Document:

REGISTRATION RIGHTS AGREEMENT

                  This Registration  Rights Agreement (this "Agreement") is made
and entered into as of July 31, 2000, among General DataComm Industries, Inc., a
Delaware  corporation (the "Company"),  and the investors signatory hereto (each
such investor is a "Purchaser"  and all such  investors are,  collectively,  the
"Purchasers").

                  This  Agreement is made  pursuant to the  Securities  Purchase
Agreement,  dated as of the date  hereof,  among the Company and the  Purchasers
(the "Purchase Agreement").

                  In  consideration  of the mutual  covenants  contained  in the
Purchase Agreement and in this Agreement,  the Company and the Purchasers hereby
agree as follows:

1.                Definitions

                  Capitalized  terms used and not otherwise  defined herein that
are defined in the Purchase  Agreement  shall have the meanings given such terms
in the Purchase Agreement. As used in this Agreement,  the following terms shall
have the following meanings:

                  "Affiliate"  means,  with  respect  to any  Person,  any other
Person that directly or indirectly  controls or is controlled by or under common
control with such Person.  For the purposes of this definition,  "control," when
used with respect to any Person,  means the possession,  direct or indirect,  of
the power to direct or cause the  direction  of the  management  and policies of
such Person, whether through the ownership of voting securities,  by contract or
otherwise;  and the terms  "affiliated,"  "controlling"  and  "controlled"  have
meanings correlative to the foregoing.

                  "Business Day" means any day except  Saturday,  Sunday and any
day  which  shall  be  a  federal  legal  holiday  or a  day  on  which  banking
institutions in the state of New York and the State of Connecticut generally are
authorized or required by law or other governmental action to close.

                  "Closing  Date"  shall  have  the  meaning  set  forth  in the
Purchase Agreement.

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<PAGE>

                  "Commission" means the Securities and Exchange Commission.

                  "Common  Stock" means the Company's  common  stock,  par value
$.10 per share and any other securities into which such stock shall hereafter be
redistributed or recapitalized.

                   "Effectiveness Date" means the 90th day following the Closing
Date, provided, that if (i) the Commission fails to respond with either comments
(whether or not such  comments  request the filing of  additional  material),  a
request for  additional  information,  a notice of no-review,  or a notice of no
further review (whether, in any case, orally or in writing) to the filing by the
Company with the  Commission of a Registration  Statement  within 20 days of the
date that such  Registration  Statement was filed (the "Response  Period"),  and
(ii) the Company  shall have during such entire  period used its best efforts to
obtain such comments,  requests or  notifications,  then, for each day after the
Response Period during which such failure by the Commission continues and during
which the Company  shall have  continued to have used its best efforts to obtain
such  comments,  requests  or  notifications,  one  day  will  be  added  to the
definition of "Effectiveness Date" for all purposes of this Agreement, provided,
however,  that in the case of an  amendment  to a  Registration  Statement,  the
Response  Period  shall  be 15  days  of  the  date  that  such  amendment  to a
Registration Statement was filed.

                  "Effectiveness  Period"  shall have the  meaning  set forth in
Section 2(a).

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended.

                  "Filing Date" means the 45th day following the Closing Date.

                  "Holder"  or  "Holders"  or "Selling  Stockholders"  means the
holder  or  holders,  as the  case  may be,  from  time  to time of  Registrable
Securities.

                  "Indemnified  Party"  shall  have  the  meaning  set  forth in
Section 5(c).

                  "Indemnifying  Party"  shall  have the  meaning  set  forth in
Section 5(c).

                  "Losses" shall have the meaning set forth in Section 5(a).

                  "Person"  means an individual or a  corporation,  partnership,
trust,  incorporated  or  unincorporated  association,  joint  venture,  limited
liability  company,  joint stock company,  government (or an agency or political
subdivision thereof) or other entity of any kind.

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<PAGE>

                  "Preferred   Stock"   means  the   Company's   5%   Cumulative
Convertible Preferred Stock, par value $1.00 per share, issued to the Purchasers
in accordance with the Purchase Agreement.

                  "Proceeding" means an action,  claim,  suit,  investigation or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

                  "Prospectus"  means the prospectus  included in a Registration
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities Act), as amended or supplemented by any prospectus  supplement,  with
respect  to  the  terms  of  the  offering  of any  portion  of the  Registrable
Securities covered by such Registration Statement,  and all other amendments and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

                  "Registrable  Securities"  means the  shares  of Common  Stock
issuable  upon  conversion  of and  dividends  on the  Preferred  Stock and upon
exercise in full of the Warrants.

                  "Registration  Statement" means the registration statement and
any additional  registration  statement  contemplated by Section 3(c), including
(in each case) the Prospectus,  amendments and supplements to such  registration
statement or  Prospectus,  including  pre- and  post-effective  amendments,  all
exhibits  thereto,  and all material  incorporated  by reference or deemed to be
incorporated by reference in such registration statement.

                  "Rule  144"  means  Rule  144  promulgated  by the  Commission
pursuant to the  Securities  Act, as such Rule may be amended from time to time,
or any similar rule or regulation  hereafter  adopted by the  Commission  having
substantially the same effect as such Rule.

                  "Rule  415"  means  Rule  415  promulgated  by the  Commission
pursuant to the  Securities  Act, as such Rule may be amended from time to time,
or any similar rule or regulation  hereafter adopted by the Commission to having
substantially the same effect as such Rule.

                  "Rule  424"  means  Rule  424  promulgated  by the  Commission
pursuant to the  Securities  Act, as such Rule may be amended from time to time,
or any similar rule or regulation  hereafter  adopted by the  Commission  having
substantially the same effect as such Rule.

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<PAGE>

                  "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

                  "Special Counsel" means one special counsel to the Holders for
which the Holders will be reimbursed by the Company pursuant to Section 4.

                  "Warrants"  means the  Warrants  as  defined  in the  Purchase
Agreement.

                  2.                Shelf Registration

                  (a) On or prior to the 45th day  following  the Closing  Date,
the Company  shall prepare and file with the  Commission a "Shelf"  Registration
Statement  covering the resale of all Registrable  Securities for an offering to
be made on a continuous basis pursuant to Rule 415. The  Registration  Statement
shall be on Form S-3 (except if the Company is not then eligible to register for
resale the Registrable  Securities on Form S-3, in which case such  registration
shall be on another  appropriate form in accordance  herewith as the Holders may
consent).  The Company  shall  respond  fully to all comments  received from the
Commission  within fifteen (15) days of receipt thereof  provided Holders timely
provide the Company with all information  concerning  themselves required by the
Commission.  The Company  shall use its best  efforts to cause the  Registration
Statement  to be  declared  effective  under the  Securities  Act as promptly as
possible after the filing thereof,  but in any event prior to the  Effectiveness
Date,  and  shall  use its best  efforts  to keep  such  Registration  Statement
continuously  effective under the Securities Act until the date which is two (2)
years after the date that such Registration  Statement is declared  effective by
the Commission or such earlier date when all Registrable  Securities  covered by
such  Registration  Statement  have  been  sold  or may be sold  without  volume
restrictions pursuant to Rule 144(k) as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the  Company's  transfer  agent and the  affected  Holders  (the  "Effectiveness
Period"),  provided,  that the Company shall not be deemed to have used its best
efforts to keep the Registration  Statement  effective during the  Effectiveness
Period if it  voluntarily  takes any action that would result in the Holders not
being  able to sell the  Registrable  Securities  covered  by such  Registration
Statement during the Effectiveness  Period, unless such action is required under
applicable law or the Company has filed one or more post-effective amendments to
the Registration Statement and the Commission has not declared it effective.

                  (b) The initial  Registration  Statement to be filed hereunder
shall  include a number of shares of Common Stock equal to the Maximum  Issuable
Shares (as defined in Section 3.5 of the Purchase Agreement) which is the sum of
(i) the number of shares of

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<PAGE>

Common Stock issuable upon  conversion of the Preferred Stock (ii) the number of
shares issuable upon exercise in full of the Closing Warrant,  and the number of
shares  issuable as dividends  on the  Preferred  Stock in lieu of cash,  not to
exceed 19.999% of the outstanding Common Stock on July 20, 2000.

                   (c) If (i) the Company  fails to file with the  Commission  a
request  to  accelerate  in  accordance  with  Rule 461  promulgated  under  the
Securities  Act within  five (5)  business  days of the date that the Company is
notified  (orally or in writing,  whichever is earlier) by the Commission that a
Registration  Statement  will not be  "reviewed"  or is not  subject  to further
review,  or (ii) the  initial  Registration  Statement  filed  hereunder  is not
declared  effective by the  Commission  on or before the 120th day following the
Closing  Date) by  reason of acts or  failure  to act by the  Company  (any such
breach or failure being  referred to as an "Event"),  and for purposes of clause
(i), the date on which such five (5)  business day period is exceeded,  and as a
result of any one or more  Events the  Registration  Statement  is not  declared
effective  on or before the 120th day  following  the Closing Date unless due to
comments by the Commission,  in writing,  specifically  addressing violations of
the Federal  securities  laws by the Holder or Holders  (including  the identity
thereof but not of the structure of this  transaction  generally),  then, in any
such case,  as  liquidated  damages for the damages  suffered  therefrom  by the
Holder  including  damages  for  failure  of the  Registration  Statement  to be
effective  on the  Effectiveness  Date (which  remedy  shall be exclusive of any
other  remedies  available  at law or in equity  except  the right to rescind as
provided  in the  Purchase  Agreement  if  said  Registration  Statement  is not
declared  effective  by the 180th date  following  the  Closing  Date unless the
Company has been notified by the  Commission,  in writing,  that such failure to
declare the  Registration  Statement  effective is due to comments  specifically
addressing  violations of the Federal  securities  laws by the Holder or Holders
(including  the  identity  thereof  but not the  structure  of this  transaction
generally)  the Company  shall,  on the monthly  anniversary  of the date of the
Event, and on each monthly  anniversary thereof until the Event is cured, pay to
the Holders liquidated damages in the amount of $5,000 per calendar day from the
day  after  the date of the  Event  and  each day  thereafter  until  cured.  In
addition, in the event the Company does not file such Registration  Statement by
the 45th day following the Closing Date the Company shall, on the second monthly
anniversary of the Closing Date and on each monthly anniversary thereafter until
the Registration  Statement is filed, pay to the Holders  liquidated  damages in
the  aggregate  amount of $5,000 per  calendar  day from such 46th day up to but
excluding  the day on  which  the  Registration  Statement  is  filed  with  the
Commission.  In the event of such rescission provided in the Purchase Agreement,
he Company shall promptly withdraw the Registration Statement.

                  (d) The  Company  shall not  permit a  registration  statement
filed with the  Commission  covering any  securities of the Company issued after
the Closing Date which are

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<PAGE>

convertible or exercisable into shares of Common Stock, which securities contain
reset  provisions with respect to lowering the exercise or conversion  price for
the  acquisition of such shares of Common Stock or involves Common Stock sold at
a discount  greater  than 20% (but  excluding  an  issuance of  securities  to a
strategic  investor),  to become effective until the 46th day following the date
the  Registration  Statement  filed  pursuant  to  this  Agreement  is  declared
effective.   Each  such  registration  statement  should  contain  the  delaying
amendment  language  provided  in Rule 473 under the  Securities  Act, as may be
amended from time to time, or any similar rule or regulation  hereafter  adopted
by the  Commission  having  substantially  the same effect as such Rule 473. The
foregoing shall not apply to registration  statements on Form S-8 covering stock
option and/or stock purchase plans covering  shares issuable to employees of the
Company,  or any  registration  statement with respect to warrants  disclosed in
Schedule 6(b) of this Agreement.

                  (e) The Company shall not permit the Registration Statement to
cease to be effective for more than ten (10) days (which need not be consecutive
days)  during any 60 day period,  nor more than thirty (30) days (which need not
be consecutive days), during any twelve (12) month period,  other than by reason
of acts or omissions  of, or matters  relating to, the Holders where the Company
has  been  notified  by the  Commission  that  such  event is due to the acts or
omissions of, or related to, the Holders.

3.                Registration Procedures

                  In  connection  with the  Company's  registration  obligations
hereunder, the Company shall:

                  (a)  Prepare and file with the  Commission  on or prior to the
30th day  following the Closing  Date, a  Registration  Statement as required by
Section 2(a) which shall contain the "Plan of  Distribution"  attached hereto as
Annex  A  (except  if  otherwise  directed  by  the  Holders),   and  cause  the
Registration  Statement  to become  effective  and remain  effective as provided
herein, provided, that not less than three (3) Business Days prior to the filing
of a  Registration  Statement  or any related  Prospectus  or any  amendment  or
supplement  thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference),  the Company shall, (i) furnish to the
Holders and their Special  Counsel copies of all such  documents  proposed to be
filed,   which  documents  (other  than  those  incorporated  or  deemed  to  be
incorporated  by  reference)  will be subject to the review of such  Holders and
their Special  Counsel,  and (ii) cause its officers and directors,  counsel and
independent  certified public  accountants to respond to such inquiries as shall
be necessary,  in the reasonable  opinion of respective counsel to such Holders,
to conduct a reasonable  investigation within the meaning of the Securities Act.
The Company shall not file the Registration

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<PAGE>

Statement or any such  Prospectus or any  amendments or  supplements  thereto to
which the Holders of a majority of the  Registrable  Securities or their Special
Counsel shall reasonably object, but all time periods relating to the filing and
effectiveness of such Registration Statement shall be adjusted for the period of
such objections.

                  (b) (i) Prepare and file with the Commission such  amendments,
including  post-effective  amendments,  to the  Registration  Statement  and the
Prospectus  used  in  connection  therewith  as may be  necessary  to  keep  the
Registration  Statement  continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such  additional  Registration  Statements in order to register for resale under
the Securities  Act all of the  Registrable  Securities;  (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus  supplement,
and as so  supplemented  or  amended  to be filed  pursuant  to Rule 424;  (iii)
respond as promptly as reasonably possible, and in any event within fifteen (15)
days,  to  any  comments  received  from  the  Commission  with  respect  to the
Registration  Statement or any amendment thereto,  and as promptly as reasonably
possible provide the Holders true and complete copies of all correspondence from
and to the Commission relating to the Registration Statement; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with respect to the disposition of all Registrable Securities covered by the
Registration  Statement  during the  applicable  period in  accordance  with the
intended  methods  of  disposition  by the  Holders  thereof  set  forth  in the
Registration Statement as so amended or in such Prospectus as so supplemented.

                   (c)(i)  File such  supplements  or attach  "stickers"  to the
Registration  Statement or Prospectus as and when required by the  Commission to
evidence a material amount of resales by a Holder  pursuant to a Prospectus.  In
connection  therewith,  if  such  supplements  or  "stickers"  are  periodically
required by the  Commission,  the Company  shall,  within six (6) Business Days,
file such  supplements or attach such  "stickers"  whenever a Holder has advised
Company that Holder has sold 50% of the  Registrable  Securities  covered by the
then  outstanding  Prospectus (as last  supplemented or "stickered") in order to
cover 100% of the number of the outstanding Registrable Securities.

                     (ii)  File  additional  Registration  Statements  covering
shares in  addition  to the  Maximum  Issuable  Shares  as and to the  extent so
permitted and effectuated by the Company  pursuant to Section  (D)(10)(c) of the
Certificate  of  Designations.  The Company  shall have thirty (30) days to file
such additional  Registration  Statements after the Company has effectuated such
increase and such additional Registration Statements shall be declared effective
by the 90th day thereafter.

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                  (d) Notify the Holders of  Registrable  Securities  to be sold
and their Special  Counsel as promptly as reasonably  possible (and, in the case
of (i)(A)  below,  not less than three (3)  Business  Days (or, in the case of a
supplement  or  "sticker"  required to be filed or attached  pursuant to Section
3(c),  within one (1) Business  Days) prior to such filing) and (if requested by
any such  Person)  confirm such notice in writing no later than one (1) Business
Days following the day (i)(A) when a Prospectus or any Prospectus  supplement or
post-effective  amendment to the Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration  Statement and whenever the Commission  comments in writing on
such Registration  Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders);  and (C) with
respect to the Registration Statement or any post-effective  amendment, when the
same has become  effective;  (ii) of any request by the  Commission or any other
Federal or state  governmental  authority for  amendments or  supplements to the
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration  Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings  for that purpose;  (iv) if at any time any of the
representations  and  warranties  of the  Company  contained  in  any  agreement
contemplated hereby ceases to be true and correct in all material respects;  (v)
of the receipt by the Company of any notification with respect to the suspension
of the  qualification or exemption from  qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose;  and (vi) of the occurrence of any event or passage
of time  that  makes  the  financial  statements  included  in the  Registration
Statement  ineligible  for  inclusion  therein  or  any  statement  made  in the
Registration  Statement or Prospectus or any document  incorporated or deemed to
be  incorporated  therein by reference  untrue in any  material  respect or that
requires  any  revisions  to the  Registration  Statement,  Prospectus  or other
documents so that, in the case of the Registration  Statement or the Prospectus,
as the case may be, it will not contain any untrue  statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

                  (e) Use its best  efforts  to avoid the  issuance  of,  or, if
issued,  obtain the withdrawal of (i) any order suspending the  effectiveness of
the  Registration  Statement,  or (ii) any suspension of the  qualification  (or
exemption from  qualification) of any of the Registrable  Securities for sale in
any jurisdiction, at the earliest practicable moment.

                  (f) Furnish to each Holder and their Special  Counsel  without
charge,  at least one  conformed  copy of each  Registration  Statement and each
amendment thereto,

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including  financial  statements and schedules,  all documents  incorporated  or
deemed to be incorporated  therein by reference,  and all exhibits to the extent
requested by such Person  (including those previously  furnished or incorporated
by reference) promptly after the filing of such documents with the Commission.

                  (g) Promptly deliver to each Holder and their Special Counsel,
without charge, as many copies of the Prospectus or Prospectuses (including each
form of prospectus) and each amendment or supplement thereto as such Persons may
reasonably  request;  and  the  Company  hereby  consents  to the  use  of  such
Prospectus  and each  amendment  or  supplement  thereto by each of the  selling
Holders in connection with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto.

                  (h) Prior to any public  offering of  Registrable  Securities,
use its best  efforts  to  register  or qualify or  cooperate  with the  selling
Holders  and their  Special  Counsel  in  connection  with the  registration  or
qualification  (or exemption from such  registration or  qualification)  of such
Registrable  Securities for offer and sale under the securities or Blue Sky laws
of such  jurisdictions  within  the  United  States as any  Holder  requests  in
writing,   to  keep  each  such  registration  or  qualification  (or  exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or  things  necessary  or  advisable  to  enable  the  disposition  in such
jurisdictions of the Registrable Securities covered by a Registration Statement;
provided,  however,  that the Company shall not be required to qualify generally
to do business in any jurisdiction  where it is not then so qualified or to take
any action that would subject it to any tax in any such jurisdiction where it is
not then so subject.

                  (i)      Cooperate  with the  Holders to facilitate the timely
preparation and delivery of certificates  representing Registrable Securities to
be delivered to a transferee

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<PAGE>

pursuant to a Registration  Statement,  which certificates shall be free, to the
extent permitted by the Purchase Agreement,  of all restrictive  legends, and to
enable such Registrable Securities to be in such denominations and registered in
such names as any such Holders may request.

                  (j) Upon the occurrence of any event  contemplated  by Section
3(d)(vi), as promptly as reasonably possible, prepare a supplement or amendment,
including  a  post-effective  amendment,  to  the  Registration  Statement  or a
supplement to the related  Prospectus or any document  incorporated or deemed to
be incorporated  therein by reference,  and file any other required  document so
that,  as  thereafter  delivered,  neither the  Registration  Statement nor such
Prospectus will contain an untrue  statement of a material fact or omit to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.

                  (k) Use its best efforts to cause all  Registrable  Securities
relating  to such  Registration  Statement  to be listed  on the New York  Stock
Exchange  ("NYSE")  or if not so listed,  on any other  stock  market or trading
facility on which  shares of Common  Stock are traded,  listed or quoted (each a
"Subsequent Market") as and when required pursuant to the Purchase Agreement.

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<PAGE>

 (l)     Comply with all applicable rules and regulations of the Commission.

     (m) The Company may require each  selling  Holder to furnish to the Company
     such information regarding the distribution of such Registrable  Securities
     and the  beneficial  ownership  of Common  Stock held by such  Holder as is
     required by law to be  disclosed  in the  Registration  Statement,  and the
     Company may exclude from such  registration  the Registrable  Securities of
     any such Holder who unreasonably fails to furnish such information within a
     reasonable time after receiving such request. If the Registration Statement
     refers to any Holder by name or otherwise  as the holder of any  securities
     of the Company, then such Holder shall have the right to require by written
     advice  (if such  reference  to such  Holder  by name or  otherwise  is not
     required by the  Securities  Act or any  similar  Federal  statute  then in
     force) the  deletion of the  reference  to such Holder in any  amendment or
     supplement to the  Registration  Statement filed or prepared  subsequent to
     the time  that  such  reference  ceases  to be  required.

4.  Registration Expenses

                  All  fees  and  expenses  incident  to the  performance  of or
compliance with this Agreement by the Company except as limited herein and Annex
A shall be borne by the Company  whether or not the  Registration  Statement  is
filed or becomes  effective and whether or not any  Registrable  Securities  are
sold pursuant to the Registration  Statement.  The fees and expenses referred to
in  the  foregoing  sentence  shall  include,   without   limitation,   (i)  all
registration and filing fees (including,  without limitation,  fees and expenses
with respect to filings  required to be made with the NYSE or if applicable  the
replacement Subsequent Market, exclusive,  however, of such fees and expenses in
compliance  with  state  securities  or  Blue  Sky  laws   (including,   without
limitation, fees and disbursements of counsel for the Holders in connection with
Blue  Sky  qualifications  or  exemptions  of  the  Registrable  Securities  and
determination  of the eligibility of the  Registrable  Securities for investment
under the laws of such jurisdictions as the Holders of a majority of Registrable
Securities may designate), (ii)

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<PAGE>

printing  expenses  (including,  without  limitation,  expenses of printing
certificates  for  Registrable  Securities  and of  printing  or  reproducing  a
reasonable  quantity of prospectuses if such supply of prospectuses is requested
by the  holders of a majority  of the  Registrable  Securities  included  in the
Registration Statement) (iii) messenger,  telephone and delivery expenses of the
Company,  (iv) fees and  disbursements  of counsel  for the  Company and Special
Counsel for the Holders (limited in the case of Special Counsel for the Holders,
up to a maximum of $5,000),  (v)  Securities  Act  liability  insurance,  if the
Company so  desires  such  insurance,  and (vi) fees and  expenses  of all other
Persons  retained  by the Company in  connection  with the  consummation  of the
transactions  contemplated by this Agreement.  In addition, the Company shall be
responsible  for all of its internal  expenses  incurred in connection  with the
consummation  of the  transactions  contemplated  by this Agreement  (including,
without  limitation,  all salaries  and  expenses of its officers and  employees
performing  legal or accounting  duties),  the expense of any annual audit,  the
fees and expenses  incurred in  connection  with the listing of the  Registrable
Securities on any securities exchange as required hereunder.

5.       Indemnification

                  (a)  Indemnification  by  the  Company.   The  Company  shall,
notwithstanding  any termination of this Agreement,  indemnify and hold harmless
each Holder,  its officers,  directors,  agents and  employees,  each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act
or Section  20 of the  Exchange  Act) and the  officers,  directors,  agents and
employees of each such  controlling  Person and brokers acting on behalf of such
Holder  in the  sale  of the  Registrable  Securities,  to  the  fullest  extent
permitted  by  applicable  law,  from and against  any and all  losses,  claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and  reasonable  attorneys'  fees) and  expenses  (collectively,  "Losses"),  as
determined by a court of competent  jurisdiction in a final judgment not subject
to appeal or review as  incurred,  arising  out of or  relating to any untrue or
alleged  untrue  statement  of a material  fact  contained  in the  Registration
Statement,  any  Prospectus  or any form of  prospectus  or in any  amendment or
supplement  thereto  or in any  preliminary  prospectus,  or  arising  out of or
relating to any omission or alleged  omission of a material  fact required to be
stated therein or necessary to make the  statements  therein (in the case of any
Prospectus  or form  of  prospectus  or  supplement  thereto,  in  light  of the
circumstances under which they were made) not misleading,  except to the extent,
but only to the extent,  that (1) such untrue  statements or omissions are based
solely  upon  information  regarding  such  Holder  furnished  in writing to the
Company by such Holder  expressly  for use  therein,  or to the extent that such
information  relates  to  such  Holder  or such  Holder's  pro-posed  method  of
distribution of Registrable  Securities and was reviewed and expressly  approved
in writing by such Holder expressly for use in the Registration Statement,  such
Prospectus or such form of Prospectus or in any amendment or supplement  thereto
or (2) in the case of an occurrence of an event of the type specified in Section
3(d)(ii)-(vi),  the use by such Holder of an outdated  or  defective  Prospectus
after the Company has  notified  such

                                       12
<PAGE>

Holder in writing that the Prospectus is outdated or defective and prior to
the  receipt by such  Holder of the Advice  contemplated  in Section  6(e).  The
Company  shall  notify  the  Holders  promptly  of the  institution,  threat  or
assertion of any  Proceeding  of which the Company is aware in  connection  with
such indemnification.

                  (b) Indemnification by Holders.  Each Holder shall,  severally
and not  jointly,  indemnify  and hold  harmless  the  Company,  its  directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors,  officers,  agents and employees of such controlling Persons,
to the fullest extent  permitted by applicable  law, from and against all Losses
as  determined  by a court of  competent  jurisdiction  in a final  judgment not
subject  to appeal or review  arising  solely  out of or based  solely  upon any
untrue statement of a material fact contained in the Registration Statement, any
Prospectus,  or any  form  of  prospectus,  or in any  amendment  or  supplement
thereto,  or  arising  solely  out of or based  solely  upon any  omission  of a
material fact required to be stated  therein or necessary to make the statements
therein not misleading to the extent,  but only to the extent,  that such untrue
statement or omission is contained in any information so furnished in writing by
such  Holder to the  Company  specifically  for  inclusion  in the  Registration
Statement or such Prospectus or to the extent that such  information  relates to
such Holder or such Holder's  proposed  method of  distribution  of  Registrable
Securities  and was  reviewed and  expressly  approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus,  or in any  amendment or  supplement  thereto and, in the case of an
occurrence of an event of the type specified in Section  3(d)(ii)-(vi),  the use
by such  Holder of an  outdated or  defective  Prospectus  after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice  contemplated in Section 6(e).
In no event shall the  liability of any selling  Holder  hereunder be greater in
amount than the dollar  amount of the net proceeds  received by such Holder upon
the  sale of the  Registrable  Securities  giving  rise to such  indemnification
obligation.

                   (c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity  hereunder
(an  "Indemnified  Party"),  such  Indemnified  Party shall promptly  notify the
Person from whom indemnity is sought (the "Indemnifying  Party") in writing, and
the  Indemnifying  Party  shall  assume  the  defense  thereof,   including  the
employment of counsel reasonably satisfactory to the

                                       13
<PAGE>

Indemnified  Party and the  payment  of all  reasonable  fees and  expenses
incurred in connection with defense thereof;  provided,  that the failure of any
Indemnified  Party to give such notice shall not relieve the Indemnifying  Party
of its obligations or liabilities pursuant to this Agreement,  except (and only)
to the  extent  that it  shall be  finally  determined  by a court of  competent
jurisdiction  (which  determination  is not subject to appeal or further review)
that such failure shall have approximately and materially  adversely  prejudiced
the Indemnifying Party.

                  An Indemnified  Party shall have the right to employ  separate
counsel in any such Proceeding and to cooperate in, but not control, the defense
thereof,  but the fees and expenses of such  counsel  shall be at the expense of
such Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed
in writing to pay such fees and expenses;  or (2) the  Indemnifying  Party shall
have  failed  promptly to assume the  defense of such  Proceeding  and to employ
counsel   reasonably   satisfactory  to  such  Indemnified  Party  in  any  such
Proceeding;  or (3) the named  parties  to any such  Proceeding  (including  any
impleaded  parties)  include both such  Indemnified  Party and the  Indemnifying
Party, and such Indemnified  Party shall have been advised in writing by counsel
that a  conflict  of  interest  is likely to exist if the same  counsel  were to
represent such Indemnified  Party and the Indemnifying  Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ  separate  counsel  at the  expense  of the  Indemnifying  Party,  the
Indemnifying  Party shall not have the right to assume the  defense  thereof and
such  counsel  shall  be  at  the  expense  of  the  Indemnifying   Party).  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected  without its written  consent,  which consent shall not be unreasonably
withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party,  unless such settlement (i) provides for
the  payment of money only and (ii)  includes an  unconditional  release of such
Indemnified  Party from all  liability on claims that are the subject  matter of
such proceeding.

                  The  Indemnified  Party shall  reasonably  cooperate with the
Indemnifying  Party in the defense thereof.

                   (d)     Contribution.   If  a  claim  for   indemnification
under  Section  5(a)  or  5(b)  is unavailable to an Indemnified Party (by
reason of public policy or otherwise), then each

                                       14
<PAGE>

Indemnifying  Party, in lieu of indemnifying such Indemnified  Party, shall
contribute to the amount paid or payable by such  Indemnified  Party as a result
of such Losses,  in such  proportion as is  appropriate  to reflect the relative
fault of the  Indemnifying  Party and  Indemnified  Party in connection with the
actions,  statements  or omissions  that  resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and  Indemnified  Party shall be  determined  by reference to, among other
things,  whether any action in question,  including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been  taken  or made  by,  or  relates  to  information  supplied  by,  such
Indemnifying  Party or  Indemnified  Party,  and the parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include,  subject to the  limitations set forth
in Section 5(c), any reasonable  attorneys' or other reasonable fees or expenses
incurred  by such party in  connection  with any  Proceeding  to the extent such
party   would  have  been   indemnified   for  such  fees  or  expenses  if  the
indemnification  provided  for in this  Section was  available  to such party in
accordance with its terms.

                  The  parties  hereto  agree  that it  would  not be  just  and
equitable if  contribution  pursuant to this Section 5(d) were determined by pro
rata  allocation  or by any other method of  allocation  that does not take into
account the equitable  considerations  referred to in the immediately  preceding
paragraph.  Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute,  in the aggregate, any amount in excess of the amount
by which the  proceeds  actually  received  by such  Holder from the sale of the
Registrable  Securities  subject  to the  Proceeding  exceeds  the amount of any
damages that such Holder has  otherwise  been  required to pay by reason of such
untrue or alleged untrue  statement or omission or alleged  omission.  No Person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  from any Person who was
not guilty of such fraudulent misrepresentation.

                  The indemnity and  contribution  agreements  contained in this
Section are in addition to any liability that the Indemnifying  Parties may have
to the Indemnified Parties.

6.  Miscellaneous

                  (a) Remedies.  In the event of a breach by the Company or by a
Holder,  of any of their  obligations  under this Agreement,  each Holder or the
Company,  as the case may be, in  addition to being  entitled  to  exercise  all
rights granted by law and under this Agreement,  including  recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary  damages would not provide  adequate
compensation  for any losses  incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific  performance  in respect of such breach,  it shall waive the
defense that a remedy at law would be adequate.

                                       15
<PAGE>

                   (b) No Inconsistent  Agreements;  Other Registration  Rights.
The Company has not entered,  as of the date hereof, nor shall the Company on or
after the date of this  Agreement,  enter into any agreement with respect to its
securities that is  inconsistent  with the rights granted to the Holders in this
Agreement or otherwise  conflicts with the provisions  hereof.  Except as and to
the extent  specified in Schedule  6(b) hereto,  the Company has not  previously
entered into any agreement granting any registration  rights with respect to any
of its securities to any Person, which rights remain unexercised.

                  (c) No Piggyback on Registration  Statement.  Except as and to
the extent specified in Schedule 6(b) hereto, neither the Company nor any of its
security  holders (other than the Holders in such capacity  pursuant hereto) may
include  securities of the Company in the Registration  Statement other than the
Registrable  Securities,  and the Company  shall not after the date hereof enter
into any agreement providing any such right to any of its security holders.  The
Holders  shall not have any rights  hereunder  to piggyback on or be included in
any other  Registration  Statement  with respect to the  Registrable  Securities
other then the Registration Statement to be filed hereunder.

                  (d) Compliance.  Each Holder  covenants and agrees that (i) it
will not sell any Registrable  Securities under the Registration Statement until
it has received  copies of the  Prospectus  as then amended or  supplemented  as
contemplated in Section 3(g) and notice from the Company that such  Registration
Statement and any  post-effective  amendments  thereto have become  effective as
contemplated  by  Section  3(j)  and  (ii) it and its  officers,  directors  and
Affiliates, if any, will comply with the prospectus delivery requirements of the
Securities  Act as  applicable  to any of  them  in  connection  with  sales  of
Registrable Securities pursuant to the Registration Statement.  Each Holder will
not take any  action  prohibited  by  Regulation  M under  the  Exchange  Act in
connection  with the  distribution of the  Registrable  Securities  contemplated
hereby.

                  (e)  Discontinued  Disposition.  Each  Holder  agrees  by  its
acquisition of such  Registrable  Securities that, upon receipt of a notice from
the Company of the  occurrence  of any event of the kind  described  in Sections
3(d)(ii),  3(d)(iii),  3(d)(iv), 3(d)(v) or 3(d)(vi), such Holder will forthwith
discontinue  disposition of such  Registrable  Securities under the Registration
Statement  until  such  Holder's  receipt  of the  copies  of  the  supplemented
Prospectus and/or amended Registration  Statement  contemplated by Section 3(j),
or until it is advised in writing (the  "Advice") by the Company that the use of
the  applicable  Prospectus  may be resumed,  and, in either case,  has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated  by reference in such  Prospectus or Registration  Statement.
The Company may provide  appropriate  stop orders to enforce the  provisions  of
this paragraph.

                   (f) Amendments and Waivers. The provisions of this Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers

                                       16
<PAGE>

or  consents to  departures  from the  provisions  hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders of
at least a majority of the then outstanding Registrable Securities.

                  (g) Notices.  Any and all notices or other  communications  or
deliveries  required or permitted to be provided  hereunder  shall be in writing
and  shall be deemed  given and  effective  on the  earliest  of (i) the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  telephone  number  specified in this Section  prior to 5:30 p.m. (New
York City  time) on a  Business  Day,  (ii) the  Business  Day after the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  telephone number specified in the Purchase  Agreement later than 5:30
p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City
time) on such date,  (iii) the Business  Day of receipt of delivery,  if sent by
nationally  recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such  notice is  required  to be given.  The  address for such
notices and communications shall be as follows:

         If to the Company:         General DataComm Industries, Inc.
                                    Park Road Extension
                                    Middlebury, Connecticut 06762-1299
                                    Facsimile No.:(203) 577-6244
                                    Attn:  Chief Financial Officer

         With copies to:            Weisman Celler Spett & Modlin P.C
                                    445 Park Avenue
                                    New York, NY 10022
                                    Facsimile No.: (212) 371-5407
                                    Attn: Howard S. Modlin, Esq.

         If  to  a   Purchaser:     To the address  set forth under such
                                    Purchaser's   name   on   the
                                    signature pages hereto.

         If to any other  Person  who is then the registered Holder:

         To the address and facsimile number of such Holder as it appears in the
stock  transfer  books of the Company or such other address as may be designated
in writing hereafter, in the same manner, by such Person.

                  (h)      Successors  and  Assigns.  This  Agreement  shall
inure to the benefit of and be binding upon the successors and permitted assigns
of each of the  parties  and shall  inure to the  benefit  of each  Holder.  The
Company may not assign its rights or obligations hereunder

                                       17
<PAGE>

without  the prior  written  consent of the  Holders  of a majority  of the
Registrable  Securities  then  outstanding,  except the  Company  may assign its
rights or obligations  hereunder without the consent of the Holders in the event
of a merger in which the Company does not survive,  consolidation or sale of all
or  substantially  all of the  Company's  assets.  Each Holder may assign  their
respective  rights hereunder in the manner and to the Persons as permitted under
this Agreement and the Purchase Agreement.

                  (i) Counterparts. This Agreement may be executed in any number
of  counterparts,  each of  which  when so  executed  shall be  deemed  to be an
original  and, all of which taken  together  shall  constitute  one and the same
Agreement.   In  the  event  that  any   signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

                   (j) Governing  Law. This  Agreement  shall be governed by and
construed and enforced in accordance  with the internal laws of the State of New
York without  regard to the  principles of conflicts of law thereof.  Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal  courts sitting in the City of New York,  borough of Manhattan,  for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or  discussed  herein and  hereby  irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the  jurisdiction of any such court,  that
such suit,  action or  proceeding  is improper.  Each party  hereby  irrevocably
waives  personal  service of process and consents to process being served in any
such suit,  action or  proceeding by mailing a copy thereof to such party at the
address in effect for  notices to it under this  Agreement  and agrees that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

                   (k)     Cumulative  Remedies.  Except as otherwise limited
herein,  the remedies provided herein are cumulative and not exclusive of any
remedies provided by law.

                  (l)  Severability.   If  any  term,  provision,   covenant  or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated
by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the

                                       18

<PAGE>

intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

                  (m)      Headings.  The headings in this  Agreement  are for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof.

                   (n)  Independent  Nature of Holders'  Obligations and Rights.
The  obligations  of each  Holder  hereunder  are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the  performance of the  obligations of any other Holder  hereunder.
Nothing contained herein or in any other agreement or document  delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto,  shall be
deemed to  constitute  the Holders as a  partnership,  an  association,  a joint
venture or any other kind of entity,  or create a  presumption  that the Holders
are in any way  acting  in  concert  with  respect  to such  obligations  or the
transactions contemplated by this Agreement.  Except as set forth herein whereby
the election of the Holders of a specified percentage of Registrable  Securities
shall bind all Holders, each Holder shall be entitled to protect and enforce its
rights,  including without  limitation the rights arising out of this Agreement,
and it shall not be necessary for any other Holder to be joined as an additional
party in any proceeding for such purpose.

                                       19
<PAGE>

         IN WITNESS WHEREOF,  the parties have executed this Registration Rights
Agreement as of the date first written above.

                                    GENERAL DATACOMM INDUSTRIES, INC.

                                    By:  /S/ WILLIAM G. HENRY
                                    Name:  William G. Henry
                                    Title: Vice President, Finance

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOWS]

<PAGE>
                                  STRONG RIVER INVESTMENTS, INC.

                                  By:  /S/ KENNETH L. HENDERSON
                                  Name:  Kenneth L. Henderson
                                  Title: Attorney-in-Fact

                                  Address for Notice:

                                  Strong River Investments, Inc.
                                  c/o Gonzalez-Ruiz & Aleman (BVI) Limited
                                  Wickhams Cay I, Vanterpool Plaza
                                  P.O. Box 873
                                  Road Town, Tortolla, BVI
                                  Facsimile No.:  (212) 541-4630

                                 With copies to:

                                 Robinson Silverman Pearce Aronsohn & Berman LLP
                                 1290 Avenue of the Americas
                                 New York, NY  10104
                                 Facsimile No.:  (212) 541-4630 & (212) 541-1432
                                 Attn:   Kenneth L. Henderson, Esq. and
                                         Eric L. Cohen. Esq.

                                       21

<PAGE>

                                                                     Annex A
                              Plan of Distribution

         The  Selling  Stockholders  and any of their  pledgees,  assignees  and
successors-in-interest  may, from time to time,  sell any or all of their shares
of Common Stock  issuable  upon  conversion  of or as dividends on the Preferred
Stock or upon exercise of the Closing Warrants on any stock exchange,  market or
trading  facility  on which the shares  are  traded or in private  transactions.
These sales may be at fixed or negotiated prices.  The Selling  Stockholders may
use any one or more of the following methods when selling shares of Common Stock
except as limited by the Purchase Agreement:

-        ordinary brokerage transactions and transactions in which the
         broker-dealer solicits purchasers;

-        block trades in which the broker-dealer will attempt to sell the shares
         as  agent  but may  position  and  resell  a  portion  of the  block as
         principal to facilitate the transaction;

-        purchases by a broker-dealer as principal and resale by the
         broker-dealer for its account;

-        an exchange distribution in accordance with the rules of the applicable
         exchange;

-        privately negotiated transactions;

-        short sales, except as limited by the Purchase Agreement;

-        broker-dealers  may agree with the Selling  Stockholders  to sell a
         specified  number of such shares at a stipulated price per share;

-        a combination of any such methods of sale; and

-        any other method permitted pursuant to applicable law.

         The Selling  Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

         Except as limited by the Purchase Agreement,  the Selling  Stockholders
may also  engage  in short  sales  against  the box,  puts and  calls  and other
transactions  in securities of the Company or derivatives of Company  securities
and may sell or deliver  shares in  connection  with these  trades.  The Selling
Stockholders  may  pledge  their  shares  to  their  brokers  under  the  margin
provisions of customer agreements. If a Selling Stockholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged shares.

                                       22
<PAGE>

         Broker-dealers  engaged by the  Selling  Stockholders  may  arrange for
other  brokers-dealers  to  participate  in sales.  Broker-dealers  may  receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares,  from the purchaser) in amounts to be
negotiated.  The  Selling  Stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

         The  Selling  Stockholders  and any  broker-dealers  or agents that are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act.

         Because the Selling  Stockholders  may be deemed to be  "underwriters,"
the Selling  Stockholders  will be subject to prospectus  delivery  requirements
under the  Securities  Act. In  addition,  in the event of a  "distribution"  of
securities,  the  Selling  Stockholders,   any  selling  broker-dealer  and  any
"affiliated  purchasers"  may be subject to  Regulation  M under the  Securities
Exchange Act of 1934,  which  prohibits  certain  activities  for the purpose of
pegging,  fixing or  stabilizing  the price of securities in connection  with an
offering.

         Except as  otherwise  provided  by the  Registration  Rights  Agreement
pursuant to which the  Registration  Statement  is being  filed,  the Company is
required  to pay all fees  and  expenses  incident  to the  registration  of the
shares,  including fees and disbursements of counsel to the Selling Stockholders
(not to exceed $5,000 in the aggregate) and excluding all discounts, commissions
and other  similar  expenses  paid to brokers,  dealers,  agent and others.  The
Company has agreed to indemnify the Selling Stockholders against certain losses,
claims, damages and liabilities, including liabilities under the Securities Act.

                                       23
<PAGE>

                                  SCHEDULE 6(b)

         Other Registrations Rights and Registration Statements*

         1.       Registration Rights for Foothill Capital Corporation Lenders -
                  600,000 and 444,444 shares;

         2.       Registration Rights for Middlebury Office Park Limited
                  Partnership - 52,379 shares;

         3.       Existing   registration   statements  for  securities issuable
                  on conversion of the Company's 7 3/4% Senior  Convertible
                  Subordinated  Debentures due 2002 and 9% Cumulative
                  Convertible Preferred Stock.

--------
* None of these will be included in this Registration Statement

                                       24EXHIBIT 10.1
                                             ------------

                        UAL CORPORATION
                        ---------------
                   2000 INCENTIVE STOCK PLAN
                   -------------------------

     1.   Purpose.  The purpose of the UAL Corporation 2000
Incentive Stock Plan (the "Plan") is to attract and retain
outstanding individuals as officers and key employees of UAL
Corporation (the "Company") and its subsidiaries, to further
align participants' interests with those of the Company's
shareholders through compensation that is based on shares of
the Company's common stock, par value $.01 per share
("Common Stock") and to furnish incentives to such persons
by providing such persons opportunities to acquire shares of
Common Stock or monetary payments based on the value of such
shares or both, on advantageous terms as herein provided.

     2.   Administration. All benefits granted under the
Plan shall be granted by either the Compensation
Administration Committee or the Compensation Committee of
the Board of Directors of the Company (such committee, as
applicable, herein called the "Committee"). The Plan shall
be administered by the Compensation Administration Committee
for (I) all grants with respect to any "officer" as such
term is defined in Rule 16a-1(f) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or
(II) any other grant to covered employees for purposes of
Section 162(m) of the Internal Revenue Code of 1986, as
amended and the regulations promulgated thereunder (the
"Code"), to the extent necessary or proper to preserve
deductibility of the compensation expense associated with
such grant under Section 162(m); and by the Compensation
Committee for all grants to participants who are not covered
employees under the Code or officers under Rule 16-1(f) of
the Exchange Act.  However, a benefit granted under the Plan
shall not be ineffective solely because it is granted by the
Compensation Administration Committee or the Compensation
Committee not in accordance with the preceding sentence.
The Committee is authorized to interpret the provisions of
the Plan, to determine the terms and conditions of benefits
to be granted under the Plan and to make all other
determinations necessary or advisable for the administration
of the Plan, but only to the extent not contrary to or
inconsistent with the express provisions of the Plan.
Determinations, decisions and actions of the Committee, in
connection with the construction, interpretation,
administration, or application of the Plan will be final,
conclusive, and binding upon any participant and any person
claiming under or through the participant.  No member of the
Committee will be liable for any determination, decision, or
action made in good faith with respect to the Plan or any
benefits granted under the Plan.  To the extent that the
Committee determines that the restrictions imposed by the
Plan preclude the achievement of the material purposes of
the benefits in jurisdictions outside the United States, the
Committee will have the authority and discretion to modify
those restrictions as the Committee determines to be
necessary or appropriate to conform to applicable
requirements or practices of jurisdictions outside of the
United States. This Plan is not intended to modify or limit
the powers, duties or responsibilities of either the Board
of Directors or the Committee as set forth under the UAL
Corporation Restated Certificate of Incorporation.

     3.   Participants.  Participants in the Plan will
consist of such officers or other key employees of the
Company and its subsidiaries as the Committee in its sole
discretion may designate from time to time to receive
benefits hereunder.  The Committee shall consider such
factors as it deems pertinent in selecting participants and
in determining the type and amount of their respective
benefits, including without limitation (i) the financial
condition of the Company; (ii) anticipated profits for the
current or future years; (iii) contributions of participants
to the profitability and development of the Company; and
(iv) other compensation provided to participants.

     4.   Types of Benefits.  Benefits under the Plan may be
granted in any one or a combination of (a) Incentive Stock
Options, (b) Nonqualified Stock Options, and (c) Stock
Appreciation Rights, all as described below.

     5.   Shares Reserved under the Plan.  There is hereby
reserved for issuance under the Plan the sum of: (i)
8,000,000 shares of Common Stock, which may be newly issued
or treasury shares, (ii) any shares of Common Stock
available for future awards under any prior plan of the
Company (the "Prior Plans") as of May 18, 2000; and (iii)
any shares of Common Stock that are represented by benefits
granted under the Plan or any Prior Plans which are
forfeited, expired or canceled without delivery of shares of
Common Stock or which are used to satisfy the applicable tax
withholding obligations.  All of such shares described in
(i) above may, but need not be issued pursuant to the
exercise of Incentive Stock Options.  If the purchase price
of any option granted under the Plan is satisfied by
tendering shares of Common Stock to the Company (either by
actual delivery or by attestation), only the number of
shares of Common Stock issued net of the shares of Common
Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Common Stock
available for delivery under the Plan.  Subject to Section
15, in no event may the aggregate number of shares of Common
Stock, with respect to which options or Stock Appreciation
Rights are granted to any individual, exceed 250,000 during
any one calendar year period; provided, however, that grants
made to any new employee as a condition of employment may
not exceed two times such annual limit during the first year
of employment.

     6.   Incentive Stock Options.  Incentive Stock Options
will consist of options to purchase shares of Common Stock
that are intended to satisfy the requirements applicable to
"incentive stock options" described in Section 422(b) of the
Code or any successor provision.  The purchase price for
Incentive Stock Options will not be less than one hundred
percent (100%) of the fair market value of such shares on
the date of grant.  Incentive Stock Options will be
exercisable over not more than ten (10) years after the date
of grant.  The aggregate fair market value (determined on
the date of grant) of the shares of Common Stock with
respect to which Incentive Stock Options are exercisable for
the first time in any calendar year (under all option plans
of the Company and its parent and subsidiary corporations)
shall not exceed $100,000.

     7.   Nonqualified Stock Options.  Nonqualified Stock
Options will consist of options to purchase shares of Common
Stock that are not intended to satisfy the requirements
applicable to "incentive stock options" described in Section
422(b) of the Code or any successor provision.  The purchase
price for Nonqualified Stock Options will not be less than
one hundred percent (100%) of the fair market value of
shares on the date of grant.  Nonqualified Stock Options
will be exercisable over not more than ten (10) years after
the date of grant.

     8.   Stock Appreciation Rights.  The Committee may, in
its discretion, grant a Stock Appreciation Right to the
holder of any Nonqualified Stock Option granted hereunder.
In addition, a Stock Appreciation Right may be granted
independently of and without relation to any stock option.
Stock Appreciation Rights shall be subject to such terms and
conditions consistent with the Plan as the Committee shall
impose from time to time, including the following:

     (a)  A Stock Appreciation Right may be granted
          with respect to a Nonqualified Stock Option at the
          time of its grant or at any time thereafter up to
          six (6) months prior to its expiration.

     (b)  Each Stock Appreciation Right will entitle the
          holder to elect to receive in cash up to 100% of
          the appreciation in fair market value of the
          shares subject thereto up to the date the right is
          exercised.  In the case of a Stock Appreciation
          Right issued in relation to a Nonqualified Stock
          Option, such appreciation shall be measured from
          the option price.  In the case of a Stock
          Appreciation Right issued independently of any
          stock option, the appreciation shall be measured
          from not less than the fair market value of the
          Common Stock on the date the right is granted.

     (c)  The Committee shall have the discretion to
          satisfy a participant's right to receive the
          amount of cash determined under subparagraph (b)
          hereof, in whole or in part, by the delivery of
          shares of Common Stock valued as of the date of
          the participant's election.

     (d)  In the event of the exercise of a Stock
          Appreciation Right, the number of shares reserved
          for issuance hereunder (and the shares subject to
          the related option, if any) shall be reduced by
          the number of shares with respect to which the
          right is exercised.

     9.   Nontransferability.  Except as otherwise provided
by the Committee, each benefit granted under this Plan shall
not be transferable other than by will or the laws of
descent and distribution, and shall be exercisable, during
the holder's lifetime, only by the holder.

     10.  Other Provisions.  The award of any benefit under
the Plan may also be subject to other provisions (whether or
not applicable to the benefit awarded to any other
participant) as the Committee determines appropriate,
including, without limitation, provisions requiring that
grants of benefits under the Plan be evidenced by an
agreement (in writing or other form deemed appropriate by
the Committee); provisions concerning vesting; provisions
concerning exercise periods following termination of
employment; provisions for the payment of the purchase price
of shares under stock options by delivery of other shares of
the Company having a then market value equal to the purchase
price of such shares; restrictions on resale or other
disposition; such provisions as may be appropriate to comply
with federal or state securities laws and stock exchange
requirements; and understandings or conditions as to the
participant's employment in addition to those specifically
provided for under the Plan.

     11.  Term of Plan. Subject to the approval of the
shareholders of the Company at the Company's annual meeting
of its shareholders, the Plan shall be effective as of May
18, 2000 and shall remain in effect as long as any benefits
under it remain outstanding.  No benefit shall be granted
after May 18, 2010.

     12.  Taxes.  The Company shall be entitled to withhold
the amount of any tax attributable to any amount payable or
shares deliverable under the Plan after giving the person
entitled to receive such amount or shares notice as far in
advance as practicable, and the Company may defer making
payment or delivery if any such tax may be pending unless
and until indemnified to its satisfaction.

     13.  Fair Market Value.  Unless otherwise determined by
the Committee, the fair market value of the Company's shares
of Common Stock as of any date shall be the mean between the
lowest and highest reported sale prices of the Common Stock
on that date on the New York Stock Exchange.

     14.  Limitation of Implied Rights.

     (a)  Neither a participant nor any other person
          shall, by reason of participation in the Plan,
          acquire any right in or title to any assets, funds
          or property of the Company or any subsidiary
          whatsoever, including, without limitation, any
          specific funds, assets, or other property which
          the Company or any subsidiary, in its sole
          discretion, may set aside in anticipation of a
          liability under the Plan.  A participant shall
          have only a contractual right to the shares of
          Common Stock or amounts, if any, payable under the
          Plan, unsecured by any assets of the Company or
          any subsidiary, and nothing contained in the Plan
          shall constitute a guarantee that the assets of
          the Company or any subsidiary shall be sufficient
          to pay any amounts to any person.

     (b)  The Plan does not constitute a contract of
          employment, and selection as a participant will
          not give any participating employee the right to
          be so retained in the employ of the Company or any
          subsidiary, nor any right or claim to any benefit
          under the Plan, unless such right or claim has
          specifically accrued under the terms of the Plan.
          Except as otherwise provided in the Plan, no
          benefit under the Plan shall confer upon the
          holder thereof any rights as a shareholder of the
          Company prior to the date on which the individual
          fulfills all conditions for receipt of such
          rights.

     15.  Adjustment Provisions.  In the event of a
corporate transaction involving the Company (including,
without limitation, any Common Stock dividend, Common Stock
split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off,
combination or exchange of shares), the Committee may adjust
awards without enlargement or diminution to preserve the
benefits or potential benefits of the awards intended to be
made available under the Plan.  Action by the Committee may
include:  (i) adjustment of the number and kind of shares
which may be delivered under the Plan; (ii) adjustment of
the number and kind of shares subject to outstanding Awards;
(iii) adjustment of the exercise price of outstanding
options and Stock Appreciation Rights; and (iv) any other
adjustments that the Committee determines to be equitable or
appropriate.

     16.  Amendment and Termination of Plan.  The Board may
amend the Plan from time to time or terminate the Plan at
any time, but no such action, without the participant's
consent, shall adversely affect the rights of a participant
under any option or Stock Appreciation Right granted.

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