standing  under the laws of the  United  States or of the
States of New York or New Jersey (or of any other state of the United  States so
long as such  corporation  is authorized to do business in the State of New York
or New  Jersey),  having  a  principal  office  in the  State of New York or New
Jersey, which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority  and  which  has at the  time of its  appointment  as  Rights  Agent a
combined capital and surplus of at least $100,000,000 or (b) an affiliate of any
such corporation described in clause (a) above. After appointment, the successor
Rights  Agent  shall  be  vested  with  the  same  powers,  rights,  duties  and
responsibilities  as if it had been  originally  named as Rights  Agent  without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose.  Not later than the  effective  date of any such  appointment,  the
Company shall file notice thereof in writing with the  predecessor  Rights Agent
and each  transfer  agent of the Common Stock and  Preferred  Stock,  and mail a
notice thereof in writing to the registered  holders of the Rights  Certificates
or, prior to the Distribution  Date, the registered  holders of shares of Common
Stock.  Failure to give any notice provided for in this Section 21, however,  or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.

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

     Section 23.  Redemption and Termination.  (a) The Board of Directors of the
Company may, at its option,  at any time prior to the earlier of (i) the date on
which a Section 11(a)(ii) Event occurs or (ii) the Final Expiration Date, redeem
all but not less than all the then  outstanding  Rights at a redemption price of
$.001 per Right, as such amount shall 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");  and the Company may, at its option, pay the Redemption Price either in
cash  or  securities  or  both  having  a  current  market  price,  as of a date
determined by the Board of Directors, of $.001.

     (b)  Immediately  upon the action of the Board of  Directors of the Company
ordering the  redemption of the Rights,  evidence of which shall have been filed
with the Rights Agent and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights  shall be to receive  the  Redemption  Price for each Right so
held.  Promptly  after  the  action  of the  Board  of  Directors  ordering  the
redemption of the Rights,  the Company  shall give notice of such  redemption to
the Rights Agent and the holders of the then outstanding  Rights by mailing such
notice to all such holders at each  holder's last address as it appears 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 Stock.  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.

     Section  24.  Notice  of  Certain  Events.  (a) In case the  Company  shall
propose,  at any time  after  the  Distribution  Date,  (i) to pay any  dividend
payable in shares of any class of  capital  stock to the  holders  of  Preferred
Stock or to make any other distribution to the holders of Preferred Stock (other
than a regular quarterly cash dividend paid out of earnings or retained earnings
of the  Company),  or (ii) to offer to the holders of Preferred  Stock rights or
warrants to  subscribe  for or to purchase  any  additional  shares of Preferred
Stock or  shares  of  stock of any  class or any  other  securities,  rights  or
options,  or (iii) to effect any  reclassification of its Preferred Stock (other
than a reclassification  involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any consolidation or merger into or with any
other Person  (other than a  Subsidiary  of the Company in a  transaction  which
complies with Section 11(o) hereof) or to effect any sale or other  transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer),
in one  transaction or series of related  transactions,  of more than 50% of the
assets or earning power of the Company and its  Subsidiaries  (taken as a whole)
to any other Person (other than the Company  and/or any of its  Subsidiaries  in
one or more transactions  each of which complies with Section 11(o) hereof),  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  Rights
Certificate, to the extent feasible, and in accordance with Section 25 hereof, a
notice of such  proposed  action,  which  shall  specify the record date for the
purposes of such share dividend, 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 Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least  twenty (20) days prior to the record date for
determining  holders of the Preferred Stock for purposes of such action,  and in
the case of any such other  action,  at least twenty (20) days prior to the date
of the taking of such proposed  action or the date of  participation  therein by
the holders of the Preferred Stock, whichever shall be the earlier.

     (b) Upon the occurrence of a Section 11(a)(ii) Event, (i) the Company shall
as soon as practicable  thereafter give to each holder of a Rights  Certificate,
to the extent  feasible,  in accordance with Section 25 hereof,  a notice of the
occurrence of such event and the  consequences of the event to holders of Rights
under  Section  11(a)(ii)  hereof  and  (ii)  all  references  in the  preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock
and/or, if appropriate, other securities.

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

                  NUI Corporation
                  550 Route 202-206
                  P.O. Box 760
                  Bedminster, New Jersey  07921-0760

                  Attention:  Secretary and
                  General Counsel

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

                  American Stock Transfer & Trust Company
                  59 Maiden Lane
                  New York, NY 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 Rights Certificate (or if prior
to the  Distribution  Date, to the holder of  certificates  representing  Common
Stock) 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 26. Supplements and Amendments.  Prior to the Distribution Date and
subject to the next to last  sentence of this  Section  26, the Company  may, by
resolution of its Board of Directors and the Rights Agent shall,  if the Company
so directs,  supplement  or amend any  provision of this  Agreement  without the
approval of any holders of  certificates  representing  Common  Stock.  From and
after the  Distribution  Date and  subject to the next to last  sentence of this
Section 26, the Company and the Rights Agent  shall,  if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates  in order (i) to cure any ambiguity,  (ii) to correct or supplement
any provision  contained herein which may be defective or inconsistent  with any
other provisions herein,  (iii) to change or supplement the provisions hereunder
in any manner which the Company may deem  necessary or desirable and which shall
not adversely affect the interests of the holders of Rights  Certificates (other
than an Acquiring  Person or an Affiliate or Associate of an Acquiring  Person),
or (iv) to  shorten  or  lengthen  any time  period  hereunder;  provided,  this
Agreement  may not be  supplemented  or amended to lengthen,  pursuant to clause
(iv) of this  sentence,  (A) a time  period  relative  to when the Rights may be
redeemed  at such time as the Rights are not then  redeemable,  or (B) any other
time period unless such lengthening is for the purpose of protecting,  enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate  from an appropriate  officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding  anything  contained  in  this  Agreement  to the  contrary,  no
supplement or amendment  shall be made which changes the Redemption  Price,  the
Final  Expiration  Date, the Purchase  Price,  or the number of Preferred  Stock
Fractions for which a Right is exercisable.  Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.

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

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

     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 Rights  Certificates  (and, prior to the Distribution
Date,  registered  holders of the Common  Stock) any legal or  equitable  right,
remedy or claim under this  Agreement;  but this Agreement shall be for the sole
and  exclusive  benefit  of the  Company,  the Rights  Agent and the  registered
holders  of the  Rights  Certificates  (and,  prior  to the  Distribution  Date,
registered holders of the Common Stock).

     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;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court  or  authority  to be  invalid,  void or  unenforceable  and the  Board of
Directors of the Company determines in its good faith judgment that severing the
invalid  language  from this  Agreement  would  adversely  affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be  reinstated  and shall not expire  until the Close of  Business  on the
tenth day following the date of such determination by the Board of Directors.

     Section  31.  Governing  Law.  This  Agreement,  each Right and each Rights
Certificate  issued  hereunder  shall be deemed to be a contract  made under the
laws of the state of New Jersey 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.

                                      * * *

<PAGE>

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

Attest:                                NUI CORPORATION

By /s/ Carol A. Sliker                 By /s/ James R. Van Horn
   -----------------------                -------------------------
Name:  Carol A. Sliker                 Name:  James R. Van Horn
Title: Assistant Secretary             Title: Secretary and General Counsel

Attest:                                AMERICAN STOCK TRANSFER & TRUST COMPANY

By /s/ Susan Silber                    By /s/ Herbert J. Lemmer
   -----------------------                -------------------------
Name:  Susan Silber                    Name:  Herbert J. Lemmer
Title: Assistant Secretary             Title: Vice-President

<PAGE>

                                                                       EXHIBIT A

                                    FORM OF

                            CERTIFICATE OF AMENDMENT

                                       OF

                      RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                                 NUI CORPORATION

   Pursuant to Section 14A: 7-2(4) of the New Jersey Business Corporation Act

     NUI CORPORATION,  a corporation organized and existing under the New Jersey
Business  Corporation Act, (the "Corporation") in accordance with the provisions
of Section 14A:7-2(4) thereof, DOES HEREBY CERTIFY:

     FIRST: The name of the Corporation is NUI Corporation.

     SECOND:  Pursuant to the authority conferred upon the Board of Directors by
the Restated  Certificate of  Incorporation  of the said  Corporation,  the said
Board of  Directors  on March 2,  2001 duly  adopted  the  following  resolution
creating a series of Preferred Stock designated as Series A Junior Participating
Preferred Stock:

     RESOLVED,  that pursuant to the authority  vested in the Board of Directors
of  this   Corporation  in  accordance  with  the  provisions  of  its  Restated
Certificate of Incorporation,  a series of Preferred Stock of the Corporation be
and it hereby is created  and that the  designation  and amount  thereof and the
voting powers,  preferences  and relative,  participating,  optional,  and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:

     Section 1.  Designation  and  Amount.  The shares of such  series  shall be
designated as "Series A Junior Participating  Preferred Stock" and the number of
shares  constituting  such  series  shall  initially  be  one  hundred  thousand
(100,000),  no par value,  such  number of shares to be subject to  increase  or
decrease by action of the Board of Directors as  evidenced by a  certificate  of
designations.

     Section  2.  Dividends  and  Distributions.  (a)  Subject  to the prior and
superior  rights of the holders of any shares of any series of  Preferred  Stock
ranking  prior and  superior  to the  shares  of  Series A Junior  Participating
Preferred  Stock with  respect to  dividends,  the holders of shares of Series A
Junior Participating  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 last day of March,  June,
September and December in each year (each such date being  referred to herein as
a

                                       1
<PAGE>

"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 Junior  Participating  Preferred Stock, in an amount per share (rounded
to the  nearest  cent)  equal to the  greater  of (a) $10 or (b)  subject to the
provision  for  adjustment  hereinafter  set forth,  100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other  distributions other than a
dividend  payable in shares of Common Stock 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 Junior  Participating  Preferred  Stock.  In the
event  the  Corporation  shall at any time  after  March 2,  2001  (the  "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A Junior Participating 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 Junior  Participating  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 $10 per share on the
Series A Junior  Participating  Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.

     (c) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Junior  Participating  Preferred  Stock from the Quarterly  Dividend
Payment Date next  preceding the date of issue of such shares of Series A Junior
Participating  Preferred Stock,  unless the date of issue of such share is prior
to the record date for the first Quarterly  Dividend Payment Date, in which case
dividends  on such  shares  shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the  determination of holders of shares of Series
A Junior Participating  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 Junior Participating 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

                                       2
<PAGE>

Series A Junior  Participating  Preferred Stock entitled to receive payment of a
dividend or distribution  declared  thereon,  which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.

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

     (a) Subject to the provision for  adjustment  hereinafter  set forth,  each
share of Series A Junior Participating  Preferred Stock shall entitle the holder
thereof to 100 votes on all matters  submitted to a vote of the  stockholders of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration  Date (i) declare any dividend on Common Stock  payable in shares of
Common stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the  number  of votes per  share to which  holders  of shares of Series A Junior
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 herein or by law, the holders of shares of
Series A Junior  Participating  Preferred  Stock  and the  holders  of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.

     (c) (i) If at any time  dividends  on any  Series  A  Junior  Participating
Preferred  Stock  shall be in  arrears in an amount  equal to six (6)  quarterly
dividends  thereon,  the occurrence of such contingency shall mark the beginning
of a period  (herein  called a "default  period")  which shall extend until such
time when all accrued and unpaid dividends for all previous  quarterly  dividend
periods and for the current quarterly  dividend period on all shares of Series A
Junior  Participating  Preferred Stock then outstanding shall have been declared
and paid or set apart for payment.  During each default  period,  all holders of
Preferred  Stock  (including  holders  of  the  Series  A  Junior  Participating
Preferred  Stock) with  dividends in arrears in an amount equal to (6) quarterly
dividends  thereon,  voting as a class,  irrespective of series,  shall have the
right to elect two (2) Directors.

          (ii) During any default  period,  such voting  right of the holders of
     Series A Junior Participating Preferred Stock may be exercised initially at
     a special  meeting called  pursuant to  subparagraph  (iii) of this Section
     3(c) or at any annual  meeting of  stockholders,  and  thereafter at annual
     meetings of  stockholders,  provided that neither such voting right nor the
     right of the holders of any other  series of  Preferred  Stock,  if any, to
     increase,  in certain cases,  the authorized  number of Directors  shall be
     exercised  unless the holders of ten  percent  (10%) in number of shares of
     Preferred  Stock  outstanding  shall be present in person or by proxy.  The
     absence  of a quorum of the  holders of Common  Stock  shall not affect the
     exercise by the holders of  Preferred  Stock of such voting  right.  At any
     meeting at which the holders of Preferred Stock

                                       3
<PAGE>

     shall  exercise  such voting  right  initially  during an existing  default
     period,  they  shall  have  the  right,  voting  as a class,  to fill  such
     vacancies,  if any, in the Board of  Directors  as may then exist up to two
     (2) Directors or, if such right is exercised at an annual meeting, to elect
     two (2)  Directors.  If the number  which may be so elected at any  special
     meeting  does  not  amount  to the  required  number,  the  holders  of the
     Preferred Stock shall have the right to make such increase in the number of
     Directors  as shall be  necessary  to permit  the  election  by them of the
     required  number.  After the  holders  of the  Preferred  Stock  shall have
     exercised  their right to elect  Directors in any default period and during
     the  continuance  of such  period,  the  number of  Directors  shall not be
     increased or decreased  except by vote of the holders of Preferred Stock as
     herein provided or pursuant to the rights of any equity securities  ranking
     senior to or pari passu with the  Series A Junior  Participating  Preferred
     Stock.

         (iii) Unless the holders of Preferred  Stock shall,  during an existing
     default period,  have previously  exercised their right to elect Directors,
     the Board of Directors may order, or any stockholder or stockholders owning
     in the  aggregate  not less than ten percent  (10%) of the total  number of
     shares of Preferred Stock outstanding, irrespective of series, may request,
     the calling of a special meeting of the holders of Preferred  Stock,  which
     meeting  shall  thereupon  be  called by the  Chairman  of the  Board,  the
     President or the Secretary of the  Corporation.  Notice of such meeting and
     of any annual  meeting at which holders of Preferred  Stock are entitled to
     vote pursuant to this  paragraph  (c)(iii) shall be given to each holder of
     record of  Preferred  Stock by mailing a copy of such  notice to him at his
     last  address  as the same  appears on the books of the  Corporation.  Such
     meeting  shall be called for a time not earlier  than 10 days and not later
     than 60 days after such order or  request,  such  meeting  may be called on
     similar notice by any stockholder or  stockholders  owning in the aggregate
     not less than ten percent  (10%) of the total number of shares of Preferred
     Stock  outstanding.   Notwithstanding  the  provisions  of  this  paragraph
     (c)(iii),  no such special meeting shall be called during the period within
     60 days immediately preceding the date fixed for the next annual meeting of
     the stockholders.

          (iv) In any default  period,  the holders of Common  Stock,  and other
     classes of stock of the  Corporation  if  applicable,  shall continue to be
     entitled  to elect  the whole  number of  Directors  until the  holders  of
     Preferred Stock shall have exercised their right to elect two (2) Directors
     voting as a class,  after the exercise of which right (x) the  Directors so
     elected by the holders of  Preferred  Stock shall  continue in office until
     their  successors  shall  have been  elected  by such  holders or until the
     expiration  of the  default  period,  and (y) any  vacancy  in the Board of
     Directors may (except as provided in paragraph (c)(ii) of this Section 3 be
     filled by vote of a majority of the remaining Directors theretofore elected
     by the  holders of the class of stock  which  elected  the  Director  whose
     office  shall have  become  vacant.  References  in this  paragraph  (C) to
     Directors  elected by the  holders  of a  particular  class of stock  shall
     include  Directors  elected by such Directors to fill vacancies as provided
     in clause (y) of the foregoing sentence.

          (v) Immediately upon the expiration of a default period, (x) the right
     of the  holders  of  Preferred  Stock as a class to elect  Directors  shall
     cease, (y) the term of any

                                       4
<PAGE>

     Directors  elected  by the  holders  of  Preferred  Stock as a class  shall
     terminate,  and (z) the number of Directors  shall be such number as may be
     provided  for in the  Restated  Certificate  of  Incorporation  or  By-Laws
     irrespective  of any increase made pursuant to the  provisions of paragraph
     (c)(ii) of this Section 3 (such number being  subject,  however,  to change
     thereafter in any manner provided by law or in the Restated  Certificate of
     Incorporation or By-Laws). Any vacancies in the Board of Directors effected
     by the  provisions of clauses (y) and (z) in the preceding  sentence may be
     filled by a majority of the remaining Directors.

     (d) Except as set forth  herein,  holders of Series A Junior  Participating
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.

     Section 4. Certain Restrictions.  (a) Whenever quarterly dividends or other
dividends  or  distributions  payable  on  the  Series  A  Junior  Participating
Preferred  Stock as provided in Section 2 are in arrears,  thereafter  and until
all accrued and unpaid dividends and distributions,  whether or not declared, on
shares of Series A Junior  Participating  Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:

          (i) declare or pay dividends on, make any other  distributions  on, or
     redeem or purchase or  otherwise  acquire for  consideration  any shares of
     stock  ranking  junior  (either  as  to  dividends  or  upon   liquidation,
     dissolution or winding up) to the Series A Junior  Participating  Preferred
     Stock;

          (ii) declare or pay  dividends on 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  Junior
     Participating  Preferred Stock, except dividends paid ratably on the Series
     A Junior  Participating  Preferred Stock and all such parity stock on which
     dividends  are payable or in arrears in  proportion to the total amounts to
     which the holders of all such shares are then entitled;

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

          (iv)  purchase or otherwise  acquire for  consideration  any shares of
     Series A Junior  Participating  Preferred  Stock,  or any  shares  of stock
     ranking on a parity with the Series A Junior Participating Preferred Stock,
     except  in  accordance  with  a  purchase  offer  made  in  writing  or  by
     publication  (as  determined  by the Board of  Directors) to all holders of
     such shares upon such terms as the Board of Directors,  after consideration
     of the respective annual dividend rates and other relative rights and

                                       5
<PAGE>

     preferences of the respective  series and classes,  shall determine in good
     faith will  result in fair and  equitable  treatment  among the  respective
     series or classes.

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

     Section 5. Reacquired Shares.  Any shares of Series A Junior  Participating
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 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 Board of
Directors,  subject to the  conditions  and  restrictions  on issuance set forth
herein.

     Section 6. Liquidation, Dissolution or Winding Up. (a) Upon any liquidation
(voluntary  or  otherwise),  dissolution  or winding up of the  Corporation,  no
distribution  shall be made to the  holders  of shares of stock  ranking  junior
(either as to dividends or upon  liquidation,  dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series A Junior  Participating  Preferred Stock shall have received
$100 per  share,  plus an amount  equal to  accrued  and  unpaid  dividends  and
distributions thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference").  Following the payment of the full amount of
the Series A Liquidation Preference,  no additional  distributions shall be made
to the  holders  of  shares  of Series A Junior  Participating  Preferred  Stock
unless, prior thereto, the holders of shares of Common Stock shall have received
an amount per share (the "Common  Adjustment") equal to the quotient obtained by
dividing (i) the Series A Liquidation  Preference by (ii) 100 (as  appropriately
adjusted as set forth in  subparagraph  C below to reflect  such events as stock
splits, stock dividends and recapitalizations  with respect to the Common Stock)
(such number in clause (ii), the "Adjustment Number").  Following the payment of
the full amount of the Series A Liquidation Preference and the Common Adjustment
in respect of all outstanding shares of Series A Junior Participating  Preferred
Stock and Common Stock,  respectively,  holders of Series A Junior Participating
Preferred  Stock and  holders  of shares of Common  Stock  shall  receive  their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the  Adjustment  Number to 1 with respect to such  Preferred  Stock and
Common Stock, on a per share basis, respectively.

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

                                       6
<PAGE>

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

     Section 7. Consolidation,  Merger, etc. In case the Corporation shall enter
into any  consolidation,  merger,  combination or other transaction in which the
shares  of  Common  Stock are  exchanged  for or  changed  into  other  stock or
securities,  cash and/or any other property, then in any such case the shares of
Series  A  Junior  Participating  Preferred  Stock  shall  at the  same  time be
similarly  exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be,  into  which or for which  each  share of  Common  Stock is  changed  or
exchanged.  In the  event the  Corporation  shall at any time  after the  Rights
Declaration  Date (i) declare any dividend on Common Stock  payable in shares of
Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the  preceding  sentence with respect to the exchange or
change  of  shares of Series A Junior  Participating  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.

     Section  8. No  Redemption.  The  shares of  Series A Junior  Participating
Preferred Stock shall not be redeemable.

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

     Section 10.  Amendment.  The Restated  Certificate 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 Junior
Participating  Preferred  Stock  so as to  affect  them  adversely  without  the
affirmative  vote of the holders of two-thirds  (2/3) or more of the outstanding
shares of Series A Junior Participating  Preferred Stock, voting separately as a
class.

     Section 11.  Fractional  Shares.  Series A Junior  Participating  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

                                       7
<PAGE>

distributions and to have the benefit of all other rights of holders of Series A
Junior Participating Preferred Stock.

     THIRD: The Corporation's  Restated  Certificate of Incorporation is amended
so  that  the  rights,  preferences  and  limitations  of the  Series  A  Junior
Participating Preferred Stock are as stated in the foregoing resolution.

     IN WITNESS  WHEREOF,  the  undersigned  has signed  this  Amendment  to the
Restated  Certificate of Incorporation on behalf of the Corporation this 2nd day
of March 2001.

                                          NUI CORPORATION

                                          By: ____________________________
                                          Name:  John Kean, Jr.
                                          Title: President

                                       8

<PAGE>

                                                                       EXHIBIT B

                           Form of Rights Certificate

Certificate No. R-                                             _________  Rights

NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT  REFERRED  TO BELOW).  THE RIGHTS ARE  SUBJECT TO  REDEMPTION,  AT THE
OPTION OF THE  COMPANY,  AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.  UNDER  CERTAIN  CIRCUMSTANCES,   RIGHTS  BENEFICIALLY  OWNED  BY  AN
ACQUIRING  PERSON OR AN AFFILIATE  OR ASSOCIATE OF AN ACQUIRING  PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS  AGREEMENT)  AND ANY  SUBSEQUENT  HOLDER OF SUCH
RIGHTS  MAY  BECOME  NULL AND  VOID.  [THE  RIGHTS  REPRESENTED  BY THIS  RIGHTS
CERTIFICATE  ARE OR WERE  BENEFICIALLY  OWNED BY A PERSON  WHO WAS OR  BECAME AN
ACQUIRING  PERSON OR AN AFFILIATE  OR ASSOCIATE OF AN ACQUIRING  PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS  REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.] (1)

                               Rights Certificate

                                 NUI CORPORATION

     This certifies that ____________________________, or registered assigns, is
the  registered  holder 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 2, 2001 (as it may be amended, modified
or  supplemented  from  time to  time,  the  "Rights  Agreement"),  between  NUI
Corporation,  a New Jersey  corporation  (the  "Company"),  and  American  Stock
Transfer & Trust  Company,  a New York trust  company (the "Rights  Agent"),  to
purchase  from the Company at any time prior to 5:00 P.M. (New York time) on the
Expiration Date (as defined in the Rights  Agreement),  which shall not be later
than March 2, 2011 at the office or offices of the Rights Agent  designated  for
such purpose, or its successors as Rights Agent, one one-hundredth of a share of
the Company's Series A Junior  Participating  Preferred stock, no par value (the
"Preferred  Stock"),  at a purchase price of $50 (the "Purchase  Price") per one
one-hundredth   of  a  Preferred  Stock  (such  fraction,   a  "Preferred  Stock
Fraction"),  upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase set forth on the reverse hereof and the Certificate
contained therein duly executed.  Except as otherwise  provided in Section 11(q)
of the Rights Agreement, the Purchase Price shall be paid at the election of the
holder in cash or by certified bank check or money order payable to the order of
the Company.  The number of Rights evidenced by this Rights  Certificate and the
number of Preferred Stock Fractions which may be purchased upon exercise thereof
and the Purchase Price per Preferred  Stock Fraction,  set forth above,  are the
number of Rights,  number of one Preferred Stock Fractions and Purchase Price as
of  ___________,  20__,(2)  based on the Preferred  Stock as constituted at such
date.

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

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

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

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

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this Certificate may be redeemed by the Board of Directors of the Company at its
option at a redemption price of $.001 per Right at any time prior to the earlier
of (i) the date on which a Section  11(a)(ii)  Event  occurs  and (ii) the Final
Expiration Date.

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

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

     WITNESS the facsimile signature of the proper officers of the Company.

Dated as of __________, 20__

ATTEST:                                  NUI CORPORATION
___________________________________      By_____________________________________
Name:                                    Name:
Title:                                   Title:

Countersigned:                           American Stock Transfer & Trust Company

By_________________________________      By_____________________________________
Name:                                    Name:
Title:                                   Title:

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

(2)  Insert the Distribution Date.

<PAGE>

                   Form of Reverse Side of Rights Certificate

                               FORM OF ASSIGNMENT

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

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

Dated:  ____________________, 20__

                                            __________________________
                                            Signature

Signature Guaranteed:

                                   Certificate

     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:  __________________, 20__                ________________________________
                                                Signature

                                     NOTICE

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

<PAGE>

                          FORM OF ELECTION TO PURCHASE

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

To:  NUI CORPORATION

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

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

Please insert social security or other identifying number:

___________________________________

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

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

Please insert social security or other identifying number:

___________________________________

Dated:  __________________, 20__                ________________________________
                                                Signature

Signature Guaranteed:

                                   Certificate

     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:  __________________, 20__                ________________________________
                                                Signature

<PAGE>

                                                                       EXHIBIT C

                          SUMMARY OF RIGHTS TO PURCHASE

                                 PREFERRED STOCK

         On March 2, 2001,  the Board of  Directors  of NUI  Corporation,  a New
Jersey  corporation  (the  "Company"),  declared a dividend  distribution of one
Right for each  outstanding  share of common  stock,  no par value (the  "Common
Stock") of the Company,  to  stockholders  of record at the close of business on
March 2, 2001 (the "Record  Date").  Each Right  entitles  the record  holder to
purchase  from  the  Company  one  one-hundredth  of a share  ("Preferred  Stock
Fraction") of the Company's  Series A Junior  Participating  Preferred Stock, no
par value  (the  "Preferred  Stock") at a price of $50 (the  "Purchase  Price"),
subject to adjustment in certain circumstances.  Except as otherwise provided in
the Rights  Agreement,  the Purchase  Price may be paid,  at the election of the
registered  holder, in cash or be certified bank check or money order payable to
the order of the Company.  The description and terms of the Rights are set forth
in a Rights Agreement, dated as of March 2, 2001 (as it may be amended, modified
or supplemented from time to time, the "Rights Agreement"),  between the Company
and American Stock Transfer & Trust Company, as Rights Agent.

         Initially, the Rights will be attached to the certificates representing
outstanding  shares  of  Common  Stock,  and  no  Rights  Certificates  will  be
distributed.  The Rights will separate from the Common Stock and a  Distribution
Date will occur upon the earlier of:

         -     the close of business on the tenth day after the date of a public
               announcement  that a person or group of  affiliated or associated
               persons (an  "Acquiring  Person") has  acquired,  or obtained the
               right  to  acquire,  beneficial  ownership  of 15% or more of the
               outstanding  shares  of  Common  Stock  (the  "Stock  Acquisition
               Date"), or

         -     the close of  business on the tenth  Business  Day (or such later
               date as may be  determined  by the  Company's  Board of Directors
               prior to such time as any  person  becomes an  Acquiring  Person)
               after the  commencement  of a tender offer or exchange  offer if,
               upon consummation  thereof, the person or group making such offer
               would be the beneficial  owner of 15% or more of the  outstanding
               shares of Common Stock.

Until the Distribution Date:

         -     the Rights will be evidenced by the Common Stock certificates and
               will  be  transferred  with  and  only  with  such  Common  Stock
               certificates,

         -     new Common Stock  certificates  issued after the Record Date will
               contain  a  notation   incorporating   the  Rights  Agreement  by
               reference, and

         -     the surrender for transfer of any  certificates  for Common Stock
               outstanding  will also  constitute  the  transfer  of the  Rights
               associated with the Common Stock represented by such certificate.

         As  soon  as  practicable   following  the  Distribution  Date,  Rights
Certificates  will be mailed to holders of record of the Common  Stock as of the
close of business on the Distribution Date and, thereafter, such separate Rights
Certificates  alone  will  evidence  the  Rights.   Except  in  certain  limited
circumstances, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.

         The Rights are not  exercisable  until the  Distribution  Date and will
expire at the close of business on March 2, 2011 unless earlier  redeemed by the
Company as described below.

         Except in the  circumstances  described  below,  after the Distribution
Date each  Right will be  exercisable  into a  Preferred  Stock  Fraction.  Each
Preferred Stock Fraction carries voting and dividend rights that are intended to
produce the  equivalent  of one share of Common  Stock.  The voting and dividend
rights  of the  Preferred  Stock  are  subject  to  adjustment  in the  event of
dividends, subdivisions and combinations with respect to the Common Stock of the
Company.  In lieu of issuing  certificates  for fractions of shares of Preferred
Stock  (other than  fractions  which are integral  multiples of Preferred  Stock
Fractions), the Company may pay cash in accordance with the Rights Agreement.

         In the event that,  at any time  following  the  Distribution  Date,  a
Person  becomes an  Acquiring  Person  (other than  pursuant to an offer for all
outstanding shares of Common Stock at a price and on terms which the majority of
the  independent  Directors  determine to be fair to, and  otherwise in the best
interests of, stockholders), the Rights Agreement provides that proper provision
shall be made so that each holder of a Right will  thereafter  have the right to
receive, upon the exercise thereof,  Common Stock (or, in certain circumstances,
cash,  property or other  securities of the Company) having a value equal to two
(2) times the exercise price of the Right.  In lieu of requiring  payment of the
Purchase Price upon exercise of the Rights following any such event, the Company
may provide that each Right be exchanged for one share of Common Stock (or cash,
property or other securities, as the case may be). The only right of a holder of
Rights following the Company's election to provide for such exchange shall be to
receive the above described  securities.  Notwithstanding  any of the foregoing,
following the occurrence of any of the events set forth in this  paragraph,  any
Rights  that are,  or  (under  certain  circumstances  specified  in the  Rights
Agreement) were,  beneficially  owned by an Acquiring  Person shall  immediately
become null and void.

         For  example,  at an  exercise  price of $50 per Right,  each Right not
owned by an Acquiring Person (or by certain related parties)  following an event
set forth in the preceding  paragraph  would entitle its holder to purchase $100
worth of Common Stock (or other consideration, as noted above) for $50. Assuming
that the Common  Stock had a per share value of $25 at such time,  the holder of
each valid Right would be entitled to purchase  four shares of Common  Stock for
$50. Alternatively,  the Company could permit the holder to surrender each Right
in  exchange  for one share of Common  Stock  (with a value of $25)  without the
payment of any consideration other than the surrender of the Right.

         In the event that, at any time following the Stock Acquisition Date:

         -     the  Company  engages in a merger or  consolidation  in which the
               Company is not the surviving corporation

         -     the Company  engages in a merger or  consolidation  with  another
               person in which the Company is the surviving corporation,  but in
               which all or part of its Common Stock is changed or exchanged, or

         -     50% or more of the  Company's  assets or earning power is sold or
               transferred  (except with respect to the first two bullet  points
               above, a merger or consolidation which follows an offer described
               in the  second  preceding  paragraph  and in which the amount and
               form of consideration is the same as was paid in such offer),

the Rights  Agreement  provides that proper provision shall be made so that each
holder of a Right (except Rights which  previously have been voided as set forth
above) shall  thereafter have the right to receive,  upon the exercise  thereof,
common stock of the acquiring  company having a value equal to two (2) times the
exercise  price of the Right.  The events set forth in this paragraph and in the
second preceding paragraph are referred to as the "Triggering Events."

         The Purchase Price payable, and the number of Preferred Stock Fractions
or other  securities  or  property  issuable,  upon  exercise  of the Rights are
subject to adjustment from time to time to prevent  dilution under the following
circumstances:

         -     in the event of a stock dividend on the Preferred  Stock or other
               capital stock, or a subdivision,  combination or reclassification
               of the Preferred Stock,

         -     upon the  grant to  holders  of the  Preferred  Stock of  certain
               rights or warrants to subscribe for Preferred Stock or securities
               convertible  into Preferred Stock at less than the current market
               price  of  the   Preferred   Stock,   or  under   the   following
               circumstances:  upon the distribution to holders of the Preferred
               Stock of evidences of indebtedness or assets  (excluding  regular
               quarterly cash dividends or dividends payable in Preferred Stock)
               or of subscription  rights or warrants (other than those referred
               to above).

         With certain  exceptions,  no adjustment in the Purchase  Price will be
required until  cumulative  adjustments  require an adjustment of at least 1% in
such  Purchase  Price.  No  fractional  shares of  Preferred  Stock  (other than
fractions  which are integral  multiples of Preferred  Stock  Fractions) will be
issued upon exercise of the Rights and, in lieu thereof,  a cash payment will be
made based on the market price of the  Preferred  Stock on the last trading date
prior to the date of exercise.

         At any  time  prior  to the  earlier  of the  date on  which a  Section
11(a)(ii) Event occurs and the Final  Expiration Date, the Board of Directors of
the Company may redeem the Rights in whole, but not in part, at a price of $.001
per  Right,  payable in cash or  securities  or both (the  "Redemption  Price").
Immediately  upon the action of the Board of Directors  of the Company  ordering
redemption  of the Rights,  the Rights will  terminate and the only right of the
holders of Rights will be to receive the Redemption Price.

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

         Any of the  provisions  of the Rights  Agreement,  other  than  certain
provisions  relating  to the  principal  economic  terms of the  Rights,  may be
amended by the Board of Directors of the Company prior to the Distribution Date.
Thereafter,  the  provisions,  other than  certain  provisions  relating  to the
principal  economic terms of the Rights,  of the Rights Agreement may be amended
by the Board in  order:  to cure any  ambiguity,  defect  or  inconsistency;  to
shorten or lengthen any time period under the Rights Agreement;  or in any other
respect  that will not  adversely  affect  the  interests  of  holders of Rights
(excluding the interests of any Acquiring Person); provided that no amendment to
adjust the time period  governing  redemption  shall be made at such time as the
Rights are not redeemable.

         A copy of the Rights  Agreement  will be filed with the  Securities and
Exchange Commission as an Exhibit to a Registration  Statement of the Company on
Form 8-A. A copy of the Rights  Agreement is  available  free of charge from the
Company upon written request  therefor.  This summary  description of the Rights
does not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement, which is incorporated herein by reference.GREEN MOUNTAIN COFFEE, INC.
                             STOCK OPTION AGREEMENT
                          UNDER 2000 STOCK OPTION PLAN
                             INCENTIVE STOCK OPTION

                                December 20, 2000

         AGREEMENT  entered into by and between Green Mountain  Coffee,  Inc., a
Delaware corporation with its principal place of business in Waterbury,  Vermont
(together with its subsidiaries, the "Company"), and the undersigned employee of
the Company (the "Optionee").

         The Company  desires to grant the  Optionee an  incentive  stock option
under the  Company's  2000 Stock Option Plan, as amended (the "Plan") to acquire
shares of the Company's Common Stock, par value $.10 per share (the "Shares").

         The Plan  provides  that each  option is to be  evidenced  by an option
agreement, setting forth the terms and conditions of the option.

         ACCORDINGLY,  in  consideration  of the  premises  and  of  the  mutual
covenants and agreements  contained herein,  the Company and the Optionee hereby
agree as follows:

         1.       Grant of Option.

         The Company  hereby  grants to the  Optionee  incentive  stock  options
(collectively, the "Option") to purchase all or any part of the number of Shares
shown at the end of this Agreement on the terms and conditions  hereinafter  set
forth.  This Option is intended to be treated as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

         2.       Purchase Price.

         The purchase  price  ("Purchase  Price") for the Shares  covered by the
Option  shall  be the  dollar  amount  per  Share  set  forth at the end of this
Agreement.

         3.       Time of Exercise of Option.

         This Option shall be first exercisable as to a quarter of the Shares on
each of the first four anniversary dates of this Agreement.

         To the extent  the  Option is not  exercised  by the  Optionee  when it
becomes exercisable, it shall not expire, but shall be carried forward and shall
be exercisable, on a cumulative basis, until the Expiration Date, as hereinafter
defined.

<PAGE>

         4.       Term of Options; Exercisability.

         (a)      Term.

                  (i)      Each Option shall expire on the date shown at the end
                           of  this  Agreement  (the  "Expiration   Date"),   as
                           determined  by the Board of  Directors of the Company
                           (the "Board").

                  (ii)     Except as  otherwise  provided in this  Section 4, if
                           the   Optionee's   employment   by  the   Company  is
                           terminated,   the  Option  granted  to  the  Optionee
                           hereunder  shall  terminate  on the earlier of ninety
                           days after the date the Optionee's  employment by the
                           Company is terminated,  or (ii) the date on which the
                           Option expires by its terms.

                  (iii)    If the  Optionee's  employment  is  terminated by the
                           Company  for  cause or  because  the  Optionee  is in
                           breach of any employment agreement,  such Option will
                           terminate on the date the  Optionee's  employment  is
                           terminated by the Company.

                  (iv)     If the  Optionee's  employment  is  terminated by the
                           Company  because the Optionee has become  permanently
                           disabled  (within the meaning of Section  22(e)(3) of
                           the Code), such Option shall terminate on the earlier
                           of (i)  one  year  after  the  date  such  Optionee's
                           employment by the Company is terminated,  or (ii) the
                           date on which the option expires by its terms.

                  (v)      In the event of the death of the Optionee, the Option
                           granted  to  such  Optionee  shall  terminate  on the
                           earlier   of  (i)  one  year   after  the  date  such
                           optionee's  employment by the Company is  terminated;
                           or (ii) the date on which the  option  expires by its
                           terms.

         (b)      Exercisability.

                  (i)      Except  as   provided   below,   if  the   Optionee's
                           employment by the Company is  terminated,  the Option
                           granted   to  the   Optionee   hereunder   shall   be
                           exercisable  only to the  extent  that  the  right to
                           purchase  shares under such Option has accrued and is
                           in effect on the date the  Optionee's  employment  by
                           the Company is terminated.

<PAGE>

                  (ii)     If the  Optionee's  employment  is  terminated by the
                           Company  because  he or she  has  become  permanently
                           disabled, as defined above, the option granted to the
                           Optionee  hereunder shall be immediately  exercisable
                           as to the  full  number  of  Shares  covered  by such
                           Option,  whether  or  not  under  the  provisions  of
                           Section   3  hereof   such   Option   was   otherwise
                           exercisable as of the date of disability.

                  (iii)    In the event of the death of the Optionee, the Option
                           granted to such Optionee may be exercised to the full
                           number  of Shares  covered  thereby,  whether  or not
                           under the provisions of Section 3 hereof the Optionee
                           was  entitled  to do so at  the  date  of  his or her
                           death,  by the  executor,  administrator  or personal
                           representative of such Optionee,  or by any person or
                           persons  who  acquired  the  right to  exercise  such
                           Option by bequest or  inheritance or by reason of the
                           death of such Optionee.

         5.       Manner of Exercise of Option.

         (a) To the extent that the right to exercise the Option has accrued and
is in effect,  the option may be exercised in full or in part by giving  written
notice to the Company stating the number of Shares  exercised and accompanied by
payment in full for such Shares.  No partial  exercise may be made for less than
twenty-five  (25) full shares of Common  Stock.  Payment may be either wholly in
cash or in whole or in part in Shares already owned by the person exercising the
Option,  valued  at fair  market  value  as of the date of  exercise;  provided,
however,  that payment of the exercise price by delivery of Shares already owned
by the person  exercising  the Option may be made only if such  payment does not
result in a charge to earnings for financial  accounting  purposes as determined
by the  Board.  Upon such  exercise,  delivery  of a  certificate  for  paid-up,
non-assessable  Shares shall be made at the  principal  office of the Company to
the person  exercising  the option,  not less than thirty (30) and not more than
ninety (90) days from the date of receipt of the notice by the Company.

         (b) The  Company  shall at all  times  during  the  term of the  Option
reserve  and keep  available  such  number of Shares  as will be  sufficient  to
satisfy the requirements of the Option.

         6.       Non-Transferability.

         The  right  of  the  Optionee  to  exercise  the  option  shall  not be
assignable or transferable by the Optionee otherwise than by will or the laws of
descent and distribution, and the Option may be exercised during the lifetime of
the  Optionee  only by him or her. The Option shall be null and void and without
effect upon the  bankruptcy of the Optionee or upon any attempted  assignment or
transfer,  except as  hereinabove  provided,  including  without  limitation any
purported  assignment,  whether  voluntary  or  by  operation  of  law,  pledge,
hypothecation or other disposition contrary to the provisions hereof, or levy of
execution,  attachment,  trustee  process or similar  process,  whether legal or
equitable, upon the Option.

<PAGE>

         7.       Representation Letter and Investment Legend.

         (a) In the event  that for any  reason  the  Shares  to be issued  upon
exercise of the Option shall not be effectively  registered under the Securities
Act of 1933,  as amended (the "1933 Act"),  upon any date on which the option is
exercised  in whole or in part,  the person  exercising  the Option shall give a
written  representation  to the Company in the form attached hereto as Exhibit 1
and the Company shall place an "investment legend",  so-called,  as described in
Exhibit  1,  upon any  certificate  for the  Shares  issued  by  reason  of such
exercise.

         (b) The Company shall be under no  obligation  to qualify  Shares or to
cause a registration statement or a post-effective amendment to any registration
statement to be prepared for the purposes of covering the issue of Shares.

         8.       Adjustments on Changes in Capitalization.

         Adjustments on changes in capitalization  and the like shall be made in
accordance with the Plan, as in effect on the date of this Agreement.

         9.       No Special Employment Rights.

         Nothing  contained in the Plan or this Agreement  shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment  of the  Optionee  for the period  within  which  this  Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render  diligently  and  faithfully the services which are assigned to the
Optionee  from time to time by the  Board or by the  executive  officers  of the
Company and shall at no time take any action which directly or indirectly  would
be inconsistent with the best interests of the Company.

         10.      Rights as a Shareholder.

         The Optionee shall have no rights as a shareholder  with respect to any
Shares  which may be  purchased  by exercise  of this option  unless and until a
certificate  or  certificates  representing  such  Shares  are duly  issued  and
delivered to the Optionee.  Except as otherwise  expressly provided in the Plan,
no  adjustment  shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.

         11.      Withholding Taxes.

         Whenever  Shares are to be issued  upon  exercise of this  Option,  the
Company  shall have the right to require the Optionee to remit to the Company an
amount  sufficient  to satisfy  all  Federal,  state and local  withholding  tax
requirements  prior to the delivery of any certificate or certificates  for such
Shares.  The  Company  may agree to  permit  the  Optionee  to  withhold  Shares
purchased   upon  exercise  of  this  Option  to  satisfy  the   above-mentioned
withholding requirement.

<PAGE>

         IN  WITNESS  HEREOF,  the  Company  has  caused  this  Agreement  to be
executed,  and the Optionee has hereunto set his or her hand and seal, all as of
the day and year first above written.

GREEN MOUNTAIN COFFEE, INC.  OPTIONEE

By:   /s/ Robert D. Britt                              /s/ Robert P. Stiller
      --------------------                             ------------------------
      Robert D. Britt                                  Robert P. Stiller
      Treasurer/ Secretary
                                                       100,000
                                                       ------------------------
                                                       Number of Shares

                                                       $28.1875
                                                       ------------------------
                                                       Purchase Price Per Share

                                                       December 20, 2005
                                                       ------------------------
                                                       Expiration Date

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