Document:

EXHIBIT 4.1

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                              NORTH BAY BANCORP and

                             REGISTRAR AND TRANSFER
                                   COMPANY as

                                  Rights Agent

                                RIGHTS AGREEMENT

                            Dated as October 28, 2002

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                                TABLE OF CONTENTS

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

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

Section 3. Issue of Right Certificates....................................   4

Section 4. Form of Right Certificates.....................................   6

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

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

Section 7. Exercise of Rights and Expiration Date of Rights...............   7

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

Section 9. Reservation and Availability of Preferred Stock................   8

Section 10. Preferred Shares Record Date..................................   9

Section 11. Purchase Price and Adjustments................................  10

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

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

Section 14. Fractional Rights and Fractional Shares.......................  17

Section 15. Rights of Action..............................................  17

Section 16. Agreement of Right Holders....................................  18

Section 17. Right Certificate Holder Not Deemed a Shareholder.............  18

Section 18. Concerning the Rights Agent...................................  19

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

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

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

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

Section 23. Redemption....................................................  22

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Section 24. Exchange......................................................  22

Section 25. Notice of Certain Events......................................  23

Section 26. Notices.......................................................  24

Section 27. Supplements and Amendments....................................  24

Section 28. Successors....................................................  25

Section 29. Benefits of this Agreement....................................  25

Section 30. Determinations and Actions by the Board of Directors..........  25

Section 31. Severability..................................................  25

Section 32. Governing Law.................................................  26

Section 33. Counterparts..................................................  26

Section 34. Descriptive Headings..........................................  26

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                                RIGHTS AGREEMENT

            Agreement dated as of October 28, 2002, between NORTH BAY BANCORP, a
California corporation (the "Company"),  and REGISTRAR AND TRANSFER COMPANY (the
"Rights Agent").

            The Board of Directors of the Company has  authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as defined in this  Agreement) of the Company  outstanding on November 15, 2002
(the  "Record  Date"),  each  Right  representing  the  right  to  purchase  one
one-hundredth  of a share (a  "Unit")  of  Preferred  Stock (as  defined in this
Agreement),  upon the terms and  subject  to the  conditions  contained  in this
Agreement,  and has further  authorized  and  directed the issuance of one Right
with  respect to each Common  Share that shall  become  outstanding  between the
Record Date and the earliest of the  Distribution  Date, the Redemption Date and
the Final Expiration Date (as such terms are defined in this Agreement).

            Accordingly,  in  consideration  of  the  premises  and  the  mutual
agreements contained in this Agreement, the parties agree as follows:

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

            (a)  "Acquiring  Person"  shall mean any Person (as  defined in this
Agreement)  who or which,  together with all Affiliates and Associates (as those
terms are as defined in this Agreement) of such Person,  shall become, after the
date of this Agreement, the Beneficial Owner or Record Owner (as those terms are
as  defined  in  this  Agreement)  of 10% or  more  of the  Common  Shares  then
outstanding,  but shall not include the Company,  any  Subsidiary (as defined in
this  Agreement)  of the Company or any employee  benefit plan of the Company or
any  Subsidiary  of the  Company,  or any entity  holding  Common  Shares for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person
shall become an  "Acquiring  Person" as the result of an  acquisition  of Common
Shares by the  Company  which,  by  reducing  the number of shares  outstanding,
increases the proportionate  number of shares  beneficially owned by such Person
to 10% or more of the Common Shares of the Company then outstanding.

            (b) "Adverse  Person"  shall mean any Person who or which,  together
with  all  Affiliates  and  Associates  of such  Person  (i) is or  becomes  the
Beneficial  Owner or  Record  Owner  of 10% or more of the  Common  Shares  then
outstanding,  and at least a majority of the Board of  Directors  of the Company
who are not officers of the Company, after reasonable inquiry and investigation,
including   consultation   with  such  persons  as  such  directors  shall  deem
appropriate,  shall  conclude  that the effect of such stock  ownership,  in the
light of the  actions  which  the  Person  proposes  or is  likely  to take,  is
potentially  materially adverse to the Company's business,  assets,  competitive
position,  prospects or other  shareholders;  (ii) is or becomes the  Beneficial
Owner or Record Owner of 10% or more of the Common Shares then  outstanding  and
at  least a  majority  of the  Board of  Directors  of the  Company  who are not
officers of the Company  determine,  after reasonable inquiry and investigation,
including   consultation   with  such  persons  as  such  directors  shall  deem
appropriate,  that (a) such  Beneficial  Ownership  or Record  Ownership by such
Person is intended to cause the Company to repurchase the Common Shares

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owned by such Person or to cause pressure on the Company to take action or enter
into a  transaction  or series of  transactions  intended to provide such Person
with short-term  financial gain or any economic benefit not otherwise  available
to other  shareholders under  circumstances  where the Board of Directors of the
Company determines that the best long-term  interests of the Company and all its
stockholders  would not be served by taking such  action or  entering  into such
transactions  or series  of  transactions  at that  time or (b) such  Beneficial
Ownership  or  Record  Ownership  is  causing  or  reasonably  likely to cause a
material  adverse  impact   (including,   but  not  limited  to,  impairment  of
relationships  with customers or impairment of the Company's ability to maintain
its  competitive  position)  on the  business or prospects of the Company or its
shareholders; (iii) is or becomes the Beneficial Owner or Record Owner of 10% or
more of the  Common  Shares  then  outstanding  and  exercises  or  attempts  to
exercise, directly or indirectly, a controlling influence over the management or
policies of the Company or otherwise exercises "control" of the Company, as such
term is defined in 12 C.F.R.  ss.225.2(e),  as amended from time to time,  or in
any successor  regulation;  or (iv) is or becomes the Beneficial Owner or Record
Owner of 10% or more of the Common Shares then outstanding and sells, transfers,
assigns or  otherwise  disposes of all or a portion of such  Common  Shares in a
manner that  results in a Person  owning 9.9% or more of the Common  Shares then
outstanding.

            (c) "Affiliate" and "Associate"  shall have the respective  meanings
ascribed to such terms in Rule 12b-2,  as amended  from time to time,  or in any
successor  rule,  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.

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

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

                  (ii) which such Person or any of such  Person's  Affiliates or
            Associates  has (A) the  right to  acquire  (whether  such  right is
            exercisable  immediately  or only  after the  passage of time or the
            receipt of regulatory  approvals or both) pursuant to any agreement,
            arrangement or understanding  (other than customary  agreements with
            and between underwriters and selling group members with respect to a
            bona fide public  offering of  securities),  or upon the exercise of
            conversion  rights,   exchange  rights,  rights  (other  than  these
            Rights), warrants or options, or otherwise;  provided, however, that
            a  Person  shall  not be  deemed  the  Beneficial  Owner  of,  or to
            beneficially  own, (1) securities  tendered  pursuant to a tender or
            exchange  offer  made by or on behalf of such  Person or any of such
            Person's Affiliates or Associates until such tendered securities are
            accepted for purchase or exchange,  or (2) securities which a Person
            or any of such Person's  Affiliates  or Associates  may be deemed to
            have  the  right  to  acquire   pursuant  to  any  merger  or  other
            acquisition agreement between the Company and such Person (or one or
            more of such Person's  Affiliates or  Associates)  if such agreement
            has been  approved by the Board of Directors of the Company prior to
            there being an Acquiring  Person;  or (B) the right to vote pursuant
            to any agreement,  arrangement or understanding;  provided, however,
            that a Person  shall not be deemed  the  Beneficial  Owner of, or to
            beneficially  own, any  security if the  agreement,  arrangement  or
            understanding to vote such security (1) rises solely from

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            a revocable  proxy or consent  given to such Person in response to a
            public  proxy or  consent  solicitation  made  pursuant  to,  and in
            accordance  with,  the  applicable  rules  and  regulations  of  the
            Exchange  Act and (2) is not also then  reportable  on Schedule  13D
            under the Exchange Act (or any comparable or successor report), or

                  (iii) which are beneficially owned, directly or indirectly, by
            any other  Person  with  which such  Person or any of such  Person's
            Affiliates  or  Associates   has  any   agreement,   arrangement  or
            understanding  (other  than  customary  agreements  with and between
            underwriters  and selling  group members with respect to a bona fide
            public  offering  of  securities)  for  the  purpose  of  acquiring,
            holding, voting (except to the extent contemplated by the proviso to
            Section 1(d)(ii)(B)) or disposing, of any securities of the Company;
            provided,  however,  that in no case shall an officer or director of
            the  Company be deemed (A) the  Beneficial  Owner of any  securities
            beneficially  owned by another  officer or  director  of the Company
            solely by reason of  actions  undertaken  by such  persons  in their
            capacity  as  officers  or  directors  of the  Company  or  (B)  the
            Beneficial  Owner of securities held of record by the trustee of any
            employee  benefit  plan  of the  Company  or any  Subsidiary  of the
            Company  for the  benefit  of any  employee  of the  Company  or any
            Subsidiary  of the Company,  other than the officer or director,  by
            reason of any influence  that such officer or director may have over
            the voting of the securities held in the plan.

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

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

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

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

            (h) "Company"  shall have the meaning set forth in the  introduction
to this Agreement.

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

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

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

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

            (m) A "Record Owner" of any  securities  shall mean the Person whose
name appears on the stock transfer books of a company as the registered owner of
such securities.

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

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

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

            (q) "Unit" shall have the meaning set forth in the  introduction  to
this Agreement.

            (r)  "Voting  Stock"  shall mean (i) the Common  Shares and (ii) any
other shares of capital stock of the Company  entitled to vote  generally in the
election of directors  or entitled to vote  together  with the Common  Shares in
respect of any merger,  consolidation,  sale of all or substantially  all of the
Company's assets, liquidation, dissolution or winding up.

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

            Section 3. Issue of Right  Certificates.  (a) Until the  earliest of
(i) the tenth day after the Shares  Acquisition  Date;  (ii) the tenth day after
the date of the  commencement  of, or of the first  public  announcement  of the
intention of any Person (other than the Company,  any Subsidiary of the Company,
any employee  benefit plan of the Company or of any Subsidiary of the Company or
any entity  holding Common Shares for or pursuant to the terms of any such plan)
to commence,  a tender or exchange offer the  consummation of which would result
in any Person  becoming the  Beneficial  Owner or Record Owner of Common  Shares
aggregating 10% or more of the then outstanding Common Shares; or (iii) the date
a Person becomes an Adverse  Person  (including any such date which is after the
date of this Agreement and prior to the issuance of the Rights;  the earliest of
such dates being herein referred to as the "Distribution  Date"), (x) the Rights
will be  evidenced  (subject to the  provisions  of Section  3(b) hereof) by the
certificates  for Common Shares  registered  in the name of the holders  thereof
(which  certificates  shall also be deemed to be Right  Certificates) and not by
separate Right Certificates; and (y) the

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right to receive Right Certificates will be transferable only in connection with
the transfer of Common  Shares.  As soon as practicable  after the  Distribution
Date, the Company will prepare and execute,  the Rights Agent will  countersign,
and the Company  will send or cause to be sent (and the Rights  Agent  will,  if
requested, send) by first-class,  insured, postage-prepared mail, to each record
holder of Common Shares as of the close of business on the Distribution Date, at
the  address  of such  holder  shown  on the  records  of the  Company,  a Right
Certificate,   in  substantially   the  form  of  Exhibit  A  hereto  (a  "Right
Certificate"),  evidencing  one Right for each Common  Share so held.  As of the
Distribution   Date,  the  Rights  will  be  evidenced   solely  by  such  Right
Certificate.

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

            (c)  Certificates   for  Common  Shares  which  become   outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this  paragraph  (c) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have  impressed  on,  printed on,  written on or  otherwise  affixed to them the
following legend:

                  This certificate also evidences and entitles the holder hereof
                  to certain rights as set forth in a Rights  Agreement  between
                  North Bay Bancorp  and  Registrar  and  Transfer  Company,  as
                  Rights  Agent,  as dated as of October 28,  2002 (the  "Rights
                  Agreement"), the terms of which are hereby incorporated herein
                  by reference  and a copy of which is on file at the  principal
                  executive   offices  of  North  Bay  Bancorp.   Under  certain
                  circumstances,  as set  forth in the  Rights  Agreement,  such
                  Rights  will be  evidenced  by  this  certificate.  North  Bay
                  Bancorp will mail to the holder of this  certificate a copy of
                  the Rights Agreement without charge after receipt of a written
                  request thereof. As described in the Rights Agreement,  Rights
                  issued  to any  Person  who  becomes  an  Acquiring  Person or
                  Adverse  Person (as  defined in the  Rights  Agreement)  shall
                  become null and void.

With respect to such  certificates  containing the foregoing  legend,  until the
Distribution  Date, the Rights associated with the Common Shares  represented by
such  certificates  shall  be  evidenced

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

            Section 4. Form of Right  Certificates.  The Right Certificates (and
the forms of election to purchase Units of Preferred  Stock and of assignment to
be printed on the reverse thereof) shall be substantially  the same as Exhibit B
hereto  and may  have  such  marks of  identification  or  designation  and such
legends,  summaries  or  endorsements  printed  thereon as the  Company may deem
appropriate and as are not  inconsistent  with the provisions of this Agreement,
or as may be  required  to comply  with any  applicable  law or with any rule or
regulation  of any stock  exchange or  quotation  system on which the Rights may
from time to time be listed,  or to conform to usage.  Subject to the provisions
of Section 22 hereof,  the Right  Certificates shall entitle the holders thereof
to  purchase  such  number  of Units of  Preferred  Stock as shall be set  forth
therein at the price per limit set forth therein (the "Purchase Price"), but the
number of such Units and the Purchase  Price shall be subject to  adjustment  as
provided herein.

            Section 5. Countersignature and Registration.

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

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

            Section 6.  Transfer.  Split Up.  Combination  and Exchange of Right
Certificates;  Mutilated. Destroyed. Lost or Stolen Right Certificates.  Subject
to the provisions of Section 14 hereof,  at any time after the close of business
on the Distribution Date, and at or prior to the

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

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

            Section 7. Exercise of Rights and Expiration Date of Rights. (a) The
registered  holder of any Right  Certificate  may exercise the Rights  evidenced
thereby  (except as otherwise  provided  herein) in whole or in part at any time
after the Distribution  Date upon surrender of the Right  Certificate,  with the
form of election to purchase on the reverse side thereof duly  executed,  to the
Rights  Agent,  together  with  payment of the  Purchase  Price for each Unit of
Preferred Stock as to which the Rights are exercised, at or prior to the earlier
of (i) the close of business on October 28, 2012 (the "Final Expiration  Date"),
(ii) the time at which the Rights are  redeemed as provided in Section 23 hereof
(the "Redemption Date") or (iii) exchanged pursuant to Section 24 hereof.

            (b) The  Purchase  Price  for each  Unit of  Preferred  Stock  shall
initially  be  $90.00 , shall be  subject  to  adjustment  from  time to time as
provided in  Sections 11 and 13 hereof and shall be paid in lawful  money of the
United States of America in accordance with paragraph (c) below.

            (c) Upon  receipt of a Right  Certificate  representing  exercisable
Rights,  with the form of election to purchase  duly  executed,  accompanied  by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any  applicable  transfer tax required to be paid by the holder of such Right
Certificate in accordance  with Section 9 hereof by certified  check,  cashier's
check,  bank draft or money  order  payable  to the order of the  Company or the
Rights Agent, the Rights Agent shall thereupon promptly (i) requisition from any
transfer agent of the Preferred  Stock  certificates  for the number of Units of
Preferred  Stock to be purchased and the Company hereby  irrevocably  authorizes
its transfer agent to comply with all such requests,

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<PAGE>

(ii) when  appropriate,  requisition  from the  Company the amount of cash to be
paid in lieu of issuance of  fractional  shares in  accordance  with  Section 14
hereof, (iii) after receipt of such certificates, cause the same to be delivered
to or upon  the  order  of the  registered  holder  of such  Right  Certificate,
registered  in such name or names as may be  designated  by such holder and (iv)
when appropriate,  after receipt,  deliver such cash to or upon the order of the
registered holder of such Right Certificate.

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

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

            Section 9.  Reservation  and  Availability of Preferred  Stock.  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 or any
shares  of  Preferred  Stock  held in its  treasury,  the  number  of  shares of
Preferred  Stock that will be  sufficient  to permit the exercise in full of all
outstanding Rights.

            The Company  covenants  and agrees that it will take all such action
as may be necessary to ensure that all shares of Preferred  Stock 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 shares.

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

            The Company  shall use its  reasonable  best efforts to (i) file, as
soon as  practicable  following  the earlier of (A) 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  in
accordance  with Section 11 (a) (iii)  hereof,  or (B) as soon as is required by
law following the Distribution Date, a registration  statement on an appropriate
form  under the  Securities  Act,  with  respect  to the  Common  Stock or other
securities purchasable upon exercise of the Rights, (ii) cause such registration
statement to become effective as soon as practicable

                                      -8-
<PAGE>

after  such  filing,  and (iii)  cause  such  registration  statement  to remain
effective  (with a  prospectus  at all times  meeting  the  requirements  of the
Securities  Act) until the earlier of (x) the date as of which the Rights are no
longer  exercisable for such  securities,  and (y) 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, 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 at such
time as the suspension is no longer in effect. In addition, if the Company shall
determine  that a  registration  statement  is required  in other  circumstances
following the Distribution  Date, the Company similarly may temporarily  suspend
the exercisability of the Rights until such time as a registration statement has
been declared effective.  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  shall  not  be  permitted  under  applicable  law,  or a
registration statement shall not have been declared effective.

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

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

                                      -9-
<PAGE>

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. Purchase Price and Adjustments.  The Purchase Price, the
number of Units of  Preferred  Stock  covered  by each  Right and the  number of
Rights  outstanding  are subject to adjustment from time to time, as provided in
this Section 11:

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

            (ii) In the event any Person shall become an Acquiring  Person or an
Adverse Person,  proper  provision shall be made so that each holder of a Right,
except  as  provided  below,  shall  thereafter  have a right to  receive,  upon
exercise  thereof at a price equal to the then current Purchase Price multiplied
by the number of Units of Preferred Stock for which a Right is then exercisable,
in  accordance  with  the  terms  of this  Agreement,  such  number  of Units of
Preferred  Stock of the  Company  as shall  equal  the  result  obtained  by (A)
multiplying  the then  current  Purchase  Price by the then  number  of Units of
Preferred Stock for which a Right is then exercisable and dividing, that product
by (B) 50% of the then  current per share market  price of the  Preferred  Stock
(determined  pursuant  to  Section  11(d))  on the date  such  Person  became an
Acquiring Person or an Adverse Person.

            Notwithstanding the foregoing, from and after the occurrence of such
event,  any  Rights  that  are or were  acquired  or  beneficially  owned  by an
Acquiring  Person or an Adverse  Person (or any  Associate  or Affiliate of such
Acquiring  Person or Adverse Person) shall be void and any holder of such Rights
shall  thereafter  have no right to exercise  such Rights under any provision of
this Agreement.  No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person or an Adverse Person
or any Associate or Affiliate  thereof and no Right  Certificate shall be issued
at any time upon the transfer of any Rights to an Acquiring Person or an Adverse
Person or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Adverse Person,  Associate or Affiliate. Any Right Certificate delivered
to the Rights Agent for transfer to an Acquiring Person shall be cancelled.

                  (iii) In the event that there shall not be  sufficient  shares
of Preferred  Stock issued but not  outstanding  or  authorized  but unissued to
permit the exercise in full of the

                                      -10-
<PAGE>

Rights in accordance  with the foregoing  subparagraph  (ii),  the Company shall
take all such  action as may be  necessary  to  authorize  additional  shares of
Preferred Stock for issuance upon exercise of the Rights.

                  (iv) The failure by the Board of  Directors  of the Company to
declare a Person to be an Adverse  Person  following  such Person  becoming  the
Beneficial Owner or Record Owner of 10% or more of the outstanding Common Shares
shall not imply that such Person is not an Adverse  Person or limit the Board of
Directors'  right any time in the future to declare such Person to be an Adverse
Person.

            (b) In case the Company  shall fix a record date for the issuance of
rights,  options  or  warrants  to all  holders  of  shares of  Preferred  Stock
entitling them (for a period  expiring within 45 calendar days after such record
date) to subscribe for or purchase  shares of Preferred  Stock (or shares having
the same rights,  privileges  and  preferences  thereof  ("equivalent  preferred
shares")) or securities convertible into Preferred Stock or equivalent preferred
shares at a price per share of Preferred Stock or equivalent preferred share (or
having a conversion  price per share, if a security  convertible  into Preferred
Stock or  equivalent  preferred  shares)  less than the then  current  per share
market price of the Preferred Stock (as defined in Section 11(d)) 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 shares so to be offered (and/or
the aggregate  initial  conversion price of the convertible  securities so to be
offered)  would  purchase at such current  market price and the  denominator  of
which  shall be the  number of shares of  Preferred  Stock  outstanding  on such
record  date plus the number of  additional  shares of  Preferred  Stock  and/or
equivalent  preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration  shall be as
determined  in good  faith  by the  Board of  Directors  of the  Company,  whose
determination  shall be  described in a statement  filed with the Rights  Agent.
Shares of 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 the making of a
distribution  to  all  holders  of  the  Preferred  Stock  (including  any  such
distribution  made in  connection  with a  consolidation  or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
shares of Preferred Stock) or subscription  rights or warrants  (excluding those
referred to in Section  1l(b)),  the  Purchase  Price to be in effect after such
record date shall be  determined  by  multiplying  the Purchase  Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall be the then  current per share  market  price of the  Preferred  Stock (as
defined in Section  11(d)) 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

                                      -11-
<PAGE>

be described in a statement  filed with the Rights  Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights  or  warrants  applicable  to  one  share  of  Preferred  Stock  and  the
denominator  of which  shall  be such  current  per  share  market  price of the
Preferred Stock.  Such adjustments  shall be made  successively  whenever such a
record date is fixed;  and in the event that such  distribution  is not so made,
the Purchase  Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.

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

                  (ii)  For  the  purpose  of  any  computation  hereunder,  the
"current per share market price" of the  Preferred  Stock shall be determined in
accordance with the method set forth in Section 11(d)(i) (appropriately adjusted
to reflect any stock  split,  stock  dividend or similar  transaction  occurring
after the date hereof). If the Preferred Stock is not publicly held or so listed
or traded,  "current per share market price" shall mean the fair value per share
as  determined  in good faith by the Board of Directors  of the  Company,  whose
determination shall be described in a statement filed with the Rights Agent.

                                      -12-
<PAGE>

            (e) No  adjustment  in the Purchase  Price shall be required  unless
such  adjustment  would  require an  increase  or decrease of at least 1% in the
Purchase Price; provided,  however, that any adjustments which by reason of this
Section  11(e) are not  required  to be made shall be carried  forward and taken
into account in any subsequent  adjustment.  All calculations under this Section
11 shall be made to the nearest cent or to the nearest one-hundredth of a share,
as the case may be.  Notwithstanding  the first  sentence of this Section 11(e),
any  adjustment  required  by this  Section  11 shall be made no later  than the
earlier of (i) three years from the date of the transaction  which requires such
adjustment  or (ii) the date of the  expiration  of the  right to  exercise  any
Rights.

            (f) If as a result of an adjustment  made pursuant to Section 11(a),
the holder of any Right  thereafter  exercised  shall become entitled to receive
any  shares  of  capital  stock  of the  Company  other  than  Preferred  Stock,
thereafter  the number of such other shares so  receivable  upon exercise of any
Right shall be subject to adjustment  from time to time in a manner and on terms
as nearly  equivalent  as  practicable  to the  provisions  with  respect to the
Preferred  Stock  contained in Section  11(a)  through (c),  inclusive,  and the
provisions of Sections 7, 9, 10 and 13 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 Units of Preferred Stock
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 Section 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 Units of Preferred
Stock (calculated to the nearest one-hundredth)  obtained by (i) multiplying (x)
the number of shares 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 Units of  Preferred  Stock  purchasable  upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of Units of Preferred Stock
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  one-hundredth)
obtained  by  dividing  the  Purchase  Price  in  effect  immediately  prior  to
adjustment  of the Purchase  Price by the Purchase  Price in effect  immediately
after  adjustment  of the  Purchase  Price.  The  Company  shall  make a  public
announcement  of its  election  to adjust the number of Rights,  indicating  the
record date for the  adjustment,  and,  if known at the time,  the amount of the
adjustment  to be made.  This record date may be the date on which the  Purchase
Price is adjusted or any day  thereafter,  but, if the Right  Certificates  have
been  issued,  shall  be at  least 10 days  later  than  the date of the  public
announcement.  If Right  Certificates  have been issued,  upon adjustment of the
number of

                                      -13-
<PAGE>

Rights  pursuant  to this  Section  11(i),  the  Company  shall,  as promptly as
practicable,  cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to Section 14 hereof,
the  additional  Rights to which such  holders  shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be distributed
to such  holders  of  record  in  substitution  and  replacement  for the  Right
Certificates  held by such  holders  prior to the date of  adjustment,  and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders  shall be entitled  after such  adjustment.
Right  Certificates  so  to  be  distributed  shall  be  issued,   executed  and
countersigned  in the manner  provided for herein and shall be registered in the
names  of the  holders  of  record  of Right  Certificates  on the  record  date
specified in the public announcement.

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

            (k) Before taking any action that would cause an adjustment reducing
the  Purchase  Price below the then par value,  if any, of the  Preferred  Stock
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  shares of
Preferred Stock 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 issuing to the holder of any Right exercised after such record date of
the Preferred  Stock and other  capital  stock or securities of the Company,  if
any,  issuable upon such  exercise over and above the Preferred  Stock and other
capital stock or securities of the Company,  if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however,  that the  Company  shall  deliver  to such  holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

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

            (n) The Company 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)),  (ii) merge with or into any
other Person (other than a

                                      -14-
<PAGE>

Subsidiary of the Company in a transaction which complies with Section 11(o), or
(iii) sell or transfer (or permit any  Subsidiary to sell or  transfer),  in one
transaction,  or a series of 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)), 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  Person  shall  have  distributed  or  otherwise  transferred  to its
shareholders  or other persons  holding an equity interest in such Person Rights
previously  owned  by  such  Person  or any of its  Affiliates  and  Associates;
provided,  however,  this  Section  11(n)  shall not affect  the  ability of any
Subsidiary of the Company to  consolidate  with,  merge with or into, or sell or
transfer assets or earnings power to, any other Subsidiary of the Company.

            (o) After the  Distribution  Date, the Company shall not,  except as
permitted by Section 23 or Section 27, 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) In the event that, at any time after the date of this  Agreement
and prior to the  Distribution  Date,  the Company  shall (i) declare or pay any
dividend on outstanding  Common Shares payable in Common Shares or (ii) effect a
subdivision,   combination   or   consolidation   of  the   Common   Shares  (by
reclassification  or otherwise  than by payment of dividends in shares of Common
Shares) into a greater or lesser number of Common Shares,  then in any such case
the number of Units of Preferred Stock  purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of Units of
Preferred  Stock so purchasable  immediately  prior to such event by a fraction,
the  numerator of which is the number of Common Shares  outstanding  immediately
before such event and the  denominator  of which is the number of Common  Shares
outstanding  immediately after such event. The adjustments  provided for in this
Section 11(p) shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected.

                                      -15-
<PAGE>

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

            Whenever  an  adjustment  is made as  provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate  setting forth such
adjustment,  and a brief statement of the facts  accounting for such adjustment,
(b) file  with the  Rights  Agent and with each  transfer  agent for the  Common
Shares a copy of such  certificate  and (c) mail a brief summary thereof to each
holder  of  a  Right   Certificate   in  accordance   with  Section  26  hereof.
Notwithstanding the foregoing sentence,  the failure by the Company to make such
certification  or give such notice shall not affect the validity of or the force
or effect of the  requirement  for such  adjustment.  The Rights  Agent shall be
fully  protected  in  relying  on any  such  certificate  and on any  adjustment
contained  therein and shall not be deemed to have knowledge of such  adjustment
unless and until it shall have received such certificate.

            Section 13.  Consolidation.  Merger or Sale or Transfer of Assets or
Earning  Power.  In the event,  directly or  indirectly,  (a) the Company  shall
consolidate with, or merge with and into, any other person, (b) any Person shall
consolidate with the Company, or merge with and into the Company and the Company
shall  be the  continuing  or  surviving  corporation  of such  merger  and,  in
connection  with such merger,  all or part of the Common Shares shall be changed
into or  exchanged  for stock or other  securities  of any other  Person (or the
Company)  or cash  or any  other  property,  or (c) the  Company  shall  sell or
otherwise  transfer (or one or more of its Subsidiaries  shall sell or otherwise
transfer), in one or more transactions,  assets or earning power aggregating 50%
or more of the  assets or  earning  power of the  Company  and its  Subsidiaries
(taken as a whole) to any other  Person other than the Company or one or more of
its  wholly-owned  Subsidiaries,  then, and in each such case,  proper provision
shall be made so that (i) each holder of a Right  (except as otherwise  provided
herein) shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current  Purchase  Price  multiplied  by the number of
Units of Preferred  Stock for which a Right is then  exercisable,  in accordance
with the terms of this  Agreement,  such  number of Common  Shares of such other
Person  (including  the  Company  as  successor  thereto  or  as  the  surviving
corporation)  as shall be equal to the result  obtained by (x)  multiplying  the
then current  Purchase Price by the number of Units of Preferred Stock for which
a Right is then  exercisable  and  dividing  that product by (y) 50% of the then
current  per  share  market  price of the  Common  Shares of such  other  Person
(determined  pursuant  to  Section  11(d)) on the date of  consummation  of such
consolidation,  merger, sale or transfer;  (ii) the issuer of such Common Shares
shall   thereafter  be  liable  for,  and  shall  assume,   by  virtue  of  such
consolidation,  merger, sale or transfer,  all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such  issuer:  and (iv) such  issuer  shall  take such  steps
(including,  but not limited to, the  reservation of a sufficient  number of its
Common  Shares in  accordance  with  Section 9 hereof) in  connection  with such
consummation  as may be  necessary  to assure that the  provisions  hereof shall
thereafter be  applicable,  as nearly as  reasonably  may be, in relation to the
Common  Shares  thereafter  deliverable  upon the  exercise of the  Rights.  The
Company  shall not enter into any  transaction  of the kind  referred to in this
Section 13 if at the time of such  transaction  there are any rights,  warrants,
instruments or securities  outstanding or any agreements or arrangements  which,
as a  result  of the  consummation  of  such  transaction,  would  eliminate  or
substantially  diminish the benefits intended to be afforded by the Rights.  The
Company shall not consummate any such  consolidation,  merger,  sale or transfer
unless  prior  thereto  the  Company and such  issuer  shall have  executed  and
delivered to the Rights Agent a supplemental agreement so providing.

                                      -16-
<PAGE>

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

            Section 14. Fractional Rights and Fractional Shares.

            (a) The Company  shall not be required to issue  fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu of
such  fractional  Rights,  there shall be paid to the registered  holders of the
Right  Certificates  with regard to which such fractional Rights would otherwise
be issuable,  an amount in cash equal to the same fraction of the current market
value of a whole  Right.  For the purposes of this  Section  14(a),  the current
market  value of a whole Right shall be the closing  price of the Rights for the
Trading Day immediately  prior to the date on which such fractional Rights would
have been  otherwise  issuable.  The closing price for any day shall be the last
sale price,  regular  way, or, in case no such sale takes place on such day, the
average of the  closing  bid and asked  prices,  regular  way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities  listed or admitted to trading on 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.

            (b) The Company  shall not be required to issue  fractions of shares
of Preferred  Stock upon  exercise of the Rights or to  distribute  certificates
which evidence  fractional shares of Preferred Stock (other than fractions which
are integral multiples of one  one-hundredth.  In lieu of fractional shares that
are not integral  multiples of one  one-hundredth,  the Company shall pay to the
registered  holders of Right  Certificates at the time such Rights are exercised
as herein  provided an amount in cash equal to the same  fraction of the current
market value of one share of Preferred  Stock as determined  pursuant to Section
11(d).

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

            Section  15.  Rights of  Action.  All rights of action in respect of
this  Agreement,  excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective  registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares), and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares),  without the consent of the Rights
Agent  or of the  holder  of any  other  Right  Certificates  (or,  prior to the
Distribution Date, of the Common Shares),  may, in his or her own behalf and for
his or her own benefit, enforce, and may institute

                                      -17-
<PAGE>

and maintain any suit, action or proceeding  against the Company to enforce,  or
otherwise  act in respect of, his or her right to exercise the Rights  evidenced
by such Right  Certificate in the manner provided in such Right  Certificate and
in this Agreement.  Without limiting the foregoing or any remedies  available to
the  holders of Rights,  it is  specifically  acknowledged  that the  holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to  specific  performance  of the  obligations  under,  and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.

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

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

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

            (c) the Company  and the Rights  Agent may deem and treat the person
in whose name the Right  Certificate  (or, prior to the  Distribution  Date, the
associated  Common  Shares  certificate)  is  registered  as the absolute  owner
thereof and of the Rights evidenced  thereby  (notwithstanding  any notations of
ownership or writing on the Right  Certificates or the associated  Common Shares
certificate  made by anyone other than the Company or the Rights  Agent) for all
purposes  whatsoever,  and neither  the  Company  nor the Rights  Agent shall be
affected by any notice to the contrary; 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 to
enacted by any  governmental  authority,  prohibiting  or otherwise  restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise  overturned
as soon as possible.

            Section 17. Right  Certificate  Holder Not Deemed a Shareholder.  No
holder,  as such, of any Right  Certificate  shall be entitled to vote,  receive
dividends  or be deemed for any  purpose  the holder of the shares of  Preferred
Stock or any other  securities  of the Company which may at any time be issuable
on the exercise of the Rights represented  thereby,  nor that anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter  submitted to
shareholders at any meeting  thereof,  or to consent or withhold  consent to any
corporate  action,  or to receive  notice of meeting or other actions  affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends

                                      -18-
<PAGE>

or subscription  rights,  or otherwise,  until the Right or Rights  evidenced by
such  Right  Certificate  shall  have  been  exercised  in  accordance  with the
provisions hereof.

            Section 18.  Concerning the Rights Agent.  The Company agrees to pay
to the Rights Agent  reasonable  compensation  for all  services  rendered by it
hereunder and, from time to time, on demand of the Rights Agent,  its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this  Agreement and the exercise and  performance of its duties
hereunder.  The Company  also agrees to  indemnify  the Rights Agent for, and to
hold it harmless  against,  any loss,  liability,  or expense,  incurred without
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  cost and  expenses  of
defending against any claim of liability in the premises.

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

            Section  19.  Merger  or  Consolidation  or Change of Name of Rights
Agent. 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 business of the Rights Agent or any successor  Rights Agent,  shall be the
successor  to the Rights  Agent under this  Agreement  without the  execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation  would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor  Rights Agent shall succeed to the agency  created by this  Agreement,
any of the Right  Certificates  shall have been countersigned but not delivered,
any  such  successor  Rights  Agent  may  adopt  the   countersignature  of  the
predecessor  Rights Agent and deliver such Right  Certificates so countersigned;
and in case at that  time any of the  Right  Certificates  shall  not have  been
countersigned,   any  successor   Rights  Agent  may   countersign   such  Right
Certificates  either in the name of the predecessor  Rights Agent or in the name
of the  successor  Rights Agent;  and in all such cases such Right  Certificates
shall  have  the full  force  provided  in the  Right  Certificates  and in this
Agreement.

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

                                      -19-
<PAGE>

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

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

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

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

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

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

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

                                      -20-
<PAGE>

            (g) The Rights  Agent is hereby  authorized  and  directed to accept
instructions  with respect to the  performance of its duties  hereunder from any
one of the Chairman of the Board,  the  President,  any Executive or Senior Vice
President,  any Vice  President,  the Treasurer or the Secretary of the Company,
and to apply to such officers for advice or  instructions in connection with its
duties,  and it shall not be liable for any action  taken or  suffered  by it in
good faith in accordance with  instructions of any such officer or for any delay
in acting while waiting for those instructions.

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

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

            Section  21.  Change  of  Rights  Agent.  The  Rights  Agent  or any
successor  Rights Agent may resign and be discharged  from its duties under this
Agreement  upon 30 days'  notice in writing  mailed to the  Company  and to each
transfer  agent of the  Preferred  Stock and the Common  Shares by registered or
certified  mail,  and to the holders of the Right  Certificates  by  first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days'  notice in  writing,  mailed to the Rights  Agent or  successor  Rights
Agent, as the case may be, and to each transfer agent of the Preferred Stock and
the Common  Shares by registered  or certified  mail,  and to the holders of the
Right  Certificates by first-class  mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a  successor  to the  Rights  Agent.  If the  Company  shall  fail to make  such
appointment  within a period of 30 days after  giving  notice of such removal or
after it has been notified in writing of such  resignation  or incapacity by the
resigning or incapacitated  Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his or her Right Certificate for inspection
by the Company),  then the registered  holder of any Right Certificate may apply
to any court of  competent  jurisdiction  for the  appointment  of a new  Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of the
United States or of any state of the United States, in good standing, 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 $50 million.  After appointment,  the successor Rights Agent
shall be vested with the same power,  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

                                      -21-
<PAGE>

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
Preferred  Stock and the Common Shares,  and mail a notice thereof in writing to
the  registered  holders of the Right  Certificates.  Failure to give any notice
provided  for in this  Section 21,  however,  or any defect  therein,  shall not
affect the  legality  or validity  of the  resignation  or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

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

            Section  23.  Redemption.  (a) (a) The  Board  of  Directors  of the
Company may, at its option, at any time prior to the Shares  Acquisition Date or
such time as any Person becomes an Acquiring Person or an Adverse Person, redeem
all but not less than all the then  outstanding  Rights at a redemption price of
$.001 per Right,  appropriately  adjusted  to  reflect  any stock  split,  stock
dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").

            (b)  Notwithstanding  anything  contained  in this  Agreement to the
contrary,  the Rights shall not be  exercisable  pursuant to Section 7(a) at any
time when the Rights are redeemable hereunder.

            Section 24. Exchange. (a) The Board of Directors of the Company may,
at its  option,  at any time  after any  Person  becomes  an  Acquiring  Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include  Rights that have become void pursuant to the  provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per
Right,  appropriately  adjusted to reflect any stock split,  stock dividend,  or
similar  transaction  occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors  shall not be  empowered  to effect such  exchange at any
time after any person  (other than the Company,  any  Subsidiary of the Company,
any employee benefit plan of the Company or any such  Subsidiary,  or any entity
holding  Common Shares for or pursuant to the terms of any such plan),  together
with all Affiliates and Associates of such Person,  becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.

            (b)  Immediately  upon the effective date of the action of the Board
of  Directors of the Company  ordering  the  exchange of any Rights  pursuant to
subsection (a) of this Section 24 and without any further action and without any
notice,  the right to exercise  such Rights shall  terminate  and the only right
thereafter  of a holder of such Rights shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder  multiplied by the
Exchange  Ratio.  The Company  shall  promptly  give  public  notice of any such
exchange;  provided,  however,  that the failure to give, or any defect in, such
notice  shall not affect the  validity of such  exchange.  The Company  promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the

                                      -22-
<PAGE>

registry  books of the Rights Agent on the effective  date of said action of the
Board of Directors  ordering the exchange of Rights.  Any notice which is mailed
in the manner herein  provided shall be deemed given,  whether or not the holder
receives the notice. Each such notice of exchange will state the method by which
the exchange of the Rights for Common  Shares will be effected and, in the event
of any  partial  exchange,  the number of Rights  which will be  exchanged.  Any
partial exchange shall be effected pro rata based on the number of Rights (other
than  Rights  which have  become  void  pursuant  to the  provisions  of Section
11(a)(ii) hereof) held by each holder of Rights.

            (c) In the event that there shall not be  sufficient  Common  Shares
issued but not  outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with subsection (a) of this Section 24, the
Company may  substitute,  for each Common Share that would otherwise be issuable
upon  exchange  of a Right,  a number of shares of  Preferred  Stock or fraction
thereof  such that the current per share  market  price of one Unit of Preferred
Stock  multiplied  by such  number or fraction is equal to the current per share
market  price of one Common  Share as of the date of issuance of such  Preferred
Stock or fraction thereof.

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

            Section 25. Notice of Certain Events.  (a) In case the Company shall
propose (i) to pay any dividend  payable in stock of any class to the holders of
its Preferred  Stock (other than a regular  quarterly  cash dividend) or (ii) to
offer to the holders of its 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  Preferred  Stock),  or (iv) to
effect any  consolidation or merger into or with, or to effect any sale or other
transfer  (or to permit  one or more of its  Subsidiaries  to effect any sale or
other transfer),  in one or more  transactions,  of 50% or more of the assets or
earning  power of the  Company and its  Subsidiaries  (taken as a whole) to, any
other Person, or (v) to effect the liquidation, dissolution or winding up of the
Company,  or (vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision,  combination or  consolidation  of the
Common Shares (by  reclassification or otherwise than by payment of dividends in
Common  Shares),  then, in each such case, the Company shall give to each holder
of a Right  Certificate,  in accordance with Section 26 hereof, a notice of such
proposed  action,  which shall  specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such
reclassification,    consolidation,   merger,   sale,   transfer,   liquidation,
dissolution,  or  winding  up is to take  place  and the  date of  participation
therein by the holders of the Preferred Stock or the Common Shares,  if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii)

                                      -23-
<PAGE>

above at least 20 days prior to the record date for  determining  holders of the
Preferred  Stock or the Common  Shares for purposes of such  action,  and in the
case of any such other action,  at least 20 days prior to the date of the taking
of such proposed action or the date of  participation  therein by the holders of
the Common Shares, whichever shall be the earlier.

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

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

                  North Bay Bancorp
                  1500 Soscol Avenue
                  Napa, California 94559-1314

                  Attention: President and
                             Chief Executive Officer

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

                  Registrar and Transfer Company
                  10 Commerce Drive
                  Cranford, New Jersey 07016

                  Attention: Account Manager
                             North Bay Bancorp

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

            Section 27.  Supplements and Amendments.  Prior to the  Distribution
Date, the Company may supplement or amend this Agreement without the approval of
any holders of Rights by action of its Board of Directors,  and the Rights Agent
shall, if the Company so directs, execute such supplement or amendment. From and
after the Distribution  Date, the Company may supplement or amend this Agreement
without the approval of any holder of Rights, by

                                      -24-
<PAGE>

action of its Board of Directors,  in order (i) to cure any  ambiguity,  (ii) to
correct or supplement any provision  contained  herein which may be defective or
inconsistent  with any other provisions  herein (iii) to shorten or lengthen any
time period hereunder,  or to (v) make any other provisions in regard to matters
or questions  arising  hereunder which the Company and the Rights Agent may deem
necessary or desirable and which shall be consistent  with,  and for the purpose
of  fulfilling,  the  objectives  of the Board of  Directors  in  adopting  this
Agreement;  provided,  however,  that  from and after  such  time as any  Person
becomes an Acquiring  Person or an Adverse  Person,  this Agreement shall not be
amended in any manner which would adversely  affect the interests of the holders
of Rights.  Upon receipt of a  certificate  from an  appropriate  officer of the
Company  that the proposed  supplement  or  amendment  is  consistent  with this
Section 27 and, after such time as any Person has become an Acquiring  Person or
an Adverse Person,  that the proposed supplement or amendment does not adversely
affect the  interests of the holders of Rights , the Rights Agent shall  execute
such supplement or amendment.

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

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

            Section 30.  Determinations  and Actions by the Board of  Directors.
For all  purposes of this  Agreement,  any  calculation  of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular  percentage of such outstanding shares of which any Person is the
Beneficial  Owner,  shall be made in  accordance  with the last sentence of Rule
13d-3(d)(1)(i)  of the Exchange Act, as amended from time, or with any successor
rule.  The Board of Directors of the Company shall have the exclusive  power and
authority to  administer  this  Agreement  and to exercise all rights and powers
specifically  granted to the Board of  Directors,  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 of Directors in good faith, shall (x) be final,  conclusive and binding on
the Company,  the Rights Agent,  the holders of the Rights  Certificate  and all
other parties and (y) not subject the Board of Directors to any liability to the
holders of the Rights.

            Section  31.  Severability.  If any  term,  provision,  covenant  or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions, covenants and restrictions of this

                                      -25-
<PAGE>

Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.

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

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

            Section  34.  Descriptive  Headings.  Descriptive  headings  of  the
several  Sections of this Agreement are inserted for convenience  only and shall
not  control or affect  the  meaning or  construction  of any of the  provisions
hereof.

            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.

                                                  NORTH BAY BANCORP

Attest:

By:                                               By:
           ---------------------------                      -----------------
Name:      Wyman G. Smith III                     Name:     Terry L. Robinson
           ---------------------------                      -----------------
Title:     Secretary                              Title:    President and CEO
           ---------------------------                      -----------------

Attest:                                           REGISTRAR AND TRANSFER COMPANY

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

                                      -26-EXHIBIT 4.2

                                                                       Exhibit A

                          CERTIFICATE OF DETERMINATION

                                       of

                            SERIES A PREFERRED STOCK

                                       of

                                NORTH BAY BANCORP

                         (Pursuant to Section 401 of the

                       California General Corporation Law)

      Terry L. Robinson and Wyman G. Smith III hereby certify that:

      A.  They are the  President  and  Secretary,  respectively,  of North  Bay
Bancorp, a California corporation (the "Corporation").

      B. The authorized number of shares of Preferred Stock is 500,000,  none of
which have been issued.  The  authorized  number of shares of Series A Preferred
Stock is 100,000, none of which have been issued.

      C. Pursuant to the authority  conferred upon the Board of Directors by the
Articles of Incorporation of the Corporation,  and pursuant to the provisions of
Section  401 of the  General  Corporation  Law of the State of  California  (the
"GCL"),  the Board of  Directors,  at a meeting  duly held on October 28,  2002,
adopted  resolutions  providing for the  designation and issuance of a series of
ONE HUNDRED THOUSAND  (100,000) shares of Series A Preferred Stock,  without par
value (the "Series A Preferred Stock").

      D. The  Certificate  of  Determination  creating the rights,  preferences,
privileges and restrictions of the Series A Preferred Stock reads as follows:

            Section 1.  Designation and Amount.  The shares of such series shall
be designated as "Series A Preferred Stock" (the "Series A Preferred Stock") and
the number of shares  constituting  the Series A  Preferred  Stock  shall be ONE
HUNDRED THOUSAND (100,000).  Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no decrease shall reduce
the  number  of shares of  Series A  Preferred  Stock to a number  less than the
number of shares  then  outstanding  plus the  number  of  shares  reserved  for
issuance upon the exercise of outstanding,  options,  rights or warrants or upon
the  conversion  of  any  outstanding   securities  issued  by  the  Corporation
convertible into Series A Preferred Stock.

                                      -1-
<PAGE>

            Section 2. Dividends and Distributions. (A) Subject to the rights of
the  holders  of any  shares of any series of  Preferred  Stock (or any  similar
stock)  ranking prior and superior to the Series A Preferred  Stock with respect
to dividends,  the holders of shares of Series A Preferred  Stock, in preference
to the  holders of Common  Stock,  no par value  (the  "Common  Stock"),  of the
Corporation,  and of any other junior 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 "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 Preferred  Stock,  in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $0.25 or (b) subject to the provision for adjustment
hereinafter set forth, the aggregate per share amount of all cash dividends, and
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  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 Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock  payable in shares of Common  Stock,  or
effect a subdivision or combination or consolidation  of the outstanding  shares
of Common Stock (by  reclassification or otherwise than by payment of a dividend
in shares of Common  Stock) into a greater or lesser  number of shares of Common
Stock,  then in each such case the amount to which holders of shares of Series A
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  Preferred  Stock  as  provided  in  paragraph  (A)  of  this  Section
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 $0.25 per share on the
Series A  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 Preferred Stock from the Quarterly Dividend Payment Date next
preceding  the date of issue of such  shares,  unless  the date of issue of such
shares is prior to the  record  date for the first  Quarterly  Dividend  Payment
Date, in which case dividends 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 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 Preferred Stock in an amount less

                                      -2-
<PAGE>

than the total amount of such  dividends at the time accrued and payable on such
shares  shall be  allocated  pro rata on a  share-by-share  basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the  determination  of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or  distribution  declared  thereon,  which record
date shall be not less than 10 nor more than 60 days prior to the date fixed for
the payment thereof.

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

            (A) Each share of Series A Preferred  Stock shall entitle the holder
thereof to one vote on all matters  submitted to a vote of the  shareholders  of
the Corporation.

            (B) Except as otherwise provided herein, in any other Certificate of
Determination  creating a series of Preferred  Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the  Corporation  having  general
voting  rights  shall vote  together as one class on all matters  submitted to a
vote of shareholders of the Corporation.

            Section 4. Certain Restrictions. (A) Whenever quarterly dividends or
other  dividends  or  distributions  payable on the Series A 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 Preferred  Stock  outstanding  shall have been paid in fall,  the  Corporation
shall not:

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

                  (ii)   declare   or  pay   dividends,   or  make   any   other
            distributions, on any shares of stock ranking on a parity (either as
            to dividends or upon liquidation dissolution or winding up) with the
            Series A  Preferred  Stock,  except  dividends  paid  ratably on the
            Series  A  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  junior  (either  as to
            dividends  or upon  liquidation,  dissolution  or winding up) to the
            Series A Preferred  Stock,  provided that the Corporation may at any
            time redeem, purchase or otherwise acquire shares of any such junior
            stock in exchange for shares of any stock of the Corporation ranking
            Junior (either as to dividends or upon  dissolution,  liquidation or
            winding up) to the Series A Preferred Stock; or

                  (iv) redeem or purchase or otherwise acquire for consideration
            any  shares  of Series A  Preferred  Stock,  or any  shares of stock
            ranking on a parity  with the Series A  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

                                      -3-
<PAGE>

            of such  shares  upon such  terms as the Board of  Directors,  after
            consideration  of the  respective  annual  dividend  rates and other
            relative  rights  and  preferences  of  the  respective  series  and
            classes,  shall  determine  in good  faith  will  result in fair and
            equitable treatment among the respective series or classes.

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

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

            Section  6.  Liquidation.   Dissolution  or  Winding  Up.  Upon  any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the  holders  of shares of stock  ranking  junior  (either  as to
dividends  or upon  liquidation,  dissolution  or  winding  up) to the  Series A
Preferred  Stock  unless,  prior  thereto,  the  holders  of  shares of Series A
Preferred  Stock shall have received an amount per share equal to $100.00,  plus
an amount  equal to accrued  and unpaid  dividends  and  distributions  thereon,
whether or not declared, to the date of such payment,  provided that the holders
of shares of Series A Preferred  Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to the aggregate  amount to be distributed  per share to holders of shares
of Common  Stock,  or (2) to the holders of shares of stock  ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred  Stock,  except  distributions  made  ratably on the Series A
Preferred  Stock and all such parity stock in proportion to the total amounts to
which the  holders  of all such  shares  are  entitled  upon  such  liquidation,
dissolution  or  winding  up.  In the event  the  Corporation  shall at any time
declare  or pay any  dividend  on the Common  Stock  payable in shares of Common
Stock,  or  effect  a  subdivision  or  combination  or   consolidation  of  the
outstanding  shares of Common Stock (by  reclassification  or otherwise  than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock,  then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) 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.

            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 each share of
Series A  Preferred  Stock  shall at the same  time be  similarly  exchanged  or
changed into an amount per share subject to the provision for adjustment

                                      -4-
<PAGE>

hereinafter set forth equal to 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  declare or pay any  dividend on the Common Stock
payable in shares of Common Stock,  or effect a subdivision  or  combination  or
consolidation of the outstanding shares of Common Stock (by  reclassification or
otherwise  than by  payment  of a  dividend  in shares of Common  Stock)  into a
greater or lesser number of shares of Common  Stock,  then in each such case the
amount set forth in the  preceding  sentence  with  respect to the  exchange  or
change of shares of Series A 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. Redemption.  The shares of Series A Preferred Stock shall
not be redeemable.

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

            Section 10. Amendment.  The Articles of Incorporation (including any
Certificate of Determination issued under the authority of said Articles) of the
Corporation  shall not be amended in any manner which would  materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding  shares of Series A Preferred Stock,  voting
together as a single series.

            E. The foregoing Certificate of Determination has been duly approved
by the Board of Directors of the Corporation.

            F. None of the shares of Series A Preferred Stock  authorized by the
foregoing Certificate of Determination has been issued.

            The  undersigned  have executed this  certificate  and declare under
penalty of perjury  under the laws of the State of  California  that the matters
set forth in this Certificate are true and correct of their own knowledge.

Date: October 28, 2002

                                             -----------------------------------
                                             Terry L. Robinson, President

                                             -----------------------------------
                                             Wyman G. Smith III, Secretary

                                      -5-

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