Document:

EXHIBIT 4.2

                           MPOWER HOLDING CORPORATION

                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                            SERIES E PREFERRED STOCK

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

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware

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

                  Mpower Holding Corporation, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

                  that, pursuant to authority conferred upon the Board of
Directors of the Corporation by its Certificate of Incorporation, as amended and
restated on June 27, 2001 (the "Certificate"), and, pursuant to the provisions
of Section 151 of the General Corporation Law of the State of Delaware, said
Board of Directors, at a duly called meeting held on June 27, 2001 at which a
quorum was present and acted throughout, adopted the following resolutions,
which resolutions remain in full force and effect on the date hereof creating a
series of 100,000 shares of Preferred Stock having a par value of $.001 per
share, designated as Series E Preferred Stock (the "Series E Preferred Stock")
out of the class of 50,000,000 shares of preferred stock of the par value of
$.001 per share (the "Preferred Stock"):

                  RESOLVED, that pursuant to the authority vested in the Board
of Directors in accordance with the provisions of the Certificate, the Board of
Directors does hereby create, authorize and provide for the issuance of the
Series E Preferred Stock having the voting powers, designation, relative,
participating, optional and other special rights, preferences, and
qualifications, limitations and restrictions thereof that are set forth as
follows:

                  Section 1. Designation and Amount. The shares of such series
shall be designated as "Series E Preferred Stock" and the number of shares
constituting such series shall be 100,000.

                  Section 2. Dividends and Distributions. (A) Subject to the
prior and superior rights of the holders of any shares of any other series of
Preferred Stock or any other shares of preferred stock of the Corporation
ranking prior and superior to the shares of Series E Preferred Stock with
respect to dividends, each holder of one one-thousandth (1/1,000) of a share (a
"Unit") of Series E Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for that
purpose, (i) quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date

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being a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of such Unit of Series E
Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to
the greater of (a) $.01 or (b) subject to the provision for adjustment
hereinafter set forth, the aggregate per share amount of all cash dividends
declared on shares of the Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of a Unit of Series E Preferred Stock, and (ii)
subject to the provision for adjustment hereinafter set forth, quarterly
distributions (payable in kind) on each Quarterly Dividend Payment Date in an
amount per Unit equal to the aggregate per share amount of all non-cash
dividends or other distributions (other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock, by
reclassification or otherwise) declared on shares of Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or with respect to the
first Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series E Preferred Stock. In the event that the Corporation shall at any time
after June 28, 2001 (the "Rights Declaration Date") (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock or (iii) combine outstanding shares
of Common Stock into smaller number of shares, then in each such case the amount
to which the holder of a Unit of Series E Preferred Stock was entitled
immediately prior to such event pursuant to the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.

                  (B) The Corporation shall declare a dividend or distribution
on Units of Series E Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the shares of Common
Stock (other than a dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $.01
per Unit on the Series E Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

                  (C) Dividends shall begin to accrue and shall be cumulative on
each outstanding Unit of Series E Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such Unit of Series E
Preferred Stock, unless the date of issuance of such Unit is prior to the record
date for the first Quarterly Dividend Payment Date, in which case, dividends on
such Unit shall begin to accrue from the date of issuance of such Unit, or
unless the date of issuance is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of Units of Series E
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on Units of
Series E Preferred Stock in an amount less than the aggregate amount of all such
dividends at the time accrued and payable on such Units shall be allocated pro
rata on a unit-by-unit basis among all Units of Series E Preferred Stock at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of Units of Series E Preferred Stock entitled to

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receive a payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the payment
thereof.

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

                  (A) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series E Preferred Stock shall entitle the holder thereof to
one vote on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares, then in each such case the number of votes per Unit to which
holders of Units of Series E Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying each number by a fraction the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after such event and the denominator of which shall be the number of
shares of Common Stock that were outstanding immediately prior to such event.

                  (B) Except as otherwise provided herein or by law, the holders
of Units of Series E Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.

                  (C) (i) If at any time dividends on any Units of Series E
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, then during the period (a "default period") from the
occurrence of such event until such time as all accrued and unpaid dividends for
all previous quarterly dividend periods and for the current quarterly dividend
period on all Units of Series E Preferred Stock then outstanding shall have been
declared and paid or set apart for payment, all holders of Units of Series E
Preferred Stock, voting separately as a class, shall have the right to elect two
Directors.

                  (ii) During any default period, such voting rights of the
holders of Units of Series E Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at
any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting rights nor any right of the
holders of Units of Series E Preferred Stock to increase, in certain cases, the
authorized number of Directors may be exercised at any meeting unless one-third
of the outstanding Units of Preferred Stock shall be present at such meeting in
person or by proxy. The absence of a quorum of the holders of Common Stock shall
not affect the exercise by the holders of Units of Series E Preferred Stock of
such rights. At any meeting at which the holders of Units of Series E Preferred
Stock shall exercise such voting rights initially during an existing default
period, they shall have the right, voting separately as a class, to elect
Directors to fill up to two vacancies in the Board of Directors, if any such
vacancies may then exist, or, if such right is exercised at an annual meeting to
elect two Directors. If the number which may be so elected at any special
meeting does not amount to the required number, the holders of the Series E
Preferred Stock shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of the required
number. After the holders of Units of Series E Preferred Stock shall have
exercised their right to elect Directors during any default period, the

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<PAGE>

number of Directors shall not be increased or decreased except as approved by a
vote o the holders of Units of Series E Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to the Series E
Preferred Stock.

                  (iii) Unless the holders of the Series E Preferred Stock
shall, during the existing default period, have previously exercised their right
to elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 25% of the total number of
the Units of Series E Preferred Stock outstanding may request, the calling of a
special meeting of the holders of Units of Series E Preferred Stock, which
meeting shall thereupon be called by the Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of Units of Series E
Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall
be given to each holder of record of Units of Series E Preferred Stock by
mailing a copy of such notice to him at his last address as the same appears on
the books of the Corporation. Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such order or request or
in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than 25% of the total number of
outstanding Units of Series E Preferred Stock. Notwithstanding the provisions of
this paragraph (C)(iii), no such special meeting shall be called during the 60
days immediately preceding the date fixed for the next annual meeting of the
stockholders.

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

                  (v) Immediately upon the expiration of a default period, (x)
the right of the holders of Units of Series E Preferred Stock as a separate
class to elect Directors shall cease, (y) the term of any Directors elected by
the holders of Units of Series E Preferred Stock as a separate class shall
terminate, and (z) the number of Directors shall be such number as may be
provided for in the Certificate or by-laws irrespective of any increase made
pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner provided by law or in
the Certificate or by-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled by
a majority of the remaining Directors.

                  (vi) The provisions of this paragraph (C) shall govern the
election of Directors by holders of Units of Preferred Stock during any default
period notwithstanding any provisions

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<PAGE>

of the Certificate to the contrary, including, without limitation, the
provisions of Article Five of the Certificate.

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

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

                  (i) declare or pay dividends on, make any other distributions
         on, or redeem or purchase or otherwise acquire for consideration any
         shares of junior stock;

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

                  (iii) redeem or purchase or otherwise acquire for
         consideration shares of any parity stock, provided, however, that the
         corporation may at any time redeem, purchase or otherwise acquire
         shares of any such parity stock in exchange for shares of any junior
         stock;

                  (iv) purchase or otherwise acquire for consideration any Units
         of Series E Preferred Stock, except in accordance with a purchase offer
         made in writing or by publication (as determined by the Board of
         Directors) to all holders of such Units.

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

                  Section 5. Reacquired Shares. Any Units of Series E Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such Units shall, upon their cancellation, become authorized but
unissued Units of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.

                  Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
junior stock unless the holders of Units of Series E Preferred Stock shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the

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<PAGE>

greater of either (a) $.01 per Unit plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the
date of such payment, or (b) the amount equal to the aggregate per share amount
to be distributed to holders of shares of Common Stock, or (ii) to the holders
of shares of parity stock, unless simultaneously therewith distributions are
made ratably on Units of Series E Preferred Stock and all other shares of such
parity stock in proportion to the total amounts to which the holders of Units of
Series E Preferred Stock are entitled under clause (i)(a) of this sentence and
to which the holders of shares of such parity stock are entitled, in each case
upon such liquidation, dissolution or winding up.

                  (B) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of
Common Stock, or (iii) combine outstanding shares of Common Stock into a smaller
number of shares, then in each such case the aggregate amount to which holders
of Units of Series E Preferred Stock were entitled immediately prior to such
event pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.

                  Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of common stock are exchanged for or converted into other stock
or securities, cash and/or any other property, then in any such case Units of
Series E Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for adjustment
hereinafter set forth) equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the immediately preceding sentence with respect to the
exchange or conversion of Units of Series E Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be the number
of shares of Common Stock that are outstanding immediately after such event and
the denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  Section 8. Redemption. The Units of Series E Preferred Stock
shall not be redeemable.

                  Section 9. Ranking. The Units of Series E Preferred Stock
shall rank junior to all other series of the Preferred Stock and to any other
class of preferred stock that hereafter may be issued by the Corporation as to
the payment of dividends and the distribution of assets, unless the terms of any
such series or class shall provide otherwise.

                  Section 10. Amendment. The Certificate, including, without
limitation, this resolution, shall not hereafter be amended, either directly or
indirectly, or through merger or

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<PAGE>

consolidation with another corporation in any manner that would alter or change
the powers, preferences or special rights of the Series E Preferred Stock so as
to affect them adversely without the affirmative vote of the holders of a
majority or more of the outstanding Units of Series E Preferred Stock, voting
separately as a class.

                  Section 11. Fractional Shares. The Series E Preferred Stock
may be issued in Units or other fractions of a share, which Units or fractions
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series E Preferred Stock.

                  Section 12. Certain Definitions. As used herein with respect
to the Series E Preferred Stock, the following terms shall have the following
meanings:

                  (A) The term "Common Stock" shall mean the class of stock
designated as the common stock, par value $.001 per share, of the Corporation at
the date hereof or any other class of stock resulting from successive changes or
reclassification of such common stock.

                  (B) The term "junior stock" (i) as used in Section 4, shall
mean the Common Stock and any other class or series of capital stock of the
Corporation hereafter authorized or issued over which the Series E Preferred
Stock has preference or priority as to the payment of dividends and (ii) as used
in Section 6, shall mean the Common Stock and any other class or series of
capital stock of the Corporation over which the Series E Preferred Stock has
preference or priority in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.

                  (C) The term "parity stock" (i) as used in Section 4, shall
mean any class or series of stock of the Corporation hereafter authorized or
issued ranking pari passu with the Series E Preferred Stock as to the payment of
dividends and (ii) as used in Section 6, shall mean any class or series of
capital stock ranking pari passu with the Series E Preferred Stock in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.

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<PAGE>

                  IN WITNESS WHEREOF, Mpower Holding Corporation has caused this
Certificate of Designation to be signed by its Chief Executive Officer and
President, and attested to by its Secretary, on June 27, 2001.

                                            MPOWER HOLDING CORPORATION

                                            By: /s/ ROLLA P. HUFF
                                                --------------------------------
                                                 Name:  Rolla P. Huff
                                                 Title: Chief Executive Officer
                                                        And President

Attest:

     /s/ RUSSEL I. ZUCKERMAN
--------------------------------
Name:    Russell I. Zuckerman
Title:   Senior Vice President,
         General Counsel and Secretary

                                            Sworn to this 27th day of June, 2001

                                            By:/s/ KAREN A. KOCH
                                               ---------------------------------
                                                   Notary Public

                                       8====================================================
              ====================================================

                             FIRST FINANCIAL BANCORP

                                       and

                          MELLON INVESTOR SERVICES LLC,

                                  Rights Agent

                                RIGHTS AGREEMENT

                            Dated as of June 15, 2001

              ====================================================
              ====================================================

<PAGE>

<TABLE>
                                                 Table of Contents
                                                 -----------------
<CAPTION>
                                                                                                               Page
                                                                                                               ----

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

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

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

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

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

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

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

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

Section 9.        Availability of Preferred Shares...............................................................8

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

Section 11.       Adjustment of Purchase Price, Number of Shares or Number of Rights.............................9

Section 12.       Certificate of Adjusted Purchase Price or Number of Shares....................................15

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

Section 14.       Fractional Rights and Fractional Shares.......................................................18

Section 15.       Rights of Action..............................................................................19

Section 16.       Agreement of Right Holders....................................................................20

Section 17.       Right Certificate Holder Not Deemed a Shareholder.............................................20

Section 18.       Concerning the Rights Agent...................................................................20

Section 19.       Merger or Consolidation or Change of Name of Rights Agent.....................................21

Section 20.       Duties of Rights Agent........................................................................21

Section 21.       Change of Rights Agent........................................................................23

Section 22.       Issuance of New Right Certificates............................................................23

Section 23.       Redemption....................................................................................24

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

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

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

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

Section 28.       Registration of Securities....................................................................27

Section 29.       Determinations and Actions by the Board of Directors..........................................27

Section 30.       Successors....................................................................................28

                                                         i

<PAGE>

                                                 Table of Contents
                                                 -----------------
                                                    (continued)
                                                                                                               Page
                                                                                                               ----

Section 31.       Benefits of this Agreement....................................................................28

Section 32.       Severability..................................................................................28

Section 33.       Governing Law.................................................................................28

Section 34.       Counterparts..................................................................................28

Section 35.       Descriptive Headings..........................................................................28

</TABLE>

                                                        ii

<PAGE>
                                RIGHTS AGREEMENT

         Agreement, dated as of June 15, 2001 between First Financial Bancorp, a
California corporation (the "Company"),  and Mellon Investor Services LLC, a New
Jersey limited liability company (the "Rights Agent").

         Pursuant to this Agreement,  the Board of Directors of the Company (the
"Board") has authorized and declared a dividend of one preferred  share purchase
right (a "Right") for each Common Share (as hereinafter  defined) of the Company
outstanding on July 6, 2001 (the "Record  Date"),  each Right  representing  the
right to  purchase  one  one-hundredth  of a  Preferred  Share  (as  hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further  authorized  and directed the issuance of one Right with respect to each
Common  Share that shall  become  outstanding  between  the Record  Date and the
earliest of the Distribution  Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).

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

Section 1.     Certain Definitions

         For purposes of this  Agreement,  the following terms have the meanings
indicated:

         (a)  "Acquiring  Person"  shall  mean  any  Person  (as  such  term  is
hereinafter  defined) who or which,  together with all Affiliates and Associates
(as such terms are hereinafter  defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter  defined) of 10% or more of the Common Shares
of the Company then  outstanding  (other than as the result of a Permitted Offer
(as such term is hereinafter  defined)),  but shall not include the Company, any
Subsidiary  (as such term is hereinafter  defined) of the Company,  any employee
benefit plan of the Company (including without limitation the Employee Plans) or
of any Subsidiary of the Company,  or of any entity holding Common Shares for or
pursuant  to the  terms  of any  such  plan,  provided,  however,  that the term
"Acquiring  Person" shall not include any Grandfathered  Person (as such term is
hereinafter defined),  unless such Grandfathered Person subsequently becomes the
Beneficial  Owner of more  than the  Grandfathered  Percentage  (as such term is
hereinafter defined) of the Common Shares of the Company; and provided, further,
that any person who first  obtains  the  written  approval  of a majority of the
Board of  Directors  of the  Company for the  acquisition  of 10% or more of the
Common  Shares of the  Company  and  therefore  accumulates  at least 10% of the
Common Shares,  within six months of the date of such written approval shall not
be an "Acquiring Person." Any Grandfathered  Person who subsequently becomes the
Beneficial  Owner of less than 10% of the  Common  Shares of the  Company  shall
cease to be a Grandfathered  Person.  Notwithstanding  the foregoing,  no Person
shall become an "Acquiring Person" as the result of either (x) an acquisition of
Common  Shares  by  the  Company  which,   by  reducing  the  number  of  shares
outstanding,  increases the proportionate number of shares beneficially owned by
such Person to 10% or more of the Common Shares of the Company then outstanding;
provided,  however, that if a Person shall become the Beneficial Owner of 10% 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, then
such Person shall be deemed to be an  "Acquiring  Person" or (y) if (i) within 8
days after such Person would otherwise have become an Acquiring  Person (but for
the operation of this subclause y), such Person  notifies the Board of

                                       1

<PAGE>

Directors  that such  Person did so  inadvertently  and (ii) within 5 days after
such  notification,  such Person is the Beneficial Owner of less than 10% of the
outstanding  Common  Shares or, if the Person is a  Grandfathered  Person,  such
Person is the Beneficial Owner of less than the Grandfathered Percentage.

         (b)  "Adjusted  Shares"  shall  have the  meaning  set forth in Section
11(a)(ii) 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  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  as in
effect on the date of this Agreement.

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

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

                  (ii) which such Person or any of such  Person's  Affiliates or
Associates  has (A) the right to  acquire  (whether  such  right is  exercisable
immediately  or only  after the  passage  of time)  pursuant  to any  agreement,
arrangement or understanding  (other than customary  agreements with and between
underwriters  and  selling  group  members  with  respect to a bona fide  public
offering of  securities),  or upon the exercise of conversion  rights,  exchange
rights,  rights (other than these  Rights),  warrants or options,  or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own,  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  (B)  the  right  to  vote  pursuant  to  any   agreement,   arrangement   or
understanding;  provided,  however,  that  a  Person  shall  not be  deemed  the
Beneficial  Owner of, or to  beneficially  own, any  security if the  agreement,
arrangement  or  understanding  to vote such  security (1) 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  promulgated  under the  Exchange Act and (2) is not also
then  reportable  on Schedule 13D under the Exchange Act (or any  comparable  or
successor report); or

                  (iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such  Person's  Affiliates  or
Associates has any agreement, arrangement or understanding (other than customary
agreements with and between  underwriters and selling group members with respect
to a bona fide public  offering  of  securities)  for the purpose of  acquiring,
holding,  voting  (except to the extent  contemplated  by the proviso in Section
l(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 the
Beneficial  Owner of  securities  held of  record by or in the  capacity  of the
trustee  of  any  employee  benefit  plan  of  the  Company  (including  without
limitation the Employee  Plans) or any Subsidiary of the Company for the benefit
of any employee of the Company or any Subsidiary of the Company,  other than the
officer or director,  by reason of any  influence  that such officer or director
may have over the voting of the securities held in the plan.

         Notwithstanding  anything in this definition of Beneficial Ownership to
the  contrary,  the phrase  "then  outstanding,"  when used with  reference to a
Person's  Beneficial  Ownership of  securities  of the  Company,  shall mean the
number of such securities  then issued and outstanding  together with

                                       2

<PAGE>

the number of such  securities not then actually  issued and  outstanding  which
such Person would be deemed to own beneficially hereunder.

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

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

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

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

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

         (j)  "Employee  Plans" shall mean any Employee  Stock  Ownership  Plan,
401(k) Plan or other  tax-qualified  employee  benefit plan of the Company or of
any Subsidiary of the Company.

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

         (l)  "Grandfathered   Percentage"  shall  mean,  with  respect  to  any
Grandfathered  Person (as such term is hereinafter  defined),  the percentage of
the outstanding Common Shares that such Grandfathered  Person beneficially owned
on June 15, 2001, plus one percentage point.

         (m) "Grandfathered Person" shall mean any Person who or which, together
with all  Affiliates  and  Associates  of such  Person,  and the members of such
Person's  "immediate family," as such term is defined in Rule 16a-1(e) under the
Exchange  Act or any  successor  to such  rule,  was,  on  June  15,  2001,  the
Beneficial Owner of 10% or more of the Common Shares of the Company  outstanding
on such date.

         (n)  "Permitted  Offer" shall mean a tender or exchange  offer which is
for all outstanding  Common Shares at a price and on terms determined,  prior to
the  purchase  of shares  under such  tender or  exchange  offer,  by at least a
majority of the members of the Board of  Directors  who are not  officers of the
Company and who are not Acquiring Persons or Affiliates, Associates, nominees or
representatives  of an Acquiring Person, to be adequate (taking into account all
factors that such directors deem relevant including, without limitation,  prices
that could  reasonably  be achieved if the Company or its assets were sold on an
orderly  basis  designed to realize  maximum  value) and  otherwise  in the best
interest  of the  Company  and its  shareholders  (other  than the Person or any
Affiliates or Associate  thereof on whose behalf the offer is being made) taking
into account all factors that such directors may deem relevant.

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

                                       3

<PAGE>

         (p)   "Preferred   Shares"   shall  mean  shares  of  Series  A  Junior
Participating  Preferred  Stock,  no par value, of the Company having the rights
and  preferences  set forth in the  Certificate  of  Determination  for Series A
Junior Participating Preferred Stock attached hereto as Exhibit A.

         (q) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.

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

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

         (t)  "Registered  Common  Shares"  shall have the  meaning set forth in
Section 13(d) hereof.

         (u)  "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 or such
earlier date as a majority of the directors of the Company shall become aware of
the existence of an Acquiring Person.

         (v)  "Spread"  shall have the  meaning  set forth in Section  11(a)(iv)
hereof.

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

         (x)  "Substitution  Period" shall have the meaning set forth in Section
11(a)(iv) hereof.

         (y) "Trading Day" shall have the meaning set forth in Section 11(a)(iv)
hereof.

         (z) A "Trigger Event" shall be deemed to have occurred upon any Person,
together  with  all  Affiliates  and  Associates  of such  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.     Issue of Right Certificates

         (a) Until the  earlier  of the close of  business  on (i) the tenth day
after the Shares Acquisition Date, or (ii) the tenth Business Day (or such later
date as may be determined by action of the Board of Directors prior to such time
as any Person becomes an Acquiring Person) after the date of the commencement by
any Person (other than the Company,  any Subsidiary of the Company, any employee
benefit plan of the Company (including without limitation the Employee Plans) or
of any  Subsidiary  of the Company or any entity  holding  Common  Shares for or
pursuant to the terms of any such plan) of, or of the first public  announcement
of the  intention of any Person (other than the

                                       4

<PAGE>

Company, any Subsidiary of the Company, any employee benefit plan of the Company
(including  without  limitation the Employee  Plans) or of any Subsidiary of the
Company or any entity  holding Common Shares for or pursuant to the terms of any
such plan) to commence,  a tender or exchange  offer the  consummation  of which
would  result in any  Person  becoming  the  Beneficial  Owner of Common  Shares
aggregating 10% or more of the then outstanding  Common Shares  (irrespective of
whether  any Common  Shares  are  actually  purchased  pursuant  to such  offer)
(including  any such date which is after the date of this Agreement and prior to
the issuance of the Rights),  (the earliest of such dates being herein  referred
to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions  of Section  3(b)  hereof)  by the  certificates  for  Common  Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y)
the right to receive Right  Certificates will be transferable only in connection
with  the  transfer  of  Common  Shares.   As  soon  as  practicable  after  the
Distribution  Date,  the Company  will  promptly  notify the Rights Agent of the
occurrence  thereof and, if the Rights Agent is not then also the transfer agent
and  registrar  of the Common  Shares,  provide the Rights  Agent with names and
addresses of all record  holders of Common Shares  (together  with all necessary
information)  and the Company will  prepare and  execute,  the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, insured, postage-prepaid mail, to each
record holder of Common  Shares as of the close of business on the  Distribution
Date, at the address of such holder shown on the records of the Company, a Right
Certificate,   in  substantially   the  form  of  Exhibit  B  hereto  (a  "Right
Certificate"),  evidencing  one Right for each Common  Share so held.  As of the
Distribution   Date,  the  Rights  will  be  evidenced   solely  by  such  Right
Certificates.

         (b) On the  Record  Date,  or as soon as  practicable  thereafter,  the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially  the form of  Exhibit  C hereto  (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.  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
regardless of whether a copy of the Summary of Rights is attached thereto. Until
the  Distribution  Date (or the  earlier  of the  Redemption  Date or the  Final
Expiration  Date),  the  surrender  for transfer of any  certificate  for Common
Shares  outstanding on the Record Date, with or without a copy of the Summary of
Rights  attached  thereto,  shall also  constitute  the  transfer  of the Rights
associated with the Common Shares represented thereby.

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

                  This certificate also evidences and entitles the holder hereof
                  to certain rights as set forth in a Rights  Agreement  between
                  First  Financial  Bancorp and Mellon  Investor  Services  LLC,
                  dated as of June 15, 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
                  First Financial Bancorp. Under certain  circumstances,  as set
                  forth in the Rights  Agreement,  such Rights will be evidenced
                  by separate  certificates  and will no longer be  evidenced

                                       5

<PAGE>

                  by this  certificate. First Financial Bancorp 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,  as set  forth  in  the  Rights
                  Agreement,   Rights  issued  to  any  Person  who  becomes  an
                  Acquiring  Person (as  defined in the  Rights  Agreement)  may
                  become null and void.

With respect to such  certificates  containing the foregoing  legend,  until the
Distribution  Date, the Rights associated with the Common Shares  represented by
such  certificates  shall  be  evidenced  by such  certificates  alone,  and the
surrender  for  transfer  of any such  certificate  shall  also  constitute  the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company  purchases  or acquires  any Common  Shares after the
Record  Date but  prior to the  Distribution  Date,  the  Company  shall  not be
entitled to exercise any Rights  associated  with such Common  Shares while they
are not outstanding.

Section 4.     Form of Right Certificates

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

Section 5.     Countersignature and Registration

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

                                       6

<PAGE>

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

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

         Subject to the  provisions of Section 14 hereof,  at any time after the
close of  business  on the  Distribution  Date,  and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date, any
Right  Certificate  or  Right   Certificates   (other  than  Right  Certificates
representing  Rights that have become void pursuant to Section  11(a)(ii) hereof
or that have been exchanged  pursuant to Section 24 hereof) may be  transferred,
split  up,  combined  or  exchanged  for  another  Right  Certificate  or  Right
Certificates,  entitling the registered  holder to purchase a like number of one
one-hundredths   of  a  Preferred  Share  as  the  Right  Certificate  or  Right
Certificates  surrendered then entitled such holder to purchase.  Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the Rights
Agent,  and shall  surrender the Right  Certificate or Right  Certificates to be
transferred,  split up,  combined or exchanged at the office of the Rights Agent
designated for such purpose.  Thereupon the Rights Agent shall  countersign  and
deliver  to  the  person   entitled   thereto  a  Right   Certificate  or  Right
Certificates,  as the case may be, as so  requested.  The  Company  may  require
payment of a sum sufficient to cover any tax or governmental  charge that may be
imposed in connection  with any transfer,  split up,  combination or exchange of
Right Certificates. The Rights Agent shall have no duty or obligation under this
Section until it is satisfied that all such taxes and/or charges have been paid.

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

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

         (a) The  registered  holder of any Right  Certificate  may exercise the
Rights  evidenced  thereby (except as otherwise  provided herein) in whole or in
part at any time  after  the  Distribution  Date  upon  surrender  of the  Right
Certificate,  with the form of election to purchase on the reverse  side thereof
duly executed,  to the Rights Agent at the principal office of the Rights Agent,
together  with payment of the  Purchase  Price for each one  one-hundredth  of a
Preferred  Share  as to  which  the  Rights  are  exercised,  at or prior to the
earliest of (i) the close of  business  on May 31,  2011 (the "Final  Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof  (the  "Redemption  Date"),  or (iii) the time at which  such  Rights are
exchanged as provided in Section 24 hereof.

         (b) The Purchase Price for each one  one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $47.50,  shall be subject
to  adjustment  from time to time as

                                       7

<PAGE>

provided in Sections 11 and 13 hereof and shall be payable at the sole  election
of the holder of the Right in (i) lawful money of the United  States of America,
(ii) any  equity  security  issued  by the  Company,  or (iii)  any  combination
thereof,  in accordance  with paragraph (c) below.  The value of any such equity
securities  tendered  to the  Company in payment of part or all of the  Purchase
Price  shall be the  current  per  share  market  price as  defined  in  Section
11(d)(i), and the provisions of Section 11(d)(i) shall apply.

         (c)  Upon  receipt  of a  Right  Certificate  representing  exercisable
Rights,  with the form of election to purchase  duly  executed,  accompanied  by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable tax or charge  required to be paid by the holder of such Right
Certificate  in  accordance  with Section 9 hereof,  by cash,  certified  check,
cashier's  check or money  order  payable to the order of the  Company  (or such
equity securities of the Company as provided in Section 7(b),  properly endorsed
for transfer),  the Rights Agent shall  thereupon  promptly (i) (A)  requisition
from any transfer agent of the Preferred  Shares  certificates for the number of
Preferred Shares to be purchased and the Company hereby  irrevocably  authorizes
its transfer agent to comply with all such requests, or (B) requisition from the
depository  agent   depository   receipts   representing   such  number  of  one
one-hundredths  of a  Preferred  Share as are to be  purchased  (in  which  case
certificates  for the Preferred  Shares  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) when
appropriate,  requisition from the Company the amount of cash to be paid in lieu
of issuance of  fractional  shares in accordance  with Section 14 hereof,  (iii)
after receipt of such certificates or depository receipts,  cause the same to be
delivered  to or  upon  the  order  of  the  registered  holder  of  such  Right
Certificate,  registered  in such  name or  names as may be  designated  by such
holder and (iv) when  appropriate,  after receipt,  deliver such cash to or upon
the order of the registered holder of such Right Certificate.

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

         (e) The Company  covenants and agrees that it will cause to be reserved
and kept  available  out of its  authorized  and unissued  Preferred  Shares the
number of  Preferred  Shares that will be  sufficient  to permit the exercise in
full of all outstanding Rights in accordance with this Section 7.

Section 8.        Cancellation and Destruction of Right Certificates

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

                                       8

<PAGE>

Section 9.        Availability of Preferred Shares

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

         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
issuance or delivery of the Right  Certificates or of any Preferred  Shares 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
Right  Certificates  to a person  other  than,  or the  issuance  or delivery of
certificates  or depository  receipts for the  Preferred  Shares in a name other
than that of, the registered holder of the Right  Certificate  evidencing Rights
surrendered  for  exercise  or  to  issue  or to  deliver  any  certificates  or
depository  receipts for Preferred  Shares 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 Right  Certificate  at the time of  surrender)  or
until it has been established to the Company's and the Rights Agent's reasonable
satisfaction  that no such tax is due. Under no  circumstances  shall the Rights
Agent require a person in whose favor a Right is being exercised to pay any tax,
fee or charge except where the same is required by law to be paid by such person
and the same has not and may not legally be paid by the Company.

Section 10.       Preferred Shares Record Date

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

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

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

         (a) (i) In the event the  Company  shall at any time  after the date of
this  Agreement  (A)  declare a  dividend  on the  Preferred  Shares  payable in
Preferred Shares,  (B) subdivide the outstanding  Preferred Shares,  (C) combine
the outstanding  Preferred  Shares 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),
except as otherwise provided in this

                                       9

<PAGE>
Section  11(a),  the Purchase Price in effect at the time of the record date for
such  dividend or of the  effective  date of such  subdivision,  combination  or
reclassification, and the number and kind of shares of capital stock issuable on
such date,  shall be  proportionately  adjusted  so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate  number and
kind of  shares  of  capital  stock  which,  if such  Right  had been  exercised
immediately  prior to such date and at a time when the Preferred Shares transfer
books of the Company were open,  he would have owned upon such exercise and been
entitled  to receive by virtue of such  dividend,  subdivision,  combination  or
reclassification; 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.

         (ii) Subject to Section 24 of this Agreement, in the event:

                (A)a Trigger  Event shall have  occurred  (other than through an
         acquisition described in subparagraph (iii) of this paragraph (a)); or

                (B)  during  such time as there is an  Acquiring  Person,  there
         shall be any  reclassification  of  securities  (including  any reverse
         stock split), or  recapitalization  or reorganization of the Company or
         other transaction or series of transactions involving the Company which
         has the effect,  directly or indirectly,  of increasing by more than 1%
         the  proportionate  share of the  outstanding  shares  of any  class of
         equity   securities   of  the  Company  or  any  of  its   Subsidiaries
         beneficially  owned  by  any  Acquiring  Person  or  any  Affiliate  or
         Associate thereof,

each holder of a Right shall  thereafter have a right to receive,  upon exercise
thereof at a price equal to the then current  Purchase  Price  multiplied by the
number  of one  one-hundredths  of a  Preferred  Share for which a Right is then
exercisable,  in  accordance  with the  terms of this  Agreement  and in lieu of
Preferred  Shares,  such number of Common  Shares of the Company (such number of
shares being referred to herein as the  "Adjustment  Shares") as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right is then exercisable
and dividing  that product by (y) 50% of the then current per share market price
of the Company's Common Shares (determined  pursuant to Section 11(d) hereof) on
the date of the  occurrence  of the earliest of the events  described in clauses
(A) and (B) above.

         From and after the  occurrence of the earliest of the events  described
in clauses  (A) and (B) above,  any Rights  that are or were  acquired or are or
were  beneficially  owned by any Acquiring Person (or any Associate or Affiliate
of such  Acquiring  Person) shall be null and void and any holder of such Rights
(including any subsequent transferee) shall thereafter have no right to exercise
such Rights under any provision of this Agreement. No Right Certificate shall be
issued pursuant to Section 3 that  represents  Rights  beneficially  owned by an
Acquiring  Person or any  Associate or Affiliate  thereof  whose Rights would be
null and void pursuant to the preceding sentence;  no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person or any
Associate or Affiliate  thereof  whose Rights would be null and void pursuant to
the preceding sentence or to any nominee of such Acquiring Person,  Associate or
Affiliate;  and any Right Certificate delivered to the Rights Agent for transfer
to any such Acquiring Person, Associate or Affiliate shall be canceled.

                                       10
<PAGE>

         (iii)  The  right to buy  Common  Shares  of the  Company  pursuant  to
subparagraph  (ii) of this  paragraph  (a)  shall  not  arise as a result of any
Person becoming an Acquiring Person through a purchase of Common Shares pursuant
to a tender offer made in the manner prescribed by Section 14(d) of the Exchange
Act and the rules and regulations  promulgated  thereunder;  provided,  however,
that  such  tender  offer  shall  provide  for  the  acquisition  of  all of the
outstanding  Common  Shares  held by any Person  other than such  Person and its
Affiliates  or  Associates  at a price  and on  terms  determined  by at least a
majority of the members of the Board of  Directors  who are not  officers of the
Company and who are not representatives,  nominees,  Affiliates or Associates of
an Acquiring  Person,  after  receiving  advice from one or more  investment  or
financial  advisers,  to be (A) fair to  shareholders  (taking  into account all
factors  which  such  members  of the Board  deem  relevant  including,  without
limitation,  prices  which  could  reasonably  be achieved if the Company or its
assets were sold on an orderly basis designed to realize  maximum value) and (B)
otherwise in the best interests of the Company and its shareholders,  employees,
customers and communities in which the Company does business.

         (iv) In the event  that there  shall not be  sufficient  Common  Shares
authorized  but  unissued  to  permit  the  exercise  in full of the  Rights  in
accordance  with  the  foregoing  subparagraph  (ii),  the  Company  shall:  (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the  "Current  Value"),  over (2) the Purchase  Price (such
excess being hereinafter  referred to as the "Spread"),  and (B) with respect to
each  Right,  make  adequate   provision  to  substitute  for  such  unavailable
Adjustment  Shares either (1) cash, (2) a reduction in the Purchase  Price,  (3)
other equity securities of the Company, including without limitation,  Preferred
Shares,  (4) debt  securities  of the  Company,  (5)  other  assets,  or (6) any
combination of the foregoing, having, together with the Adjustment Shares issued
upon  exercise of such Right,  an  aggregate  value equal to the Current  Value,
where such aggregate  value has been determined by the Board of Directors of the
Company based upon the advice of a reputable investment banking firm selected by
the Board of Directors of the Company;  provided,  however,  if,  within 30 days
following the date of the occurrence of the earliest of the events  described in
clauses (A) and (B) of Section  11(a)(ii) above, the Company shall have not made
adequate  provision  to deliver  value  pursuant  to clause (B) above,  then the
Company  shall be obligated  to deliver,  upon the  surrender  for exercise of a
Right and without requiring payment of the Purchase Price, Common Shares (to the
extent such shares are  available)  and then,  if  necessary,  cash or Preferred
Shares, which shares and/or cash have an aggregate value equal to the Spread. If
the Board of Directors of the Company  shall  determine in good faith that it is
likely that sufficient additional Common Shares could be authorized for issuance
upon  exercise in full of the Rights,  the 30-day  period set forth above may be
extended to the extent necessary,  but not more than 120 days following the date
of the occurrence of the earliest of the events described in clauses (A) and (B)
of Section  11(a)(ii)  above,  in order that the  Company  may seek  shareholder
approval for the authorization of such additional shares (such period, as it may
be  extended,  hereinafter  referred to as the  "Substitution  Period").  To the
extent that the  Company  determines  that action need be taken  pursuant to the
first and/or second sentences of this Section  11(a)(iv),  the Company (x) shall
provide,  subject to Section  11(a)(ii)  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 and/or to decide the  appropriate  form of
distribution  to be made  pursuant to such first  sentence and to determine  the
value thereof.  In the event of any such  suspension,  the Company shall issue a
public  announcement  stating  that the  exercisability  of the  Rights has been
temporarily  suspended,  as well as a public  announcement  at such  time as the
suspension  is no longer in effect.  The Company  shall  notify the Rights Agent
whenever it makes a public  announcement  pursuant to this Section 11(a)(iv) and
give the Rights Agent a copy of such announcement.  For purposes of this Section
11(a)(iv),  the value of

                                       11

<PAGE>

the Common  Shares shall be the current per share  market  price (as  determined
pursuant to Section 11(d) hereof) per Common Share on the date of the occurrence
of the  earliest  of the  events  described  in  clauses  (A) and (B) of Section
11(a)(ii) above.

         (b) In case the  Company  shall fix a record  date for the  issuance of
rights,  options or warrants to all holders of Preferred  Shares  entitling them
(for a period  expiring  within 45  calendar  days  after such  record  date) to
subscribe  for or purchase  Preferred  Shares (or shares having the same rights,
privileges  and  preferences  as the  Preferred  Shares  ("equivalent  preferred
shares"))  or  securities   convertible  into  Preferred  Shares  or  equivalent
preferred  shares at a price per Preferred  Share or equivalent  preferred share
(or  having a  conversion  price  per  share,  if a  security  convertible  into
Preferred Shares or equivalent  preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date,  the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record  date by a  fraction,  the  numerator  of which  shall be the  number  of
Preferred  Shares  outstanding  on such record date plus the number of Preferred
Shares  which the  aggregate  offering  price of the total  number of  Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial  conversion price of the convertible  securities so to be offered) would
purchase at such current market price and the  denominator of which shall be the
number of Preferred  Shares  outstanding  on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription  or purchase  (or into which the  convertible  securities  so to be
offered are initially convertible).  In case such subscription price may be paid
in a consideration  part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company,  whose determination shall be described in a statement
filed with the Rights Agent.  Preferred  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 record
date is fixed; and in the event that such rights, options or warrants are not so
issued,  the  Purchase  Price shall be adjusted to be the  Purchase  Price which
would then be in effect if such record date had not been fixed.

         (c) In case the  Company  shall fix a record  date for the  making of a
distribution  to all  holders  of  the  Preferred  Shares  (including  any  such
distribution  made in  connection  with a  consolidation  or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription  rights or warrants  (excluding those referred
to in Section  11(b)  hereof),  the  Purchase  Price to be in effect  after such
record date shall be  determined  by  multiplying  the Purchase  Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall be the then current per share market price of the Preferred Shares on such
record  date,  less the fair market  value (as  determined  in good faith by the
Board of Directors of the Company,  whose  determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription  rights or warrants
applicable to one  Preferred  Share and the  denominator  of which shall be such
current per share market price of the Preferred  Shares.  Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such  distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase  Price which would then be in effect if such record date had not
been fixed.

         (d) (i) For the purpose of any computation hereunder,  the "current per
share  market  price" of any  security  (a  "Security"  for the  purpose of this
Section  11(d)(i))  on any date  shall be

                                       12
<PAGE>

deemed to be the average of the daily closing  prices per share of such Security
for the 20  consecutive  Trading  Days (as  such  term is  hereinafter  defined)
immediately prior to such date;  provided,  however,  that in the event that the
current per share  market price of the  Security is  determined  during a period
following the  announcement  by the issuer of such Security of (A) a dividend or
distribution  on such Security  payable in shares of such Security or securities
convertible  into  such  shares,   or  (B)  any   subdivision,   combination  or
reclassification of such Security and prior to the expiration of 20 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision,  combination or  reclassification,  then, and in each such
case,  the current per share  market  price shall be  appropriately  adjusted to
reflect the current  market price per share  equivalent  of such  Security.  The
closing price for each day shall be the last sale price or, in case no such sale
takes place on such day,  the  average of the  closing  bid and asked  prices 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 reported trade in the over-the-counter market, as reported by
the Nasdaq National  Market  ("Nasdaq") or such other system then in use, or, if
on any such  date the  Security  is not  quoted  by any such  organization,  the
average of the  closing  bid and asked  prices as  furnished  by a  professional
market maker making a market in the Security  selected by the Board of Directors
of the Company.  The term  "Trading Day" shall mean a day on which the principal
national  securities  exchange  on which the  Security  is listed or admitted to
trading is open for the  transaction  of  business  or, if the  Security  is not
listed or admitted to trading on any national  securities  exchange,  a Business
Day.

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

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

         (f) If as a result of an  adjustment  made  pursuant  to Section  11(a)
hereof,  the holder of any Right  thereafter  exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred  Shares,
thereafter  the number of such other shares so  receivable  upon

                                       13
<PAGE>
exercise  of any Right  shall be  subject to  adjustment  from time to time in a
manner and on terms as nearly  equivalent as practicable to the provisions  with
respect  to the  Preferred  Shares  contained  in  Section  11(a)  through  (c),
inclusive,  and the  provisions  of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other shares.

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

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

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

         (j)  Irrespective  of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the exercise
of the Rights,  the Right  Certificates  previously  and  thereafter  issued may
continue to express the Purchase Price and the number of one

                                       14
<PAGE>

one-hundredths  of a Preferred  Share that were  expressed in the initial  Right
Certificates issued hereunder.

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

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

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

         (n) The  Company  covenants  and agrees  that it shall not, at any time
after the Distribution  Date, (i) consolidate  with, or merge with and into, any
other  Person  (other than a  Subsidiary  of the Company in a  transaction  that
complies  with Section  11(o)),  (ii) permit or cause any Person to  consolidate
with the Company, or merge with and into the Company (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o)), or (iii) sell or
otherwise  transfer (or permit any  Subsidiary to sell or  transfer),  in one or
more transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its  Subsidiaries  (taken as a whole) to any
other Person or Persons (other than the Company  and/or any of its  Subsidiaries
in one or more  transactions  each of which complies with Section 11(o)),  if at
the time of or immediately  after such  consolidation,  merger or sale there are
any  rights,   warrants  or  other  instruments  or  securities  outstanding  or
agreements in effect that would  substantially  diminish or otherwise  eliminate
the benefits intended to be afforded by the Rights.

         (o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23, Section 24 or Section 27 hereof,
take (or permit any Subsidiary of the Company to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.

                                       15
<PAGE>

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

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

         Whenever an adjustment  (including without  limitation,  an event which
causes Rights to become null and void) is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate  setting forth such
adjustment or describing such event, and a brief reasonably  detailed  statement
of the facts,  computations and methodology accounting for such adjustment,  (b)
file with the Rights Agent and with each transfer agent for the Common Shares or
the  Preferred  Shares a copy of such  certificate  and (c) mail a brief summary
thereof to each holder of a Right  Certificate  in  accordance  with  Section 25
hereof.  The  Rights  Agent  shall be fully  protected  in  relying  on any such
certificate  and on any adjustment or any event therein  contained and shall not
be deemed to have  knowledge  of any  adjustment  unless and until it shall have
received such certificate.

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

         (a) If, following the Distribution  Date,  directly or indirectly,  (i)
the Company shall consolidate with, or merge with and into, any other Person and
the  Company  shall  not be the  continuing  or  surviving  corporation  of such
consolidation or merger,  (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 merger and, in connection with such merger, all or
part of the Common  Shares shall be changed into or exchanged for stock or other
securities  of any other Person (or the Company) or cash or any other  property,
(iii) any Person shall acquire all or a majority of the Common  Shares  pursuant
to a statutory  plan of  exchange,  or (iv) the Company  shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise  transfer),
in one or more transactions,  assets or earning power aggregating 50% or more of
the assets or earning  power of the  Company  and its  Subsidiaries  (taken as a
whole)  to any  other  Person  other  than  the  Company  or one or  more of its
wholly-owned  Subsidiaries,  then, and in each such case, proper provision shall
be made so that (A) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof at a price
equal to the  then  current  Purchase  Price  multiplied  by the  number  of one
one-hundredths  of a Preferred Share for which a Right is then  exercisable,  in
accordance  with the terms of this  Agreement  and in lieu of Preferred  Shares,
such number of Common Shares of the Principal  Party (as  hereinafter  defined),
not subject to any liens, encumbrances, rights of first refusal or other adverse
claims,  as shall equal the result  obtained by (1) multiplying the then current
Purchase  Price by the number of one  one-hundredths  of a  Preferred  Share for
which a Right is then  exercisable  and dividing  that product by (2) 50% of the
then current

                                       16
<PAGE>

per share  market  price of the Common  Shares  (determined  pursuant to Section
11(d)  hereof)  of such  Principal  Party  on the date of  consummation  of such
consolidation,  merger,  sale  or  transfer;  (B)  such  Principal  Party  shall
thereafter  be liable for, and shall  assume,  by virtue of such  consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (C) the term "Company" shall thereafter be deemed to refer to
such  Principal  Party,  it being  specifically  intended that the provisions of
Section 11 shall apply only to such Principal  Party after the first  occurrence
of an event described in this Section 13(a); (D) such Principal Party shall take
such steps  (including,  but not limited  to, the  reservation  of a  sufficient
number of its Common Shares in  accordance  with Section 9 hereof) in connection
with such  consummation as may be necessary to assure that the provisions hereof
shall  thereafter be applicable,  as nearly as reasonably may be, in relation to
the Common Shares  thereafter  deliverable upon the exercise of the Rights;  and
(E) the provisions of Section  11(a)(ii) shall be of no further effect following
the  first  occurrence  of any  event  described  in  this  Section  13(a).  The
provisions of Section 7 shall apply to the exercise of the Rights and the manner
and form of payment of the Purchase  Price in the  circumstances  referred to in
this Section 13.

         (b) "Principal Party" shall mean:

                (i) in the case of any transaction described in clause (i), (ii)
or (iii) of Section  13(a),  (A) the Person that is the issuer of any securities
into  which  Common  Shares  of  the  Company  are  converted  in  such  merger,
consolidation  or for  which  they  are  exchanged  in  such  statutory  plan of
exchange, or, if there is more than one such issuer, the issuer of Common Shares
that has the highest  aggregate  current market price  (determined in accordance
with Section 11(d)) and (B) if no securities  are so issued,  the Person that is
the other party to such merger, consolidation or statutory plan of exchange, or,
if there is more than one such Person, the Person the Common Shares of which has
the highest  aggregate  current  market price  (determined  in  accordance  with
Section 11(d)); and

                (ii) in the case of any transaction  described in clause (iv) of
Section 13(a), the Person that is the party receiving the largest portion of the
assets  or  earning  power   transferred   pursuant  to  such   transaction   or
transactions,  or,  if  each  Person  that is a party  to  such  transaction  or
transactions   receives  the  same  portion  of  the  assets  or  earning  power
transferred  pursuant  to such  transaction  or  transactions  or if the  Person
receiving  the  largest  portion  of the  assets  or  earning  power  cannot  be
determined,  whichever  Person  the  Common  Shares  of  which  has the  highest
aggregate current market price (determined in accordance with Section 11(d));

provided,  however,  that in any such  case,  (A) if the  Common  Shares of such
Person are not at such time and have not been  continuously  over the  preceding
twelve-month period registered under Section 12 of the Exchange Act ("Registered
Common  Shares"),  or such  Person is not a  corporation,  and such  Person is a
direct or  indirect  Subsidiary  of another  Person that has  Registered  Common
Shares  outstanding,  "Principal Party" shall refer to such other Person; (B) if
the Common Shares of such Person are not Registered Common Shares or such Person
is not a  corporation,  and such  Person is a direct or indirect  Subsidiary  of
another  Person but is not a direct or  indirect  Subsidiary  of another  Person
which has Registered Common Shares outstanding, "Principal Party" shall refer to
the ultimate  parent entity of such  first-mentioned  Person;  (C) if the Common
Shares of such Person are not  Registered  Common Shares or such Person is not a
corporation,  and such Person is directly or indirectly  controlled by more than
one Person,  and one or more of such other Persons has Registered  Common Shares
outstanding, "Principal Party" shall refer to whichever of such other Persons is
the issuer of the Registered  Common Shares having the highest aggregate current
market price

                                       17
<PAGE>

(determined in accordance with Section  11(d));  and (D) if the Common Shares of
such  Person  are  not  Registered  Common  Shares  or  such  Person  is  not  a
corporation,  and such Person is directly or indirectly  controlled by more than
one  Person,  and none of such  other  Persons  have  Registered  Common  Shares
outstanding,  "Principal Party" shall refer to whichever  ultimate parent entity
is the  corporation  having  the  greatest  shareholders'  equity or, if no such
ultimate  parent  entity is a  corporation,  shall refer to  whichever  ultimate
parent entity is the entity having the greatest net assets.

         (c) The Company shall not  consummate any such  consolidation,  merger,
statutory  plan of exchange,  sale or transfer  unless prior thereto the Company
and the Principal  Party shall have executed and delivered to the Rights Agent a
supplemental  agreement  confirming  that (i) such Principal  Party shall,  upon
consummation of such consolidation,  merger,  statutory plan of exchange or sale
or transfer of assets or earning power, assume this Agreement in accordance with
Section 13, (ii) 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,  (iii) any  provision  of the  authorized
securities  of  such  Principal  Party  or  of  its  charter,  bylaws  or  other
instruments  governing its corporate affairs which would obligate such Principal
Party to issue in connection with, or as a consequence of, the consummation of a
transaction  referred to in Section 13(a), Common Shares of such Principal Party
at less than the then-current  per share market price  (determined in accordance
with Section 11(d)(i)) or securities  exercisable for, or convertible into, such
Common Shares at less than such  then-current per share market price (other than
to the  holders  of Rights  pursuant  to this  Section  13) have been  waived or
canceled,  and (iv)  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 any  consolidation,  merger,  statutory  plan of
exchange or sale or transfer of assets or earning  power  referred to in Section
13(a), such Principal Party will:

              (A) prepare and file a registration statement under the Securities
         Act of 1933, as amended,  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
         of 1933, as amended) until the Final Expiration Date of the Rights, and
         similarly comply with applicable state securities laws:

              (B) use its best  efforts to list (or continue the listing of) the
         Rights and the securities purchasable upon exercise of the Rights or to
         meet the eligibility  requirements for quotation of the Rights and such
         securities on Nasdaq or other system then in use; and

              (C)  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 an  event
described in Section  11(a)(ii)  hereof some or all of the Rights shall not have
then been  exercised  at the time of the  occurrence  of an event  described  in
Section 13(a) hereof, 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)).

                                       18
<PAGE>

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

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

Section 14.       Fractional Rights and Fractional Shares

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

         (b) The Company  shall not be required to issue  fractions of Preferred
Shares (other than fractions which are integral  multiples of one  one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute  certificates
which  evidence  fractional  Preferred  Shares (other than  fractions  which are
integral  multiples of one  one-hundredth  of a Preferred  Share).  Fractions of
Preferred Shares in integral multiples of one one-hundredth 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 of a Preferred Share, the
Company shall pay to the registered  holders of Right  Certificates  at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market

                                       19
<PAGE>

value of one  Preferred  Share.  For the  purposes of this  Section  14(b),  the
current  market  value of a  Preferred  Share  shall be the  closing  price of a
Preferred  Share (as  determined  pursuant  to the  second  sentence  of Section
11(d)(i)  hereof)  for the  Trading  Day  immediately  prior to the date of such
exercise.

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

         (d) The Rights Agent shall have no duty or  obligation  with respect to
this  Section  14 and  Section  24  unless  and until it has  received  specific
instructions (and sufficient cash, if required) from the Company with respect to
its duties and obligations under such Sections.

Section 15.       Rights of Action

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

Section 16.       Agreement of Right Holders

         Every  holder of a Right,  by accepting  the same,  consents and agrees
with the Company and with every other holder of a Right that:

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

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

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

                                       20
<PAGE>

Section 17.       Right Certificate Holder Not Deemed a Shareholder

         No holder of any Right Certificate, by reason of being a holder of such
Right Certificate, shall be entitled to vote, receive dividends or be deemed for
any purpose 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  Right
Certificate be construed to confer upon the holder of any Right Certificate,  by
reason  of being a holder  of such  Right  Certificate,  any of the  rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,  or to give or
withhold  consent to any corporate  action,  or to receive notice of meetings or
other actions affecting  shareholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights  evidenced  by such  Right  Certificate  shall  have  been  exercised  in
accordance with the provisions hereof.

Section 18.       Concerning the Rights Agent

         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, amendment,  administration
and execution of this  Agreement and the exercise and  performance of its duties
hereunder.  The Company  also agrees to  indemnify  the Rights Agent for, and to
hold it harmless against, any loss, liability,  damage, judgment, fine, penalty,
claim, demand, settlement,  cost or expense (including,  without limitation, the
reasonable  fees  and  expenses  of  legal  counsel),   incurred  without  gross
negligence,  bad faith or willful misconduct (which gross negligence, bad faith,
or willful  misconduct  must be  determined  by a final,  non-appealable  order,
judgment,  decree or ruling of a court of competent jurisdiction) on the part of
the Rights Agent, for any action taken,  suffered or omitted by the Rights Agent
in connection with the acceptance,  administration,  exercise and performance of
this Agreement,  including the costs and expenses of defending against any claim
of liability in the premises.  The reasonable costs and expenses incurred by the
Rights Agent in  enforcing  this right of  indemnification  shall be paid by the
Company.  The  provisions  of this Section 18 and Section 20 below shall survive
the termination of this Agreement,  the exercise or expiration of the Rights and
the resignation or removal of the Rights Agent.

         The Rights Agent shall be  authorized  and 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 and the
exercise and  performance  of its duties  hereunder,  in reliance upon any Right
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 believed by it to be genuine
and to be signed,  executed and, where necessary,  verified or acknowledged,  by
the proper  person or persons,  or  otherwise  upon the advice of counsel as set
forth in Section 20 hereof.

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

         Any 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 stock  transfer  or
shareholder services business of the Rights Agent or any successor Rights

                                       21
<PAGE>

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

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

Section 20.       Duties of Rights Agent

         The Rights Agent  undertakes to perform only the duties and obligations
expressly imposed by this Agreement upon the following terms and conditions,  by
all of  which  the  Company  and the  holders  of Right  Certificates,  by their
acceptance thereof, shall be bound:

         (a) The Rights Agent may consult  with legal  counsel (who may be legal
counsel for the Company), or legal counsel for the Rights Agent), 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 good faith and
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 the current per-share market price) be proved or established by
the Company prior to taking,  suffering or omitting any action  hereunder,  such
fact or matter (unless other evidence in respect thereof be herein  specifically
prescribed)  may be  deemed  to be  conclusively  proved  and  established  by a
certificate  signed by any one of the Chairman of the Board, the Chief Executive
Officer,  the President,  any Executive Vice President,  or the Secretary of the
Company and delivered to the Rights Agent;  and such  certificate  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  in good  faith by it under  the  provisions  of this  Agreement  in
reliance upon such certificate.

         (c) The Rights  Agent shall be liable  hereunder to the Company and any
other Person only for its own gross negligence,  bad faith or willful misconduct
(which gross negligence,  bad faith, or willful misconduct must be determined by
a  final,  non-appealable  order,  judgment,  decree  or  ruling  of a court  of
competent   jurisdiction).   Anything  in  this   Agreement   to  the   contrary
notwithstanding,  in no event  shall the  Rights  Agent be liable  for  special,
punitive,  indirect,

                                       22
<PAGE>

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 and regardless of the form of action.  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 Right
Certificates (except its countersignature  thereof) or be required to verify the
same, but all such  statements and recitals are and shall be deemed to have been
made by the Company only.

         (e) The Rights Agent shall not be under any  responsibility  in respect
of the validity of this  Agreement or the execution and delivery  hereof (except
the due  execution  hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its  countersignature  thereof);  nor
shall it be  responsible  for any  breach  by the  Company  of any  covenant  or
condition contained in this Agreement or in any Right Certificate;  nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights  becoming  null and void  pursuant  to Section  11(a)(ii)  hereof) or any
adjustment in the terms of the Rights  (including  the manner,  method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right  Certificates  after actual
notice  that such change or  adjustment  is  required);  nor shall it by any act
hereunder  be  deemed  to  make  any   representation  or  warranty  as  to  the
authorization  or reservation of any Preferred  Shares to be issued  pursuant to
this Agreement or any Right  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 Executive Vice President,  or the Secretary of the Company,  and to apply to
such  officers  for  instructions  in  connection  with  its  duties,  and  such
instructions  shall be full and complete  authorization  and  protection  to the
Rights  Agent and it shall not be liable for or in respect of any action  taken,
suffered or omitted by it in good faith in accordance  with the  instructions of
any  such  officer  or  for  any  delay  in  acting  while   waiting  for  those
instructions.

         (h) The Rights Agent and any shareholder,  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  shareholder,  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, or employees) or by or

                                       23
<PAGE>

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 or any other  Person  resulting  from any
such act, default, neglect or misconduct,  absent gross negligence, bad faith or
willful  misconduct in the selection and  continued  employment  thereof  (which
gross  negligence,  bad faith,  or willful  misconduct  must be  determined by a
final,  non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).

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

         (k) If, with respect to any Right Certificate surrendered to the Rights
Agent  for  exercise  or  transfer,  the  certificate  attached  to the  form of
assignment  or form of  election to  purchase,  as the case may be, has not been
executed,  the Rights  Agent shall not take any further  action with  respect to
such requested exercise of transfer without first consulting with the Company.

Section 21.       Change of Rights Agent

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

                                       24
<PAGE>

Section 22.       Issuance of New Right Certificates

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

Section 23.       Redemption

         (a) The Board of Directors  of the Company  may, at its option,  at any
time prior to such time as any Person  becomes an Acquiring  Person,  redeem all
but not less  than all the then  outstanding  Rights  at a  redemption  price of
$0.001 per Right,  appropriately  adjusted  to reflect  any stock  split,  stock
dividend or similar transaction occurring after the date hereof (such redemption
price  being  hereinafter  referred  to as the  "Redemption  Price");  provided,
however,  that if,  following the  occurrence of a Shares  Acquisition  Date and
following the  expiration of the right of redemption  hereunder but prior to any
event described in clause (B) of Section  11(a)(ii) or clauses (i), (ii),  (iii)
or (iv) of Section 13(a) hereof,  (i) a Person who is an Acquiring  Person shall
have transferred or otherwise disposed of a number of shares of Common Shares in
one transaction or series of transactions,  not directly or indirectly involving
the Company or any of its  Subsidiaries,  which did not result in the occurrence
of an event  described in clause (B) of Section  11(a)(ii) or clauses (i), (ii),
(iii) or (iv) of Section  13(a)  hereof  such that such Person is  thereafter  a
Beneficial  Owner of less than 10% of the  outstanding  Common Shares,  and (ii)
there are no other  Persons,  immediately  following the occurrence of the event
described in clause (i), who are Acquiring Persons, then the right of redemption
shall be reinstated  and thereafter be subject to the provisions of this Section
23. The redemption of the Rights by the Board of Directors may be made effective
at such time,  on such basis and with such  conditions as the Board of Directors
in its sole discretion may establish. The Company may, in its discretion,  round
up the redemption  price to be paid to any holder of Rights to the nearest whole
cent.

         (b)  Immediately  upon the  action  of the  Board of  Directors  of the
Company  ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice,  the right to
exercise the Rights will terminate and the only right  thereafter of the holders
of Rights shall be to receive the Redemption  Price.  The Company shall promptly
give public notice of any such redemption;  provided,  however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption.  Within 10 days after such action of the Board of Directors ordering
the  redemption of the Rights,  the Company shall mail a notice of redemption to
all the holders of the then  outstanding  Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry  books of the transfer  agent for the Common  Shares.  Any
notice  which is mailed in the manner  herein  provided  shall be deemed  given,
whether or not the holder  receives the notice.  Each such notice of  redemption
will state the method by which the payment of the Redemption Price will be made.

Section 24.       Exchange

         (a) The Board of Directors  of the Company  may, at its option,  at any
time after any Person becomes an Acquiring  Person,  exchange all or part of the
then  outstanding  and  exercisable  Rights (which shall not include Rights that
have become void  pursuant to the  provisions of Section  11(a)(ii)  hereof) for
Common Shares at an exchange ratio of one Common Share per Right,

                                       25

<PAGE>

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

         (c) In any exchange  pursuant to this  Section 24, the Company,  at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section  11(b)  hereof) for Common  Shares  exchangeable  for
Rights,  at the  initial  rate of one  one-hundredth  of a  Preferred  Share (or
equivalent preferred share) for each Common Share, as appropriately  adjusted to
reflect adjustments in the voting rights of the Preferred Shares pursuant to the
terms thereof,  so that the fraction of a Preferred  Share  delivered in lieu of
each Common Share shall have the same voting rights as one Common Share.

         (d) In the event that there shall not be  sufficient  Common  Shares or
Preferred Shares issued but not outstanding or authorized but unissued to permit
any exchange of Rights as  contemplated  in accordance with this Section 24, the
Company  shall use its best  efforts to cause all such action to be taken as may
be necessary  to  authorize  additional  Common  Shares or Preferred  Shares for
issuance upon exchange of the Rights.

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

                                       26
<PAGE>

Section 25.       Notice of Certain Events

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

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

Section 26.       Notices

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

                  First Financial Bancorp
                  701 South Ham Lane
                  Lodi, California  95242
                  Attn:  Chief Financial Officer

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

                                       27
<PAGE>

                  Mellon Investor Services LLC
                  235 Montgomery St., 23rd Fl.
                  San Francisco, California  94104
                  Attn: Relationship Manager
                  With a copy to:
                  Mellon Investor Services LLC
                  85 Challenger Road
                  Ridgefield Park, New Jersey 07660-2108
                  Attention:  General Counsel

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

Section 27.       Supplements and Amendments

         The Company may from time to time  supplement  or amend this  Agreement
without the approval of any holders of Right  Certificates  in order to cure any
ambiguity,  to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to make any other
provisions  with respect to the Rights  which the Company may deem  necessary or
desirable,  any such supplement or amendment to be evidenced by a writing signed
by the Company and the Rights Agent; provided, however, that from and after such
time as any Person  becomes an Acquiring  Person,  this  Agreement  shall not be
amended in any manner which would adversely  affect the interests of the holders
of Rights.  Upon delivery of a certificate  from an  appropriate  officer of the
Company  and, if  requested  by the Rights  Agent,  an opinion of counsel,  that
states that the proposed supplement or amendment is in compliance with the terms
of this  Section 27, the Rights Agent shall  promptly  execute and return to the
Company a duplicate copy of such supplement or amendment unless the Rights Agent
shall have  determined  in good faith that such  supplement  or amendment  would
materially  increase its rights,  duties,  obligations or immunities  under this
Agreement.  Without limiting the foregoing, the Company may at any time prior to
such time as any Person  becomes an  Acquiring  Person  amend this  Agreement to
raise or lower the thresholds set forth in Sections l(a) and 3(a),  provided the
threshold  may not be  lowered to less than the  greater  of (i) any  percentage
greater than the largest  percentage of the outstanding Common Shares then known
by the Company to be  beneficially  owned 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  entity  holding  Common  Shares for or
pursuant to the terms of any such plan or a person  excluded from the definition
of "Acquiring Person" by the provision such definition) and (ii) 10%.

Section 28.       Registration of Securities

         The Company may temporarily suspend, for a period of time not to exceed
ninety (90) days, the exercisability of the Rights in order to prepare and file,
if deemed  necessary  by the Company,  such  registration  statements  and other
filings  under the  Securities  Act of 1933, as amended,  and the  securities or
"blue sky" laws of any state,  with respect to any securities  purchasable  upon
the exercise of the Rights, and to permit the same to become effective. Upon any
such suspension,  the Company

                                       28
<PAGE>

shall issue a public announcement  stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the  suspension  is no longer in effect.  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 has been
obtained.

Section 29.       Determinations and Actions by the Board of Directors

         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 to the Company,  or as may be necessary or
advisable  in  the   administration  of  this  Agreement,   including,   without
limitation,  the  right  and  power  to (i)  interpret  the  provisions  of this
Agreement,  and (ii) make all  determinations  deemed necessary or advisable for
the administration of this Agreement  (including a determination to redeem or to
not  redeem  the  Rights  or  to  amend  the   Agreement).   All  such  actions,
calculations,  interpretations  and determinations  (including,  for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board in good faith,  shall (x) be final,  conclusive and binding on
the Company,  the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board to any liability to the holders of the Rights.

Section 30.       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 31.       Benefits of this Agreement

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

Section 32.       Severability

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

Section 33.       Governing Law

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

                                       29
<PAGE>

Section 34.       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 35.       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.

                                       30

<PAGE>

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

                                    FIRST FINANCIAL BANCORP

                                    By: /s/ LEON J. ZIMMERMAN
                                       -----------------------------------------
                                          Leon J. Zimmerman
                                          President and Chief Executive Officer

                                    Mellon Investor Services LLC
                                    as Rights Agent

                                    By: /s/ W. A. Dougherty
                                       -----------------------------------------

                                    Title: Assistant Vice President
                                          --------------------------------------

                                       31

<PAGE>

                                                                       Exhibit A
                                                                       ---------

                          CERTIFICATE OF DETERMINATION

                 SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
                                       OF
                             FIRST FINANCIAL BANCORP

     Pursuant  to  Section  401  of  the  Corporations  Code  of  the  State  of
California:

     We, Leon  Zimmerman,  President and Chief Executive  Officer,  and Allen R.
Christenson,  Senior Vice-President and Secretary, of First Financial Bancorp, a
corporation  organized and existing  under the laws of  California  (hereinafter
called the "Corporation"), do hereby certify as follows:

     1. On May 31, 2001,  the Board of Directors  of the  Corporation  adopted a
resolution  designating  1,000,000  shares of Preferred Stock as Series A Junior
Participating Preferred Stock.

     2. No shares of Series A Junior  Participating  Preferred  Stock  have been
issued.

     3. Pursuant to the authority  conferred  upon the Board of Directors by the
Articles of Incorporation of the Corporation,  the following resolution was duly
adopted  by the  Board of  Directors  on May 31,  2001  creating  the  series of
Preferred Stock designated as Series A Junior Participating Preferred Stock:

     RESOLVED  FURTHER,  That in order to  implement  the  Rights,  a series  of
Preferred  Stock of the  Corporation  be and  hereby  is  created,  and that the
determination  of the amount  thereof  and the voting  powers,  preferences  and
relative, participating, optional and other special rights of the shares of such
series,  and the  qualifications,  limitations or restrictions  thereof,  are as
follows:

     Series A Junior Participating Preferred Stock:

     "Paragraph 1.  Designation  and Amount.  The shares of such series shall be
designated  as "Series A Junior  Participating  Preferred  Stock" (the "Series A
Preferred  Stock") and the number of shares  constituting the Series A Preferred
Stock shall be 1,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors;  provided,  that no decrease  shall reduce
the  number  of shares of  Series A  Preferred  Stock to a number  less than the
number of shares  then  outstanding  plus the  number  of  shares  reserved  for

<PAGE>

issuance upon the exercise of  outstanding  options,  rights or warrants or upon
the  conversion  of  any  outstanding   securities  issued  by  the  Corporation
convertible into Series A Preferred Stock.

     Paragraph 2. Dividends and Distributions.

     (A)  Subject  to the  rights of the  holders of any shares of any series of
Preferred  Stock (or any similar stock) ranking prior and superior to the Series
A Preferred  Stock with respect to dividends,  the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, no par value (the
"Common  Stock"),  of the Corporation,  and of any other junior stock,  shall be
entitled to receive,  when,  as and if declared by the Board of Directors out of
funds legally available for the purpose, dividends payable in cash (each payment
date  determined  by the  Board of  Directors  being  referred  to  herein  as a
"Dividend  Payment Date"),  commencing on the first Dividend  Payment Date after
the first  issuance  of a share or  fraction  of a share of  Series A  Preferred
Stock,  in an  amount  per  share  (subject  to  the  provision  for  adjustment
hereinafter  set forth) equal to 100 times the aggregate per share amount of all
cash  dividends,  and 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions,  other than a dividend payable
in shares of Common  Stock or a  subdivision  of the  outstanding  shares of the
Common Stock (by  reclassification  or otherwise),  declared on the Common Stock
since the immediately  preceding  Dividend  Payment Date or, with respect to the
first Dividend  Payment Date,  since the first issuance of any share or fraction
of a share of Series A Preferred  Stock. In the event the  Corporation  shall at
any time declare or pay any  dividend on the Common  Stock  payable in shares of
Common Stock,  or effect a subdivision or combination  or  consolidation  of the
outstanding  shares of Common Stock (by  reclassification  or otherwise  than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under the preceding  sentence shall be adjusted by multiplying  such amount by a
fraction,  the  numerator  of which is the  number of  shares  of  Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

     (B) The Corporation  shall declare a dividend or distribution on the Series
A Preferred  Stock as provided in paragraph (A) of this  Paragraph 2 immediately
after it declares a dividend or  distribution  on the Common Stock (other than a
dividend payable in shares of Common Stock).

     (C) The Board of Directors may fix a record date for the  determination  of
holders of shares of Series A Preferred  Stock entitled to receive  payment of a
dividend or distribution  declared thereon,  which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.

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

     (A) Subject to the provision for  adjustment  hereinafter  set forth,  each
share of Series A Preferred  Stock shall entitle the holder thereof to 100 votes
on all matters  submitted to a

                                       2
<PAGE>

vote of the shareholders of the Corporation.  In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock,  or effect a subdivision or combination  or  consolidation  of the
outstanding  shares of Common Stock (by  reclassification  or otherwise  than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock,  then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled immediately
prior to such an  event  shall be  adjusted  by  multiplying  such  number  by a
fraction,  the  numerator  of which is the  number of  shares  of  Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

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

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

     Paragraph 4. Certain Restrictions.

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

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

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

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

                                       3
<PAGE>

         dividends or upon dissolution, liquidation or winding up) to the Series
         A Preferred Stock; or

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

     (B) The  Corporation  shall not permit any subsidiary of the Corporation to
purchase  or  otherwise  acquire  for  consideration  any shares of stock of the
Corporation  unless the Corporation could, under paragraph (A) of this Paragraph
4,  purchase or  otherwise  acquire  such shares at such time and in such manner
except  in  connection  with  funding  of  any  employee  benefit  plan  of  the
Corporation or any such subsidiary.

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

     Paragraph 6. Liquidation,  Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation,  no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation,  dissolution or winding up) to the Series A Preferred Stock unless,
prior  thereto,  the  holders of shares of Series A  Preferred  Stock shall have
received a minimum of $100.00  per share,  plus an amount  equal to accrued  and
unpaid  dividends  and  distributions  thereon,  to the  date of  such  payment,
provided  that the  holders  of  shares  of Series A  Preferred  Stock  shall be
entitled to receive an aggregate amount per share,  subject to the provision for
adjustment  hereinafter set forth, equal to 100 times the aggregate amount to be
distributed  per share to  holders  of shares  of  Common  Stock,  or (2) to the
holders of shares of stock  ranking on a parity  (either as to dividends or upon
liquidation,  dissolution  or  winding  up) with the Series A  Preferred  Stock,
except  distributions  made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled  upon such  liquidation,  dissolution  or winding up. In the
event the  Corporation  shall at any time  declare  or pay any  dividend  on the
Common  Stock  payable in shares of Common  Stock,  or effect a  subdivision  or
combination  or  consolidation  of the  outstanding  shares of Common  Stock (by
reclassification  or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common  Stock,  then in each
such case the aggregate  amount to which holders of shares of Series A Preferred
Stock were entitled  immediately prior to such event under the proviso in clause
(1) of the preceding  sentence shall be adjusted by multiplying such amount by a
fraction  the  numerator

                                       4
<PAGE>

of which is the number of shares of Common Stock  outstanding  immediately after
such event and the  denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.

     Paragraph 7.  Consolidation,  Merger,  etc. In case the  Corporation  shall
enter into any consolidation,  merger, combination or other transaction in which
the shares of Common  Stock are  exchanged  for or changed  into other  stock or
securities,  cash and/or any other property, then in any such case each share of
Series A  Preferred  Stock  shall at the same  time be  similarly  exchanged  or
changed  into an amount  per  share,  subject to the  provision  for  adjustment
hereinafter  set  forth,  equal to 100  times  the  aggregate  amount  of stock,
securities,  cash and/or any other property  (payable in kind),  as the case may
be, into which or for which each share of Common Stock is changed or  exchanged.
In the event the  Corporation  shall at any time  declare or pay any dividend on
the Common Stock payable in shares of Common Stock,  or effect a subdivision  or
combination  or  consolidation  of the  outstanding  shares of Common  Stock (by
reclassification  or otherwise than by payment of a dividend in shares of Common
Stock into a greater or lesser number of shares of Common  Stock),  then in each
such case the amount set forth in the  preceding  sentence  with  respect to the
exchange  or change of shares of Series A  Preferred  Stock shall be adjusted by
multiplying  such amount by a fraction,  the numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

     Paragraph 8. No  Redemption.  The shares of Series A Preferred  Stock shall
not be redeemable.

     Paragraph 9. Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends  and the  distribution  of assets,  junior to all other
series of the Corporation's Preferred Stock.

     Paragraph 10. Amendment. The Articles of Incorporation shall not be amended
in any manner which would materially alter or change the powers,  preferences or
special  rights of the Series A Preferred  Stock so as to affect them  adversely
without,  in addition  to any other vote of  shareholders  required by law,  the
affirmative vote of the holders of at least a majority of the outstanding shares
of Series A Preferred Stock, voting together as a single class.

     Paragraph 11. Fractional Shares. The Series A Preferred Stock may be issued
in fractions of a share which shall  entitle the holder,  in  proportion to such
holder's  fractional  shares,  to exercise  voting  rights,  receive  dividends,
participate  in  distributions  and to have the  benefit of all other  rights of
holders of the Series A Preferred Stock."

                                       5

<PAGE>

     4. We further  declare under penalty of perjury under the laws of the State
of  California  that the  matters  set  forth in this  certificate  are true and
correct of our own knowledge.

                  Executed on June 13, 2001 at Lodi, California.

                                ---------------------------------------
                                  Leon Zimmerman

                                  President and Chief Executive Officer

                                ---------------------------------------
                                  Allen R. Christenson
                                  Senior Vice-President and Secretary

                                       6

<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                            FORM OF RIGHT CERTIFICATE

Certificate No. R-________ Rights

         NOT EXERCISABLE AFTER MAY 31, 2011 OR EARLIER IF REDEMPTION OR
         EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001
         PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
         AGREEMENT.

                                RIGHT CERTIFICATE

                             FIRST FINANCIAL BANCORP

     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 June 15,  2001  (the  "Rights  Agreement"),
between First Financial Bancorp, a California  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.,
San Francisco time, on May 31, 2011 at the principal office of the Rights Agent,
or at the office of its successor as Rights Agent, one  one-hundredth of a fully
paid non-assessable share of Series A Junior Participating  Preferred Stock (the
"Preferred  Shares"),  of the  Company,  at a  purchase  price of $47.50 per one
one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right  Certificate  with the Form of Election to Purchase duly
executed.  The number of Rights  evidenced  by this Right  Certificate  (and the
number of one  one-hundredths  of a Preferred  Share which may be purchased upon
exercise  hereof) set forth above,  and the Purchase Price set forth above,  are
the number and Purchase Price as of _____________,  2001, based on the Preferred
Shares as  constituted  at such date. As provided in the Rights  Agreement,  the
Purchase Price and the number of one  one-hundredths  of a Preferred Share which
may be  purchased  upon the  exercise  of the  Rights  evidenced  by this  Right
Certificate  are subject to  modification  and adjustment  upon the happening of
certain events.

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

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

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this  Certificate  (i) may be redeemed by the Company at a  redemption  price of
$.001  per  Right or (ii)  may be  exchanged  in whole or in part for  Preferred
Shares or shares of the Company's Common Stock, no par value.

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

<PAGE>

     No holder of this Right  Certificate  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
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,  or to give or
withhold  consent to any corporate  action,  or to receive notice of meetings or
other  actions  affecting   shareholders  (except  as  provided  in  the  Rights
Agreement), or to receive dividends or subscription rights, or otherwise,  until
the  Right or  Rights  evidenced  by this  Right  Certificate  shall  have  been
exercised as provided in the Rights Agreement.

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

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

ATTEST:                                   FIRST FINANCIAL BANCORP

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

Countersigned:                            By _________________________________

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

By ______________________________
         Authorized Signature

                                       2

<PAGE>

Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT
------------------

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

     FOR VALUE RECEIVED
                       ---------------------------------------------------------
hereby sells, assigns and transfers unto
                                         ---------------------------------------

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

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

Dated:  ____________, ____.

                                                                           S
                                                                           i
                                                                           g
                                                                           n
                                                                           a
                                                                           t
                                                                           u
                                                                           r
                                                                           e

Signature Guaranteed:

     Signatures  must be  guaranteed  by a member firm of a registered  national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.

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

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

                                       3

<PAGE>

Form of Reverse Side of Right Certificate -- continued

FORM OF ELECTION TO PURCHASE
----------------------------

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

To First Financial Bancorp:

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

Please insert social security or other identifying number

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

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

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

Please insert social security or other identifying number

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

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

Dated:  ____________, ____.

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

Signature Guaranteed:

     Signatures  must be  guaranteed  by a member firm of a registered  national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.

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

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

                                       4

<PAGE>

NOTICE
------

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

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

                                       5

<PAGE>

                                                                       EXHIBIT C
                                                                       ---------

                 SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES

     On May 31, 2001 the Board of  Directors  of First  Financial  Bancorp  (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding  share of common stock, no par value (the "Common Shares"),
of the Company.  The dividend is payable on July 6, 2001 (the "Record  Date") to
the  shareholders  of record on that date.  Each Right  entitles the  registered
holder to purchase  from the Company  one  one-hundredth  of a share of Series A
Junior Participating  Preferred Stock, no par value (the "Preferred Shares"), of
the Company at a price of $47.50 per one one-hundredth of a Preferred Share (the
"Purchase  Price"),  subject to  adjustment.  The  description  and terms of the
Rights  are set  forth in a Rights  Agreement  dated  as of June 15,  2001  (the
"Rights  Agreement")  between the Company and Mellon  Investor  Services LLC, as
Rights Agent (the "Rights Agent").

     Initially,  the Rights will be evidenced by the  certificates  representing
Common Shares then outstanding, regardless of whether any such certificate has a
copy  of  this  Summary  of  Rights  attached  thereto,  and no  separate  Right
Certificates  will be  distributed.  The Rights  will  separate  from the Common
Shares  and a  Distribution  Date will  occur  upon the  earlier  of (i) 10 days
following  a public  announcement  that a  person  or  group  of  affiliated  or
associated  persons  have  acquired  beneficial  ownership of 10% or more of the
outstanding Common Shares (an "Acquiring Person");  provided,  however, a person
or group holding 10% or more of the outstanding  shares as of June 15, 2001 will
become a "Grandfathered Person" and such Grandfathered Person will be treated as
an Acquiring Person upon public announcement or knowledge by the Company's Board
of Directors that such Grandfathered Person has acquired beneficial ownership of
an additional 1% of the outstanding  Common Shares; or (ii) 10 business days (or
such later date as may be determined  by action of the Board of Directors  prior
to  such  time  as  any  Person  becomes  an  Acquiring  Person)  following  the
commencement  of, or  announcement  of an  intention  to make, a tender offer or
exchange  offer  the  consummation  of  which  would  result  in the  beneficial
ownership by a person or group of 10% or more of such outstanding  Common Shares
(unless the Company's Board of Directors has approved the offer).

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

                                      C-1

<PAGE>

     The Rights are not exercisable until the Distribution Date. The Rights will
expire on May 31,  2011 (the  "Final  Expiration  Date"),  unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described below.

     The Purchase  Price  payable,  and the number of Preferred  Shares or other
securities  or  property  issuable,  upon  exercise of the Rights are subject to
adjustment  from time to time to  prevent  dilution  (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or  warrants  to  subscribe  for or  purchase  Preferred  Shares at a price,  or
securities  convertible into Preferred Shares with a conversion price, less than
the  then  current  market  price of the  Preferred  Shares  or  (iii)  upon the
distribution to holders of the Preferred  Shares of evidences of indebtedness or
assets  (excluding  regular  periodic  cash  dividends  paid out of  earnings or
retained  earnings or dividends  payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).

     The number of outstanding  Rights and the number of one one-hundredths of a
Preferred  Share  issuable  upon  exercise  of each  Right are also  subject  to
adjustment  in the  event  of a stock  split  of the  Common  Shares  or a stock
dividend  on the  Common  Shares  payable  in Common  Shares  or a  subdivision,
consolidation or combination of the Common Shares  occurring,  in any such case,
prior to the Distribution Date.

     Preferred  Shares  purchasable  upon  exercise  of the  Rights  will not be
redeemable.  Each  Preferred  Share will be entitled  to a minimum  preferential
dividend  payment of 100 times the dividend  declared per Common  Share.  In the
event of liquidation,  the holders of the Preferred Shares will be entitled to a
minimum  preferential  liquidation  payment  of  $100.00  per  share but will be
entitled to an aggregate payment of 100 times the payment made per Common Share.
Each  Preferred  Share  will have 100  votes,  voting  together  with the Common
Shares. Finally, in the event of any merger,  consolidation or other transaction
in which Common Shares are exchanged,  each Preferred  Share will be entitled to
receive  100 times the  amount  received  per  Common  Share.  These  rights are
protected by customary antidilution provisions.

     Because of the nature of the Preferred  Shares'  dividend,  liquidation and
voting rights, the value of the one one-hundredth  interest in a Preferred Share
purchasable  upon  exercise of each Right  should  approximate  the value of one
Common Share.

     In the event  that (i) any  person  or group of  affiliated  or  associated
persons  becomes an  Acquiring  Person,  or (ii) during such time as there is an
Acquiring  Person,  there  shall  be  a  reclassification  of  securities  or  a
recapitalization or reorganization of the Company or other transaction or series
of transactions involving the Company which has the effect of increasing by more
than 1% the proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its subsidiaries  beneficially  owned by the
Acquiring  Person (each a "flip-in"  event),  proper  provision shall be made so
that  each  holder  of a Right,  other  than  Rights  beneficially  owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive  upon  exercise  that number of Common  Shares (or, in the event that
there are insufficient authorized Common Shares,  substitute  consideration such
as cash, property,  or other securities of the Company, such as Preferred Stock)
having a market value of two times the exercise price of the Right. In the event
that  the  Company  is  acquired  in a

                                      C-2

<PAGE>

merger  or  other  business  combination  transaction  or  50%  or  more  of its
consolidated  assets or earning  power are sold (a  "flip-over  event"),  proper
provision will be made so that each holder of a Right will  thereafter  have the
right to receive,  upon the exercise  thereof at the then current exercise price
of the Right,  that number of shares of common  stock of the  acquiring  company
which at the time of such  transaction will have a market value of two times the
exercise price of the Right.

     At any time after the  acquisition  by a person or group of  affiliated  or
associated  persons of  beneficial  ownership of 10% or more of the  outstanding
Common  Shares and prior to the  acquisition  by such  person or group of 50% or
more of the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights  (other than Rights owned by such person or group which have
become void),  in whole or in part, at an exchange ratio of one Common Share, or
one  one-hundredth  of a Preferred  Share (or of a share of a class or series of
the  Company's  preferred  stock  having  equivalent  rights,   preferences  and
privileges), per Right (subject to adjustment).

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

     At any time  before a person  becomes  an  Acquiring  Person,  the Board of
Directors of the Company may redeem the Rights in whole,  but not in part,  at a
price of $0.001 per Right (the "Redemption Price").  After the redemption period
has expired,  the Company's  rights of redemption may be reinstated if, prior to
completion of certain recapitalizations, mergers or other business combinations,
an Acquiring  Person  reduces its  beneficial  ownership to less than 10% of the
outstanding  Common  Shares  in a  transaction  or series  of  transactions  not
involving the Company.  The  redemption  of the rights may be made  effective at
such time,  on such basis and with such  conditions as the Board of Directors in
its sole  discretion  may  establish.  Immediately  upon any  redemption  of the
Rights,  the right to exercise the Rights will  terminate  and the only right of
the holders of Rights will be to receive the Redemption Price.

     The terms of the Rights may be  amended  by the Board of  Directors  of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds  described above to not less than the greater of (i)
any percentage  greater than the largest  percentage of the  outstanding  Common
Shares then known to the Company to be beneficially owned by any person or group
of  affiliated or  associated  persons  (unless such person or group is excluded
from the effect of such reduction) and (ii) 10%, except that from and after such
time as any person  becomes an Acquiring  Person no such amendment may adversely
affect the interests of the holders of the Rights.

     Until a Right is  exercised,  the holder of a Right will not,  by reason of
being such a holder,  have rights as a  shareholder  of the Company,  including,
without limitation, the right to vote or to receive dividends.

                                      C-3

<PAGE>

     A copy of the  Rights  Agreement  has been filed  with the  Securities  and
Exchange  Commission  as an Exhibit to a  Registration  Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company.  This
summary  description  of the  Rights  does not  purport  to be  complete  and is
qualified in its entirety by reference to the Rights Agreement,  which is hereby
incorporated herein by reference.

                                      C-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00026-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00026-of-00352.parquet"}]]