Document:

EMPLOYMENT AGREEMENT

AGREEMENT  dated as of  April  19,  1999  ("Commencement  Date)  by and  between
CareAdvantage, Inc. ("Company") and Dennis J. Mouras ("Employee").

1. Employment.  Company agrees to employ Employee,  and Employee agrees to be so
employed,  in the capacity of Senior Vice  President  for Marketing and Sales at
the Company's  headquarters,  and shall have the duties customary to such office
and such ancillary and other duties as the President and Chief Operating Officer
shall reasonably determine.

2.Time and Efforts.  Employee shall  diligently and  conscientiously  devote his
full and exclusive time and attention and best efforts in discharging his duties
as Senior Vice President for Marketing and Sales.

3.  Compensation.

         3.1 Salary.  Commencing upon the  Commencement  Date, the Company shall
pay Employee  compensation for his services at an annual rate of $225,000.  This
amount shall be paid in bi-weekly  installments.  The Company  shall deduct from
all compensation due the Employee  applicable  payroll taxes,  withholding taxes
and other required amounts.

         3.2 Commissions. As additional compensation,  the Company agrees to pay
Employee  sales  commissions  with respect to contracts for new clients  entered
into during Employee's employment ("New Contracts") (excluding any contract that
may be  entered  into  between  the  Company  and the New York City  Health  and
Hospitals  Corporation) in an amount equal to two and one-half (2.5%) percent of
collected  revenues with respect to the first year such New Contracts  remain in
effect.  In addition,  in the event (i) the Company collects revenues on account
of a New  Contract  with  respect  to such  contract's  second  year,  (ii) such
collected revenues exceed the collected revenues with respect to the first year,
and  (iii) a  portion  of such  collected  revenues  are  attributable  to (A) a
population  not serviced by the Company  during the entirety of such first year,
or (B) a product not  provided by the Company  during the  entirety of the first
year, then the Company agrees to pay you commissions  with respect to the second
year in an amount equal to two and one-half (2.5%) percent of the smaller of (1)
such  portion of  collected  revenues  attributable  to such new  population  or
product,  or (2) the amount by which  collected  revenues  for the  second  year
exceed collected revenues for the first year. Notwithstanding anything herein to
the contrary, the Company shall not pay Employee aggregate commissions in excess
of $150,000 with respect to any New  Contract;  provided,  however,  the Company
shall not pay Employee aggregate  commissions in excess of $100,000 with respect
to any contract  that may be entered into between the Company and Michigan  Blue
Cross and Blue Shield.  The Company  shall pay  commissions  due to the Employee
monthly, with commissions on account of any month to be paid the month following
the month in which the Company collects revenues.  The Company shall deduct from
all commissions due the Employee applicable payroll taxes, withholding taxes and
other required amounts.

4. Stock  Options and Fringe  Benefits.  The Company  shall provide the Employee
with the stock options and fringe benefits as described in Exhibit A.

5.  Expense  Reimbursement.   The  Company  shall  reimburse  Employee  for  all
reasonable and necessary expenses incurred in carrying out his duties under this
Agreement.  Employee  shall present to the Company from time to time an itemized
account of such expenses in any form required by the Company.

6. Term.  Except as otherwise  provided,  this Agreement shall be for a one-year
term  ending on the  anniversary  of the  Commencement  Date and shall renew for
successive  one-year  terms  unless  at  least  sixty  (60)  days  prior  to  an
anniversary of the Commencement Date either party gives notice to the contrary.

<PAGE>

7.       Termination Without Cause.

         (a) The Company may without cause  terminate this Agreement at any time
by notifying the Employee of such termination. In such event, the Employee shall
continue  to render his  services  and shall be paid salary and  commissions  in
accordance with Sections 3.1 and 3.2 respectively up to the date of termination.
Thereafter, (i) the Employee shall receive no salary under Section 3.1; and (ii)
the Employee shall be entitled to receive commissions provided by Section 3.2 on
account of sales closed prior to his  termination.  In the event the Employee is
terminated  without cause  following a "change of control" of the Company,  then
the  preceding  sentence  shall be  applied by  substituting  for clause (i) the
following: "(i) the Employee shall receive salary in accordance with Section 3.1
for six (6) months following the date of termination; and". For purposes of this
section,  "change of control"  shall mean any of the following  events:  (a) the
Company  sells  substantially  all of its assets  (regardless  of  whether  this
Agreement is assigned in connection with such sale);  (b) at least 50 percent of
the vote or 50 percent of the value of the Company's  stock is sold,  exchanged,
or  otherwise  disposed  of,  in one  transaction;  or (c)  there is a merger or
consolidation   of  the  Company  in  a  transaction   in  which  the  Company's
stockholders  receive 50 percent or less of the outstanding vote or value in the
new or continuing Company.

         (b) The Employee may without cause  terminate  this Agreement by giving
sixty (60) days'  written  notice to the  Company.  In such event,  the Employee
shall  continue to render his services and shall be paid salary and  commissions
in  accordance  with  Sections  3.1  and  3.2  respectively  up to the  date  of
termination.  Thereafter, (i) the Employee shall receive no salary under Section
3.1; and (ii) the Employee shall receive no commissions with respect to revenues
collected  by the  Company  during  the month in which  the date of  termination
occurs or thereafter.

8. Termination With Cause. The Company may for cause terminate this Agreement at
any time by notifying the Employee of such  termination  and the cause therefor,
which cause may include,  but not be limited,  to death and disability.  In such
event, Section 7 shall not apply, and the Employee shall receive no salary under
Section 3.1 after the date of termination; and, in the event such termination is
for a reason  other than death or  disability,  the  Employee  shall  receive no
commissions  with respect to revenues  collected by the Company during the month
in which the date of termination occurs or thereafter.

9.  Confidentiality,  Invention and Non-Solicitation  Agreement.  Simultaneously
with the  execution of this  Agreement,  the parties shall execute the agreement
entitled "Confidentiality, Invention and Non-Solicitation Agreement."

10. Notices.  All notices required or permitted to be given under this Agreement
shall be given by certified mail,  return receipt  requested,  to the parties at
the  following  addresses or to such other  addresses as either may designate in
writing to the other party.

         If to Company:

                  President & Chief Operating Officer
                  CareAdvantage, Inc.
                  485-C Route 1 South
                  Iselin, New Jersey 08830

         If to Employee:

                  35 South Second Street
                  Surf City, New Jersey 08008

11.  Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the state of New Jersey.

12.  Amendments.  This Agreement may be amended only in writing,  signed by both
parties.

13.  Non-Waiver.  A delay or failure by either  party to  exercise a right under
this  Agreement,  or a  partial  or single  exercise  of that  right,  shall not
constitute a waiver of that or any other right.

14. Binding Effect.  The provisions of this  Agreement,  which shall replace all
other letters and agreements  between Employee and Company regarding the subject
matter  hereof,  shall be binding  upon and inure to the benefit of both parties
and their respective successors and assigns.

         IN WITNESS WHEREOF, Company has by its appropriate officers, signed and
affixed its seal and Employee has signed and sealed this Agreement.

CAREADVANTAGE, INC.                          DENNIS J. MOURAS

By: /S/  Richard W. Freeman                  /S/  Dennis J. Mouras
    ---------------------------              -------------------------

<PAGE>

                                    EXHIBIT A

                        STOCK OPTIONS AND FRINGE BENEFITS

1. Stock Options. Subject to approval by the Company's Board of Directors (or an
appropriate  committee  thereof),  Employee  shall be  granted  incentive  stock
options in the Company to purchase  800,000 shares of the Company's Common Stock
on such  terms  and  conditions  as the  Company's  Board  of  Directors  (or an
appropriate committee thereof) may determine in its sole discretion.

2. Fringe  Benefits.  The  Employee  shall be entitled to the  following  fringe
benefits:

(a)  vacation  leave in the amount of 20 days per year,  accruing at the rate of
     1.67 days per month;

(b)  other leave (sick leave,  personal time, and holidays) in the amount and on
     the same  terms  and  conditions  as  provided  to other  employees  of the
     Company;

(c)  medical  insurance,  life  insurance,  and  participation  in the Company's
     401(k) plan on the same terms and conditions as these benefits are provided
     to other employees of the Company; and

(d)  disability   insurance  (long-  and  short-term)  on  the  same  terms  and
     conditions as provided to senior management of the Company; and

(e)  in the event  Employee  relocates  to New Jersey prior to April 19, 2000, a
     relocation  allowance  in the amount of $35,000,  payable  upon  Employee's
     change of his principal residence from Malvern, Pennsylvania to New Jersey.
     The  Company  shall  deduct from such  $35,000  applicable  payroll  taxes,
     withholding taxes and other required amounts.

<PAGE>

                               CAREADVANTAGE, INC.

            CONFIDENTIALITY, INVENTION AND NON-SOLICITATION AGREEMENT

I,  Dennis  J.  Mouras,   as  partial   consideration   for  my   employment  by
CareAdvantage,  Inc.  or its  subsidiaries  and  affiliates  (including  without
limitation  CareAdvantage  Health  Systems,  Inc.  and  Contemporary  HealthCare
Management,  Inc.) or  successors  in  business  (hereinafter  individually  and
collectively  the "Company"),  and for the  compensation to be paid to me during
the continuance of such employment,  enter into this Confidentiality,  Invention
and Non-Solicitation Agreement (hereinafter "Agreement") as follows:

                   1. Non-Interference With Third-Party Rights

1.1 I  understand  that my  employment  with  the  Company  is  based  on (a) my
representation  that I am free to undertake  employment with the Company and the
duties and obligations  imposed under this Agreement without breach of any other
agreement  (whether  written  or  oral)  or duty to  another  party,  and (b) my
acknowledgment that the Company is entitled to the benefit of my work. I further
understand  that the  Company has no  interest  in using any  person's  patents,
copyrights,  trade secrets or trademarks in an unlawful manner. As such, I shall
not misapply proprietary rights that the Company has no rights to use.

                   2. Confidentiality of Trade Secrets and Business Information

2.1 I  acknowledge  that during the course of my  employment,  I may develop and
obtain  access to trade secrets and  confidential  business  information  of the
Company.  Under the law a "trade secret" is a type of intangible  property,  and
its  theft is a crime in most  states.  A trade  secret  generally  consists  of
valuable, secret information or ideas that the Company collects or uses in order
to keep its  competitive  edge.  Examples of trade  secrets are system  designs,
computer  programs  and  software,  proprietary  clinical  protocols,  operating
processes,   and  any  other  proprietary  technology.   "Confidential  business
information,"  which the  Company  also treats as  proprietary,  consists of all
other  competitively  sensitive  information  kept in confidence by the Company.
Examples  of   confidential   business   information  are  selling  and  pricing
information and procedures, business and marketing plans, and internal financial
statements.

2.2 I agree to not use or  disclose  any trade  secrets to which I am exposed or
have access to in the course of my  employment  with the  Company,  whether such
trade  secrets  belong to the  Company  (including  trade  secrets  embodied  or
contained  in any Employee  Developments  as defined in Section 4.1) or to third
parties,  during  my  employment  and for so  long  afterward  as the  pertinent
information or data remain trade  secrets,  whether or not the trade secrets are
in written or  tangible  form,  except as  required  and  authorized  during the
performance  of  my  duties.  I  further  agree  to  not  use  or  disclose  any
confidential business information to which I am exposed or have access to in the
course of my employment with the Company,  whether such  information  belongs to
the Company (including  confidential  business information embodied or contained
in any Employee  Developments  as defined in Section  4.1) or to third  parties,
during my employment and for so long  afterward as the pertinent  information or
data remain confidential business  information,  whether or not the confidential
business  information  is in written or tangible  form,  except as required  and
authorized during the performance of my duties.

<PAGE>

                   3. Return of Company Property

3.1 At the request of the Company,  and in any event, at the time of termination
of my  employment,  I will  return all  records,  materials  and other  physical
objects that pertain to the Company's  business or to my  employment,  including
but not limited to all memoranda,  notes, records, drawings, manuals, documents,
papers,  computer  software  and  passwords  or other  identification  materials
(including all copies thereof).  I will also return to the Company all materials
involving any trade secrets or confidential business information of the Company.
The foregoing  obligations apply to all materials relating to the affairs of the
Company or to any of its customers,  clients,  vendors or agents which may be in
may possession or control.

                   4. Ownership of Employee Developments

4.1 The Company  shall be  entitled  to own and to control all care  management,
medical,  technological,  operating, and training ideas, processes and materials
that are  developed or conceived  by me,  solely or jointly with others,  at any
time during my employment with the Company to the extent that they relate to the
Company's then present business (collectively known as "Employee Developments").
Accordingly, I will promptly disclose and make available to the Company all work
papers,  models or other  tangible  embodiments  of such Employee  Developments.
Further,  I will deliver and assign to the Company all  copyrights,  inventions,
discoveries,  improvements  and  trade  secrets  (whether  or  not  patentable),
including all  interests in computer  programs,  arising in  connection  with my
employment  with the Company,  and I will take  whatever  steps may be needed to
give the Company the full and exclusive  benefit of them. To the fullest  extent
permitted by  applicable  law, all such  inventions  and  developments  shall be
considered  work made for hire under  applicable  law, and I shall assign to the
Company  all  other  rights  that  I  may  have  in  any  such   inventions  and
developments.

                   5. Non-Solicitation

5.1 I agree  that  during  the  period  commencing  on the  date  hereof  to and
including the first  anniversary  of the date on which I cease to be employed by
the Company (the "Non-Solicitation Period"), I and any entity in which I have an
equity interest shall not solicit any customer of the Company or any prospective
customer  of the  Company to provide  (i)  utilization  review of  inpatient  or
outpatient  care,  managed  care  services,   or  disease  management   services
(collectively,  "Care  Management  Services"),  or (ii) training with respect to
Care Management Services.  For purposes of this Section, a "prospective customer
of the  Company"  includes  (A) any  entity to which,  during  the  period of my
employment  with the  Company,  the Company has made a proposal to provide  Care
Management Services or training with respect to Care Management Services, or (B)
any entity that the Company specifically  identifies as a prospective  customer,
in good faith, during the term of my employment with the Company; a "prospective
customer"  shall not include an entity that would  otherwise meet the definition
of Clause (A) where such entity has expressly indicated to the Company (prior to
any  solicitation by me or an entity in which I have an equity interest) that it
is not  interested  in becoming a customer of the Company.  Notwithstanding  the
foregoing,  however,  this  Section  shall not be deemed to  prevent me from (a)
investing in securities  if such class of securities in which the  investment is
so made is listed on a national  securities  exchange  or is issued by a company
registered  under Section 12(g) of the Securities  Exchange Act of 1934, so long
as such investment holdings do not, in the aggregate, constitute more than 1% of
the voting stock of any company's securities,  or (b) making passive investments
in which I do not  participate  in  management.  I further agree that during the
Non-Solicitation Period, I shall not seek or accept employment,  an affiliation,
a consultancy or any other  arrangement  with any entity with which Company,  at
the time of the  termination of my employment,  has or is negotiating a business
relationship other than as a vendor to the Company.

5.2 I acknowledge  that I have been employed for my special  talents.  I further
acknowledge  that my  training,  experience  and  technical  skills  are of such
breadth that the foregoing  obligations will not unreasonably  impair my ability
to engage in business activity after the termination of my employment.

<PAGE>

5.3 I agree that I will not, during the  Non-Solicitation  Period, hire or offer
to hire or entice away or in any other  manner  persuade or attempt to persuade,
either in my  individual  capacity  or as agent for  another,  any of  Company's
officers,  employees,  or  agents to  discontinue  their  relationship  with the
Company.  I further agree that I will not, during the  Non-Solicitation  Period,
contract, solicit or divert or attempt to contact or divert from the Company any
business  whatsoever by  influencing  or attempting to influence any customer or
account of the Company at the time of termination of my employment.

                   6. Other Terms

6.1 This Agreement shall inure to the benefit of, and shall be binding upon, the
Company and its subsidiaries and affiliates, together with their successors, and
me, together with my executor, administrator, personal representative, heirs and
legatees.

6.2 This  Agreement  merges with and  supersedes  all prior and  contemporaneous
agreements  and  understandings  (except the  Employment  Agreement  between the
parties executed contemporaneously  herewith),  whether written or oral, express
or  implied,  to the extent they  contradict  or  conflict  with the  provisions
hereof.

6.3 If any term of this  Agreement is found to be unlawful or  unenforceable  in
any respect,  the courts shall enforce such term,  in whole or in part,  and all
other terms of this Agreement to the fullest extent possible.

6.4  Irreparable  harm should be presumed if this  Agreement  is breached in any
way.  Damages would be impossible to ascertain,  and the faithful  observance of
all terms of this  Agreement is an essential  condition of  employment  with the
Company.  Furthermore,  this  Agreement  is intended to protect the  proprietary
rights of the Company in  important  ways,  and even the threat of any misuse of
any proprietary information disclosed to or developed by me under this Agreement
would be extremely harmful because of the importance and value of such material.
In light of these  considerations,  I agree  that upon the  Company's  request a
court of competent  jurisdiction  should  immediately  enjoin any breach of this
Agreement  upon proof of such  matters as may be required  by such court,  other
than  irreparable harm which should be presumed as aforesaid.  In addition,  the
Company is released from the  requirement to post any bond in connection  with a
grant of a temporary or interlocutory relief, to the extent permitted by law.

6.5  My  obligations  under  this  Agreement  shall  remain  unaffected  by  the
termination of my employment with the Company.

6.6 This Agreement shall be governed by and enforced in accordance with the laws
of the State of New Jersey.

CAREADVANTAGE, INC.                          DENNIS J. MOURAS

By: /s/ Richard W. Freeman                   /s/  Dennis J. Mouras
    ----------------------                   ----------------------
    Richard W. Freeman                       Dennis J. MourasDH APPAREL COMPANY, INC.

                                       and

                           FIRST UNION NATIONAL BANK,
                                 as Rights Agent

                          SHAREHOLDER RIGHTS AGREEMENT
                                January 27, 2000

                                        1
<PAGE>
<TABLE>
<CAPTION>

                                Table of Contents

<S>         <C>                                                                               <C>

Section 1.  Certain Definitions.................................................................1
Section 2.  Appointment of Rights Agent.........................................................5
Section 3.  Issue of Right Certificates.........................................................5
Section 4.  Form of Right Certificates..........................................................7
Section 5.  Countersignature and Registration...................................................8
Section 6.  Transfer, Split Up, Combination and Exchange of Right Certificates;
            Mutilated, Destroyed, Lost or Stolen Right Certificates.............................8
Section 7.  Exercise of Rights; Exercise Price; Final Expiration Date of Rights.................9
Section 8.  Cancellation and Destruction of Right Certificates.................................11
Section 9.  Reservation and Availability of Common Stock.......................................11
Section 10. Common Stock Record Date...........................................................12
Section 11. Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights........13
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.........................21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............21
Section 14. Fractional Rights and Fractional Shares............................................24
Section 15. Rights of Action...................................................................25
Section 16. Agreement of Right Holders.........................................................25
Section 17. Right Certificate Holder Not Deemed a Shareholder..................................26
Section 18. Concerning the Rights Agent........................................................26
Section 19. Merger or Consolidation or Change of Name of Rights Agent..........................27
Section 20. Duties of Rights Agent.............................................................27
Section 21. Change of Rights Agent.............................................................30
Section 22. Issuance of New Right Certificates.................................................30
Section 23. Redemption.........................................................................31
Section 24. Exchange...........................................................................32
Section 25. Notice of Certain Events...........................................................34
Section 26. Notices............................................................................34
Section 27. Supplements and Amendments.........................................................35
Section 28. Successors.........................................................................36
Section 29. Determinations and Actions by the Board of Directors...............................36
Section 30. Benefits of this Agreement.........................................................36
Section 31. Severability.......................................................................36
Section 32. Governing Law......................................................................37
Section 33. Counterparts.......................................................................37
Section 34. Descriptive Headings...............................................................37

Exhibit A -- Form of Right Certificate
Exhibit B -- Form of Summary of Rights

</TABLE>

                                        2
<PAGE>

                          SHAREHOLDER RIGHTS AGREEMENT

     Shareholder  Rights Agreement (as the same may from time to time be amended
or supplemented,  this  "Agreement"),  dated as of January 27, 2000,  between DH
Apparel Company,  Inc., a Georgia  corporation (the "Company"),  and First Union
National Bank, a national bank,  (the "Rights  Agent",  which term shall include
any successor Rights Agent hereunder).

                               W I T N E S S E T H

     WHEREAS,  on  January  20,  2000 the  Board  of  Directors  of the  Company
authorized  and declared a dividend  distribution  of one Right (as  hereinafter
defined) for each whole share of Common Stock, $0.01 par value per share, of the
Company (the "Common Stock")  outstanding as of the Close of Business on January
20, 2000 (the "Record  Date") and  authorized the issuance of one Right for each
whole  share of Common  Stock of the  Company  which is issued or which  becomes
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), each Right initially representing the right to purchase one quarter of
a share of Common  Stock,  upon the terms and  conditions  set forth herein (the
"Rights");

     WHEREAS, First Union National Bank has agreed to serve as Rights Agent;

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

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

     (a)  "Acquiring  Person" shall mean any Person who or which,  together with
all Affiliates and Associates of such Person,  shall on any date  hereafter,  be
the  Beneficial  Owner  of 20% or  more  of the  shares  of  Common  Stock  then
outstanding,  but shall not include (i) the Company,  (ii) any Subsidiary of the
Company,  (iii)  any  employee  benefit  plan  of  the  Company  or  any  of its
Subsidiaries, or (iv) any entity or Person holding shares of Common Stock for or
pursuant  to the  terms of any  such  plan if such  entity  or  Person  is not a
beneficiary of or participant in such plan. The Persons described in clauses (i)
through (iv) above are referred to herein as "Exempt  Persons."  Notwithstanding
the foregoing,  no Person shall become an "Acquiring Person" as the result of an
acquisition  of Common  Stock by the Company  which,  by reducing  the number of
shares  outstanding,  increases the proportionate  number of shares beneficially
owned by such  Person  (together  with all  Affiliates  and  Associates  of such
Person)  to 20% or more of the Common  Stock of the  Company  then  outstanding;
provided,  however,  that if any  Person,  (together  with  all  Affiliates  and
Associates  of such  Person,  (other  than  Exempt  Persons)  shall  become  the
Beneficial  Owner  of 20% or  more  of the  Common  Stock  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

                                        1
<PAGE>

additional  shares of Common  Stock of the  Company,  then such Person  shall be
deemed to be an "Acquiring  Person."  Notwithstanding anything contained in this
Agreement to the  contrary,  Robert D. Rockey,  Jr. shall not be deemed to be or
become an  Acquiring  Person as a result of the exercise of his right to acquire
up to 1,000,000  shares of the Common Stock on the date that is six months after
the date Common Stock is distributed by Delta Woodside  Industries,  Inc. to its
shareholders  as  contemplated in that certain letter dated March 15, 1999 which
was amended on October 19, 1999  pertaining to Mr.  Rockey's  employment  by the
Company unless he shall also be or become the Beneficial  Owner of more than 10%
of the  Common  Stock  then  outstanding  after the  exercise  of such  right in
addition to the shares acquired upon exercise of such right.

     (b)  "Adjustment  Event"  shall  mean any  Section  11(a)(ii)  Event or any
Section 13 Event.

     (c)  "Adjustment  Shares"  shall  have the  meaning  set  forth in  Section
11(a)(ii).

     (d) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such  terms in Rule  12b-2 of the  General  Rules and  Regulations  under the
Exchange  Act, as in effect on the date of this  Agreement;  provided,  however,
that no Exempt Person shall be deemed an Affiliate or an Associate.

     (e) 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  own,  directly  or  indirectly  (as  determined
     pursuant  to Rule  13d-3 of the  General  Rules and  Regulations  under the
     Exchange Act, as in effect on the date of this  Agreement) or has the right
     to dispose of;

          (ii)  which  such  Person  or  any  of  such  Person's  Affiliates  or
     Associates,  directly or indirectly,  has (A) the right to acquire (whether
     such  right is  exercisable  immediately  or  after  the  passage  of time)
     pursuant to any agreement, arrangement or understanding,  upon the exercise
     of  conversion  rights,  exchange  rights,  rights (other than the Rights),
     warrants or options, or otherwise;  provided,  however, that a Person shall
     not be deemed  the  "Beneficial  Owner"  of, or to  "beneficially  own" (1)
     securities  tendered  pursuant to a tender or  exchange  offer made by such
     Person or any of such Person's Affiliates or Associates until such tendered
     securities are accepted for purchase or exchange;  (2) securities  issuable
     upon  exercise  of  Rights  at  any  time  prior  to the  occurrence  of an
     Adjustment  Event; or (3) securities  issuable upon exercise of Rights from
     and after the  occurrence  of an  Adjustment  Event,  if such  Rights  were
     acquired by such Person or such Person's  Affiliates or Associates prior to
     the Distribution Date or pursuant to Section 3(a) or Section 22 or pursuant
     to Section  11(a)(i) in connection  with an adjustment made with respect to
     any of the Rights heretofore specified in this clause (3); or (B) the right
     to vote pursuant to any agreement, arrangement or understanding (whether or
     not in writing);  provided,  however, that a Person shall not be deemed the
     "Beneficial  Owner" of, or to  "beneficially  own," any security under this
     clause (B) if the  agreement,  arrangement  or  understanding  to vote such
     security (1) arises  solely from a revocable  proxy given to such Person or
     any of such Person's Affiliates or Associates 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, or (2)
     is made in connection  with, or is to otherwise  participate in, a proxy or
     consent  solicitation  made or to be made  pursuant  to, and in  accordance
     with, the applicable rules and regulations  promulgated  under the Exchange
     Act, in the case of either clause (1) or (2) of this proviso whether or not
     such agreement, arrangement or

                                        2
<PAGE>

     understanding  is also then reportable by such person on Schedule 13D under
     the Exchange Act (or any comparable or successor report); or

          (iii) which are  beneficially  owned,  directly or indirectly,  by any
     other Person (or any Affiliate or Associate thereof) with which such Person
     or any of  such  Person's  Affiliates  or  Associates  has  any  agreement,
     arrangement or understanding  (whether or not in writing),  for the purpose
     of acquiring,  holding,  voting  (except  pursuant to a revocable  proxy as
     described  in clause (B) of Section  1(e)(ii)  hereof) or  disposing of any
     securities of the Company; provided, however, that (1) no Person engaged in
     business as an  underwriter  of securities  shall be deemed the  Beneficial
     Owner of any securities acquired through such Person's  participation as an
     underwriter  or selling  group  member in good  faith in a firm  commitment
     underwriting  until  the  expiration  of 40  days  after  the  date of such
     acquisition;  (2) no Person who is a director  or an officer of the Company
     shall be deemed the Beneficial  Owner of any securities of the Company that
     are  beneficially  owned by any other  director  or officer of the  Company
     solely as a result of his or her  position  as  director  or officer of the
     Company; (3) any agreement, arrangement or understanding (whether or not in
     writing),  or any  communication  or discussion,  among two or more Persons
     with respect to any matter relating to the management, operation or conduct
     of the business of the Company,  including any  discussion or agreement on,
     or any  communication  with respect to, a position with respect to any such
     matter and the disclosure of such communication,  discussion,  agreement or
     position to other Persons (including shareholders of the Company) or to the
     Company shall not  constitute an agreement,  arrangement  or  understanding
     contemplated by Section 1(e)(ii)(B).

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

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

     (h) "Common Stock" shall mean the Common Stock,  $0.01 par value per share,
of the  Company,  except that  "common  stock" 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 Person, or the equity securities or other
equity interest having power to control or direct the management, of such person
or,  if such  Person  is a  subsidiary  of  another  Person,  the  Person  which
ultimately  controls  such  first-mentioned  Person  and  which has  issued  and
outstanding such capital stock, equity securities or equity interests.

     (i) "Current  Per Share  Market  Price" shall have the meaning set forth in
Section 11(d).

     (j) "Current Value" shall have the meaning set forth in Section 11(a)(iii).

                                        3
<PAGE>

     (k)  "Disinterested  Director"  shall mean (i) any member of the  Company's
Board of Directors who is unaffiliated with an Acquiring Person, or an Affiliate
or  Associate  of any such  Person  and was a member of the  Company's  Board of
Directors  prior to the time  that an  Acquiring  Person  became  such,  and any
successor  of a  Disinterested  Director who is  unaffiliated  with an Acquiring
Person,  or any Affiliate or Associate of any such Person and is  recommended to
succeed a Disinterested  Director by a majority of the  Disinterested  Directors
then on the Company's Board of Directors.

     (l)  "Distribution  Date"  shall have the meaning  defined in Section  3(a)
hereof.

     (m)  "Equivalent  Common Stock" shall have the meaning set forth in Section
11(a)(iii) hereof.

     (n)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

     (o)  "Exchange  Rate"  shall have the  meaning  set forth in Section  24(a)
hereof

     (p) "Exercise Price" shall have the meaning set forth in Section 4 hereof.

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

     (r) "Group" shall mean two or more Persons acting as a partnership, limited
partnership,  syndicate or other group for the purpose of acquiring,  holding or
disposing of the Common Stock.

     (s) "Person" shall mean any individual,  firm, corporation,  partnership or
other entity or Group,  and shall include any successor (by merger or otherwise)
thereof; provided,  however, that when two or more Persons act as a partnership,
limited  partnership,  syndicate  or other Group for the  purpose of  acquiring,
holding disposing of the Common Stock, such  partnership,  limited  partnership,
syndicate or other Group shall be deemed to be a single Person.

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

     (u) "Record Date" shall have the meaning set forth in the recital clause of
this Agreement.

     (v) "Redemption Date" shall have the meaning set forth in Section 7(a).

     (w) "Rights" shall have the meaning set forth in the recital clause of this
Agreement.

     (x) "Right Certificate" shall have the meaning set forth in Section 3(a).

                                        4
<PAGE>

     (y) "Section 11(a)(ii) Adjustment Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.

     (z) "Section  11(a)(ii)  Event"  shall mean any event  described in Section
11(a)(ii)(A), (B), or (C) hereof.

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

     (bb)  "Share  Acquisition  Date"  shall mean the first date on which  there
shall be a public  announcement  by the Company or an  Acquiring  Person that an
Acquiring Person has become such.

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

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

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

     (ff) "Summary of Rights" shall have the meaning set forth in Section 3(b).

     (gg)  "Trading  Day" shall have the meaning  set forth in Section  11(d)(i)
hereof.

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

     Section 3. Issue of Right Certificates

     (a) Until the earlier of (i) the Close of Business on the 10th calendar day
after  the  Share  Acquisition  Date,  (ii) the  Close of  Business  on the 10th
Business Day (or such later date as may be  determined by action of the Board of
Directors  of the  Company  prior to such  time as any  Person  shall  become an
Acquiring Person) after the date of (x) the commencement,  by any Person,  other
than an Exempt Person, of, or (y) the first public announcement of the intention
of any Person

                                        5
<PAGE>

(other than an Exempt  Person) to commence,  a tender or exchange offer if, upon
consummation  thereof,  such Person would be an Acquiring Person,  including any
such date which is after the date of this Agreement and prior to the issuance of
the  Rights  (the  earliest  of  such  dates  being  herein  referred  to as the
"Distribution Date"), the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by  certificates  for the Common  Stock  registered  in the
names of the holders of the Common  Stock (which  certificates  for Common Stock
shall  be  deemed  also to be  certificates  for  Rights)  and  not by  separate
certificates,  and the Rights will be  transferable  only in connection with the
transfer of the underlying shares of Common Stock. The Board of Directors of the
Company may defer the date set forth in clause (ii) in the preceding sentence to
a specified  later date or to an unspecified  later date to be determined,  with
the concurrence of a majority of the Disinterested  Directors,  by action of the
Directors of the Company.  As soon as practicable after the Company has notified
the Rights Agent of the  occurrence of the  Distribution  Date, the Rights Agent
will send, by first-class,  insured, postage prepaid mail, to each record holder
of the Common Stock as of the Close of Business on the Distribution Date, at the
address  of  such  holder  shown  on the  records  of the  Company,  one or more
certificates, in substantially the form attached hereto as Exhibit A (the "Right
Certificates"),  evidencing  one Right for each  share of Common  Stock so held,
subject to adjustment as provided herein.  As of and after the Close of Business
on the  Distribution  Date,  the Rights will be  evidenced  solely by such Right
Certificates.

     (b) On the Record Date, or thereafter, the Company will send a notification
of the existence of the Rights,  by postage  prepaid mail, to each record holder
of the  Common  Stock as of the Close of  Business  on the Record  Date,  at the
address of such holder  shown on the  records of the  Company.  With  respect to
certificates  for the Common Stock  outstanding as of the Record Date, until the
Distribution  Date or the earlier of the Redemption Date or the Final Expiration
Date,  the Rights will be  evidenced by such  certificates  for the Common Stock
with or without a copy of the Summary of Rights in the form  attached  hereto as
Exhibit B (the "Summary of Rights") attached thereto, and the registered holders
of the Common  Stock  shall  also be the  registered  holders of the  associated
Rights.  Until the  Distribution  Date (or  earlier  redemption,  expiration  or
termination  of the  Rights),  the transfer of any of the  certificates  for the
Common Stock  outstanding on the Record Date, even without a copy of the Summary
of Rights  attached  thereto,  shall also  constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.

     (c)  Certificates  for the Common Stock  issued after the Record Date,  but
prior to the earlier of the Distribution  Date, the Redemption Date or the Final
Expiration Date,  shall be deemed also to be certificates for Rights,  and shall
bear the following legend:

     This  certificate  also evidences and entitles the holder hereof to certain
     Rights as set forth in a Shareholder  Rights  Agreement  between DH Apparel
     Company,  Inc. and First Union National Bank, as Rights Agent,  dated as of
     January 27, 2000 (the  "Rights  Agreement"),  the terms of which are hereby
     incorporated  herein  by  reference  and a copy of  which is on file at the
     principal offices of DH Apparel Company, Inc. Under certain  circumstances,
     as set forth in the Rights  Agreement,  such  Rights will be  evidenced  by
     separate  certificates and will no longer be evidenced by this certificate.
     DH Apparel Company, Inc. will mail to the holder of this certificate

                                        6
<PAGE>

     a copy of the  Rights  Agreement,  as in  effect  on the  date of  mailing,
     without charge promptly after receipt of a written request therefor.  Under
     certain circumstances, Rights issued to Acquiring Persons or any Affiliates
     or  Associates  thereof  (as  defined  in the  Rights  Agreement)  and  any
     subsequent holder of such Rights may become null and void.

With respect to such  certificates  containing the foregoing  legend,  until the
Distribution  Date or the earlier of the Redemption Date or the Final Expiration
Date,  the  Rights   associated  with  the  Common  Stock  represented  by  such
certificates shall be evidenced by such certificates  alone, and the transfer of
any of such  certificates  shall  also  constitute  the  transfer  of the Rights
associated with the Common Stock represented by such certificates.  In the event
that the  Company  purchases  or acquires  any shares of Common  Stock after the
Record Date but prior to the Distribution  Date, any Rights associated with such
Common Stock shall be deemed cancelled and retired so that the Company shall not
be entitled to exercise  any Rights  associated  with the shares of Common Stock
which are no longer outstanding.

     Section 4. Form of Right Certificates.

     (a) The Right  Certificates  (and the forms of election to purchase  shares
and  of  assignment  to be  printed  on  the  reverse  thereof)  shall  each  be
substantially  in the form of  Exhibit  A  hereto  and may  have  such  marks of
identification  or  designation  and such  legends,  summaries  or  endorsements
printed thereon as the Company may deem  appropriate and as are not inconsistent
with the provisions of this Agreement,  or as may be required to comply with any
applicable  law,  rule or regulation or with any rule or regulation of any stock
exchange  on which the Rights may from time to time be listed,  or to conform to
usage.  Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date, and on
their face shall  entitle the holders  thereof to Purchase such number of shares
of Common  Stock as shall be set forth  therein  at the price set forth  therein
(the  "Exercise  Price"),  but the number of such shares and the Exercise  Price
shall be subject to adjustment as provided herein.

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

                                        7
<PAGE>

     The Rights  represented by this Right  Certificate are or were beneficially
     owned by a Person who was or became an Acquiring  Person or an Affiliate or
     an  Associate  of an  Acquiring  Person (as such  terms are  defined in the
     Rights Agreement). This Right Certificate and the Rights represented hereby
     may become  null and void  under  certain  circumstances  as  specified  in
     Section 11 of the Rights Agreement.

The Company  shall give  notice to the Rights  Agent  promptly  after it becomes
aware of the existence and identity of any Acquiring  Person or any Associate or
Affiliate thereof.

     Section 5. Countersignature and Registration.

     (a) The Right  Certificates  shall be  executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President,  either manually
or by facsimile signature,  and shall have affixed thereto the Company's seal or
a facsimile  thereof  which shall be attested by the  Secretary or any 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 so  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
Certificates  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.

     (b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at one of its offices designated as the appropriate place for surrender
of Right  Certificates  upon exercise or transfer,  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.

     (a) Subject to the  provisions of Section 4(b),  Section 11, Section 14 and
Section 24 hereof,  at any time after the Close of Business on the  Distribution
Date,  and at,  or  prior  to,  the  Close of  Business  on the  earlier  of the
Redemption  Date  or  the  Final  Expiration  Date,  any  Right  Certificate  or
Certificates  may be  transferred,  split up,  combined or exchanged for another
Right Certificate or Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock (or following an Adjustment  Event,  other
securities, cash or other assets as the case may be) as the Right Certificate or
Certificates surrendered then entitled such holder to purchase. Any registered

                                        8
<PAGE>

holder desiring to transfer, split up, combine or exchange any Right Certificate
shall make such  request in writing  delivered  to the Rights  Agent,  and shall
surrender the Right  Certificate or Certificates  to be  transferred,  split up,
combined  or  exchanged,  with  the  form of  assignment  and  certificate  duly
executed,  at the  office or offices of the  Rights  Agent  designated  for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action  whatsoever  with respect to the transfer of any such  surrendered  Right
Certificate  until the  registered  holder shall have  completed  and signed the
certificate  contained  in the form of  assignment  on the reverse  side of such
Right  Certificate  and shall have  provided  such  additional  evidence  of the
identity of the Beneficial Owner (or former  Beneficial  Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent  shall,  subject  to  Section  4(b),  Section  11 and  Section  14 hereof,
countersign  and deliver to the Person entitled  thereto a Right  Certificate or
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.

     (b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory  to them of the loss,  theft,  destruction or mutilation of a Right
Certificate,  and,  in case of  loss,  theft or  destruction,  of  indemnity  or
security  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  execute  and deliver a new Right  Certificate  of like tenor to the Rights
Agent for  countersignature  and delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.

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

     (a) Subject to Section 11(a)(ii) hereof, the registered holder of any Right
Certificate  may  exercise  the Rights  evidenced  thereby  (except as otherwise
provided   herein,   including,   without   limitation,   the   restrictions  on
exercisability set forth in Section 9, Section 11(a)(iii) and Section 23(a)), 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 and the certificate set
forth on the reverse side thereof  completed  and duly  executed,  to the Rights
Agent at the office or offices of the Rights Agent  designated for such purpose,
together  with payment of the aggregate  Exercise  Price for the total number of
shares of Common Stock (or other  securities,  cash or other assets, as the case
may be) as to which such surrendered  Rights are then exercised,  at or prior to
the  earlier  of (i) the Close of  Business  on  January  20,  2010 (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 which such Rights
are  exchanged as provided in Section 24.  Except as set forth in Section  11(a)
hereof and notwithstanding any other provision of this Agreement, any Person who
prior to the Distribution Date becomes a record holder of shares of Common Stock
may  exercise all of the rights of a  registered  holder of a Right  Certificate
with  respect  to the  Rights  associated  with such  shares of Common  Stock in
accordance  with the  provisions of this  Agreement,  as of the date such Person
becomes a record holder of shares of Common Stock.

                                        9
<PAGE>

     (b) The Exercise  Price for each quarter share of Common Stock  pursuant to
the exercise of a Right shall initially be $10.00 (equivalent to $40.00 for each
share of  Common  Stock),  shall be  subject  to  adjustment  from  time to time
provided  in  Section 11 and  Section 13 hereof,  and shall be payable in lawful
money of the United States of America  in  accordance  with  Section 7(c) below.

     (c) Upon receipt of a Right Certificate  representing  exercisable  Rights,
with the form of  election  to  purchase  and the  certificate  set forth on the
reverse side thereof completed and duly executed,  accompanied by payment of the
Exercise  Price  for the  shares  (or,  following  an  Adjustment  Event,  other
securities,  cash or other  assets,  as the case may be) to be purchased  and an
amount equal to any applicable  transfer tax (as determined by the Rights Agent)
in  cash,  or by  certified  check or bank  draft  payable  to the  order of the
Company,  the Rights Agent shall,  subject to Section  20(k)  hereof,  thereupon
promptly  (i)(A)  requisition  from any  transfer  agent of the shares of Common
Stock (or make  available,  if the Rights Agent is the transfer agent  therefor)
certificates  for the number of shares of Common Stock to be  purchased  and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests,  or (B) if the Company  shall have elected to deposit the total number
of shares of Common Stock issuable upon exercise of the Rights  hereunder with a
depositary  agent,  requisition from the depositary  agent  depositary  receipts
representing  such number of shares of Common Stock as are to be  purchased  (in
which case  certificates  for the  shares of Common  Stock  represented  by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company will direct the depositary  agent to comply with such request,  (ii)
when appropriate, requisition from the Company the amount of cash, if any, to be
paid in lieu of issuance of  fractional  shares in  accordance  with  Section 14
hereof,  (iii)  promptly  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  promptly
deliver  such cash to or upon the order of the  registered  holder of such Right
Certificate.  In the  event  that  the  Company  is  obligated  to  issue  other
securities of the Company,  pay cash or distribute  other  property  pursuant to
Section 11(a) hereof,  the Company will make all arrangements  necessary so that
such other securities,  cash or other property are available for distribution by
the Rights Agent, if and when appropriate.

     (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 and delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14  hereof.

     (e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company  shall be  obligated  to undertake  any action with
respect to a registered  holder of Rights upon the  occurrence  of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i)  completed and signed the  certificate  contained in the form of election to
purchase set forth on the reverse side of the Right Certificate  surrendered for
such exercise, and

                                       10
<PAGE>

(ii) provided such additional  evidence of the identity of the Beneficial  Owner
(or former Beneficial Owner) or Affiliates or Associates  thereof as the Company
shall reasonably request.

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

     Section 9. Reservation and Availability of Common Stock.

     (a) The Company  covenants and agrees that it will cause to be reserved and
kept available out of its  authorized and unissued  shares of Common Stock (and,
following the occurrence of an Adjustment Event,  other securities or out of its
authorized  and  issued  shares  held in its  treasury)  the number of shares of
Common Stock (and,  following  the  occurrence  of an  Adjustment  Event,  other
securities) that, as provided in this Agreement will be sufficient to permit the
exercise in full of all outstanding Rights;  provided, that such action need not
be taken with respect to shares of Common Stock (or other  securities)  issuable
upon occurrence of an Adjustment Event  until  the  occurrence  of  such  event.

     (b) If at the time the  Rights  become  exercisable,  the then  outstanding
shares  of Common  Stock  are  listed on any  national  or  regional  securities
exchange or are quoted on the National  Association of Securities Dealers,  Inc.
Automated  Quotation  System  ("NASDAQ")  or  any  successor  thereto  or  other
comparable  quotation  system,  the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable,  all shares of Common
Stock (and,  following the occurrence of an Adjustment Event,  other securities)
reserved for issuance  upon such  exercise to be quoted on such system or listed
on such exchange, as the case may be.

     (c) The  Company  shall  use  its  best  efforts  to (i)  file,  as soon as
practicable  following  the  earliest  date  after the  occurrence  of a Section
11(a)(ii)  Event as of which the  consideration  to be  delivered by the Company
upon  exercise  of the  Rights  has been  determined  in  accordance  with  this
Agreement, or as soon as required by law following the Distribution Date, as the
case may be, a  registration  statement  under the  Securities  Act of 1933,  as
amended  (the  "Securities  Act"),  with  respect to the  Common  Stock or other
securities  purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such  registration  statement to become  effective as soon as  practicable
after  such  filing,  and (iii)  cause  such  registration  statement  to remain
effective  (with a prospectus  that at all times meets the  requirements  of the
Securities  Act)  until  the  earlier  of  (A)  the  date  as  of

                                       11
<PAGE>

which the Rights are no longer exercisable for such securities, and (B) the date
of the  expiration of the Rights.  The Company will also take such action as may
be appropriate  under, and which will ensure  compliance with, the securities or
blue sky laws of the various states in connection with the exercisability of the
Rights.  The Company may temporarily  suspend for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to prepare and file
such  registration  statement  and  permit  it to  become  effective.  Upon 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.
Notwithstanding any such provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite  qualification
in such jurisdiction shall have been obtained.

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

     (e) The Company further covenants and agrees that, subject to Section 6, it
will pay when due and payable any and all federal and state  transfer  taxes and
charges which may be payable in respect of the issuance or delivery of the Right
Certificates  or of any  certificates  for  shares  of  Common  Stock  (or other
securities,  as the case may be) upon the exercise of Rights.  The Company shall
not,  however,  be  required  to pay any  transfer  tax which may be  payable in
respect of any  transfer  or delivery of Right  Certificates  to a Person  other
than,  or in respect of the issuance or delivery of  securities  in a name other
than that of, the registered holder of the Right Certificates  evidencing Rights
surrendered for exercise or to issue or deliver any  certificates for securities
in a name other than that of the  registered  holder  upon the  exercise  of any
Rights  until such tax shall  have been paid (any such tax being  payable by the
holder of such Right  Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.

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

                                       12

<PAGE>

exercise any preemptive  rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

     Section  11.  Adjustment  of Exercise  Price,  Number and Kind of Shares or
Number of Rights.  The Exercise Price,  the number and kind of shares covered by
each Right and the number of Rights  outstanding  are subject to adjustment from
time to time as provided in this Section 11.

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

     (ii) Subject to Section 24, in the event

     (A) any  Acquiring  Person or any  Associate or Affiliate of any  Acquiring
Person,  at any time after the date of this  Agreement,  directly or indirectly,
(1) shall merge into the Company or  otherwise  combine with the Company and the
Company  shall be the  continuing  or  surviving  corporation  of such merger or
combination and the Common Stock of the Company shall remain outstanding and not
changed into or exchanged  for stock or other  securities of any other Person or
the  Company  or  cash  or any  other  property,  (2)  shall,  in  one  or  more
transactions,  transfer  any assets to the Company in  exchange  (in whole or in
part)  for  shares  of  any  equity  security  of  the  Company  or  any  of its
Subsidiaries or for securities exercisable for or convertible into shares of any
equity security of the Company or any of its  Subsidiaries  or otherwise  obtain
from the Company,  with or without  consideration,  any additional shares of any
equity security of the Company or securities exercisable for or convertible into
shares of any equity security of the Company or any of its  Subsidiaries  (other
than as part of a pro rata  distribution  to all holders of Common  Stock),  (3)
shall sell, purchase, lease, exchange,  mortgage,  pledge, transfer or otherwise
dispose (in one or more

                                       13
<PAGE>

transactions),  to, from or with,  as the case may be, the Company or any of its
Subsidiaries,  assets on terms and conditions less favorable to the Company than
the  Company  would  be able  to  obtain  in  arm's-length  negotiation  with an
unaffiliated  third Person, (4) shall engage in any transaction with the Company
involving the sale, purchase,  lease, exchange,  mortgage,  pledge,  transfer or
other disposition (in one transaction or a series of  transactions),  other than
incidental to the lines of business  currently  engaged in as of the date hereof
by the Company and such Acquiring Person,  or Associate or Affiliate,  of assets
having an aggregate fair market value of more than $5,000,000, (5) shall receive
any  compensation  from the Company or any of the Company's  Subsidiaries  other
than  compensation  for full time  employment as a regular  employee at rates in
accordance  with the Company's (or its  Subsidiaries')  past  practices,  or (6)
shall receive the benefit,  directly or indirectly (except  proportionately as a
shareholder),  of any loans  other  than in the  ordinary  course of  business),
advances,  guarantees,  pledges or other financial assistance or any tax credits
or other tax advantage provided by the Company or any of its Subsidiaries, or

     (B) any Person  (other than an Exempt  Person),  shall  become an Acquiring
Person, or

     (C) during such time as there is an  Acquiring  Person,  there shall be any
reclassification   of  securities   (including  any  reverse  stock  split),  or
recapitalization  of the Company,  or any merger or consolidation of the Company
with any of its Subsidiaries or any other  transaction or series of transactions
(whether or not with or into or otherwise  involving an Acquiring  Person) 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  which is directly or indirectly owned
by any Acquiring Person or any Associate or Affiliate of any  Acquiring  Person,

then, and in each such case,  proper provision shall be made so that each holder
of a Right,  except as provided in this paragraph (ii),  shall thereafter have a
right to receive, upon exercise of such Right at the then current Exercise Price
in accordance with the terms of this Agreement,  such number of shares of Common
Stock of the Company as shall equal the result  obtained by (x)  multiplying the
then current  Exercise  Price by the then number of one quarter shares of Common
Stock  for  which  a  Right  was  exercisable  immediately  prior  to the  first
occurrence of a Section  11(a)(ii)  Event and (y) dividing that product  (which,
following  such  first  occurrence,  shall  thereafter  be  referred  to as  the
"Exercise  Price" for each Right and for all purposes of this  Agreement) by 50%
of the Current Per Share Market Price of the Common Stock  (determined  pursuant
to Section  11(d)) on the date of the occurrence of any one of the events listed
above in this  Section  11(a)(ii)  (such  number of shares is herein  called the
"Adjustment  Shares");  provided,  however,  that if the transaction  that would
otherwise  give  rise  to  the  foregoing  adjustment  is  also  subject  to the
provisions  of Section 13 hereof,  then only the  provisions of Section 13 shall
apply and no adjustment  shall be made pursuant to this Section  11(a)(ii).  The
Company shall not enter into any  transaction of the kind listed in this Section
11(a)(ii)  if at the time of such  transaction  there are any rights,  warrants,
instruments or securities outstanding or any agreements or arrangements which as
a result of the consummation of such

                                       14
<PAGE>

transaction,  would  substantially  diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.

     Notwithstanding  anything in this Agreement to the contrary, from and after
the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned
by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee  after the  Acquiring  Person  becomes such, or (iii) a
transferee of an Acquiring  Person (or of any such  Associate or Affiliate)  who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer  (whether or not
for  consideration)  from the Acquiring Person to holders of equity interests in
such  Acquiring  Person or to any Person with whom the Acquiring  Person has any
continuing  agreement,  arrangement or  understanding  regarding the transferred
Rights,  or (B) a  transfer  which the Board of  Directors  of the  Company  has
determined  is part of a  plan,  arrangement  or  understanding  which  has as a
primary purpose or effect the avoidance of this Section 11(a), shall become null
and void without any further  action and no holder or  beneficial  owner of such
Rights shall have any rights  whatsoever  with  respect to such Rights,  whether
under any provision of this  Agreement or  otherwise.  The Company shall use all
reasonable  efforts to ensure  that the  provisions  of this  Section  11(a) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
or beneficial owner of Right Certificates or any other Person as a result of its
failure to make any  determinations  with respect to an Acquiring  Person or any
Affiliates and Associates thereof or any transferee of any  of  them  hereunder.

     (iii) In the event  that the  number of  shares of Common  Stock  which are
authorized by the Company's  articles of  organization  but not  outstanding  or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient  to permit  the  exercise  in full of the Rights in  accordance  with
Section 11(a)(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 Exercise Price (such excess is herein called the "Spread"),
and (B) with respect to each Right,  make adequate  provision to substitute  for
the Adjustment Shares,  upon payment of the applicable Exercise Price, (1) cash,
(2) a  reduction  in the  Exercise  Price,  (3)  Common  Stock or  other  equity
securities of the Company (including,  without  limitation,  shares, or units of
shares,  of preferred stock which the Board has deemed to have the same value as
shares of Common Stock (such  shares or units of shares of  preferred  stock are
herein called "Equivalent  Common Stock")),  (4) debt securities of the Company,
(5) other assets,  or (6) any combination of the foregoing,  having an aggregate
value equal to the Current Value, where such aggregate value has been determined
by the Board  based  upon the  advice of a  competent  investment  banking  firm
selected by the Board;  provided,  however,  if the Company  shall not have made
adequate  provision to deliver value  pursuant to clause (B) above within thirty
(30) days following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's  right of  redemption  pursuant to
Section 23(a) expires (the later of (x) and (y) being  referred to herein as the
"Section  11(a)(ii)  Adjustment  Date"),  then the Company shall be obligated to
deliver,  upon the  surrender  for  exercise  of a Right and  without  requiring
payment of the Exercise Price,  shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares or cash have an aggregate value equal
to the Spread. If the Board shall

                                       15
<PAGE>

determine in good faith that it is likely that sufficient  additional  shares of
Common  Stock could be  authorized  for  issuance  upon  exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to the extent
necessary,  but not more than  ninety  (90) days  after  the  Section  11(a)(ii)
Adjustment Date, in order that the Company may seek stockholder approval for the
authorization of such additional  shares (such thirty (30) day period, as it may
be extended, is herein called the "Substitution Period"). To the extent that the
Company  determines  that some  action  need be taken  pursuant  to the first or
second  sentence of this  Section  11(a)(iii),  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  an
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.  For the purpose of this Section  11(a)(iii),
the value of  Adjustment  Shares  shall be the Current Per Share Market Price of
the Common Stock on the Section 11(a)(ii)  Adjustment Date, and the per share or
per unit  value of any  Equivalent  Common  Stock  shall be  deemed to equal the
Current  Per  Share  Market  Price  of  the Common  Stock  on  such  date.

     (b) If the  Company  shall  fix a record  date for the  issuance  of rights
(other than the  Rights),  options or  warrants  to all holders of Common  Stock
entitling them (for a period  expiring within 45 calendar days after such record
date) to subscribe for or purchase  Common Stock or  Equivalent  Common Stock or
securities  convertible into Common Stock or Equivalent  Common Stock at a price
per share of Common Stock or per share of  Equivalent  Common Stock (or having a
conversion  price per share,  if a security  convertible  into  Common  Stock or
Equivalent  Common  Stock)  less than the  Current  Per Share  Market  Price (as
determined  pursuant to Section 11(d) hereof) of the Common Stock on such record
date,  the  Exercise  Price to be in effect  after  such  record  date  shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction,  the numerator of which shall be the number of shares
of Common Stock  outstanding  on such record date,  plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock or Equivalent Common Stock to be offered (and the aggregate initial
conversion price of the convertible  securities so to be offered) would purchase
at such Current Per Share Market Price and the denominator of which shall be the
number of shares of Common  Stock  outstanding  on such  record  date,  plus the
number of  additional  shares of Common Stock or  Equivalent  Common Stock to be
offered for  subscription or purchase (or into which the convertible  securities
so to be offered are initially convertible); provided, however, that in no event
shall the  consideration  to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of the Company  issuable upon the exercise
thereof.  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 the Current Per Share Market Price  thereof  determined  in  accordance
with  Section  11(d)  hereof.  Shares of Common  Stock  owned by or held for the
account of the Company  shall not be deemed  outstanding  for the purpose of any
such computation.  Such adjustments  shall be made successively  whenever such a
record date is fixed; and in the event that such rights or

                                       16
<PAGE>

warrants  are not so issued,  the  Exercise  Price  shall be  adjusted to be the
Exercise  Price  which  would then be in effect if such record date had not been
fixed.

     (c) If the Company shall fix a record date for the making of a distribution
to all  holders  of  Common  Stock  (including  any  such  distribution  made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of  indebtedness,  cash (other than a regular periodic
cash dividend out of the earnings or retained  earnings of the Company),  assets
(other than a dividend  payable in Common  Stock,  but  including  any  dividend
payable in stock other than Common  Stock) or  options,  subscription  rights or
warrants  (excluding those referred to in Section 11(b)),  the Exercise Price to
be in effect  after such  record date shall be  determined  by  multiplying  the
Exercise  Price in effect  immediately  prior to such record date by a fraction,
the  numerator  of  which  shall be the  Current  Per  Share  Market  Price  (as
determined  pursuant  to Section  11(d)  hereof) of Common  Stock on such record
date, less the Current Per Share Market Price (as determined pursuant to Section
11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such options, subscription rights or warrants applicable
to one share of Common Stock and the  denominator  of which shall be the Current
Per Share Market Price (as determined  pursuant to Section 11(d) hereof) per one
share  of  Common  Stock;  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 the  Company  issuable  upon the  exercise
thereof. Such adjustments shall be made successively whenever such a record date
is fixed;  and in the event that such  distribution is not so made, the Exercise
Price shall again be adjusted to be the Exercise  Price which would be in effect
if such record date had not been fixed.

     (d) For the purpose of this Agreement, the "Current Per Share Market Price"
of any share of Common  Stock or any other stock or any Right or other  security
or  any  other  property  shall be determined as provided in this Section 11(d).

          (i)  In  the  case  of  a  publicly-traded  stock  or  other  security
     (hereinafter in this Section 11(d)(i) a "Security"),  the Current Per Share
     Market  Price on any date  shall be deemed to be the  average  of the daily
     closing  prices per share of such Security for the thirty (30)  consecutive
     Trading Days (as such term is  hereinafter  defined)  immediately  prior to
     such date;  provided,  however,  that for the purpose of computations  made
     pursuant to Section  11(a)(iii)  hereof, the Current Per Share Market Price
     on any date shall be deemed to be the average of the daily  closing  prices
     per  share of such  Security  for the ten  (10)  consecutive  Trading  Days
     immediately  following such date; and provided  further,  that in the event
     that the  Current Per Share  Market  Price of any  Security  is  determined
     during a period  following the  announcement by the issuer of such Security
     of (x) a dividend or  distribution  on such  Security  payable in shares of
     such Security or securities convertible into shares of such Security (other
     than the Rights) or (y) any subdivision, combination or reclassification of
     such  Security,  and prior to the  expiration of the requisite  thirty (30)
     Trading Day or ten (10) Trading Day period,  as set forth above,  after the
     ex-dividend date for such dividend or distribution,  or the record date for
     such subdivision,  combination or reclassification,  then, and in each such
     case, the Current Per Share Market Price shall be properly adjusted to take
     into account ex-dividend  trading.  The closing price for each day shall be
     the last sale price, regular way, or, in

                                       17
<PAGE>

     case no such sale takes  place on such day,  the average of the closing bid
     and asked prices,  regular way, in either case as reported in the principal
     consolidated transaction reporting system with respect to securities listed
     or admitted to trading on the New York Stock Exchange or, if the Securities
     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 such Security is listed or admitted to trading;  or, if not listed
     or admitted to trading on any national securities exchange, the last quoted
     price (or,  if not so quoted,  the  average of the last quoted high bid and
     low asked prices) in the over-the-counter  market, as reported by NASDAQ or
     such other  system  then in use;  or, if, on any such date no bids for such
     Security  are 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 such Security  selected by the Board of Directors of the Company.
     If on any such  date no market  maker is making a market in such  Security,
     the Current Per Share Market  Price of such  Security on such date shall be
     determined  reasonably  and with good faith to the holders of the Rights by
     the Board of Directors of the  Company,  including,  if at the time of such
     determination there is an Acquiring Person, a majority of the Disinterested
     Directors then in office, or if there are no Disinterested  Directors, by a
     competent investment banking firm selected by the Board of Directors, which
     determination shall be described in a statement filed with the Rights Agent
     and shall be binding on the Rights Agent and the holders of the Rights. The
     term  "Trading  Day"  shall  mean a day on  which  the  principal  national
     securities exchange on which such Security is listed or admitted to trading
     is open for the  transaction of business or, if such Security is not listed
     or admitted to trading on any national securities exchange, a Business Day.

          (ii) If a Security  is not  publicly  held or not so listed or traded,
     "Current  Per Share  Market  Price"  shall mean the fair value per share of
     stock or per other unit of such  Security,  determined  reasonably and with
     utmost good faith to the holders of the Rights by the Board of Directors of
     the Company,  including,  if at the time of such determination  there is an
     Acquiring Person, a majority of the Disinterested Directors then in office,
     or if there  are no  Disinterested  Directors,  by a  competent  investment
     banking firm selected by the Board of Directors,  which determination shall
     be  described  in a  statement  filed  with the  Rights  Agent and shall be
     binding on the Rights Agent and the holders of the Rights.

          (iii) In the case of property other than  securities,  the Current Per
     Share Market Price thereof shall be determined  reasonably  and with utmost
     good  faith to the  holders  of  Rights by the  Board of  Directors  of the
     Company,  including,  if at the  time of  such  determination  there  is an
     Acquiring Person, a majority of the Disinterested Directors then in office,
     or if there  are no  Disinterested  Directors,  by a  competent  investment
     banking firm selected by the Board of Directors,  which determination shall
     be  described  in a  statement  filed  with the  Rights  Agent and shall be
     binding upon  the  Rights  Agent  and  the  holders  of  the  Rights.

     (e) Anything herein to the contrary  notwithstanding,  no adjustment in the
Exercise  Price  shall be  required  unless  such  adjustment  would  require an
increase or decrease of at least l% in the Exercise  Price;  provided,  however,
that any adjustments which by reason of this Section 11(e)

                                       18
<PAGE>

are not  required to be made shall be carried  forward and taken into account in
any subsequent adjustment.  All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share, as the case may
be.  Notwithstanding  the first sentence of this Section  11(e),  any adjustment
required  by this  Section  shall be made no later than the earlier of (i) three
(3) years from the date of the  transaction  which  mandates such  adjustment or
(ii) the Final Expiration Date.

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

     (g)  All  Rights  originally  issued  by  the  Company  subsequent  to  any
adjustment  made to the Exercise  Price  hereunder  shall  evidence the right to
purchase,  at the adjusted  Exercise  Price,  the number of shares (or fractions
thereof) of Common Stock  purchasable  from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.

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

     (i) The  Company  may elect on or after the date of any  adjustment  of the
Exercise  Price  to  adjust  the  number  of  Rights,  in  substitution  for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable  immediately prior to such adjustment.  Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights  (calculated to the nearest one  ten-thousandth)  obtained by dividing
the Exercise  Price in effect  immediately  prior to  adjustment of the Exercise
Price by the  Exercise  Price in  effect  immediately  after  adjustment  of the
Exercise Price. The Company shall make a public  announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made.  This record date
may be the date on which the Exercise  Price is adjusted or any day  thereafter,
but, if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement.  If Right Certificates have been
issued,

                                       19
<PAGE>

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 may bear, at
the option of the Company,  the adjusted Exercise Price) and shall be registered
in the names of the holders of record of Right  Certificates  on the record date
specified in the public announcement.

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

     (k) Before  taking any action that would cause an  adjustment  reducing the
Exercise  Price  below the then par  value,  if any,  of the number of shares of
Common Stock  issuable upon  exercise of the Rights,  the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may  validly  and  legally  issue fully paid and  nonassessable
shares of Common Stock at such adjusted Exercise Price.

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

     (m)  Notwithstanding  anything  in this  Section  11 to the  contrary,  the
Company  shall be entitled to make such  reductions  in the Exercise  Price,  in
addition to those adjustments  expressly  required by this Section 11, as and to
the extent that it in its sole  discretion  shall  determine  to be advisable in
order that any consolidation or subdivision of the Common Stock, issuance wholly
for cash of any shares of Common Stock at less than the Current Per Share Market
Price, issuance wholly for cash of shares of Common Stock or securities which by
their terms are  convertible  into or  exchangeable  for shares of Common Stock,
stock  dividends  or  issuance  of  rights,  options  or  warrants  referred  to
hereinabove in this Section 11,  hereafter made by the Company to holders of its
Common Stock, shall not be taxable to such shareholders.

                                       20
<PAGE>

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

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

     Section 12.  Certificate  of Adjusted  Exercise  Price or Number of Shares.
Whenever an  adjustment is made as provided in Section 11 and Section 13 hereof,
the  Company  shall  (a)  promptly  prepare a  certificate  setting  forth  such
adjustment and a brief  statement of the facts  accounting for such  adjustment,
(b)  promptly  file with the Rights Agent and with each  transfer  agent for the
Common Stock 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  contained  therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.

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

     (a) In the event that, on or after the Share Acquisition Date,  directly or
indirectly,  (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary  of the Company in a transaction  which is
not  prohibited  by Section  11(o)  hereof),  and the  Company  shall not be the
continuing  or surviving  corporation  of such  consolidation  or merger (y) any
Person  (other than a Subsidiary  of the Company in a  transaction  which is not
prohibited by Section 11(o) hereof) 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 shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell,  mortgage or otherwise  transfer (or one or more of its Subsidiaries
shall sell, mortgage or otherwise  transfer),  in one transaction or a series of
related  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 or any Subsidiary of the
Company in one or more  transactions  each of which is not prohibited by Section
11(o) hereof)

                                       21
<PAGE>

then, and in each such case,  proper  provision  shall be made so that: (i) each
holder of a Right, except as provided otherwise herein,  shall have the right to
receive,  upon the  exercise  thereof  at the  then  current  Exercise  Price in
accordance with the terms of this Agreement,  such number of validly  authorized
and issued, fully paid and nonassessable shares of freely tradeable Common Stock
of the Principal Party (as hereinafter defined in Section 13(b)), free and clear
of rights of call or first refusal, liens, encumbrances or other adverse claims,
as shall be equal to the result  obtained by (1)  multiplying  the then  current
Exercise  Price by the number of one quarter  shares of Common Stock for which a
Right is exercisable  immediately  prior to the first occurrence of a Section 13
Event  (or,  if a  Section  11(a)(ii)  Event  has  occurred  prior to the  first
occurrence of a Section 13 Event,  multiplying  the number of one quarter shares
of Common Stock for which a Right was exercisable immediately prior to the first
occurrence  of a  Section  11(a)(ii)  Event  by the  Exercise  Price  in  effect
immediately  prior to such first  occurrence)  and dividing that product (which,
following the first  occurrence  of a Section 13 Event,  shall be referred to as
the "Exercise  Price" for each Right and for all purposes of this  Agreement) by
(2) 50% of the Current Per Share  Market Price  (determined  pursuant to Section
11(d)  hereof)  of the  Common  Stock  of such  Principal  Party  on the date of
consummation  of  such  consolidation,  merger,  sale  or  transfer;  (ii)  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;  (iii)  the  term  "Company"  shall
thereafter be deemed to refer to such  Principal  Party,  it being  specifically
intended that the  provisions of Section 11 hereof shall apply to such Principal
Party; and (iv) such Principal Party shall take such steps  (including,  but not
limited to, the reservation of a sufficient number of shares of its Common Stock
to permit  exercise of all  outstanding  Rights in accordance  with this Section
13(a)) 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 its shares of Common Stock  thereafter  deliverable  upon
the exercise of the Rights.  The Company shall not enter into any transaction of
the kind set forth in this subsection if at the time of the consummation of such
transaction  there are any options,  warrants,  rights,  conversion  or exchange
provisions or securities outstanding or any agreements or arrangements in effect
which, as a result of the consummation of such  transaction,  would eliminate or
substantially  diminish the benefits intended to be afforded by the Rights.  If,
in the case of a  transaction  of the kind  described in clause (z) of the first
sentence  of this  subsection,  the Person or Persons to whom  assets or earning
power are sold or otherwise  transferred  are  individuals,  then the  preceding
sentences  of this  subsection  shall be  inapplicable,  and the  Company  shall
require as a condition to such sale or transfer  that such Person or Persons pay
to each holder of a Rights  Certificate,  upon its surrender to the Rights Agent
and in exchange therefor (without requiring payment by such holder), cash in the
amount  determined by multiplying the then current  Exercise Price by the number
of one quarter shares of Common Stock for which a  Right  is  then  exercisable.

     (b) "Principal Party" shall mean

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

                                       22
<PAGE>

     Common Stock of the Company are converted in such merger or  consolidation,
     and if no securities  are so issued,  the Person that is the other party to
     the merger or consolidation; and

          (ii) in the case of any  transaction  described  in clause  (z) of the
     first sentence of Section 13(a), the Person that is the party receiving the
     greatest  portion of the assets or earning  power  transferred  pursuant to
     such transaction or transactions;

provided, however, that in any such case, (x) if the Common Stock of such Person
is not at such time and has not been  continuously  over the preceding  12-month
period  registered  under  Section 12 of the Exchange  Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered,  "Principal Party" shall refer to such other Person; and
(y) in case such Person is a Subsidiary,  directly or  indirectly,  or more than
one  Person,  the  Common  Stocks  of two or more of which  are and have been so
registered,  "Principal  Party"  shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest  aggregate market value of shares
outstanding.

     (c) The Company shall not consummate any such  consolidation,  merger, sale
or transfer unless prior thereto (x) the Principal Party shall have a sufficient
number of  authorized  shares of its Common  Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this  Section  13, and (y) the Company  and each  Principal  Party and each
other Person who may become a Principal Party as a result of such consolidation,
merger, sale or transfer shall have executed and delivered to the Rights Agent a
supplemental  agreement  providing  for the terms set forth in Section 13(a) and
(b) and further  providing  that, as soon as  practicable  after the date of any
consolidation,  merger,  sale or transfer of assets  mentioned in Section 13(a),
the Principal Party at its own expense will

          (i) prepare and file a registration statement under the Securities Act
     with respect to the Rights and the securities  purchasable upon exercise of
     the  Rights on an  appropriate  form,  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  that  at all  times  meets  the
     requirements  of the  Securities Act)  until  the  Final  Expiration  Date;

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

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

                                       23
<PAGE>

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

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

     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 may 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 purposes of this Section 14(a),  the current market
value of a whole Right shall be the closing  price per Right for the Trading Day
immediately  prior to such  date on which  fractional  Rights  would  have  been
otherwise issuable. The closing price for any Trading Day shall be the last sale
price,  regular  way,  or, in case no such sale takes place on such Trading Day,
the average of the closing bid and asked prices,  regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities  listed or admitted to trading on the New York Stock  Exchange or,
if the  Rights  are not  listed or  admitted  to  trading  on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national  securities exchange
on which the Rights  are listed or  admitted  to  trading;  or, if not listed or
admitted to trading on any national securities  exchange,  the last quoted price
(or,  if not so quoted,  the  average of the last  quoted high bid and low asked
prices) in the  over-the-counter  market,  as  reported  by NASDAQ or such other
system then in use;  or, if, on any such  Trading Day no bids for the Rights are
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 market
maker is making a market in the Rights the current market value of the Rights on
such Trading Day shall be  determined  reasonably  and with utmost good faith to
the  holders  of the  Rights by the Board of  Directors  of the  Company,  whose
determination  shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent.

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

                                       24
<PAGE>

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

     Section  15.  Rights of  Action.  All  rights of action in  respect of this
Agreement,  other than rights of action  vested in the Rights Agent  pursuant to
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 Stock);  and any registered holder of any Right Certificate (or, prior to
the Distribution  Date, of the Common Stock),  without the consent of the Rights
Agent  or of the  holder  of any  other  Right  Certificate  (or,  prior  to the
Distribution Date, of the Common Stock),  may, in his own behalf and for his own
benefit,  enforce, and may institute and maintain any suit, action or proceeding
against  the Company to enforce,  or  otherwise  act in respect of, his right to
exercise the Right 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 shall be entitled to specific  performance  of the
obligations  hereunder  and  injunctive  relief  against  actual  or  threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Holders  of  Rights  shall be  entitled  to  recover  the  reasonable  costs and
expenses,  including  attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.

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

     (a) prior to the  Distribution  Date, each Right will be transferable  only
simultaneously and together with the transfer of shares of Common Stock;

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

     (c) subject to Sections 6 and 11, the Company and the Rights Agent may deem
and  treat  the  person  in whose  name a Right  Certificate  (or,  prior to the
Distribution Date, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby  (notwithstanding any
notations of ownership or writing on the Right  Certificates  or the  associated
Common  Stock  certificate  made by anyone  other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary; and

     (d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights  Agent shall have any  liability to any holder of a Right
or other Person as the result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or

                                       25
<PAGE>

permanent  injunction  or other  order,  decree or  ruling  issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission,  or any statute,  rule, regulation or executive order promulgated
or enacted by any governmental  authority  prohibiting or otherwise  restraining
performance of such obligations;  provided,  however,  that the Company must use
its reasonable  best efforts to have any such order,  decree or ruling lifted or
otherwise overturned as soon as possible.

     Section 17. Right Certificate  Holder Not Deemed a Shareholder.  No holder,
as such, of any Right Certificate  shall be entitled to vote,  receive dividends
or be deemed for any  purpose  the  holder of the shares of Common  Stock 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,  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 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.

     (a) The Company agrees to pay to the Rights Agent  reasonable  compensation
for all services  rendered by it hereunder  and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and
other  disbursements  incurred  in the  administration  and  execution  of  this
Agreement and the exercise and performance of its duties hereunder.  The Company
also agrees to indemnify the Rights Agent and its directors, officers, employees
and agents for, and to hold each of them harmless  against any loss,  liability,
or  expense,  incurred  without  gross  negligence,  recklessness,  bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the  Rights  Agent or such other  indemnified  party in  connection  with the
acceptance and administration of this Agreement or the performance of the Rights
Agent's duties hereunder,  including the costs and expenses of defending against
any claim of liability arising therefrom, directly or indirectly.

     (b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement or the performance of the Rights Agent's duties
hereunder in reliance upon any Right Certificate or certificate for Common Stock
or 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 in reliance upon the advice of counsel as set
forth in Section 20.

                                       26
<PAGE>

     (c) The indemnity  provided in this Section 18 shall survive the expiration
of the Rights and the termination of the Agreement.

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

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

     (b) 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 the duties
and  obligations  imposed  by  this  Agreement  upon  the  following  terms  and
conditions,  by all of which the Company and the holders of Right  Certificates,
by their acceptance thereof, shall be bound:

     (a) The Rights Agent may consult with legal counsel selected by it (who may
be legal  counsel for the  Company),  and the advice or opinion of such  counsel
shall be full and complete  authorization  and protection to the Rights Agent as
to any action taken 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 Current Per Share Market Price) be proved or established by the
Company prior to taking or suffering any action  hereunder,  such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be

                                       27
<PAGE>

conclusively  proved  and  established  by a  certificate  signed  by  any  duly
authorized  officer of the Company and delivered to the Rights  Agent;  and such
certificate  shall be full and  complete  authorization  and  protection  to the
Rights  Agent as to any action  taken or omitted by it in good faith in reliance
upon such certificate.

     (c) The  Rights  Agent  shall be  liable  hereunder  only for its own gross
negligence, recklessness, bad faith or willful misconduct.

     (d) The  Rights  Agent  shall not be liable  for or by reason of any of the
statements  of fact or  recitals  contained  in this  Agreement  or in the Right
Certificates (except its 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  void  pursuant  to Section  11(a)  hereof)  or any  adjustment
required  under  the  provisions  of  Sections  3, 11,  13,  23 or 24  hereof or
responsible  for the  manner,  method or amount  of any such  adjustment  or the
ascertaining  of the existence of facts that would  require any such  adjustment
(except with respect to the exercise of Rights  evidenced by Right  Certificates
after  receipt of a  certificate  describing  any such  adjustment  furnished in
accordance  with  Section  12  hereof),  nor  shall  it be  responsible  for any
determination  by the Board of Directors of the Company of current  market value
of the Rights or Common Stock  pursuant to the  provisions of Section 14 hereof;
nor  shall it by any act  hereunder  be  deemed  to make any  representation  or
warranty as to the authorization or reservation of any shares of Common Stock to
be issued  pursuant to this Agreement or any Right  Certificate or as to whether
any shares of Common  Stock  will,  when so issued,  be validly  authorized  and
issued,  fully paid and  nonassessable;  nor shall it be under any obligation to
institute  any  action,  suit or legal  proceeding  or to take any other  action
likely to involve  expense  unless the Company or one or more of the  registered
holders of the Rights  Certificates shall furnish the Rights Agent with security
and  indemnity  to its  satisfaction  for any  costs and  expenses  which may be
incurred; nor shall it be liable for any failure to perform any duties except as
specifically set forth herein and no implied  covenants or obligations  shall be
read into this Agreement against the Rights Agent,  whose duties and obligations
shall be determined solely by the express provisions hereof.

     (f) The Company  agrees that it will inform the Rights Agent  promptly upon
the Company's  determination  that a Person has become an Acquiring Person,  and
the Rights Agent will not be  responsible  for making such  determination  or be
deemed  to have  knowledge  thereof  prior to such  notice by the  Company.  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

                                       28
<PAGE>

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  and
certificates delivered pursuant to any provision hereof from any duly authorized
officer of the  Company,  and is  authorized  to apply to any such  officer  for
advice or instructions in connection with its duties, and it shall not be liable
for any action  taken or suffered to be taken by it in good faith in  accordance
with  instructions of any such officer or for any delay in acting while awaiting
instructions.  Any application by the Rights Agent for written instructions from
the  Company  may, at the option of the Rights  Agent,  set forth in writing any
action  proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on and/or after which such action  shall be taken or such  omission
shall be  effective.  The Rights  Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance  with a proposal  included in
such application on or after the date specified in such application  (which date
shall not be less than five  Business  Days  after the date any  officer  of the
Company actually receives such  application,  unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission),  the Rights Agent shall have
received  written  instructions in response to such  application  specifying the
action to be taken or omitted.

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

     (i) The Rights  Agent may execute and  exercise any of the rights or powers
vested in it or perform  any of its duties  hereunder  either  directly or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default,  neglect or misconduct of any such attorney or
agent or for any loss to the  Company  resulting  from  any such  act,  default,
neglect or  misconduct,  provided the Rights Agent was not grossly  negligent in
the selection or continued employment of such agent.

     (j) 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 either not
been completed or indicates an affirmative  response to clause (1) or clause (2)
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

     (k) Anything in this  Agreement to the  contrary  not  withstanding,  in no
event shall the Rights  Agent be liable for special,  indirect or  consequential
loss or  damage  of any  kind  whatsoever  (including  but not  limited  to lost
profits).

                                       29
<PAGE>

     (l) No provision in 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.

     Section  21.  Change of Rights  Agent.  The Rights  Agent or any  successor
Rights Agent may resign and be discharged  from its duties under this  agreement
upon  thirty (30) days'  notice in writing  mailed to the  Company,  and to each
transfer  agent of the Common Stock 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 (with or without  cause) upon
thirty (30) days'  notice in writing,  mailed to the Rights  Agent or  successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
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  incumbent  Rights  Agent  or  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) a  corporation  or  trust  company
organized and doing business under the laws of the United States or of the State
of State of Georgia (or of any other state of the United  States so long as such
corporation  is authorized to do business as a banking  institution in the State
of Georgia),  in good standing,  which is authorized under such laws to exercise
shareholder  services or corporate trust powers and is subject to supervision or
examination  by federal or state  authority or (b) an Affiliate of a corporation
described  in clause (a) of this  sentence.  After  appointment,  the  successor
Rights  Agent  shall  be  vested  with  the  same  powers,  rights,  duties  and
responsibilities  as if it had been  originally  named as Rights  Agent  without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose.  Not later than the  effective  date of any such  appointment,  the
Company shall file notice thereof in writing with the  predecessor  Rights Agent
and each transfer agent of the Common Stock and mail a notice thereof in writing
to the registered holders of the Right Certificates.  Failure to give any notice
provided  for in this  Section 21,  however,  or any defect  therein,  shall not
affect the  legality  or validity  of the  resignation  or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

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

                                       30
<PAGE>

provisions of this  Agreement.  In addition,  in connection with the issuance or
sale of shares of Common Stock following the Distribution  Date and prior to the
redemption or expiration of the Rights,  the Company (a) shall,  with respect to
shares of  Common  Stock so issued or sold  pursuant  to the  exercise  of stock
options  or under  any  employee  plan or  arrangement,  or upon  the  exercise,
conversion or exchange of securities  hereafter  issued by the Company,  and (b)
may, in any other  case,  if deemed  necessary  or  appropriate  by the Board of
Directors of the Company, issue Right Certificates  representing the appropriate
number of Rights in connection  with such issuance or sale;  provided,  however,
that (i) no such Right  Certificate  shall be issued if, and to the extent that,
the  Company  shall be advised  by counsel  that such  issuance  would  create a
significant  risk of  material  adverse tax  consequences  to the Company or the
person to whom such Right  Certificate  would be issued,  and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate  adjustments
shall otherwise have been made in lieu of the issuance thereof.

     Section 23. Redemption.

     (a) The Board of Directors  of the Company may, at its option,  at any time
prior to the earlier of (x) the Close of Business on the tenth day following the
Share  Acquisition  Date (or, if the Share  Acquisition Date shall have occurred
prior to the Record Date,  the Close of Business on the tenth day  following the
Record Date), or (y) the Final Expiration Date, redeem all but not less than all
of the then outstanding Rights at a redemption price of $.001 per Right, as such
amount may be appropriately  adjusted,  as determined by the Board of Directors,
to reflect any  transaction  of the kind described in clauses (A) through (D) of
Section  11(a)(i)  occurring after the date hereof (such  redemption price being
hereinafter referred to as the "Redemption Price");  provided,  however, that if
the Board of Directors of the Company  shall  authorize  the  redemption  of the
Rights in the  circumstances  set forth in clause (i) or (ii) below,  then there
must be Disinterested  Directors in office and such authorization  shall require
the  concurrence  of a  majority  of  such  Disinterested  Directors:  (i)  such
authorization  occurs on or after the date a Person becomes an Acquiring  Person
or (ii) such  authorization  occurs on or after the date of a change  (resulting
from one or more proxy or consent  solicitations) in a majority of the directors
in  office at the  commencement  of such  solicitation  if any  Person  who is a
participant in such  solicitation  has stated (or, if upon the  commencement  of
such  solicitation  a majority  of the Board of  Directors  of the  Company  has
determined  in  good  faith)  that  such  Person  (or any of its  Affiliates  or
Associates)  intends to take,  or may  consider  taking,  any action which would
result in such  person  becoming  an  Acquiring  Person or which would cause the
occurrence of an Adjustment Event. In considering  whether to redeem the Rights,
the Board of  Directors  of the  Company may  consider  the best  long-term  and
short-term interests of the Company, including,  without limitation, the effects
of the redemption of the Rights upon  employees,  suppliers and customers of the
Company or any  Subsidiary  of the Company and  communities  in which offices or
other establishments of the Company or any Subsidiary of the Company are located
and all other pertinent  factors,  including without  limitation the factors set
forth in the Company's  Articles of  Incorporation as amended from time to time.
The  redemption of the Rights by the Board of Directors may be effective at such
time,  on such basis and with such  conditions as such Board of Directors in its
sole discretion may establish.  In addition to the right of redemption  reserved
in the  first  sentence  of this  subsection  (a),  if there  are  Disinterested
Directors then in office, such Board

                                       31
<PAGE>

of  Directors  may  redeem,   with  the   concurrence  of  a  majority  of  such
Disinterested  Directors,  all,  but not less than all, of the then  outstanding
Rights at the Redemption Price after the occurrence of a Share Acquisition Date,
but prior to the occurrence of any  transaction of the kind described in Section
11(a)(ii)(A) or (C) or Section 13(a), if either (i) a Person who is an Acquiring
Person shall have  transferred  or  otherwise  disposed of a number of shares of
Common  Stock in one  transaction  or series of  transactions,  not  directly or
indirectly  involving the Company or any of its  Subsidiaries  and which did not
result in the  occurrence of any  transaction  of the kind  described in Section
11(a)(ii)(A) or (C) or Section 13(a), as shall result in such Person  thereafter
being a  Beneficial  Owner of 10% or less of the  outstanding  shares  of Common
Stock of the Company,  and after such transfer or other disposition there are no
other Acquiring Persons,  or (ii) in connection with any transaction of the kind
described in Section  11(a)(ii)(A)  or Section 13(a) in which all holders of the
Common  Stock of the Company are treated the same and which shall not involve an
Acquiring Person,  an Affiliate or Associate of an Acquiring  Person,  any other
Person in which such Acquiring  Person,  Affiliate or Associate has any interest
or  any  other  Person  acting,  directly  or  indirectly,  on  behalf  of or in
association with such Acquiring Person, Affiliate or Associate.  Notwithstanding
any other provision of this Agreement, the Rights shall not be exercisable after
the first occurrence of an event specified in Section  11(a)(ii) until such time
as the Company's right of redemption hereunder has expired.

     (b)  Immediately  upon the action of the Board of  Directors of the Company
ordering  the  redemption  of the Rights,  and  without  any further  action and
without any notice, the right to exercise the Rights will terminate and the only
right  thereafter  of the holders of Rights  shall be to receive the  Redemption
Price  for  each  Right so held.  Promptly  after  the  action  of the  Board of
Directors  ordering the redemption of the Rights,  the Company shall give notice
of such  redemption to the Rights Agent and the holders of the then  outstanding
Rights by mailing  such  notice to the Rights  Agent and to all such  holders at
their last  addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution  Date, on the registry books of the Transfer Agent
for the Common Stock.  Any notice which is mailed in the manner herein  provided
shall be deemed given,  whether or not the holder receives the notice. Each such
notice  of  redemption  will  state  the  method  by which  the  payment  of the
Redemption Price will be made.  Neither the Company nor any of its Affiliates or
Associates  may  redeem,  acquire or purchase of value any Rights at any time in
any manner  other than that  specifically  set forth in this  Section  23, or in
connection  with the  purchase,  acquisition  or  redemption of shares of Common
Stock prior to the Distribution Date.

     (c) The  Company  may,  at its option,  pay the  Redemption  Price in cash,
shares of Common  Stock  (based on the  Current  Per Share  Market  Price of the
Common Stock as of the time of  redemption)  or any other form of  consideration
deemed appropriate by the Board.

     Section 24. Exchange.

     (a) The Board of Directors  of the Company may, at its option,  at any time
after any Person shall have become an Acquiring Person, exchange all or any part
of the then  outstanding and exercisable  Rights (which shall not include Rights
which have become void pursuant to the

                                       32
<PAGE>

provisions of Section  11(a)(ii)) for Common Stock of the Company at an exchange
rate of one quarter share of Common Stock per Right,  appropriately  adjusted to
reflect any  transaction  specified  in clauses (A) through (D),  inclusive,  of
Section  11(a)(i)  occurring  after the date hereof  (such  exchange  rate being
hereinafter called the "Exchange Rate");  provided,  however,  that the Board of
Directors  shall not be  empowered  to effect such an exchange at any time after
any Person  (other than an Exempt  Person),  together  with all  Affiliates  and
Associates of such Person, shall have become the Beneficial Owner of 50% or more
of the Common Stock of the Company then outstanding.

     (b)  Immediately  after any action by the Board of Directors of the Company
directing the exchange of any Rights  pursuant to subsection (a) of this Section
24,  notice of which  shall be filed  with the Rights  Agent,  and  without  any
further  action and without any notice,  the right to exercise such Rights shall
terminate and each registered holder of such Rights shall thereafter be entitled
to  receive  only the number of shares of Common  Stock  which  shall  equal the
number of Rights held by such registered holder multiplied by the Exchange Rate.
The Company shall give prompt public notice of any exchange directed pursuant to
such subsection (a); provided,  however, that the failure to give, or any defect
in, any such notice  shall not affect the validity of such  exchange.  Within 10
days after  action by such Board of  Directors  directing  the  exchange of such
Rights, the Company shall mail a notice of exchange to all registered holders of
such Rights at their last  addresses  appearing  upon the registry  books of the
Rights Agent or, prior to the  Distribution  Date, on the registry  books of the
transfer  agent for the Common  Stock.  Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not received by the registered
holder to whom sent; provided,  however, that the failure to give, or any defect
in, any such notice  shall not affect the  validity of any such  exchange.  Each
such  notice  shall state the method by which the  exchange of Common  Stock 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
among the registered  holders of the Rights based upon the number of Rights held
(excluding  Rights which have become void pursuant to the  provisions of Section
11(a)(ii)); and in such case, a new Rights Certificate evidencing the Rights not
being exchanged shall be prepared and executed by the Company and  countersigned
and  delivered  by the  Rights  Agent to the  registered  holder of such  Rights
subject to the provisions of Section 14.

     (c) In the event that there  shall be an  insufficient  number of shares of
Common Stock  authorized  but unissued or issued and held in the treasury of the
Company to permit an exchange of Rights  directed by the Board of  Directors  of
the  Company,  the  Company  shall take all such action as may be  necessary  to
authorize  additional  shares of Common Stock for issuance upon such exchange of
the Rights.  In any such  exchange,  the Company may, at its option,  substitute
Equivalent  Common  Stock  for  some  or  all  of  the  Common  Stock  otherwise
exchangeable for the Rights.

     (d) The Company shall not be required to issue fractional  shares of Common
Stock in  exchange  for  Rights or to  distribute  certificates  which  evidence
fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
the Company  shall pay to the  registered  holders of the Rights with respect to
which such fractional Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the Current Per Share Market Value of Common Stock
(as

                                       33
<PAGE>

determined as provided in Section 11(d)) for the Trading Day  immediately  prior
to the date of such exchange.

     Section 25. Notice of Certain Events

     (a) In case the Company shall propose,  at any time after the  Distribution
Date,  (i) to pay any  dividend  payable in stock of any class to the holders of
Common  Stock or to make any other  distribution  to the holders of Common Stock
(other  than a regular  periodic  cash  dividend  out of  earnings  or  retained
earnings of the Company), or (ii) to offer to the holders of Common Stock rights
or warrants to  subscribe  for or to purchase  any  additional  shares of Common
Stock or  shares  of  stock of any  class or any  other  securities,  rights  or
options, or (iii) to effect any reclassification of its Common Stock (other than
a  reclassification  involving only the  subdivision  of  outstanding  shares of
Common Stock), or (iv) to effect any consolidation or merger into or with, or to
effect any sale,  non-ordinary  course  mortgage or other transfer (or to permit
one or more of its Subsidiaries to effect any sale, non-ordinary course mortgage
or other transfer),  in one transaction or a series of related 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  (other than a Subsidiary of the Company
in one or more  transactions  each of which is not  prohibited  by Section 11(o)
hereof),  or (v) to effect  the  liquidation,  dissolution  or winding up of the
Company,  then,  in each such case,  the Company  shall give to each holder of a
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,  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 shares of Common Stock,  if any such date is to be
fixed,  and such notice shall be so given,  in the case of any action covered by
clause (i) or (ii)  above,  at least ten (10) days prior to the record  date for
determining  holders of the shares of Common  Stock for purposes of such action,
and in the case of any such  other  action,  at least ten (10) days prior to the
date of the taking of such proposed action or the date of participation  therein
by the holders of the shares of Common Stock, whichever shall be the earlier.

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

                           DH Apparel Company, Inc.
                           1020 Barrow Industrial Parkway
                           Winder, Georgia 30680
                           Attn:  Secretary

                                       34
<PAGE>

Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement  to be given or made by the  Company  or by the  holder  of any  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:

                           First Union National Bank
                           1525 West W.T. Harris Boulevard, 3C3
                           Charlotte, North Carolina 28288-1153
                           Attention: Shareholder Services Group

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 (or, prior to
the Distribution Date, to the holder of any certificate  representing  shares of
Common Stock) shall be sufficiently  given or made if sent by first- class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.

     Section 27. Supplements and Amendments. Prior to the Distribution Date, the
Company and the Rights Agent shall, if so directed by the Company, supplement or
amend any  provision  of this  Agreement  without the approval of any holders of
certificates  representing  Common Stock. From and after the Distribution  Date,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holder of Right Certificates in
order (i) to cure any  ambiguity,  (ii) to correct or  supplement  any provision
contained  herein  which  may  be  defective  or  inconsistent  with  any  other
provisions  herein,  (iii) to shorten or lengthen  any time period  hereunder or
(iv) to change or supplement  the  provisions  hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect, as
determined solely by the Company,  the interests of the holders of the Rights or
the Right  Certificates  (other  than an  Acquiring  Person or an  Affiliate  or
Associate of an Acquiring Person);  provided,  however,  that this Agreement may
not be supplemented or amended  pursuant to clause (iii) of this sentence (A) to
lengthen any time period unless (1) approved by a majority of the  Disinterested
Directors  then in  office  and (2)  such  lengthening  is for  the  purpose  of
protecting,  enhancing  or  clarifying  the rights of,  and/or the  benefits to,
registered holders of the Rights, or (B) to lengthen any time period relating to
when  the  Rights  may be  redeemed  if at such  time  the  Rights  are not then
redeemable. Upon the delivery of such certificate from an appropriate officer of
the Company  which  states  that the  proposed  supplement  or  amendment  is in
compliance  with the terms of this  Section 27, the Rights  Agent shall  execute
such  supplement  or  amendment.  Notwithstanding  anything  contained  in  this
Agreement to the contrary,  no supplement or amendment shall be made on or after
the Distribution  Date which changes the Redemption  Price, the Final Expiration
Date, the Exercise Price or the number of shares (or portions thereof) of Common
Stock for which a Right is  exercisable,  and no  supplement  or amendment  that
changes the rights and duties of the Rights Agent under this Agreement  shall be
effective  without the consent of the Rights  Agent.  Prior to the  Distribution
Date,

                                       35
<PAGE>

the  interests  of the  holders of Rights  shall be deemed  coincident  with the
interests of the holders of Common Stock.

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

     Section 29.  Determinations and Actions by the Board of Directors.  For all
purposes of this  Agreement,  any  calculation of the number of shares of Common
Stock outstanding at any particular time,  including for purposes of determining
the particular  percentage of such  outstanding  shares of Common Stock of which
any Person is the Beneficial  Owner,  shall be made in accordance  with the last
sentence of Rule  13d-3(d)(1)(i)  of the General Rules and Regulations under the
Exchange  Act as in effect on the date  hereof.  The Board of  Directors  of the
Company  (with,  where  specifically  provided  for  herein,  the  approval of a
majority of the  Disinterested  Directors)  shall have the  exclusive  power and
authority to  administer  this  Agreement  and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for herein,
the approval of a majority of the Disinterested Directors) 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 not redeem the Rights or to amend the Agreement). All such actions,
calculations,  interpretations  and determinations  (including,  for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board of Directors (or, where specifically provided for herein, by a
majority  of the  Disinterested  Directors)  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  any member of the Board of
Directors or any of the Disinterested  Directors to any liability to the holders
of the Rights or to any other person.

     Section 30. 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,  registered  holders of the Common  Stock) any legal or
equitable right, remedy or claim under this Agreement;  but this Agreement shall
be for the sole and exclusive  benefit of the Company,  the Rights Agent and the
registered  holders of the Right  Certificates  (and,  prior to the Distribution
Date, registered holders of the Common Stock).

     Section 31. Severability.  If any term, provision,  covenant or restriction
of this  Agreement  is  held  by a court  of  competent  jurisdiction  or  other
authority  to be invalid,  void or  unenforceable,  the  remainder of the terms,
provisions,  covenants and  restrictions  of this Agreement shall remain in full
force and  effect  and shall in no way be  affected,  impaired  or  invalidated;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court  or  authority  to be  invalid,  void or  unenforceable  and the  Board of
Directors of the Company (including, if at the time of such determination, there
is an Acquiring

                                       36
<PAGE>

Person, a majority of the Disinterested  Directors then in office) determines in
its good faith  judgment that  severing the invalid  language from the Agreement
would  adversely  affect the  purpose or effect of the  Agreement,  the right of
redemption  set forth in Section  23 hereof  shall be  reinstated  and shall not
expire until the Close of Business on the tenth day  following  the date of such
determination by the Board of Directors.

     Section  32.  Governing  Law.  This  Agreement,  each  Right and each Right
Certificate  issued  hereunder  shall be deemed to be a contract  made under the
laws of the State of  Georgia  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 to be performed entirely within Georgia.

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

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

                          SIGNATURES ON FOLLOWING PAGE

                                       37
<PAGE>

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

ATTEST:                               DH APPAREL COMPANY, INC.

By:     s/ Cathy G. Morris            By:      s/ K. Scott Grassmyer
---     ------------------            ---      ---------------------
Name:   Cathy G. Morrie               Name:    K. Scott Grassmyer
Title:  Assistant to Chairman & CFO   Title:   Sr. V.P., CFO

ATTEST:                               FIRST UNION NATIONAL BANK

By:    s/ Johnnie H. Coble            By:      s/ Patrick J. Edwards
---    -------------------            ---      ---------------------
Name:  Johnnie H. Coble               Name:    Patrick J. Edwards
Title: Corporate Trust Officer        Title:   Vice President

                                       38
<PAGE>

                                                                       Exhibit A
                           [Form of Right Certificate]

Certificate No. R-______________                               __________ Rights

NOT  EXERCISABLE  AFTER  JANUARY 20, 2010 OR EARLIER IF NOTICE OF  REDEMPTION IS
GIVEN.  THE RIGHTS ARE SUBJECT TO REDEMPTION,  AT THE OPTION OF THE COMPANY,  AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS  AGREEMENT.  [UNDER CERTAIN
CIRCUMSTANCES,  RIGHTS  BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS  AGREEMENT) AND ANY  SUBSEQUENT  HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.] [THE RIGHTS  REPRESENTED BY THIS  CERTIFICATE  ARE OR
WERE BENEFICIALLY  OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING  PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT).  THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID UNDER  CERTAIN  CIRCUMSTANCES  AS SPECIFIED IN SECTION  11(a) OF THE
RIGHTS AGREEMENT.]

                                RIGHT CERTIFICATE
                               DH APPAREL COMPANY, INC.

     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
Shareholder  Rights  Agreement  dated  as  of  January  27,  2000  (the  "Rights
Agreement")  between DH Apparel Company,  Inc. (the "Company"),  and First Union
National  Bank (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 the Close of Business on January 20, 2010, at the office or offices
of the Rights Agent  designated  for such purpose,  or its  successors as Rights
Agent,  one  quarter of a fully paid and  nonassessable  share of common  stock,
$0.01 par value per share (the "Common Stock"),  of the Company,  at an exercise
price of $10.00 per quarter share (the  "Exercise  Price")  equivalent to $40.00
for each share),  upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase and the related Certificate duly executed.  The
number of Rights  evidenced by this Right  Certificate (and the number of shares
which may be purchased  upon exercise  thereof) set forth above and the Exercise
Price per share  set  forth  above,  are the  number  and  Exercise  Price as of
_________________, based on the Common Stock as constituted at such date.

     Upon the occurrence of a Section  11(a)(ii)  Event (as such term is defined
in the Rights Agreement),  if the Rights evidenced by this Right Certificate are
beneficially  owned by (i) an  Acquiring  Person or an Affiliate or Associate of
any such Person (as such terms are defined in the

                                        1
<PAGE>

Rights Agreement),  (ii) a transferee of any such Acquiring Person, Affiliate or
Associate,  or  (iii)  under  certain  circumstances  specified  in  the  Rights
Agreement,  a  transferee  of a Person  who,  after  such  transfer,  became  an
Acquiring  Person,  or an Affiliate or  Associate of an Acquiring  Person,  such
Right shall become null and void and no holder  hereof shall have any right with
respect to such Rights from and after the  occurrence of such Section  11(a)(ii)
Event.

     As provided in the Rights  Agreement,  the Exercise Price and the number of
shares of Common  Stock or other  securities  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,  which
limitations of rights include the temporary  suspension of the exercisability of
such Rights under the specific  circumstances set forth in the Rights Agreement.
Copies of the  Rights  Agreement  are on file at the  principal  offices  of the
Company and the Rights Agent and are also available upon written  request to the
Company or the Rights Agent.

     This Right  Certificate,  with or without  other Right  Certificates,  upon
surrender  at the  office or offices of the  Rights  Agent  designated  for such
purpose,  may be exchanged for another Right Certificate or Certificates of like
tenor  and date  evidencing  Rights  entitling  the  holder to  purchase  a like
aggregate  number of shares of Common Stock as the Rights evidenced by the Right
Certificate  or  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
Certificates for the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this Certificate may be redeemed by the Board of Directors of the Company at its
option at a redemption  price of $.001 per Right (payable in cash,  Common Stock
or other consideration deemed appropriate by the Board of Directors),  or may be
exchanged, in whole or in part, for Common Stock.

     No  fractional  shares of Common  Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.

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

                                        2
<PAGE>

corporate  action,  or to receive notice of meetings or other actions  affecting
stockholders  (except  as  provided  in the  Rights  Agreement),  or to  receive
dividends  or  subscription  rights,  or  otherwise,  until  the Right or Rights
evidenced by this 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 ____________, 20__.

ATTEST:                                          DH APPAREL COMPANY, INC.

By:________________________                       By:________________________
   Secretary                                               President

Countersigned:

FIRST UNION NATIONAL BANK
as Rights Agent

By: ____________________________

Title: ___________________________

                                        3
<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: _________________ 20___                  ______________________________
                                                          Signature

Signature Guaranteed:____________________

                                   CERTIFICATE

The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: ____________, 20___                        ______________________________
                                                          Signature

                                     NOTICE

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

                                        4
<PAGE>

                          FORM OF ELECTION TO PURCHASE

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

To: DH Apparel Company, Inc.:

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

______________________________________________________________________________
                         (Please print name and address)

___________________________________
(Please insert social security or other identifying number)

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

______________________________________________________________________________
                         (Please print name and address)

___________________________________
(Please insert social security or other identifying number)

Dated: ____________, 20___

                                           ____________________________________
                                                     Signature

Signature Guaranteed:______________________

                                        5
<PAGE>

                                                                       Exhibit B

                               DH APPAREL COMPANY, INC.
                   SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK

     On January 20, 2000,  the Board of Directors  of DH Apparel  Company,  Inc.
(the  "Company")  declared a dividend  distribution of one Common Stock Purchase
Right for each outstanding  share of Common Stock of the Company to stockholders
of record at the close of business on January 20, 2000.  Each Right entitles the
registered  holder to purchase  from the  Company  one  quarter  share of Common
Stock, $0.01 par value per share (the "Common Stock"),  at a cash exercise price
of $10.00 per quarter share, subject to adjustment. The description and terms of
the Rights are set forth in a Shareholder  Rights Agreement  between the Company
and First Union National Bank, as Rights Agent.

     Initially,  the Rights  will not be  exercisable,  will be  attached to all
outstanding  shares of Common Stock, and no separate Right  Certificates will be
distributed.  The Rights will separate from the Common Stock and a  Distribution
Date will occur upon the earliest of (i) 10 days following a public announcement
that a person  or group of  affiliated  or  associated  persons  (an  "Acquiring
Person")  (other than an Exempt Person as defined in the Agreement) has acquired
beneficial  ownership of 20% or more of the  outstanding  shares of Common Stock
(the date of said  announcement  being  referred  to as the  "Share  Acquisition
Date") and (ii) 10 business days following the commencement of a tender offer or
exchange  offer that would result in a Person or group owning 20% or more of the
outstanding shares of Common Stock. Pursuant to the terms of his employment, the
Company's  President,  Chairman and Chief Executive  Officer,  Robert D. Rockey,
Jr., has the right to purchase up to  1,000,000  shares of the Common Stock on a
date six months  after the  "spin-off"  of the Company  from its initial  parent
company, Delta Woodside Industries,  Inc.   Notwithstanding the other provisions
of this  paragraph,  the  exercise  of this right will not by itself,  cause Mr.
Rockey to become an Acquiring Person.

     Until the  Distribution  Date (or earlier  redemption  or expiration of the
Rights),  (a) the Rights will be evidenced by the Common Stock  certificates and
will be  transferred  only with such Common Stock  certificates,  (b) new Common
Stock  certificates  issued  after  January  20,  2000 will  contain a  notation
incorporating  the  Shareholder  Rights  Agreement  by  reference,  and  (c) the
surrender for transfer of any certificates for Common Stock will also constitute
the transfer of the Rights  associated with the Common Stock represented by such
certificate.

     The Rights are not exercisable  until the Distribution Date and will expire
at the close of business on January 20, 2010 unless  previously  redeemed by the
Company as described below.

     As soon as practicable after the Distribution Date, Right Certificates will
be mailed to holders of record of Common  Stock as of the close of  business  on
the Distribution Date and,  thereafter,  the separate Right  Certificates  alone
will  represent  the  Rights.  Except as  otherwise  determined  by the Board of
Directors,  only shares of Common Stock issued  prior to the  Distribution  Date
will be issued with Rights.

                                        1
<PAGE>

     In the event that (i) a Person acquires beneficial ownership of 20% or more
of the Company's Common Stock, (ii) the Company is the surviving  corporation in
a merger with an Acquiring  Person or any Affiliate or Associate of an Acquiring
Person and the Common  Stock is not  changed or  exchanged,  (iii) an  Acquiring
Person engages in one of a number of self-dealing  transactions specified in the
Shareholder  Rights  Agreement,  or (iv) an  event  occurs  that  results  in an
Acquiring  Person's  ownership  interest being increased by more than 1%, proper
provision will be made so that each holder of a Right will  thereafter  have the
right to receive upon exercise thereof at the then current exercise price,  that
number of shares of Common Stock (or in certain  circumstances,  cash, property,
or other  securities  of the  Company)  having a market  value of two times such
exercise price. However, the Rights are not exercisable following the occurrence
of any of the  events  set forth  above  until the time the Rights are no longer
redeemable as set forth below. Notwithstanding any of the foregoing, upon any of
the events set forth  above,  rights that are or were  beneficially  owned by an
Acquiring Person shall become null and void.

     In the event that, at any time  following the Share  Acquisition  Date, (i)
the Company is acquired in a merger or other business combination transaction or
(ii) 50% or more of the Company's  assets or earning power is sold,  each holder
of a Right shall  thereafter  have the right to receive,  upon exercise,  common
stock of the  acquiring  company  having a market  value  equal to two times the
exercise price of the Right.

     At any time after any person becomes an Acquiring  Person and prior to such
the time such Person,  together with its Affiliates and Associates,  becomes the
Beneficial  Owner of 50% or more of the outstanding  Common Stock,  the Board of
Directors of the Company may  exchange  the Rights  (other than Rights that have
become void),  in whole or in part, at the exchange rate of one quarter share of
Common  Stock per  Right,  subject  to  adjustment  as  provided  in the  Rights
Agreement.

     The  exercise  price  payable,  and the number of shares of Common Stock 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 Common
Stock,  (ii) if all holders of the Common  Stock are granted  certain  rights or
warrants to subscribe  for Common Stock or  securities  convertible  into Common
Stock at less than the current  market price of the Common Stock,  or (iii) upon
the  distribution to all holders of the Common Stock of evidence of indebtedness
or assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).

     With  certain  exceptions,  no  adjustment  in the  exercise  price will be
required  until  cumulative  adjustments  amount to at least 1% of the  exercise
price.  No  fractional  shares of Common Stock will be issued upon exercise of a
Right and, in lieu  thereof,  a payment , in cash will be made based on the fair
market  value of the Common  Stock on the last trading date prior to the date of
exercise.

     The Rights may be redeemed in whole,  but not in part,  at a price of $.001
per  Right  (payable  in  cash,  Common  Stock  or  other  consideration  deemed
appropriate  by the Board of  Directors)  by the Board of  Directors at any time
prior to the close of business on the tenth day after the Share

                                        2

<PAGE>

Acquisition  Date or the  final  expiration  Date of the  Rights  (whichever  is
earlier);  provided  that  under  certain  circumstances,  the Rights may not be
redeemed unless there are Disinterested  Directors in office and such redemption
is approved by a majority of such Disinterested Directors.  After the redemption
period has expired, the Company's right of redemption may be reinstated upon the
approval of the Board of Directors if an Acquiring Person reduces his beneficial
ownership  to  10%  or  less  of the  outstanding  shares  of  Common  Stock  in
transaction or series of transactions not involving the Company and there are no
other Acquiring  Persons.  Immediately upon the action of the Board of Directors
ordering  redemption of the Rights, the Rights will terminate and thereafter the
only right of the holders of Rights will be to  receive  the  redemption  price.

     Until a Right is exercised, the holder will have no rights as a stockholder
of the Company (beyond those as an existing stockholder), including the right to
vote or to receive dividends.

     Any of the  provisions of the Rights  Agreement may be amended by the Board
of  Directors  of  the  Company  prior  to  the  Distribution  Date.  After  the
Distribution  Date,  the  provisions of the Rights  Agreement,  other than those
relating to the principal  economic  terms of the Rights,  may be amended by the
Board to cure any ambiguity,  defect or  inconsistency,  to make changes that do
not adversely affect the interests of holders of Rights (excluding the interests
of any  Acquiring  Person),  or to shorten or lengthen any time period under the
Rights  Agreement.   Amendments   adjusting  time  periods  may,  under  certain
circumstances, require the approval of a majority of Disinterested Directors, or
otherwise be limited.

     While the distribution of the Rights will not be taxable to stockholders or
to the Company,  stockholders may, depending upon the  circumstances,  recognize
taxable income in the event that the Rights become  exercisable for Common Stock
(or other  consideration)  of the  Company or for common  stock of an  acquiring
company as set forth above.

     A copy of the Shareholder 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 Shareholder Rights
Agreement.

                                        3
<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}]]