VIATEL INC
8-A12G, 1999-12-27
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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

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

                                    FORM 8-A

              FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
                  PURSUANT TO SECTION 12(b) OR 12(g) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                                  VIATEL, INC.
            (Exact Name of Registrant as Specified in Its Charter)

                          Delaware                              13-3787366
            (State of Incorporation or Organization)        (I.R.S. Employer
                                                      Identification No.)

            685 Third Avenue, New York, New York                 10017
            (Address of Principal Executive Offices)           (Zip Code)

         If this form relates to the       If this form relates to the
         registration of a class of        registration of a class of
         securities pursuant to            securities pursuant to
         Section 12 (b) of the             Section 12 (g) of the
         Exchange Act and is               Exchange Act and is
         effective pursuant to             effective pursuant to
         General Instruction               General Instruction
         A. (c), please check the          A. (d), please check the
         following box. |_|                following box. |X|

Securities  Act  registration  statement file number to which this form relates:
    Not applicable.

Securities to be registered pursuant to Section 12 (b) of the Act:

          Title of Each Class                Name of Each Exchange on Which
          to be so Registered                  Each Class is to be Registered
          -------------------                --------------------------------

                  None                               Not applicable

Securities to be registered pursuant to Section 12 (g) of the Act:

                         Preferred Stock Purchase Rights
                                (Title of Class)


<PAGE>

Item 1.  Description of Registrant's Securities to be Registered.

     On December 6, 1999, the Board of Directors of Viatel, Inc. ("the Company")
authorized  and declared a dividend of one  Preferred  Share  Purchase  Right (a
"Right") for each outstanding  share of common stock,  $0.01 par value per share
(the  "Common  Stock")  of  the  Company.  The  dividend  will  be  made  to the
stockholders  of record at the  close of  business  on  December  24,  1999 (the
"Record Date").  Each Right entitles the registered  holder to purchase from the
Company,  subject to  adjustment,  one  two-hundred-thousandth  (1/200,000) of a
share of Series A Junior  Participating  Preferred  Stock,  par  value  $.01 per
share,  of the Company (the "Preferred  Shares"),  upon the terms and subject to
the  conditions  set forth in a Rights  Agreement,  dated as of December 6, 1999
(the  "Rights  Agreement"),  between the  Company  and The Bank of New York,  as
Rights Agent (the "Rights Agent").  The Rights Agreement also provides,  subject
to specified  exceptions  and  limitations,  that certain shares of Common Stock
that shall  become  outstanding  after the Record Date will be entitled  to, and
accompanied by, Rights.  The Rights are in all respects  subject to and governed
by the  provisions  of the  Rights  Agreement,  a copy of which  (including  all
exhibits  thereto) is filed as Exhibit  4.12 hereto and  incorporated  herein by
reference.  A summary description of the Rights is set forth in Exhibit C to the
Rights Agreement.




Item 2.  Exhibits

Exhibit No.       Description.

4.12              Rights  Agreement,  dated as of  December  6, 1999,  between
                  Viatel, Inc. and The Bank of New York, as Rights Agent.













                                      2

<PAGE>



                                   SIGNATURES


            Pursuant to the requirements of the Securities Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                          VIATEL, INC.



Date:  December 24, 1999          By:  /S/   JAMES P. PRENETTA
                                       -----------------------------------------
                                       Name:  James P. Prenetta
                                       Title: Vice President and General Counsel




<PAGE>



                                  EXHIBIT INDEX




Exhibit No.       Description.

4.12              Rights  Agreement,  dated as of  December  6, 1999,  between
                  Viatel, Inc. and  The  Bank  of  New York,  as  Rights Agent.



                                                                    Exhibit 4.12
                                  VIATEL, INC.

                                       AND

                      THE BANK OF NEW YORK, AS RIGHTS AGENT

                                RIGHTS AGREEMENT

                          DATED AS OF DECEMBER 6, 1999

<PAGE>

                                RIGHTS AGREEMENT


          RIGHTS  AGREEMENT,  dated as of December  6, 1999 (this  "AGREEMENT"),
between Viatel,  Inc., a Delaware  corporation (the "COMPANY"),  and The Bank of
New York, a New York banking corporation, as rights agent (the "RIGHTS AGENT").

          The Board of  Directors of the Company has  authorized  and declared a
dividend of one preferred share purchase right (a "RIGHT") for each Common Share
(as hereinafter defined) outstanding as of the Close of Business (as hereinafter
defined) on December 24, 1999 (the "RECORD DATE"),  each Right  representing the
right  to   purchase   (subject   to   adjustment   as   provided   herein)  one
two-hundred-thousandth   (1/200,000)  of  a  Preferred   Share  (as  hereinafter
defined), upon the terms and subject to the conditions set forth herein, and has
further authorized and directed the issuance of one Right (subject to adjustment
as  provided  herein)  with  respect to each  Common  Share  that  shall  become
outstanding between the Record Date (as hereinafter  defined) and the earlier of
the  Distribution  Date (as  hereinafter  defined)  or the  Expiration  Date (as
hereinafter defined);  provided, however, that Rights may be issued with respect
to Common Shares that become  outstanding  after the Distribution Date and prior
to the Expiration Date in accordance with Section 22.

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

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

          (a)  "ACQUIRING PERSON" shall mean any Person (as hereinafter defined)
who,  together with all Affiliates (as  hereinafter  defined) and Associates (as
hereinafter  defined)  of  such  Person,  shall  be  the  Beneficial  Owner  (as
hereinafter  defined) of 15% or more of the Common Shares then outstanding,  but
shall not include an Exempt Person (as hereinafter defined);  provided, however,
that: (i) if, as of the Record Date,  any Person is the Beneficial  Owner of 15%
or more of the shares of Common Stock outstanding, then such Person shall not be
or become an "ACQUIRING  PERSON" unless and until such time as such Person shall
become the  Beneficial  Owner of  additional  shares of Common Stock (other than
pursuant  to a  dividend  or  distribution  paid or made by the  Company  on the
outstanding  Common  Stock in shares of Common  Stock or  pursuant to a split or
subdivision  of  the  outstanding  Common  Stock)  unless,   upon  becoming  the
Beneficial Owner of such additional  shares of Common Stock,  such Person is not
then the  Beneficial  Owner of 15% or more of the  shares of Common  Stock  then
outstanding,  provided,  however, that this Section 1(a)(i) shall cease to apply
to such  Person  at and  after  such  time as such  Person,  together  with  all
Affiliates and Associates of such Person,  ceases to be the Beneficial  Owner of
15% or more of the Common  Shares then  outstanding;  (ii) no Person shall be or
become an  "ACQUIRING  PERSON" as the result of an  acquisition  of  outstanding
Common Shares by the Company which, by reducing the number of Common Shares then
outstanding,  increases the proportionate  number of Common Shares  Beneficially
Owned (as hereinafter defined) by such Person,  together with all Affiliates and
Associates of such Person, to 15% or more of the Common Shares then outstanding;
provided, however, that if a Person, together with all Affiliates and Associates
of such Person,  shall be or become the  Beneficial  Owner of 15% or more of the
Common Shares then outstanding by reason of such an acquisition and such Person,
or any of the  Affiliates  or Associates  of such Person,  shall,  after such an
acquisition,  become the Beneficial Owner of any additional Common Shares (other
than pursuant to a dividend or distribution paid or made in Common Shares by the
Company on outstanding Common Shares or pursuant to a split-up or subdivision of

<PAGE>

outstanding Common Shares), then such Person shall be deemed to be an "ACQUIRING
PERSON," unless,  upon becoming the Beneficial  Owner of such additional  Common
Shares, such Person, together with all Affiliates and Associates of such Person,
is  not  the  Beneficial  Owner  of 15%  or  more  of  the  Common  Shares  then
outstanding; and (iii) if the Board of Directors determines in good faith that a
Person who would  otherwise be or have become an "ACQUIRING  PERSON," as defined
pursuant to the  preceding  sentences of this Section  1(a),  is becoming or has
become such inadvertently  (including,  without  limitation,  because:  (A) such
Person was unaware that it Beneficially Owned a percentage of Common Shares then
outstanding that would otherwise cause such Person to be an "Acquiring  Person;"
or (B) such  Person  was  aware of the  percentage  of the  Common  Shares  then
outstanding  Beneficially  Owned  by it  but  had  no  actual  knowledge  of the
consequences of such Beneficial  Ownership under this Agreement) and without any
intention of changing or  influencing  control of the Company,  then such Person
shall not be  deemed  to be or to have  become  an  "ACQUIRING  PERSON"  for any
purposes of this  Agreement  unless and until such  Person  shall have failed to
divest itself,  as promptly as  practicable  (as determined in good faith by the
Board of  Directors) of  Beneficial  Ownership of a sufficient  number of Common
Shares so that such Person would no longer be an "ACQUIRING  PERSON," as defined
pursuant to the preceding  sentences of this Section  1(a).  For all purposes of
this Agreement,  any  calculation of the number of Common Shares  outstanding at
any particular time, including the determination of the particular percentage of
outstanding  Common Shares of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule  13d-3(d)(1)(i) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), as in effect on the date hereof.

          (b)  "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 hereof.

          (c)   A Person shall be deemed the "BENEFICIAL  OWNER" of and shall be
deemed to have  "BENEFICIAL  OWNERSHIP" of and shall be deemed to  "BENEFICIALLY
OWN" any securities that:

               (i)  such Person or any of such Person's Affiliates or Associates
is deemed to  beneficially  own,  directly or indirectly,  within the meaning of
Rule 13d-3 of the General  Rules and  Regulations  under the Exchange Act, as in
effect on the date hereof;

               (ii) such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire  (whether such right is exercisable  immediately or
only after the  passage  of time)  pursuant  to any  agreement,  arrangement  or
understanding (other than customary agreements with and between underwriters and
selling  group  members  with  respect  to  a  bona  fide  public   offering  of
securities),  or upon the exercise of any conversion  rights,  exchange  rights,
rights,  warrants or options,  or otherwise;  provided,  however,  that a Person
shall not be deemed the  "BENEFICIAL  OWNER" of, or to  "BENEFICIALLY  OWN": (x)
securities  tendered pursuant to a tender or exchange offer made by or on behalf
of such  Person or any of such  Person's  Affiliates  or  Associates  until such
tendered securities are accepted for purchase or exchange;  (y) securities which
such Person has a right to acquire upon the exercise of Rights at any time prior
to the time that any  Person  becomes an  Acquiring  Person;  or (z)  securities
issuable  upon the  exercise  of Rights  from and after the time that any Person
becomes an Acquiring  Person if such Rights were  acquired by such Person or any
of such  Person's  Affiliates or Associates  prior to the  Distribution  Date or
pursuant to Section 3(a) or 22 ("ORIGINAL  RIGHTS") or pursuant to Section 11(i)
or 11(n) with respect to an adjustment to Original  Rights,  or (B) the right to


                                       2
<PAGE>

vote pursuant to any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the "BENEFICIAL OWNER" of, or to "BENEFICIALLY
OWN", any security by reason of such agreement,  arrangement or understanding if
the agreement,  arrangement or understanding  to vote such security:  (l) arises
solely from a revocable  proxy or consent  given to such Person in response to a
public proxy or consent  solicitation  made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act; and (2)
is not also then  reportable  on  Schedule  13D under the  Exchange  Act (or any
comparable or successor report); or

               (iii)  are  beneficially owned,  directly or  indirectly,  by any
other  Person  and with  respect to which  such  Person or any of such  Person's
Affiliates or Associates has any agreement,  arrangement or understanding (other
than  customary  agreements  with and between  underwriters  and  selling  group
members  with  respect to a bona fide  public  offering of  securities)  for the
purpose of acquiring,  holding, voting (except to the extent contemplated by the
proviso to Section 1(c) (ii) (B)) or disposing of any securities of the Company;
provided,  however, that no Person who is an officer, director or employee of an
Exempt  Person  shall be  deemed,  solely by reason of such  Person's  status or
authority  as  such,  to be the  "BENEFICIAL  OWNER"  of or to have  "BENEFICIAL
OWNERSHIP" of or to  "BENEFICIALLY  OWN" any securities  that are  "BENEFICIALLY
OWNED" (as defined in this Section 1(c)),  including,  without limitation,  in a
fiduciary capacity,  by an Exempt Person or by any other such officer,  director
or employee of an Exempt Person.

          (d)  "BOARD  OF  DIRECTORS"  shall  mean the  members  of the Board of
Directors of the Company at the relevant time.

          (e) "BUSINESS DAY" shall mean any day other than a Saturday,  a Sunday
or a day on which banking  institutions  in the State of New York or the city in
which the  principal  stock  transfer  office of the Rights Agent is located are
authorized or obligated by law or executive order to close.

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

          (g) "COMMON  SHARES," when used with  reference to the Company,  shall
mean shares of common stock of the  Company,  which have a par value of $.01 per
share.

          (h)  "COMMON  SHARE  EQUIVALENTS"  shall have the meaning set forth in
Section 11(a)(iii).

          (i) "COMMON  STOCK," when used with reference to any Person other than
the Company,  shall mean the common stock (or, in the case of an  unincorporated
Person,  other equity or ownership  interest) with the greatest  voting power of
such other  Person  or, if such other  Person is a  Subsidiary  (as  hereinafter
defined) of another Person,  the Person or Persons that  ultimately  controls or
control, respectively, such other Person.

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

          (k) "DISTRIBUTION DATE" shall have the meaning set forth in Section 3.

          (l) "EQUIVALENT  PREFERRED SHARES" shall have the meaning set forth in
Section 11(b).



                                       3
<PAGE>

          (m) "EXEMPT  PERSON"  shall mean the Company or any  Subsidiary of the
Company,  in  each  case  including,  without  limitation,  the  Company  or any
Subsidiary of the Company in its  fiduciary  capacity,  or any employee  benefit
plan of the Company or any  Subsidiary of the Company,  or any entity or trustee
holding  Common  Shares for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding any other  benefits for employees of
the Company or any Subsidiary of the Company.

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

          (o) "EXPIRATION DATE" shall have the meaning set forth in Section 7.

          (p)  "FINAL  EXPIRATION  DATE"  shall  have the  meaning  set forth in
Section 7.

          (q) "FLIP-IN EVENT" shall have the meaning set forth in Section 11.

          (r) "NASDAQ STOCK MARKET" shall mean The Nasdaq Stock Market.

          (s) "PERSON" shall mean any  individual,  firm,  partnership,  limited
liability company, business trust, corporation or other entity and shall include
any successor (by merger or otherwise) thereto.

          (t)   "PREFERRED   SHARES"  shall  mean  shares  of  Series  A  Junior
Participating  Preferred  Stock, par value $.01 per share, of the Company having
the rights and  preferences set forth in the Form of Certificate of Designations
attached to this Agreement as EXHIBIT A.

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

          (v) "PURCHASE PRICE" shall have the meaning set forth in Section 4.

          (w) "REDEMPTION DATE" shall have the meaning set forth in Section 7.

          (x) "REDEMPTION PRICE" shall have the meaning set forth in Section 23.

          (y) "RIGHT CERTIFICATE" shall have the meaning set forth in Section 3.

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

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

          (bb) "SECURITY" shall have the meaning set forth in Section 11(d)(i).

          (cc)  "SHARES  ACQUISITION  DATE"  shall mean the first date of public
announcement  (and, for purposes of this definition,  public  announcement shall
include,  without  limitation,  a report filed  pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such or such earlier  date as a majority of the Board of Directors  shall
become aware of the existence of an Acquiring Person.

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

          (ee) "SUBSIDIARY" of any Person shall mean any other Person of which a
majority  of the  voting  power of the  voting  equity  securities  or equity or


                                       4
<PAGE>

ownership  interests is owned or  controlled,  directly or  indirectly,  by such
Person,  or any  other  Person of which  equity  securities  or other  equity or
ownership  interests having ordinary voting power sufficient to elect a majority
of the board of directors or other  persons  performing  similar  functions  are
Beneficially Owned, directly or indirectly,  by such Person, or any other Person
that is otherwise controlled by such Person.

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

          (gg)  "SUMMARY OF RIGHTS"  shall have the meaning set forth in Section
3.

          (hh)  "TRADING  DAY"  shall  have the  meaning  set  forth in  Section
11(d)(i).

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

          Section 3. ISSUE OF RIGHT CERTIFICATES.

          (a) Until the Close of  Business  on the earlier of: (i) the tenth day
after the Shares Acquisition Date; or (ii) the tenth Business Day (or such later
date as may be determined by action of the Board of Directors prior to such time
as any Person becomes an Acquiring Person) after the date of the commencement by
any Person (other than an Exempt Person) of, or the first public announcement of
the intention of any Person (other than an Exempt Person) to commence,  a tender
or exchange  offer the  consummation  of which would result in any Person (other
than  an  Exempt  Person)   becoming  the  Beneficial  Owner  of  Common  Shares
aggregating  15% or more (or, with respect to any Person  referred to in proviso
(i) of Section 1(a) hereof,  upon the  acquisition of any  additional  shares of
Common  Stock as  described  therein)  of the  Common  Shares  then  outstanding
(including  any such date which is after the date of this Agreement and prior to
the  issuance  of the Rights,  and the  earlier of such dates  being  called the
"DISTRIBUTION  DATE;"  provided,  however,  that if either of such dates  occurs
after the date hereof and on or prior to the Record Date, then the "DISTRIBUTION
DATE" shall be the Record  Date);  (x) the Rights will be evidenced  (subject to
the provisions of Section 3(b)) by the certificates for Common Shares registered
in the names of the holders thereof (which  certificates shall also be deemed to
be Right  Certificates),  and not by separate  Right  Certificates;  and (y) the
Rights  will be  transferable  only in  connection  with the  transfer of Common
Shares.  The Company  shall give the Rights Agent prompt  written  notice of the
Distribution  Date. As soon as  practicable  after the  Distribution  Date,  and
receipt of written notice of the Distribution Date from the Company, the Company
will  prepare  and  execute,  the  Rights  Agent  will  at  expense  of  Company
countersign  and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, insured, postage-prepaid mail, to each
record  holder of Common Shares  outstanding  as of the Close of Business on the
Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring  Person),  at the address of such holder shown on the records of
the Company, a Right Certificate,  in substantially the form of EXHIBIT B hereto
(a "RIGHT CERTIFICATE"), evidencing one Right (subject to adjustment as provided
herein) for each Common Share so held. As of the  Distribution  Date, the Rights
will be evidenced solely by such Right Certificates.



                                       5
<PAGE>

          (b) On the Record  Date,  or as soon as  practicable  thereafter,  the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially  the form of EXHIBIT C (the "SUMMARY OF RIGHTS"),  by first-class,
postage-prepaid  mail, to each record holder of Common Shares  outstanding as of
the Close of Business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate  of an Acquiring  Person),  at the address of such holder
shown on the records of the  Company.  With respect to  certificates  for Common
Shares  outstanding  as of the Record Date,  until the  Distribution  Date,  the
Rights will be evidenced  by such  certificates  registered  in the names of the
holders thereof together with the Summary of Rights. Until the Distribution Date
(or, if  earlier,  the  Expiration  Date),  the  surrender  for  transfer of any
certificate for Common Shares  outstanding on the Record Date, with or without a
copy of the Summary of Rights,  shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.

          (c) Rights shall be issued in respect of all Common  Shares  issued or
disposed (including,  without limitation, Common Shares disposed out of treasury
or issued or reissued out of authorized  but unissued  Common  Shares) after the
Record Date but prior to the earlier of the Distribution  Date or the Expiration
Date,  or,  in  certain   circumstances   provided  in  Section  22,  after  the
Distribution  Date.  Certificates in respect of Common Shares issued or disposed
(including, without limitation, certificates issued upon transfer of outstanding
Common Shares, disposition of Common Shares out of treasury stock or issuance or
reissuance of Common Shares out of authorized but unissued  Common Shares) after
the  Record  Date  but  prior to the  earlier  of the  Distribution  Date or the
Expiration  Date shall have  impressed on,  printed on,  written on or otherwise
affixed to them the following legend:

          This  certificate  also  evidences  and  entitles the holder
          hereof  to  certain  Rights  as  defined  and set forth in a
          Rights  Agreement  between Viatel,  Inc. (the "COMPANY") and
          The Bank of New York, as Rights Agent,  dated as of December
          6,  1999 as the same may be  amended  from time to time (the
          "RIGHTS   AGREEMENT"),   the  terms  of  which  are   hereby
          incorporated  herein by reference  and a copy of which is on
          file at the  principal  executive  offices  of the  Company.
          Under  certain  circumstances,  as set  forth in the  Rights
          Agreement,   such  Rights  will  be  evidenced  by  separate
          certificates  and  will  no  longer  be  evidenced  by  this
          certificate.  The  Company  will mail to the  holder of this
          certificate a copy of the Rights  Agreement  without  charge
          after receipt of a written request therefor. As set forth in
          the Rights Agreement,  under certain  circumstances,  Rights
          issued to, held or owned by or transferred to any Person who
          is or becomes an Acquiring  Person (as defined in the Rights
          Agreement) and certain transferees thereof shall become null
          and void and will no longer be transferable.

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


                                       6
<PAGE>

Notwithstanding this Section 3(c), the omission of a legend shall not affect the
enforceability  of any part of this  Agreement  or the  rights of any  holder of
Rights.

          Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase  Preferred  Shares and of assignment to be printed
on the  reverse  thereof)  shall be  substantially  the same as  EXHIBIT B (in a
format  that is machine  printable  and  reasonably  satisfactory  to the Rights
Agent)  and may  have  such  marks of  identification  or  designation  and such
legends,  summaries  or  endorsements  printed  thereon as the  Company may deem
appropriate and as are not  inconsistent  with the provisions of this Agreement,
or as may be  required  to comply  with any  applicable  law or with any rule or
regulation  made  pursuant  thereto or with any rule or  regulation of any stock
exchange or over-the-counter market on which the Rights may from time to time be
listed or admitted to trading or quotation,  or as may be appropriate to conform
to usage. The Right Certificates shall be in a machine printable format and in a
form reasonably  satisfactory to the Rights Agent.  Subject to the provisions of
Sections 11, 13 and 22, the Right Certificates shall entitle the holders thereof
to purchase such number of one  two-hundred-thousandths  of a Preferred Share as
shall be set forth  therein  at the price per one  two-hundred-thousandths  of a
Preferred Share set forth therein (the "PURCHASE PRICE"), but the number of such
one two-hundred-thousandths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.

          Section 5. COUNTERSIGNATURE AND REGISTRATION.

          (a) The Right  Certificates shall be executed on behalf of the Company
by its Chief  Executive  Officer,  its  President or any of its  Executive  Vice
Presidents or Senior Vice Presidents, either manually or by facsimile signature,
shall have affixed  thereto the Company's seal or a facsimile  thereof and shall
be attested by the Secretary or the Treasurer 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  thereof by the
Company, such Right Certificates may nevertheless be countersigned by the Rights
Agent and issued and  delivered by the Company with the same force and effect as
though such signatory had not ceased to be such officer of the Company;  and any
Right  Certificate may be signed on behalf of the Company by any individual 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 Agreement any such individual was not such an officer.

          (b) Following  the  Distribution  Date,  the Rights Agent will keep or
cause to be kept, at an office or agency designated for such purposes, 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 this Agreement, at any time after the
Close of  Business  on the  Distribution  Date  and at or prior to the  Close of
Business on the Expiration Date, any Right Certificate or Right Certificates may
be transferred, split up, combined or exchanged by the registered holder thereof
for another Right  Certificate or Right  Certificates  entitling such registered


                                       7
<PAGE>

holder to purchase a like number of one  two-hundred-thousandths  of a Preferred
Share as the Right Certificate or Right  Certificates  surrendered then entitled
such registered holder to purchase.  Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right  Certificates shall
deliver  a  written  request  to that  effect  to the  Rights  Agent,  and shall
surrender the Right Certificate or Right  Certificates to be transferred,  split
up, combined or exchanged at the office or agency of the Rights Agent designated
for such  purpose,  along  with a  signature  guarantee  and other  and  further
documentation as the Rights Agent may reasonably request.  Thereupon, the Rights
Agent  shall   countersign  and  deliver  to  such  registered  holder  a  Right
Certificate  or Right  Certificates,  as the case may be, as so  requested.  The
Company  may  require  payment  by the  registered  holder  of  Rights  of a sum
sufficient  to cover any tax (which  word,  for all  purposes  hereof,  shall be
deemed to include any other type of governmental  charge) that may be imposed in
connection  with any  transfer,  split up,  combination  or  exchange of a Right
Certificate or Right Certificates.

          (b) Subject to the provisions of this Agreement, at any time after the
Distribution  Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence  reasonably  satisfactory  to them of the loss,
theft,  destruction or mutilation of a Right Certificate,  and, in case of loss,
theft or destruction,  of indemnity or security reasonably satisfactory to them,
or, in the case of mutilation, of surrender to the Rights Agent and cancellation
of the mutilated Right Certificate, and, at the Company's request, reimbursement
to the  Company  and the  Rights  Agent of all  reasonable  expenses  incidental
thereto, the Company will make and deliver a new Right Certificate of like tenor
to the Rights Agent for delivery to the registered holder thereof in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.

          Section 7.  EXERCISE OF RIGHTS;  PURCHASE  PRICE;  EXPIRATION  DATE OF
RIGHTS.

          (a) Except as  otherwise  provided  herein,  the Rights  shall  become
exercisable on the Distribution Date and thereafter the registered holder of any
Right  Certificate  may,  subject to Section  11(a)(ii)  and except as otherwise
provided herein,  exercise the Rights evidenced thereby in whole or in part upon
surrender  of such Right  Certificate,  with the form of election to purchase on
the reverse  side thereof  duly  executed,  to the Rights Agent at the office or
agency of the Rights Agent designated for such purpose, together with payment of
the  aggregate   Purchase  Price  with  respect  to  the  total  number  of  one
two-hundred-thousandths of a share of Preferred Stock (or other securities, cash
or assets,  as the case may be) as to which such  Rights are  exercised,  at any
time  both  subsequent  to the  Distribution  Date and  prior  to the time  (the
"EXPIRATION  DATE")  that is the  earliest  of:  (i) the  Close of  Business  on
December  5,  2009 (the  "FINAL  EXPIRATION  DATE");  (ii) the time at which the
Rights are redeemed as provided in Section 23 (the "REDEMPTION  DATE"); or (iii)
the time at which such Rights are exchanged as provided in Section 24.

          (b) The  Purchase  Price  for  each  one  two-hundred-thousandth  of a
Preferred  Share  purchasable  upon exercise of a Right shall initially be $210.
The Purchase Price and the number of one  two-hundred-thousandths  of a share of
Preferred  Stock (or other  securities,  cash or  assets)  to be  acquired  upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 11 and 13. The  Purchase  Price shall be payable in lawful  money of
the United States of America in accordance with this Section 7.

          (c)  Except as  otherwise  provided  herein,  upon  receipt of a Right
Certificate  representing  exercisable  Rights,  with  the form of  election  to
purchase duly  executed,  accompanied  by payment of the Purchase  Price for the


                                       8
<PAGE>

Preferred Shares to be purchased and an amount equal to any applicable  transfer
tax required to be paid by the  registered  holder of such Right  Certificate in
accordance  with Sections 6 and 9, in cash or by certified or cashier's check or
money  order  payable  to the  order of the  Company,  the  Rights  Agent  shall
thereupon: (i) promptly (A) requisition from any transfer agent of the Preferred
Shares (or make  available  if the Rights  Agent is the  transfer  agent for the
Preferred  Shares)  certificates  for  the  number  of  Preferred  Shares  to be
purchased (and the Company hereby irrevocably  authorizes such transfer agent to
comply with all such  requests) or (B)  requisition  from the  depositary  agent
(appointed by the Company  pursuant to Section 14, if any)  depositary  receipts
representing  interests  in  such  number  of one  two-hundred-thousandths  of a
Preferred  Share as are to be  purchased  (in which  case  certificates  for the
Preferred  Shares  represented  by such  receipts  shall  be  deposited  by such
transfer  agent with the  depositary  agent) and the Company  hereby directs the
depositary agent to comply with such request; (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional
shares in  accordance  with Section 14;  (iii)  promptly  after  receipt of such
certificates or depositary  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.

          (d) Except as otherwise provided herein, in case the registered holder
of any Right  Certificate  shall exercise less than all of the Rights  evidenced
thereby,  a new Right  Certificate  evidencing the Rights remaining  unexercised
shall be issued  by the  Rights  Agent to the  registered  holder of such  Right
Certificate  or to his duly  authorized  assigns,  subject to the  provisions of
Sections 6 and 14.

          (e)  Notwithstanding  anything  contained  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 transfer or exercise of Rights pursuant to Section 6
or this Section 7 unless such  registered  holder shall have:  (i) completed and
signed the  certificate  contained in the form of assignment or form of election
to purchase set forth on the reverse side of the Right  Certificate  surrendered
for such transfer or exercise; and (ii) provided such additional evidence of the
identity of the  Beneficial  Owner (or former  Beneficial  Owner) thereof as the
Company shall reasonably request.  The Rights Agent will endeavor to comply with
the  provisions  hereof to the  extent  it has  received  instructions  from the
Company concerning such matters.

          Section 8. CANCELLATION OF RIGHT CERTIFICATES.  All Right Certificates
surrendered  for the purpose of exercise,  transfer,  split up,  combination  or
exchange  shall,  if  surrendered  to the  Company or to any of its  agents,  be
delivered to the Rights Agent for  cancellation  or in  cancelled  form,  or, if
surrendered  to the  Rights  Agent,  shall  be  cancelled  by it,  and no  Right
Certificates  shall be issued in lieu thereof  except as expressly  permitted by
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.

          Section 9. AVAILABILITY OF PREFERRED SHARES.

          (a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized  and unissued  Preferred  Shares or any


                                       9
<PAGE>

Preferred Shares held in its treasury,  the number of Preferred Shares that will
be sufficient to permit the exercise in full of all Rights then  outstanding  in
accordance with Section 7.

          (b) So long as the  Preferred  Shares  issuable  upon the  exercise of
Rights  may be listed or  admitted  to  trading  or  quotation  on any  national
securities exchange or  over-the-counter  market, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
Preferred  Shares reserved for such issuance to be listed or admitted to trading
or quotation on such  exchange or market upon  official  notice of issuance upon
such exercise.

          (c) From and after such time as the  Rights  become  exercisable,  the
Company shall use its best efforts,  if then necessary to permit the issuance of
Preferred Shares upon the exercise of Rights,  to register and qualify Preferred
Shares under the  Securities Act and any  applicable  state  securities or "Blue
Sky" laws (to the extent  exemptions  therefrom are not  available),  cause such
registrations  and  qualifications  to become  effective as soon as possible and
keep such  registrations  and  qualifications  effective (with, if necessary,  a
prospectus at all times meeting the  requirements  of the Securities  Act) until
the  earlier of the date as of which the Rights  are no longer  exercisable  for
Preferred  Shares or the Expiration  Date. The Company may temporarily  suspend,
for a period of time not to exceed 90 days, the  exercisability of the Rights in
order to prepare and file a registration  statement under the Securities Act and
permit it to become effective. Upon any such suspension, the Company shall issue
a public  announcement,  in each case with  simultaneous  written  notice to the
Rights  Agent,   stating  that  the  exercisability  of  the  Rights  has  been
temporarily  suspended  and, upon  termination of such  suspension,  the Company
shall issue a public  announcement  stating that such suspension is no longer in
effect,  in each case with  simultaneous  written  notice to the  Rights  Agent.
Notwithstanding  anything contained herein to the contrary, the Rights shall not
be exercisable in any  jurisdiction  unless the requisite  qualification in such
jurisdiction  shall have been obtained and until a registration  statement under
the Securities Act (if required) shall have been declared effective.  The Rights
Agent may assume that any Right  exercised is  permitted  to be exercised  under
applicable  law and shall have no  liability  for acting in  reliance  upon such
assumption.

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

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



                                       10
<PAGE>

          Section 10.  PREFERRED  SHARES RECORD DATE.  Each Person in whose name
any certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the  Preferred
Shares  represented  thereby on, and such  certificate  shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable  transfer taxes required to be
paid by the registered holder of such Rights) was made; provided,  however, that
if the date of such  surrender  and  payment is a date upon  which the  transfer
books for  Preferred  Shares are  closed,  such  Person  shall be deemed to have
become the record holder of such Preferred Shares on, and such certificate shall
be dated,  the next  succeeding  Business  Day on which the  transfer  books for
Preferred  Shares  are  open.  Prior to the  exercise  of the  Rights  evidenced
thereby,  the holder of a Right  Certificate shall not be entitled to any rights
of a holder of  Preferred  Shares for which such  Rights  shall be  exercisable,
including,  without  limitation,  the right to vote or to receive  dividends  or
other  distributions  or to exercise  any  preemptive  rights,  and shall not be
entitled  to receive any notice of any  proceedings  of the  Company,  except as
provided herein.

          Section 11.  ADJUSTMENT OF PURCHASE  PRICE,  NUMBER AND KIND OF SHARES
AND NUMBER OF RIGHTS.  The Purchase  Price,  the number of  Preferred  Shares or
other  securities  or property  purchasable  upon exercise of each Right and the
number of Rights  outstanding  are  subject to  adjustment  from time to time as
provided in this Section 11.

          (a) (i) If the  Company  shall at any time  after the date  hereof (A)
declare and pay a dividend on Preferred Shares payable in Preferred Shares,  (B)
subdivide  the  outstanding   Preferred  Shares,  (C)  combine  the  outstanding
Preferred  Shares  into a smaller  number of  Preferred  Shares or (D) issue any
shares of its capital stock in a reclassification of Preferred Shares (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 Purchase Price in effect at the
time of the  record  date for such  dividend  or of the  effective  date of such
subdivision, combination or reclassification,  and the number and kind of shares
of capital  stock  issuable  upon  exercise  of a Right on such  date,  shall be
proportionately  adjusted so that the holder of any Right  exercised  after such
time shall be  entitled to receive  the  aggregate  number and kind of shares of
capital stock which, if such Right had been exercised  immediately prior to such
date and at a time when the transfer  books for Preferred  Shares were open, the
registered  holder of such Right  would have owned upon such  exercise  and been
entitled  to receive by virtue of such  dividend,  subdivision,  combination  or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the  aggregate  par value of
the shares of capital stock issuable upon exercise of one Right.

          (ii) Subject to Section 24, if any Person becomes an Acquiring  Person
(the first occurrence of such event being called the "FLIP-IN EVENT"),  then (A)
the  Purchase  Price  shall be  adjusted  to be the  Purchase  Price  in  effect
immediately  prior  to  the  Flip-In  Event  multiplied  by  the  number  of one
two-hundred-thousandths  of  Preferred  Share for which a Right was  exercisable
immediately  prior to the  Flip-In  Event,  whether  or not such  Right was then
exercisable,  and (B) each holder of a Right,  except as  otherwise  provided in
this Section 11(a)(ii) and Section  11(a)(iii),  shall thereafter have the right
to receive,  upon exercise thereof at a price equal to the Purchase Price (as so
adjusted),  in  accordance  with  the  terms  of this  Agreement  and in lieu of
Preferred  Shares,  such  number of  Common  Shares  as shall  equal the  result
obtained by dividing  the  Purchase  Price (as so  adjusted)  by 50% of the then


                                       11
<PAGE>

current per share market price of the Common Shares (as  determined  pursuant to
Section 11(d)) on the date of the Flip-In  Event;  provided,  however,  that the
Purchase  Price (as so adjusted)  and the number of Common  Shares so receivable
upon  exercise of a Right  shall,  following  the Flip-In  Event,  be subject to
further   adjustment  as  appropriate  in  accordance   with  this  Section  11.
Notwithstanding  anything contained in this Agreement to the contrary,  from and
after the  Flip-In  Event,  any Rights that are  beneficially  owned by: (x) any
Acquiring Person (or any Affiliate or Associate of any Acquiring Person);  (y) a
transferee of any  Acquiring  Person (or any such  Affiliate or  Associate)  who
becomes a  transferee  after  the  Flip-In  Event;  or (z) a  transferee  of any
Acquiring  Person (or any such  Affiliate or Associate)  who became a transferee
prior to or  concurrently  with the  Flip-In  Event  pursuant  to  either  (I) a
transfer from the Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing  agreement,  arrangement or understanding
regarding the transferred  Rights or (II) a transfer that the Board of Directors
has  determined is part of a plan,  arrangement or  understanding  which has the
purpose or effect of avoiding the  provisions of this Section 11, and subsequent
transferees  of such Persons,  shall be void without any further  action and any
holder of such Rights shall thereafter have no rights whatsoever with respect to
such Rights under any  provision of this  Agreement.  The Company  shall use all
reasonable  efforts to ensure that the provisions of this Section  11(a)(ii) are
complied with,  but shall have no liability to any holder of Right  Certificates
or other  Person  as a result of its  failure  to make any  determinations  with
respect to an Acquiring  Person or its  Affiliates,  Associates  or  transferees
hereunder.  From and after the  Flip-In  Event,  no Right  Certificate  shall be
issued pursuant to Section 3 or 6 that represents Rights that are or have become
void  pursuant  to the  provisions  of this  Section  11(a)(ii),  and any  Right
Certificate  delivered  to the Rights Agent that  represents  Rights that are or
have become void pursuant to the provisions of this Section  11(a)(ii)  shall be
cancelled. From and after the occurrence of an event specified in Section 13(a),
any Rights that  theretofore  have not been  exercised  pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with Section 13 and
not pursuant to this Section 11(a)(ii).

          (iii) The  Company  may at its option  substitute  for a Common  Share
issuable upon the exercise of Rights in  accordance  with Section  11(a)(ii),  a
number of Preferred  Shares or fraction  thereof such that the current per share
market price of one  Preferred  Share  multiplied  by such number or fraction is
equal to the current per share market price of one Common Share.  If there shall
not be sufficient  Common Shares issued but not  outstanding  or authorized  but
unissued to permit the exercise in full of outstanding Rights in accordance with
Section  11(a)(ii),  the  Company  and the  Board  of  Directors  shall  use all
reasonable  efforts  to take or  cause to be taken  all  such  action  as may be
necessary to authorize  additional  Common  Shares for issuance upon exercise of
the Rights. If the Company shall,  after good faith effort, be unable to take or
cause to be taken all such  action,  or the Board of Directors  shall  determine
that it is not practicable to take or cause to be taken all such action, in each
case as may be necessary to authorize such additional  Common Shares,  the Board
of Directors shall, with respect to such insufficiency,  to the extent permitted
by  applicable  law and any  material  agreements  then in  effect  to which the
Company is a party,  (A)  determine  the excess  (such  excess  being called the
"SPREAD') of (1) the value of the Common Shares  issuable upon the exercise of a
Right in accordance  with Section  11(a)(ii) (the "CURRENT  VALUE") over (2) the
Purchase  Price (as so adjusted)  and (B) with respect to each Right (other than
Rights  which have  become  void),  make or cause the  Company to make  adequate
provision  to  substitute  for the Common  Shares  issuable in  accordance  with
Section 11(a)(ii), upon exercise of such Right and payment of the Purchase Price
(as so  adjusted),  (1)  cash,  (2) a  reduction  in the  Purchase  Price (as so


                                       12
<PAGE>

adjusted),  (3)  Preferred  Shares or other  equity  securities  of the  Company
(including, without limitation, shares or fractions of preferred stock which, by
virtue  of  having  dividend,   voting  and  liquidation  rights   substantially
comparable to those of the Common Shares,  are deemed in good faith by the Board
of Directors  to have  substantially  the same value as the Common  Shares (such
Preferred  Shares and shares or  fractions  of shares of  preferred  stock being
called "COMMON SHARE  EQUIVALENTS")),  (4) debt  securities of the Company,  (5)
other assets or (6) any combination of the foregoing, having a value which, when
added to the value of the Common  Shares  issued  upon  exercise  of such Right,
shall have an aggregate value equal to the Current Value (less the amount of any
reduction in the Purchase  Price (as so adjusted)),  where such aggregate  value
has been  determined  by the Board of Directors  upon the advice of a nationally
recognized  investment  banking  firm  selected  in good  faith by the  Board of
Directors;  provided,  however,  that if  adequate  provision  to deliver  value
pursuant to clause (B) above  shall not have been made within 30 days  following
the Flip-In  Event (the date of the  Flip-In  Event  being  called the  "SECTION
11(A)(II)  TRIGGER  DATE"),  then  the  Company  shall  deliver,  to the  extent
permitted by applicable law and any material  agreements then in effect to which
the Company is a party,  upon the  surrender for exercise of a Right and without
requiring  payment  of  such  Purchase  Price,  Common  Shares  (to  the  extent
available) and then, if necessary,  such number or fractions of Preferred Shares
(to the extent available) and then, if necessary,  cash, which Preferred Shares,
Common Shares and/or cash have an aggregate value equal to the Spread.  If, upon
the occurrence of the Flip-In Event,  the Board of Directors  shall determine in
good faith that it is likely that sufficient  additional  Common Shares could be
authorized for issuance upon exercise in full of the Rights,  then, if the Board
of Directors so elects,  the 30-day period set forth above may be extended by it
to the extent  necessary,  but not more than 90 days after the Section 11(a)(ii)
Trigger  Date, in order that the Company may seek  stockholder  approval for the
authorization  of such  additional  Common  Shares.  Such  period,  as it may be
extended, is called the "SUBSTITUTION PERIOD." To the extent that the Company or
the Board of Directors determines that some action need be taken pursuant to the
second and/or third sentence of this Section  11(a)(iii),  the Company (x) shall
provide,  subject to Section  11(a)(ii)  and the last  sentence of this  Section
11(a)(iii), that such action shall apply uniformly to all outstanding Rights and
(y) may suspend the  exercisability  of the Rights until the  expiration  of the
Substitution  Period in order to seek any  authorization  of  additional  Common
Shares and/or to decide the appropriate form of distribution to be made pursuant
to such  third  sentence  and to  determine  the  value  thereof.  Upon any such
suspension,  the Company  shall  issue a public  announcement  stating  that the
exercisability   of  the  Rights  has  been  temporarily   suspended  and,  upon
termination  of  any  such   suspension,   the  Company  shall  issue  a  public
announcement  stating that such suspension is no longer in effect.  For purposes
of this Section 11(a)(iii),  the value of the Common Shares shall be the current
per share  market  price (as  determined  pursuant to Section  11(d)(i))  on the
Section  11(a)(ii)  Trigger  Date and the per share or  fractional  value of any
Common  Share  Equivalent  shall be deemed to equal the current per share market
price of the  Common  Shares.  The  Board of  Directors  may,  but  shall not be
required to, establish procedures to allocate the right to receive Common Shares
upon the  exercise of the Rights  among  holders of the Rights  pursuant to this
Section 11(a)(iii).

          (b) In case the Company  shall fix a record  date for the  issuance of
rights, options or warrants to holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase  Preferred Shares (or securities having the same rights,  privileges
and  preferences  as  Preferred  Shares  ("EQUIVALENT   PREFERRED  SHARES"))  or
securities convertible into Preferred Shares or Equivalent Preferred Shares at a


                                       13
<PAGE>

price per Preferred Share or Equivalent  Preferred Share (or having a conversion
price per  share,  if it is a  security  convertible  into  Preferred  Shares or
Equivalent  Preferred  Shares) less than the then current per share market price
of the Preferred  Shares  (determined  pursuant to Section 11(d)) on such record
date,  then the  Purchase  Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record  date by a  fraction,  the  numerator  of which  shall be the  number  of
Preferred Shares and Equivalent Preferred Shares outstanding on such record date
plus the number of Preferred  Shares and Equivalent  Preferred  Shares which the
aggregate  offering  price  of the  total  number  of  Preferred  Shares  and/or
Equivalent  Preferred  Shares so to be offered  (and/or  the  aggregate  initial
conversion price of the convertible  securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
Preferred Shares and Equivalent Preferred Shares outstanding on such record date
plus the number of  additional  Preferred  Shares  and/or  Equivalent  Preferred
Shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible);  provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate  par value of the shares of capital stock  issuable upon
exercise of one Right. Preferred Shares and Equivalent Preferred Shares owned by
or held for the account of the Company shall not be deemed  outstanding  for the
purpose of any such computation. In case such subscription or purchase 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 determined in good faith by the
Board of Directors,  whose determination shall be described in a statement filed
with the Rights  Agent.  Such  adjustment  to the  Purchase  Price shall be made
successively  whenever such a record date is fixed.  If such rights,  options or
warrants  are not so issued,  the  Purchase  Price  shall be  adjusted to be the
Purchase  Price  which  would then be in effect if such record date had not been
fixed.

          (c) In case the  Company  shall fix a record  date for the making of a
distribution  to holders of Preferred  Shares  (including any such  distribution
made in connection  with a  consolidation  or merger in which the Company is the
continuing  or surviving  corporation)  of evidences of  indebtedness  or assets
(other than a regular quarterly cash dividend or a dividend payable in Preferred
Shares) or subscription rights or warrants (excluding those described in Section
11(b)),  the  Purchase  Price to be in effect  after such  record  date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction,  the numerator of which shall be the then current per
share  market  price of the  Preferred  Shares  (determined  pursuant to Section
11(d)) on such record date,  less the fair market value (as  determined  in good
faith by the Board of  Directors,  whose  determination  shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription  rights or warrants
applicable to one  Preferred  Share and the  denominator  of which shall be such
current per share market price of the Preferred Shares; provided,  however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the  aggregate  par value of the shares of capital  stock to be issued
upon exercise of one Right.  Such adjustment to the Purchase Price shall be made
successively  whenever such a record date is fixed. If such  distribution is not
so made,  the Purchase  Price shall again be adjusted to be the  Purchase  Price
which would then be in effect if such record date had not been fixed.

          (d) (i) Except as otherwise  provided  herein,  for the purpose of any
computation  hereunder,  the "current per share market price" of any security (a
"SECURITY" for the purpose of this Section 11(d)(i)) on any date shall be deemed
to be the average of the daily closing prices per share of such Security for the


                                       14
<PAGE>

30 consecutive Trading Days (as hereinafter  defined)  immediately prior to such
date;  provided,  however,  that if the current per share  market  price of such
Security is determined  during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution  on such Security  payable in
shares of such Security or securities  convertible into such Security or (B) any
subdivision,  combination or reclassification of such Security, and prior to the
expiration  of 30 Trading Days after the  ex-dividend  date for such dividend or
distribution   or  the  record  date  for  such   subdivision,   combination  or
reclassification,  then,  and in each such case,  the current  per share  market
price shall be  appropriately  adjusted to reflect the current  market price per
share  equivalent of such Security.  The closing price for each day shall be the
last sale price,  regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices,  regular way, in either case as
reported by the  principal  consolidated  transaction  reporting  system for the
principal national securities exchange or over-the-counter  market on which such
Security is listed or admitted to trading or quotation  or, if such  Security is
not so listed or  admitted,  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.  The term "TRADING DAY" shall mean a day on
which the principal  national  securities  exchange  over-the-counter  market on
which such  Security is listed or admitted to trading or  quotation  is open for
the transaction of business or, if such Security is not so listed or admitted, a
Business Day.

               (ii)  For  the  purpose  of  any  computation  hereunder,  if the
Preferred  Shares are publicly  traded,  the "current per share market price" of
the Preferred Shares shall be determined in accordance with the method set forth
in Section  11(d)(i).  If Common  Shares are publicly  traded at a time when the
Preferred Shares are not publicly  traded,  the "current per share market price"
of the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common  Shares as  determined  pursuant to Section  11(d)(i)
multiplied  by  the  then  applicable  Adjustment  Number  (as  defined  in  and
determined in accordance with the Certificate of Designations  for the Preferred
Shares).  If neither the Common  Shares nor the  Preferred  Shares are  publicly
traded,  "current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent.

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

          (f) If, as a result of an adjustment  made pursuant to Section  11(a),
the holder of any Right  thereafter  exercised  shall become entitled to receive
any  shares  of  capital  stock of the  Company  other  than  Preferred  Shares,
thereafter  the Purchase Price and the number of such other shares so receivable
upon exercise of a Right shall be subject to  adjustment  from time to time in a
manner and on terms as nearly  equivalent as practicable to the provisions  with
respect to the  Preferred  Shares  contained in Sections  11(a),  11(b),  11(c),
11(e),  11(h),  11(i),  11(m), 11(n) and the provisions of Sections 7, 9, 10, 13


                                       15
<PAGE>

and 14 with  respect to the  Preferred  Shares  shall apply on like terms to any
such other shares.

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

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

          (i) The  Company may elect on or after the date of any  adjustment  of
the Purchase  Price  pursuant to Section  11(b) or 11(c) to adjust the number of
Rights,   in   substitution   for  any   adjustment   in  the   number   of  one
two-hundred-thousandths  of a Preferred Share purchasable upon the exercise of a
Right.  Each of the Rights  outstanding  after such  adjustment of the number of
Rights shall be exercisable for the number of one  two-hundred-thousandths  of a
Preferred  Share  for which a Right was  exercisable  immediately  prior to such
adjustment.  Each Right held of record prior to such adjustment of the number of
Rights  shall  become  that  number of Rights  (calculated  to the  nearest  one
one-hundredth)  obtained by dividing  the Purchase  Price in effect  immediately
prior to  adjustment  of the  Purchase  Price by the  Purchase  Price in  effect
immediately  after  adjustment of the Purchase  Price.  The Company shall make a
public  announcement 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.  Such record date may be the date on which the  Purchase
Price is adjusted or any day  thereafter,  but, if the Right  Certificates  have
been  issued,  shall  be at  least 10 days  later  than  the date of the  public
announcement.  If Right  Certificates have been issued,  upon each adjustment of
the number of Rights  pursuant  to this  Section  11(i),  the  Company  may,  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, 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 of 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 herein and shall be registered in the
names  of the  holders  of  record  of Right  Certificates  on the  record  date
specified in the public announcement.

          (j)  Irrespective of any adjustment or change in the Purchase Price or
the number of one two-hundred-thousandths of a Preferred Share issuable upon the
exercise of a Right, the Right  Certificates  theretofore and thereafter  issued


                                       16
<PAGE>

may   continue   to  express   the   Purchase   Price  and  the  number  of  one
two-hundred-thousandths  of a Preferred Share that were expressed in the initial
Right Certificates issued hereunder.

          (k) Before taking any action that would cause an  adjustment  reducing
the  Purchase  Price below the then par value,  if any,  of the  fraction of the
Common Shares,  Preferred  Shares or other shares of capital stock issuable upon
exercise of a Right,  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  Common Shares,  Preferred Shares
or other shares, as the case may be, at such adjusted Purchase Price.

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

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

          (n)  Notwithstanding  anything  contained  in  this  Agreement  to the
contrary,  if, at any time after the date  hereof and prior to the  Distribution
Date,  the Company  shall:  (i) declare  and pay any  dividend on Common  Shares
payable  in  Common  Shares;  or  (ii)  effect  a  subdivision,  combination  or
consolidation of Common Shares (by reclassification or otherwise than by payment
of a dividend  payable  in Common  Shares)  into a greater  or lesser  number of
Common  Shares,  then, in each such case, the number of Rights  associated  with
each Common Share then outstanding, or issued or delivered thereafter,  shall be
proportionately adjusted so that the number of Rights thereafter associated with
each Common Share  following  any such event shall equal the result  obtained by
multiplying the number of Rights  associated with each Common Share  immediately
prior to such event by a fraction, the numerator of which is the total number of
Common Shares outstanding  immediately prior to the occurrence of such event and
the  denominator  of which is the  total  number of  Common  Shares  outstanding
immediately  following the occurrence of such event. The adjustments provided in
this  Section  11(n)  shall be made  successively  whenever  such a dividend  is
declared  and  paid or  such a  subdivision,  combination  or  consolidation  is
effected.



                                       17
<PAGE>

          (o) The Company  agrees  that,  after the earlier of the  Distribution
Date or the  Shares  Acquisition  Date,  it will  not,  except as  permitted  by
Sections  23, 24 or 27,  take (or  permit any of its  Subsidiaries  to take) any
action if at the time such  action is taken it is  reasonably  foreseeable  that
such action will diminish substantially or eliminate the benefits intended to be
afforded by the Rights.

          Section  12.  CERTIFICATE  OF  ADJUSTED  PURCHASE  PRICE OR  NUMBER OF
SHARES.  Whenever  an  adjustment  is made as  provided in Section 11 or 13, the
Company shall promptly:  (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment; (b) file with
the Rights  Agent and with the  transfer  agents  for the Common  Shares and the
Preferred  Shares  a copy of such  certificate;  and  (c)  mail a brief  summary
thereof to each holder of a Right  Certificate as required under Section 25. The
Rights Agent shall be fully protected in relying on any such  certificate and on
any  adjustment  therein  contained 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) If directly or  indirectly,  at any time after the Flip-In  Event,
(x) the  Company  shall  consolidate  with,  or merge  with and into,  any other
Person,  (y) any Person  shall  merge with and into the  Company and the Company
shall  be the  continuing  or  surviving  corporation  of such  merger  and,  in
connection  with such merger,  all or part of the Common Shares shall be changed
into or exchanged  for stock or other  securities of any other Person (or of the
Company) or cash or any other property or (z) the Company (or one or more of its
Subsidiaries)  shall sell or otherwise  transfer,  in one or more  transactions,
assets or earning power  aggregating  50% or more of the assets or earning power
of the  Company  and its  Subsidiaries  (taken as a whole)  to any other  Person
(other  than  the  Company  or  one or  more  wholly-owned  Subsidiaries  of the
Company),  then, and in each such case,  proper provision shall be made so that:
(i) each holder of a Right (other than Rights which have become void pursuant to
Section 11(a)(ii)) shall thereafter have the right to receive, upon the exercise
thereof at the  Purchase  Price (as  theretofore  adjusted  in  accordance  with
Section  11(a)(ii)),  in accordance with the terms of this Agreement and in lieu
of Preferred  Shares or Common  Shares,  such number of validly  authorized  and
issued, fully paid, non-assessable and freely tradable shares of Common Stock of
the Principal  Party,  not subject to any liens,  encumbrances,  rights of first
refusal or other adverse claims,  as shall equal the result obtained by dividing
the Purchase Price (as therefore  adjusted pursuant to Section 11(a)(ii)) by 50%
of the  current per share  market  price of the Common  Stock of such  Principal
Party (determined pursuant to Section 11(d)) on the date of consummation of such
consolidation,  merger, sale or transfer;  provided,  however, that the Purchase
Price (as theretofore  adjusted in accordance with Section 11(a)(ii) hereof) and
the number of shares of Common Stock of such Principal  Party so receivable upon
exercise of a Right shall be subject to further  adjustment  as  appropriate  in
accordance with this Section 11(f) to reflect any events occurring in respect of
the  Common  Stock  of  such  Principal  Party  after  the  occurrence  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;  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 in  accordance  with  Section 9) in  connection  with such
consummation of such consolidation, merger, sale or transfer as may be necessary


                                       18
<PAGE>

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

          (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):  (A) the
Person  that is the  issuer of the  securities  into  which  Common  Shares  are
converted  in such  merger or  consolidation  or, if there is more than one such
issuer,  the issuer of the shares of Common Stock (included in such  Securities)
which have the greatest  aggregate market value of shares  outstanding or (B) if
no  securities  are so  issued,  (x) the Person  that is the other  party to the
merger,  if such Person  survives such merger or, if there is more than one such
Person,  the  Person  the  shares of  Common  Stock of which  have the  greatest
aggregate  market value of shares  outstanding  or (y) if the Person that is the
other  party to the merger does not survive  such  merger,  the Person that does
survive such merger  (including  the Company,  if it survives) or (z) the Person
resulting  from  such  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 or, if each Person that
is a party to such transaction or transactions  receives the same portion of the
assets or earning power so transferred  or if the Person  receiving the greatest
portion of the assets or earning power cannot be  determined,  whichever of such
Persons is the issuer of Common Stock having the greatest aggregate market value
of shares outstanding;  provided,  however, that in any case described in clause
(i) or (ii) of this Section 13(b), if the Common Stock of such Persons is not at
such  time or has not been  continuously  over  the  preceding  12-month  period
registered  under  Section 12 of the Exchange  Act, then (1) if such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so  registered,  the term  "PRINCIPAL  PARTY" shall refer to such other
Person or (2) if such Person is a Subsidiary,  directly or  indirectly,  of more
than one Person, the Common Stock of all of which is and has been so registered,
the term  "Principal  Party"  shall refer to  whichever  of such  Persons is the
issuer of Common  Stock  having the  greatest  aggregate  market value of shares
outstanding or (3) if such Person is owned,  directly or indirectly,  by a joint
venture  formed  by  two or  more  Persons  that  are  not  owned,  directly  or
indirectly,  by the same Person, the provisions set forth in clauses (1) and (2)
above shall apply to each of the owners  having an interest in the venture as if
the Person owned by the joint  venture was a  Subsidiary  of both or all of such
joint  venturers and the Principal Party in each case shall bear the obligations
set forth in this  Section 13 in the same ratio as its  interest  in such Person
bears to the total of such interests.

          (c) The Company shall not consummate any consolidation,  merger,  sale
or transfer  described in Section 13(a) unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights
Agent an agreement  confirming that the requirements of Sections 13(a) and 13(b)


                                       19
<PAGE>

shall  promptly  be  performed  in  accordance  with  their  terms and that such
consolidation,  merger,  sale or  transfer  shall not result in a default by the
Principal  Party under this Agreement as the same shall have been assumed by the
Principal  Party  pursuant  to  Sections  13(a) and  13(b) and that,  as soon as
practicable  after  executing  such  agreement  pursuant to this Section 13, the
Principal Party will:

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

               (ii) use its best  efforts,  if the Common Stock of the Principal
Party  shall be listed  or  admitted  to  trading  or  quotation  on a  national
securities exchange or  over-the-counter  market, to list or admit to trading or
quotation  (or continue the listing or admission to trading or quotation of) the
Rights  and the  securities  purchasable  upon  exercise  of the  Rights on such
exchange or market or, if the Common Stock of the  Principal  Party shall not be
so listed or admitted,  to cause the Rights and the securities  receivable  upon
exercise of the Rights to be admitted to quotation on the Nasdaq Stock Market;

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

               (iv) obtain  waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.

          (d)  In  case  the  Principal  Party  has a  provision  in  any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument  governing its corporate  affairs which would have the effect of: (i)
causing the Principal  Party to issue (other than to holders of Rights  pursuant
to this Section 13), in connection with or as a consequence of the  consummation
of a  transaction  described in this Section 13, shares of Common Stock or other
equity securities of the Principal Party (including,  without limitation, shares
or fractions of preferred stock,  which by virtue of having dividend,  voting or
liquidation rights substantially  comparable to those of the Common Stock of the
Principal  Party are  deemed in good  faith by the  Board of  Directors  to have
substantially the same value as the Common Stock of the Principal Party) at less
than the then current  market price per share  thereof  (determined  pursuant to
Section 11(d)) or securities exercisable or exchangeable for or convertible into
such Common Stock or equity  securities  with  exercise,  exchange or conversion
prices at less than such then current  market price;  or (ii)  providing for any
special payment, tax or similar provision in connection with the issuance of the
Common Stock of the Principal  Party  pursuant to the provisions of this Section
13, then the Company  hereby agrees with each holder of Rights that it shall not
consummate  any such  transaction  unless  prior  thereto  the  Company  and the
Principal  Party  shall  have  executed  and  delivered  to the  Rights  Agent a
supplemental  agreement providing that such provision shall have been cancelled,
waived  or  amended,  or  that  the  authorized  securities  shall  be  retired,
repurchased  or  redeemed,  so  that  such  provision  will  have no  effect  in
connection  with  or as a  consequence  of  the  consummation  of  the  proposed
transaction.



                                       20
<PAGE>

          (e) The  Company  covenants  and agrees that it shall not, at any time
after the Flip-In  Event,  enter into any  transaction  of the type described in
clauses (x), (y) or (z) of Section  13(a) if: (i) at the time of or  immediately
after such consolidation, merger, sale, transfer or other transaction, there are
any  rights,   warrants  or  other  instruments  or  securities  outstanding  or
agreements in effect which would  substantially  diminish or otherwise eliminate
the   benefits   intended  to  be  afforded  by  the  Rights;   (ii)  prior  to,
simultaneously  with or  immediately  after such  consolidation,  merger,  sale,
transfer or other transaction, the stockholders of the Person who constitutes or
would  constitute  the Principal  Party for purposes of Section 13(b) shall have
received a distribution of Rights  previously owned by such Person or any of its
Affiliates or  Associates;  or (iii) the form or nature of  organization  of the
Principal Party would preclude or limit the exercisability of the Rights.

          (f) In no event shall the Rights  Agent have any  liability in respect
of any such Principal Party transactions,  including,  without  limitation,  the
propriety  thereof.  The Rights Agent may rely and be fully protected in relying
upon a certificate of the Company stating that the provisions of this Section 13
have been fulfilled. Notwithstanding anything in this Agreement to the contrary,
the prior  written  consent of the Rights  Agent must be obtained in  connection
with any supplemental  agreement which alters the rights or duties of the Rights
Agent.

          Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

          (a) The Company  shall not be required  to issue  fractions  of Rights
(except prior to the  Distribution  Date in accordance with Section 11(n)) or to
distribute Right Certificates which evidence  fractional Rights. In lieu of such
fractional  Rights,  there shall be paid to the registered  holders of the Right
Certificates  with regard to which such  fractional  Rights  would  otherwise be
issuable,  an amount in cash equal to the same  fraction of the  current  market
value of a whole  Right.  For the purposes of this  Section  14(a),  the current
market  value of a whole Right shall be the closing  price of the Rights for the
Trading Day immediately  prior to the date on which such fractional Rights would
have been  otherwise  issuable.  The closing price for any day shall be the last
sale price,  regular  way or, in case no such sale takes place on such day,  the
average of the closing bid (or, if more than one, highest bid) and asked (or, if
more than one, lowest asked) prices,  regular way, in either case as reported in
the  principal  consolidated  transaction  reporting  system  for the  principal
national securities exchange or over-the-counter  market on which the Rights are
listed or admitted to trading or  quotation  or, if the Rights are not so listed
or  admitted,  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.  If on any such date no such  market  maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors shall be used.

          (b) The Company shall not be required to issue  fractions of Preferred
Shares   (other   than   fractions   which  are   integral   multiples   of  one
two-hundred-thousandth of a Preferred Share) or to distribute certificates which
evidence  fractional  Preferred  Shares (other than fractions which are integral
multiples of one  two-hundred-thousandth  of a Preferred Share) upon exercise or
exchange of Rights.  Interests  in  fractions  of  Preferred  Shares in integral
multiples  of  one  two-hundred-thousandth  of a  Preferred  Share  may,  at the
election of the  Company,  be evidenced by  depositary  receipts  pursuant to an
appropriate  agreement  between  the Company  and a  depositary  selected by it;
provided,  that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled  as  beneficial  owners of the  Preferred  Shares  represented  by such
depositary  receipts.  In lieu  of  fractional  Preferred  Shares  that  are not
integral  multiples  of one  two-hundred-thousandth  of a Preferred  Share,  the
Company shall pay to the  registered  holders of the Right  Certificates  at the
time the Rights evidenced  thereby are exercised or exchanged as herein provided
an amount in cash equal to the same fraction of the current  market value of one
Preferred Share (as determined in accordance with Section 14(a)) for the Trading
Day immediately prior to the date of such exercise or exchange.



                                       21
<PAGE>

          (c) The Company  shall not be required  to issue  fractions  of Common
Shares or to distribute  certificates  which evidence  fractional  Common Shares
upon the  exercise  or  exchange of Rights.  In lieu of such  fractional  Common
Shares,  the  Company  shall  pay  to  the  registered  holders  of  the  Rights
Certificates at the time the Rights evidenced thereby are exercised or exchanged
as herein  provided an amount in cash equal to the same  fraction of the current
market value of a Common Share (as determined in accordance  with Section 14(a))
for the Trading Day immediately prior to the date of such exercise or exchange.

          (d) The  holder of a Right by the  acceptance  of the Right  expressly
waives  his or her right to  receive  any  fractional  Rights or any  fractional
shares upon  exercise or exchange of a Right  (except as  otherwise  provided in
this Section 14).

          Section 15. RIGHTS OF ACTION.  All rights of action in respect of this
Agreement,  excepting  the  rights of action  given to the  Rights  Agent  under
Section  18,  are  vested  in  the  respective   registered   holders  of  Right
Certificates  (and,  prior to the Distribution  Date, the registered  holders of
Common Shares), and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of any Common Shares),  without the consent of the Rights
Agent  or of the  holder  of any  other  Right  Certificate  (or,  prior  to the
Distribution Date, of any other Common Shares), on his or her own behalf and for
his or her own benefit,  may enforce,  and may  institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of,  such  holder's  right  to  exercise  the  Rights  evidenced  by such  Right
Certificate (or prior to the  Distribution  Date,  such Common  Shares),  in the
manner  provided  in  such  Right  Certificate  and in this  Agreement.  Without
limiting the  foregoing or any  remedies  available to holders of Rights,  it is
specifically  acknowledged  that  holders of Rights  would not have an  adequate
remedy at law for any breach of this  Agreement and will be entitled to specific
performance of the obligations  under,  and injunctive  relief against actual or
threatened  violations  of  the  obligations  of any  Person  subject  to,  this
Agreement.

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

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

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

          (c) the Company and the Rights  Agent may deem and treat the Person in
whose  name  a  Right  Certificate  (or,  prior  to  the  Distribution  Date,  a
certificate  for Common  Shares) is registered as the absolute owner thereof and
of the Rights evidenced thereby  (notwithstanding  any notations of ownership or
writing on such Right Certificates or such certificate for Common Shares made by
anyone other than the Company or the Rights Agent) for all purposes  whatsoever,
and neither the Company nor the Rights Agent,  subject to Section 7(e), shall be
affected by any notice to the contrary.

          (d)  notwithstanding  anything in this Agreement to the contrary,  the
Rights Agent shall have no liability to any holder of a Right or other Person as
a result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent  injunction or other order,  decree or
ruling  issued  by a  court  of  competent  jurisdiction  or by a  governmental,
regulatory  or  administrative  agency  or  commission,  or any  statute,  rule,
regulation  or  executive  order  promulgated  or  enacted  by any  governmental
authority prohibiting or otherwise restraining performance of such obligation.

          Section 17.  RIGHT  CERTIFICATE  HOLDER NOT DEEMED A  STOCKHOLDER.  No
holder,  as such, of any Right  Certificate shall be entitled to vote or receive
dividends  or be deemed  for any  purpose  the holder of the  Preferred  Shares,


                                       22
<PAGE>

Common  Shares  or  other  securities  of the  Company  that  may at any time be
issuable on the  exercise or exchange  of the Rights  represented  thereby,  and
nothing  contained  herein or in any Right  Certificate  shall be  construed  to
confer upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,  or to give or
withhold  consent to any corporate  action,  or to receive notice of meetings or
other actions affecting  stockholders  (except as provided in Section 25), or to
receive  dividends or  subscription  rights,  or  otherwise,  until the Right or
Rights  evidenced  by such  Right  Certificate  shall  have  been  exercised  or
exchanged in accordance with the provisions hereof.

          Section 18. CONCERNING THE RIGHTS AGENT.

          (a) The Company agrees to pay to the Rights Agent such compensation as
shall be agreed to in writing  between the Company and the Rights  Agent for all
services  rendered  by it  hereunder  and,  from time to time,  on demand of the
Rights  Agent,  its  reasonable  expenses  and its  reasonable  counsel fees and
counsel  disbursements  incurred in the  administration  and  execution  of this
Agreement and the exercise and performance of its duties hereunder.  The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless  against,
any loss, liability or expense, incurred without gross negligence,  bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement,  including  without  limitation  the costs and  expenses of defending
against  any  claim  (whether  asserted  by the  Company,  a  holder  of a Right
Certificate  or any  other  Person)  of  liability  arising  therefrom,  whether
directly or  indirectly.  The provisions of this Section 18(a) shall survive the
expiration of the Rights and the termination of this Agreement.

          (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  in  reliance  upon  any  Right
Certificate  or certificate  for Preferred  Shares or Common Shares or for other
securities  of the Company,  instrument  of  assignment  or  transfer,  power of
attorney,  endorsement,   affidavit,  letter,  notice,  instruction,  direction,
consent, certificate,  statement or other paper or document believed by it to be
genuine  and to be signed and  executed  by the  proper  Person or  Persons,  or
otherwise upon the advice of counsel as set forth in Section 20. Notwithstanding
anything in this  Agreement to the contrary,  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 loss profits), even if the Rights Agent
has been advised of the  likelihood of the loss or damage and  regardless of the
form of the action.

          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
all or  substantially  all the stock  transfer or corporate  trust powers 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;  provided,  that such corporation
would be  eligible  for  appointment  as a  successor  Rights  Agent  under  the
provisions of Section 21. In case, at the time such successor Rights Agent shall
succeed to the agency created by this Agreement,  any of the Right  Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the  countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case, at that time, any of the Right
Certificates shall not have been  countersigned,  any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor  Rights Agent;  and in all such cases such
Right  Certificates shall have the full force provided in the Right Certificates
and in this Agreement.


                                       23
<PAGE>

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

          (b) In case,  at any  time,  the  name of the  Rights  Agent  shall be
changed  and at  that  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  expressly  imposed by this  Agreement,  and no implied
duties or  obligations  shall be read into this  Agreement  against  the  Rights
Agent. 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  of its own
selection  (who may be legal counsel for the  Company),  and the opinion of such
counsel shall be full and complete  authorization  and  protection to the Rights
Agent as to any action  taken or  omitted by it in good faith and in  accordance
with such opinion.

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

          (c) The Rights Agent shall be liable  hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct;
provided,  however,  that the Rights Agent shall not be liable for any indirect,
special, consequential or punitive damages.

          (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),  and
shall not be  responsible  for any  breach by the  Company  of any  covenant  or
condition contained in this Agreement or in any Right Certificate, and shall not
be responsible for any change in the exercisability of the Rights (including the
Rights  becoming  void pursuant to Section  11(a)(ii)) or any  adjustment in the
terms  of  the  Rights  provided  in  Sections  3,  11,  13,  23  and  24 or the
ascertaining  of the  existence  of facts that would  require any such change or
adjustment  (except with  respect to the  exercise of Rights  evidenced by Right


                                       24
<PAGE>

Certificates after the Rights Agent's actual receipt of a certificate  furnished
pursuant to Section 12 describing such change or  adjustment),  and shall not by
any act hereunder,  be deemed to make any  representation  or warranty as to the
authorization  or reservation of any Preferred  Shares or other securities to be
issued pursuant to this Agreement or any Right  Certificate or as to whether any
Preferred Shares or other securities  will, when issued,  be validly  authorized
and  issued,  fully  paid and  nonassessable,  nor  shall  the  Rights  Agent be
responsible  for  the  legality  of  the  terms  hereof  in its  capacity  as an
administrative agent.

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

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

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

          (j) If,  with  respect to any Rights  Certificate  surrendered  to the
Rights Agent for exercise or transfer,  the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be,  has not been  completed  to  certify  the  holder is not an
Acquiring  Person (or an Affiliate  or  Associate  of an Acquiring  Person) or a
transferee  thereof,  the Rights  Agent shall not take any  further  action with


                                       25
<PAGE>

respect to such requested exercise or transfer without first consulting with the
Company.

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

          (l) The Rights Agent shall be  protected  and shall incur no liability
for, or in respect of, any action taken or omitted by it in connection  with its
administration of this Agreement if such acts or omissions are in reliance upon:
(i) the proper execution of the certification  concerning  beneficial  ownership
appended to the form of assignment and the form of election to purchase attached
hereto  unless the Rights Agent shall have actual  knowledge  that, as executed,
such  certification is untrue; or (ii) the non-execution of such  certification,
including,  without limitation,  any refusal to honor any otherwise  permissible
assignment or election by reason of such non-execution.

          (m) The Company  agrees to give the Rights Agent prompt written notice
of any event or  ownership  known to it which  would  prohibit  the  exercise or
transfer of the Right Certificates.

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

          (o) In addition to the foregoing,  the Rights Agent shall be protected
and shall incur no liability  for, or in respect of, any action taken or omitted
by it in connection  with its  administration  of this Agreement if such acts or
omissions  are in reliance  upon (i) the proper  execution of the  certification
concerning  beneficial ownership appended to the form of assignment and the form
of election to  [purchase][exercise]  attached  hereto  unless the Rights  Agent
shall have actual knowledge that, as executed,  such certification is untrue, or
(ii) the non-execution of such certification including,  without limitation, any
refusal to honor any otherwise  permissible  assignment or election by reason of
such non-execution.

          Section 21. CHANGE OF RIGHTS AGENT.  The Rights Agent or any successor
Rights Agent may resign and be discharged  from its duties under this  Agreement
upon 30 days notice in writing  mailed to the Company and to each transfer agent
of Common  Shares and  Preferred  Shares by  registered  or certified  mail and,
following  the  Distribution  Date,  to the  registered  holders  of  the  Right
Certificates by first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days notice in writing mailed to the Rights Agent
or successor  Rights Agent,  as the case may be, and to each  transfer  agent of
Common  Shares  and  Preferred  Shares  by  registered  or  certified  mail and,
following  the  Distribution  Date,  to the  registered  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  Rights  Agent  or  any  registered  holder  of  any  Right
Certificate may, at the expense of the Company,  apply to any court of competent
jurisdiction  for the  appointment of a new Rights Agent.  Any successor  Rights
Agent,  whether  appointed  by the  Company  or by  such  a  court,  shall  be a
corporation  organized and doing business under the laws of the United States or
any state of the United  States or the District of Columbia,  in good  standing,
having  an  office  in the  State of New  York,  authorized  under  such laws to
exercise  corporate  trust or stock transfer  powers,  subject to supervision or
examination  by  federal  or  state  authority,  and  having  at the time of its
appointment  as Rights  Agent a  combined  capital  and  surplus of at least $50
million. After appointment,  the successor Rights Agent shall be vested with the
same powers,  rights,  duties and  responsibilities as if it had been originally
named as Rights Agent without  further act or deed; but the  predecessor  Rights
Agent shall deliver and transfer to the  successor  Rights Agent any property at
the time held by it  hereunder  and execute  and deliver any further  assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective


                                       26
<PAGE>

date of any such  appointment,  the Company shall file notice thereof in writing
with the  predecessor  Rights Agent and each transfer  agent of Common Shares or
Preferred Shares and,  following the Distribution Date, mail a notice thereof in
writing to the  registered  holders of Right  Certificates.  Failure to give any
notice  provided 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 forms
as may be approved by the Board of Directors to reflect any adjustment or change
in the  Purchase  Price  and the  number  or kind or  class of  shares  or other
securities  or  property  purchasable  upon  exercise  or  exchange of Rights in
accordance  with the provisions of this  Agreement.  In addition,  in connection
with the issuance or sale of Common Shares following the  Distribution  Date and
prior to the Expiration  Date, the Company may, with respect to Common Shares so
issued or sold  pursuant to: (i) the exercise of stock  options;  (ii) under any
employee plan or arrangement; (iii) upon the exercise, conversion or exchange of
securities,  notes or  debentures  issued by the Company;  or (iv) a contractual
obligation of the Company, in each case existing prior to the Distribution Date,
issue  Right  Certificates  representing  the  appropriate  number  of Rights in
connection with such issuance or sale.

          Section 23. REDEMPTION.

          (a) The  Board of  Directors  may,  at any time  prior to the  Flip-In
Event,  redeem  all but not less  than all of the then  outstanding  Rights at a
redemption price of $.01 per Right,  appropriately adjusted to reflect any stock
split,  stock dividend or similar  transaction  occurring  after the date hereof
(the redemption  price being called the "REDEMPTION  PRICE").  The redemption of
the  Rights  may be made  effective  at such  time,  on such basis and with such
conditions as the Board of Directors in its sole  discretion may establish.  The
Redemption Price shall be payable, at the option of the Company, in cash, Common
Shares or such  other  form of  consideration  as the Board of  Directors  shall
determine.

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


                                       27
<PAGE>

Section 24 or other than in connection  with the purchase of Common Shares prior
to the Distribution Date.

          Section 24. EXCHANGE.

          (a) The Board of Directors  may, at its option,  at any time after the
Flip-In  Event,  exchange all or part of the then  outstanding  and  exercisable
Rights  (which  shall not include  Rights that have become void  pursuant to the
provisions of Section  11(a)(ii))  for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such amount per
Right being called the " EXCHANGE RATIO").  Notwithstanding  the foregoing,  the
Board of Directors  shall not be  empowered to effect such  exchange at any time
after an  Acquiring  Person  shall have  become the  Beneficial  Owner of Common
Shares  aggregating 50% or more of the Common Shares then outstanding.  From and
after the  occurrence of an event  specified in Section  13(a),  any Rights that
theretofore  have  not been  exchanged  pursuant  to this  Section  24(a)  shall
thereafter  be  exercisable  only in  accordance  with Section 13 and may not be
exchanged  pursuant to this  Section  24(a).  The  exchange of the Rights by the
Board of Directors  may be made  effective at such time,  on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.

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

          (c) If there  shall not be  sufficient  Common  Shares  issued but not
outstanding  or  authorized  but  unissued to permit any  exchange of Rights for
Common Shares as  contemplated  in accordance  with this Section 24, the Company
shall use all reasonable efforts to take or cause to be taken all such action as
may be  necessary  to  authorize  additional  Common  Shares for  issuance  upon
exchange of the Rights.  The  Company may at its option  substitute,  and if the
Company shall,  after good faith effort,  be unable to take or cause to be taken
all such action as may be necessary to authorize such additional  Common Shares,
the Company  shall,  to the extent of the  insufficiency,  substitute,  for each
Common Share that would otherwise be issuable upon exchange of a Right, a number
of Preferred  Shares or fraction thereof (or Equivalent  Preferred  Shares) such
that the current per share market price  (determined  pursuant to Section 11(d))
of one Preferred Share or Equivalent  Preferred Share  multiplied by such number
or fraction is equal to the current per share market price (determined  pursuant
to Section 11(d)) of one Common Share as of the date of such exchange.



                                       28
<PAGE>

          Section 25. NOTICE OF CERTAIN EVENTS.

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

          (b) In case any event  described  in Section  11(a)(ii)  or Section 13
shall occur,  then the Company shall as soon as practicable  thereafter  give to
each holder of a Right  Certificate  and to the Rights  Agent (or, if  occurring
prior to the  Distribution  Date, each holder of Common  Shares),  in accordance
with Section 26, a notice of the  occurrence  of such event,  which notice shall
describe  such  event and the  consequences  of such  event to holders of Rights
under Section 11(a)(ii) and Section 13.

          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 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:

             Viatel, Inc.
             685 Third Avenue
             New York, New York  10017
             Attention:  General Counsel

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 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:

            The Bank of New York
            101 Barclay Street, 12 W
            New York, New York  10286
            Attention: Stock Transfer Administration



                                       29
<PAGE>

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

          Section  27.  SUPPLEMENTS  AND  AMENDMENTS.  Except as provided in the
penultimate  sentence  of this  Section  27,  for so long as the Rights are then
redeemable, the Company may, in its sole and absolute discretion, and the Rights
Agent shall,  if the Company so directs,  supplement  or amend any  provision of
this Agreement in any respect without the approval of any holders of the Rights.
At any time when the Rights are no longer redeemable,  except as provided in the
penultimate  sentence of this  Section 27, the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights to: (i) cure any  ambiguity;  (ii)  correct or
supplement any provision contained herein which may be defective or inconsistent
with any other  provision  herein;  (iii)  shorten or  lengthen  any time period
hereunder;  or (iv) change or supplement the provisions  hereunder in any manner
which the Company may deem  necessary  or  desirable;  provided,  that,  no such
supplement or amendment shall (a) adversely  affect the interests of the holders
of Rights, as such (other than an Acquiring Person, or an Affiliate or Associate
of an Acquiring  Person, or transferees of an Acquiring  Person),  (b) cause the
Rights  again to  become  redeemable  or (c)  cause  this  Agreement  to  become
amendable other than in accordance with this sentence.  Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall be
made which changes the Redemption Price. Upon the delivery of a certificate from
an  appropriate  officer of the  Company  which  states that the  supplement  or
amendment is in  compliance  with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment.  Notwithstanding any other provision
hereof, no supplement or amendment that amends the provisions of Sections 18, 19
20 or 21 in a manner adverse to the Rights Agent shall become effective  without
the prior consent of the Rights Agent (which shall be evidenced by its execution
of such  supplement or amendment)  and any other  supplement or amendment  shall
become effective immediately upon execution by the Company,  whether or not also
executed by the Rights Agent.

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

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

          Section 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.

          (a) The  Board  of  Directors  shall  have  the  exclusive  power  and
authority to  administer  this  Agreement  and to exercise the rights and powers
specifically  granted to the Board of 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,   without  limitation,   a
determination  to redeem or not  redeem the Rights or to amend or not amend this
Agreement).



                                       30
<PAGE>

          (b) All such actions, calculations, interpretations and determinations
(including,  for purposes of clause (y) below, all omissions with respect to the
foregoing)  that are done or made by the Board of Directors in good faith shall:
(x) be final,  conclusive  and binding on the  Company,  the Rights  Agent,  the
holders of Rights,  as such, and all other parties and (y) not subject the Board
of Directors to any liability to the holders of Rights.

          Section  31.  SEVERABILITY.   If  any  term,  provision,  covenant  or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

          Section 32.  GOVERNING LAW. This Agreement and each Right  Certificate
issued  hereunder  shall be deemed to be a  contract  made under the laws of the
State of Delaware  and for all  purposes  shall be governed by and  construed in
accordance  with the laws of the State of Delaware  applicable to contracts made
and to be performed  entirely within the State of Delaware;  provided,  however,
that the rights and  obligations  of the Rights  Agent  shall be governed by and
construed in  accordance  with the laws of the State of New York. As between the
Company and Rights Agent exclusively,  the parties hereto hereby waive the right
to a jury trial in any action arising out of this Agreement. Any dispute arising
out of this Agreement  shall be litigated in the borough of Manhattan,  New York
City, New York, and the Company and Rights Agent submit to the  jurisdiction  of
such courts and acknowledge that such courts are a convenient forum.

          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 one and
the same instrument.

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

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


                                           VIATEL, INC.


                                           By:___________________________
                                              Title:



                                           THE BANK OF NEW YORK,
                                           as Rights Agent


                                           By:___________________________
                                              Title:

<PAGE>

                                                                      EXHIBIT A

                                      FORM

                                       of

                           CERTIFICATE OF DESIGNATIONS

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                                  VIATEL, INC.


          The undersigned hereby certifies that he is  _________________________
of VIATEL,  INC.  (the  "Corporation"),  that the  Corporation  is a corporation
organized  and  existing  under  the  General  Corporation  Law of the  State of
Delaware  (the  "Law") and that,  pursuant to  authority  vested in the Board of
Directors of the  Corporation  in accordance  with the provisions of the Amended
and Restated  Certificate of Incorporation of the Corporation,  as amended,  the
following  resolution  was  duly  adopted  by  the  Board  of  Directors  of the
Corporation  as required by Section 151 of the Law at a meeting  duly called and
held on December 6, 1999:

               RESOLVED, that pursuant to the authority granted to and vested in
               the Board of Directors of the  Corporation in accordance with the
               provisions   of  the  Amended   and   Restated   Certificate   of
               Incorporation  of the  Corporation,  as  amended,  the  Board  of
               Directors of the Corporation hereby creates a series of Preferred
               Stock, par value $.01 per share (the "Preferred  Stock"),  of the
               Corporation  and  hereby  states  the  designation  and number of
               shares,  and fixes the voting and other powers,  preferences  and
               relative, participating, optional or other rights thereof and the
               qualifications, limitations and restrictions thereon, as follows:

          Section  I.  DESIGNATION  AND  AMOUNT.  There  shall  be a  series  of
Preferred Stock  designated as "Series A Junior  Participating  Preferred Stock"
(the  "Series A  Preferred  Stock")  and the number of shares  constituting  the
Series A Preferred Stock shall be 1,000.  Such number of shares may be increased
or decreased by resolution of the Board of Directors; PROVIDED, HOWEVER, that no
decrease  shall  reduce the number of shares to a number less than the number of
shares then  outstanding  plus the number of shares then  reserved  for issuance
upon the  exercise  of  outstanding  options,  rights  or  warrants  or upon the
conversion  or  exchange of  outstanding  securities  issued by the  Corporation
convertible into or exchangeable for Series A Preferred Stock.


                                      A-1
<PAGE>

          Section II. DIVIDENDS AND DISTRIBUTIONS.

               A. Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends,  the holders
of shares of Series A Preferred  Stock,  in  preference to the holders of Common
Stock,  par value $.01 per share, of the Corporation  (the "Common Stock") shall
be entitled to receive,  when,  as and if declared by the Board of Directors out
of funds legally available for the purpose,  quarterly dividends payable in cash
on the 15th day of April, July, October and January in each year (each such date
being called as a "Quarterly  Dividend  Payment Date"),  commencing on the first
Quarterly  Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred  Stock,  in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $420,000 or (b) the Adjustment  Number
(as defined  below) times the aggregate per share amount of all cash  dividends,
plus the fair value,  as determined by the Board of Directors upon the advice of
a nationally  recognized  investment  banking firm selected in good faith by the
Board of Directors,  of all non-cash  dividends and other  distributions  (other
than dividends  payable in shares of Common Stock)  declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly  Dividend  Payment Date,  since the first issuance of any
share or  fraction  of a share of  Series A  Preferred  Stock.  The  "Adjustment
Number" shall initially be 200,000.  In the event the  Corporation  shall at any
time after December 24, 1999 (the "Rights  Declaration  Date"):  (i) declare and
pay any  dividend  on Common  Stock  payable  in shares  of Common  Stock;  (ii)
subdivide the outstanding  Common Stock; or (iii) combine the outstanding shares
of Common  Stock  into a smaller  number of  shares,  then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction,  the numerator of which is the
number of shares of Common Stock  outstanding  immediately  after such event and
the  denominator  of which is the  number of shares  of Common  Stock  that were
outstanding  immediately  prior  to  such  event.   (References  herein  to  the
Adjustment  Amount shall mean the Adjustment Amount as in effect at the relevant
time.

               B. The  Corporation  shall declare a dividend or  distribution on
the Series A Preferred  Stock as provided in  paragraph  (A) of this  Section II
immediately  after it declares a dividend or distribution on Common Stock (other
than a dividend payable in shares of Common Stock); PROVIDED, that, in the event
no dividend or distribution  shall have been declared on the Common Stock during
the period between any Quarterly  Dividend  Payment Date and the next subsequent
Quarterly  Dividend Payment Date, a dividend of $420,000 per share on the Series
A Preferred Stock shall  nevertheless be declared for payment on such subsequent
Quarterly Dividend Payment Date.

               C.  Dividends   shall  begin  to  accrue  and  be  cumulative  on
outstanding  shares of Series A  Preferred  Stock  from the  Quarterly  Dividend
Payment Date next preceding the date of first issuance of any shares of Series A
Preferred  Stock,  unless the date of  issuance  of such  shares is prior to the
record  date for the  first  Quarterly  Dividend  Payment  Date,  in which  case
dividends  on shares of Series A Preferred  Stock shall begin to accrue from the
date of  issuance  thereof,  or unless the date of  issuance of such shares is a
Quarterly  Dividend  Payment  Date or is a date  after the  record  date for the
determination  of  holders of shares of Series A  Preferred  Stock  entitled  to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which cases  dividends  shall begin to accrue and be  cumulative  from
such Quarterly  Dividend  Payment Date.  Accrued but unpaid  dividends shall not
bear interest. Dividends paid on shares of Series A Preferred Stock in an amount
less than the total amount of such  dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the  determination  of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or  distribution  declared  thereon,  which record
date  shall be not more than 60 days  prior to the date  fixed  for the  payment
thereof.



                                      A-2
<PAGE>

          Section  III.  VOTING  RIGHTS.  The  holders  of  shares  of  Series A
Preferred Stock shall have the following voting rights:

               A. Subject to the provision for adjustment set forth herein, each
share of Series A Preferred  Stock shall entitle the holder  thereof to a number
of votes  equal to the  Adjustment  Number  (as then  adjusted)  on all  matters
submitted to a vote of the holders of Common Stock.

               B. Except as  otherwise  provided  herein or required by law, the
holders  of shares  of Series A  Preferred  Stock and the  holders  of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of holders of Common Stock.

               C. Except as  otherwise  set forth herein or required by law, the
holders of Series A  Preferred  Stock  shall have no voting or  approval  rights
separate  or apart  from  their  right to vote with  holders of shares of Common
Stock as set forth herein.

          Section IV. CERTAIN RESTRICTIONS.

               A.   Whenever   quarterly   dividends   or  other   dividends  or
distributions  payable on the Series A Preferred Stock as provided in Section II
are in  arrears,  thereafter  and until all  accrued  and unpaid  dividends  and
distributions,  whether or not declared,  on the Series A Preferred  Stock shall
have been paid in full, the Corporation shall not:

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

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

                    3.  redeem,  purchase  or  otherwise  acquire  shares of any
          Common Stock or other stock ranking  junior (either as to dividends or
          upon  liquidation  or  dissolution)  to the Series A Preferred  Stock,
          provided  that the  Corporation  may at any time  redeem,  purchase or
          otherwise  acquire  shares of any such junior  stock in  exchange  for
          shares of any other stock of the  Corporation  ranking junior (both as
          to dividends  and upon  dissolution  or  liquidation)  to the Series A
          Preferred Stock; or


                                      A-3

<PAGE>

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

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

          Section V. REACQUIRED  SHARES.  Any shares of Series A Preferred Stock
redeemed,  purchased or otherwise  acquired by the Corporation or any subsidiary
of the  Corporation  in any manner  shall be promptly  retired.  All such shares
shall upon their retirement  become  authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred  Stock created in
accordance  with the Amended  and  Restated  Certificate  of  Incorporation,  as
amended, and the Law.

          Section VI. LIQUIDATION OR DISSOLUTION.

               (A) Upon any liquidation or dissolution of the Corporation (which
terms  include a winding up of the  Corporation,  voluntary  or  otherwise),  no
distribution  shall be made on any shares of stock ranking  junior (either as to
dividends or upon  liquidation or  dissolution)  to the Series A Preferred Stock
unless,  prior thereto,  the holders of shares of Series A Preferred Stock shall
have received an amount per share (the "Series A Liquidation  Preference") equal
to the  greater of (i)  $42,000,000  plus an amount  equal to accrued and unpaid
dividends and  distributions  thereon,  whether or not declared,  to the date of
such  payment or (ii) the  Adjustment  Number  times the per share amount of all
cash and  other  property  to be  distributed  on the  Common  Stock  upon  such
liquidation or dissolution.

               (B) If  there  are not  sufficient  assets  available  to  permit
payment  in full of the  Series A  Liquidation  Preference  and the  liquidation
preferences  of all other  classes and series of stock of the  Corporation  that
rank on a parity with the Series A Preferred Stock in respect thereof,  then the
assets  available  for such  distribution  shall be  distributed  ratably to the
holders of the Series A Preferred  Stock and the holders of such parity stock in
proportion to their respective liquidation preferences.

               (C) Neither the merger or  consolidation  of the Corporation into
or with another corporation (or other entity) nor the merger or consolidation of
another  corporation  (or other  entity) into or with the  Corporation  shall be
deemed to be a liquidation or dissolution of the Corporation  within the meaning
of this Section VI.


                                      A-4

<PAGE>

          Section VII. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation,  merger, combination or other transaction in which
shares  of  Common  Stock  are  exchanged  for  or  changed  into  other  stock,
securities,  cash  and/or  other  property,  then in any such case each share of
Series A  Preferred  Stock  shall at the same  time be  similarly  exchanged  or
changed  into an  amount  per share  equal to the  Adjustment  Number  times the
aggregate amount of stock,  securities,  cash and/or other property, as the case
may be,  into  which or for which  each  share of  Common  Stock is  changed  or
exchanged.

          Section VIII. NO  REDEMPTION.  The shares of Series A Preferred  Stock
shall not be redeemable.

          Section IX. RANKING.  The Series A Preferred Stock shall, with respect
to payments of dividends and rights upon  liquidation or dissolution,  rank: (a)
senior and prior to (i) the Common Stock and (ii) any series of preferred  stock
of the Corporation which is stated to be junior to the Series A Preferred Stock;
(b) PARI PASSU with (i) any series of preferred stock of the  Corporation  which
is not stated to be senior to or junior to the Series A Preferred Stock; and (c)
junior and subordinate to any series of preferred stock of the Corporation which
is stated to be senior to the  Series A  Preferred  Stock.  Determination  as to
whether any such statements has shall be made by reference to the Certificate of
Incorporation of the Corporation, as then in effect.

          Section X.  AMENDMENT.  At any time that  shares of Series A Preferred
Stock are  outstanding,  the Certificate of  Incorporation of the Corporation as
then in effect shall not be amended in any manner which would  materially  alter
or change the powers,  preferences or rights of the Series A Preferred  Stock so
as to affect them adversely  without the  affirmative  vote of the holders of at
least two-thirds of the outstanding  shares of Series A Preferred Stock,  voting
together as a single class.

          Section XI. FRACTIONAL SHARES.  Series A Preferred Stock may be issued
in fractions of a share that shall  entitle the holder,  in  proportion  to such
holder's  fractional  shares,  to exercise  voting  rights,  receive  dividends,
participate  in  distributions  and to have the  benefit of all other  rights of
holders of Series A Preferred Stock.

          Section  XII.  MISCELLANEOUS.  The  rights  of  holders  of  Series  A
Preferred Stock shall, to the extent not inconsistent  with this resolution,  be
the same as those of holders of Common Stock.

          This  Certificate of Designations  shall become effective at 9:00 a.m.
on December 24, 1999.

          IN WITNESS WHEREOF, this Certificate of Designations has been executed
on this 6th day of December, 1999.


                                  By:______________________________________
                                     Name:
                                     Title:


                                      A-5



<PAGE>

                                                                       EXHIBIT B

                            Form of Right Certificate
Certificate No. R-_______                                       Date: __________

No. of Rights: ________

                NOT EXERCISABLE  AFTER DECEMBER 5, 2009 OR EARLIER IF REDEMPTION
                OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
                PER RIGHT AND TO  EXCHANGE  ON THE TERMS SET FORTH IN THE RIGHTS
                AGREEMENT.  UNDER  CERTAIN  CIRCUMSTANCES,  AS SET  FORTH IN THE
                RIGHTS  AGREEMENT,  RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
                WHO IS OR  BECOMES AN  ACQUIRING  PERSON OR ITS  AFFILIATES,  OR
                ASSOCIATES (EACH AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
                TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER
                BE TRANSFERABLE.


                                RIGHT CERTIFICATE

                                  VIATEL, 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 Rights Agreement dated as of December 6, 1999, as the same may
be amended from time to time (the "Rights  Agreement"),  between Viatel, Inc., a
Delaware  corporation  (the "Company") and The Bank of New York, as Rights Agent
(the  "Rights  Agent"),  to  purchase  from the  Company  at any time  after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M.,  New York City time,  on  December 5, 2009 at the office or agency of
the  Rights  Agent  designated  for  such  purpose,  one  two-hundred-thousandth
(1/200,000)  of a fully  paid  and  non-assessable  share  of  Series  A  Junior
Participating  Preferred  Stock,  par  value $ .01  per  share  (the  "Preferred
Shares"),   of  the   Company  at  a   purchase   price  of  $210  per  one  one
two-hundred-thousandth  of  a  Preferred  Share  (the  "Purchase  Price"),  upon
presentation  and surrender of this Right  Certificate with the Form of Election
to  Purchase  duly  executed.  The  number of Rights  evidenced  by this  Rights
Certificate  (and the number of one one  two-hundred-thousandths  of a Preferred
Share that may be  purchased  upon  exercise  hereof) set forth  above,  and the
Purchase Price set forth above, are the number and Purchase Price as of December
24, 1999, based on the Preferred Shares as constituted at such date. As provided
in  the  Rights   Agreement,   the  Purchase  Price,   the  number  of  one  one
two-hundred-thousandths  of a Preferred Share (or other  securities or property)
that may be  purchased  upon the exercise of the Rights and the number of Rights
evidenced by this Right  Certificate are subject to modification  and adjustment
upon the happening of certain events.

                                      B-1
<PAGE>

          This Right  Certificate  is subject to all of the terms and conditions
of the Rights  Agreement,  which terms 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,  obligations,
duties, indemnities and immunities in respect of rights of the Rights Agent, the
Company and holders of Right  Certificates as well as the  limitations  thereon.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the  above-mentioned  office or agency of the Rights Agent.  The
Company will mail to the registered  holder of this Right  Certificate a copy of
the Rights Agreement without charge after receipt of a written request therefor.

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

          Subject  to  the  provisions  of  the  Rights  Agreement,  the  Rights
evidenced  by  this  Certificate  may  be:  (i)  redeemed  by the  Company  at a
Redemption Price of $.01 per Right; or (ii) may be exchanged in whole or in part
for shares of the Company's  Common Stock, par value $.01 per share (the "Common
Shares"), or Preferred Shares.

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

          No holder of this Right  Certificate,  as such,  shall be  entitled to
vote or receive  dividends in respect of, or be deemed for any purpose to be the
holder of, the Preferred  Shares or other  securities of the Company that may at
any time be issuable on the  exercise or  exchange  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  of the  Company at any  meeting  thereof,  or to give or  withhold
consent to any  corporate  action,  or to receive  notice of  meetings  or other
actions affecting  Stockholders of the Company (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 or exchanged as provided in the Rights Agreement.

                                      B-2
<PAGE>

          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.

                                  VIATEL, INC.



                                  By:_________________________________
                                     Name:
                                     Title:
ATTEST:



___________________________________
Name:
Title:


Countersigned:


THE BANK OF NEW YORK, as Rights Agent



By:_________________________________
   [Name], Authorized Signature



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


Dated: ____________________________



                                             ___________________________________
                                             Signature

Signature Guaranteed:


          Signatures must be guaranteed by a bank, trust company, broker, dealer
or other eligible institution  participating in a recognized signature guarantee
medallion program.

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

                                (To be completed)

          The  undersigned  hereby  certifies that the Rights  evidenced by this
Right  Certificate  are not  beneficially  owned by,  were not  acquired  by the
undersigned  from  and are not  being  assigned  to an  Acquiring  Person  or an
Affiliate or Associate thereof (each, as defined in the Rights Agreement).


                                             ___________________________________
                                             Signature


                                      B-4
<PAGE>


              Form of Reverse Side of Right Certificate - continued

                          FORM OF ELECTION TO PURCHASE

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



          The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Right Certificate to purchase the Preferred Shares (or other
securities  or property)  issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or such other securities) be issued
(and such other property delivered) in the name of:

________________________________________________________________________________
                         (Please print name and address)



________________________________________________________________________________

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

Please insert social security
or other identifying number


________________________________________________________________________________
                         (Please print name and address)



________________________________________________________________________________

Dated:____________________


                                             ___________________________________
                                             Signature

Signature Guaranteed:

          Signature must be guaranteed by a bank, trust company,  broker, dealer
or other eligible institution  participating in a recognized signature guarantee
medallion program.


                                      B-5
<PAGE>


              Form of Reverse Side of Right Certificate - continued



________________________________________________________________________________
                                (To be completed)

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




                                             ___________________________________
                                             Signature




________________________________________________________________________________


                                     NOTICE

          The  signature  on the  Form of  Assignment  or Form  of  Election  to
Purchase,  as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.

          If the  certification set forth above in the Form of Assignment or the
Form of  Election  to  Purchase,  as the case  may be,  is not  completed,  such
Assignment or Election to Purchase will not be honored.


                                      B-6


<PAGE>


                                                                       EXHIBIT C


                UNDER CERTAIN CIRCUMSTANCES,  AS SET FORTH IN
                THE  RIGHTS  AGREEMENT,  RIGHTS  OWNED  BY OR
                TRANSFERRED  TO ANY  PERSON WHO IS OR BECOMES
                AN  ACQUIRING  PERSON  OR ITS  AFFILIATES  OR
                ASSOCIATES  (EACH,  AS  DEFINED IN THE RIGHTS
                AGREEMENT)  AND CERTAIN  TRANSFEREES  THEREOF
                WILL  BECOME NULL AND VOID AND WILL NO LONGER
                BE TRANSFERABLE.

                          SUMMARY OF RIGHTS TO PURCHASE
                               PREFERRED SHARES OF
                                  VIATEL, INC.

          On December 6, 1999,  the Board of Directors  (the "Board") of Viatel,
Inc. (the  "Company")  declared a dividend of one preferred share purchase right
(a  "Right")  for each  outstanding  share of common  stock,  par value $.01 per
share, of the Company (the "Common Shares"). The dividend is payable on December
24,  1999 (the  "Payment  Date") to the  holders  of record of Common  Shares on
December 24, 1999 (the "Record Date"). Each Right entitles the registered holder
to purchase from the Company one  two-hundred-thousandth  of a share of Series A
Junior  Participating  Preferred Stock, par value $.01 per share, of the Company
(the "Preferred Shares") at a price of $210 per one  two-hundred-thousandth of a
Preferred Share (the "Purchase Price"),  subject to adjustment.  The description
and terms of the Rights are set forth in a Rights Agreement dated as of December
6, 1999, as the same may be amended from time to time (the "Rights  Agreement"),
between  the  Company  and The Bank of New York,  as Rights  Agent (the  "Rights
Agent").

          Until  the  earlier  to  occur  of:  (i) 10 days  following  a  public
announcement  that a person or group of  affiliated  or  associated  persons has
acquired  beneficial  ownership  of 15% or more of the then  outstanding  Common
Shares or a person or group that was the beneficial  owner of 15% or more of the
outstanding  Common  Shares  as of  the  Record  Date  has  acquired  additional
outstanding   Common  Shares   (other  than   pursuant  to  a  stock   dividend,
distribution,  split or  subdivision  made or authorized  by the Company)  (with
certain exceptions,  an "Acquiring  Person");  or (ii) 10 business days (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 or group of affiliated  persons becomes
an Acquiring  Person)  following  the  commencement  of, or  announcement  of an
intention to make, a tender offer or exchange  offer the  consummation  of which
would result in the beneficial  ownership by a person or group of 15% or more of
the then  outstanding  Common Shares (the earlier of such dates being called the
"Distribution  Date"), the Rights will be evidenced,  with respect to any of the
certificates  for  Common  Shares  outstanding  as of the Record  Date,  by such
certificate together with a copy of this Summary of Rights.


                                      C-1
<PAGE>

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

          The Rights are not exercisable until the Distribution Date. The Rights
will expire on December 5, 2009 (the "Final Expiration Date"),  unless the Final
Expiration  Date is  advanced  or  extended  or unless the  Rights  are  earlier
redeemed or exchanged by the Company.

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

          The number of outstanding Rights is subject to adjustment in the event
of a stock dividend on Common Shares  payable in Common Shares or  subdivisions,
consolidations  or  combinations of Common Shares  occurring,  in any such case,
prior to the Distribution Date.

          The Preferred Shares  purchasable upon exercise of the Rights will not
be redeemable.  Each Preferred Share will be entitled, when, as and if declared,
to a minimum  preferential  quarterly  dividend payment equal to the greater of:
(a) $420,000;  or (b) the  Adjustment  Number (as hereafter  defined)  times the
quarterly  dividend  declared per Common Share.  The  "Adjustment  Number" shall
initially  be 200,000.  If the Company  shall at any time after the Record Date:
(i) declare and pay any dividend on Common Shares payable in Common Shares; (ii)
subdivide the outstanding Common Shares; or (iii) combine the outstanding Common
Shares into a smaller number of shares, then in each such case the Adjustment


                                      C-2
<PAGE>

Number  in  effect  immediately  prior  to  such  event  shall  be  adjusted  by
multiplying such Adjustment Number by a fraction,  the numerator of which is the
number  of  Common  Shares  outstanding  immediately  after  such  event and the
denominator  of which is the  number of Common  Shares  outstanding  immediately
prior to such event.  In the event of liquidation or dissolution of the Company,
holders of Preferred Shares will be entitled to a minimum  preferential  payment
equal to the greater of (i) $42,000,000  per share (plus any accrued but unpaid
dividends) or (ii) the Adjustment  Number times the per share amount of all cash
and other  property to be  distributed in respect of the Common Shares upon such
liquidation  or dissolution  of the Company.  Each  Preferred  Share will have a
number of votes equal to the Adjustment  Number voting  together with the Common
Shares. Finally, in the event of any merger,  consolidation or other transaction
in which  outstanding  Common Shares are converted or exchanged,  each Preferred
Share shall at the same time be similarly  exchanged or converted into an amount
per share equal to the  Adjustment  Number times the aggregate  amount of stock,
securities,  cash and/or any other  property,  as the case may be, into which or
for which each Common Share is converted or exchanged.

          Because of the nature of the dividend,  liquidation  and voting rights
of the  Preferred  Shares,  the  value  of one one  two-hundred-thousandth  of a
Preferred Share should approximate the value of one Common Share.

          If any person or group of affiliated or associated  persons becomes an
Acquiring Person,  each holder of a Right, other than Rights  beneficially owned
by the Acquiring Person (which will thereupon become void), will thereafter have
the right to  receive  upon  exercise  of a Right that  number of Common  Shares
having a market value of two times the exercise price of the Right.

          If,  after a person  or group  has  become an  Acquiring  Person,  the
Company is acquired in a merger,  consolidation  or other  transaction or 50% or
more of its  consolidated  assets or earning power are sold,  proper  provisions
will be made so that each  holder of a Right  (other  than  Rights  beneficially
owned by an Acquiring  Person which will have become void) will  thereafter have
the right to  receive  upon the  exercise  of a Right  that  number of shares of
common  stock of the person with whom the  Company  has engaged in such  merger,
consolidation  or  transaction  (or  its  parent)  that  at  the  time  of  such
transaction have a market value of two times the exercise price of the Right.

          At any time after any person or group becomes an Acquiring  Person and
prior to the earlier of one of the events described in the previous paragraph or
the acquisition by such Acquiring  Person of 50% or more of the then outstanding
Common  Shares,  the Board may exchange  the Rights  (other than Rights owned by
such  Acquiring  Person which will have become void),  in whole or in part,  for
Common Shares or Preferred Shares (or a series of the Company's  preferred stock
having equivalent  rights,  preferences and privileges),  at an average exchange
ratio of one Common Share,  or a fractional  Preferred Share (or other preferred
shares) equivalent in value thereto, per Right.


                                      C-3
<PAGE>

          With certain  exceptions,  no adjustment in the Purchase Price will be
required until  cumulative  adjustments  require an adjustment of at least 1% in
such Purchase  Price.  No fractional  Preferred  Shares or Common Shares will be
issued (other than fractions of Preferred Shares which are integral multiples of
one one  two-hundred-thousandth of a Preferred Share, which may, at the election
of the Company,  be evidenced by  depositary  receipts),  and in lieu thereof an
adjustment  in cash  will be made  based  on the  current  market  price  of the
Preferred Shares or the Common Shares, respectively.

          At any time prior to the time an Acquiring  Person  becomes such,  the
Board may redeem the  Rights in whole,  but not in part,  at a price of $.01 per
Right  (the  "Redemption  Price").  The  redemption  of the  Rights  may be made
effective at such time,  on such basis and with such  conditions as the Board in
its sole  discretion  may  establish.  Immediately  upon any  redemption  of the
Rights,  the right to exercise the Rights will  terminate  and the only right of
the holders of Rights will be to receive the Redemption Price.

          For so long as the Rights are then redeemable, the Company may, except
with respect to the Redemption Price,  amend the Rights Agreement in any manner.
After the Rights are no longer redeemable,  the Company may, except with respect
to the Redemption Price, amend the Rights Agreement only in any manner that does
not adversely affect the interests of holders of Rights.

          Until a Right is exercised or exchanged,  the holder thereof, as such,
will  have  no  rights  as a  stockholder  of the  Company,  including,  without
limitation, the right to vote or to receive dividends.

          A copy of the Rights  Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration  Statement on Form 8-A dated
December 24, 1999.  A copy of the Rights  Agreement is available  free of charge
from the Company.  This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights  Agreement,
as the same may be  amended  from  time to time,  which is  hereby  incorporated
herein by reference.


                                      C-4



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