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                               i-STAT CORPORATION

                          CERTIFICATE OF DESIGNATION OF
                      SERIES D CONVERTIBLE PREFERRED STOCK

         i-STAT Corporation (the "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 Corporation's Board of
Directors (the "Board") by the Corporation's Restated Certificate of
Incorporation, as amended and including any Certificate of Designations filed
therewith (the "Certificate"), and pursuant to Section 151 of the General
Corporation Law of the State of Delaware, the Board at a meeting duly held on
December 5, 2001, adopted resolutions (i) authorizing a new series of the
Corporation's previously authorized preferred stock, $0.10 par value per share,
and (ii) providing for the designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or
restrictions thereof, of 30,000 shares of Series D Convertible Preferred Stock
of the Corporation, as follows:

         RESOLVED, that the Corporation is authorized to issue 30,000 shares of
Series D Convertible Preferred Stock, $0.10 par value per share, which shall
have the following powers, designations, preferences and other special rights:

         Section 1. Designation, Amount and Par Value. The series of preferred
stock shall be designated as the Corporation's Series D Convertible Preferred
Stock (the "Preferred Stock") and the number of shares so designated shall be
30,000 (which shall not be subject to increase without the consent of the
holders (each, a "Holder" and collectively, the "Holders") of a majority of the
Preferred Stock.). Each share of Preferred Stock shall have a par value of $.10
and a stated value equal to $1,000 (the "Stated Value"). Capitalized terms used
and not defined elsewhere in this Certificate of Designation shall have the
respective meanings ascribed to them in Section 9.

         Section 2. Ranking. The Preferred Stock shall rank, with respect to
dividend distributions and distributions upon a Liquidation Event (as defined
herein), senior to all classes of common stock of the Corporation (including the
Common Stock) and senior to any other class of capital stock or series of
preferred stock established by the Corporation prior to or after the date hereof
(the "Original Issue Date"). All classes of Common Stock of the Corporation and
any other class of capital stock or series of preferred stock established prior
to or after the Original Issue Date to which the Preferred Stock is senior are
collectively referred to herein as "Junior Securities."

         Section 3. Dividends.


         (a) Each holder of Preferred Stock shall be entitled to receive, out of
funds legally available for the payment of dividends, cumulative dividends in an
amount per share equal to the Applicable Percentage (as defined herein) of the
Series D Liquidation Preference Payment (as defined herein) as of the
immediately preceding Dividend Payment Date (as defined herein) (or, for the
initial Dividend Period (as defined



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herein), as of the Original Issue Date). Dividends paid pursuant to this Section
3(a) shall be payable in arrears on March 31, June 30, September 30 and December
31 of each year (each of such dates being a "Dividend Payment Date" and each
such quarterly period being a "Dividend Period"). Each such dividend shall be
payable to the holders of record of shares of the Preferred Stock on the 10th
day prior to the relevant Dividend Payment Date, as they appear on the stock
records of the Corporation at the close of business on such record dates. Such
dividends shall accrue quarterly from the Original Issue Date to the Holders
thereof (except that dividends on any amounts added to the Series D Liquidation
Preference Payment pursuant to Section 3(b) shall accrue from the date such
amounts are added to the Series D Liquidation Preference Payment), whether or
not declared by the Board and whether or not in any Dividend Period or Periods
there shall be funds of the Corporation legally available for the payment of
such dividends.

         (b) At the Corporation's option, dividends may be paid in cash. If
dividends are not paid in cash on any Dividend Payment Date for the immediately
preceding Dividend Period (or portion thereof if less than a full Dividend
Period), the unpaid amount shall be added to the Series D Liquidation Preference
Payment for purposes of calculating succeeding Dividend Periods' dividends.
Notwithstanding anything else contained herein, once any dividends for the
immediately preceding Dividend Period (or portion thereof if less than a full
Dividend Period) are so added to the Series D Liquidation Preference Payment,
such dividends will no longer be payable in cash.

         (c) The "Applicable Percentage" shall be eight percent (8%) per annum;
provided that if at any time the Per Share Market Value of the Common Stock is
at or above $15.00 per share (subject to equitable adjustment for stock splits,
combinations, stock dividends and similar events) for 45 consecutive Trading
Days, such rate shall be reduced to two percent (2%) per annum beginning on the
next Trading Day and shall continue at such rate unless and until the Per Share
Market Value of the Common Stock is below $10.00 per share (subject to equitable
adjustment for stock splits, combinations, stock dividends and similar events)
for 45 consecutive Trading Days, at which point such rate shall re-adjust to
eight percent (8%) per annum the next Trading Day. The adjustment to the
Applicable Percentage pursuant to this Section 3(c) shall continue until all
shares of Preferred Stock shall have been converted pursuant to Section 7 or
redeemed pursuant to Section 8 hereto. The Applicable Percentage for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Preferred Stock shall be computed on the basis of the actual
number of days elapsed over four (4) 90-day quarters and a 360-day year. The
Applicable Percentage shall also be subject to adjustment in accordance with
Section 8(c) hereof.

         Section 4. Liquidation Preference.


         (a) In the event of any liquidation, dissolution or winding up of the
Corporation (a "Liquidation Event"), whether voluntary or involuntary, the
Holders of the shares of Preferred Stock then outstanding shall be entitled to
receive, prior and in preference to any payment or distribution of any of the
assets of the Corporation to the holders of any Junior Securities, by reason of
their ownership thereof, an amount per share equal to the sum of $1,000 per
share (the "Series D Issuance Price") (subject to equitable adjustment for stock
splits, combinations, stock dividends and similar events) and (ii) an amount
equal to all accrued and/or


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declared but unpaid dividends on such share, computed to the date payment
thereof is made as provided in Section 3 hereof (together with the Series D
Issuance Price, the "Series D Liquidation Preference Payment"). If upon the
occurrence of any Liquidation Event, the assets and funds to be distributed
among the holders of the Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then the
entire assets and funds of the Corporation available for distribution shall be
distributed pro rata among the Holders of the Preferred Stock in proportion to
the number of shares of Preferred Stock owned by each such Holder bears to the
total number of shares of Preferred Stock then outstanding.

         (b) (i) For purposes of this Section 4(b)(i), (x) any merger,
reorganization or consolidation of the Corporation into or with any other
corporation or entity (including a stock for stock exchange or stock for cash
exchange), or (y) a sale, conveyance, transfer, license, lease, abandonment or
other disposition or transfer of all or substantially all of the assets of the
Corporation, including without limitation, all or substantially all of its
intellectual property (other than by means of a license in the ordinary course
of business), in one or more related transactions shall be deemed a Liquidation
Event of the Corporation unless the holders of capital stock of the Corporation
immediately prior thereto shall, immediately thereafter, hold as a group the
right to cast at least a majority of votes of all holders of voting securities
of the resulting or surviving corporation or entity, or the parent of such
surviving corporation or entity, on any matter on which any such holder of
voting securities shall be entitled to vote.

         (ii) In any such events, if the consideration received by the
Corporation is other than cash, its value will be deemed its fair market value;
provided that, the fair market value of any securities or assets shall be valued
as follows:

              (x) Securities not subject to an investment letter or other
similar restrictions on free marketability:

                   (A) If traded on Nasdaq, the value shall be deemed to be the
average of the closing bid prices of the securities on Nasdaq or such exchange,
as applicable, over the thirty (30) day period ending three (3) days prior to
the consummation of the Liquidation Event;

                   (B) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices (whichever is
applicable) over the thirty (30) day period ending three (3) days prior to the
consummation of the Liquidation Event; and

                   (C) If there is no active public market, the value shall be
the fair market value thereof, as determined by an investment banking firm
selected by the Corporation and reasonably approved by holders of a majority of
the then outstanding shares of Preferred Stock.

              (y) The method of valuation of securities subject to an investment
letter or other restrictions on free marketability (other than restrictions
arising solely by virtue of a stockholder's status as an affiliate or former
affiliate) shall be to make an


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appropriate discount from the market value determined as above in (x)(A), (B) or
(C) to reflect the approximate fair market value thereof, as determined by an
investment banking firm selected by the Corporation and reasonably approved by
holders of a majority of the then outstanding shares of Preferred Stock.

         (c) The Corporation shall give each holder of record of Preferred Stock
written notice of an impending Liquidation Event not later than fifteen (15)
days prior to the stockholders' meeting called to approve such transaction or
not later than fifteen (15) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending Liquidation Event and the
provisions of this Section 4, and the Corporation shall thereafter give such
holders prompt notice of any material changes. The transaction shall in no event
take place sooner than fifteen (15) days after the Corporation has given the
first notice provided for herein or sooner than fifteen (15) days after the
Corporation has given notice of any material changes provided for herein;
provided, however, that such periods may be shortened upon the written consent
of the holders of Preferred Stock that represent at least a majority of the
voting power of all then outstanding shares of the Preferred Stock.

         Section 5. Voting Rights.


         Except as may be otherwise provided in this Certificate of Designation
or required by law, the Preferred Stock shall vote together with all other
classes and series of stock of the Corporation as a single class on all actions
to be taken by the stockholders of the Corporation. The Holders shall have the
right to one vote on each such action for each whole share of Common Stock into
which such Preferred Stock could then be converted (taking into account the
Conversion limitations then applicable pursuant to Section 7(a)(iii), and with
respect to such vote, such Holder shall have full voting rights and powers equal
to the voting rights and powers of the holders of Common Stock, and shall be
entitled, notwithstanding any provision hereof, to notice of any stockholders'
meeting in accordance with the By-Laws of the Corporation.

         Section 6. Protective Provisions.


         The Corporation shall not, and shall not permit any of its Subsidiaries
to, without the affirmative vote or written consent of the Holders of a majority
of the then outstanding shares of Preferred Stock, voting or consenting as a
separate class:

         (a) make any Restricted Payment (as defined below). For the purposes
hereof, "Restricted Payment" means (i) the declaration or payment of any
dividends or any other distributions of any sort by the Corporation in respect
of its Junior Securities, (ii) the direct or indirect purchase, redemption or
other acquisition or retirement for value of any of the Corporation's capital
stock or any security exercisable or exchangeable for its capital stock (other
than the redemption of the Preferred Stock) or the exercise by the Corporation
of any option to exchange any capital stock that by its terms is exchangeable
solely at its option, or (iii) the setting apart of money or other property for
any redemption, purchase or other analogous fund for the redemption, purchase,
or acquisition of any of the Corporation's capital stock or any security
exercisable or exchangeable for the Corporation's capital stock;


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         (b) engage in Affiliated Party Transactions, except for transactions
(i) on an arm's-length basis for fair value with Abbott Laboratories or other
distribution or technology partners; (ii) with any Wholly-Owned Subsidiary;
(iii) on an arm's-length basis for fair value with a Qualified Joint Venture;
(iv) made for tax planning purposes; (iv) where the aggregate value of the
transaction is not in excess of $100,000 or (v) that are loans to officers and
employees on terms approved by a majority of the entire Board, provided that the
aggregate principal amount and accrued interest on loans to officers and
employees outstanding may not exceed $5,000,000 at any one time;

         (c) reorganize, reclassify or recapitalize any shares of capital stock
of the Corporation;

         (d) acquire any assets (whether by means of an asset purchase, stock
purchase or merger) in excess of $1,000,000 in any one transaction or series of
related transactions that take place within a twelve-month period that are not
reasonably related to the Corporation's business as presently conducted;

         (e) convey, sell, lease, assign, transfer, exchange or otherwise
dispose of any of its property, business or assets whether now owned or
hereafter acquired in excess of $1,000,000 in any one transaction or series of
related transactions that take place within a twelve-month period, except for:
(i) the sale or other disposition of any tangible or intangible personal
property that has become obsolete or worn out and is disposed of in the ordinary
course of business, (ii) the sale or other disposition of inventory made in the
ordinary course of business, (iii) capitalized leases and sale/leaseback
transactions (subject to the rights of the Purchasers (as such term is defined
in the Purchase Agreement) in Section 4.7 of the Purchase Agreement and to the
provisions of Section 6(g) hereof) or (iv) the sale of the Corporation which is
structured as a sale of all or substantially all of the assets of the
Corporation;

         (f) make any advance, loan, extension of credit or capital contribution
to, or purchase any stock (other than in connection with acquisitions made by
the Corporation in accordance with paragraph (d)), bonds, notes, debentures or
other securities of, or make any other investment in, any Person except: (i) the
Corporation may make investments in, or loans or advances to, any Wholly-Owned
Subsidiaries and any Wholly-Owned Subsidiaries may make investments in, or loans
or advances to, the Corporation, (ii) the Corporation or its Wholly-Owned
Subsidiaries may acquire and hold receivables owing to it, if created in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms, (iii) the Corporation may make Full Recourse Loans to
Qualified Joint Ventures pro rata to their equity ownership in such Qualified
Joint Ventures; provided that such Full Recourse Loans are made on the same
terms as, and contemporaneously with, Full Recourse Loans made by the other
equity owners of such Qualified Joint Venture; (iv) the Corporation may make
loans to officers and employees on terms approved by a majority of the entire
Board, provided that the aggregate principal amount and accrued interest on
loans outstanding to officers and employees may not exceed $5,000,000 at any one
time; (v) direct obligations of the government of the United States of America
or any agency or instrumentality therein, (vi) interest-bearing certificates of
deposit or repurchase agreements issued by a commercial banking institution
located in and authorized to do business as a commercial bank in the United
States, and (vii)


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money market accounts maintained at a commercial bank located in and authorized
to do business as a commercial bank in the United States;

         (g) create, incur, assume, permit, guarantee or otherwise become or
remain liable, directly or indirectly, with respect to any Indebtedness except
Indebtedness in the aggregate amount at any one time outstanding of $12,000,000,
provided that Corporation may, or permit any of its Subsidiaries to, create,
incur, assume, permit, guarantee or otherwise become or remain liable, directly
or indirectly, for Indebtedness in excess of $12,000,000 at any one time
outstanding if at the date of such creation, incurrence, permission, guarantee
or becoming or remaining liable for such Indebtedness in excess of $12,000,000,
the Corporation and its consolidated Subsidiaries are meeting or surpassing the
Operating Targets. The Operating Targets shall mean targets, on a consolidated
basis, for the Corporation's revenues, operating income, earnings before
interest, taxes, depreciation and amortization, and net income as proposed by
the Corporation and approved by the Holders of a majority of the outstanding
shares of Preferred Stock in their sole and absolute discretion. For so long as
the Corporation and its Subsidiaries are not meeting or surpassing the Operating
Targets at a time when there is more than $12,000,000 of Indebtedness in the
aggregate outstanding (the "Excess Indebtedness"), the Corporation shall not, or
shall not permit any of its Subsidiaries, to incur, assume, permit, guarantee or
otherwise become or remain liable, directly or indirectly, with respect to any
additional Indebtedness but may refinance or renew the Excess Indebtedness on
terms no less favorable to the Corporation and its Subsidiaries than the Excess
Indebtedness being refinanced or renewed;

         (h) permit to exist limitations on the payment of dividends or
distributions by the Corporation (with respect to the Preferred Stock) or by its
Subsidiaries;

         (i) amend, alter or repeal its Certificate of Incorporation, this
Certificate of Designation or By-laws (whether by merger, consolidation,
reclassification, combination or otherwise), or waive any provisions thereof, in
a manner that would adversely affect the rights, preferences, privileges or
powers of the Preferred Stock or which would increase or decrease the amount of
authorized shares of Preferred Stock;

         (j) create or authorize the creation of or issuance of (including
without limitation, by way of merger, consolidation, reclassification,
recapitalization or otherwise), or obligate itself to authorize or issue, any
equity security of the Corporation, ranking senior to, or pari passu with, the
Preferred Stock with respect to rights, privileges, liquidations preferences,
dividends or distributions;

         (k) effect any liquidation, dissolution or winding up of the
Corporation; or

         (l) enter into any contract, agreement or understanding with respect to
any of the foregoing.

         Section 7. Conversion.


         (a) (i) Optional Conversion. Subject to the limitations set forth in
Section 7(a)(iii), each share of Preferred Stock shall be convertible into
shares of Common Stock at the Conversion Ratio, at the option of the Holder, at
any time and from time to time. Holders shall


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effect conversions by providing the Corporation with the form of conversion
notice attached hereto as Exhibit A (a "Conversion Notice"). Each Conversion
Notice shall specify the number of shares of Preferred Stock to be converted,
the number of shares of Preferred Stock owned prior to the conversion at issue,
the number of shares of Preferred Stock owned subsequent to the conversion at
issue and the date on which such conversion is to be effected, which date may
not be prior to the date the Holder delivers such Conversion Notice by facsimile
(the "Conversion Date"). The number of shares of Preferred Stock shown as owned
by the Holder prior to and giving effect to a conversion shall control absent
manifest or mathematical error. If no Holder Conversion Date is specified in a
Conversion Notice, the Holder Conversion Date shall be the date that such
Conversion Notice is deemed delivered hereunder. To effect conversions of
Preferred Stock, a Holder shall not be required to surrender the certificate(s)
representing such shares of Preferred Stock to the Corporation unless all of the
shares of Preferred Stock represented thereby are so converted.

              (ii) [Intentionally Omitted]

              (iii) Certain Conversion Restrictions. Notwithstanding anything to
the contrary contained herein, the number of shares of Common Stock that may be
acquired by a Holder that is not an Institutional Investor upon any conversion
of shares of Preferred Stock (or otherwise in respect hereof) shall, until such
time as the Standstill Agreement has been terminated or has expired, be limited
to the extent necessary to insure that, following such conversion, the total
number of shares of Common Stock then beneficially owned by such Holder and its
affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with such Holder's for purposes of Section 13(d) of the
Exchange Act, does not exceed 14.99% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). Upon termination or expiration of the
Standstill Agreement, the number of shares of Common Stock that may be acquired
by such Holder upon any conversion of shares of Preferred Stock (or otherwise in
respect hereof) shall be limited to the extent necessary to prevent such Holder
from becoming an "Acquiring Person" under the Plan as a result of such
conversion. For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of a Conversion Notice hereunder will
constitute a representation by a Holder that it has evaluated the limitation set
forth in this paragraph and determined that issuance of the full number of
Underlying Shares requested in such Conversion Notice is permitted under this
paragraph. The Corporation will have no obligation to issue shares of Common
Stock in excess of the limitation referred to in this Section until such time,
if any, as such shares of Common Stock may be issued in compliance with such
limitation.

         (b) (i) Not later than three Trading Days after each Conversion Date,
the Corporation will issue and deliver to the Holder at the Corporation's
expense a certificate or certificates registered in such name or names as the
Holder may direct which shall be free of restrictive legends and trading
restrictions (other than those required by Section 4.1 of the Purchase
Agreement) representing the number of shares of Common Stock being acquired upon
the conversion of shares of Preferred Stock. The Corporation shall, upon request
of the Holder, if available, use its best efforts to deliver any certificate or
certificates required to be delivered by the Corporation under this Section
electronically through the Depository Trust Corporation or


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another established clearing corporation performing similar functions. If in the
case of any Conversion Notice such certificate or certificates are not delivered
to or as directed by the applicable Holder by the fourth Trading Day after the
Conversion Date, the Holder shall be entitled to elect by written notice to the
Corporation at any time on or before its receipt of such certificate or
certificates thereafter, to rescind such conversion, in which event the
Corporation shall immediately return the certificates representing the shares of
Preferred Stock tendered for conversion.

              (ii) In addition to any other rights available to the Holder, if
the Corporation fails to deliver to the Holder such certificate or certificates
pursuant to Section 3(b)(i), by the fourth Trading Day after the Conversion
Date, and if after such fourth Trading Day the Holder purchases (in an open
market transaction or otherwise) Common Stock to deliver in satisfaction of a
sale by such Holder of the Underlying Shares which the Holder was entitled to
receive upon such conversion (a "Buy-In"), then the Corporation shall (A) pay in
cash to the Holder the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the Common Stock so purchased
exceeds (y) the product of (1) the aggregate number of shares of Common Stock
that such Holder was entitled to receive from the conversion at issue multiplied
by (2) the market price of the Common Stock at the time of the sale giving rise
to such purchase obligation and (B) at the option of the Holder, either return
the shares of Preferred Stock for which such conversion was not honored or
deliver to such Holder the number of shares of Common Stock that would have been
issued had the Corporation timely complied with its conversion and delivery
obligations under Section 3(b)(i). For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted conversion of shares of Preferred Stock with respect to which the
market price of the Underlying Shares on the date of conversion totaled $10,000,
under clause (A) of the immediately preceding sentence the Corporation shall be
required to pay the Holder $1,000. The Holder shall provide the Corporation
written notice indicating the amounts payable to the Holder in respect of the
Buy-In. Nothing herein shall limit a Holder's right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the
Corporation's failure to timely deliver certificates representing shares of
Common Stock upon conversion of the shares of Preferred Stock as required
pursuant to the terms hereof.

         (c) (i) The conversion price for each share of Preferred Stock in
effect on any Conversion Date (the "Conversion Price") shall equal $8.00
(subject to equitable adjustment for stock splits, combinations, stock dividends
and similar events).

              (ii) If the Corporation, at any time while shares of Preferred
Stock are outstanding, shall distribute to all holders of Common Stock (and not
to the Holders) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security, then in each such case the Conversion
Price at which each share of Preferred Stock shall thereafter be convertible
shall be determined by multiplying the Conversion Price in effect immediately
prior to the record date fixed for determination of stockholders entitled to
receive such distribution by a fraction of which the denominator shall be the
Per Share Market Value determined as of the record date mentioned above, and of
which the numerator shall be such Per Share Market Value on such record date
less the then fair market value at such record date of the portion of such
assets or evidence of indebtedness so distributed applicable to one outstanding
share of Common


                                      -8-
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Stock as determined by the Board in good faith. If the Holder shall dispute the
findings of the Corporation's Board, then such fair market value shall be
determined by an investment banking firm selected by the Corporation and
reasonably approved by the Holders of a majority of the outstanding Preferred
Stock. In either case the adjustments shall be described in a statement provided
to the Holders of the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.

              (iii) All calculations under this Section 7 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. The number
of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Corporation or its Subsidiaries, and
the disposition of any such shares shall be considered an issue or sale of
Common Stock.

              (iv) Whenever the Conversion Price is adjusted pursuant to the
terms hereof, the Corporation shall promptly mail to each Holder a notice
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.

              (v) In case of any reclassification, reorganization or
recapitalization of the Common Stock, or any compulsory share exchange pursuant
to which the Common Stock is entitled to receive or is converted into other
securities, cash or property, the Holders shall have the right thereafter to
convert such shares only into the shares of stock and other securities, cash and
property receivable upon or deemed to be held by holders of Common Stock
following such reclassification, reorganization, recapitalization or share
exchange, and the Holders shall be entitled upon such event to receive such
amount of securities, cash or property as a holder of the number of shares of
Common Stock of the Corporation into which such shares of Preferred Stock could
have been converted immediately prior to such reclassification, reorganization,
recapitalization or share exchange would have been entitled. This provision
shall similarly apply to successive reclassifications or share exchanges. The
Corporation shall not effect any transaction described in this subsection unless
the resulting successor or acquiring entity (if not the Corporation) assumes by
written instrument the obligation to deliver to the Holders of the Preferred
Stock such shares of stock and/or securities as, in accordance with the
foregoing provisions, the Holders of Preferred Stock may be entitled to receive.

              (vi) Subject to Section 8, in case of any merger or consolidation
of the Corporation with or into another Person, sale by the Corporation of more
than one-half of the assets of the Corporation (on an as valued basis) in one or
a series of related transactions or similar transactions, a Holder shall have
the right thereafter to convert its shares of Preferred Stock into the shares of
stock and other securities, cash and property receivable upon or deemed to be
held by holders of Common Stock following such merger, consolidation or sale,
and such Holder shall be entitled upon such event or series of related events to
receive such amount of securities, cash and property as the shares of Common
Stock into which such shares of Preferred Stock could have been converted
immediately prior to such merger, consolidation or sale would have been
entitled. The terms of any such merger, sale or consolidation shall include such
terms so as continue to give the Holders the right to receive the securities,
cash and property set forth


                                      -9-
<PAGE>

in this Section upon any conversion or redemption following such event. This
provision shall similarly apply to successive such events. The Corporation shall
not effect any transaction described in this subsection unless the resulting
successor or acquiring entity (if not the Corporation) assumes by written
instrument the obligation to deliver to the Holders of the Preferred Stock such
shares of stock and/or securities as, in accordance with the foregoing
provisions, the Holders of Preferred Stock may be entitled to receive.

              (vii) If (a) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock, (b) the Corporation shall declare a
special nonrecurring cash dividend on or a redemption of the Common Stock, (c)
the Corporation shall authorize the granting to all holders of Common Stock,
rights or warrants to subscribe for or purchase any shares of capital stock of
any class or of any rights, (d) the approval of any stockholders of the
Corporation shall be required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Corporation is a party,
any sale or transfer of all or substantially all of the assets of the
Corporation, or any compulsory share of exchange whereby the Common Stock is
converted into other securities, cash or property, or (e) the Corporation shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Corporation; then the Corporation shall notify the Holders at
their last addresses as they shall appear upon the stock books of the
Corporation, at least 20 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer or
share exchange is expected to become effective or close, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share
exchange. Holders are entitled to convert shares of Preferred Stock during the
20-day period commencing the date of such notice to the effective date of the
event triggering such notice.

         (d) The Corporation covenants that it will at all times reserve and
keep available out of its authorized and unissued shares of Common Stock solely
for the purpose of issuance upon conversion of Preferred Stock, each as herein
provided, free from preemptive rights or any other actual contingent purchase
rights of persons other than the Holders, not less than such number of shares of
Common Stock as shall be issuable upon the conversion of all outstanding shares
of Preferred Stock. The Corporation covenants that all shares of Common Stock
that shall be so issuable shall, upon issue, be duly and validly authorized and
issued and fully paid and nonassessable.

         (e) Upon a conversion hereunder the Corporation shall not be required
to issue stock certificates representing fractions of shares of Common Stock,
but may if otherwise permitted, make a cash payment in respect of any final
fraction of a share based on the Per Share Market Value at such time. If any
fraction of an Underlying Share would, except for the provisions of this
Section, be issuable upon a conversion hereunder, the Corporation shall pay an
amount in cash equal to the Conversion Ratio multiplied by such fraction.


                                      -10-
<PAGE>

         (f) The issuance of certificates for Common Stock on conversion of
Preferred Stock shall be made without charge to the Holders thereof for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided that the Corporation shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate upon conversion in a name
other than that of the Holder of such shares of Preferred Stock so converted.

         (g) Any and all notices or other communications or deliveries to be
provided by the Holders of the Preferred Stock hereunder, including, without
limitation, any Conversion Notice, shall be in writing and delivered personally,
by facsimile or sent by a nationally recognized overnight courier service,
addressed to the attention of the Chief Financial Officer of the Corporation
addressed to 104 Windsor Center Drive, East Windsor, NJ 08520, Facsimile No.:
(609) 243-9311, attention Chief Financial Officer, or to such other address or
facsimile number as shall be specified in writing by the Corporation for such
purpose. Any and all notices or other communications or deliveries to be
provided by the Corporation hereunder shall be in writing and delivered
personally, by facsimile or sent by a nationally recognized overnight courier
service, addressed to each Holder at the facsimile telephone number or address
of such Holder appearing on the books of the Corporation, or if no such
facsimile telephone number or address appears, at the principal place of
business of the Holder. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 5:30 p.m. (New
York City time)(with confirmation of transmission), (ii) the date after the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified in this Section later than 5:30 p.m.
(New York City time) (with confirmation of transmission) on any date and earlier
than 11:59 p.m. (New York City time) on such date (with confirmation of
transmission), (iii) upon receipt, if sent by a nationally recognized overnight
courier service (next day service specified), or (iv) upon actual receipt by the
party to whom such notice is required to be given.

         Section 8. Redemption.


         (a) Mandatory Redemption. The Corporation shall not have the right to
call or redeem at any time all or any shares of Preferred Stock, except as
expressly authorized herein. On the Mandatory Redemption Date, the Corporation
shall redeem all of the shares of Preferred Stock. The "Mandatory Redemption
Date" shall be the tenth (10th) anniversary of the Original Issue Date or if
such date is not a Trading Day, the first Trading Day thereafter.

         (b) Optional Redemption. At any time after the sixth (6th) anniversary
of the Original Issue Date (the "Optional Redemption Date", and together with
the Mandatory Redemption Date, the "Redemption Date"), the Corporation may
redeem at its option all of the shares of Preferred Stock held by the Holders by
providing written notice (the "Notice") thereof to the Holders on a date not
less than fifteen (15) and not more than sixty (60) days prior to the Optional
Redemption Date which shall be fixed by the Corporation and specified on the
Notice; provided, that the Corporation may redeem less than all of the shares of
Preferred Stock held by the Holders only upon the consent of the Holders of a
majority of shares of Preferred Stock. In the event the Corporation redeems
pursuant to this Section 8(b) less than all of the shares of


                                      -11-
<PAGE>

Preferred Stock held by the Holders upon the consent to the Holders of a
majority of shares of Preferred Stock, the Corporation shall redeem such shares
of Preferred Stock on a pro rata basis determined by the aggregate amount of
shares of Preferred Stock held by each Holder.

         (c) Redemption Price and Payment. The Preferred Stock to be redeemed on
a Redemption Date shall be redeemed by paying for each share, in cash, out of
any assets of the Corporation legally available therefor, an amount equal to the
Redemption Price (as defined below). For purposes of this Section 8(c), the
"Redemption Price" shall mean $1,000 plus accrued and unpaid dividends on each
outstanding share of Preferred Stock.

         (d) Mechanics of Redemption. At least 10 but not more than 60 days
prior to a Redemption Date, written notice (the "Redemption Notice") shall be
given by the Corporation by mail, postage prepaid, or by facsimile or email
transmission, to each holder of record (at the close of business on the business
day next preceding the day on which the Redemption Notice is given) of shares of
Preferred Stock notifying such holder of the redemption and specifying the
Redemption Price, the Redemption Date and the place where the Redemption Price
shall be payable. The Redemption Notice shall be addressed to each Holder of
shares of Preferred Stock to be redeemed at his address as shown by the records
of the Corporation. From and after the close of business on the Redemption Date,
if on the Redemption Date the Redemption Price is paid or tendered for payment,
then notwithstanding that the certificates evidencing any of the shares of
Preferred Stock elected to be redeemed shall not have been surrendered,
dividends with respect to such shares of Preferred Stock shall cease to accrue
and all rights of holders of such shares of Preferred Stock subject to
redemption (except the right to receive the Redemption Price without interest
upon surrender of their certificate or certificates) shall cease with respect to
such shares, and such shares shall not thereafter be transferred on the books of
the Corporation or be deemed to be outstanding for any purpose whatsoever. Any
shares of Preferred Stock redeemed pursuant to this Section 8 shall be canceled
and shall not under any circumstances be reissued; and the Corporation may from
time to time take such appropriate corporate action as may be necessary to
reduce accordingly the number of authorized shares of Preferred Stock. The
Corporation shall not send a Notice to redeem the shares of Preferred Stock
pursuant to Section 8(b) unless the assets of the Corporation legally available
for redemption are sufficient to redeem the total number of shares of Preferred
Stock to be redeemed on an Optional Redemption Date and the Corporation redeems
all such shares. In the event of a redemption of Preferred Stock pursuant to
Section 8(a), if (i) the assets of the Corporation legally available for
redemption of shares of Preferred Stock on the Mandatory Redemption Date are
insufficient to redeem the total number of outstanding shares of Preferred Stock
to be redeemed on such Mandatory Redemption Date or (ii) the Corporation fails
for any other reason to redeem the total number of outstanding shares of
Preferred Stock to be redeemed on such Mandatory Redemption Date other than
because of a failure on the part of a holder of Preferred Stock to deliver a
certificate evidencing such shares (a "Non-Redemption Event"), the holders of
shares of Preferred Stock to be redeemed shall share ratably in any assets
legally available for redemption of such shares according to the respective
amounts which would be payable with respect to the full number of shares owned
by them if all such outstanding shares were redeemed in full and with respect to
the dividend on the Preferred Stock to be paid under Section 3 hereof, the
Applicable Percentage shall increase by 2% over the Applicable Percentage for
the prior period on the expiration date of each sixty (60) day period after the
Mandatory Redemption Date that the Preferred Stock is not redeemed in full up to
a maximum of 16%. The shares of Preferred Stock not redeemed remain


                                      -12-
<PAGE>

outstanding and entitled to all rights and preferences provided herein. At any
time thereafter when additional funds of the Corporation are legally available
for the redemption of shares of Preferred Stock, such assets will be used
immediately to redeem the balance of such shares, or such portion thereof for
which assets are then legally available, on the basis set forth above.

         (e) Non-Redemption Event.

              (i) Notwithstanding the provisions of Section 3 hereof, in the
event of a Non-Redemption Event, the Corporation shall promptly give written
notice thereof to each Holder and the Holders shall, immediately upon the giving
of written notice to the Corporation by the Holders of at least a majority of
the outstanding shares of Preferred Stock voting together as a single class, be
entitled to elect the number of additional directors (collectively, the "Series
D Directors") which shall provide the Holders with the greater of (x) percentage
representation on the Board equal to the ownership percentage of the Corporation
represented by the sum of (i) the Preferred Shares held by the Holders on an as
converted basis, (ii) all shares of Common Stock held by the Holders and (iii)
the shares of Common Stock issuable upon the exercise of unexercised warrants
then held by the Holders (in each case without regard to any limitation on
percentage ownership as provided for in the Abbott Standstill Agreement, Abbott
Purchase Agreement or any other limitation on conversion or exercise) and (y)
20% of the directors on the Board; and the holders of shares of Common Stock and
of any other class or series of voting stock, as a class, shall be entitled to
elect the remaining members of the Board.

              (ii) Whenever under the provisions of subsection (i) above the
right shall have accrued to the Holders of the shares of Preferred Stock as a
class to elect the Series D Directors, the Holders of Preferred Stock shall be
entitled immediately thereafter to act by written consent without a meeting to
elect the Series D Directors. In the event that the holders of Preferred Stock
do not choose to act by written consent in lieu of a meeting, the Board shall,
within ten days after delivery to the Corporation at its principal office of a
request to such effect by the Holders of at least 10% of the then outstanding
shares of Preferred Stock, call a special meeting of the holders of Preferred
Stock for the election of directors, to be held upon not less than 20 nor more
than 30 days' notice to such holders. At any meeting so called or at any other
meeting held while the holders of the outstanding shares of Preferred Stock
shall have the voting power provided in subsection (i) above, the holders of a
majority of the then outstanding shares of Preferred Stock, present in person or
by proxy, shall be sufficient to constitute a quorum for the election of
directors as herein provided. So long as the Non-Redemption Event shall
continue, any vacancy in the office of a Series D Director may be filled by
written consent of the Series D Directors remaining in office or, if none
remains in office, by vote of the Holders of a majority of the outstanding
shares of Preferred Stock, voting together as a single class. As long as the
Non-Redemption Event shall continue, holders of any of the outstanding capital
stock (other than the Preferred Stock) of the Corporation entitled to vote on
the election of directors shall not be entitled to vote on the election or
removal of the Series D Directors.

              (iii) Upon redemption of all outstanding Preferred Stock pursuant
to this Section 8, the holders of the shares of Preferred Stock shall be
divested of all of the voting rights specified in subsection (i) above. The term
of office of each Series D Director elected by the holders of the Preferred
Stock pursuant to such special voting right shall forthwith terminate


                                      -13-
<PAGE>

and the number of directors constituting the entire Board shall be reduced by
the number of the Series D Directors.

         Section 9. Definitions. For the purposes hereof, the following terms
shall have the following meanings:


         "Abbott Purchase Agreement" means the Common Stock Purchase Agreement,
dated as of August 3, 1998, between the Corporation and Abbott Laboratories.

         "Affiliate" means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 144 of the
Securities Act.

         "Affiliated Party Transactions" means any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate.

         "Common Stock" means the Corporation's common stock, par value $0.15
per share, and stock of any other class into which such shares may hereafter
have been reclassified or changed.

         "Conversion Ratio" means, at any time, a fraction, the numerator of
which is the Series D Liquidation Preference Payment and the denominator of
which is the Conversion Price at such time.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Full Recourse Loan" means a loan for which the liability to the
Corporation is not limited to specific assets for payment.

         "Indebtedness" means (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes, or other similar instruments
and all reimbursement or other obligations in respect of letters of credit,
bankers acceptances, interest rate swaps, or other financial products, (c) all
obligations under capitalized leases, (d) all obligations or liabilities of
others secured by a lien on any asset of the Corporation or any Subsidiary,
irrespective of whether such obligation or liability is assumed, (e) all
obligations of the Corporation or any Subsidiary for the deferred purchase price
of assets (other than trade debt incurred in the ordinary course of business)
and (f) any obligation guaranteeing or intended to guarantee any obligation of
any other Person.

         "Institutional Investor" shall have the meaning set forth in the Plan
as in effect on the Original Issuance Date.

         "Nasdaq" means the Nasdaq National Market.

         "Per Share Market Value" means, for any date, the price determined by
the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on the


                                      -14-
<PAGE>

Nasdaq or a Subsequent Market, the closing bid price per share of the Common
Stock for such date (or the nearest preceding date) on the Nasdaq or such
Subsequent Market on which the Common Stock is then listed or quoted; (b) if
prices for the Common Stock are then quoted on the OTC Bulletin Board, the
closing bid price per share of the Common Stock for such date (or the nearest
preceding date) so quoted; (c) if prices for the Common Stock are then reported
in the "Pink Sheets" published by the National Quotation Bureau Incorporated (or
a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported; or
(d) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by a
majority-in-interest of the Holders.

         "Person" means a corporation, an association, a partnership, a limited
liability company, an organization, a business, an individual, a government or
political subdivision thereof or a governmental agency.

         "Plan" means the Stockholder Protection Agreement, dated as of June 26,
1995, between the Corporation and First Fidelity Bank, N.A., as rights agent.

         "Purchase Agreement" means the Securities Purchase Agreement, dated as
of December 6, 2001, to which the Corporation and the original Holders are
parties, as amended, modified or supplemented from time to time in accordance
with its terms.

         "Qualified Joint Venture" means any joint venture (whether in the form
of a corporation, partnership, or other entity) in which the Corporation or a
Wholly-Owned Subsidiary has at least a 20% equity interest; provided that the
joint venture engages in activity reasonably related to the Corporation's
business as conducted on the Original Issuance Date.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Standstill Agreement" means the Standstill Agreement, dated as of
August 3, 1998, between the Corporation and Abbott Laboratories.

         "Subsequent Market" means either the New York Stock Exchange, American
Stock Exchange or Nasdaq SmallCap Market.

         "Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which 50% or more of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person (or combination
thereof) and (ii) any partnership or limited liability company (a) the sole
general partner or the managing general partner or member of which is such
Person or a Subsidiary of such Person or (b) the only general partners or
members of which are such Person or of one or more Subsidiaries of such Person
(or any combination thereof).

         "Trading Day" means (a) a day on which the shares of Common Stock are
traded on the Nasdaq or on such Subsequent Market on which the shares of Common
Stock are then listed or quoted, or (b) if the shares of Common Stock are not
listed on the Nasdaq or a


                                      -15-
<PAGE>

Subsequent Market, a day on which the shares of Common Stock are traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the
shares of Common Stock are not quoted on the OTC Bulletin Board, a day on which
the shares of Common Stock are quoted in the over-the-counter market as reported
by the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, that in the
event that the shares of Common Stock are not listed or quoted as set forth in
(a), (b) and (c) hereof, then Trading Day shall mean any day except Saturday,
Sunday and any day which shall be a legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.

         "Underlying Shares" means, collectively, the shares of Common Stock
into which the shares of Preferred Stock are convertible in accordance with the
terms hereof.

         "Wholly-Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding capital stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person and the Wholly-Owned Subsidiaries of such Person.



                                      -16-
<PAGE>


         IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be duly executed as of the 10th day of December, 2001.

                 i-STAT Corporation

                 By:           /s/ Roger J. Mason
                        --------------------------------------------
                        Name:   Roger J. Mason
                        Title:  Vice President of Finance, Treasurer
                                and Chief Financial Officer





<PAGE>


                                    EXHIBIT A

                              NOTICE OF CONVERSION

(To be Executed by the Registered Holder
in order to convert shares of Preferred Stock)

         The undersigned hereby elects to convert the number of shares of Series
D Convertible Preferred Stock indicated below, into shares of common stock, par
value $0.15 per share (the "Common Stock"), of i-STAT Corporation, a Delaware
corporation (the "Corporation"), according to the conditions hereof, as of the
date written below. If shares are to be issued in the name of a person other
than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Corporation in accordance therewith. No fee will be
charged to the Holder for any conversion, except for such transfer taxes, if
any.

Conversion calculations:        Date to Effect Conversion

                                Number of shares of Preferred Stock to be
                                Converted

                                Stated Value of shares of Preferred Stock
                                to be Converted

                                Number of shares of Preferred Stock remaining
                                after Conversion

                                Number of shares of Common Stock to be Issued

                                Applicable Conversion Price
                                Signature

                                Name
                                Address

By the delivery of this Notice of Conversion the undersigned represents and
warrants to the Corporation that its ownership of the Common Stock does not
exceed the amounts determined in accordance with Section 13(d) of the Exchange
Act, specified under Section 7(a)(iii) of the Certificate of Designations
governing the rights and privileges of the Series D Convertible Preferred Stock.

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