<PAGE>
                                                                     Exhibit 4.2
                               IROBOT CORPORATION

                                      AND

                       COMPUTERSHARE TRUST COMPANY, INC.

                                AS RIGHTS AGENT

                          SHAREHOLDER RIGHTS AGREEMENT

                        DATED AS OF [___________], 2005
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                     Page
-------                                                                     ----
<S>                                                                         <C>
SECTION 1. CERTAIN DEFINITIONS.................................................1

SECTION 2. APPOINTMENT OF RIGHTS AGENT.........................................6

SECTION 3. ISSUE OF RIGHT CERTIFICATES.........................................7

SECTION 4. FORM OF RIGHT CERTIFICATES..........................................8

SECTION 5. COUNTERSIGNATURE AND REGISTRATION...................................9

SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
           CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
           CERTIFICATES.......................................................10

SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS......11

SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.................13

SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK....................13

SECTION 10. PREFERRED STOCK RECORD DATE.......................................14

SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND OF SHARES OR
            NUMBER OF RIGHTS..................................................15

SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES........23

SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
            POWER.............................................................23

SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES...........................26

SECTION 15. RIGHTS OF ACTION..................................................26

SECTION 16. AGREEMENT OF RIGHT HOLDERS........................................27

SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.................27

SECTION 18. CONCERNING THE RIGHTS AGENT.......................................28

SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.........28

SECTION 20. DUTIES OF RIGHTS AGENT............................................29

SECTION 21. CHANGE OF RIGHTS AGENT............................................31
</TABLE>

                                       -i-
<PAGE>
<TABLE>
<S>                                                                         <C>
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES................................32

SECTION 23. REDEMPTION........................................................32

SECTION 24. EXCHANGE..........................................................33

SECTION 25. NOTICE OF CERTAIN EVENTS..........................................35

SECTION 26. NOTICES...........................................................36

SECTION 27. SUPPLEMENTS AND AMENDMENTS........................................36

SECTION 28. SUCCESSORS........................................................37

SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS..............37

SECTION 30. BENEFITS OF THIS AGREEMENT........................................37

SECTION 31. SEVERABILITY......................................................38

SECTION 32. GOVERNING LAW.....................................................38

SECTION 33. COUNTERPARTS......................................................38

SECTION 34. DESCRIPTIVE HEADINGS..............................................38

SECTION 35. FORCE MAJEURE.....................................................38
</TABLE>

Exhibit A --  Certificate of Designations of
              Series A-1 Junior Participating
              Cumulative Preferred Stock

Exhibit B --  Form of Right Certificate

                                      -ii-
<PAGE>
                          SHAREHOLDER RIGHTS AGREEMENT

      Agreement, dated as of [November ___ ], 2005, between iRobot Corporation,
a Delaware corporation (the "Company"), and Computershare Trust Company, Inc., a
limited purpose trust company (the "Rights Agent").

                               W I T N E S S E T H

      WHEREAS, the Board of Directors of the Company desires to provide
shareholders of the Company with the opportunity to benefit from the long-term
prospects and value of the Company and to ensure that shareholders of the
Company receive fair and equal treatment in the event of any proposed takeover
of the Company; and

      WHEREAS, effective [PRICING DATE], the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as such term is
hereinafter defined) for each outstanding share of Common Stock, par value $.01
per share, of the Company (the "Common Stock") outstanding as of the close of
business on [CLOSING DATE] (the "Record Date"), and authorized the issuance of
one Right for each share of Common Stock of the Company issued between the
Record Date and the earlier of the Distribution Date or the Expiration Date (as
such terms are hereinafter defined), each Right initially representing the right
to purchase one ten-thousandth of a share of Series A-1 Junior Participating
Cumulative Preferred Stock of the Company having the rights, powers and
preferences set forth on Exhibit A hereto, upon the terms and subject to the
conditions hereinafter set forth (the "Rights"); and

      WHEREAS, the Company desires to appoint the Rights Agent to act as rights
agent hereunder, in accordance with the terms and conditions hereof.

      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 of the Company
then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan or compensation arrangement of the
Company or any Subsidiary of the Company or (iv) any Person holding shares of
Common Stock of the Company organized, appointed or established by the Company
or any Subsidiary of the Company for or pursuant to the terms of any such
employee benefit plan or compensation arrangement (the Persons described in
clauses (i) through (iv) above are referred to herein as "Exempt Persons").
<PAGE>
      Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition by the Company of Common Stock of the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares Beneficially Owned by such Person to 15% or more
of the shares of Common Stock of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 15% or more of
the shares of Common Stock of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional shares of Common Stock of the
Company and immediately thereafter be the Beneficial Owner of 15% or more of the
shares of Common Stock of the Company then outstanding, then such Person shall
be deemed to be an "Acquiring Person."

      In addition, notwithstanding the foregoing, and notwithstanding anything
to the contrary provided in the Agreement including, without limitation, in
Sections 1(oo), 3(a) or 27, a Person shall not be an "Acquiring Person" if the
Board of Directors of the Company determines at any time that a Person who would
otherwise be an "Acquiring Person," has become such without intending to become
an "Acquiring Person," and such Person divests as promptly as practicable (or
within such period of time as the Board of Directors of the Company determines
is reasonable) a sufficient number of shares of Common Stock of the Company so
that such Person would no longer be an "Acquiring Person," as defined pursuant
to the foregoing provisions of this Section 1(a).

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

            (c)   "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations (the
"Rules") under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement; provided, however, that no
Person who is a director or officer of the Company shall be deemed an Affiliate
or an Associate of any other director or officer of the Company solely as a
result of his or her position as director or officer of the Company.

            (d)   A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "Beneficially Own" and have "Beneficial Ownership" of, any
securities:

                  (i)   which such Person or any of such Person's Affiliates or
      Associates, directly or indirectly, Beneficially Owns (as determined
      pursuant to Rule 13d-3 of the Rules under the Exchange Act, as in effect
      on the date of this Agreement);

                  (ii)  which such Person or any of such Person's Affiliates or
      Associates, directly or indirectly, has:

                        (A)   the right to acquire (whether or not such right is
            exercisable immediately or only after the passage of time or upon
            the satisfaction of any conditions or both) pursuant to any
            agreement, arrangement or understanding (whether or not in writing)
            (other than customary agreements with and between underwriters and
            selling group members with respect to a bona fide public offering of
            securities) or upon the exercise of conversion rights, exchange
            rights,

                                       2
<PAGE>
            rights (other than the Rights), warrants or options, or otherwise;
            provided, however, that a Person shall not be deemed the "Beneficial
            Owner" of, or to "Beneficially Own" or have "Beneficial Ownership"
            of, (1) securities tendered pursuant to a tender or exchange offer
            made by or on behalf of such Person or any of such Person's
            Affiliates or Associates until such tendered securities are accepted
            for purchase or exchange; (2) securities issuable upon exercise of
            Rights at any time prior to the occurrence of a Triggering Event; or
            (3) 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 Sections 3(a), 11(i) or 22 hereof;
            or

                        (B)   the right to vote pursuant to any agreement,
            arrangement or understanding (whether or not in writing); provided,
            however, that a Person shall not be deemed the "Beneficial Owner"
            of, or to "Beneficially Own" or have "Beneficial Ownership" of, any
            security under this clause (B) if the agreement, arrangement or
            understanding to vote such security (1) arises solely from a
            revocable proxy or consent given in response to a public proxy or
            consent solicitation made pursuant to a written proxy or consent
            solicitation statement filed with the Securities and Exchange
            Commission in accordance with the Rules of the Exchange Act and (2)
            is not also then reportable by such person on Schedule 13D under the
            Exchange Act (or any comparable or successor report); or

                        (C)   the right to dispose of pursuant to any agreement,
            arrangement or understanding (whether or not in writing) (other than
            customary arrangements with and between underwriters and selling
            group members with respect to a bona fide public offering of
            securities); or

                  (iii) which are Beneficially Owned, directly or indirectly, by
      any other Person (or any Affiliate or Associate thereof) with which such
      Person or any of such Person's Affiliates or Associates has any agreement,
      arrangement or understanding (whether or not in writing) (other than
      customary agreements with and between underwriters and selling group
      members with respect to a bona fide public offering of securities) for the
      purpose of acquiring, holding, voting (except pursuant to a revocable
      proxy or consent as described in clause (B) of Section 1(d)(ii) hereof) or
      disposing of any securities of the Company;

provided, however, that (1) no Person engaged in business as an underwriter of
securities shall be deemed the Beneficial Owner of any securities acquired
through such Person's participation as an underwriter in good faith in a firm
commitment underwriting until the expiration of forty (40) days after the date
of such acquisition, and (2) no Person who is a director or an officer of the
Company shall be deemed, as a result of his or her position as director or
officer of the Company, the Beneficial Owner of any securities of the Company
that are Beneficially Owned by any other director or officer of the Company.

                                       3
<PAGE>
      For all purposes of this Agreement, the phrase "then outstanding," when
used with reference to the percentage of the then outstanding securities
Beneficially Owned by a Person, shall mean the number of securities then issued
and outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to Beneficially Own
hereunder.

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

            (f)   "Certificate of Incorporation" when used in reference to the
Company shall mean the Second Restated Certificate of Incorporation, as may be
amended from time to time, of the Company.

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

            (h)   "Common Stock" when used in reference to the Company shall
mean the common stock, par value $0.01 per share, of the Company or any other
shares of capital stock of the Company into which such stock shall be
reclassified or changed. "Common Stock" when used with reference to any Person
other than the Company organized in corporate form shall mean (i) the capital
stock or other equity interest of such Person with the greatest voting power,
(ii) the equity securities or other equity interest having power to control or
direct the management of such Person or (iii) if such Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person and which have issued any such outstanding capital stock,
equity securities or equity interest. "Common Stock" when used with reference to
any Person not organized in corporate form shall mean units of beneficial
interest which (x) shall represent the right to participate generally in the
profits and losses of such Person (including without limitation any flow-through
tax benefits resulting from an ownership interest in such Person) and (y) shall
be entitled to exercise the greatest voting power of such Person or, in the case
of a limited partnership, shall have the power to remove or otherwise replace
the general partner or partners.

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

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

            (k)   "Delaware Courts" shall have the meaning set forth in Section
32 hereof.

            (l)   "Depositary Agent" shall have the meaning set forth in Section
7(c) hereof.

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

                                       4
<PAGE>
            (n)   "Exchange Date" shall have the meaning set forth in Section
7(a) hereof.

            (o)   "Exempt Person" shall have the meaning set forth in the
definition of "Acquiring Person."

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

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

            (r)   "Fair Market Value" of any securities or other property shall
be as determined in accordance with Section 11(d) hereof.

            (s)   "Force Majeure Condition" shall have the meaning set forth in
Section 35 hereof.

            (t)   "Group" shall have the meaning set forth in clause (b) of the
definition of "Person."

            (u)   "NASDAQ" shall have the meaning set forth in Section 9(b)
hereof.

            (v)   "Person" shall mean (a) an individual, a corporation, a
partnership, a limited liability company, an association, a joint stock company,
a trust, a business trust, a government or political subdivision, any
unincorporated organization, or any other association or entity including any
successor (by merger or otherwise) thereof or thereto, and (b) a "group" as that
term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.

            (w)   "Preferred Stock" shall mean shares of Series A-1 Junior
Participating Cumulative Preferred Stock, par value $0.01 per share, of the
Company having the rights and preferences set forth in the form of Certificate
of Designations attached hereto as Exhibit A.

            (x)   "Preferred Stock Equivalents" shall have the meaning set forth
in Section 11(b) hereof.

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

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

            (aa)  "Redemption Price" shall have the meaning set forth in Section
23 hereof.

            (bb)  "Registered Common Stock" shall have the meaning set forth in
Section 13(b) hereof.

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

            (dd)  "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.

                                       5
<PAGE>
            (ee)  "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.

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

            (gg)  "Section 24(a)(i) Exchange Ratio" shall have the meaning set
forth in Section 24(a)(i) hereof.

            (hh)  "Section 24(a)(ii) Exchange Ratio" shall have the meaning set
forth in Section 24(a)(ii) hereof.

            (ii)  "Securities Act" shall have the meaning set forth in Section
9(c) hereof.

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

            (kk)  "Stock Acquisition Date" shall mean the date of the first
public announcement (which for purposes of this definition shall include,
without limitation, the issuance of a press release or the filing of a
publicly-available report or other document with the Securities and Exchange
Commission or any other governmental agency) by the Company, acting pursuant to
a resolution adopted by the Board of Directors of the Company, or by an
Acquiring Person, subject in each case to the last paragraph of Section 1(a),
that an Acquiring Person has become such.

            (ll)  "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient, in the absence of contingencies, to
elect a majority of the board of directors or other persons performing similar
functions of such corporation or other entity are at the time directly or
indirectly Beneficially Owned or otherwise controlled by such Person either
alone or together with one or more Affiliates of such Person.

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

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

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

      Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock of the Company) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and any Co-Rights Agents shall
be as the Company shall determine. The Company shall give ten (10) days' prior
written notice to the Rights Agent of the appointment of one or more Co-Rights
Agents and the respective duties of

                                       6
<PAGE>
the Rights Agent and any such Co-Rights Agents. The Rights Agent shall have no
duty to supervise, and shall in no event be liable for, the acts or omissions of
any such Co-Rights Agent.

      Section 3. Issue of Right Certificates.

            (a)   From the date hereof until the earlier of (i) the Close of
Business on the tenth calendar day after the Stock Acquisition Date or (ii) the
Close of Business on the tenth Business Day (or such later calendar day, if any,
as the Board of Directors of the Company may determine in its sole discretion)
after the date a tender or exchange offer by any Person, other than an Exempt
Person, is first published or sent or given within the meaning of Rule 14d-4(a)
of the Exchange Act, or any successor rule, if, upon consummation thereof, such
Person could become the Beneficial Owner of 15% or more of the shares of Common
Stock of the Company then outstanding (including any such date which is after
the date of this Agreement and prior to the issuance of the Rights) (the
earliest of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for the Common Stock of the Company registered in the names
of the holders of the Common Stock of the Company (which certificates for Common
Stock of the Company 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 of the
Company. As soon as practicable after the Distribution Date, the Rights Agent
will, at the Company's expense send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock of the Company as of the Close
of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more certificates, in substantially the form of
Exhibit B hereto (the "Right Certificates"), evidencing one Right for each share
of Common Stock of the Company so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock of the Company has been made pursuant to Section 11(o) hereof, the
Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) at the time of distribution of the Right
Certificates, so that Right Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Close of Business on the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.

            (b)   With respect to certificates for the Common Stock of the
Company issued prior to the Close of Business on the Record Date, the Rights
will be evidenced by such certificates for the Common Stock of the Company on or
until the Distribution Date (or the earlier redemption, expiration or
termination of the Rights), and the registered holders of the Common Stock of
the Company also shall be the registered holders of the associated Rights. Until
the Distribution Date (or the earlier redemption, expiration or termination of
the Rights), the transfer of any of the certificates for the Common Stock of the
Company outstanding prior to the date of this Agreement shall also constitute
the transfer of the Rights associated with the Common Stock of the Company
represented by such certificate.

            (c)   Certificates for the Common Stock of the Company issued after
the Record Date, but prior to the earliest of the Distribution Date, Redemption
Date, Exchange Date or Final Expiration Date, shall be deemed also to be
certificates for Rights, and shall bear a legend, substantially in the form set
forth below:

                                       7
<PAGE>
            This certificate also evidences and entitles the holder
            hereof to certain Rights as set forth in a Shareholder
            Rights Agreement between iRobot Corporation and
            Computershare Trust Company, Inc. (or any successor
            thereto), as Rights Agent, dated as of [___________,
            2005] as amended, restated, renewed, supplemented or
            extended from time to time (the "Rights Agreement"), the
            terms of which are hereby incorporated herein by
            reference and a copy of which is on file at the
            principal offices of iRobot Corporation and the stock
            transfer administration office of the Rights Agent.
            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. iRobot Corporation may redeem the Rights at
            a redemption price of $0.0001 per Right, subject to
            adjustment, under the terms of the Rights Agreement.
            iRobot Corporation will mail to the holder of this
            certificate a copy of the Rights Agreement, as in effect
            on the date of mailing, without charge promptly after
            receipt of a written request therefor. Under certain
            circumstances, Rights issued to or held by Acquiring
            Persons or any Affiliates or Associates thereof (as
            defined in the Rights Agreement), and any subsequent
            holder of such Rights, may become null and void. The
            Rights shall not be exercisable, and shall be void so
            long as held, by a holder in any jurisdiction where the
            requisite qualification, if any, to the issuance to such
            holder, or the exercise by such holder, of the Rights in
            such jurisdiction shall not have been obtained or be
            obtainable.

      With respect to such certificates containing the foregoing legend, the
Rights associated with the Common Stock of the Company represented by such
certificates shall be evidenced by such certificates alone until the earliest of
the Distribution Date, Redemption Date, Exchange Date or Final Expiration Date,
and the transfer of any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock of the Company represented by
such certificates. In the event that the Company purchases or acquires any
shares of Common Stock of the Company after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock of the Company
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the shares of Common Stock of the Company
which are no longer outstanding. The failure to print the foregoing legend on
any such certificate representing Common Stock of the Company or any defect
therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.

Section 4.  Form of Right Certificates.

            (a)   The Right Certificates (and the forms of election to purchase
shares and of assignment and certificate to be printed on the reverse thereof)
shall each be substantially in the form of Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply

                                       8
<PAGE>
with any applicable law, rule or regulation or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to customary usage. The Right Certificates shall be in a machine
printable format and in a form reasonably satisfactory to the Rights Agent.
Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date, shall
show the date of countersignature, and on their face shall entitle the holders
thereof to purchase such number of one ten-thousandths (0.0001) of a share of
Preferred Stock as shall be set forth therein at the price set forth therein
(the "Exercise Price"), but the number of such shares and the Exercise Price
shall be subject to adjustment as provided herein.

            (b)   Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights Beneficially Owned by (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any Associate or Affiliate of an Acquiring Person)
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 (whether or not in writing)
regarding the transferred Rights, the shares of Common Stock of the Company
associated with such Rights or the Company or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section
7(e) hereof, and any Right Certificate issued pursuant to Section 6, Section 11
or Section 22 upon transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall have deleted therefrom the
second sentence of the existing legend on such Right Certificate and in
substitution therefor shall contain the following legend:

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

      The Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence and identity of any Acquiring Person or any
Associate or Affiliate thereof. The Company shall instruct the Rights Agent in
writing of the Rights which should be so legended. The failure to print the
foregoing legend on any such Right Certificate or any defect therein shall not
affect in any manner whatsoever the application or interpretation of the
provisions of Section 7(e) hereof.

      Section 5. Countersignature and Registration.

            (a)   The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board of Directors, or its President or any Vice
President and by its Treasurer or

                                       9
<PAGE>
any Assistant Treasurer, or by its Secretary or any Assistant Secretary, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested to by the Secretary or any
Assistant Secretary of the Company, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by an authorized
signatory of the Rights Agent and shall not be valid for any purpose unless so
countersigned, and such countersignature upon any Right Certificate shall be
conclusive evidence, and the only evidence, that such Right Certificate has been
duly countersigned as required hereunder. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by an authorized signatory of the Rights Agent, and issued and
delivered by the Company with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificates may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.

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

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

            (a)   Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the Expiration Date, any Right
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Certificates, entitling the registered holder
to purchase a like number of one ten-thousandths (0.0001) of a share of
Preferred Stock (or following a Triggering Event, Common Stock of the Company,
cash, property, debt securities, Preferred Stock or any combination thereof,
including any such securities, cash or property following a Section 13 Event) as
the Right Certificate or Certificates surrendered then entitled such holder to
purchase and at the same Exercise Price. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Certificates to be transferred, split up, combined or exchanged,
with the form of assignment and certificate duly executed, at the office or
offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right

                                       10
<PAGE>
Certificate or Certificates, as the case may be, as so requested. The Company
may require payment by the registered holder of a Right Certificate, of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.

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

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

            (a)   Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Exercise Price for the total number of
one ten-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercised, at or prior to the earlier of (i) the Close of Business on the tenth
anniversary of the Record Date (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date") or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof (the "Exchange Date") (the earliest of (i), (ii) or (iii)
being herein referred to as the "Expiration Date"). Except as set forth in
Section 7(e) hereof and notwithstanding any other provision of this Agreement,
any Person who prior to the Distribution Date becomes a record holder of shares
of Common Stock of the Company may exercise all of the rights of a registered
holder of a Right Certificate with respect to the Rights associated with such
shares of Common Stock of the Company in accordance with the provisions of this
Agreement, as of the date such Person becomes a record holder of shares of
Common Stock of the Company.


            (b)   The Exercise Price for each one ten-thousandth (0.0001) of a
share of Preferred Stock pursuant to the exercise of a Right shall initially be
One Hundred Twenty United States Dollars (U.S. $120.00), shall be subject
to adjustment from time to time as provided in Section 11 and Section 13 hereof
and shall be payable in lawful money of the United States of America in
accordance with Section 7(c) below.


            (c)   As promptly as practicable following the Distribution Date,
the Company shall deposit with a corporation, trust, bank or similar institution
in good standing organized under the laws of the United States or any State of
the United States, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by a
federal or state authority (such institution is hereinafter referred to as the
"Depositary Agent"), certificates representing the shares of Preferred Stock
that may be acquired

                                       11
<PAGE>
upon exercise of the Rights and the Company shall cause such Depositary Agent to
enter into an agreement pursuant to which the Depositary Agent shall issue
receipts representing interests in the shares of Preferred Stock so deposited.
Upon receipt of a Right Certificate representing exercisable Rights, with the
form of election to purchase and the certificate on the reverse side thereof
duly executed, accompanied by payment of the Exercise Price for the shares to be
purchased and an amount equal to any applicable transfer tax (as determined by
the Rights Agent) by certified check or bank draft payable to the order of the
Company or by money order, the Rights Agent shall, subject to Section 20(k) and
Section 14(b) hereof, thereupon promptly (i) requisition from the Depositary
Agent (or make available, if the Rights Agent is the Depositary Agent)
depositary receipts or certificates for the number of one ten-thousandths
(0.0001) of a share of Preferred Stock to be purchased and the Company hereby
irrevocably authorizes the Depositary Agent to comply with all such requests,
(ii) when appropriate, requisition from the Company the amount of cash, if any,
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt of each
certificate or depositary receipts promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate. In the event that the
Company is obligated to issue other securities (including Common Stock of the
Company) of the Company, pay cash or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash or other property are available for distribution by
the Rights Agent, if and when appropriate. The payment of the Exercise Price may
be made by certified or bank check payable to the order of the Company, or by
money order or wire transfer of immediately available funds to the account of
the Company (provided that notice of such wire transfer shall be given by the
holder of the related Right to the Rights Agent).

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

            (e)   Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event or Section 13
Event, any Rights Beneficially Owned by (i) an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Associate or Affiliate of an Acquiring Person) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any Associate or Affiliate of an Acquiring Person) 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, the shares of Common Stock of the Company associated with such Rights or
the Company, or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall be null and
void without any further action and no holder of

                                       12
<PAGE>
such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any Affiliates or
Associates of an Acquiring Person or any transferee of any of them hereunder.

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

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

      Section 9. Reservation and Availability of Preferred Stock.

            (a)   The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or any authorized and issued shares of Preferred Stock held in
its treasury, the number of shares of Preferred Stock that will be sufficient to
permit the exercise in full of all outstanding and exercisable Rights. Upon the
occurrence of any events resulting in an increase in the aggregate number of
shares of Preferred Stock issuable upon exercise of all outstanding Rights in
excess of the number then reserved, the Company shall make appropriate increases
in the number of shares so reserved.

            (b)   The Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance to be listed, upon official notice of issuance,
upon the principal national securities exchange, if any, upon which the Common
Stock of the Company is listed or, if the principal market for the Common Stock
of the Company is not on any national securities exchange, to be eligible for
quotation on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or any successor thereto or other comparable quotation system.

            (c)   The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined

                                       13
<PAGE>
in accordance with Section 11(a)(iii) hereof, or as soon as required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing and (iii) cause such registration
statement to remain effective (with a prospectus that at all times meets the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities or (B) the
Expiration Date. The Company will also take such action as may be appropriate
under, and which will ensure compliance with, the securities or "blue sky" laws
of the various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed ninety (90)
days after the date determined in accordance with the provisions of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect, in
each case with prompt written notice to the Rights Agent. Notwithstanding any
such provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained.

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

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

      Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock or other securities (including any fraction of a
share of Preferred Stock or such other securities) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the shares of Preferred Stock or such other securities represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the transfer
books of the Company for the Preferred Stock or such

                                       14
<PAGE>
other securities, as applicable, are closed, such person shall be deemed to have
become the record holder of such shares of Preferred Stock or such other
securities on, and such certificate shall be dated, the next succeeding Business
Day on which the transfer books of the Company are open; and provided, further,
however, that if delivery of shares of Preferred Stock or such other securities
is delayed pursuant to Section 9(c), such Person shall be deemed to have become
the record holder of such shares of Preferred Stock or such other securities
only when such shares or such other securities first become deliverable. Prior
to the exercise of the Right evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a shareholder of the Company
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.

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

            (a)   (i)   In the event the Company shall at any time after the
      date of this Agreement (A) declare a dividend on the 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, change or alter any shares of its
      capital stock in a reclassification or recapitalization of the Preferred
      Stock (including any such reclassification or recapitalization in
      connection with a consolidation or merger in which the Company is the
      continuing or surviving Person), except as otherwise provided in this
      Section 11(a) and Section 7(e) hereof, the Exercise Price in effect at the
      time of the record date for such dividend or the effective time of such
      subdivision, combination, reclassification or recapitalization, and the
      number and kind of shares of capital stock issuable on such date or at
      such time, shall be proportionately adjusted so that the holder of any
      Right exercised after such time shall be entitled to receive the aggregate
      number and kind of shares of capital stock which, if such Right had been
      exercised immediately prior to such date and at a time when the Preferred
      Stock transfer books of the Company were open, such holder would have
      owned upon such exercise and been entitled to receive by virtue of such
      dividend, subdivision, combination, reclassification or recapitalization;
      provided, however, that in no event shall the consideration to be paid
      upon the exercise of a Right be less than the aggregate par value of the
      shares of capital stock of the Company issuable upon exercise of a Right.
      If an event occurs which would require an adjustment under both Section
      11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this
      Section 11(a)(i) shall be in addition to, and shall be made prior to, any
      adjustment required pursuant to Section 11(a)(ii) hereof.

                  (ii)  Subject to the provisions of Section 24 hereof, in the
      event any Person, alone or together with its Affiliates and Associates,
      shall become an Acquiring Person, then, promptly following any such
      occurrence (a "Section 11(a)(ii) Event"), proper provision shall be made
      so that each holder of a Right, except as provided in Section 7(e) hereof,
      shall thereafter have a right to receive, upon exercise thereof at the

                                       15
<PAGE>
      then current Exercise Price in accordance with the terms of this
      Agreement, in lieu of a number of one ten-thousandths (0.0001) of a share
      of Preferred Stock, such number of shares of Common Stock of the Company
      as shall equal the result obtained by (x) multiplying the then current
      Exercise Price by the then number of one ten-thousandths (0.0001) 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, whether or not
      such Right was then exercisable, and dividing that product by (y) 50% of
      the Fair Market Value per share of Common Stock of the Company (determined
      pursuant to Section 11(d)) on the date of the occurrence of a Section
      11(a)(ii) Event (such number of shares being referred to as the
      "Adjustment Shares").

                  (iii) In lieu of issuing any shares of Common Stock of the
      Company in accordance with Section 11(a)(ii) hereof, the Company, acting
      by or pursuant to a resolution of the Board of Directors of the Company,
      may, and in the event that the number of shares of Common Stock of the
      Company which are authorized by the Company's Certificate of Incorporation
      but not outstanding or reserved for issuance for purposes other than upon
      exercise of the Rights is not sufficient to permit the exercise in full of
      the Rights in accordance with the foregoing subparagraph (ii) of this
      Section 11(a), the Company, acting by or pursuant to a resolution of the
      Board of Directors of the Company, shall: (A) determine the excess of (X)
      the Fair Market Value of the Adjustment Shares issuable upon the exercise
      of a Right (the "Current Value") over (Y) the Exercise Price attributable
      to each Right (such excess being referred to as the "Spread") and (B) with
      respect to all or a portion of each Right (subject to Section 7(e)
      hereof), make adequate provision to substitute for the Adjustment Shares,
      upon payment of the applicable Exercise Price, (1) Common Stock of the
      Company or equity securities, if any, of the Company other than Common
      Stock of the Company (including without limitation shares, or units of
      shares, of Preferred Stock that the Board of Directors of the Company has
      determined to have the same value as shares of Common Stock of the Company
      (such shares of Preferred Stock being referred to herein as "Common Stock
      Equivalents")), (2) cash, (3) a reduction in the Exercise Price, (4)
      Preferred Stock Equivalents which the Board of Directors of the Company
      has deemed to have the same value as shares of Common Stock of the
      Company, (5) debt securities of the Company, (6) other assets or
      securities of the Company or (7) any combination of the foregoing, having
      an aggregate value equal to the Current Value, where such aggregate value
      has been determined by the Board of Directors of the Company after
      receiving the advice of a nationally recognized investment banking firm
      selected by the Board of Directors of the Company; provided, however, that
      if the Company shall not have made adequate provision to deliver value
      pursuant to clause (B) above within thirty (30) days following the later
      of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date
      on which the Company's right of redemption pursuant to Section 23(a)
      expires (the later of (x) and (y) being referred to herein as the "Section
      11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver,
      upon the surrender for exercise of a Right and without requiring payment
      of the Exercise Price, shares of Common Stock of the Company (to the
      extent available) and then, if necessary, cash, which shares and/or cash
      have an aggregate value equal to the Spread. If the Board of Directors of
      the Company shall determine in good faith that it is likely that
      sufficient additional shares of Common Stock of the Company could be
      authorized for issuance upon exercise in full of the Rights, the

                                       16
<PAGE>
      30-day period set forth above may be extended to the extent necessary, but
      not more than ninety (90) days after the Section 11(a)(ii) Trigger Date,
      in order that the Company may seek shareholder approval for the
      authorization of such additional shares (such period, as it may be
      extended, being referred to herein as the "Substitution Period"). To the
      extent that the Company determines that some action need be taken pursuant
      to the first and/or second sentences of this Section 11(a)(iii), the
      Company (x) shall provide, subject to Section 7(e) hereof, that such
      action shall apply uniformly to all outstanding Rights and (y) may suspend
      the exercisability of the Rights until the expiration of the Substitution
      Period in order to seek any authorization of additional shares and/or to
      decide the appropriate form of distribution to be made pursuant to such
      first sentence and to determine the value thereof. In the event of any
      such suspension, the Company shall issue a public announcement stating
      that the exercisability of the Rights has been temporarily suspended and 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 the Common Stock of
      the Company and of the Preferred Stock shall be the Fair Market Value (as
      determined pursuant to Section 11(d) hereof) per share of the Common Stock
      of the Company and the Preferred Stock, respectively, on the Section
      11(a)(ii) Trigger Date, the value of any Common Stock Equivalent shall be
      deemed to have the same value as the Common Stock of the Company on such
      date and the value of any Preferred Stock Equivalent shall be deemed to
      have the same value as the Preferred Stock on such date.

            (b)   If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within forty-five (45) calendar days after such record
date) to subscribe for or purchase Preferred Stock (or securities having the
same or more favorable rights, privileges and preferences as the shares of
Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into
Preferred Stock or Preferred Stock Equivalents at a price per share of Preferred
Stock or per share of Preferred Stock Equivalents (or having a conversion price
per share, if a security convertible into Preferred Stock or Preferred Stock
Equivalents) less than the Fair Market Value (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock on such record date, the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of 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 Preferred Stock Equivalents to be offered (and the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Fair Market Value 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 Preferred
Stock Equivalents to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise
of a Right be less than the aggregate par value of the shares of stock of the
Company issuable upon exercise of a Right. In case such subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be the Fair Market Value thereof
determined in accordance with Section 11(d) hereof. Shares of Preferred Stock
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
rights or

                                       17
<PAGE>
warrants are not so issued, the Exercise Price shall be adjusted to be the
Exercise Price which would then be in effect if such record date had not been
fixed.

            (c)   If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
convertible securities, subscription rights or warrants (excluding those
referred to in Section 11(b)), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Fair Market Value (as determined pursuant to Section 11(d) hereof)
per one ten-thousandth (0.0001) of a share of Preferred Stock on such record
date, less the Fair Market Value (as determined pursuant to Section 11(d)
hereof) of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such convertible securities, subscription rights or warrants
applicable to one ten-thousandth (0.0001) of a share of Preferred Stock and the
denominator of which shall be the Fair Market Value (as determined pursuant to
Section 11(d) hereof) per one ten-thousandth (0.0001) of a share of Preferred
Stock; provided, however, that in no event shall the consideration to be paid
upon the exercise of a Right be less than the aggregate par value of the shares
of stock of the Company issuable upon exercise of a Right. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Exercise Price shall again be
adjusted to be the Exercise Price which would be in effect if such record date
had not been fixed.

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

                  (i)   In the case of a publicly-traded stock or other
      security, the Fair Market Value on any date shall be deemed to be the
      average of the daily closing prices per share of such stock or per unit of
      such other security for the 30 consecutive Trading Days (as such term is
      hereinafter defined) immediately prior to such date; provided, however,
      that in the event that the Fair Market Value per share of any share of
      stock is determined during a period following the announcement by the
      issuer of such stock of (x) a dividend or distribution on such stock
      payable in shares of such stock or securities convertible into shares of
      such stock or (y) any subdivision, combination or reclassification of such
      stock, and prior to the expiration of the 30 Trading Day period after the
      ex-dividend date for such dividend or distribution, or the record date for
      such subdivision, combination or reclassification, then, and in each such
      case, the Fair Market Value 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

                                       18
<PAGE>
      securities listed or admitted to trading on the New York Stock Exchange
      or, if the securities are not listed or admitted to trading on the New
      York Stock Exchange, as reported in the principal consolidated transaction
      reporting system with respect to securities listed on the principal
      national securities exchange on which such security is listed or admitted
      to trading; or, if not listed or admitted to trading on any national
      securities exchange, the last quoted price (or, if not so quoted, the
      average of the last quoted high bid and low asked prices) in the
      over-the-counter market, as reported by NASDAQ or such other system then
      in use; or, if on any such date no bids for such security are quoted by
      any such organization, the average of the closing bid and asked prices as
      furnished by a professional market maker making a market in such security
      selected by the Board of Directors of the Company. If on any such date no
      market maker is making a market in such security, the Fair Market Value of
      such security on such date shall be determined reasonably and with utmost
      good faith to the holders of the Rights by the Board of Directors of the
      Company, provided, however, that if at the time of such determination
      there is an Acquiring Person, the Fair Market Value of such security on
      such date shall be determined by a nationally recognized investment
      banking firm selected by the Board of Directors of the Company, which
      determination shall be described in a statement filed with the Rights
      Agent and shall be binding on the Rights Agent and the holders of the
      Rights. The term "Trading Day" shall mean a day on which the principal
      national securities exchange on which such security is listed or admitted
      to trading is open for the transaction of business or, if such security is
      not listed or admitted to trading on any national securities exchange, a
      Business Day.

                  (ii)  If a security is not publicly held or not so listed or
      traded, "Fair Market Value" shall mean the fair value per share of stock
      or per other unit of such security, determined reasonably and in good
      faith to the holders of the Rights by the Board of Directors of the
      Company; provided, however, that if at the time of such determination
      there is an Acquiring Person, the Fair Market Value of such security on
      such date shall be determined by a nationally recognized investment
      banking firm selected by the Board of Directors of the Company, which
      determination shall be described in a statement filed with the Rights
      Agent and shall be binding on the Rights Agent and the holders of the
      Rights; provided, however, that for the purposes of making any adjustment
      provided for by Section 11(a)(ii) hereof, the Fair Market Value of a share
      of Preferred Stock shall not be less than the product of the then Fair
      Market Value of a share of Common Stock multiplied by the higher of the
      then Dividend Multiple or Vote Multiple (as both of such terms are defined
      in the Certificate of Designations attached as Exhibit A hereto)
      applicable to the Preferred Stock and shall not exceed 105% of the product
      of the then Fair Market Value of a share of Common Stock multiplied by the
      higher of the then Dividend Multiple or Vote Multiple applicable to the
      Preferred Stock.

                  (iii) In the case of property other than securities, the Fair
      Market Value thereof shall be determined reasonably and in good faith to
      the holders of Rights by the Board of Directors of the Company; provided,
      however, that if at the time of such determination there is an Acquiring
      Person, the Fair Market Value of such property on such date shall be
      determined by a nationally recognized investment banking firm selected by
      the Board of Directors of the Company, which determination shall be
      described in a statement filed with the Rights Agent and shall be binding
      upon the Rights Agent and the holders of the Rights.

                                       19
<PAGE>
            (e)   Anything herein to the contrary notwithstanding, no adjustment
in the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one-millionth of a share of Common Stock of the Company
or hundred-millionth of a share of Preferred Stock, as the case may be, or to
such other figure as the Board of Directors of the Company may deem appropriate.
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 any provision of Section 11(a) or Section
13(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Section 11(a), (b), (c), (d), (e), (g) through (k)
and (m), inclusive, 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 Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one ten-thousandths
(0.0001) of a share of Preferred Stock (or other securities or amount of cash or
combination thereof) purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.

            (h)   Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number of one
ten-thousandths (0.0001) of a share of Preferred Stock (calculated to the
nearest hundred-millionth) as the Board of Directors of the Company determines
is appropriate to preserve the economic value of the Rights, including, by way
of example, that number obtained by (i) multiplying (x) the number of one
ten-thousandths (0.0001) of a share of Preferred Stock for which a Right may be
exercisable immediately prior to this adjustment by (y) the Exercise Price in
effect immediately prior to such adjustment of the Exercise Price and (ii)
dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment of the Exercise Price.

            (i)   The Company may elect on or after the date of any adjustment
of the Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of 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 ten-thousandths
(0.0001) 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-millionth)

                                       20
<PAGE>
obtained by dividing the Exercise Price in effect immediately prior to
adjustment of the Exercise Price by the Exercise Price in effect immediately
after adjustment of the Exercise Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Exercise Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.

            (j)   Irrespective of any adjustment or change in the Exercise Price
or the number of one ten-thousandths (0.0001) of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Exercise Price per share and the
number of shares which were expressed in the initial Right Certificates issued
hereunder without prejudice to any adjustment or change.

            (k)   Before taking any action that would cause an adjustment
reducing the Exercise Price below the then stated value, if any, of the number
of one ten-thousandths (0.0001) of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Preferred Stock
at such adjusted Exercise Price.

            (l)   In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the number of one ten-thousandths (0.0001) of a share of Preferred Stock or
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one ten-thousandths (0.0001) of a share of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.

            (m)   Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the

                                       21
<PAGE>
Board of Directors of the Company shall determine to be advisable in order that
any consolidation or subdivision of the Preferred Stock, issuance wholly for
cash of any shares of Preferred Stock at less than the Fair Market Value,
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,
stock dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of its
Preferred Stock, shall not be taxable to such shareholders.

            (n)   The Company covenants and agrees that it shall not, at any
time after the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or exchanged pursuant to Section 24
hereof, (i) consolidate with (other than a Subsidiary of the Company in a
transaction that complies with the proviso at the end of this sentence), (ii)
merge with or into, or (iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction or a series of related transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries taken as a whole, to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with the proviso at the end of this
sentence) if (x) at the time of or immediately after such consolidation, merger
or sale there are any rights, warrants or other instruments outstanding or
agreements or arrangements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale the shareholders of a Person who constitutes, or would constitute, the
"Principal Party" for the purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates; provided, however, that, subject to the following sentence, this
Section 11(n) shall not affect the ability of any Subsidiary of the Company to
consolidate with, or merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company. The Company further covenants and
agrees that after the Distribution Date it 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 substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.

            (o)   Notwithstanding anything in this Agreement to the contrary, in
the event the Company shall at any time after the date of this Agreement and
prior to the Distribution Date (i) declare or pay any dividend on the
outstanding Common Stock of the Company payable in shares of Common Stock of the
Company or (ii) effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock of the Company (by reclassification or
otherwise than by payment of dividends in shares of Common Stock of the Company)
into a greater or lesser number of shares of Common Stock of the Company, then
in any such case (A) the number of one ten-thousandths (0.0001) of a share of
Preferred Stock purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one ten-thousandths (0.0001) of
a share of Preferred Stock so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of shares of Common Stock of the
Company outstanding immediately prior to such event and the denominator of which
is the number of shares of Common Stock of the Company outstanding immediately
after such event, and (B) each share of Common Stock of the Company outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each share of Common Stock of the Company outstanding immediately
prior to such event had issued with respect to it. The

                                       22
<PAGE>
adjustments provided for in this Section 11(o) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.

            (p)   The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent so exercised
and neither such exercise nor any exchange of Rights pursuant to Section 24
shall otherwise affect the rights of holders of Right Certificates under this
Rights Agreement, including rights to purchase securities of the Principal Party
following a Section 13 Event which has occurred or may thereafter occur, as set
forth in Section 13 hereof. Upon exercise of a Right Certificate under Section
11(a)(ii), the Rights Agent shall return such Right Certificate duly marked to
indicate that such exercise has occurred.

      Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock of the Company a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate (or,
if prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock of the Company) in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.

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

            (a)   In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which is not prohibited by Section 11(n) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in a transaction
which is not prohibited by the proviso at the end of the first sentence of
Section 11(n) hereof) shall consolidate with the Company, or merge with and into
the Company and the Company shall be the continuing or surviving corporation of
such merger and, in connection with such merger, all or part of the shares of
Common Stock of the Company shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (z) the
Company shall sell, mortgage or otherwise transfer (or one or more of its
Subsidiaries shall sell, mortgage or otherwise transfer), in one transaction or
a series of related transactions, assets or earning power aggregating 50% or
more of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions, each of which is not
prohibited by the proviso at the end of the first sentence of Section 11(n)
hereof), then, and in each such case, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
have the right to receive, upon the exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid and nonassessable shares of freely
tradable Common Stock of the Principal Party (as hereinafter defined in Section
13(b)), free and clear of rights of call or first refusal, liens, encumbrances,
transfer restrictions or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Exercise Price by the number of one
ten-thousandths

                                       23
<PAGE>
of a share of Preferred Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event (without taking into account any
adjustment previously made pursuant to Section 11(a)(ii) or 11(a)(iii) hereof),
and dividing that product by (2) 50% of the Fair Market Value (determined
pursuant to Section 11(d) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such consolidation, merger, sale
or transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale, mortgage or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall apply
to such Principal Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of shares
of its Common Stock to permit exercise of all outstanding Rights in accordance
with this Section 13(a) and the making of payments in cash and/or other
securities in accordance with Section 11(a)(iii) hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights.

            (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 Company
      are converted in such merger or consolidation, or, if there is more than
      one such issuer, the issuer of Common Stock that has the highest aggregate
      Fair Market Value (determined pursuant to Section 11(d)), and if no
      securities are so issued, the Person that is the other party to the merger
      or consolidation, or, if there is more than one such Person, the Person
      the Common Stock of which has the highest aggregate Fair Market Value
      (determined pursuant to Section 11(d)); and

                  (ii)  in the case of any transaction described in clause (z)
      of the first sentence of Section 13(a), the Person that is the party
      receiving the greatest portion of the assets or earning power transferred
      pursuant to such transaction or transactions, or, if each Person that is a
      party to such transaction or transactions receives the same portion of the
      assets or earning power transferred pursuant to such transaction or
      transactions or if the Person receiving the largest portion of the assets
      or earning power cannot be determined, whichever Person the Common Stock
      of which has the highest aggregate Fair Market Value (determined pursuant
      to Section 11(d));

provided, however, that in any such case described in clauses (i) or (ii) of
Section 13(b) hereof, (1) if the Common Stock of such Person is not at such time
and has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act ("Registered Common Stock") or such Person
is not a corporation, and such Person is a direct or indirect Subsidiary or
Affiliate of another Person who has Registered Common Stock outstanding,
"Principal Party" shall refer to such other Person; (2) if the Common Stock of
such Person is not Registered Common Stock or such Person is not a corporation,
and such Person is a direct or indirect Subsidiary of another Person but is not
a direct or indirect Subsidiary of another Person which has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate parent entity
of such first-mentioned Person; (3) if the Common Stock of such Person is not

                                       24
<PAGE>
Registered Common Stock or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of such other Persons is the issuer of the Registered
Common Stock having the highest aggregate Fair Market Value (determined pursuant
to Section 11(d)); and (4) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and none of such other Persons
has Registered Common Stock outstanding, "Principal Party" shall refer to
whichever ultimate parent entity is the corporation having the greatest
shareholders' equity or, if no such ultimate parent entity is a corporation,
"Principal Party" shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.

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

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

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

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

                  (iv)  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.

            (d)   In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation or By-laws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the

                                       25
<PAGE>
then current Fair Market Value (determined pursuant to Section 11(d)) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such Fair Market Value, or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of this Section 13,
then, in such event, the Company shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.

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

      Section 14. Fractional Rights and Fractional Shares.

            (a)   The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(o)
hereof, or to distribute Right Certificates which evidence fractional Rights. If
the Company elects not to issue such fractional Rights, the Company shall pay,
in lieu of such fractional Rights, to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Fair Market Value
of a whole Right, as determined pursuant to Section 11(d) hereof.

            (b)   The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
ten-thousandth (0.0001) of a share of Preferred Stock) 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
ten-thousandth of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one ten-thousandth (0.0001)
of a share of Preferred Stock, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the Fair Market Value of one
ten-thousandth (0.0001) of a share of Preferred Stock. For purposes of this
Section 14(b), the Fair Market Value of one ten-thousandth of a share of
Preferred Stock shall be determined pursuant to Section 11(d) hereof for the
Trading Day immediately prior to the date of such exercise.

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

      Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (or, prior to the Distribution Date, the registered
holders of the Common Stock of the Company); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Common Stock of
the Company), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior

                                       26
<PAGE>
to the Distribution Date, of the Common Stock of the Company), may, in such
registered holder's own behalf and for such registered holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his right to exercise
the Right evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.

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

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

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

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

            (d)   notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as the result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligations; provided, however, that the Company must use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.

      Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the shares of Preferred Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right

                                       27
<PAGE>
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

      Section 18. Concerning the Rights Agent.

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

            (b)   The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate representing Common Stock of the Company, Preferred
Stock, or other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it in good faith
and without negligence to be genuine and to be signed and executed by the proper
Person or Persons.

            (c)   The Rights Agent shall not be liable for consequential damages
under any provision of this Agreement or for any consequential damages arising
out of any act or failure to act hereunder.

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

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

                                       28
<PAGE>
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.

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

      Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations expressly imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:

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

            (b)   Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "Fair Market Value") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof shall be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by a
person believed by the Rights Agent to be the Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, the President, a Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company and delivered to the Rights Agent. Any 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
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.

            (e)   The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its

                                       29
<PAGE>
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section 7(e) hereof)
or any adjustment required under the provisions of Sections 11, 13 or 23(c)
hereof or responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate describing any such adjustment
furnished in accordance with Section 12 hereof), nor shall it be responsible for
any determination by the Board of Directors of the Company of the Fair Market
Value of the Rights or Preferred Stock pursuant to the provisions of Section 14
hereof; nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of Common Stock
of the Company or Preferred Stock to be issued pursuant to this Agreement or any
Right Certificate or as to whether or not any shares of Common Stock of the
Company or Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.

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

            (g)   The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any person believed
by the Rights Agent to be the Chairman of the Board of Directors, any Vice
Chairman of the Board of Directors, the President, a Vice President, the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of
the Company, and is authorized 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. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not be liable
for any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in such application on or after the date specified in such
application (which date shall not be less than five (5) Business Days after the
date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.

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

                                       30
<PAGE>
            (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.

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

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

      Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company by first class
mail, provided, however, that in the event the transfer agency relationship in
effect between the Company and the Rights Agent with respect to the Common Stock
of the Company terminates, the Rights Agent will be deemed to have resigned
automatically on the effective date of such termination. The Company may remove
the Rights Agent or any successor Rights Agent (with or without cause),
effective immediately or on a specified date, by written notice given to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock of the Company and Preferred Stock, and by giving
notice to the holders of the Right Certificates by any means reasonably
determined by the Company to inform such holders of such removal (including
without limitation, by including such information in one or more of the
Company's reports to shareholders or reports or filings with the Securities and
Exchange Commission). If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the incumbent Rights Agent or the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States, the State of Delaware or the State
of New York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of Delaware or the State of New York), in good standing, which is authorized
under such laws to exercise stock transfer or 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 $10,000,000 or (b) an Affiliate of a Person described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights

                                       31
<PAGE>
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock of
the Company and the Preferred Stock, and give notice to the holders of the Right
Certificates by any means reasonably determined by the Company to inform such
holders of such appointment (including without limitation, by including such
information in one or more of the Company's reports to shareholders or reports
or filings with the Securities and Exchange Commission). Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

      Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by the Board of Directors of the Company to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock of
the Company following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock of the Company so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustments
shall otherwise have been made in lieu of the issuance thereof.

      Section 23. Redemption.

            (a)   The Board of Directors of the Company may, at its option,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $0.0001 per Right, appropriately adjusted to reflect any stock dividend
declared or paid, any subdivision or combination of the outstanding shares of
Common Stock of the Company or any similar event occurring after the date of
this Agreement (such redemption price, as adjusted from time to time, being
hereinafter referred to as the "Redemption Price"). The Rights may be redeemed
only until the earlier to occur of (i) the time at which any Person becomes an
Acquiring Person or (ii) the Final Expiration Date.

            (b)   Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights in accordance with Section 23
hereof, 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 Company ordering the

                                       32
<PAGE>
redemption of the Rights in accordance with Section 23 hereof, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to the Rights Agent and to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock of the Company. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or Section 24 hereof or in connection with the purchase of
shares of Common Stock of the Company prior to the Distribution Date.

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

      Section 24. Exchange.

            (a)   (i)   The Board of Directors of the Company may, at its
option, at any time on or after the occurrence of a Section 11(a)(ii) Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock of the Company at an exchange ratio of
one (1) share of Common Stock of the Company per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as the
"Section 24(a)(i) Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors of the Company shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock of the Company.


                  (ii)  Notwithstanding the foregoing, the Board of Directors of
      the Company may, at its option, at any time on or after the occurrence of
      a Section 11(a)(ii) Event, exchange all or part of the then outstanding
      and exercisable Rights (which shall not include Rights that have become
      null and void pursuant to the provisions of Section 7(e) hereof) for
      shares of Common Stock of the Company at an exchange ratio specified in
      Section 24(a)(i), as appropriately adjusted to reflect any stock split,
      stock dividend or similar transaction occurring after the date of this
      Agreement. Subject to the adjustment described in the foregoing sentence,
      each Right may be exchanged for that number of shares of Common Stock of
      the Company obtained by dividing the Spread (as defined in Section
      11(a)(iii)) by the then Fair Market Value per one ten-thousandth (0.0001)
      of a share of Preferred Stock on the earlier of (x) the date on which any
      person becomes an Acquiring Person or (y) the date on which a tender or
      exchange offer by any Person (other than an Exempt Person) is first
      published or sent or given within the meaning of


                                       33
<PAGE>
      Rule 14d-4(a) of the Exchange Act or any successor rule, if upon
      consummation thereof such Person could become an Acquiring Person (such
      exchange ratio being referred to herein as the "Section 24(a)(ii) Exchange
      Ratio"). Notwithstanding the foregoing, the Board of Directors of the
      Company shall not be empowered to effect such exchange at any time after
      any Person (other than an Exempt Person), together with all Affiliates and
      Associates of such Person, becomes the Beneficial Owner of 50% or more of
      the Common Stock of the Company.

            (b)   Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights pursuant to Section 11(a)(ii) shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number of
shares of Common Stock of the Company equal to the number of such Rights held by
such holder multiplied by the Section 24(a)(i) Exchange Ratio or the Section
24(a)(ii) Exchange Ratio, as applicable; provided, however, that the holder of a
Right exchanged pursuant to this Section 24 shall continue to have the right to
purchase securities or other property of the Principal Party following a Section
13 Event that has occurred or may thereafter occur. The Company shall promptly
give notice of any such exchange in accordance with Section 26 hereof and shall
promptly mail a notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books of the Rights
Agent; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the shares of Common Stock of the Company for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become null and void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.

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

            (d)   In the event that there shall not be sufficient shares of
Common Stock of the Company or Preferred Stock (or Preferred Stock Equivalents)
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock of the Company or Preferred Stock (or Preferred Stock Equivalent)
for issuance upon exchange of the Rights.

            (e)   The Company shall not be required to issue fractions of Common
Stock of the Company or to distribute certificates which evidence fractional
shares of Common Stock of

                                       34
<PAGE>
the Company. If the Company elects not to issue such fractional shares of Common
Stock of the Company, the Company shall pay, in lieu of such fractional shares
of Common Stock of the Company, to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock of the
Company 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 of the
Company. For the purposes of this paragraph (e), the Fair Market Value of a
whole share of Common Stock of the Company shall be the closing price of a share
of Common Stock of the Company (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.

      Section 25. Notice of Certain Events.

            (a)   In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular periodic cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of 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, or to effect any sale, mortgage or other transfer (or to
permit one or more of its Subsidiaries to effect any sale, mortgage or other
transfer), in one transaction or a series of related transactions, of 50% or
more of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to, any other Person (other than a Subsidiary of the Company in one
or more transactions each of which is not prohibited by the proviso at the end
of the first sentence of Section 11(n) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Stock of the Company payable in Common Stock of the
Company or to effect a subdivision, combination or consolidation of the Common
Stock of the Company (by reclassification or otherwise than by payment of
dividends in Common Stock of the Company) then in each such case, the Company
shall give to each holder of a Right Certificate and to the Rights Agent, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares of Common
Stock of the Company and/or 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 twenty (20) 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 twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock of the
Company and/or Preferred Stock, whichever shall be the earlier; provided,
however, no such notice shall be required pursuant to this Section 25 as a
result of any Subsidiary of the Company effecting a consolidation or merger with
or into, or effecting a sale or other transfer of assets or earnings power to,
any other Subsidiary of the Company in a manner not inconsistent with the
provisions of this Agreement.

                                       35
<PAGE>
            (b)   In case any Section 11(a)(ii) Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right Certificate and to the Rights Agent, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.

      Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, by facsimile transmission or by nationally-recognized
overnight courier addressed (until another address is filed in writing with the
Rights Agent) as follows:

            iRobot Corporation
            63 South Avenue
            Burlington, MA 01803
            Facsimile No.: (781) 345-0201
            Attention: Chief Executive Officer

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

            Computershare Trust Company, Inc.
            350 Indiana Street, Suite 800
            Golden, CO 80401
            Facsimile No.: 303-262-0700
            [Attention:                          ]
                        ------------------------

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

      Section 27. Supplements and Amendments. Prior to the occurrence of a
Section 11(a)(ii) Event, the Company and the Rights Agent shall, if the Board of
Directors of the Company so directs, supplement or amend any provision of this
Agreement as the Board of Directors of the Company may deem necessary or
desirable without the approval of any holders of certificates representing
shares of Common Stock of the Company. From and after the occurrence of a
Section 11(a)(ii) Event, the Company and the Rights Agent shall, if the Board of
Directors of the Company so directs, supplement or amend this Agreement without
the approval of any holder of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or supplement
the provisions hereof in any manner which the Board of Directors of the Company
may deem necessary or

                                       36
<PAGE>
desirable and which shall not adversely affect the interests of the holders of
Right Certificates (other than an Acquiring Person or any Affiliate or Associate
of an Acquiring Person); provided, however, that from and after the occurrence
of a Section 11(a)(ii) Event 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 the benefits
to, the holders of Rights (other than an Acquiring Person or any Affiliate or
Associate of an Acquiring Person). Without limiting the foregoing, the Company
may at any time prior to the occurrence of a Section 11(a)(ii) Event amend this
Agreement to lower the threshold set forth in Section 1(a) to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
Common Stock of the Company then known by the Company to be Beneficially Owned
by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Common Stock of the Company for or pursuant to the terms of any
such plan) and (ii) 10%. Upon the delivery of such certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment, and any failure of the Rights Agent
to so execute such supplement or amendment shall not affect the validity of the
actions taken by the Board of Directors of the Company pursuant to this Section
27. Prior to the occurrence of a Section 11(a)(ii) Event, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock of the Company. Notwithstanding any other provision hereof, the
Rights Agent's consent must be obtained regarding any amendment or supplement
pursuant to this Section 27 which alters the Rights Agent's rights or duties.

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

      Section 29. Determinations and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including without limitation,
the right and power to (i) interpret the provisions of this Agreement and (ii)
make all determinations and computations 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 in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject any member of the Board of Directors to any liability to the
holders of the Rights or to any other person.

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

                                       37
<PAGE>
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock of the Company).

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

      Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and to be performed entirely within such State. The courts of the State
of Delaware and of the United States of America located in the State of Delaware
(the "Delaware Courts") shall have exclusive jurisdiction over any litigation
arising out of or relating to this Agreement and the transactions contemplated
hereby, and any Person commencing or otherwise involved in any such litigation
shall waive any objection to the laying of venue of such litigation in the
Delaware Courts and shall not plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum.

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

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

      Section 35. Force Majeure. Notwithstanding anything to the contrary
contained herein, neither the Company nor the Rights Agent shall be liable for
any delay or failure in performance resulting directly from any act or event
beyond its reasonable control and without the fault or gross negligence of the
delayed or non-performing party that causes a sudden, substantial or widespread
disruption in business activities, including, without limitation, fire, flood,
natural disaster or act of God, strike or other industrial disturbance, war
(declared or undeclared), embargo, blockade, legal restriction, riot,
insurrection, act of terrorism, disruption in transportation, communications,
electric power or other utilities, or other vital infrastructure or any means of
disrupting or damaging internet or other computer networks or facilities (each,
a "Force Majeure Condition"); provided, that such delayed or non-performing
party shall use reasonable commercial efforts to resume performance as soon as
practicable. If any Force Majeure Condition occurs, the party delayed or unable
to perform shall give immediate written

                                       38
<PAGE>
notice to the other party, stating the nature of the Force Majeure Condition and
any action being taken to avoid or minimize its effect.

                  [Remainder of page intentionally left blank]

                                       39
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as an instrument under seal and attested, all as of the day and
year first above written.

ATTEST:                                     iRobot Corporation

By:                                         By:
   ---------------------------------            --------------------------------
                                                  Name:
                                                  Title:

ATTEST:                                     Computershare Trust Company, Inc.,
                                            as Rights Agent

By:                                         By:
    --------------------------------            --------------------------------
                                                  Name:
                                                  Title:

                                            By:
                                                --------------------------------
                                                  Name:
                                                  Title:
<PAGE>
                                    EXHIBIT A


                    CERTIFICATE OF DESIGNATIONS, PREFERENCES
                            AND RIGHTS OF A SERIES OF
                                 PREFERRED STOCK

                                       OF

                               IROBOT CORPORATION

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

IROBOT CORPORATION, a corporation organized and existing under the General
Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

      That, pursuant to authority conferred upon the Board of Directors by
the Second Amended and Restated Certificate of Incorporation, as amended, of
said corporation, and pursuant to the provisions of Section 151 of Title 8 of
the Delaware Code of 1953, said Board of Directors, at a meeting duly held on
October 21, 2005, adopted a resolution providing for the designations,
preferences and relative, participating, optional or other rights, and the
qualifications, limitations or restrictions thereof, of a Series of Preferred
Stock, which resolution is as follows:


                            See attached pages 2A-7A
<PAGE>



                         VOTE OF DIRECTORS ESTABLISHING
                   SERIES A-1 JUNIOR PARTICIPATING CUMULATIVE
                                 PREFERRED STOCK
                                       OF
                               IROBOT CORPORATION

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

      VOTED, that pursuant to authority conferred upon and vested in the Board
of Directors by the Second Restated Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), of iRobot Corporation (the "Corporation"),
the Board of Directors hereby establishes and designates a series of Preferred
Stock of the Corporation, and hereby fixes and determines the relative rights
and preferences of the shares of such series, in addition to those set forth in
the Certificate of Incorporation, as follows:

      Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A-1 Junior Participating Cumulative Preferred Stock" (the
"Series A-1 Preferred Stock"), and the number of shares initially constituting
such series shall be 150,000; provided, however, that if more than a total of
150,000 shares of Series A-1 Preferred Stock shall be issuable upon the exercise
of Rights (the "Rights") issued pursuant to the Shareholder Rights Agreement
dated as of [____________], between the Corporation and Computershare Trust
Company, Inc., as Rights Agent (the "Rights Agreement"), the Board of Directors
of the Corporation, pursuant to Section 151(g) of the General Corporation Law of
the State of Delaware, may direct by resolution or resolutions that a
certificate be properly executed, acknowledged, filed and recorded, in
accordance with the provisions of Section 103 thereof, providing for the total
number of shares of Series A-1 Preferred Stock authorized to be issued to be
increased (to the extent that the Certificate of Incorporation then permits) to
the largest number of whole shares (rounded up to the nearest whole number)
issuable upon exercise of such Rights.

      Section 2. Dividends and Distributions.

      (A) (i) Subject to the rights of the holders of any shares of any series
of preferred stock (or any similar stock) ranking prior and superior to the
Series A-1 Preferred Stock with respect to dividends, the holders of shares of
Series A-1 Preferred Stock, in preference to the holders of shares of common
stock and of any other junior stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first 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-1 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 provisions for
adjustment hereinafter set forth, 10,000 times the aggregate per share amount of
all cash dividends, and 10,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions,


                                      2-A
<PAGE>

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-1 Preferred
Stock. The multiple of cash and non-cash dividends declared on the common stock
to which holders of the Series A-1 Preferred Stock are entitled, which shall be
10,000 initially but which shall be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Dividend Multiple." In the event
the Corporation shall at any time after [____________] (the "Rights Declaration
Date") (i) declare or pay any dividend on common stock payable in shares of
common stock, or (ii) effect a subdivision or combination or consolidation of
the outstanding shares of common stock (by reclassification or otherwise than by
payment of a dividend in shares of common stock) into a greater or lesser number
of shares of common stock, then in each such case the Dividend Multiple
thereafter applicable to the determination of the amount of dividends which
holders of shares of Series A-1 Preferred Stock shall be entitled to receive
shall be the Dividend Multiple applicable immediately prior to such event
multiplied 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.

            (ii) Notwithstanding anything else contained in this paragraph (A),
the Corporation shall, out of funds legally available for that purpose, declare
a dividend or distribution on the Series A-1 Preferred Stock as provided in this
paragraph (A) 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-1 Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

      (B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A-1 Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A-1 Preferred Stock,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue 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-1 Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A-1
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 in accordance with applicable law a record date for the
determination of holders of shares of Series A-1 Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than


                                      3-A
<PAGE>

such number of days prior to the date fixed for the payment thereof as may be
allowed by applicable law.

      Section 3. Voting Rights. In addition to any other voting rights required
by law, the holders of shares of Series A-1 Preferred Stock shall have the
following voting rights:

      (A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A-1 Preferred Stock shall entitle the holder thereof to 10,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
The number of votes which a holder of a share of Series A-1 Preferred Stock is
entitled to cast, which shall initially be 10,000 but which may be adjusted from
time to time as hereinafter provided, is hereinafter referred to as the "Vote
Multiple." In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on common stock payable in
shares of common stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of common stock (by reclassification or
otherwise than by payment of a dividend in shares of common stock) into a
greater or lesser number of shares of common stock, then in each such case the
Vote Multiple thereafter applicable to the determination of the number of votes
per share to which holders of shares of Series A-1 Preferred Stock shall be
entitled shall be the Vote Multiple immediately prior to such event multiplied
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-1 Preferred Stock, the holders of shares of common stock and the
holders of shares of any other capital stock of this Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.

      (C) Except as otherwise required by applicable law or as set forth herein,
holders of Series A-1 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.

      Section 4. Certain Restrictions.

      (A) Whenever dividends or distributions payable on the Series A-1
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
shares of Series A-1 Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:

            (i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A-1 Preferred Stock;

            (ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding


                                      4-A
<PAGE>

up) with the Series A-1 Preferred Stock, except dividends paid ratably on the
Series A-1 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) except as permitted in subsection 4(A)(iv) below, redeem,
purchase or otherwise acquire for consideration shares of any stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A-1 Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A-1
Preferred Stock; or

            (iv) purchase or otherwise acquire for consideration any shares of
Series A-1 Preferred Stock, or any shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A-1 Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.

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

      Section 5. Reacquired Shares. Any shares of Series A-1 Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.

      Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made (x) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A-1 Preferred Stock unless, prior thereto, the holders of shares of
Series A-1 Preferred Stock shall have received an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment, plus an amount equal to the greater of (1) $10,000.00 per share
or (2) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 10,000 times the aggregate amount to be
distributed per share to holders of common stock, or (y) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A-1 Preferred Stock, except distributions made
ratably on the Series A-1 Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In the event the
Corporation shall


                                      5-A
<PAGE>

at any time after the Rights Declaration Date (i) declare or pay any dividend on
common stock payable in shares of common stock, or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of common stock (by
reclassification or otherwise than by payment of a dividend in shares of common
stock) into a greater or lesser number of shares of common stock, then in each
such case the aggregate amount per share to which holders of shares of Series
A-1 Preferred Stock were entitled immediately prior to such event under clause
(x) 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.

      Neither the consolidation of nor merging of the Corporation with or into
any other corporation or corporations, nor the sale or other transfer of all or
substantially all of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation within the meaning of
this Section 6.

      Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of common stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A-1 Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 10,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of common stock is changed or exchanged,
plus accrued and unpaid dividends, if any, payable with respect to the Series
A-1 Preferred Stock. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare or pay any dividend on common stock payable
in shares of common stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of common stock (by reclassification or
otherwise than by payment of a dividend in shares of common stock) into a
greater or lesser number of shares of common stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A-1 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.

      Section 8. Redemption. The shares of Series A-1 Preferred Stock shall not
be redeemable; provided, however, that the foregoing shall not limit the ability
of the Corporation to purchase or otherwise deal in such shares to the extent
otherwise permitted hereby and by law.

      Section 9. Ranking. Unless otherwise expressly provided in the Certificate
of Incorporation or a Certificate of Designations relating to any other series
of preferred stock of the Corporation, the Series A-1 Preferred Stock shall rank
junior to every other series of the Corporation's preferred stock previously or
hereafter authorized, as to the payment of dividends and the distribution of
assets on liquidation, dissolution or winding up and shall rank senior to the
common stock.


                                      6-A
<PAGE>

      Section 10. Amendment. The Certificate of Incorporation and this
Certificate of Designations shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A-1 Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds or more of the outstanding shares
of Series A-1 Preferred Stock, voting separately as a class.

      Section 11. Fractional Shares. Series A-1 Preferred Stock may be issued in
whole shares or in any fraction of a share that is one ten-thousandth
(1/10,000th) of a share or any integral multiple of such fraction, 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-1 Preferred Stock.
In lieu of fractional shares, the Corporation may elect to make a cash payment
as provided in the Rights Agreement for fractions of a share other than one
ten-thousandth (1/10,000th) of a share or any integral multiple thereof.


                                      7-A
<PAGE>


      I, __________________, _____________________, do make this certificate,
hereby declaring and certifying that this is my act and deed on behalf of the
Corporation this ___ of [_________] 2005.


                                            ________________________________
                                            By:
                                            Title:

<PAGE>
                                    EXHIBIT B

                           [Form of Right Certificate]

Certificate No. R-______ Rights

      NOT EXERCISABLE AFTER [10 YEARS FOLLOWING RIGHTS AGREEMENT] OR EARLIER IF
NOTICE OF REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF IROBOT CORPORATION, AT $0.0001 PER RIGHT, ON THE TERMS SET FORTH IN
THE SHAREHOLDER RIGHTS AGREEMENT BETWEEN IROBOT CORPORATION AND COMPUTERSHARE
TRUST COMPANY, INC., AS RIGHTS AGENT, DATED AS OF [______________] (THE "RIGHTS
AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

                                Right Certificate

                               IROBOT CORPORATION

      This certifies that ________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Shareholder Rights Agreement dated as of [_________________] (the "Rights
Agreement") between iRobot Corporation (the "Company") and Computershare Trust
Company, Inc., as Rights Agent (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to the close of business on [10 YEARS FOLLOWING
RIGHTS AGREEMENT] at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one ten-thousandth of a fully
paid, non-assessable share of the Series A-1 Junior Participating Cumulative
Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of
$120.00 per one ten-thousandth of a share (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and the related Certificate duly executed. The number of Rights
evidenced by this Right Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Exercise Price per
share set forth above, are the number and Exercise Price as of _______, based on
the 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 Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person or Associate or Affiliate thereof, 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.

<PAGE>

      As provided in the Rights Agreement, the Exercise Price and the number of
shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.

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

      This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exercised. If this Right
Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this Right
Certificate duly marked to indicate that such exercise has occurred as set forth
in the Rights Agreement.

      Under certain circumstances, subject to the provisions of the Rights
Agreement, the Board of Directors of the Company at its option may exchange all
or any part of the Rights evidenced by this Certificate for shares of the
Company's Common Stock or Preferred Stock at an exchange ratio (subject to
adjustment) specified in the Rights Agreement.

      Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Board of Directors of the Company at its
option at a redemption price of $0.0001 per Right (payable in cash, Common Stock
or other consideration deemed appropriate by the Board of Directors).

      The Company is not obligated to issue fractional shares of stock upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one ten-thousandth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts). If
the Company elects not to issue such fractional shares, in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.

      No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock, Common Stock or any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for


                                       2
<PAGE>

the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.

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

      WITNESS the facsimile signature of the proper officers of the Company as a
document under corporate seal.


Attested:                                   IROBOT CORPORATION

By:___________________________              By: ____________________________
Secretary                                       Name: Helen Greiner
                                                Title: Chairman of the Board


Countersigned:

COMPUTERSHARE TRUST COMPANY, INC.

By:___________________________
     Name:
     Title:


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                   [FORM OF REVERSE SIDE OF RIGHT CERTIFICATE]

                               FORM OF ASSIGNMENT
                (TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
               HOLDER DESIRES TO TRANSFER THE RIGHT CERTIFICATE.)


      FOR VALUE RECEIVED ___________________________ hereby sells, assigns and
transfers unto __________________________ (Please print name and address of
transferee) __________________________ this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ___________________ Attorney, to transfer the within Right Certificate
on the books of the within-named Company, with full power of substitution.

      Dated: _________, _____              ___________________________________
                                           ___________________________________
                                           Signature

      Signature Guaranteed: ____________________________________________________

                                   CERTIFICATE

      The undersigned hereby certifies by checking the appropriate boxes that:

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

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

      Dated: _________, _____              ___________________________________
                                           ___________________________________
                                           Signature


<PAGE>


                                     NOTICE

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


<PAGE>


                          FORM OF ELECTION TO PURCHASE

                      (TO BE EXECUTED IF HOLDER DESIRES TO
                        EXERCISE THE RIGHT CERTIFICATE.)

To IROBOT CORPORATION:

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

Please insert social security or other identifying taxpayer number:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)

      If such number of Rights shall not be all the Rights evidenced by this
Right Certificate or if the Rights are being exercised pursuant to Section
11(a)(ii) of the Rights Agreement, a new Right Certificate for the balance of
such Rights shall be registered in the name of and delivered to:

Please insert social security or other identifying taxpayer number:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)

      Dated: _________, _____              ___________________________________
                                           ___________________________________
                                           Signature

Signature Guaranteed: __________________________________________________________



<PAGE>


                                   CERTIFICATE

      The undersigned hereby certifies by checking the appropriate boxes that:

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

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

      Dated: _________, _____              ___________________________________
                                           ___________________________________
                                           Signature


<PAGE>


                                     NOTICE

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