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<SEC-DOCUMENT>0000905870-02-000035.txt : 20021115
<SEC-HEADER>0000905870-02-000035.hdr.sgml : 20021115
<ACCEPTANCE-DATETIME>20021115154627
ACCESSION NUMBER:		0000905870-02-000035
CONFORMED SUBMISSION TYPE:	8-A12G
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20021115

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INVESTORS TITLE CO
		CENTRAL INDEX KEY:			0000720858
		STANDARD INDUSTRIAL CLASSIFICATION:	TITLE INSURANCE [6361]
		IRS NUMBER:				561110199
		STATE OF INCORPORATION:			NC
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-A12G
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-11774
		FILM NUMBER:		02829926

	BUSINESS ADDRESS:	
		STREET 1:		121 N COLUMBIA ST
		STREET 2:		P O DRAWER 2687
		CITY:			CHAPEL HILL
		STATE:			NC
		ZIP:			27514
		BUSINESS PHONE:		9199682200

	MAIL ADDRESS:	
		STREET 1:		121 NORTH COLUMBIA STREET
		CITY:			CHAPEL HILL
		STATE:			NC
		ZIP:			27514
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-A12G
<SEQUENCE>1
<FILENAME>form8a.txt
<DESCRIPTION>FORM 8-A FOR INVESTORS TITLE COMPANY
<TEXT>



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-A

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


                            Investors Title Company
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

          North Carolina                            56-1110199
- ----------------------------------------   --------------------------------
 (State of incorporation or organization) (I.R.S. Employer Identification No.)

           121 North Columbia Street
           Chapel Hill, North Carolina                  27514
    ----------------------------------------         -------------
    (Address of principal executive offices)          (Zip Code)

     Securities to be registered pursuant to Section 12(b) of the Act: None


     If this form relates to the registration of a class of securities  pursuant
to  Section  12(b) of the  Exchange  Act and is  effective  pursuant  to General
Instruction A.(c), check the following box. [ ]

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

     Securities  Act  registration  statement  file  number  to which  this form
relates: N/A (if applicable)
         ---

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


     Rights to Purchase Series A Junior Participating Preferred Stock
     ----------------------------------------------------------------
                      (Title of class)
<PAGE>

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

     The following  summaries of certain  provisions of the Rights  Agreement do
not purport to be complete and are subject,  and are qualified in their entirety
by  reference,  to all the  provisions  of the Rights  Agreement,  including the
definitions therein of certain terms.

     On November 12, 2002,  the Board of  Directors of Investors  Title  Company
(the "Corporation") authorized and declared a dividend distribution of one right
(a "Right") for each  outstanding  share of common stock,  no par value,  of the
Corporation  ("Common Stock") to shareholders of record at the close of business
on December  2, 2002 (the  "Record  Date").  Each Right  entitles  the holder of
Common Stock to purchase from the  Corporation  a unit (a "Unit")  consisting of
one one-hundredth of a share of Series A Junior Participating Preferred Stock of
the Corporation (the "Preferred Stock") at a purchase price of $80 per Unit (the
"Purchase  Price"),  subject to  adjustment.  The  description  and terms of the
Rights are set forth in the Rights Agreement (the "Rights Agreement"),  dated as
of November 12,  2002,  between the  Corporation  and Central  Carolina  Bank, a
division of National Bank of Commerce, as Rights Agent.

     Initially,  the  Rights  will be  attached  to  Common  Stock  certificates
representing  shares then outstanding,  and no separate Rights Certificates will
be  distributed.   The  Rights  will  separate  from  the  Common  Stock  and  a
Distribution  Date will occur upon the earlier of (i) ten days following  public
announcement  that a person or group of affiliated or associated  persons,  with
such  exceptions  as are  set  forth  in the  Rights  Agreement  (an  "Acquiring
Person"),  has acquired, or obtained the right to acquire,  beneficial ownership
of 15% or more of the outstanding shares of Common Stock (the "Stock Acquisition
Date") or (ii) ten  Business  Days (or such later date as the Board of Directors
may determine)  following the commencement  of, or first public  announcement of
the intent of a person or group to commence,  a tender  offer or exchange  offer
that would result in a person or group (with such exceptions as are set forth in
the Rights Agreement)  beneficially owning 15% or more of the outstanding shares
of Common Stock.  Until the Distribution  Date, (i) the Rights will be evidenced
by the Common Stock certificates and will be transferred with and only with such
Common  Stock  certificates,  (ii) new Common  Stock  certificates  issued after
December 2, 2002 will contain a notation  incorporating  the Rights Agreement by
reference and (iii) the surrender  for transfer of any  certificates  for Common
Stock  outstanding  at the close of business  on December 2, 2002 or  thereafter
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.

     An Acquiring Person does not include (i) the Corporation, any subsidiary of
the  Corporation,  any  employee  benefit  plan or  employee  stock  plan of the
Corporation,  of any subsidiary of the Corporation or the identified  members of
the  Fine  family,  trusts  created  for  their  benefit  and  certain  of their
dependents,  or (ii) any person or group whose  ownership  of 15% or more of the
shares of Common  Stock  then  outstanding  results  solely  from any  action or
transaction or series of related actions or  transactions  approved by the Board
of Directors before such person or group became an Acquiring Person.

<PAGE>

     The Rights are not exercisable  until the Distribution Date and will expire
at the close of  business  on  November  11,  2012  unless  earlier  redeemed or
exchanged by the Corporation as described below.

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

     In the event that an Acquiring  Person becomes the beneficial  owner of 15%
or more of the then outstanding  shares of Common Stock,  each holder of a Right
will thereafter have the right to receive,  upon exercise,  Common Stock (or, in
certain  circumstances,  cash,  property or other securities of the Corporation)
having a value equal to two times the Exercise Price of the Right.  The Exercise
Price is the  Purchase  Price  times  the  number  of  shares  of  Common  Stock
associated  with  each  Right  (initially,  one).  Notwithstanding  any  of  the
foregoing, following the occurrence of an event set forth in this paragraph, all
Rights  that are,  or  (under  certain  circumstances  specified  in the  Rights
Agreement)  were,  beneficially  owned by any Acquiring  Person will be null and
void. However,  Rights are not exercisable  following the occurrence of an event
set  forth  in this  paragraph  until  such  time as the  Rights  are no  longer
redeemable by the Corporation as set forth below.

     In  the  event  that,   following  the  Stock  Acquisition  Date,  (i)  the
Corporation is acquired in a merger or consolidation in which the Corporation is
not the  surviving  corporation,  (ii) the  Corporation  engages  in a merger or
consolidation  in which the  Corporation  is the surviving  corporation  and the
Common Stock of the Corporation is changed or exchanged,  or (iii) more than 50%
of the Corporation's assets or earning power is sold or transferred, each holder
of a Right (except Rights that have  previously  been voided as set forth above)
shall thereafter have the right to receive,  upon exercise of the Right,  common
stock of the  acquiring  company  having a value equal to two times the Exercise
Price of the Right.

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

     The number of outstanding Rights and the number of Units of Preferred Stock
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Stock or a dividend on the Common  Stock  payable
in Common Stock or subdivisions  or combinations of the Common Stock  occurring,
in any such case, prior to the Distribution Date.

<PAGE>

     With certain  exceptions,  no  adjustments  in the  Purchase  Price will be
required  until  cumulative  adjustments  amount to at least 1% of the  Purchase
Price.  No fractional  Units are required to be issued and, in lieu thereof,  an
adjustment in cash will be made based on the market price of the Preferred Stock
on the last trading date prior to the date of exercise.

     At any time after a person or group of  affiliated  or  associated  persons
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the  outstanding  Common  Stock,  the Board of  Directors  may
exchange the Rights  (other than Rights  owned by such person or its  affiliates
and  associates,  which have become  void),  in whole or in part, at an exchange
ratio of one share of Common Stock, or one one-hundredth of a share of Preferred
Stock (or of a share of a series of the  Corporation's  preferred  stock  having
equivalent preferences,  limitations and relative rights), per Right (subject to
adjustment).

     At any time until ten Business Days following the Stock  Acquisition  Date,
the Corporation  may redeem the Rights in whole,  but not in part, at a price of
$.01 per Right, subject to adjustment.  Immediately upon the action of the Board
of Directors  ordering  redemption of the Rights,  the Rights will terminate and
the only right of the holders of Rights will be to receive the redemption price.

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

     Except as set forth below,  any of the  provisions of the Rights  Agreement
may be  amended  at the  direction  of  the  Board  of  Directors  prior  to the
Distribution  Date.  After the  Distribution  Date,  any provision of the Rights
Agreement may be amended at the direction of the Board of Directors  without the
approval of holders of Rights Certificates to make changes that do not adversely
affect the interests of holders of Rights Certificates  (excluding the interests
of any  Acquiring  Person) or to shorten or lengthen  any time period  under the
Rights Agreement, except that no amendment to lengthen the time period governing
redemption may be made at such time as the Rights are not redeemable nor may any
other  time  period be  lengthened  except to  protect  the rights of holders of
Rights.  In no case,  however,  may the  Rights  Agreement  be amended to change
(other than pursuant to certain adjustments  therein) the fraction of a share of
Preferred  Stock  for  which a Right is  exercisable  or to  advance  the  Final
Expiration Date.

     The Rights  have  certain  anti-takeover  effects.  The  Rights  will cause
substantial  dilution  to a  person  or  group  that  attempts  to  acquire  the
Corporation on terms not approved by the Board of Directors of the  Corporation.
The Rights should not interfere  with any merger or other  business  combination
approved  by the  Board of  Directors  of the  Corporation  since  the  Board of
Directors may, at its option,  at any time prior to the close of business on the
earlier of (i) the tenth  business day following the Stock  Acquisition  Date or
(ii)  November  11,  2012  redeem  all,  but not  less  than  all,  of the  then
outstanding Rights at the Redemption Price.

     The form of Rights  Agreement  between  the  Company  and the Rights  Agent
specifying  the terms of the  Rights,  which  includes  as Exhibit B the Form of
Rights Certificate,  is attached as an exhibit hereto and is incorporated herein
by  reference.  The foregoing  description  of the Rights does not purport to be
complete and is qualified in its entirety by reference to such exhibit.

<PAGE>

Item 2.    Exhibits.

Exhibit No.                                 Description
- -----------                                 -----------

1    Rights  Agreement,  dated as of November 12, 2002,  between  Investors
     Title  Company and Central  Carolina  Bank, a division of National  Bank of
     Commerce,  as Rights  Agent.  The  Rights  Agreement  includes  the Form of
     Articles of  Amendment  with  respect to the Series A Junior  Participating
     Preferred Stock as Exhibit A, the Form of Rights  Certificate as Exhibit B,
     and the Summary of Rights as Exhibit C.


                                    SIGNATURE

     Pursuant to the  requirements of Section 12 of the Securities  Exchange Act
of 1934, the Registrant hs duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized.

                                               INVESTORS TITLE COMPANY

                                               By /s/ J. Allen Fine
                                                  -------------------
                                                  J. Allen Fine
                                                  Chief Executive Officer

Date:  November 12, 2002

<PAGE>

                                  EXHIBIT INDEX

Exhibit No.                                 Description

1    Rights  Agreement,  dated as of November 12, 2002,  between Investors Title
     Company and Central Carolina Bank, a division of National Bank of Commerce,
     as Rights  Agent.  The Rights  Agreement  includes  the Form of Articles of
     Amendment with respect to the Series A Junior Participating Preferred Stock
     as Exhibit A, the Form of Rights  Certificate as Exhibit B, and the Summary
     of Rights as Exhibit C.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>4
<FILENAME>rights.txt
<DESCRIPTION>RIGHTS AGREEMENT
<TEXT>




                            INVESTORS TITLE COMPANY


                                      and


                             CENTRAL CAROLINA BANK,
                    a division of National Bank of Commerce


                                  Rights Agent


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


                                Rights Agreement


                         Dated as of November 12, 2002
<PAGE>

                               Table of Contents

Section 1.  Certain Definitions................................................1
Section 2.  Appointment of Rights Agent........................................4
Section 3.  Issue of Rights Certificates.......................................4
Section 4.  Form of Rights Certificates........................................6
Section 5.  Countersignature and Registration..................................7
Section 6.  Transfer, Split Up, Combination and Exchange of Rights
            Certificates; Mutilated, Destroyed, Lost or Stolen Rights
            Certificates.......................................................7
Section 7.  Exercise of Rights; Purchase Price; Expiration Date of Rights......8
Section 8.  Cancellation of Rights Certificates...............................10
Section 9.  Reservation and Availability of Capital Stock.....................10
Section 10. Preferred Stock Record Date.......................................12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
            Number of Rights..................................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares........20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
            Power.............................................................20
Section 14. Fractional Rights and Fractional Shares...........................22
Section 15. Rights of Action..................................................24
Section 16. Agreement of Rights Holders.......................................24
Section 17. Rights Certificate Holder Not Deemed a Shareholder................25
Section 18. Concerning the Rights Agent.......................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent.........26
Section 20. Duties of Rights Agent............................................26
Section 21. Change of Rights Agent............................................29
Section 22. Issuance of New Rights Certificates...............................29
Section 23. Redemption and Termination........................................30
Section 24. Exchange..........................................................31
Section 25. Notice of Certain Events..........................................32
Section 26. Notices...........................................................33
Section 27. Supplements and Amendments........................................34
Section 28. Successors........................................................34
Section 29. Determinations and Actions by the Board of Directors, etc.........34
Section 30. Benefits of this Agreement........................................35
Section 31. Severability......................................................35
Section 32. Governing Law.....................................................35
Section 33. Counterparts......................................................35
Section 34. Descriptive Headings..............................................36
Exhibit A   FORM OF ARTICLES OF AMENDMENT of INVESTORS TITLE COMPANY.........A-1
Exhibit B   FORM OF RIGHTS CERTIFICATE.......................................B-1
Exhibit C   FORM OF SUMMARY OF RIGHTS TO PURCHASE
            SERIES A JUNIOR PARTICIPATING PREFERRED STOCK....................C-1

<PAGE>


     RIGHTS  AGREEMENT,  dated as of November  12, 2002  ("Agreement"),  between
Investors Title Company, a North Carolina corporation (the  "Corporation"),  and
Central  Carolina  Bank,  a division of National  Bank of  Commerce,  a national
banking  association,  as Rights  Agent (the  "Rights  Agent,"  which term shall
include any successor Rights Agent hereunder).

                               W I T N E S S E T H

     WHEREAS,  on November 12, 2002,  the Board of Directors of the  Corporation
authorized and declared a dividend  distribution of one preferred stock purchase
right  (each,  a "Right")  payable on December 16, 2002 for each share of common
stock, no par value, of the Corporation (the "Common Stock")  outstanding at the
close of business on December 2, 2002 (the "Record  Date");  and  authorized the
issuance of one Right (as such number may  hereinafter  be adjusted  pursuant to
the  provisions  of Section  11(p) hereof) for each share of Common Stock of the
Corporation  issued  between  the  Record  Date  and the  Distribution  Date (as
hereinafter  defined),  each Right initially  representing the right to purchase
one one-hundredth (1/100) of a share of Preferred Stock (as hereinafter defined)
upon the terms and subject to the conditions hereinafter set forth;

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

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

          (a)  "Acquiring  Person" shall mean any Person who or which,  together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the  shares of Common  Stock then  outstanding,  but shall not
include (i) the  Corporation,  any Subsidiary of the  Corporation,  any Exempted
Person,  any employee  benefit plan or employee stock plan of the Corporation or
of any Subsidiary of the  Corporation,  or any trust or other entity  organized,
appointed,  established  or holding Common Stock for or pursuant to the terms of
any such plan, or (ii) any Person,  together with all  Affiliates and Associates
of such Person,  who or which would be an Acquiring  Person  solely by reason of
(x)  being the  Beneficial  Owner of shares  of  Common  Stock,  the  Beneficial
Ownership  of which  was  acquired  by such  Person  pursuant  to any  action or
transaction or series of related actions or  transactions  approved by the Board
of Directors of the Corporation before such Person otherwise became an Acquiring
Person,  or (y) a reduction  in the number of issued and  outstanding  shares of
Common  Stock  pursuant  to a  transaction  or a series of related  transactions
approved by the Board of Directors of the  Corporation  (provided  that, in case
the  Person  set forth in clause  (ii) does not  become an  Acquiring  Person by
reason of clause (x) or (y) above,  such  Person set forth in clause  (ii) shall
nonetheless become an Acquiring Person upon acquisition of any additional shares
of Common  Stock unless such  acquisition  of  additional  Common Stock will not
result in such Person or group  becoming an  Acquiring  Person by reason of such
clause (x) or (y)).  Notwithstanding the foregoing, if the Board of Directors of
the Corporation determines in good faith that a Person who would otherwise be an
"Acquiring  Person" as defined  pursuant  to the  foregoing  provisions  of this
paragraph (a) has become such inadvertently, and such Person divests as promptly
as practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an  "Acquiring  Person" as defined  pursuant to the foregoing
provisions
                                        1
<PAGE>

of this  paragraph  (a),  then  such  Person  shall not be deemed an
"Acquiring Person" for any purposes of this Agreement.

          (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.

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

                    (i) which such Person or any of such Person's  Affiliates or
          Associates,  directly or indirectly, has the right to acquire (whether
          such right is  exercisable  immediately  or only after the  passage of
          time) pursuant to any agreement, arrangement or understanding (whether
          or not in writing) or upon the exercise of 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," (A) securities  tendered  pursuant to a tender or
          exchange offer made by such Person or any of such Person's  Affiliates
          or Associates until such tendered securities are accepted for purchase
          or exchange, or (B) securities issuable upon exercise of Rights at any
          time prior to the occurrence of a Triggering  Event, or (C) securities
          issuable  upon  exercise of Rights from and after the  occurrence of a
          Triggering  Event which 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 Section  22 hereof  (the  "Original
          Rights") or pursuant to Section  11(i)  hereof in  connection  with an
          adjustment made with respect to any Original Rights;

                    (ii) which such Person or any of such Person's Affiliates or
          Associates,  directly or indirectly,  has the right to vote or dispose
          of or has  "beneficial  ownership" of (as determined  pursuant to Rule
          13d-3 of the General Rules and  Regulations  under the Exchange  Act),
          including  pursuant to any agreement,  arrangement  or  understanding,
          whether or not in writing; provided,  however, that a Person shall not
          be deemed the  "Beneficial  Owner" of, or to  "beneficially  own," any
          security  under this  subparagraph  (ii) as a result of an  agreement,
          arrangement or  understanding to vote such security if such agreement,
          arrangement or understanding: (A) arises solely from a revocable proxy
          or consent given in response to a public proxy or consent solicitation
          made pursuant to, and in accordance with, the applicable provisions of
          the General Rules and  Regulations  under the Exchange Act, and (B) is
          not also then  reportable  by such  Person on  Schedule  13D under the
          Exchange Act (or any comparable or successor report); or

                    (iii) which are beneficially owned,  directly or indirectly,
          by any other Person (or any Affiliate or Associate thereof) with which
          such Person (or any of such Person's Affiliates or Associates) has any
          agreement,  arrangement or understanding  (whether or not in writing),
          for the purpose of acquiring,  holding,  voting (except  pursuant to a
          revocable proxy or consent as described in the proviso to subparagraph
          (ii) of this paragraph  (c)) or disposing of any voting  securities of
          the Corporation;

                                        2
<PAGE>



          provided, however, that nothing in this paragraph (c)
          shall  cause  a  Person  engaged  in  business  as an  underwriter  of
          securities to be deemed the "Beneficial Owner" of, or to "beneficially
          own," any securities  acquired through such Person's  participation in
          good faith in a firm commitment  underwriting  until the expiration of
          forty days after the date of such acquisition.

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

          (e) "Close of business" on any given date shall mean 5:00 p.m.,  North
Carolina  time,  on such  date;  provided,  however,  that if such date is not a
Business  Day it  shall  mean  5:00  p.m.,  North  Carolina  time,  on the  next
succeeding Business Day.

          (f) "Common Stock" shall mean the common stock,  no par value,  of the
Corporation,  except that "Common  Stock" when used with reference to any Person
other than the Corporation  shall mean the capital stock of such Person with the
greatest voting power, or the equity  securities or other equity interest having
power to control or direct the management, of such Person.

          (g)  "Distribution  Date"  shall have the meaning set forth in Section
3(a).

          (h) "Exchange Act" shall mean the Securities  Exchange Act of 1934, as
amended and in effect on the date of this Agreement.

          (i) "Exempted Person" shall mean any Fine Family Member.

          (j)  "Fine  Family  Member"  shall  mean  (i) any of the  individuals,
trusts,  foundations,  partnerships or other entities listed on Schedule I, (ii)
any trust  created  by (or on behalf of) and for the  benefit of any  individual
listed  on  Schedule  I, or (iii) the  dependents  of any  individual  listed on
Schedule I that share the same household with such individual.

          (k)  "Nasdaq"  shall  mean  the  National  Association  of  Securities
Dealers, Inc. Automated Quotation System, including the National Market or Small
Cap Market.

          (l) "Person" shall mean any individual, firm, corporation, partnership
or other entity.

          (m)   "Preferred   Stock"   shall  mean  shares  of  Series  A  Junior
Participating  Preferred  Stock  of  the  Corporation  having  the  preferences,
limitations  and relative  rights set forth in the form of Articles of Amendment
attached  thereto  as  Exhibit  A,  and,  to the  extent  that  there  are not a
sufficient  number of shares of Preferred  Stock  authorized  to permit the full
exercise of the Rights,  any other series of preferred  stock of the Corporation
designated for such purpose containing terms substantially  similar to the terms
of the Preferred Stock.

                                        3
<PAGE>

          (n) "Section 11(a)(ii) Event" shall mean an event described in Section
11(a)(ii) hereof.

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

          (p) "Stock Acquisition Date" shall mean the earlier of the date of (i)
the public announcement (which, for purposes of this definition,  shall include,
without limitation,  a report filed pursuant to Section 13(d) under the Exchange
Act) by the  Corporation  or an Acquiring  Person that an  Acquiring  Person has
become  such or (ii) the public  disclosure  of facts by the  Corporation  or an
Acquiring Person indicating that an Acquiring Person has become such.

          (q)  "Subsidiary"  shall  mean,  with  reference  to any  Person,  any
corporation or other entity of which an amount of securities or other  ownership
interests  having  voting power  sufficient  to elect at least a majority of the
directors or other persons performing similar functions are beneficially  owned,
directly or indirectly, by such Person, or otherwise controlled by such Person.

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

          (s) "Triggering  Event" shall mean any Section  11(a)(ii) Event or any
Section 13 Event.

     Section 2. Appointment of Rights Agent. The Corporation hereby appoints the
Rights Agent to act as agent for the  Corporation  in accordance  with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Corporation  may from time to time appoint such Co-Rights  Agents as it may deem
necessary or desirable upon 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 Rights Certificates.

          (a) Until the  earlier of (i) the close of  business  on the tenth day
after  the  Stock  Acquisition  Date  (or,  if the  tenth  day  after  the Stock
Acquisition  Date occurs  before the Record  Date,  the close of business on the
Record Date),  or (ii) the close of business on the tenth  business day (or such
later date as the Board of Directors of the Corporation  shall  determine) after
the date of the commencement  of, or first public  announcement of the intent of
any Person (other than the Corporation,  any Subsidiary of the Corporation,  any
Exempted  Person,  any  employee  benefit  plan or  employee  stock  plan of the
Corporation  or of any  Subsidiary of the  Corporation,  or any Person or entity
organized,  appointed or established by the  Corporation  for or pursuant to the
terms of any such  plan)  to  commence,  a tender  or  exchange  offer,  if upon
consummation  thereof,  such Person would be the Beneficial Owner of 15% or more
of the shares of Common  Stock  then  outstanding  (the  earlier of (i) and (ii)
being herein  referred to as the  "Distribution  Date"),  (x) the Rights will be
evidenced  (subject to the provisions of paragraph (c) of this Section

                                        4
<PAGE>

3) by the  certificates  for the  Common  Stock  registered  in the names of the
holders of the Common Stock (which certificates for Common Stock shall be deemed
also to be certificates  for Rights) and not by separate  certificates,  and (y)
the Rights will be  transferable  only in  connection  with the  transfer of the
underlying shares of Common Stock (including a transfer to the Corporation). The
Corporation   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  Corporation,  the
Rights  Agent will,  at the  expense of the  Corporation,  send by  first-class,
insured,  postage  prepaid mail, to each record holder of the Common Stock as of
the close of business on the  Distribution  Date,  at the address of such holder
shown on the records of the  Corporation,  one or more rights  certificates,  in
substantially  the  form  of  Exhibit  B  hereto  (the  "Rights  Certificates"),
evidencing  one  Right  for each  share of  Common  Stock  so held,  subject  to
adjustment as provided herein.  In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p) hereof,
at the time of distribution of the Rights Certificates, the Corporation may make
the necessary and appropriate  rounding  adjustments (in accordance with Section
14(a)  hereof) so that Rights  Certificates  representing  only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional  Rights. As of
and after the  Distribution  Date,  the Rights will be evidenced  solely by such
Rights Certificates.

          (b)  As  promptly  as  practicable  following  the  Record  Date,  the
Corporation will send a copy of a Summary of Rights,  in substantially  the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class,  postage
prepaid  mail, to each record holder of Common Stock as of the close of business
on the Record  Date,  at the address of such holder  shown on the records of the
Corporation. With respect to certificates for Common Stock outstanding as of the
Record Date, until the  Distribution  Date, the Rights will be evidenced by such
certificates  for Common  Stock and the  registered  holders of the Common Stock
shall also be the registered holders of the associated Rights. Until the earlier
of the  Distribution  Date or the  Expiration  Date (as such term is  defined in
Section 7 hereof),  the  transfer  of any  certificates  representing  shares of
Common Stock in respect of which  Rights have been issued shall also  constitute
the transfer of the Rights associated with such shares of Common Stock.

          (c) Rights  shall be issued in  respect of all shares of Common  Stock
which  are  issued  after  the  Record  Date  but  prior to the  earlier  of the
Distribution Date or the Expiration Date. Certificates  representing such shares
of Common Stock shall also be deemed to be  certificates  for Rights,  and shall
bear the following legend:

          This  certificate  also  evidences  and entitles the holder  hereof to
          certain Rights as set forth in the Rights Agreement  between Investors
          Title  Company  (the  "Corporation")  and  Central  Carolina  Bank,  a
          division of National Bank of Commerce (the "Rights Agent") dated as of
          November  12, 2002 (the  "Rights  Agreement"),  the terms of which are
          hereby incorporated herein by reference and a copy of which is on file
          at  the   principal   offices  of  the   Corporation.   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 Corporation will mail to the holder of this
          certificate a copy of the Rights

                                        5
<PAGE>

          Agreement,  as in  effect  on the  date  of  mailing,  without  charge
          promptly after receipt of a written  request  therefor.  Under certain
          circumstances set forth in the Rights Agreement,  Rights issued to, or
          held by, any Person who is, was or becomes an Acquiring  Person or any
          Affiliate  or  Associate  thereof  (as such  terms are  defined in the
          Rights  Agreement),  whether  currently  held by or on  behalf of such
          Person or by any subsequent holder, may become null and void.

With respect to such  certificates  containing the foregoing  legend,  until the
earlier of (i) the  Distribution  Date or (ii) the  Expiration  Date, the Rights
associated  with the Common  Stock  represented  by such  certificates  shall be
evidenced  by such  certificates  alone and  registered  holders of Common Stock
shall also be the registered  holders of the associated Rights, and the transfer
of any of such  certificates  shall also  constitute  the transfer of the Rights
associated with the Common Stock  represented by such  certificates.

     Section 4. Form of Rights Certificates.

          (a) The Rights Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse  thereof) shall each be substantially
in the  form  set  forth  in  Exhibit  B  hereto  and may  have  such  marks  of
identification  or  designation  and such  legends,  summaries  or  endorsements
printed  thereon  as the  Corporation  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  transaction
reporting  system on which the Rights may from time to time be listed or quoted,
or to conform to usage.  Subject to the  provisions of Section 11 and Section 22
hereof,  the  Rights  Certificates,  whenever  issued,  shall be dated as of the
Record Date, show the date of countersignature,  and on their face shall entitle
the holders thereof to purchase such number of one  one-hundredths of a share of
Preferred  Stock as shall be set forth  therein  at the price set forth  therein
(such exercise price per one  one-hundredth of a share,  the "Purchase  Price"),
but the amount and type of  securities  purchasable  upon the  exercise  of each
Right and the Purchase  Price thereof shall be subject to adjustment as provided
herein.

          (b) Any Rights  Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights  beneficially owned by: (i) an Acquiring Person
or any  Associate or Affiliate of an Acquiring  Person,  (ii) a transferee of an
Acquiring  Person  (or of  any  such  Associate  or  Affiliate)  who  becomes  a
transferee  after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring  Person  (or of  any  such  Associate  or  Affiliate)  who  becomes  a
transferee prior to or concurrently  with the Acquiring Person becoming such and
receives  such  Rights  pursuant  to either (A) a transfer  (whether  or not for
consideration)  from the Acquiring Person to holders of equity interests in such
Acquiring  Person  or to any  Person  with whom such  Acquiring  Person  has any
continuing  agreement,  arrangement or  understanding  regarding the transferred
Rights or (B) a transfer  which the Board of  Directors of the  Corporation  has
determined is part of a plan,  arrangement or understanding that has the purpose
or effect of avoiding the  provisions  of Section  7(e)  hereof,  and any Rights
Certificate  issued  pursuant to Section 6 or Section 11 hereof  upon  transfer,
exchange,  replacement or adjustment of any other

                                        6
<PAGE>

Rights  Certificate  referred to in this sentence,  shall contain (to the extent
feasible) the following legend:

          The  Rights  represented  by  this  Rights  Certificate  are  or  were
          beneficially  owned by a Person who was or became an Acquiring  Person
          or an Affiliate or Associate of an Acquiring Person (as such terms are
          defined in the Rights Agreement). Accordingly, this Rights Certificate
          and the Rights  represented  hereby  may  become  null and void in the
          circumstances specified in Section 7(e) of such Agreement.

The  Corporation  shall instruct the Rights Agent in writing of the Rights which
should be so legended and shall (to the extent feasible) supply the Rights Agent
with such legended Rights Certificates.

     Section 5. Countersignature and Registration.

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

          (b) Following  the  Distribution  Date,  the Rights Agent will keep or
cause  to be  kept,  at  its  principal  office  or  offices  designated  as the
appropriate  place  for  surrender  of  Rights  Certificates  upon  exercise  or
transfer,  books for registration and transfer of the Rights Certificates issued
hereunder.  Such books  shall  show the names and  addresses  of the  respective
holders of the Rights  Certificates,  the number of Rights evidenced on its face
by  each  of the  Rights  Certificates  and  the  date  of  each  of the  Rights
Certificates.

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

          (a) Subject to the provisions of Section 4(b),  Section 7(e),  Section
14 and  Section  24  hereof,  at any time  after  the close of  business  on the
Distribution  Date,  and at or prior to the close of business on the  Expiration
Date,  any Rights  Certificate or  Certificates  may be

                                        7

<PAGE>

transferred,  split up, combined or exchanged for another Rights  Certificate or
Certificates,  entitling the registered  holder to purchase a like number of one
one-hundredths of a share of Preferred Stock (or,  following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case may be) as the
Rights  Certificate or  Certificates  surrendered  then entitled such holder (or
former  holder in the case of a transfer) to  purchase.  Any  registered  holder
desiring to transfer,  split up,  combine or exchange any Rights  Certificate or
Certificates  shall make such request in writing  delivered to the Rights Agent,
and shall  surrender the Rights  Certificate or  Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose.  Neither the Rights Agent nor the Corporation
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered  Rights  Certificate until the registered holder shall have
completed and signed the certificate  contained in the form of assignment on the
reverse side of such Rights  Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates  thereof as the Corporation  shall reasonably  request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
14 and Section 24 hereof, countersign and deliver to the Person entitled thereto
a  Rights  Certificate  or  Rights  Certificates,  as the  case  may  be,  as so
requested. The Corporation may require payment by holders of the Rights of a sum
sufficient  to cover  any tax or  governmental  charge  that may be  imposed  in
connection  with any  transfer,  split up,  combination  or  exchange  of Rights
Certificates.

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

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

          (a)  Subject to Section  7(e)  hereof,  the  registered  holder of any
Rights  Certificate  may  exercise  the  Rights  evidenced  thereby  (except  as
otherwise  provided herein including,  without  limitation,  the restrictions on
exercisability  set forth in Section 9(c),  Section 11(a)(iii) and Section 23(a)
hereof)  in  whole or in part at any  time  after  the  Distribution  Date  upon
surrender of the Rights  Certificate,  with the form of election to purchase and
the  certificate on the reverse side thereof duly executed,  to the Rights Agent
at the  principal  office or  offices of the Rights  Agent  designated  for such
purpose,  together with payment of the aggregate  Purchase Price with respect to
the total number of one one-hundredths of a share (or other securities,  cash or
other assets,  as the case may be) as to which such surrendered  Rights are then
exercisable,  at or prior  to the  earliest  of (i) the  close  of  business  on
November  11, 2012 (the  "Final  Expiration  Date"),  (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof, or (iii)

                                        8

<PAGE>

the date on which such  Rights are  exchanged  as  provided  in Section 24
hereof  (the  earliest of (i),(ii)  and (iii)  being  herein  referred to as the
"Expiration Date").

          (b) The  Purchase  Price  for  each  one  one-hundredth  of a share of
Preferred  Stock pursuant to the exercise of a Right shall initially be $80, and
shall be subject to adjustment  from time to time as provided in Sections 11 and
13(a) hereof and shall be payable in accordance with paragraph (c) below.

          (c) Upon  receipt  of a Rights  Certificate  representing  exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one  one-hundredth of a share of Preferred Stock (or other securities,
cash or other assets,  as the case may be) to be purchased as forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall,  subject to
Section 20(k) hereof,  thereupon  promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make  available,  if the Rights Agent
is the transfer agent for such shares)  certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased and the Corporation
hereby  irrevocably  authorizes  its  transfer  agent  to  comply  with all such
requests,  or (B) if the  Corporation  shall have  elected to deposit  the total
number of  shares of  Preferred  Stock  issuable  upon  exercise  of the  Rights
hereunder  with a  depositary  agent,  requisition  from  the  depository  agent
depositary receipts representing such number of one one-hundredths of a share of
Preferred  Stock as are to be  purchased  (in which  case  certificates  for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depository  agent) and the  Corporation  will direct the
depositary  agent  to  comply  with  such  request,  (ii)  requisition  from the
Corporation the amount of cash, if any, to be paid in lieu of fractional  shares
in accordance with Section 14 hereof,  (iii) 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 Rights  Certificate,  registered in such name or
names as may be  designated  by such  holder,  and (iv) after  receipt  thereof,
deliver such cash,  if any, to, or upon the order of, the  registered  holder of
such Rights  Certificate.  The payment of the Purchase Price (as such amount may
be reduced  pursuant to Section  11(a)(iii)  hereof) shall be made in cash or by
certified bank check or bank draft payable to the order of the  Corporation.  In
the event that the Corporation is obligated to issue other securities (including
Common Stock) of the  Corporation,  pay cash and/or  distribute  other  property
pursuant to Section 11(a) hereof,  the  Corporation  will make all  arrangements
necessary  so that  such  other  securities,  cash  and/or  other  property  are
available for  distribution  by the Rights Agent, if and when  appropriate.  The
Corporation  reserves  the  right  to  require  prior  to  the  occurrence  of a
Triggering  Event  that,  upon any  exercise  of  Rights,  a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.

          (d) In case the  registered  holder of any  Rights  Certificate  shall
exercise less than all the Rights evidenced  thereby,  a new Rights  Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the  Rights  Agent and  delivered  to, or upon the order of,  the  registered
holder of such Rights  Certificate,  registered  in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.

                                        9
<PAGE>

          (e) Notwithstanding  anything in this Agreement to the contrary,  from
and  after  the  first  occurrence  of a Section  11(a)(ii)  Event,  any  Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring  Person,  (ii) a  transferee  of an  Acquiring  Person (or of any such
Associate or  Affiliate)  who becomes a transferee  after the  Acquiring  Person
becomes  such,  or (iii) a  transferee  of an  Acquiring  Person (or of any such
Associate or Affiliate) who becomes a transferee  prior to or concurrently  with
the Acquiring  Person  becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for  consideration)  from the Acquiring Person to
holders of equity  interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement,  arrangement or understanding
regarding the transferred  Rights or (B) a transfer which the Board of Directors
of  the  Corporation   has  determined  is  part  of  a  plan,   arrangement  or
understanding which has the purpose or effect of avoiding the provisions of this
Section  7(e),  shall  become null and void without any further  action,  and no
holder of such  Rights  shall have any rights  whatsoever  with  respect to such
Rights,  whether  under  any  provision  of this  Agreement  or  otherwise.  The
Corporation  shall use all  reasonable  efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied  with,  but shall have no
liability  to any holder of Rights  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.

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

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

     Section 9. Reservation and Availability of Capital Stock.

          (a) The  Corporation  will cause to be reserved and kept available out
of its authorized  and unissued  shares of Preferred  Stock (and,  following the
occurrence of a Triggering  Event,  out of its authorized and unissued shares of
Common Stock and/or other  securities),  the number of shares of Preferred Stock
(and,  following the occurrence of a Triggering Event,

                                        10
<PAGE>

Common  Stock  and/or  other  securities)  that,  as provided in this  Agreement
including Section 11(a)(iii)  hereof,  will be sufficient to permit the exercise
in full of all outstanding Rights.

          (b) So long as the  shares of  Preferred  Stock  (and,  following  the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and  deliverable  upon the  exercise of the Rights may be listed on any national
securities  exchange  or  quoted  on  Nasdaq,  the  Corporation  shall  use  its
reasonable best efforts to cause,  from and after such time as the Rights become
exercisable (but only to the extent that it is reasonably likely that the Rights
will be exercised),  all shares  reserved for such issuance to be listed on such
exchange  or  quoted on  Nasdaq  upon  official  notice  of  issuance  upon such
exercise.

          (c) The Corporation shall use its reasonable best efforts to (i) file,
as soon as practicable following the earliest date after the first occurrence of
a Section  11(a)(ii)  Event on which the  consideration  to be  delivered by the
Corporation  upon exercise of the Rights has been  determined in accordance with
Section 11(a)(iii) hereof, a registration  statement under the Securities Act of
1933, as amended (the "Act"),  with respect to the securities  purchasable  upon
exercise  of the Rights on an  appropriate  form,  (ii) cause such  registration
statement to become  effective  as soon as  practicable  after such filing,  and
(iii) cause such  registration  statement to remain effective (with a prospectus
at all times meeting the  requirements  of the Act) until the earlier of (A) the
date as of which the Rights are no longer  exercisable for such securities,  and
(B) the date of the  expiration of the Rights.  The  Corporation  will also take
such action as may be  appropriate  under,  or to ensure  compliance  with,  the
securities  or "blue  sky" laws of the  various  states in  connection  with the
exercisability  of the Rights.  The Corporation may temporarily  suspend,  for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective.  Upon any  such  suspension,  the  Corporation  shall  issue a public
announcement  stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect,  in each case with  simultaneous  written notice to the Rights
Agent.  In addition,  if the  Corporation  shall  determine  that a registration
statement is required  following the  Distribution  Date,  the  Corporation  may
temporarily  suspend  the  exercisability  of the  Rights  until  such time as a
registration   statement  has  been  declared  effective.   Notwithstanding  any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite  qualification in such  jurisdiction  shall
not have been  obtained,  the  exercise  thereof  shall not be  permitted  under
applicable  law  or a  registration  statement  shall  not  have  been  declared
effective.  The  Rights  Agent may  assume,  unless  notified  in writing to the
contrary  by the  Corporation,  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  Corporation  will take all such action as may be necessary to
ensure that all one one-hundredths of a share of Preferred Stock (and, following
the  occurrence  of a Triggering  Event,  Common Stock and/or other  securities)
delivered  upon  exercise  of  Rights  shall,  at the  time of  delivery  of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable.

                                        11
<PAGE>

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

     Section 10.  Preferred  Stock  Record  Date.  Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common  Stock and/or  other  securities,  as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such  fractional  shares of  Preferred  Stock (or Common  Stock and/or
other  securities,  as the  case  may  be)  represented  thereby  on,  and  such
certificate  shall  be  dated,  the  date  upon  which  the  Rights  Certificate
evidencing  such Rights was duly  surrendered  and payment of the Purchase Price
(and all applicable  transfer taxes) was made;  provided,  however,  that if the
date of such surrender and payment is a date upon which the Preferred  Stock (or
Common Stock and/or other securities,  as the case may be) transfer books of the
Corporation  are closed,  such Person  shall be deemed to have become the record
holder of such shares  (fractional or otherwise) on, and such certificate  shall
be dated,  the next  succeeding  Business Day on which the  Preferred  Stock (or
Common Stock and/or other securities,  as the case may be) transfer books of the
Corporation are open. Prior to the exercise of the Rights evidenced thereby, the
holder  of a  Rights  Certificate  shall  not be  entitled  to any  rights  of a
shareholder of the Corporation with respect to shares for which the Rights shall
be exercisable,  including,  without  limitation,  the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be  entitled to receive any notice of any  proceedings  of the  Corporation,
except as provided herein.

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

          (a)

                    (i) In the event the Corporation shall at any time after the
          date of this  Agreement (A) declare a dividend on the Preferred  Stock
          payable in shares of Preferred  Stock,  (B) subdivide the  outstanding
          Preferred  Stock,  (C) combine the outstanding  Preferred Stock into a
          smaller number of shares, or (D) issue any shares of its capital stock
          in a reclassification of the

                                        12
<PAGE>

          Preferred  Stock  (including any such  reclassification  in connection
          with a  consolidation  or  merger  in  which  the  Corporation  is the
          continuing or surviving corporation),  except as otherwise provided in
          this  Section  11(a) and Section 7(e)  hereof,  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 Preferred Stock or capital stock,
          as the case may be,  issuable on such date,  shall be  proportionately
          adjusted  so that the  holder of any Right  exercised  after such time
          shall be entitled to receive,  upon payment of the Purchase Price then
          in effect,  the aggregate number and kind of shares of Preferred Stock
          or capital  stock,  as the case may be, which,  if such Right had been
          exercised  immediately  prior  to such  date  and at a time  when  the
          Preferred Stock transfer books of the Corporation  were open, he would
          have owned upon such  exercise and been  entitled to receive by virtue
          of such dividend, subdivision, combination or reclassification.  If an
          event occurs that would require an adjustment  under both this Section
          11(a)(i) and Section 11(a)(ii) hereof, the adjustment  provided for in
          this Section 11(a)(i) shall be in addition to, and shall be made prior
          to, any adjustment required pursuant to Section 11(a)(ii) hereof.

                    (ii) Subject to the next sentence of this Section  11(a)(ii)
          and to Section  24 of this  Agreement,  in the event that any  Person,
          alone or  together  with its  Affiliates  and  Associates,  becomes an
          Acquiring  Person,  then,  promptly  following the  occurrence of such
          event,  proper  provision shall be made so that each holder of a Right
          (except as provided below and in Section 7(e) hereof) shall thereafter
          have the right to receive,  upon exercise  thereof at the then current
          Purchase Price in accordance with the terms of this Agreement, in lieu
          of a number of one  one-hundredths of a share of Preferred Stock, such
          number of shares of Common Stock of the Corporation as shall equal the
          result obtained by (x) multiplying the then current  Purchase Price by
          the then number of one  one-hundredths  of a share of Preferred  Stock
          for  which a Right  was  exercisable  immediately  prior to the  first
          occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
          (which, following such first occurrence,  shall thereafter be referred
          to as the "Purchase Price" for each Right and for all purposes of this
          Agreement) by 50% of the current market price (determined  pursuant to
          Section  11(d)  hereof) per share of Common  Stock on the date of such
          first occurrence (such number of shares, the "Adjustment  Shares"). If
          the  transaction  that  would  otherwise  give  rise to the  foregoing
          adjustment is also subject to the  provisions of Section 13(a) hereof,
          then only the  provisions  of  Section  13 hereof  shall  apply and no
          adjustment shall be made pursuant to this Section 11(a)(ii).

                    (iii) In the event that the number of shares of Common Stock
          which are authorized by the  Corporation's  Articles of Incorporation,
          as amended,  but not outstanding or reserved for issuance for purposes
          other than upon  exercise of the Rights are not  sufficient  to permit
          the exercise in full of the Rights in  accordance  with the  foregoing
          subparagraph  (ii) of this Section 11(a),  the Corporation  shall: (A)
          determine  the  value  of the  Adjustment  Shares  issuable  upon  the
          exercise of a Right (the  "Current  Value"),  and (B) with  respect to
          each Right (subject to Section 7(e) hereof),  make adequate  provision
          to substitute for the Adjustment Shares,  upon the exercise of a Right
          and  payment  of  the  applicable  Purchase  Price,  (1)  cash,  (2) a
          reduction  in the  Purchase  Price,  (3) Common  Stock or other equity
          securities of the Corporation (including,  without limitation, shares,
          or units of shares, of preferred stock, such as the Preferred Stock,

                                        13
<PAGE>

          which the Board of  Directors  of the  Corporation  has deemed to have
          essentially  the same  value or  economic  rights  as shares of Common
          Stock (such  shares of  preferred  stock being  referred to as "Common
          Stock  Equivalents")),  (4) debt  securities of the  Corporation,  (5)
          other  assets,  or (6) any  combination  of the  foregoing,  having an
          aggregate  value  equal to the  Current  Value (less the amount of any
          reduction in the Purchase Price),  where such aggregate value has been
          determined by the Board of Directors of the Corporation based upon the
          advice of a nationally  recognized investment banking firm selected by
          the Board of Directors of the Corporation;  provided, however, that if
          the  Corporation  shall not have made  adequate  provision  to deliver
          value  pursuant to clause (B) above within thirty (30) days  following
          the later of (x) the first occurrence of a Section 11(a)(ii) Event and
          (y) the date on which the Corporation's  right of redemption  pursuant
          to Section 23(a)  expires (the later of (x) and (y) being  referred to
          herein as the "Section 11(a)(ii) Trigger Date"),  then the Corporation
          shall be obligated to deliver,  upon the  surrender  for exercise of a
          Right and without requiring  payment of the Purchase Price,  shares of
          Common Stock (to the extent available),  and then, if necessary,  such
          number of shares  of  Preferred  Stock or  fractions  thereof  (to the
          extent available),  and then, if necessary,  cash, which shares and/or
          cash have an aggregate value equal to the Spread.  For purposes of the
          preceding sentence, the term "Spread" shall mean the excess of (i) the
          Current Value over (ii) the Purchase  Price. If the Board of Directors
          of the  Corporation  determines  in good faith that it is likely  that
          sufficient  additional  shares of Common Stock could be authorized for
          issuance  upon  exercise  in full of the  Rights,  the thirty (30) day
          period set forth above may be extended  to the extent  necessary,  but
          not more than  ninety (90) days after the  Section  11(a)(ii)  Trigger
          Date, in order that the Corporation may seek shareholder  approval for
          the  authorization  of such  additional  shares  (such thirty (30) day
          period,  as it may be  extended,  is herein  called the  "Substitution
          Period").  To the extent  that  action is to be taken  pursuant to the
          first  and/or  third  sentences  of  this  Section   11(a)(iii),   the
          Corporation  (1) shall provide,  subject to Section 7(e) hereof,  that
          such action shall apply uniformly to all outstanding  Rights,  and (2)
          may suspend the  exercisability  of the Rights until the expiration of
          the Substitution Period in order to seek such shareholder approval for
          such   authorization  of  additional   shares  and/or  to  decide  the
          appropriate  form of  distribution  to be made  pursuant to such first
          sentence and to determine the value thereof.  In the event of any such
          suspension,  the Corporation shall issue a public announcement stating
          that the exercisability of the Rights has been temporarily  suspended,
          as well as a public  announcement at such time as the suspension is no
          longer in effect. For purposes of this Section  11(a)(iii),  the value
          of each  Adjustment  Share shall be the Current Market Price per share
          of the Common Stock on the Section  11(a)(ii) Trigger Date and the per
          share or per unit value of any Common Stock Equivalent shall be deemed
          to equal the  Current  Market  Price per share of the Common  Stock on
          such date.

          (b) In case the  Corporation  shall fix a record date for the issuance
of rights,  options or warrants to all holders of Preferred Stock entitling them
to subscribe  for or purchase  (for a period  expiring  within  forty-five  (45)
calendar days after such record date) Preferred Stock (or shares having the same
preferences,  limitations  and relative  rights as the shares of Preferred Stock
("equivalent  preferred stock")) or securities  convertible into Preferred Stock
or  equivalent  preferred  stock at a price per share of Preferred  Stock or per
share of equivalent  preferred stock (or having a conversion price per share, if
a security  convertible into Preferred Stock or

                                        14
<PAGE>

equivalent  preferred  stock) less than the current  market price (as determined
pursuant to Section  11(d)  hereof) per share of Preferred  Stock on such Record
Date,  the  Purchase  Price to be in effect  after  such  record  date  shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction,  the numerator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred  Stock and/or  equivalent  preferred stock 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 shares of  Preferred  Stock  outstanding  on such
record date,  plus the number of  additional  shares of  Preferred  Stock and/or
equivalent  preferred stock to be offered for  subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such  subscription  price may be paid by delivery of consideration  part or
all of which may be in a form other than cash,  the value of such  consideration
shall  be as  determined  in  good  faith  by  the  Board  of  Directors  of the
Corporation,  whose  determination  shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights.  Shares  of  Preferred  Stock  owned by or held for the  account  of the
Corporation  shall  not be  deemed  outstanding  for  the  purpose  of any  such
computation.  Such adjustment shall be made successively  whenever such a record
date is fixed,  and in the event that such rights 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 Corporation shall fix a record date for a distribution
to all holders of  Preferred  Stock  (including  any such  distribution  made in
connection  with a  consolidation  or  merger in which  the  Corporation  is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend of the Corporation in compliance with Section 55-6-40 of
the North  Carolina  Business  Corporation  Act),  assets (other than a dividend
payable in Preferred  Stock,  but including any dividend  payable in stock other
than  Preferred  Stock) or  subscription  rights or  warrants  (excluding  those
referred to in Section 11(b)  hereof),  the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall  be  the  current  market  price  (as   determined   pursuant  to  Section
11(d)hereof)  per share of Preferred  Stock on such record  date,  less the fair
market  value (as  determined  in good  faith by the Board of  Directors  of the
Corporation,  whose  determination  shall be described in a statement filed with
the  Rights  Agent)  of  the  portion  of  the  cash,  assets  or  evidences  of
indebtedness  so to be  distributed or of such  subscription  rights or warrants
applicable to a share of Preferred  Stock and the  denominator of which shall be
such current market price (as  determined  pursuant to Section 11(d) hereof) per
share of Preferred Stock. Such adjustments  shall be made successively  whenever
such a record date is fixed,  and in the event that such  distribution is not so
made,  the Purchase Price shall be adjusted to be the Purchase Price which would
have been in effect if such record date had not been fixed.

          (d)

                    (i) For the purpose of any computation hereunder, other than
          computations made pursuant to Section  11(a)(iii)  hereof, the Current
          Market Price per share of Common Stock

                                        15
<PAGE>

          on any date  shall be deemed to be the  average  of the daily  closing
          prices per share of such Common Stock for the thirty (30)  consecutive
          Trading  Days  immediately  prior to such date,  and for  purposes  of
          computations made pursuant to Section  11(a)(iii)  hereof, the Current
          Market  Price per share of Common Stock on any date shall be deemed to
          be the  average of the daily  closing  prices per share of such Common
          Stock for the ten (10) consecutive Trading Days immediately  following
          such  date;  provided,  however,  that in the event  that the  Current
          Market  Price per share of the  Common  Stock is  determined  during a
          period  following the  announcement by the issuer of such Common Stock
          of (A) a dividend  or  distribution  on such Common  Stock  payable in
          shares of such Common Stock or securities  convertible  into shares of
          such Common  Stock (other than the  Rights),  or (B) any  subdivision,
          combination  or   reclassification  of  such  Common  Stock,  and  the
          ex-dividend date for such dividend or distribution, or the record date
          for such subdivision,  combination or reclassification  shall not have
          occurred  prior  to the  commencement  of the  requisite  thirty  (30)
          Trading Day or ten (10) Trading Day period, as set forth above,  then,
          and in each such case,  the  Current  Market  Price  shall be properly
          adjusted to take into account ex-dividend  trading.  The closing price
          for each day shall be the last sale price, regular way, or, in case no
          such sale takes place on such day,  the average of the closing bid and
          asked prices, regular way, in either case as reported in the principal
          consolidated  transaction  reporting system with respect to securities
          listed or  admitted to trading on the New York Stock  Exchange  or, if
          the shares of Common  Stock are not listed or  admitted  to trading on
          the New York Stock Exchange, as reported in the principal consolidated
          transaction  reporting system with respect to securities listed on the
          principal national  securities  exchange on which the shares of Common
          Stock are listed or  admitted  to trading  or, if the shares of Common
          Stock are not listed or admitted to trading on any national securities
          exchange,  the last quoted price or, if not so quoted,  the average of
          the high bid and low asked prices in the  over-the-counter  market, as
          reported  by Nasdaq or such other  system  then in use,  or, if on any
          such  date the  shares  of  Common  Stock  are not  quoted by any such
          organization,  the  average  of the  closing  bid and asked  prices as
          furnished by a professional market maker making a market in the Common
          Stock  selected  by the  Board of  Directors.  If on any such  date no
          market maker is making a market in the Common Stock, the fair value of
          such shares on such date as  determined  in good faith by the Board of
          Directors of the  Corporation  shall be used.  The term  "Trading Day"
          shall mean a day on which the principal national  securities  exchange
          on which the shares of Common  Stock are listed or admitted to trading
          is open for the  transaction  of business  or, if the shares of Common
          Stock are not listed or admitted to trading on any national securities
          exchange,  a Business Day. If the Common Stock is not publicly held or
          not so listed or traded, Current Market Price per share shall mean the
          fair  value  per  share as  determined  in good  faith by the Board of
          Directors of the Corporation,  whose  determination shall be described
          in a statement filed with the Rights Agent and shall be conclusive for
          all purposes.

                    (ii)  For the  purpose  of any  computation  hereunder,  the
          Current Market Price per share of Preferred  Stock shall be determined
          in the same manner as set forth  above for the Common  Stock in clause
          (i) of this Section 11(d) (other than the last sentence  thereof).  If
          the  Current  Market  Price per  share of  Preferred  Stock  cannot be
          determined in the manner  provided above or if the Preferred  Stock is
          not publicly held or listed or traded in a manner  described in clause
          (i) of this  Section  11(d),  the  Current  Market  Price per share of
          Preferred Stock shall be

                                        16

<PAGE>

          conclusively  deemed to be an amount  equal to 100 (as such number may
          be  appropriately  adjusted  for such  events as stock  splits,  stock
          dividends  and  recapitalizations  with  respect to the  Common  Stock
          occurring after the date of this Agreement)  multiplied by the Current
          Market  Price per share of the Common  Stock.  If  neither  the Common
          Stock nor the Preferred Stock is publicly held or so listed or traded,
          Current  Market Price per share of the Preferred  Stock shall mean the
          fair  value  per  share as  determined  in good  faith by the Board of
          Directors of the Corporation,  whose  determination shall be described
          in a statement filed with the Rights Agent and shall be conclusive for
          all purposes.

          (e) Anything herein to the contrary notwithstanding,  no adjustment in
the Purchase  Price shall be required  unless such  adjustment  would require an
increase  or  decrease  of at least  one  percent  (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-hundredth  of a share of Common Stock
or other share or one  ten-thousandth of a share of Preferred Stock, 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
(3) years from the date of the transaction  which mandates such  adjustment,  or
(ii) the Expiration Date.

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

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

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

                                        17
<PAGE>

          (i) The  Corporation  may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights,  in lieu of any adjustment
in the number of one  one-hundredths  of a share of Preferred Stock  purchasable
upon  the  exercise  of a  Right.  Each  of the  Rights  outstanding  after  the
adjustment  in the number of Rights shall be  exercisable  for the number of one
one-hundredths  of a share of Preferred  Stock for which a Right was exercisable
immediately  prior to such  adjustment.  Each Right held of record prior to such
adjustment  of  the  number  of  Rights  shall  become  that  number  of  Rights
(calculated to the nearest one 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
Corporation  shall  make a public  announcement  of its  election  to adjust the
number of Rights,  indicating the record date for the adjustment,  and, if known
at the time,  the amount of the  adjustment to be made.  This record date may be
the date on which the Purchase Price is adjusted or any day thereafter,  but, if
the Rights Certificates have been issued,  shall be at least ten (10) days later
than the date of the  public  announcement.  If  Rights  Certificates  have been
issued,  upon each  adjustment of the number of Rights  pursuant to this Section
11(i),  the  Corporation  shall,  as  promptly  as  practicable,   cause  to  be
distributed  to holders of record of Rights  Certificates  on such  record  date
Rights  Certificates  evidencing,  subject to Section 14 hereof,  the additional
Rights to which such holders  shall be entitled as a result of such  adjustment,
or, at the option of the  Corporation,  shall  cause to be  distributed  to such
holders of record in substitution  and  replacement for the Rights  Certificates
held by such  holders  prior  to the  date of  adjustment,  and  upon  surrender
thereof, if required by the Corporation,  new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the  Corporation,
the adjusted Purchase Price) and shall be registered in the names of the holders
of record of Rights  Certificates  on the record  date  specified  in the public
announcement.

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

          (k) Before taking any action that would cause an  adjustment  reducing
the  Purchase  Price below the then stated  value,  if any, of the number of one
one-hundredths  of a share of  Preferred  Stock  issuable  upon  exercise of the
Rights,  the  Corporation  shall take any  corporate  action  which may,  in the
opinion of its counsel,  be necessary in order that the  Corporation may validly
and legally issue fully paid and nonassessable such number of one one-hundredths
of a share of Preferred Stock 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 Corporation may elect to defer until the occurrence of such
event the issuance to the holder of any Right  exercised

                                        18
<PAGE>

after such record date the number of one  one-hundredths of a share of Preferred
Stock and other capital stock or securities of the Corporation, if any, issuable
upon such exercise over and above the number of one one-hundredths of a share of
Preferred  Stock and other capital stock or  securities of the  Corporation,  if
any,  issuable upon such  exercise on the basis of the Purchase  Price in effect
prior to such adjustment;  provided, however, that the Corporation shall deliver
to such  holder a due  bill or  other  appropriate  instrument  evidencing  such
holder's right to receive such  additional  shares  (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment.

          (m) Anything in this Section 11 to the contrary  notwithstanding,  the
Corporation  shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments  expressly  required by this Section 11, as and to
the extent  that in their  good faith  judgment  the Board of  Directors  of the
Corporation  shall determine to be advisable in order that any (i) consolidation
or  subdivision  of the Preferred  Stock,  (ii) issuance  wholly for cash of any
shares of Preferred Stock at less than the current Market Price,  (iii) issuance
wholly for cash of shares of Preferred Stock or securities  which by their terms
are convertible into or exchangeable  for shares of Preferred Stock,  (iv) stock
dividends,  or (v) issuance of rights,  options or warrants  referred to in this
Section 11,  hereafter made by the Corporation to holders of its Preferred Stock
shall not be taxable to such shareholders.

          (n) The  Corporation  shall not,  at any time  after the  Distribution
Date,  (i)  consolidate  with any other Person  (other than a Subsidiary  of the
Corporation in a transaction  which  complies with Section 11(o)  hereof),  (ii)
merge with or into any other Person (other than a Subsidiary of the  Corporation
in a transaction  which  complies with Section 11(o)  hereof),  or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction,  or
a series of related transactions,  assets or earning power aggregating more than
50% of the  assets or  earning  power of the  Corporation  and its  Subsidiaries
(taken as a whole) to any other  Person or Persons  (other than the  Corporation
and/or  any of its  Subsidiaries  in one or  more  transactions  each  of  which
complies with Section 11(o) hereof),  if (x) at the time of or immediately after
such  consolidation,  merger or sale  there are any  rights,  warrants  or other
instruments  or  securities  outstanding  or  agreements  in effect  which would
substantially  diminish  or  otherwise  eliminate  the  benefits  intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such  consolidation,  merger  or  sale,  the  shareholders  of  the  Person  who
constitutes,  or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution  of Rights  previously  owned by
such Person or any of its Affiliates and Associates.

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

          (p) Anything in this Agreement to the contrary notwithstanding, in the
event  that  the  Corporation  shall  at any  time  after  the  Rights  Dividend
Declaration  Date and prior to the

                                        19
<PAGE>

Distribution  Date (i)  declare a dividend on the  outstanding  shares of Common
Stock payable in shares of Common Stock,  (ii) subdivide the outstanding  shares
of Common Stock, or (iii) combine the outstanding  shares of Common Stock into a
smaller  number of shares,  the number of Rights  associated  with each share of
Common Stock then  outstanding,  or issued or delivered  thereafter but prior to
the Distribution Date, shall be  proportionately  adjusted so that the number of
Rights thereafter  associated with each share of Common Stock following any such
event  shall  equal the  result  obtained  by  multiplying  the number of Rights
associated with each share of Common Stock  immediately prior to such event by a
fraction the numerator which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which  shall be the  total  number of  shares  of  Common  Stock  outstanding
immediately following the occurrence of such event.

     Section 12.  Certificate  of Adjusted  Purchase  Price or Number of Shares.
Whenever an  adjustment is made as provided in Section 11 and Section 13 hereof,
the Corporation shall

          (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment,

          (b) promptly file with the Rights Agent,  and with each transfer agent
for the Preferred Stock and the Common Stock, a copy of such certificate, and

          (c) mail, or cause the Rights Agent to mail, a brief  summary  thereof
to each holder of a Rights  Certificate (or, if prior to the Distribution  Date,
to each  holder  of a  certificate  representing  shares  of  Common  Stock)  in
accordance with Section 26 hereof.  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 such  adjustment  unless and until it
shall have received such certificate.

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

          (a) In the event that,  following the Stock Acquisition Date, directly
or indirectly,  (x) the Corporation  shall  consolidate  with, or merge with and
into,  any  other  Person  (other  than a  Subsidiary  of the  Corporation  in a
transaction that complies with Section 11(o) hereof),  and the Corporation shall
not be the continuing or surviving  corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Corporation in a transaction that
complies with Section 11(o)  hereof)  shall  consolidate  with, or merge with or
into, the Corporation,  and the Corporation shall be the continuing or surviving
corporation  of such  consolidation  or  merger  and,  in  connection  with such
consolidation or merger,  all or part of the outstanding  shares of Common Stock
shall be changed into or exchanged  for stock or other  securities  of any other
Person or the Corporation or cash or any other property,  or (z) the Corporation
shall sell or otherwise  transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer),  in one transaction or a series of related transactions,
assets or earning power

                                        20
<PAGE>

aggregating  more than 50% of the assets or earning power of the Corporation and
its  Subsidiaries  (taken as a whole) to any Person or Persons  (other  than the
Corporation  or any Subsidiary of the  Corporation  in one or more  transactions
each of which complies with Section 11(o)  hereof),  then, and in each such case
(except as may be contemplated by Section 13(d) hereof),  proper provision shall
be made so that: (i) each holder of a Right,  except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof at
the then current  Purchase Price in accordance with the terms of this Agreement,
such number of validly  authorized  and issued,  fully paid,  nonassessable  and
freely  tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter defined),  not subject to any liens,  encumbrances,  rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one  one-hundredths
of a share of Preferred Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if a Section  11(a)(ii) Event
has occurred  prior to the first  occurrence of a Section 13 Event,  multiplying
the  number  of such  one  one-hundredths  of a  share  for  which  a Right  was
exercisable  immediately  prior to the first  occurrence of a Section  11(a)(ii)
Event  by  the  Purchase  Price  in  effect  immediately  prior  to  such  first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event,  shall be referred to as the "Purchase Price" for each Right
and for all purposes of this  Agreement) by (2) 50% of the Current  Market Price
(determined  pursuant to Section  11(d)(i) hereof) per share of the Common Stock
of such Principal  Party on the date of  consummation  of such Section 13 Event;
(ii) such Principal Party shall  thereafter be liable for, and shall assume,  by
virtue  of  such  Section  13  Event,  all the  obligations  and  duties  of the
Corporation  pursuant  to this  Agreement;  (iii) the term  "Corporation"  shall
thereafter be deemed to refer to such  Principal  Party,  it being  specifically
intended  that the  provisions  of  Section 11 hereof  shall  apply only to such
Principal Party following the first occurrence of a Section 13 Event;  (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 connection
with the consummation of any such transaction as may be necessary to assure that
the provisions  hereof shall  thereafter be applicable,  as nearly as reasonably
may be, in relation to its shares of Common Stock  thereafter  deliverable  upon
the exercise of the Rights;  and (v) the provisions of Section  11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.

          (b) "Principal Party" shall mean

                              (i) in the case of any  transaction  described  in
                    clause (x) or (y) of the first  sentence  of Section  13(a),
                    the Person that is the issuer of any  securities  into which
                    shares of Common Stock of the  Corporation  are converted in
                    such merger or  consolidation,  and if no securities  are so
                    issued, the Person that is the other party to such merger or
                    consolidation; and

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

                                        21
<PAGE>

                              provided,  however,  that in any such case, (1) if
                              the  Common  Stock of such  Person  is not at such
                              time  and  has  not  been  continuously  over  the
                              preceding  twelve  (12)  month  period  registered
                              under  Section 12 of the  Exchange  Act,  and such
                              Person  is a  direct  or  indirect  Subsidiary  of
                              another  Person the  Common  Stock of which is and
                              has been so  registered,  "Principal  Party" shall
                              refer to such other  Person;  and (2) in case such
                              Person is a Subsidiary, directly or indirectly, of
                              more than one Person,  the Common Stocks of two or
                              more of  which  are and have  been so  registered,
                              "Principal Party" shall refer to whichever of such
                              Persons is the issuer of the Common  Stock  having
                              the greatest aggregate market value.

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

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

                              (ii)  deliver to holders of the Rights  historical
                    financial statements for the Principal Party and each of its
                    Affiliates   which   comply   in  all   respects   with  the
                    requirements  for registration on Form 10 under the Exchange
                    Act. The provisions of this Section 13 shall similarly apply
                    to successive  mergers or  consolidations  or sales or other
                    transfers.  In the event that a Section 13 Event shall occur
                    at any time  after the  occurrence  of a  Section  11(a)(ii)
                    Event,  the Rights that have not theretofore  been exercised
                    shall,  subject to the  provisions  of Section  7(e) hereof,
                    thereafter  become  exercisable  in the manner  described in
                    Section 13(a).

          (d) 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  Corporation  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 that alters in any adverse manner the
rights or duties of the Rights Agent.

     Section 14. Fractional Rights and Fractional Shares.

          (a) The  Corporation  shall  not be  required  to issue  fractions  of
Rights,  except  prior to the  Distribution  Date as provided  in Section  11(p)
hereof, or to distribute Rights

                                        22
<PAGE>

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

          (b) The Corporation shall not be required to issue fractions of shares
of Preferred  Stock (other than  fractions  which are integral  multiples of one
one-hundredth  of a share of  Preferred  Stock,  which may, at the option of the
Corporation, be evidenced by depositary receipts) upon exercise of the Rights or
to distribute  certificates which evidence  fractional shares of Preferred Stock
(other than fractions  which are integral  multiples of one  one-hundredth  of a
share of Preferred  Stock). In lieu of fractional shares of Preferred Stock that
are not integral  multiples of one  one-hundredth of a share of Preferred Stock,
the Corporation may pay to the registered holders of Rights  Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the
same  fraction of the current  market value of one  one-hundredth  of a share of
Preferred  Stock.  For purposes of this Section (b), the current market value of
one  one-hundredth  of a share of Preferred Stock shall be one  one-hundredth of
the  closing  price of a share of  Preferred  Stock (as  determined  pursuant to
Section  11(d)(ii)  hereof) for the Trading Day immediately prior to the date of
such exercise.

          (c) Following the occurrence of a Triggering  Event,  the  Corporation
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute  certificates which evidence fractional shares of
Common Stock. In lieu of fractional  shares of Common Stock, the Corporation may
pay to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current  market  value of one (1) share of Common  Stock.  For  purposes of this
Section  14(c),  the current  market value of one share of Common Stock shall be
the  closing

                                        23
<PAGE>

price of one share of Common Stock (as determined  pursuant to Section  11(d)(i)
hereof) for the Trading Day immediately prior tithe date of such exercise.

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

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

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

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

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

          (c) subject to Section 6(a) and Section 7(f) hereof,  the  Corporation
and the  Rights  Agent  may deem and treat  the  person  in whose  name a Rights
Certificate  (or, prior to the  Distribution  Date, the associated  Common Stock
certificate)  is  registered  as the  absolute  owner  thereof and of the Rights
evidenced thereby  (notwithstanding any notations of ownership or writing on the
Rights  Certificates or the associated  Common Stock  certificate made by anyone
other than the Corporation or the Rights Agent) for all purposes whatsoever, and
neither the  Corporation  nor the Rights Agent,  subject to the last sentence of
Section  7(e)  hereof,  shall be  required  to be  affected by any notice to the
contrary; and

                                        24
<PAGE>

          (d)  notwithstanding  anything  in  this  Agreement  to the  contrary,
neither the  Corporation  nor the Rights  Agent shall have any  liability to any
holder of a Right or other Person as a result of its inability to perform any of
its  obligations  under this Agreement by reason of any preliminary or permanent
injunction  or other  order,  decree  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;  provided, however, the Corporation must use its
best  efforts  to have any such  order,  decree  or ruling  lifted or  otherwise
overturned as soon as possible.

     Section 17. Rights Certificate Holder Not Deemed a Shareholder.  No holder,
as such, of any Rights  Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of one one-hundredths of a
share of Preferred Stock or any other securities of the Corporation which may at
any time be issuable  on the  exercise of the Rights  represented  thereby,  nor
shall  anything  contained  herein or in any Rights  Certificate be construed to
confer upon the holder of any Rights Certificate,  as such, any of the rights of
a  shareholder  of the  Corporation  or any  right to vote for the  election  of
directors or upon any matter  submitted to shareholders at any meeting  thereof,
or to give or withhold consent to any corporate  action, or to receive notice of
meetings or other actions affecting  shareholders (except as provided in Section
25 hereof), or to receive dividends or subscription rights, or otherwise,  until
the  Right or  Rights  evidenced  by such  Rights  Certificate  shall  have been
exercised in accordance with the provisions hereof.

     Section 18. Concerning the Rights Agent.

          (a) The Corporation shall pay to the Rights Agent such compensation as
shall be agreed to in writing  between the  Corporation 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 counsel fees and  disbursements  and
other  disbursements  incurred  in the  administration  and  execution  of  this
Agreement  and  the  exercise  and  performance  of its  duties  hereunder.  The
Corporation  also shall  indemnify the Rights Agent,  its  directors,  officers,
employees and agents, for, and to hold each of them 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 or such other  indemnified  party in connection with the acceptance
and  administration  of this  Agreement,  including  the costs and  expenses  of
defending  against any claim (whether  asserted by the Corporation,  a holder of
Rights or any other Person) of liability in the premises. 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  Rights
Certificate  or  certificate  for Common  Stock or for other  securities  of the
Corporation,   instrument  of   assignment  or  transfer,   power  of  attorney,
endorsement,   affidavit,  letter,  notice,  instruction,   direction,  consent,
certificate,  statement or

                                        25
<PAGE>

other  paper or  document  believed  by it to be  genuine  and to be signed  and
executed by the proper Person or Persons.

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

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

     Section 20. Duties of Rights Agent.  The Rights Agent undertakes 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 Corporation and the holders
of Rights Certificates, by their acceptance thereof, shall be bound:

          (a) The Rights Agent may consult with legal  counsel (who may be legal
counsel for the Corporation), and the advice or opinion of such counsel shall be
full and complete  authorization  and  protection  to the Rights Agent as to any
action taken or omitted by it in good faith and in  accordance  with such advice
or opinion.

          (b) Whenever in the performance of its duties under this Agreement the
Rights  Agent  shall  deem it  necessary  or  desirable  that any fact or matter
(including,  without  limitation,  the identity of any Acquiring  Person and the
determination  of  "current  market  price")

                                        26
<PAGE>

be proved or  established  by the  Corporation  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 the Chief Executive  Officer,  President,
any Vice President,  the Treasurer,  the Secretary or any Assistant Secretary of
the Corporation 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 only for its own gross
negligence, bad faith or willful misconduct.

          (d) The  Rights  Agent  shall not be liable for or by reason of any of
the statements of fact or recitals  contained in this Agreement or in the Rights
Certificates   or  be   required   to  verify   the  same   (except  as  to  its
countersignature  on such  Rights  Certificates),  but all such  statements  and
recitals are and shall be deemed to have been made by the Corporation 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 Rights Certificate (except its countersignature  thereof);  nor
shall it be  responsible  for any breach by the  Corporation  of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or  responsible  for the manner,  method or amount of any such
adjustment or the  ascertaining of the existence of facts that would require any
such  adjustment  (except with  respect to the  exercise of Rights  evidenced by
Rights  Certificates  after  receipt by the Rights Agent of actual notice of any
such  adjustment);  nor  shall it by any act  hereunder  be  deemed  to make any
representation  or warranty as to the authorization or reservation of any shares
of Common Stock or Preferred  Stock to be issued  pursuant to this  Agreement or
any Rights  Certificate or as to whether any shares of Common Stock or Preferred
Stock will,  when so issued,  be validly  authorized and issued,  fully paid and
nonassessable.

          (f) The Corporation 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 the
Chief  Executive  Officer,  President,  any Vice President,  the Secretary,  any
Assistant Secretary,  or the Treasurer of the Corporation,  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 to be taken 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  Corporation  may,  at the  option of the Rights
Agent,  set forth in writing  any action  proposed to be

                                        27
<PAGE>

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

          (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 Corporation  resulting from any such act, default,
neglect or  misconduct;  provided,  however,  the Rights  Agent was not  grossly
negligent in the selection thereof.

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

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

          (l) 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
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.

                                        28
<PAGE>

          (m) The Corporation  shall give the Rights Agent prompt written notice
of any event or  ownership  that would  prohibit the exercise or transfer of the
Rights Certificates.

     Section  21.  Change of Rights  Agent.  The Rights  Agent or any  successor
Rights Agent may resign and be discharged  from its duties under this  Agreement
upon thirty (30) days' notice in writing mailed to the Corporation,  and to each
transfer  agent of the  Common  Stock and  Preferred  Stock,  by  registered  or
certified  mail.  The  Corporation  may remove the Rights Agent or any successor
Rights  Agent upon  thirty (30) days'  notice in  writing,  mailed to the Rights
Agent or successor  Rights Agent, as the case may be, and to each transfer agent
of the Common Stock and Preferred Stock, by registered or certified mail. If the
Rights Agent shall resign or be removed or shall otherwise  become  incapable of
acting,  the  Corporation  shall appoint a successor to the Rights Agent. If the
Corporation  shall fail to make such appointment  within a period of thirty (30)
days  after  giving  notice of such  removal  or after it has been  notified  in
writing of such  resignation  or incapacity  by the  resigning or  incapacitated
Rights  Agent or by the holder of a Rights  Certificate  (who  shall,  with such
notice,  submit his Rights Certificate for inspection by the Corporation),  then
the Rights Agent, at the expense of the Corporation, or any registered holder of
any Rights Certificate may apply to any court of competent  jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the  Corporation  or by such a court,  shall be a  corporation  organized and
doing  business  under the laws of the United States or of the State of New York
or  North  Carolina  (or of any  other  state  of the  United  States),  in good
standing, which is authorized under such laws to exercise corporate trust powers
and is subject to supervision  or examination by federal or state  authority and
which has at the time of its appointment as Rights Agent a combined  capital and
surplus of at least $100,000,000.  After appointment, the successor Rights Agent
shall be vested with the same powers,  rights, duties and responsibilities as if
it had been  originally  named as Rights Agent without  further act or deed; but
the predecessor  Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance,  conveyance, act or deed necessary for the purpose. Not later
than the effective  date of any such  appointment,  the  Corporation  shall file
notice  thereof in writing with the  predecessor  Rights Agent and each transfer
agent of the Common Stock and the Preferred  Stock, and mail a notice thereof in
writing to the registered  holders of the Rights  Certificates.  Failure to give
any notice  provided for in this  Section 21,  however,  or any defect  therein,
shall not affect the legality or validity of the  resignation  or removal of the
Rights Agent or the  appointment of the successor  Rights Agent, as the case may
be.

     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary,  the  Corporation
may,  at its option,  issue new Rights  Certificates  evidencing  Rights in such
forms as may be approved by its Board of Directors to reflect any  adjustment or
change in the Purchase  Price and the number or kind or class of shares or other
securities  or  property  purchasable  under  the  Rights  Certificates  made in
accordance  with the provisions of this  Agreement.  In addition,  in connection
with the issuance or sale of shares of Common Stock  following the  Distribution
Date and prior to the  redemption or expiration of the Rights,  the  Corporation
(a) shall,  with respect to shares of Common Stock so

                                        29
<PAGE>

issued or sold  pursuant to the exercise of stock  options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or upon the
exercise,  conversion  or  exchange  of  securities  hereinafter  issued  by the
Corporation,  and (b) may, in any other case, if deemed necessary or appropriate
by  the  Board  of  Directors  of the  Corporation,  issue  Rights  Certificates
representing  the appropriate  number of Rights in connection with such issuance
or sale; provided,  however, that (i) no such Rights Certificate shall be issued
if, and to the extent  that,  the  Corporation  shall be advised by counsel that
such  issuance  would  create  a  significant   risk  of  material  adverse  tax
consequences  to the  Corporation or the Person to whom such Rights  Certificate
would be issued,  and (ii) no such Rights Certificate shall be issued if, and to
the extent that,  appropriate  adjustment shall otherwise have been made in lieu
of the issuance thereof.

     Section 23. Redemption and Termination.

          (a) The Board of Directors of the Corporation  may, at its option,  at
any time prior to the earlier of (i) the close of business on the tenth Business
Day  following the Stock  Acquisition  Date (or, if the Stock  Acquisition  Date
shall have occurred prior to the Record Date, the close of business on the tenth
Business Day  following  the Record Date),  or (ii) the Final  Expiration  Date,
redeem  all but not less than all the then  outstanding  Rights at a  redemption
price of $.01 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction  occurring after the date
hereof (such redemption price being  hereinafter  referred to as the "Redemption
Price"). Notwithstanding any action taken by any Person or Persons subsequent to
the  date  hereof,  the  Corporation's  right  of  redemption  hereunder  may be
exercised only by the Board of Directors of the Corporation acting solely in its
discretion in accordance  with its fiduciary  duties to the  Corporation and its
shareholders.  Notwithstanding  anything  contained  in  this  Agreement  to the
contrary,  the Rights shall not be exercisable  after the first  occurrence of a
Section 11(a)(ii) Event until such time as the Corporation's right of redemption
hereunder has expired.

          (b) The Corporation  may, at its option,  pay the Redemption  Price in
cash, shares of Common Stock (based on the "Current Market Price," as defined in
Section 11(d)(i)  hereof,  of the Common Stock at the time of redemption) or any
other form of consideration  deemed appropriate by the Board of Directors of the
Corporation.

          (c)  Immediately  upon the  action  of the Board of  Directors  of the
Corporation ordering the redemption of the Rights,  evidence of which shall have
been filed with the Rights Agent and without any further  action and without any
notice,  the right to  exercise  the Rights  will  terminate  and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held.  Promptly  after the action of the Board of Directors of the
Corporation  ordering the redemption of the Rights,  the Corporation  shall give
notice  of such  redemption  to the  Rights  Agent and the  holders  of the then
outstanding  Rights by mailing such notice to all such holders at each  holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the  Distribution  Date, on the registry  books of the transfer agent for the
Common Stock.  Any notice that is mailed in the manner herein  provided shall be
deemed given,

                                        30
<PAGE>

whether or not the holder  receives the notice.  Each such notice of  redemption
will state the method by which the payment of the Redemption Price will be made.

     Section 24. Exchange.

          (a) By the vote of the  Board of  Directors  of the  Corporation,  the
Corporation  may,  at its  option,  at any time  after  any  Person  becomes  an
Acquiring  Person,  exchange all or part of the then outstanding and exercisable
Rights  (which  shall not include  Rights  which have  become  void  pursuant to
Section 7(e) hereof) for shares of Common Stock at an exchange rate of one share
of Common  Stock per Right,  appropriately  adjusted to reflect any stock split,
stock  dividend  or similar  transaction  occurring  after the date  hereof (the
"Exchange Ratio").  Notwithstanding the foregoing, the Board of Directors of the
Corporation shall not be empowered to effect such exchange at any time after any
Person  (other than the  Corporation,  any  Subsidiary of the  Corporation,  any
Exempted  Person,  any  employee  benefit  plan or  employee  stock  plan of the
Corporation  or of any  Subsidiary of the  Corporation,  or any Person or entity
organized,  appointed or established by the  Corporation  for or pursuant to the
terms of any such plan),  together with all  Affiliates  and  Associates of such
Person,  becomes the Beneficial  Owner of 50% or more of the Common Stock of the
Corporation then outstanding.

          (b) Without any  further  action and without any notice,  the right to
exercise  the Rights to be so  exchanged  will  terminate  immediately  upon the
action of the Board of  Directors of the  Corporation  ordering the exchange and
the  only  right  thereafter  of each  holder  of such  Rights,  subject  to the
limitations set forth in paragraph (a) of this Section, shall be to receive that
number of shares of Common Stock equal to the number of such Rights held by such
holder  multiplied by the Exchange Ratio.  The  Corporation  shall promptly give
notice of the  exchange  to the Rights  Agent and  holders of such  Rights  then
outstanding  by mailing such notice to all such holders at their last  addresses
as they  appear upon the  registry  books of the Rights  Agent or,  prior to the
Distribution  Date, on the registry  books of the transfer  agent for the Common
Stock.  Any notice that is mailed in the manner herein  provided shall be deemed
given, whether or not the holder receives the notice;  provided,  however,  that
the  failure to give,  or any defect  in, any such  notice  shall not affect the
validity of such exchange.  Each such notice shall state the method by which the
exchange  for Rights will be effected  and, in the event of a 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 Section 7(e) hereof) held by each holder of Rights.  In
any exchange  pursuant to this Section 24, the Corporation,  at its option,  may
substitute  Preferred  Stock (or  equivalent  preferred  stock,  as such term is
defined in paragraph (b) of Section 11 hereof) for Common Stock exchangeable for
Rights,  at the initial rate of one  one-hundredth of a share of Preferred Stock
(or equivalent preferred stock) for each share of Common Stock, as appropriately
adjusted to reflect stock splits, stock dividends and other similar transactions
after the date hereof.

          (c) In the event that there shall not be  sufficient  shares of Common
Stock or Preferred  Stock issued but not  outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this Section
24,  the  Corporation  shall  either  take such

                                        31
<PAGE>

action as may be  necessary to  authorize  additional  Common Stock or Preferred
Stock for issuance upon exchange of the Rights or, alternatively, by the vote of
the Board of Directors of the  Corporation  with respect to each Right,  (i) pay
cash in an amount equal to the Purchase  Price,  in lieu of issuing Common Stock
or Preferred Stock in exchange therefor or (ii) issue debt or equity securities,
or a  combination  thereof,  having  a value  equal  to the  Current  Value  (as
hereinafter  defined) of the Common Stock or Preferred  Stock  exchangeable  for
each such Right,  where the value of such securities shall be determined in good
faith  by the  Board of  Directors  of the  Corporation  or  (iii)  deliver  any
combination  of cash,  property,  Common  Stock,  Preferred  Stock  and/or other
securities having a value equal to the Current Value in exchange for each Right.
The term  "Current  Value,"  for  purposes of this  Section  24,  shall mean the
product of the per share market price of the Common Stock  (determined  pursuant
to Section 11(d) on the date of the occurrence of the event  described  above in
paragraph (a))  multiplied by the number of shares of Common Stock for which the
right otherwise would be exchangeable if there were sufficient shares available.
To the extent  that the  Corporation  determines  that some action need be taken
pursuant  to clauses  (i),  (ii) or (iii) of this  Section  24(c),  the Board of
Directors of the Corporation may temporarily  suspend the  exercisability of the
Rights  for a period of up to sixty  (60) days  following  the date on which the
event  described  in Section  24(a)  shall have  occurred,  in order to seek any
authorization of additional Common Stock or Preferred Stock and/or to decide the
appropriate  form of distribution to be made pursuant to the above provision and
to  determine  the  value  thereof.  In the  event of any such  suspension,  the
Corporation shall issue a public announcement,  with simultaneous written notice
to the Rights  Agent,  stating  that the  exercisability  of the Rights has been
temporarily suspended.

          (d) The Corporation shall not be required to issue fractions of shares
of Common Stock or to distribute  certificates which evidence  fractional shares
of Common  Stock for  purposes of this  Section  24. In lieu of such  fractional
shares of Common Stock, the Corporation shall pay to each registered holder of a
Rights Certificate with regard to which a fractional share of Common Stock would
otherwise  be issuable an amount in cash equal to the same  fraction of the fair
market  value  of a whole  share  of  Common  Stock.  For the  purposes  of this
paragraph  (d),  the fair market value of a whole share of Common Stock shall be
the closing price of a share of Common Stock (as determined  pursuant to Section
11(d)  hereof)  for the Trading  Day  immediately  prior to the date of exchange
pursuant to this Section 24.

     Section 25. Notice of Certain Events.

          (a) In case the  Corporation  shall  propose,  at any time  after  the
Distribution  Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred  Stock or to make any other  distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend of the Corporation
in compliance  with Section 55-6-40 of the North Carolina  Business  Corporation
Act),  or (ii) to offer to the holders of Preferred  Stock rights or warrants to
subscribe for or to purchase any additional  shares of Preferred Stock or shares
of stock of any class or any other  securities,  rights or options,  or (iii) to
effect   any   reclassification   of  its   Preferred   Stock   (other   than  a
reclassification  involving  only  the  subdivision  of  outstanding  shares  of
Preferred Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a

                                        32
<PAGE>

Subsidiary of the Corporation in a transaction which complies with Section 11(o)
hereof),  or to effect any sale or other  transfer  (or to permit one or more of
its Subsidiaries to effect any sale or other transfer),  in one transaction or a
series of related transactions,  of more than 50% of the assets or earning power
of the Corporation and its  Subsidiaries  (taken as a whole) to any other Person
or Persons (other than the Corporation  and/or any of its Subsidiaries in one or
more transactions  each of which complies with Section 11(o) hereof),  or (v) to
effect the liquidation,  dissolution or winding up of the Corporation,  then, in
each  such  case,  the  Corporation  shall  give  to  each  holder  of a  Rights
Certificate  and to the Rights Agent,  to the extent  feasible and in accordance
with Section 26 hereof,  a notice of such proposed  action,  which shall specify
the record date for the purposes of such stock dividend,  distribution of rights
or warrants, or the date on which such reclassification,  consolidation, merger,
sale, transfer, liquidation,  dissolution or winding-up is to take place and the
date of  participation  therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed,  and such notice  shall be so given in the case
of any  action  covered by clause (i) or (ii) above at least ten (10) days prior
to the record date for determining  holders of the shares of Preferred Stock for
purposes of such action,  and in the case of any such other action, at least ten
(10) days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock, whichever
shall be the earlier.

          (b) In case a Section  11(a)(ii) Event shall occur,  then, in any such
case, (i) the Corporation  shall as soon as practicable  thereafter give to each
holder of a Rights  Certificate  and to the Rights Agent, to the extent feasible
and in  accordance  with Section 26 hereof,  a notice of the  occurrence of such
event,  which  shall  specify  the  event and the  consequences  of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding  paragraph to Preferred  Stock shall be deemed  thereafter to refer to
Common Stock and/or, if appropriate, other securities.

     Section 26. Notices.  Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights  Certificate to
or on the Corporation 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:

         Investors Title Company
         Attention: Chief Executive Officer
         12 North Columbia Street
         Chapel Hill, North Carolina 27514

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

         Central Carolina Bank
         Attention: David O. Shivers, Wealth Management Services

                                        33
<PAGE>

         1414 Raleigh Road, Suite 150
         Chapel Hill, North Carolina 27517

Notices  or  demands  authorized  by this  Agreement  to be given or made by the
Corporation or the Rights Agent to the holder of any Rights  Certificate (or, if
prior to the  Distribution  Date,  to the  holder of  certificates  representing
shares  of  Common  Stock)  shall  be  sufficiently  given  or  made  if sent by
first-class  mail,  postage prepaid,  addressed to such holder at the address of
such holder as shown on the registry books of the Corporation.

     Section 27. Supplements and Amendments.  Prior to the Distribution Date and
subject to the penultimate  sentence of this Section 27, the Corporation and the
Rights Agent shall,  if the Board of  Directors of the  Corporation  so directs,
supplement or amend any provision of this Agreement  without the approval of any
holders of certificates  representing shares of Common Stock. From and after the
Distribution  Date and subject to the  penultimate  sentence of this Section 27,
the  Corporation  and the Rights Agent  shall,  if the Board of Directors of the
Corporation so directs,  supplement or amend this Agreement without the approval
of any holders of Rights  Certificates in order (i) to cure any ambiguity,  (ii)
to correct or supplement any provision  contained  herein which may be defective
or inconsistent with any other provisions  herein,  (iii) to shorten or lengthen
any time  period  hereunder  or (iv) to  change  or  supplement  the  provisions
hereunder in any manner which the  Corporation  may deem  necessary or desirable
and which  shall not  adversely  affect the  interests  of the holders of Rights
Certificates  (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring  Person);  provided  that this  Agreement may not be  supplemented  or
amended to  lengthen,  pursuant  to clause  (iii) of this  sentence,  (A) a time
period  relating  to when the Rights may be  redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights.  Upon the delivery of a certificate  from an
appropriate officer of the Corporation which states that the proposed supplement
or  amendment  is in  compliance  with the terms of this  Section 27, the Rights
Agent shall  execute such  supplement  or  amendment.  Notwithstanding  anything
contained in this Agreement to the contrary, no supplement or amendment shall be
made that changes the number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable or that advances the Final  Expiration Date nor
may any amendment or supplement pursuant to this Section 27 alter in any adverse
manner the Rights Agent's  rights or duties without the Rights Agent's  consent.
Prior to the Distribution  Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.

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

     Section 29. Determinations and Actions by the Board of Directors,  etc. For
all  purposes  of this  Agreement,  any  calculation  of the number of shares of
Common Stock  outstanding  at any  particular  time,  including  for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial

                                        34
<PAGE>

Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the  General  Rules and  Regulations  under the  Exchange  Act.  The Board of
Directors of the  Corporation  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 Corporation,  or as may be necessary
or  advisable  in the  administration  of  this  Agreement,  including,  without
limitation,  the  right  and  power  to (i)  interpret  the  provisions  of this
Agreement,  and (ii) make all  determinations  deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the  Agreement).  All such actions,  calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the  Corporation in good faith,  shall (x) be final,  conclusive
and binding on the Corporation,  the Rights Agent, the holders of the Rights and
all other parties, and (y) not subject the Board of Directors of the Corporation
to any liability to the holders of the Rights.

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

     Section 31. Severability.  If any term, provision,  covenant or restriction
of this  Agreement  is  held  by a court  of  competent  jurisdiction  or  other
authority  to be invalid,  void or  unenforceable,  the  remainder of the terms,
provisions,  covenants and  restrictions  of this Agreement shall remain in full
force and  effect  and shall in no way be  affected,  impaired  or  invalidated;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court  or  authority  to be  invalid,  void or  unenforceable  and the  Board of
Directors of the Corporation determines in its good faith judgment that severing
the invalid  language from this Agreement would adversely  affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be  reinstated  and shall not expire  until the close of  business  on the
tenth day following the date of such determination by the Board of Directors.

     Section  32.  Governing  Law.  This  Agreement,  each Right and each Rights
Certificate  issued  hereunder  shall be deemed to be a contract  made under the
laws of the State of North  Carolina and for all  purposes  shall be governed by
and construed in accordance with the of such State  applicable to contracts made
and to be performed entirely within such State.

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

                                        35
<PAGE>

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

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



                                   INVESTORS TITLE COMPANY

                                   By  /s/ J. Allen Fine
                                      --------------------
                                          J. Allen Fine
                                          Chief Executive Officer

Attest:

By /s/ L. Dawn Martin
  -------------------
    L. Dawn Martin
    Assistant Secretary

                                   CENTRAL CAROLINA BANK, a division of National
                                   Bank of Commerce, as Rights Agent

                                   By /s/ David O. Shivers
                                      ---------------------
                                         Name: David O. Shivers
                                         Title:Vice President & Trust Officer


                                        36
<PAGE>



                                    Exhibit A
                          FORM OF ARTICLES OF AMENDMENT
                                       of
                             INVESTORS TITLE COMPANY

     The undersigned  corporation hereby submits these Articles of Amendment for
the purpose of amending its Articles of  Incorporation  to fix the  designation,
preferences,  limitations,  and  relative  rights of a series  of its  Preferred
Stock:

     1. The name of the corporation is Investors Title Company.

     2. The  following  resolution  relating  to the fixing of the  designation,
preferences,   limitations,   and  relative   rights  of  the  Series  A  Junior
Participating  Preferred  Stock of the Corporation was duly adopted by the Board
of Directors of the  Corporation  at a meeting held on the 12th day of November,
2002, without shareholder approval,  which was not required because the Articles
of  Incorporation,  as amended,  of the  Corporation  provide  that the Board of
Directors may determine the  preferences,  limitations,  and relative  rights of
that class:

     RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of the  Corporation  (the "Board of  Directors") by the Articles of
Incorporation,  as amended,  of the  Corporation,  the Board of Directors hereby
creates a series of Preferred  Stock of the  Corporation  and hereby  states the
designation and number of shares,  and fixes the preferences,  limitations,  and
relative rights thereof as follows:

     1. Designation and Amount. The shares of such series shall be designated as
"Series  A Junior  Participating  Preferred  Stock"  (the  "Series  A  Preferred
Stock"),  and the number of shares  constituting  the Series A  Preferred  Stock
shall be  100,000.  Such  number of shares  may be  increased  or  decreased  by
resolution of the Board of Directors; provided that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of  outstanding  options,  rights or warrants or upon the conversion of
any outstanding  securities issued by the Corporation  convertible into Series A
Preferred Stock.

     2. Dividends and Distributions.

     (a)  Subject  to the  rights of the  holders of any shares of any series of
capital 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 (as defined in  paragraph 12 below),
and of any Junior Stock (as defined in paragraph 12 below), 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 March,  June,  September,  and  December  in each year  (each such date being
referred to herein 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) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth 100 times the aggregate per share
amount  of all cash  dividends,
                                        A-1
<PAGE>

and 100 times the  aggregate per share  amount(payable  in kind) of all non-cash
dividends  or other  distributions,  other than a dividend  payable in shares of
Common  Stock or a  subdivision  of the  outstanding  shares of Common Stock (by
reclassification  or  otherwise),   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. If the Corporation shall at any
time after November 12, 2002 (the "Rights  Declaration Date") declare or pay any
dividend  on the Common  Stock  payable in shares of Common  Stock,  or effect a
subdivision  or  combination  of the  outstanding  shares  of  Common  Stock (by
reclassification  or  otherwise)  into a greater  or lesser  number of shares of
Common  Stock,  then in each such case the amount to which  holders of shares of
Series A Preferred  Stock were  entitled  immediately  prior to such event under
clause (b) of the  preceding  sentence  shall be  adjusted by  multiplying  such
amount by a fraction  the  numerator  of which is the number of shares of Common
Stock  outstanding  immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding  immediately prior to
such event.

     (b) The Board of Directors  shall declare a dividend or distribution on the
Series A Preferred Stock as provided in subparagraph (a) above immediately after
it  declares a  dividend  or  distribution  on the 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 $1.00 per share on the Series A
Preferred  Stock  shall  nevertheless  be payable 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 issue of such shares of Series A Preferred  Stock,  unless
the date of issue of such  shares is on or before the record  date for the first
Quarterly  Dividend  Payment Date, in which case  dividends on such shares shall
begin to accrue  and be  cumulative  from the date of issue of such  shares,  or
unless the date of issue 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 on or before such Quarterly
Dividend  Payment Date, in either of which events such dividends  shall begin to
accrue and be cumulative from such Quarterly  Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the 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 no more than 60 days
prior to the date fixed for the payment thereof.

     3. Voting Rights.  In addition to any other voting rights  required by law,
the  holders of shares of Series A  Preferred  Stock  shall  have the  following
voting rights:

     (a) Subject to the provision for  adjustment  hereinafter  set forth,  each
share of Series A Preferred  Stock shall entitle the holder thereof to 100 votes
on all matters  submitted to a vote
                                        A-2
<PAGE>

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

     (b) Except as otherwise provided herein or by law, the holders of shares of
Series A Preferred  Stock and the  holders of shares of Common  Stock shall vote
together as a single class on all matters submitted to a vote of shareholders of
the Corporation.

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

     4. Certain Restrictions.

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

          (i) declare or pay dividends on, or make any other  distributions  on,
     or redeem or repurchase or otherwise acquire for consideration,  any shares
     of Junior Stock;

          (ii) declare or pay  dividends on or make any other  distributions  on
     any shares of Parity  Stock (as  defined  in  paragraph  12 below),  except
     dividends paid ratably on the Series A Preferred  Stock and all such Parity
     Stock on which  dividends  are payable or in arrears in  proportion  to the
     total amounts to which the holders of all such shares are then entitled;

          (iii)  redeem or  repurchase  or otherwise  acquire for  consideration
     shares of any Parity Stock; provided,  however, that the Corporation may at
     any time redeem,  repurchase or otherwise acquire shares of any such Parity
     Stock in exchange for shares of any Junior Stock; or

          (iv) repurchase or otherwise  acquire for  consideration any shares of
     Series A  Preferred  Stock,  or any  shares  of  Parity  Stock,  except  in
     accordance  with a purchase  offer made in  writing or by  publication  (as
     determined  by the Board of  Directors)  to all holders of such shares upon
     such terms as the Board of Directors, after consideration of the respective
     annual  dividend  rates and other  relative  rights and  preferences of the
     respective series and classes, shall determine in good faith will result in
     fair and equitable treatment among the respective series or classes.
                                        A-3
<PAGE>

     (b) The  Corporation  shall not permit any subsidiary of the Corporation to
purchase  or  otherwise  acquire  for  consideration  any shares of stock of the
Corporation unless the Corporation could, under subparagraph (a) above, purchase
or otherwise acquire such shares at such time and in such manner.

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

     6. Liquidation,  Dissolution or Winding Up. Upon any liquidation (voluntary
or otherwise),  dissolution or winding up of the  Corporation,  no  distribution
shall be made (a) to the  holders  of  shares  of  Junior  Stock  unless,  prior
thereto,  the holders of shares of Series A Preferred  Stock shall have received
$1.00 per share,  plus an amount  equal to  accrued  and  unpaid  dividends  and
distributions  thereon,  whether or not  declared,  to the date of such payment;
provided  that the  holders  of  shares  of Series A  Preferred  Stock  shall be
entitled to receive an aggregate amount per share,  subject to the provision for
adjustment  hereinafter set forth, equal to 100 times the aggregate amount to be
distributed  per share to  holders  of Common  Stock,  or (b) to the  holders of
Parity Stock, except  distributions made ratably on the Series A Preferred Stock
and all such other Parity Stock in  proportion to the total amounts to which the
holders of all such shares are entitled upon such  liquidation,  dissolution  or
winding up. If the  Corporation  shall at any time after the Rights  Declaration
Date pay any  dividend  on Common  Stock  payable  in shares of Common  Stock or
effect a subdivision or combination  of the  outstanding  shares of Common Stock
(by  reclassification or otherwise) into a greater or lesser number of shares of
Common Stock,  then in each such case the  aggregate  amount to which holders of
shares of Preferred  Stock were entitled  immediately  prior to such event under
the  proviso  set forth in (a) of the  preceding  sentence  shall be adjusted by
multiplying  such amount by a fraction  the  numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

     7.  Consolidation,  Merger,  etc. If the  Corporation  shall enter into any
consolidation, merger, share exchange, combination or other transaction in which
the shares of Common  Stock are  exchanged  for or changed  into other  stock or
securities,  cash or any other  property,  or any  combination of the foregoing,
then in any such case each share of Series A  Preferred  Stock shall at the same
time be similarly exchanged or changed into an amount per share,  subject to the
provision for adjustment hereinafter set forth, equal to 100 times the aggregate
amount of stock,  securities,  cash or any other  property,  as the case may be,
into which or for which each share of Common Stock is changed or  exchanged.  If
the  Corporation  shall at any time  after the Rights  Declaration  Date pay any
dividend  on  Common  Stock  payable  in  shares  of  Common  Stock or  effect a
subdivision  or  combination  of the  outstanding  shares  of  Common  Stock (by
reclassification  or  otherwise)  into a greater  or lesser  number of shares of
Common  Stock,  then in each such  case the  amount  set forth in the  preceding
sentence  with respect to the exchange or
                                        A-4
<PAGE>

change of shares of Series A Preferred  Stock  shall be adjusted by  multiplying
such  amount by a  fraction  the  numerator  of which is the number of shares of
Common Stock  outstanding  immediately  after such event and the  denominator of
which is the number of shares of Common Stock that were outstanding  immediately
prior to such event.

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

     9. Rank. The Series A Preferred Stock shall rank junior to all other series
and classes of the Corporation's  Preferred Stock as to the payment of dividends
and the  distribution  of assets,  unless the terms of any such  series or class
shall provide otherwise.

     10.  Amendment.   The  Articles  of  Incorporation,   as  amended,  of  the
Corporation,  including,  without  limitation,  this  resolution,  shall  not be
amended in any manner (whether by merger,  consolidation  or otherwise) so as to
adversely  affect the  powers,  preferences  or  special  rights of the Series A
Preferred Stock without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting separately as a class.

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

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

     (a) "Common Stock" means the common stock, no par value, of the Corporation
at the date  hereof or any other  stock  resulting  from  successive  changes or
reclassification of the common stock.

     (b) "Junior  Stock" means the Common Stock and any other class or series of
capital stock of the Corporation  hereafter  authorized or issued over which the
Series A  Preferred  Stock has  preference  or  priority  as to the  payment  of
dividends  or  distributions  of assets  upon any  liquidation,  dissolution  or
winding up of the Corporation.

     (c)  "Parity  Stock"  means any class or  series  of  capital  stock of the
Corporation  hereafter authorized or issued ranking pari passu with the Series A
Preferred Stock as to the payment of dividends or  distributions  of assets upon
any liquidation, dissolution or winding up of the Corporation.
                                        A-5
<PAGE>

     IN WITNESS  WHEREOF,  Investors  Title Company has caused these Articles of
Amendment,  which were duly adopted by the Board of Directors of the Corporation
on November 12, 2002, to be signed by its Chief Executive  Officer on this _____
day of ________________, 2002.





                                         INVESTORS TITLE COMPANY


                                         By ___________________________
                                            J. Allen Fine

                                        A-6
<PAGE>




                                    Exhibit B

                           FORM OF RIGHTS CERTIFICATE

                    Certificate No. R- _____________ Rights

NOT  EXERCISABLE  AFTER  NOVEMBER  11,  2012  OR  EARLIER  IF  REDEEMED  BY  THE
CORPORATION.  THE  RIGHTS  ARE  SUBJECT  TO  REDEMPTION,  AT THE  OPTION  OF THE
CORPORATION,  AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS  AGREEMENT.
UNDER CERTAIN  CIRCUMSTANCES,  RIGHTS  BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS  AGREEMENT) AND ANY SUBSEQUENT  HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID.  [THE  RIGHTS  REPRESENTED  BY THIS RIGHTS
CERTIFICATE  ARE OR WERE  BENEFICIALLY  OWNED BY A PERSON  WHO WAS OR  BECAME AN
ACQUIRING  PERSON OR AN AFFILIATE  OR ASSOCIATE OF AN ACQUIRING  PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS  REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1

                               Rights Certificate

                             INVESTORS TITLE COMPANY

     This certifies that _____________, or registered assigns, is the registered
owner of the number of Rights set forth above,  each of which entitles the owner
thereof,  subject  to  the  terms,  provisions  and  conditions  of  the  Rights
Agreement,  dated as of November  12,  2002 (the  "Rights  Agreement"),  between
Investors Title Company, a North Carolina corporation (the  "Corporation"),  and
Central  Carolina  Bank,  a division of National  Bank of  Commerce,  a national
banking  association (the "Rights  Agent"),  to purchase from the Corporation at
any time prior to 5:00 p.m.  (North  Carolina  time) on November 11, 2012 at the
office or  offices of the  Rights  Agent  designated  for such  purpose,  or its
successor as Rights  Agent,  one  one-hundredth  of a fully paid,  nonassessable
share of Series A Junior  Participating  Preferred Stock (the "Preferred Stock")
of the Corporation,  at a Purchase Price of $80 per one one-hundredth of a share
(the  "Purchase  Price"),   upon  presentation  and  surrender  of  this  Rights
Certificate  with the Form of Election to Purchase and related  Certificate duly
executed.  The number of Rights  evidenced by this Rights  Certificate  (and the
number of shares which may be purchased upon exercise  thereof) set forth above,
and the Purchase  Price per share set forth  above,  are the number and Purchase
Price as of November 12, 2002 based on the  Preferred  Stock as  constituted  at
such date.

     Upon the occurrence of a Section  11(a)(ii)  Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially  owned by (i) an


- --------------
 1 The portion of the legend in brackets  shall be inserted only if
applicable and shall replace the preceding sentence.

                                        B-1
<PAGE>

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

     As provided in the Rights Agreement,  the Purchase Price and the number and
kind of shares of Preferred  Stock or other  securities,  which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification  and adjustment upon the happening of certain events,  including
Triggering Events (as such term is defined in the Rights Agreement).

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

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

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this  Certificate  may  be  redeemed  by the  Corporation  at  its  option  at a
redemption price of $.01 per Right at any time prior to the earlier of the close
of business on (i) the tenth Business Day following the Stock  Acquisition Date,
and (ii) the Final  Expiration  Date. In addition,  subject to the provisions of
the Rights Agreement, the Rights may be exchanged under certain circumstances by
the  Corporation,  in whole or in part,  for  shares  of  Common  Stock,  or for
Preferred  Stock  or  shares  of  another  series  of  Preferred  Stock  of  the
Corporation  having  equivalent  preferences,  limitations and relative  rights.
Immediately  upon the  action  of the  Board  of  Directors  of the  Corporation
authorizing any such exchange, and without any further action or any notice, the
Rights (other than Rights which are not subject to such exchange) will terminate
and the Rights will only enable holders to receive the shares issuable upon such
exchange.

     No fractional  shares of Preferred Stock are required to be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral  multiples of one  one-
                                        B-2
<PAGE>

hundredth  of a share of  Preferred  Stock,  which may,  at the  election of the
Corporation,  be evidenced by depositary  receipts),  but in lieu thereof a cash
payment may be made, as provided in the Rights Agreement.

     No holder of this Rights  Certificate  shall be  entitled to vote,  receive
dividends or be deemed for any purpose the holder of shares of  Preferred  Stock
or any other securities of the Corporation  which may at any time be issuable on
the exercise  hereof,  nor shall anything  contained in the Rights  Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a  shareholder  of the  Corporation  or any right to vote for the election of
directors or upon any matter  submitted to shareholders at any meeting  thereof,
or to give or withhold consent to any corporate action, or, to receive notice of
meetings  or other  actions  affecting  shareholders  (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights  Certificate  shall have been
exercised as provided in the Rights Agreement. This Rights Certificate shall not
be valid or obligatory for any purpose until it shall have been countersigned by
an authorized signatory of the Rights Agent.

     WITNESS the  facsimile  signature  of the duly  authorized  officers of the
Corporation and its corporate seal.

Dated as of __________ ___, _____


ATTEST:
                                               INVESTORS TITLE COMPANY

    [Corporate Seal]

By_____________________                        By ___________________________
      Secretary                                   Title:

Countersigned:


CENTRAL CAROLINA BANK


By____________________________
       Authorized Signatory
                                        B-3
<PAGE>


                  [Form of Reverse Side of Rights Certificate]

                               FORM OF ASSIGNMENT

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


FOR VALUE RECEIVED ____________________________________ hereby sells, assigns
and transfers unto__________________________________________________________
____________________________________________________________________________
            (Please print name and address of transferee)

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

Dated:                       ___, ______             ___________________________
                                                           (Signature)

Signature Guaranteed:



                                        B-4
<PAGE>

                                   Certificate
                                   -----------

     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: ___________________, ______           ____________________________
                                                       (Signature)

Signature Guaranteed:




                                     NOTICE

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

                                        B-5
<PAGE>



                          FORM OF ELECTION TO PURCHASE
                          ----------------------------
                      (To be executed if holder desires to
                       exercise Rights represented by the
                               Rights Certificate)

To INVESTORS TITLE COMPANY:

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

Please insert social security
or other identifying number


____________________________________________________________________________
                                          (Please print name and address)


     If such  number of Rights  shall not be all the  Rights  evidenced  by this
Rights  Certificate,  a new Rights  Certificate  for the  balance 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:


                                        B-6
<PAGE>

                                   Certificate
                                   -----------

     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:                       ___, ______         ____________________________
                                                        (Signature)

Signature Guaranteed:




                                     NOTICE
                                     ------

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


                                        B-7
<PAGE>


                                    Exhibit C

                      FORM OF SUMMARY OF RIGHTS TO PURCHASE
                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK


     On November 12, 2002,  the Board of  Directors of Investors  Title  Company
(the "Corporation") authorized and declared a dividend distribution of one right
(a "Right") for each  outstanding  share of common stock,  no par value,  of the
Corporation (the "Common Stock") payable on December 16, 2002 to shareholders of
record at the close of business on December 2, 2002. A Right will also be issued
for each share of Common  Stock  issued  after  December  2, 2002 and before the
Distribution  Date  (which  is  described  in the next  paragraph).  Each  Right
entitles  the  registered  holder to  purchase  from the  Corporation  a unit (a
"Unit")  consisting  of  one  one-hundredth  of  a  share  of  Series  A  Junior
Participating  Preferred Stock of the Corporation (the "Preferred  Stock"), at a
Purchase  Price of $80 per Unit (the "Purchase  Price"),  subject to adjustment.
The  description  and terms of the Rights are set forth in the Rights  Agreement
(the "Rights Agreement"), dated as of November 12, 2002, between the Corporation
and Central Carolina Bank, as Rights Agent.

     Initially,  the Rights will be attached  to all Common  Stock  certificates
representing  shares then outstanding,  and no separate Rights Certificates will
be  distributed.   The  Rights  will  separate  from  the  Common  Stock  and  a
Distribution  Date will occur upon the earlier of (i) ten days following  public
announcement  that a person or group of affiliated or associated  persons,  with
such  exceptions  as are  set  forth  in the  Rights  Agreement  (an  "Acquiring
Person"),  has acquired, or obtained the right to acquire,  beneficial ownership
of 15% or more of the outstanding shares of Common Stock (the "Stock Acquisition
Date"),  or (ii) ten Business Days (or such later date as the Board of Directors
may determine)  following the commencement  of, or first public  announcement of
the intent of a person or group to commence,  a tender  offer or exchange  offer
that would result in a person or group (with such exceptions as are set forth in
the Rights Agreement) beneficially owning 15% or more of such outstanding shares
of Common Stock.  Until the Distribution  Date, (i) the Rights will be evidenced
by the Common Stock certificates and will be transferred with and only with such
Common  Stock  certificates,  (ii) new Common  Stock  certificates  issued after
December 2, 2002 will contain a notation  incorporating  the Rights Agreement by
reference and (iii) the surrender  for transfer of any  certificates  for Common
Stock  outstanding  at the close of business  on December 2, 2002 or  thereafter
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.

     The Rights are not exercisable  until the Distribution Date and will expire
at the close of  business on  November  11,  2012,  unless  earlier  redeemed or
exchanged by the Corporation as described below.

     As soon as practicable  after the Distribution  Date,  Rights  Certificates
will be mailed to  holders  of  record  of the  Common  Stock as of the close of
business  on  the  Distribution  Date  and,  thereafter,   the  separate  Rights
Certificates alone will represent the Rights.  Except as otherwise
                                        C-1
<PAGE>

determined  by the Board of Directors,  only shares of Common Stock  outstanding
prior to the Distribution Date will be issued with Rights.

     In the event that any person becomes an Acquiring Person,  each holder of a
Right will  thereafter  have the right to receive,  upon exercise,  Common Stock
(or,  in  certain  circumstances,  cash,  property  or other  securities  of the
Corporation), having a value equal to two times the Exercise Price of the Right.
The Exercise  Price is the  Purchase  Price times the number of shares of Common
Stock associated with each Right (initially,  one).  Notwithstanding  any of the
foregoing, following the occurrence of an event set forth in this paragraph, all
Rights  that are,  or  (under  certain  circumstances  specified  in the  Rights
Agreement)  were,  beneficially  owned by any Acquiring  Person will be null and
void. However,  Rights are not exercisable  following the occurrence of an event
set  forth  in this  paragraph  until  such  time as the  Rights  are no  longer
redeemable by the Corporation as set forth below.

     In  the  event  that,   following  the  Stock  Acquisition  Date,  (i)  the
Corporation is acquired in a merger or consolidation in which the Corporation is
not the  surviving  corporation,  (ii) the  Corporation  engages  in a merger or
consolidation  in which the  Corporation  is the surviving  corporation  and the
Common Stock of the Corporation is changed or exchanged,  or (iii) more than 50%
of the Corporation's asset or earning power is sold or transferred,  each holder
of a Right (except Rights which have  previously been voided as set forth above)
shall thereafter have the right to receive,  upon exercise of the Right,  Common
Stock of the  acquiring  company  having a value equal to two times the Exercise
Price of the Right.

     The Purchase  Price  payable and the number of Units of Preferred  Stock or
other securities or property issuable upon exercise of the Rights are subject to
adjustment  from time to time to  prevent  dilution  (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock,  (ii) if holders of the  Preferred  Stock are granted  certain  rights or
warrants  to  subscribe  for  Preferred  Stock or  securities  convertible  into
Preferred Stock at less than the current market price of the Preferred Stock, or
(iii) upon the  distribution  to holder of the  Preferred  Stock of evidences of
indebtedness  or assets  (excluding  regular  quarterly  cash  dividends)  or of
subscription rights or warrants (other than those referred to above).

     The number of outstanding Rights and the number of Units of Preferred Stock
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Stock or a dividend on the Common  Stock  payable
in Common Stock or subdivisions  or combinations of the Common Stock  occurring,
in any such case, prior to the Distribution Date.

     With certain  exceptions,  no  adjustments  in the  Purchase  Price will be
required  until  cumulative  adjustments  amount to at least 1% of the  Purchase
Price.  No fractional  Units are required to be issued and, in lieu thereof,  an
adjustment in cash may be made based on the market price of the Preferred  Stock
on the last trading date prior to the date of exercise.

     At any time after a person or group of  affiliated  or  associated  persons
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the  outstanding  Common  Stock,  the Board of  Directors  may
exchange the Rights  (other than Rights
                                        C-2
<PAGE>

owned by such person or its affiliates and associates,  which have become void),
in whole or in part, at an exchange  ratio of one share of Common Stock,  or one
one-hundredth  of a share of  Preferred  Stock (or of a share of a series of the
Corporation's  preferred stock having  equivalent  preferences,  limitations and
relative rights), per Right (subject to adjustment).

     At any time until ten Business Days following the Stock  Acquisition  Date,
the Corporation  may redeem the Rights in whole,  but not in part, at a price of
$.01 per Right, subject to adjustment.  Immediately upon the action of the Board
of Directors  ordering  redemption of the Rights,  the Rights will terminate and
the only right of the holders of Rights will be to receive the redemption price.

     Until a Right is  exercised,  the  holder  thereof,  as such,  will have no
rights as a shareholder of the Corporation,  including,  without limitation, the
right to vote or to  receive  dividends.  While the  distribution  of the Rights
should not be taxable to shareholders or to the Corporation,  shareholders  may,
depending upon the circumstances, recognize taxable income in the event that the
Rights  become  exercisable  for Common  Stock (or other  consideration)  of the
Corporation as set forth above or in the event that the Rights are redeemed.

     Except as set forth below,  any of the  provisions of the Rights  Agreement
may be  amended  at the  direction  of  the  Board  of  Directors  prior  to the
Distribution  Date.  After the  Distribution  Date,  any provision of the Rights
Agreement may be amended at the direction of the Board of Directors  without the
approval of holders of Rights Certificates in order to make changes which do not
adversely affect the interests of holders of Rights Certificates  (excluding the
interests  of any  Acquiring  Person) or to shorten or lengthen  any time period
under the Rights Agreement, except that no amendment to lengthen the time period
governing  redemption  may be made at such time as the Rights are not redeemable
nor may any other time  period be  lengthened  except to  protect  the rights of
holders of Rights. In no case,  however,  may the Rights Agreement be amended to
change  (other than pursuant to certain  adjustments  therein) the fraction of a
share of  Preferred  Stock for which a Right is  exercisable  or to advance  the
Final Expiration Date.

     A copy of the  Rights  Agreement  has been filed  with the  Securities  and
Exchange  Commission  as an Exhibit to a  Registration  Statement on Form 8-A. A
copy of the Rights  Agreement is available free of charge from the  Corporation.
This  Summary  Description  of the Rights does not purport to be complete and is
qualified  in its  entirety  by  reference  to the  Rights  Agreement,  which is
incorporated herein by reference.
                                        C-3


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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