Document:

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                                                                     EXHIBIT 4.2

                          EPICOR SOFTWARE CORPORATION

                                       AND

                          MELLON INVESTOR SERVICES LLC

                                 AS RIGHTS AGENT

              AMENDED AND RESTATED PREFERRED STOCK RIGHTS AGREEMENT

                          DATED AS OF NOVEMBER 13, 2001

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                                TABLE OF CONTENTS

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<S>            <C>                                                                            <C>
Section 1.     Certain Definitions...............................................................1

Section 2.     Appointment of Rights Agent.......................................................7

Section 3.     Issuance of Rights Certificates...................................................7

Section 4.     Form of Rights Certificates.......................................................9

Section 5.     Countersignature and Registration................................................10

Section 6.     Transfer, Split Up, Combination and Exchange of Rights Certificates;
               Mutilated, Destroyed, Lost or Stolen Rights Certificates.........................10

Section 7.     Exercise of Rights; Exercise Price; Expiration Date of Rights....................11

Section 8.     Cancellation and Destruction of Rights Certificates..............................13

Section 9.     Reservation and Availability of Preferred Shares.................................13

Section 10.    Record Date......................................................................15

Section 11.    Adjustment of Exercise Price, Number of Shares or Number of Rights...............15

Section 12.    Certificate of Adjusted Exercise Price or Number of Shares.......................21

Section 13.    Consolidation, Merger or Sale or Transfer of Assets or Earning Power.............22

Section 14.    Fractional Rights and Fractional Shares..........................................25

Section 15.    Rights of Action.................................................................26

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

Section 17.    Rights Certificate Holder Not Deemed a Stockholder...............................27

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

Section 19.    Merger or Consolidation or Change of Name of Rights Agent........................28

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

Section 21.    Change of Rights Agent...........................................................31
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                                TABLE OF CONTENTS
                                   (CONTINUED)

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<S>            <C>                                                                            <C>
Section 22.    Issuance of New Rights Certificates..............................................32

Section 23.    Redemption.......................................................................32

Section 24.    Exchange.........................................................................33

Section 25.    Notice of Certain Events.........................................................35

Section 26.    Notices..........................................................................35

Section 27.    Supplements and Amendments.......................................................36

Section 28.    Successors.......................................................................37

Section 29.    Determinations and Actions by the Board of Directors, etc........................37

Section 30.    Benefits of this Agreement.......................................................37

Section 31.    Severability.....................................................................37

Section 32.    Governing Law....................................................................37

Section 33.    Counterparts.....................................................................38

Section 34.    Descriptive Headings.............................................................38

EXHIBITS

Exhibit A      Form of Rights Certificate

Exhibit B      Summary of Rights
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              AMENDED AND RESTATED PREFERRED STOCK RIGHTS AGREEMENT

        This Amended and Restated Preferred Stock Rights Agreement (this
"AGREEMENT"), is dated as of November 13, 2001, between Epicor Software
Corporation (the "COMPANY"), a Delaware corporation, and Mellon Investor
Services LLC, a New Jersey limited liability company, as rights agent (the
"RIGHTS AGENT").

        WHEREAS, the Company is party to that certain Preferred Stock Rights
Agreement, dated April 1, 1994, by and between the Company and Mellon Investor
Services LLC, as successor to First Interstate Bank of California, as rights
agent (the "PRIOR AGREEMENT");

        WHEREAS, on March 9, 1994, (the "RIGHTS DIVIDEND DECLARATION DATE"), the
Board of Directors of the Company authorized and declared a dividend of one
Preferred Share Purchase Right (a "Right") for each Common Share (as hereinafter
defined) of the Company outstanding as of the Close of Business (as hereinafter
defined) on April 14, 1994 (the "RECORD DATE"), each Right representing the
right to purchase one one-hundredth (0.01) of a share of Series A Junior
Participating Preferred Stock (as such number may be adjusted pursuant to the
provisions of this Agreement), having the rights, preferences and privileges set
forth in the form of Certificate of Designations of Rights, Preferences and
Privileges of Series A Junior Participating Preferred Stock filed with the
Secretary of the State of Delaware concurrent to the adoption of the Prior
Agreement, upon the terms and subject to the conditions therein set forth, and
further authorized and directed the issuance of one Right (as such number may be
adjusted pursuant to the provisions of this Agreement) with respect to each
Common Share that shall become outstanding between the Record Date and the
earlier of the Distribution Date and the Expiration Date (as such terms are
hereinafter defined), and in certain circumstances after the Distribution Date;

        WHEREAS, the Board of Directors of the Company deems it desirable and in
the best interests of the Company and its stockholders to amend and restate the
Prior Agreement, and has has determined that, pursuant to Section 27 of the
Prior Agreement, the Prior Agreement may be amended and restated by the Company
and the Rights Agent without the approval of the holders of the Rights;

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

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

                (a) "ACQUIRING PERSON" shall mean any Person, who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Shares then outstanding, but shall
not include the Company, any Subsidiary of the Company or 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. Notwithstanding

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the foregoing, no Person shall be deemed to be an Acquiring Person as the result
of an acquisition of Common Shares by the Company which, by reducing the number
of shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional Common Shares of
the Company (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), then such Person shall
be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of
such additional Common Shares of the Company such Person does not beneficially
own 15% or more of the Common Shares of the Company then outstanding.
Notwithstanding the foregoing, (i) if the Company's Board of Directors
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently (including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of the Common Shares
that would otherwise cause such Person to be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), or (B) such Person
was aware of the extent of the Common Shares it beneficially owned but had no
actual knowledge of the consequences of such beneficial ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, and if such Person divested or divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement; and (ii) if, as of the
date hereof, any Person is the Beneficial Owner of 15% or more of the Common
Shares outstanding, such Person shall not be or become an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), unless and
until such time as such Person shall become the Beneficial Owner of additional
Common Shares (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), unless, upon becoming
the Beneficial Owner of such additional Common Shares, such Person is not then
the Beneficial Owner of 15% or more of the Common Shares then outstanding.

                (b) "ADJUSTMENT FRACTION" shall have the meaning set forth in
Section 11(a)(i) hereof.

                (c) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as 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:

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                        (i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or
successor law or regulation);

                        (ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed pursuant to this
Section 1(d)(ii)(A) to be 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 its 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 under this Section 1(d)(ii)(B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made 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 (or any Affiliate or Associate thereof) with
which such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding, whether or not in writing (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
(x) 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 (y) 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.

                (e) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in Los Angeles, California are
authorized or obligated by law or executive order to close

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

                (g) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth
in Section 11(a)(iii) hereof. "COMMON SHARES" when used with reference to the
Company shall mean the shares of Common Stock of the Company, par value at
$0.001 per share. 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 mean Epicor Software Corporation, a Delaware
corporation, subject to the terms of Section 13(a)(iii)(C) hereof.

                (i) "CURRENT PER SHARE MARKET PRICE" of any security (a
"Security" for purposes of this definition), for all computations other than
those made pursuant to Section 11(a)(iii) hereof, shall mean the average of the
daily closing prices per share of such Security for the thirty (30) consecutive
Trading Days immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price
of any Security on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the ten (10) consecutive Trading
Days 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 (i) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of the applicable
thirty (30) Trading Day or ten (10) Trading Day period, 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 sale price or, if such last sale price is not reported, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Security, the fair value of such
shares on such date as determined in good faith by the Board of Directors of the
Company shall be used. If the Preferred Shares are not publicly traded, the
Current Per Share Market Price of the Preferred Shares shall be conclusively

                                      -4-
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deemed to be (x) the Current Per Share Market Price of the Common Shares as
determined pursuant to this Section 1(j), as appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof, multiplied by (y) 1,000. If the Security 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 and shall be conclusive for all purposes.

                (j) "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii) hereof.

                (k) "DISTRIBUTION DATE" shall mean the earlier of (i) the Close
of Business on the tenth (10th) day (or such later date as may be determined by
action of the Company's Board of Directors) after the Shares Acquisition Date
(or, if the tenth (10th) day after the Shares Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date) or (ii) the Close of
Business on the tenth (10th) Business Day (or such later date as may be
determined by action of the Company's Board of Directors) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if, assuming the successful consummation
thereof, such Person would be an Acquiring Person.

                (l) "EQUIVALENT SHARES" shall mean Preferred Shares and any
other class or series of capital stock of the Company which is entitled to the
same rights, privileges and preferences as the Preferred Shares.

                (m) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.

                (n) "EXCHANGE RATIO" shall have the meaning set forth in Section
24(a) hereof.

                (o) "EXERCISE PRICE" shall have the meaning set forth in Section
4(a) hereof.

                (p) "EXPIRATION DATE" shall mean the earliest to occur of: (i)
the Close of Business on the Final Expiration Date, (ii) the Redemption Date, or
(iii) the time at which the Board of Directors orders the exchange of the Rights
as provided in Section 24 hereof.

                (q) "FINAL EXPIRATION DATE" shall mean November 13, 2011.

                (r) "NASDAQ" shall mean The Nasdaq Stock Market, Inc.

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

                (t) "POST-EVENT TRANSFEREE" shall have the meaning set forth in
Section 7(e) hereof.

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                (u) "PREFERRED SHARES" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.001 per share, of the Company.

                (v) "PRE-EVENT TRANSFEREE" shall have the meaning set forth in
Section 7(e) hereof.

                (w) "PRINCIPAL PARTY" shall have the meaning set forth in
Section 13(b) hereof.

                (x) "RECORD DATE" shall have the meaning set forth in the
recitals at the beginning of this Agreement.

                (y) "REDEMPTION DATE" shall have the meaning set forth in
Section 23(a) hereof.

                (z) "REDEMPTION PRICE" shall have the meaning set forth in
Section 23(a) hereof.

                (aa) "RIGHTS AGENT" shall mean (i) Mellon Investor Services LLC
(ii) its successor or replacement as provided in Sections 19 and 21 hereof or
(iii) any additional Person appointed pursuant to Section 2 hereof.

                (bb) "RIGHTS CERTIFICATE" shall mean a certificate substantially
in the form attached hereto as Exhibit A.

                (cc) "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning
set forth in the recitals at the beginning of this Agreement.

                (dd) "SECTION 11(A)(II) TRIGGER DATE" shall have the meaning set
forth in Section 11(a)(iii) hereof.

                (ee) "SECTION 13 EVENT" shall mean any event described in clause
(i), (ii) or (iii) of Section 13(a) hereof.

                (ff) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.

                (gg) "SHARES ACQUISITION DATE" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such; provided that, if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a) hereof, then no Shares Acquisition
Date shall be deemed to have occurred.

                (hh) "SPREAD" shall have the meaning set forth in Section
11(a)(iii) hereof.

                (ii) "SUBSIDIARY" of any Person shall mean any corporation or
other entity of which an amount of voting securities sufficient to elect a
majority of the directors or Persons having similar authority of such
corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or any corporation or other entity otherwise controlled by such
Person.

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                (jj) "SUBSTITUTION PERIOD" shall have the meaning set forth in
Section 11(a)(iii) hereof.

                (kk) "SUMMARY OF RIGHTS" shall mean a summary of this Agreement
substantially in the form attached hereto as Exhibit B.

                (ll) "TOTAL EXERCISE PRICE" shall have the meaning set forth in
Section 4(a) hereof.

                (mm) "TRADING DAY" shall mean a day on which the principal
national securities exchange on which a referenced security is listed or
admitted to trading is open for the transaction of business or, if a referenced
security is not listed or admitted to trading on any national securities
exchange, a Business Day.

                (nn) A "Triggering Event" shall be deemed to have occurred upon
any Person becoming an Acquiring Person.

        Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any co-Rights Agent.

        Section 3. Issuance of Rights Certificates.

                (a) Until the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Rights Certificates) and not by
separate Rights Certificates and (ii) the right to receive Rights Certificates
will be transferable only in connection with the transfer of Common Shares.
Until the earlier of the Distribution Date or the Expiration Date, the surrender
for transfer of certificates for Common Shares shall also constitute the
surrender for transfer of the Rights associated with the Common Shares
represented thereby. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Rights Certificate evidencing
one Right for each Common Share so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per Common Share
has been made pursuant to Section 11 hereof, then at the time of distribution of
the Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights (in accordance with Section 14(a)
hereof). As of the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates and may be transferred by the transfer of the Rights
Certificates as permitted

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hereby, separately and apart from any transfer of Common Shares, and the holders
of such Rights Certificates as listed in the records of the Company or any
transfer agent or registrar for the Rights shall be the record holders thereof.

                (b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of the Summary of Rights by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company's transfer agent and registrar. 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 the Summary of Rights.

                (c) Unless the Board of Directors by resolution adopted at or
before the time of the issuance of any Common Shares after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date (or, in
certain circumstances provided in Section 22 hereof, after the Distribution
Date) specifies to the contrary, Rights shall be issued in respect of all Common
Shares that are so issued, and Certificates representing such Common Shares
shall also be deemed to be certificates for Rights, and shall bear the following
legend:

        THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF
        TO CERTAIN RIGHTS AS SET FORTH IN AN AMENDED AND RESTATED
        PREFERRED STOCK RIGHTS AGREEMENT BETWEEN EPICOR SOFTWARE
        CORPORATION (THE "COMPANY") AND MELLON INVESTOR SERVICES LLC AS
        THE RIGHTS AGENT, DATED AS OF NOVEMBER 13, 2001 (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 THE COMPANY. UNDER CERTAIN CIRCUMSTANCES,
        AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE
        EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE
        EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE
        HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT
        WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
        UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT,
        RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES
        AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS
        SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
        CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
        SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.

With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Shares represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such

                                      -8-
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certificate shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.

                (d) 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 canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.

        Section 4. Form of Rights Certificates.

                (a) The Rights Certificates (and the forms of election to
purchase Common Shares and of assignment to be printed on the reverse thereof)
shall be substantially in the form of Exhibit A 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, and which do not affect the rights,
duties or responsibilities of the Rights Agent, or as may be required to comply
with any applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange or a national market system,
on which the Rights may from time to time be listed or included, or to conform
to usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Record Date
(or in the case of Rights issued with respect to Common Shares issued by the
Company after the Record Date, as of the date of issuance of such Common Shares)
and on their face shall entitle the holders thereof to purchase such number of
one-hundredths (0.01) of a Preferred Share as shall be set forth therein at the
price set forth therein (such exercise price per one one-hundredth (0.01) of a
Preferred Share being hereinafter referred to as the "EXERCISE PRICE" and the
aggregate Exercise Price of all Preferred Shares issuable upon exercise of one
Right being hereinafter referred to as the "TOTAL EXERCISE PRICE"), but the
number and type of securities purchasable upon the exercise of each Right and
the Exercise Price shall be subject to adjustment as provided herein.

                (b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a Post-Event
Transferee, (iii) a Pre-Event Transferee or (iv) any subsequent transferee
receiving transferred Rights from a Post-Event Transferee or a Pre-Event
Transferee, either directly or through one or more intermediate transferees, and
any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:

        THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
        BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
        PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
        SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
        THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
        BECOME NULL AND VOID IN THE

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<PAGE>

        CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
        AGREEMENT.

        Section 5. Countersignature and Registration.

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

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

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

                (a) Subject to the provisions of Sections 7(e), 14 and 24
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the Expiration Date, any Rights Certificate
or Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of one-hundredths (0.01) of a Preferred Share
(or, following a Triggering Event, other securities, cash or other assets, as
the case may be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional

                                      -10-
<PAGE>

evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 7(e), 14 and 24 hereof,
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment from the registered holder of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates. The Rights Agent shall
have no duty or obligation under this Section 6 unless and until it is satisfied
that all such taxes and/or charges have been paid in full.

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

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

                (a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Close of Business on the Expiration
Date by surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office of the Rights Agent designated for such purpose, together with payment of
the Exercise Price for each one-hundredth (0.01) of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) as to which the Rights are exercised.

                (b) The Exercise Price for each one-hundredth (0.01) of a
Preferred Share issuable pursuant to the exercise of a Right shall initially be
Eight Dollars ($8.00), shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.

                (c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Exercise Price for the number of one-hundredths
(0.01) of a Preferred Share (or, following a Triggering Event, other securities,
cash or other assets as the case may be) to be purchased and an amount equal to
any applicable tax and charge required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights

                                      -11-
<PAGE>

Agent is the transfer agent for the Preferred Shares) a certificate or
certificates for the number of one-hundredths (0.01) of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests or (B) if the Company shall have
elected to deposit the total number of one-hundredths (0.01) of a Preferred
Share (or, following a Triggering Event, other securities, cash or other assets
as the case may be) issuable upon exercise of the Rights hereunder with a
depository agent, requisition from the depository agent depository receipts
representing such number of one-hundredths (0.01) of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) as are to be purchased (in which case certificates for the Preferred
Shares (or, following a Triggering Event, other securities, cash or other assets
as the case may be) represented by such receipts shall be deposited by the
transfer agent with the depository agent) and the Company hereby directs the
depository agent to comply with such request, (ii) 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 or
depository receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder and (iv) after receipt thereof, deliver such
cash to or upon the order of the registered holder of such Rights Certificate.
The payment of the Exercise Price (as such amount may be reduced (including to
zero) pursuant to Section 11(a)(iii) hereof) and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, may be made in cash or by
certified bank check, cashier's check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue securities of the
Company other than Preferred Shares, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when necessary to comply
with this Agreement.

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

                (e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such (a "POST-EVENT TRANSFEREE"), (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Company's Board of Directors has determined is part of a plan,
agreement, arrangement or understanding which has as a primary

                                      -12-
<PAGE>

purpose or effect the avoidance of this Section 7(e) (a "PRE-EVENT TRANSFEREE")
or (iv) any subsequent transferee receiving transferred Rights from a Post-Event
Transferee or a Pre-Event Transferee, either directly or through one or more
intermediate transferees, shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement or otherwise. The
Company shall notify the Rights Agent when this Section 7(e) applies and shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but neither the Company nor the
Rights Agent shall have any liability to any holder of Rights Certificates or to
any other Person as a result of the Company's failure to make any determinations
with respect to an Acquiring Person or any of such Acquiring Person's
Affiliates, Associates or transferees hereunder.

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

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

        Section 9. Reservation and Availability of Preferred Shares.

                (a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept available out of its authorized and
unissued Preferred Shares not reserved for another purpose (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities), the number of Preferred Shares (and, following
the occurrence of the Triggering Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.

                (b) If the Company shall hereafter list any of its Preferred
Shares on a national securities exchange, then so long as the Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and

                                      -13-
<PAGE>

after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.

                (c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable 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 (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the date of expiration of the
Rights. The Company may temporarily suspend, for a period not to exceed ninety
(90) days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating, and notify
the Rights Agent, that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notification to the Rights Agent
at such time as the suspension is no longer in effect. 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. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction, unless
the requisite qualification in such jurisdiction shall have been obtained, or an
exemption therefrom shall be available, and until a registration statement has
been declared and remains effective.

                (d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (or other
securities of the Company) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such securities (subject to payment of the
Exercise Price), be duly and validly authorized and issued and fully paid and
nonassessable.

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

                                      -14-
<PAGE>

        Section 10. Record Date. Each Person in whose name any certificate for a
number of one-hundredths (0.01) of a Preferred Share (or other securities of the
Company) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of Preferred Shares (or other securities of
the Company) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Total Exercise Price with respect to which the
Rights have been exercised (and any applicable taxes or charges) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the 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 transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a holder
of Preferred Shares (or other securities of the Company) for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.

        Section 11. Adjustment of Exercise Price, Number of Shares or Number of
Rights. The Exercise Price, the number and kind of shares or other property
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) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares (by reverse stock split or otherwise) into a
smaller number of Preferred Shares, or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such event,
except as otherwise provided in this Section 11 and Section 7(e) hereof: (1) the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification shall be
adjusted so that the Exercise Price thereafter shall equal the result obtained
by dividing the Exercise Price in effect immediately prior to such time by a
fraction (the "ADJUSTMENT FRACTION"), the numerator of which shall be the total
number of Preferred Shares (or shares of capital stock issued in such
reclassification of the Preferred Shares) outstanding immediately following such
time and the denominator of which shall be the total number of Preferred Shares
outstanding immediately prior to such time; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (2) the number of one-hundredths (0.01) of a
Preferred Share (or share of such other capital stock) issuable upon the
exercise of each Right shall equal the number of one-hundredths (0.01) of a
Preferred Share (or share of such other capital stock) as was issuable upon
exercise of a Right immediately prior to the occurrence of the event described
in clauses (A)-(D) of this Section 11(a)(i), multiplied by the Adjustment
Fraction; provided, however, that, no such adjustment shall be made pursuant to
this Section 11(a)(i) to the extent that there shall have simultaneously
occurred an event described in

                                      -15-
<PAGE>

clause (A), (B), (C) or (D) of Section 11(n) with a proportionate adjustment
being made thereunder. Each Common Share that shall become outstanding after an
adjustment has been made pursuant to this Section 11(a)(i) shall have associated
with it the number of Rights, exercisable at the Exercise Price and for the
number of one-hundredths (0.01) of a Preferred Share (or shares of such other
capital stock) as one Common Share has associated with it immediately following
the adjustment made pursuant to this Section 11(a)(i).

                        (ii) Subject to Section 24 of this Agreement, in the
event that a Triggering Event shall have occurred, then promptly following such
Triggering Event each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive for each Right, upon exercise
thereof in accordance with the terms of this Agreement and payment of the
Exercise Price in effect immediately prior to the occurrence of the Triggering
Event, in lieu of a number of one-hundredths (0.01) of a Preferred Share, such
number of Common Shares of the Company as shall equal the quotient obtained by
dividing (A) the product obtained by multiplying (1) the Exercise Price in
effect immediately prior to the occurrence of the Triggering Event by (2) the
number of one-hundredths (0.01) of a Preferred Share for which a Right was
exercisable (or would have been exercisable if the Distribution Date had
occurred) immediately prior to the first occurrence of a Triggering Event, by
(B) fifty percent (50%) of the Current Per Share Market Price for Common Shares
on the date of occurrence of the Triggering Event; provided, however, that the
Exercise Price and the number of Common Shares of the Company so receivable upon
exercise of a Right shall be subject to further adjustment as appropriate in
accordance with Section 11(e) hereof to reflect any events occurring in respect
of the Common Shares of the Company after the occurrence of the Triggering
Event.

                        (iii) In lieu of issuing Common Shares in accordance
with Section 11(a)(ii) hereof, the Company may, if the Company's Board of
Directors determines that such action is necessary or appropriate and not
contrary to the interest of holders of Rights and, in the event that the number
of Common Shares which are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit the exercise in
full of the Rights, or if any necessary regulatory approval for such issuance
has not been obtained by the Company, the Company shall: (A) determine the
excess of (1) the value of the Common Shares issuable upon the exercise of a
Right (the "CURRENT VALUE") over (2) the Exercise Price (such excess, the
"SPREAD") and (B) with respect to each Right, make adequate provision to
substitute for such Common Shares, upon exercise of the Rights, (1) cash, (2) a
reduction in the Exercise Price, (3) other equity securities of the Company
(including, without limitation, shares or units of shares of any series of
preferred stock which the Company's Board of Directors has deemed to have the
same value as Common Shares (such shares or units of shares of preferred stock
are herein called "COMMON STOCK EQUIVALENTS")), except to the extent that the
Company has not obtained any necessary stockholder or regulatory approval for
such issuance, (4) debt securities of the Company, except to the extent that the
Company has not obtained any necessary stockholder or regulatory approval for
such issuance, (5) other assets or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has
been determined by the Company's Board of Directors based upon the advice of a
nationally recognized investment banking firm selected by the Company's Board of
Directors;

                                      -16-
<PAGE>

provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Triggering Event and (y) the date on
which the Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "SECTION 11(a)(ii) TRIGGER
DATE"), then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Exercise Price, Common
Shares (to the extent available), except to the extent that the Company has not
obtained any necessary stockholder or regulatory approval for such issuance, and
then, if necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Company's Board of Directors shall determine in good faith
that it is likely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights or that any necessary
regulatory approval for such issuance will be obtained, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of such
additional shares or take action to obtain such regulatory approval (such
period, as it may be extended, the "SUBSTITUTION PERIOD"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares, to take any action to obtain any required
regulatory approval and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
(with prompt notice thereof to the Rights Agent) stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
(with prompt notice thereof to the Rights Agent) at such time as the suspension
is no longer in effect. For purposes of this Section 11(a)(iii), the value of
the Common Shares shall be the Current Per Share Market Price of the Common
Shares on the Section 11(a)(ii) Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Shares on such
date.

                (b) In case the Company shall, at any time after the date of
this Agreement, fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling such holders (for a period
expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Shares or Equivalent Shares or securities
convertible into Preferred Shares or Equivalent Shares at a price per share (or
having a conversion price per share, if a security convertible into Preferred
Shares or Equivalent Shares) less than the then Current Per Share Market Price
of the Preferred Shares or Equivalent Shares on such record date, then, in each
such case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record date,
plus the number of Preferred Shares or Equivalent Shares, as the case may be,
which the aggregate offering price of the total number of Preferred Shares or
Equivalent Shares, as the case may be, to be offered or issued (and/or the
aggregate initial conversion price of the convertible securities to be offered
or issued) would purchase at such current market price, and the denominator of
which shall be the number of Preferred Shares and Equivalent Shares (if any)
outstanding on such

                                      -17-
<PAGE>

record date, plus the number of additional Preferred Shares or Equivalent
Shares, as the case may be, to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Company's Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights and shall be
conclusive for all purposes. Preferred Shares and Equivalent Shares owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights, options
or warrants are not so issued, the Exercise Price shall be adjusted to be the
Exercise Price which would then be in effect if such record date had not been
fixed.

                (c) In case the Company shall, at any time after the date of
this Agreement, fix a record date for the making of a distribution to all
holders of the Preferred Shares or of any class or series of Equivalent Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend, if any, or a dividend payable in Preferred Shares) or subscription
rights, options or warrants (excluding those referred to in Section 11(b)),
then, in each such case, the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
Current Per Share Market Price of a Preferred Share or an Equivalent Share on
such record date, less the fair market value per Preferred Share or Equivalent
Share (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and which shall be conclusive for all purposes) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a Preferred Share or Equivalent
Share, as the case may be, and the denominator of which shall be such Current
Per Share Market Price of a Preferred Share or Equivalent Share on such record
date; provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Exercise Price shall be
adjusted to be the Exercise Price which would have been in effect if such record
date had not been fixed.

                (d) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) of the Exercise
Price; provided, however, that any adjustments which by reason of this Section
11(d) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth (0.0001) of a
Common Share or other share or one hundred-thousandth (0.00001) of a Preferred
Share, as the case may be. Notwithstanding the first

                                      -18-
<PAGE>

sentence of this Section 11(d), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three (3) years from the date of the
transaction which requires such adjustment or (ii) the Expiration Date.

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

                (f) All Rights originally issued by the Company subsequent to
any adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one-hundredths (0.01) of
a Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

                (g) Unless the Company shall have exercised its election as
provided in Section 11(h), upon each adjustment of the Exercise 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 Exercise Price, that number of Preferred
Shares (calculated to the nearest one hundred-thousandth (0.00001) of a share)
obtained by (i) multiplying (x) the number of Preferred Shares covered by a
Right immediately prior to this adjustment, by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and (ii) dividing
the product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.

                (h) The Company may elect on or after the date of any adjustment
of the Exercise Price as a result of the calculations made in Section 11(b) or
(c) to adjust the number of Rights, in substitution for any adjustment in the
number of Preferred Shares 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 one-hundredths (0.01) of a Preferred Share for
which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one hundred-thousandth
(0.00001)) obtained by dividing the Exercise Price in effect immediately prior
to adjustment of the Exercise Price by the Exercise Price in effect immediately
after adjustment of the Exercise Price. The Company shall make a public
announcement (with prompt notice thereof to the Rights Agent) 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 Exercise Price is adjusted or any day thereafter,
but, if any Rights Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(h), the Company shall, as promptly as practicable, cause to be

                                      -19-
<PAGE>

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

                (i) Irrespective of any adjustment or change in the Exercise
Price or the number of Preferred Shares issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Exercise Price per one one-hundredth (0.01) of a Preferred Share
and the number of one-hundredths (0.01) of a Preferred Share which were
expressed in the initial Rights Certificates issued hereunder.

                (j) Before taking any action that would cause an adjustment
reducing the Exercise Price below the par or stated value, if any, of the number
of one-hundredths (0.01) of a Preferred Share 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 as fully paid and nonassessable shares such number of one-hundredths
(0.01) of a Preferred Share at such adjusted Exercise Price.

                (k) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt notice of such
election to the Rights Agent) until the occurrence of such event the issuing to
the holder of any Right exercised after such record date of the number of
one-hundredths (0.01) of a Preferred Share and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the number of
one-hundredths (0.01) of a Preferred Share and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis of the Exercise
Price in effect prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares (fractional or
otherwise) upon the occurrence of the event requiring such adjustment.

                (l) Anything in this Section 11 to the contrary notwithstanding,
prior to the Distribution Date, the Company shall be entitled to make such
reductions in the Exercise 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 (i) consolidation or
subdivision of the Preferred or Common Shares, (ii) issuance wholly for cash of
any Preferred or Common Shares at less than the current market price, (iii)
issuance wholly for cash of Preferred or Common Shares or securities which by
their terms are convertible into or exchangeable for Preferred or Common Shares,
(iv) stock dividends or (v) issuance of rights, options or warrants referred to
in this

                                      -20-
<PAGE>

Section 11, hereafter made by the Company to holders of its Preferred or Common
Shares shall not be taxable to such stockholders.

                (m) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23, 24 or 27
hereof, take (or permit to be taken) 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.

                (n) In the event that the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares (by reverse stock split or otherwise) into a smaller
number of Common Shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (1) each Common Share
(or shares of capital stock issued in such reclassification of the Common
Shares) outstanding immediately following such time shall have associated with
it the number of Rights as were associated with one Common Share immediately
prior to the occurrence of the event described in clauses (A)-(D) above; (2) the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification shall be
adjusted so that the Exercise Price thereafter shall equal the result obtained
by multiplying the Exercise Price in effect immediately prior to such time by a
fraction, the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the event described in clauses (A)-(D) above,
and the denominator of which shall be the total number of Common Shares
outstanding immediately after such event; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of one-hundredths (0.01) of a
Preferred Share (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number of
one-hundredths (0.01) of a Preferred Share (or shares of such other capital
stock) as were issuable with respect to one Right immediately prior to such
event. Each Common Share that shall become outstanding after an adjustment has
been made pursuant to this Section 11(n) shall have associated with it the
number of Rights, exercisable at the Exercise Price and for the number of
one-hundredths (0.01) of a Preferred Share (or shares of such other capital
stock) as one Common Share has associated with it immediately following the
adjustment made pursuant to this Section 11(n). If an event occurs which would
require an adjustment under both this Section 11(n) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(n) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.

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

                                      -21-
<PAGE>

Rights Certificate in accordance with Section 26 hereof. Notwithstanding the
foregoing sentence, the failure of the Company to make such certification or
give such notice shall not affect the validity of such adjustment 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 have no duty with respect to 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.

                (a) In the event that, following a Triggering Event, directly or
indirectly:

                        (i) the Company shall consolidate with, or merge with
and into, any other Person (other than a wholly-owned Subsidiary of the Company
in a transaction the principal purpose of which is to change the state of
incorporation of the Company and which complies with Section 11(m) hereof);

                        (ii) 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 consolidation or 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

                        (iii) 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 fifty percent (50%) or
more 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 or one or
more of its wholly owned Subsidiaries in one or more transactions, each of which
individually (and together) complies with Section 11(m) hereof),

                                then, concurrent with and in each such case,

                                (A) each holder of a Right (except as provided
in Section 7(e) hereof) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the Total Exercise Price applicable
immediately prior to the occurrence of the Section 13 Event in accordance with
the terms of this Agreement, such number of validly authorized and issued, fully
paid, nonassessable and freely tradeable Common Shares of the Principal Party
(as hereinafter defined), free of any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by
dividing such Total Exercise Price by an amount equal to fifty percent (50%) of
the Current Per Share Market Price of the Common Shares of such Principal Party
on the date of consummation of such Section 13 Event, provided, however, that
the Exercise Price and the number of Common Shares of such Principal Party so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof;

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

                                      -22-
<PAGE>

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

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

                                (E) upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Total Exercise Price as provided in this Section 13(a), such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had such holder, at the time of such transaction, owned the Common
Shares of the Principal Party receivable upon the exercise of such Right
pursuant to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property.

                                (F) For purposes hereof, the "earning power" of
the Company and its Subsidiaries shall be determined in good faith by the
Company's Board of Directors on the basis of the operating income of each
business operated by the Company and its Subsidiaries during the three fiscal
years preceding the date of such determination (or, in the case of any business
not operated by the Company or any Subsidiary during three full fiscal years
preceding such date, during the period such business was operated by the Company
or any Subsidiary).

                (b) For purposes of this Agreement, the term "PRINCIPAL PARTY"
shall mean:

                        (i) in the case of any transaction described in clause
(i) or (ii) of Section 13(a) hereof: (A) the Person that is the issuer of the
securities into which the Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Shares of which have the greatest aggregate market value of shares outstanding,
or (B) if no securities are so issued, (x) the Person that is the other party to
the merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the Common Shares of which have the greatest aggregate
market value of shares outstanding or (y) if the Person that is the other party
to the merger does not survive the merger, the Person that does survive the
merger (including the Company if it survives) or (z) the Person resulting from
the consolidation; and

                        (ii) in the case of any transaction described in clause
(iii) of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if more than one Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred and each such portion would, were it not for the other
equal portions, constitute the

                                      -23-
<PAGE>

greatest portion of the assets or earning power so transferred, or if the Person
receiving the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of Common Shares having the
greatest aggregate market value of shares outstanding; provided that in any such
case described in the foregoing clause (b)(i) or (b)(ii), if the Common Shares
of such Person are not at such time or have not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, then
(1) if such Person is a direct or indirect Subsidiary of another Person the
Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to such other Person, or (2) if such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Shares of which are
and have been so registered, the term "Principal Party" shall refer to whichever
of such Persons is the issuer of Common Shares having the greatest aggregate
market value of shares outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly by the same Person, the rules set forth in clauses (1)
and (2) above shall apply to each of the owners having an interest in the
venture as if the Person owned by the joint venture was a Subsidiary of both or
all of such joint venturers, and the Principal Party in each such case shall
bear the obligations set forth in this Section 13 in the same ration as its
interest in such Person bears to the total of such interests.

                (c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized Common Shares
that have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior thereto
the Company and such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance with
Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive
rights in respect of the issuance of Common Shares of such Principal Party upon
exercise of outstanding Rights have been waived, that there are no 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 and that such transaction shall not result in a default by such Principal
Party under this Agreement, and further providing that, as soon as practicable
after the date of such Section 13 Event, such Principal Party will:

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

                        (ii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange or to meet the eligibility requirements
for quotation on Nasdaq and list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on Nasdaq; and

                                      -24-
<PAGE>

                        (iii) deliver to holders of the Rights historical
financial statements for such Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form) under the
Exchange Act.

        In the event that at any time after the occurrence of a Triggering Event
some or all of the Rights shall not have been exercised at the time of a
transaction described in this Section 13, the Rights which have not theretofore
been exercised shall thereafter be exercisable in the manner described in
Section 13(a) (without taking into account any prior adjustment required by
Section 11(a)(ii)).

                (d) In case the "Principal Party" for purposes of Section 13(b)
hereof has provision in any of its authorized securities or in its certificate
of incorporation or by-laws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such Principal Party to
issue (other than to holders of Rights pursuant to Section 13 hereof), in
connection with, or as a consequence of, the consummation of a Section 13 Event,
Common Shares or Equivalent Shares of such Principal Party at less than the then
Current Per Share Market Price thereof or securities exercisable for, or
convertible into, Common Shares or Equivalent Shares of such Principal Party at
less than such then Current Per Share Market Price, or (ii) providing for any
special payment, tax or similar provision in connection with the issuance of the
Common Shares of such Principal Party pursuant to the provisions of Section 13
hereof, then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with or as a consequence of, the consummation of
the proposed transaction.

                (e) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, effect or permit to occur any Section 13
Event, if (i) at the time or immediately after such Section 13 Event 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, (ii) prior to,
simultaneously with or immediately after such Section 13 Event, the stockholders
of the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(b) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or (iii)
the form or nature of organization of the Principal Party would preclude or
limit the exercisability of the Rights.

                (f) 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 Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights

                                      -25-
<PAGE>

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, as determined pursuant to
the second sentence of Section 1(j) hereof.

                (b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth (0.01) of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions that are integral multiples of one one-hundredth (0.01) of a Preferred
Share). Interests in fractions of Preferred Shares in integral multiples of one
one-hundredth (0.01) of a Preferred Share may, at the election of the Company,
be evidenced by depository receipts, pursuant to an appropriate agreement
between the Company and a depository selected by it; provided, that such
agreement shall provide that the holders of such depository receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depository
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth (0.01) of a Preferred Share, the Company shall pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a Preferred Share. For purposes of this Section 14(b), the
current market value of a Preferred Share shall be (x) one hundred multiplied by
(y) the closing price of a Common Share (as determined pursuant to the second
sentence of Section 1(j) hereof) for the Trading Day immediately prior to the
date of such exercise.

                (c) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares upon the exercise or exchange of Rights. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of a Common
Share. For purposes of this Section 14(c), the current market value of a Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 1(j) hereof) for the Trading Day immediately
prior to the date of such exercise.

                (d) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any
fractional shares (other than fractions that are integral multiples of one
one-hundredth (0.01) of a Preferred Share) upon exercise of a Right.

        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 this
Agreement, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights 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 Rights Certificate (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 and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his or her

                                      -26-
<PAGE>

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

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

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

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

                (c) subject to Sections 6(a) and 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common 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, judgment or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or by reason of any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use its reasonable best efforts to have
any such order, decree, judgment or ruling lifted or otherwise overturned as
soon as possible.

        Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose to be the holder of the Preferred Shares
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except

                                      -27-
<PAGE>

as specifically provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions
hereof.

        Section 18. Concerning the Rights Agent.

                (a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the preparation, delivery, administration,
execution and amendment of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent
(which gross negligence, bad faith or willful misconduct must be determined by a
final non-appealable court of competent jurisdiction), for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises. The costs and expenses incurred
in enforcing this right of indemnification and shall be paid by the Company. The
indemnity provided herein shall survive the termination of this Agreement, the
termination and the expiration of the Rights and the resignation or removal of
the Rights Agent.

                (b) The Rights Agent shall be authorized to rely on, shall be
protected and shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with its acceptance and administration
of this Agreement or the exercise or performance of its duties hereunder in
reliance upon any Rights Certificate or certificate for the Preferred Shares or
Common Shares or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document reasonably
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.

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

                                      -28-
<PAGE>

either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.

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

        Section 20. Duties of Rights Agent. The Rights Agent undertakes only the
duties and obligations expressly imposed by this Agreement (and no implied
duties and obligations) upon the following terms and conditions, by all of which
the Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:

                (a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent, and the
Rights Agent shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in accordance with such advice or opinion.

                (b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of Current Per Share Market Price) be proved or established by
the Company prior to taking, suffering or omitting to take any action hereunder,
such fact or matter may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Chief Financial Officer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full and complete authorization to the
Rights Agent, and the Rights Agent shall incur no liability for, or in respect
of any action taken, suffered or omitted to be taken 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 gross negligence, bad faith or willful
misconduct (which gross negligence, bad faith or willful misconduct must be
determined by a final, non-appealable court of competent jurisdiction). Anything
to the contrary notwithstanding, in no event shall the Rights Agent be liable
for special, punitive, indirect, consequential or incidental loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the likelihood of such loss or damage. Any
liability of the Rights Agent under this Agreement will be limited to the amount
of fees paid by the Company to the Rights Agent.

                (d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its

                                      -29-
<PAGE>

countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.

                (e) The Rights Agent shall not be under any responsibility or
have any liability in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be liable or responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections 3, 11,
13, 23 or 24, or the ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of a
certificate furnished pursuant to Section 12 describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Preferred 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.

                (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such advice or instructions
shall be full authorization and protection to the Rights Agent, and the Rights
Agent shall not be liable for or in respect of any action taken, suffered or
omitted by it in accordance with the advice or instructions of any such officer
or for any delay in acting while waiting for those instructions. The Rights
Agent shall be fully authorized and protected in relying upon the most recent
instructions received by any such officer. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken, suffered, or
omitted by the Rights Agent under this Rights Agreement and the date on and/or
after which such action shall be taken, suffered by, or such omission shall be
effective. The Rights Agent shall not be liable for any action taken, suffered
or omitted in accordance with a proposal included in any such application on or
after the date specified in such application (which date shall not be less than
five (5) Business Days after the date on which any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken, suffered or omitted.

                                      -30-
<PAGE>

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

                (i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
(through its directors, officers and employees) or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or agents or for any
loss to the Company, any holders of Rights or any other Person, resulting from
any such act, default, neglect or misconduct, absent gross negligence, bad faith
or willful misconduct (each as determined by a final non-appealable court of
competent jurisdiction) in the selection and continued employment thereof.

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

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

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

                                      -31-
<PAGE>

United States or of any state of the United States, in good standing, which is
authorized under such laws to exercise corporate trust or stockholder services
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million, or (b) an Affiliate of the
Person described in clause (a) above. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Preferred Shares and the Common Shares, and mail a notice
thereof in writing to the registered holders of the Rights Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.

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

        Section 23. Redemption.

                (a) The Company may, at its option and with the approval of the
Board of Directors, at any time prior to the Close of Business on the earlier of
(i) the fifth day following the Shares Acquisition Date (or such later date as
may be determined by action of the Company's Board of Directors and publicly
announced by the Company) and (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $0.001 per
Right,

                                      -32-
<PAGE>

appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being herein
referred to as the "REDEMPTION PRICE") and the Company may, at its option, pay
the Redemption Price either in Common Shares (based on the Current Per Share
Market Price thereof at the time of redemption) or cash. Such redemption of the
Rights by the Company may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
The date on which the Board of Directors elects to make the redemption effective
shall be referred to as the "REDEMPTION DATE."

                (b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice (with prompt notice thereof to the
Rights Agent) of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption. Within ten (10) days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made. Neither
the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.

        Section 24. Exchange.

                (a) Subject to applicable laws, rules and regulations, and
subject to subsection 24(c) below, the Company may, at its option, by action of
the Board of Directors, at any time after the occurrence of a Triggering Event,
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
7(e) 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 action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection 24(a) of this Section
24 and without any further action and

                                      -33-
<PAGE>

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 give public notice (with
prompt notice thereof to the Rights Agent) 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 shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) 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 Section 24(a), the Company
shall either take such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights or alternatively, at the option
of a majority of the Board of Directors, with respect to each Right (i) pay cash
in an amount equal to the Current Value (as hereinafter defined), in lieu of
issuing Common Shares in exchange therefor, or (ii) issue debt or equity
securities or a combination thereof, having a value equal to the Current Value,
in lieu of issuing Common Shares in exchange for each such Right, where the
value of such securities shall be determined by a nationally recognized
investment banking firm selected by majority vote of the Board of Directors, or
(iii) deliver any combination of cash, property, Common Shares and/or other
securities having a value equal to the Current Value in exchange for each Right.
For purposes of this Section 24(c) only, the Current Value shall mean the
product of the Current Per Share Market Price of Common Shares on the date of
the occurrence of the event described above in subsection (a), multiplied by the
number of Common Shares for which the Right otherwise would be exchangeable if
there were sufficient shares available. To the extent that the Company
determines that some action need be taken pursuant to clauses (i), (ii) or (iii)
of this Section 24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following the
date on which the event described in Section 24(a) shall have occurred, in order
to seek any authorization of additional Common Shares and/or to decide the
appropriate form of distribution to be made pursuant to the above provision and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended.

                (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, there shall be paid to the
registered holders of the Rights 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 (as
determined pursuant to the second sentence of Section 1(j) hereof).

                                      -34-
<PAGE>

                (e) The Company may, at its option, by majority vote of the
Board of Directors, at any time before any Person has become an Acquiring
Person, exchange all or part of the then outstanding Rights for rights of
substantially equivalent value, as determined reasonably and with good faith by
the Board of Directors based upon the advice of one or more nationally
recognized investment banking firms.

                (f) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection 24(e) 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 rights in exchange therefor as has
been determined by the Board of Directors in accordance with subsection 24(e)
above. The Company shall 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 shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the transfer agent for the Common Shares
of the Company. 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 will be
effected.

        Section 25. Notice of Certain Events.

                (a) In case the Company shall propose to effect or permit to
occur any Triggering Event or Section 13 Event, the Company shall give notice
thereof to each holder of Rights in accordance with Section 26 hereof at least
twenty (20) days prior to occurrence of such Triggering Event or such Section 13
Event.

                (b) In case any Triggering Event or Section 13 Event shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Sections
11(a)(ii) and 13 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 Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                             Epicor Software Corporation
                             195 Technology Drive
                             Irvine, CA 92618

                                      -35-
<PAGE>

                             with a copy to:
                             Wilson Sonsini Goodrich & Rosati
                             Professional Corporation
                             650 Page Mill Road
                             Palo Alto, California 94304-1050
                             Attention:  Katharine A. Martin

        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 Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:

                             Mellon Investor Services LLC
                             400 South Hope Street
                             4th Floor
                             Los Angeles, CA  90071
                             Attention:  Sharon Knepper

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

        Section 27. Supplements and Amendments. Prior to the occurrence of a
Distribution Date, the Company may supplement or amend this Agreement in any
respect without the approval of any holders of Rights and the Rights Agent
shall, if the Company so directs, execute such supplement or amendment. From and
after the occurrence of a Distribution Date, the Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) shorten or lengthen any time period
hereunder or (iv) to change or supplement the provisions hereunder in any manner
that the Company may deem necessary or desirable and that shall not adversely
affect the interests of the holders of Rights (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person); provided, this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon the
delivery of a certificate from an appropriate officer of the Company that states
that the proposed supplement or amendment is in compliance with the terms of
this Section 27 and, provided such supplement or amendment does not change or
increase the Rights Agent's duties, liabilities or obligations hereunder, the
Rights Agent shall execute such

                                      -36-
<PAGE>

supplement or amendment. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Shares.

        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. Determinations and Actions by the Board of Directors, etc.
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 Common 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 General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power (i) to interpret the provisions of this
Agreement and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties and
(y) not subject the Board to any liability to the holders of the Rights.

        Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim pursuant to this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common
Shares).

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

        Section 32. Governing Law. This Agreement and each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and

                                      -37-
<PAGE>

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 as of the day and year first above written.

"COMPANY"                                   Epicor Software Corporation

                                            By: /s/ Lee Kim
                                               ---------------------------------
                                            Name: Lee Kim
                                                 -------------------------------
                                            Title: Chief Financial Officer
                                                  ------------------------------

"RIGHTS AGENT"                              Mellon Investor Services LLC

                                            By: /s/ Sharon Knepper
                                               ---------------------------------
                                            Name: Sharon Knepper
                                                 -------------------------------
                                            Title: Vice President
                                                  ------------------------------

                                      -38-
<PAGE>

                                    EXHIBIT A

                           FORM OF RIGHTS CERTIFICATE

Certificate No. R-                                              _________ Rights

        NOT EXERCISABLE AFTER THE EARLIER OF (i) NOVEMBER 13, 2011, (ii)
        THE DATE TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY
        EXCHANGES THE RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE
        RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
        AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE AMENDED AND
        RESTATED PREFERRED STOCK RIGHTS AGREEMENT. UNDER CERTAIN
        CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
        OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
        TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
        HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
        REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
        OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
        AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
        DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
        CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
        AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
        RIGHTS AGREEMENT.]*

                               RIGHTS CERTIFICATE

                           EPICOR SOFTWARE CORPORATION

This certifies that ______________________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of November 13, 2001, (the "RIGHTS AGREEMENT"),
between Epicor Software Corporation, a Delaware corporation (the "COMPANY"), and
Mellon Investor Services LLC, a New Jersey limited liability company (the
"RIGHTS AGENT"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
New York time, on November 13,

-----------

* The portion of the legend in bracket shall be inserted only if applicable and
  shall replace the preceding sentence.

<PAGE>

2011 at the office of the Rights Agent designated for such purpose, or at the
office of its successor as Rights Agent, one one-hundredth (0.01) of a fully
paid and non-assessable share of Series A Junior Participating Preferred Stock,
par value $0.001 per share (the "PREFERRED SHARES"), of the Company, at an
Exercise Price of $8.00 per one-hundredth (0.01) of a Preferred Share (the
"EXERCISE PRICE"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of
one-hundredths (0.01) of a Preferred Share which may be purchased upon exercise
hereof) set forth above are the number and Exercise Price as of November 13,
2001 based on the Preferred Shares as constituted at such date. As provided in
the Rights Agreement, the Exercise Price and the number and kind of Preferred
Shares or other securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.

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

        Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company, at its option, at
a redemption price of $0.01 per Right or (ii) may be exchanged by the Company in
whole or in part for Common Shares, substantially equivalent rights or other
consideration as determined by the Company.

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

        No fractional portion of less than one one-hundredth (0.01) of a
Preferred Share will be issued upon the exercise of any Right or Rights
evidenced hereby but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.

        No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any

                                      -39-
<PAGE>

corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.

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

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

ATTEST:                                     Epicor Software Corporation

                                            By:
-----------------------------------            ---------------------------------
Secretary

                                            Its:
                                                --------------------------------

Countersigned:

Mellon Investor Services LLC
as Rights Agent

By:
   --------------------------------

Its:
    -------------------------------

<PAGE>

                   FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE

                               FORM OF ASSIGNMENT

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

     FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers unto

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

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

Dated: _______________, ____

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

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   CERTIFICATE

        The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: _______________, ____

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

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                          FORM OF ELECTION TO PURCHASE

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

To:___________________________

        The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Rights Certificate to
purchase the number of one-hundredths (0.01) of a Preferred Share issuable upon
the exercise of such Rights and requests that certificates for such number of
one-hundredths (0.01) of a Preferred Share issued in the name of:

Please insert social security
or other identifying number

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

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

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

Please insert social security
or other identifying number

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

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

Dated: _______________, ____

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

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   CERTIFICATE

        The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: _______________, ____

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

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                                     NOTICE

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

<PAGE>

                                    EXHIBIT B

                  AMENDED AND RESTATED STOCKHOLDER RIGHTS PLAN
                           EPICOR SOFTWARE CORPORATION

                                SUMMARY OF RIGHTS

<TABLE>
<S>                                  <C>
DISTRIBUTION AND                     The Board of Directors has declared a dividend of one Right
TRANSFER OF RIGHTS;                  for each share of Common Stock of Epicor Software Corporation
RIGHTS CERTIFICATE:                  (the "COMPANY") outstanding.  Prior to the Distribution Date

                                     referred to below, the Rights will be evidenced by and trade
                                     with the certificates for the Common Stock. After the
                                     Distribution Date, the Company will mail Rights certificates to
                                     the Company's stockholders and the Rights will become
                                     transferable apart from the Common Stock.

DISTRIBUTION DATE:                   Rights will separate from the Common Stock and become
                                     exercisable following (a) the tenth business day (or such later
                                     date as may be determined by the Company's Board of Directors)
                                     after a person or group acquires beneficial ownership of 15% or
                                     more of the Company's Common Stock or (b) the tenth business
                                     day (or such later date as may be determined by the Company's
                                     Board of Directors) after a person or group announces a tender
                                     or exchange offer, the consummation of which would result in
                                     ownership by a person or group of 15% or more of the Company's
                                     Common Stock.

PREFERRED STOCK                      After the Distribution Date, each Right will entitle the
PURCHASABLE UPON                     holder to purchase for $8.00 (the "EXERCISE PRICE"), a
EXERCISE OF RIGHTS:                  fraction of a share of the Company's Preferred Stock with
                                     economic terms similar to that of one share of the Company's
                                     Common Stock.

FLIP-IN:                             If an acquiror (an "ACQUIRING PERSON") obtains 15% or more of
                                     the Company's Common Stock, then each Right (other than Rights
                                     owned by an Acquiring Person or its affiliates) will entitle
                                     the holder thereof to purchase, for the Exercise Price, a
                                     number of shares of the Company's Common Stock having a
                                     then-current market value of twice the Exercise Price.

FLIP-OVER:                           If, after an Acquiring Person obtains 15% or more of the
                                     Company's Common Stock, (a) the Company merges into another
                                     entity, (b) an acquiring entity merges into the Company or
                                     (c) the Company sells more than 50% of the Company's assets or
                                     earning power, then each Right (other than Rights owned by an
                                     Acquiring Person or its affiliates) will entitle the holder
                                     thereof to purchase, for the Exercise Price, a number of
                                     shares of Common Stock of the person engaging in the
                                     transaction having a then current market value of twice the
                                     Exercise Price.

EXCHANGE PROVISION:                  At any time after the date on which an Acquiring Person
                                     obtains 15% or  more of the Company's Common Stock and prior
                                     to the acquisition by the Acquiring Person of 50% of the
                                     outstanding Common Stock, a majority of the Board of Directors
                                     and the Board of Directors of the Company may exchange the
                                     Rights (other than Rights owned by the Acquiring Person or its
                                     affiliates), in whole or in part, for shares of Common Stock
                                     of the Company at an exchange ratio of one share of Common
                                     Stock per Right (subject to adjustment).
</TABLE>

<PAGE>

<TABLE>
<S>                                  <C>
REDEMPTION OF THE                    Rights will be redeemable at the Company's option for $0.01
RIGHTS:                              per Right at any time on or prior to the fifth day (or such
                                     later date as may be determined by the Company's Board of
                                     Directors) after public announcement that a Person has
                                     acquired beneficial ownership of 15% or more of the Company's
                                     Common Stock (the "SHARES ACQUISITION DATE").

EXPIRATION OF THE                    The Rights expire on the earliest of (a) November 13, 2011 or
RIGHTS:                              (b) exchange or redemption of the Rights as described above.

AMENDMENT OF TERMS                   The terms of the Rights and the Rights Agreement may be
OF RIGHTS:                           amended in any respect without the consent of the Rights
                                     holders on or prior to the Distribution Date; thereafter, the
                                     terms of the Rights and the Rights Agreement may be amended
                                     without the consent of the Rights holders in order to cure any
                                     ambiguities or to make changes which do not adversely affect
                                     the interests of Rights holders (other than the Acquiring
                                     Person).

VOTING RIGHTS:                       Rights will not have any voting rights.

ANTI-DILUTION                        Rights will have the benefit of certain customary
PROVISIONS:                          anti-dilution provisions.

TAXES:                               The Rights distribution should not be taxable for federal
                                     income tax purposes. However, following an event which renders
                                     the Rights exercisable or upon redemption of the Rights,
                                     stockholders may recognize taxable income.
</TABLE>

The foregoing is a summary of certain principal terms of the Stockholder Rights
Plan only and is qualified in its entirety by reference to the Amended and
Restated Preferred Stock Rights Agreement dated as of November 13, 2001, between
the Company and Mellon Investor Services LLC, as Rights Agent (the "RIGHTS
AGREEMENT"). The Rights Agreement may be amended from time to time. A copy of
the Rights Agreement was filed with the Securities and Exchange Commission as an
Exhibit to a Registration Statement on Form 8-A/A dated November 21, 2001. A
copy of the Rights Agreement is available free of charge from the Company.EXHIBIT 10.1

                            ASSET PURCHASE AGREEMENT

         ASSET PURCHASE AGREEMENT dated this 13th day of November, 2001 (the
"Agreement") among The Lamaur Corporation, a Delaware corporation ("Lamaur" or
"Seller"), and Alleghany Pharmacal Corporation, a New York corporation ("Buyer")
(Buyer and Seller being collectively sometimes referred to as the "Parties)".

                                   WITNESSETH:

         WHEREAS, the Seller desires to sell certain assets relating to its
Willow Lake product lines, including certain intellectual property and
inventory, as further defined in this Agreement, and Buyer desires to purchase
such assets from Seller;

         NOW, THEREFORE, in consideration of the warranties, representations,
covenants and agreements hereinafter set forth, the Seller and Buyer hereby
agree as follows:

                                    Article 1

             Transfer of Assets, Intellectual Property and Inventory

         1.1 Transfer of Assets. Subject to the terms and conditions herein
expressed, Seller agrees to sell, assign, convey and transfer to Buyer on the
Closing Date (defined in Section 2.1) Seller's trademarks, trademark rights,
trade names, licenses, copyrights and Inventory (as defined below) in each case
relating to Seller's Willow Lake product line, including the right to use the
name "Willow Lake" and any derivation or modification thereof, and Seller's
Willow Lake customer and supplier lists, goodwill, brochures, sales literature,
advertising, promotional and training materials, and product formulations and
methods of manufacture and any other materials and intellectual property using
or relating to Seller's Willow Lake trademark and product line

                                 Exhibit 10.1-1
<PAGE>

throughout the world, in each case as set forth on Schedule A attached hereto
and incorporated herein by reference (collectively, the "Assets").

         1.2 Royalties. In exchange for the Assets of the Seller to be acquired
by Buyer as described in Section 1.1 of this Agreement, and the other rights
assigned to Buyer hereunder, on the terms and subject to the conditions of this
Agreement, Buyer shall deliver and pay to the Seller the following amounts on
the dates and in the manner set forth below:

                  (a)(i) On the Closing Date, Buyer shall transfer to Congress
Financial Corporation (Central) ("Congress") via wire transfer $1,000,000.00, in
the form of a non-refundable advance against future royalties payable in
accordance with the terms hereof, as a credit against Seller's outstanding
obligations to Congress.

                  (ii) A. If, within the 12 months immediately following Closing
(as defined below), Buyer's Net Sales of Willow Lake Products equals a minimum
of $1,666,667.00, a royalty in an amount equal to 60% of Buyer's monthly Net
Sales of Willow Lake Products for the balance of such 12-month period (including
any part of the month in which such Buyer's Net Sales of Willow Lake Products
equals such amount). This royalty shall be payable, if it becomes due, by wire
transfer to the account of Congress, within 21 days from the end of each thirty
day period during the twelve months from Closing for which it is payable.

                           B. In the event that Buyer's Net Sales of Willow Lake
Products within the 12 months immediately following Closing do not reach
$1,666,667.00, then 60% of the difference between $1,666,667.00 and Buyer's
actual Net Sales shall be a credit to Buyer against any royalties due under
paragraph 1.2(a)(iii) hereof, provided that in no event shall Seller's liability
for any such credit exceed the amounts of the royalties due Seller under
paragraph 1.2(a)(iii).

                                 Exhibit 10.1-2
<PAGE>

                           For example, if Buyer's Net Sales of Willow Lake
Products for the first ten months after Closing reaches $1,666,667.00, Buyer
shall pay Seller, in addition to the non-refundable royalty advance due under
Section 1.2(a)(i) above, 60% of Buyer's Net Sales of Willow Lake Products during
the next two months.

                           If Buyer's Net Sales of Willow Lake Products for the
12 months after Closing is $1,566,667.00, Buyer shall receive a credit of
$60,000.00 (1,666,667.00 - 1,566,667.00 = 100,000 x 60% = 60,000) to be applied
against any royalties due under paragraph 1.2(a)(iii)below, provided that in no
event shall Seller's liability for any such credit exceed the amounts of the
royalties due Seller under paragraph 1.2(a)(iii).

                  (iii) A royalty based upon Buyer's annual Net Sales of Willow
Lake Products for the three years beginning on the first day of the month
following 24 months from the Closing Date. Such additional royalty payments are
to be made annually within 45 days from the end of each such year. At the end of
the three year period, which is five years from the Closing Date, no further
royalty payments of any kind are due. The royalty rate for each year of such
three year period shall be as follows: 1/2% of the first three million dollars
of Buyer's annual Net Sales of Willow Lake Products; 1% of the next million
dollars of Buyer's annual Net Sales of Willow Lake Products; and 2% of the next
million dollars of Buyer's annual Net Sales of Willow Lake Products, provided
that in no event shall such additional royalty payments exceed $45,000 in any
given year.

                  (iv) Net Sales, as used in this Agreement, shall mean Buyer's
invoiced sales, less cash discounts, of Willow Lake Products sold to an
independent third party purchaser. Willow Lake Products, as used in this
Agreement, shall mean all Seller's products using the Willow Lake trademark.
Excluded from Net Sales shall be expenses for co-op advertising

                                 Exhibit 10.1-3
<PAGE>

media, free standing inserts, coupon redemption from clearing houses, rebates
cleared via clearing houses, and quarterly payments for planned promotional
activities. Invoiced sales shall deduct retailer promotional allowances such as
prepayment for unit "scan-downs," and other allowances reflected in a reduced
invoice price per item, or charged back.

         1.3 Inventory. On the Closing Date, Buyer agrees to purchase all of the
useable and saleable Willow Lake Products (including finished goods, raw
materials and components, but excluding obsolete Willow Lake Products) which are
either in Seller's possession as of the Closing Date or which have been ordered
prior to the Closing Date but not yet received by Seller (collectively,
"Inventory"). The purchase price for each piece of Inventory shall equal
Seller's internal standard direct cost rate as set forth in Schedule B. Unless
Congress otherwise agrees in writing, all payments due Seller hereunder shall be
made to The Lamaur Corporation, P.O. Box 1450, Minneapolis, MN 55432. The
parties hereby agree that the following additional provisions shall govern the
terms pursuant to which Buyer agrees to purchase the Inventory from Seller:

                  (a)(1) The Parties agree that following Closing, Buyer shall
be entitled to move from Seller's facilities, or facilities in which Seller
houses Inventory, to Buyer's facilities, all or a portion of the Inventory that
it is purchasing pursuant to the terms hereof, provided that Seller shall pay
any and all costs associated with moving such Inventory, exclusive of freight
and/or shipping costs (collectively, the "Moved Inventory"). The Parties agree
that Buyer shall, within thirty (30) days of the date on which it moves the
Moved Inventory, pay Seller an amount equal to the aggregate purchase price of
the Moved Inventory (which shall be determined in accordance with the prices set
forth on attached Schedule B), less One Hundred Thousand Dollars ($100,000.00),
which shall be paid to Buyer by Seller in accordance with the provisions set
forth below (such amount being referred to herein as the "Inventory Setoff").
Seller agrees that it shall

                                 Exhibit 10.1-4
<PAGE>

continue to pay all Inventory storage costs until such time as the Inventory,
including the Moved Inventory, is moved by Buyer to Buyer's facilities.

                  (a)(2) The Parties further agree that following Closing,
Seller shall continue to fill orders it receives for Inventory in accordance
with Seller's past practices, and that Seller will remit to Buyer within thirty
(30) days from the date of shipment the proceeds of all such sales, less an
amount equal to Seller's shipping and handling costs, broker commissions owed on
such sales, freight costs and cash discounts (collectively, the "Related
Costs"). Additionally, Buyer shall deduct from the proceeds of any such sale the
cost of the shipped Inventory. The Parties agree that the Related Costs on any
Inventory shipment filled by Seller in accordance with the foregoing shall be
11.0% of the aggregate price of any such Inventory shipment.

                  (a)(3) The Parties further agree that the Inventory Setoff
shall be promptly paid by Buyer to Seller on the date that is twelve (12) months
from the Closing Date, less only any payments due to Buyer, including retailer
chargebacks to Buyer which are Seller's responsibility.

                  (ii) Any Inventory not sold by Buyer within six months from
the Closing Date shall be deemed to be not useable or saleable Inventory. Such
Inventory may thereafter be sold by the Parties as a closeout or destroyed, upon
the mutual agreement of the Parties regarding price and customer. Any such
closeout sales shall accrue as a sale by Seller, with Buyer to be reimbursed by
Seller for Buyer's cost of such Inventory, if previously paid by Buyer, and no
royalty payments to be due from Buyer. Any Willow Lake Products which are
returned as returns or damages to Seller or Buyer after six months from the
Closing Date shall be the responsibility of Buyer; such returns or damages may
be sent back to Buyer or may be sold by the Parties as a closeout, upon the
mutual agreement of the Parties regarding price and customer, with no royalty
payments due to Seller on any such closeout sales. Buyer shall utilize Seller's

                                 Exhibit 10.1-5
<PAGE>

Inventory before using alternative suppliers for use in manufacturing Willow
Lake Products, provided that such products are useable and saleable. Buyer
agrees that any finished goods, raw materials or components which it purchases
from other vendors for use in the production, manufacture, marketing, and/or
advertising of the Willow Lake Products during the time period for which royalty
payments are due to Seller under this Agreement shall be at least equal to the
quality of Seller's products and packaging (in the reasonable judgment of
Seller).

                  (iii) At a time to be determined upon written request made by
Buyer to Seller after Closing, all Inventory sold to Buyer by Seller after the
date of such request shall bear Buyer's UPC Codes label. Any relabeling
necessary to meet this requirement shall be at Seller's expense.

                  (v) Seller has secured the written commitment of Tiro
Industries, Inc. ("Tiro") to extend the same benefits enjoyed by Seller under
its Manufacturing Agreement with Tiro to Buyer until December 22, 2002. A copy
of this written commitment is attached to this Agreement as Schedule F.

                                 Exhibit 10.1-6
<PAGE>

                                    Article 2

                            Closing and Closing Date

         2.1(a) The term "Closing" as used herein shall refer to the actual
conveyance, transfer, assignment and delivery of the Assets described in Section
1.1 of this Agreement to Buyer, in exchange for the payment to, and the promises
to pay, Seller the purchase price described in Section 1.2 of this Agreement on
the Closing Date and the royalties set forth in Section 1.2 on the date therein
specified. The Closing shall take place on November 13, 2001 (the "Closing
Date"), or at such other time as shall be agreed upon in writing by the Seller
and Buyer, at a location to be determined in New York City.

                  (b)(i) Buyer and its representatives shall have the right,
prior to the Closing Date, to make such investigation of the Willow Lake line of
products as it reasonably deems desirable for the purposes of evaluating the
business, and ascertaining the accuracy of the representations and warranties of
Seller contained in this Agreement, provided that such investigation does not,
in the opinion of Seller, interfere unreasonably with the operation of Seller.
In any event, all representations and warranties of Seller shall survive
closing.

                  (ii) Buyer and Seller have been exchanging confidential
information about each other's business in connection with the negotiations
leading up to this Agreement, and will continue to exchange such information
after Closing. All information, written or oral, obtained through such exchanges
and investigations from nonpublic sources shall be held in confidence by Buyer
and Seller and their representatives and not used or disclosed to any third
party, except on a confidential basis. This obligation shall survive any
termination of this Agreement. If this transaction is not consummated, all
written material acquired from Seller or Buyer or their

                                 Exhibit 10.1-7
<PAGE>

representatives or developed by or for Seller or Buyer shall be delivered to
Buyer or Seller as applicable.

         2.2      At the Closing on the Closing Date:

                  (a) The Seller shall deliver to Buyer:

                           (i) Such instruments of assignment, transfer, and
conveyance as will be sufficient or requisite, in the opinion of Buyer and its
counsel, to vest in Buyer, its successors and assigns, the full, complete,
absolute, legal and equitable title in and to the Assets of the Seller described
in Section 1.1 hereof, including a written assignment of the trademarks,
trademark rights and trade names listed in Schedule A attached hereto in
recordable form for the United States, and listed foreign countries.

                           (ii) The opinion of counsel for Seller, dated as of
the Closing Date, to the following effect:

                                    (A) The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation;

                                    (B) Seller has full right and power to enter
into, and perform its obligations under this Agreement and it has taken all
requisite corporate action to authorize the execution, delivery and performance
of this Agreement and the consummation of the sale and purchase of the Assets
and the other transactions contemplated by the Agreement; and this Agreement has
been duly executed and delivered by the Seller and is a valid, enforceable and
binding obligation of Seller, subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of creditors' rights in
general (regardless of whether such enforceability is considered in a proceeding
in equity or at law);

                                 Exhibit 10.1-8
<PAGE>

                                    (C) The bills of sale, assignments and other
documents and instruments of sale, assignment, conveyance and transfer delivered
to Buyer by Seller have been duly executed and delivered by Seller and are
binding upon, and enforceable against, Seller and are sufficient to convey and
transfer to, and to vest in Buyer, all right, title and interest, of record and
otherwise, of Seller in and to the Assets described in Section 1.1 of this
Agreement, free and clear of any claims, liens, or encumbrances.

                           (iii) Files, documents and records pertaining to the
business of the Willow Lake Products which are to be transferred to Buyer
hereunder, including formulas, methods of manufacture, and suppliers of each
product and such documents as will identify the location of such products and
all other Assets throughout the world (unless they are delivered to Buyer prior
to the Closing Date).

                  (b) Buyer shall deliver to Seller:

                           (i) The purchase price described in Section 1.2 (a)
of this Agreement;

                           (ii) The opinion of Buyer's legal counsel, dated as
of the Closing Date, to the following effect:

                                    A. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York.

                                    B. Buyer has full right and power to enter
into and perform its obligations under this Agreement and has taken all
requisite corporate action to authorize the execution, delivery and performance
of this Agreement and the consummation of the sale and purchase of the Assets
and the other transactions contemplated by this Agreement; and this Agreement
has been duly executed and delivered by Buyer and is a valid, enforceable and

                                 Exhibit 10.1-9
<PAGE>

binding obligation of Buyer, subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of creditors' rights in
general.

                  (c) The Seller and Buyer will take any and all such other
actions and do any and all such other things as may be reasonably necessary or
desirable to consummate the sale and purchase of the Assets contemplated by this
Agreement and to enable such sale and purchase to become effective on the
Closing Date in accordance with the terms and conditions of this Agreement.

                                    Article 3

                    Warranties and Representations of Seller

         The warranties in this Article 3 shall survive the Closing for the
period of the applicable statute of limitations on written contracts. The Seller
warrants and represents to Buyer, its successors and assigns as follows:

         3.1 Seller is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the corporate
power and holds all rights, privileges, franchises, immunities, licenses,
permits, authorizations and approvals (governmental or otherwise) necessary to
own and operate its properties and to carry on and conduct its business.

         3.2 The Seller has full right and power to enter into, and perform its
obligations under, this Agreement; has taken all requisite corporate action to
authorize the execution, delivery and performance of this Agreement and the
consummation of the sale and purchase of the Assets described in Section 1.1 and
the other transactions contemplated by this Agreement; and this Agreement has
been duly authorized, executed and delivered by the Seller and is binding upon,
and enforceable against, the Seller in accordance with its terms.

                                Exhibit 10.1-10
<PAGE>

         3.3 Seller has and will have at the Closing good and marketable title
to all of the Assets covered by this Agreement, free and clear of all claims,
liens and encumbrances.

         3.4 There is no product warranty or liability claim, no litigation at
law or in equity, no arbitration proceeding, and no proceeding or investigation
before or by any commission, agency or other administrative or regulatory body
or authority, pending or, to the knowledge of the Seller, threatened against or
affecting Seller, or the Willow Lake Products, which would impair or adversely
affect the Assets, or prohibit the sale of the rights, properties or Assets
contemplated by this Agreement.

         3.5 Schedule A contains a true, accurate and complete schedule setting
forth all trademarks, trade names, and copyrights, other intellectual property
and all related registrations, rights, privileges, franchises and immunities and
all applications pending or to be filed therefor, related to the Willow Lake
Products. Except as disclosed in Schedule A, no licenses, sublicenses,
covenants, agreements or other arrangements have been granted or entered into by
Seller in respect of any of such trademarks and copyrights, rights, privileges,
franchises, immunities or applications pending or to be filed therefor.

         3.6 Schedule B and C contain a true, accurate and complete schedule
setting forth the costs and sales data reflected therein.

         3.7 No claims or lawsuits have been asserted within the last three
years by any third party alleging that Seller does not have the right to use the
"Willow Lake" mark in its present business. To the best of Seller's knowledge,
there are no infringements by third parties of the "Willow Lake" mark, material
to Seller's present business.

         3.8 No contract rights of any third party shall affect Buyer with
regard to any Assets conveyed herein, except as set forth on Schedule D annexed
hereto.

                                Exhibit 10.1-11
<PAGE>

         3.9 Neither this Agreement nor the sale and purchase of the Assets or
any other transaction contemplated by this Agreement was induced or procured
through any person, firm, corporation or other entity acting on behalf of, or
representing the Seller as a broker, finder, investment banker, financial
advisor or acting in any similar capacity.

         3.10 Schedule E reflects the promotional schedule and costs committed
by Seller with respect to the Willow Lake Products as of the date of Closing.
Seller agrees that it will pay the cost of all such promotions scheduled for
November as outlined on Schedule E. Seller also agrees to pay for those
promotions scheduled for December totaling $78,000.00 as outlined on Schedule E
and the balance of all such promotional costs shall be Buyer's responsibility..
If Seller has failed to list on Schedule E a promotion that was scheduled by
Seller, Seller shall pay the cost of that promotion. Buyer retains the right to
cancel any of the promotions listed on Schedule E after the date of Closing.

                                    Article 4

                     Warranties and Representations of Buyer

         The warranties in this Article 4 shall survive the Closing for the
period of the applicable statute of limitations on written contracts. Buyer
warrants and represents to Seller, its successors and assigns as follows:

         4.1 Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York.

         4.2 Buyer has full right and power to enter into, and perform its
obligations under this Agreement and has taken all requisite corporate action to
authorize the execution, delivery and performance of this Agreement and the
consummation of the sale and purchase of the Assets and the other transactions
contemplated by this Agreement; and this Agreement has been duly

                                Exhibit 10.1-12
<PAGE>

executed and delivered by the Buyer and is binding upon, and enforceable against
the Buyer in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of
creditors rights in general and the general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

         4.3 Neither this Agreement nor the sale and purchase of the Assets or
any other transaction contemplated by this Agreement was induced or procured
through any person, firm, corporation or other entity acting on behalf of, or
representing the Buyer as a broker, finder, investment banker, financial advisor
or acting in any similar capacity.

                                    Article 5

                            Covenants of the Parties

         5.1 (a) Seller covenants that it will make available to Buyer an
employee of Seller who is knowledgeable about the Willow Lake business for
consultation up to 10 hours per week, for 12 months from the Closing Date. Buyer
will pay all travel and other out of pocket expenses incurred by such employee
in the fulfillment of such consultation services, which expenses shall not
include the employee's salary, bonuses, benefits, contributory health insurance,
payroll taxes and other costs incidents to all Seller's employees.

                  (b) Seller covenants that it will continue to operate the
Willow Lake line of products business in the usual and customary manner until
the Closing Date.

                  (c) Seller covenants that it will not sell products designed
to compete with the Willow Lake Products in the United States for a period of
five (5) years from the Closing Date. For the purposes of this Agreement,
products designed to compete with the Willow Lake Products shall be defined as
any new line of hair care products (of the type listed on Schedule A),

                                Exhibit 10.1-13
<PAGE>

which include herbal ingredients and are primarily marketed by means of
advertising the "herbal" and "natural" characteristics of such line of products.
Products shall not be deemed to compete with Willow Lake Products solely because
they contain ingredients that are or could be considered as "herbal" or
"natural," provided such ingredients are shown only on the ingredient listing of
the package. Seller also covenants that it will not sell products copying the
formulas of any of the Willow Lake Products, regardless of whether Seller
markets the products primarily by means of advertising the "herbal" and
"natural" characteristics of such products.

                  (d) Seller covenants that it will not use any of the
trademarks, tradenames, trademark rights, trade dress or copyrights listed on
Schedule A and assigned to the Buyer hereunder, as long as the Buyer, or its
successors and assigns, shall have legal rights in such trademarks, tradenames,
trademark rights, trade dress and copyrights.

                  (e)(i) For six months following Closing, subject to (iii)
below, Seller covenants that it will accept all returns of products (including
returns and damages), chargebacks, credits or allowances of every kind,
including, without limitation, such allowances as slotting allowances, new store
allowances, planogram allowances, arising from products manufactured, sold or
otherwise conveyed or granted by Seller bearing or using the trademarks or
copyrights listed on Schedule A hereto, from the trade, whether received from
the trade by Seller or Buyer. Seller will credit or otherwise fully satisfy the
claims of the parties returning such products, or credit Buyer who shall satisfy
the claims, in the event the products are returned to, or credits demanded from
Buyer. However, for the second 3 months following Closing, Buyer shall be
responsible for any such credits totaling during such period to less than
$5,000.00 from any one account.

                  (ii) Buyer may deduct any such credits or allowances paid or
credited by Buyer from any monies owed to Seller. Any such credits due Buyer
which exceeds the amount

                                Exhibit 10.1-14
<PAGE>

owed to Seller, shall be paid within 30 days of billing to Seller. Buyer shall
promptly advise Seller of all credits or allowances paid or credited by Buyer
which it seeks to deduct from monies owed to Seller or to invoice to Seller.

                  (iii) With regard to any audits conducted or credits withheld
by Seller's accounts after Closing, for Willow Lake Products sold by Seller
prior to Closing, Seller's liability shall be for the full amount that any such
audit finds to be due or any such credits withheld, regardless of how long after
Closing the audit and claim for credit takes place.

         5.2 Buyer covenants that it will use commercially reasonable efforts to
optimize the profits of Willow Lake Products during the time period for which
royalties are due to Seller under this Agreement. Buyer will not suspend,
depress or delay any sales which optimize profits of Willow Lake Products for a
period of one year from the Closing Date.

                                Exhibit 10.1-15
<PAGE>

                                    Article 6

                   Indemnification of the Buyer by the Seller

         6.1 (a) The Seller shall indemnify the Buyer against, and hold the
Buyer harmless from: (i) any and all costs, damages, expenses, liabilities,
claims, obligations or losses (including reasonable attorneys' fees and other
reasonable legal costs and expenses incurred in connection therewith) resulting
from, or arising out of, any material inaccuracy or misrepresentation in, or
breach of, or default in performance of or compliance with, any of the
warranties, representations, covenants or agreements made by the Seller in this
Agreement, and (ii) any and all costs, damages, expenses, liabilities, claims,
obligations or losses (including reasonable attorneys' fees and other reasonable
legal costs and expenses incurred in connection therewith) resulting from or
arising out of the use by any person of the Inventory.

                  (b) Seller shall maintain liability insurance of at least five
million dollars covering the products it has manufactured and sold to Buyer,
naming Buyer as a third party insured. For any such products Seller's insurance
shall be primary.

         6.2 Upon receipt of notice of any claim or demand which could give rise
to a claim for indemnification under Section 6.1 hereof, Buyer shall promptly
notify Seller of such claim or demand and Seller shall have a reasonable time
(not to exceed thirty (30) days) after receipt of such notice to elect to defend
such claim or demand on behalf of Buyer. If Seller so elects to defend such
claim or demand, Buyer shall make available to Seller and its agents and
representatives all records and other materials which are required in the
defense of such claim or demand and shall otherwise cooperate with, and assist,
Seller in the defense of such claim or demand.

                                Exhibit 10.1-16
<PAGE>

                                    Article 7

                   Indemnification of the Seller by the Buyer.

         7.1 The Buyer shall indemnify the Seller against, and hold the Seller
harmless from: any and all costs, damages, expenses, liabilities, claims,
obligations or losses (including reasonable attorneys' fees and other reasonable
legal costs and expenses incurred in connection therewith) resulting from, or
arising out of: (i) any material inaccuracy or misrepresentation in, or breach
of, or default in performance of or compliance with, any of the warranties,
representations, covenants or agreements made by Buyer in this Agreement, and
(ii) the use of any product bearing or using any trademarks or copyrights
assigned or conveyed to Buyer pursuant to this Agreement indicating a date of
manufacture subsequent to the Closing Date.

         7.2 Upon receipt of notice of any claim or demand which could give rise
to a claim for indemnification under Section 7.1 hereof, the Seller shall
promptly notify the Buyer of such claim or demand and the Buyer shall have a
reasonable time (not to exceed thirty (30) days) after receipt of such notice to
elect to defend such claim or demand on behalf of the Seller. If the Buyer so
elects to defend such claim or demand, the Seller shall make available to the
Buyer and its agents and representatives all records and other materials which
are required in the defense of such claim or demand and shall otherwise
cooperate with, and assist, Buyer in the defense of such claim or demand.

                                Exhibit 10.1-17
<PAGE>

                                    Article 8

                                  Miscellaneous

         8.1 Expenses. The Parties will pay their own costs and expenses
(including attorneys' fees, accountants' fees and other professional fees and
expenses) in connection with the negotiation, preparation, execution and
delivery of this Agreement and the consummation of the sale and purchase of the
Assets and the other transactions contemplated by this Agreement.

         8.2 Notices. Unless and until notified otherwise in writing, any and
all notices and other communication required or permitted under this Agreement
shall be effectively delivered for all purposes, if delivered personally or by
telecopier, upon the date delivered or the telecopied message is received, or if
mailed, upon deposit in the United States mail, first class postage prepaid,
and, if directed to the Buyer, properly addressed to Alleghany Pharmacal
Corporation, 277 Northern Boulevard, Great Neck, New York, 11021 Attention:
David Geller with a copy to Jerold W. Dorfman, Esq., 81 Main Street, Suite 502,
White Plains, New York 10601 and, if directed to the Seller, properly addressed
to The Lamaur Corporation, 5601 East River Road, Fridley, Minnesota, 55432-6198,
Attention: Jay Olson., with a copy to Robert Zeglovitch, Esq., Leonard, Street
and Deinard Professional Association, Suite 2300, 150 South Fifth Street,
Minneapolis, Minnesota, 55402.

         8.3 Amendments. Waivers and Consents. Amendments to this Agreement, and
waivers and consents with respect to this Agreement, may be made by an
instrument or instruments in writing signed by authorized representatives of the
Parties and no amendment to this Agreement, and no waiver or consent with
respect to this Agreement shall be effective unless and until made by such an
instrument or instruments in writing.

                                Exhibit 10.1-18
<PAGE>

         8.4 Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, and enforceable against the Parties and their
successors and assigns.

         8.5 Severability. If any term or provision of this Agreement is
prohibited or made unenforceable by any law, regulation or ordinance, such term
or provision will have no force and effect to the extent prohibited or made
unenforceable but shall not invalidate or terminate any other provisions of this
Agreement.

         8.6 Bulk Sales Statute. The Buyer waives compliance with any applicable
bulk sales statute.

         8.7 Arbitration. Any disputes arising under this Agreement shall be
resolved by three arbitrators under the rules of the American Arbitration
Association. The arbitrators shall apply the law of Minnesota and shall apply
the terms of this Agreement. Any award by the arbitrators may be confirmed and
enforced in an appropriate court. Any arbitrators chosen pursuant to the terms
hereof may permit such discovery as they, in their discretion, deem appropriate.
Nothing herein shall be construed to prohibit any party from seeking in any
court of competent jurisdiction any injunctive relief to which it is entitled
hereunder, and provided further,.

         8.8 Entire Agreement. This Agreement constitutes the entire agreement
among the Parties and supercedes all prior agreements, proposals,
representations and understandings, both written and oral, among the parties
with respect to the purchase of the Assets hereunder, and no purported variation
of this Agreement shall be effective unless made in writing signed by the
parties.

         8.9 Headings. The headings herein are for convenience of reference
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any, of the provisions hereof.

                                Exhibit 10.1-19
<PAGE>

         8.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall have the force
and effect of an original.

         8.11 Right to Audit. For the period from the Closing Date until two
years after the end of the royalty period specified in Section 1.2(a)(iii) of
this Agreement, Seller shall have the right to conduct audits of the books,
accounts and records of the Buyer upon reasonable notice and during normal
business hours, for the purpose of confirming Buyer's compliance with this
Agreement. Buyer may substitute for such an audit, at its election, statements
which set forth the amount of the royalty payment and describe in reasonable
detail the bases for such amounts and which are certified by KPMG Peat Marwick
or other certified public accountant consented to by the Seller, which consent
shall not be unreasonably withheld, attesting to the accuracy of the statements
and the compliance of such statements with generally accepted accounting
principles which have been consistently applied.

         IN WITNESS WHEREOF, the Parties have executed and delivered this
Agreement on the day and year first above written.

                                Exhibit 10.1-20
<PAGE>

ALLEGHANY PHARMACAL CORPORATION

a New York Corporation

By /s/ David Geller

Its President

THE LAMAUR CORPORATION

a Delaware Corporation

By /s/ Lawrence H. Pesin
    Lawrence H. Pesin
Its Chief Executive Officer

                                Exhibit 10.1-21
<PAGE>

                           List of Excluded Schedules

         Schedule A: Intellectual property using or relating to Lamaur's Willow
Lake trademark and product line

         Schedule B: Lamaur's internal standard Willow Lake inventory direct
cost rate

         Schedule C: Net sales by product June 2001 YTD

         Schedule D: Third party contracts effecting the conveyed assets

         Schedule E: Schedule of promotional obligations

         Schedule F: Tiro commitment

                                Exhibit 10.1-22

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