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

                              HOMESERVICES.COM INC.


                                       and


                 CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
                                 as Rights Agent


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



                                Rights Agreement
                          Dated as of October 14, 1999




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                                TABLE OF CONTENTS

 Section                                                               Page
 -------                                                               ----

 1.   Certain Definitions  . . . . . . . . . . . . . . . . . . . . . .    1

 2.   Appointment of Rights Agent  . . . . . . . . . . . . . . . . . . . 11

 3.   Issuance of Rights Certificates  . . . . . . . . . . . . . . . . . 12

 4.   Form of Rights Certificates  . . . . . . . . . . . . . . . . . . . 15

 5.   Countersignature and Registration  . . . . . . . . . . . . . . . . 17

 6.   Transfer, Split Up, Combination and Exchange of Rights
      Certificates; Mutilated, Destroyed, Lost or Stolen Rights
      Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

 7.   Exercise of Rights; Purchase Price; Expiration Date of Rights  . . 20

 8.   Cancellation and Destruction of Rights
      Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

 9.   Reservation and Availability of Capital Stock  . . . . . . . . . . 26

 10.  Preferred Stock Record Date  . . . . . . . . . . . . . . . . . .   29

 11.  Adjustment of Purchase Price, Number and Kind of Shares or Number
      of Rights  . . . . . . . . . . . . . . . . . . . . . . . . . . .   30

 12.  Certificate of Adjusted Purchase Price or Number of Shares . . .   50

 13.  Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or
      Earning Power  . . . . . . . . . . . . . . . . . . . . . . . . .   50

 14.  Fractional Rights and Fractional Shares  . . . . . . . . . . . .   56

 15.  Rights of Action . . . . . . . . . . . . . . . . . . . . . . . .   59

 16.  Agreement of Rights Holders  . . . . . . . . . . . . . . . . . .   60

 17.  Rights Certificate Holder Not Deemed a Stockholder . . . . . . .   61

 18.  Concerning the Rights Agent  . . . . . . . . . . . . . . . . . .   62
<PAGE>

 19.  Merger or Consolidation or Change of Name of Rights Agent  . . .   63

 20.  Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . .   64

 21.  Change of Rights Agent . . . . . . . . . . . . . . . . . . . . .   69

 22.  Issuance of New Rights Certificates  . . . . . . . . . . . . . .   71

 23.  Redemption and Termination . . . . . . . . . . . . . . . . . . .   72

 24.  Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . .   73

 25.  Notice of Certain Events . . . . . . . . . . . . . . . . . . . .   76

 26.  Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   78

 27.  Supplements and Amendments . . . . . . . . . . . . . . . . . . .   79

 28.  Successors . . . . . . . . . . . . . . . . . . . . . . . . . . .   80

 29.  Determinations and Action by the Board, etc. . . . . . . . . . . . 80

 30.  Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . 81

 31.  Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

 32.  Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . 83

 33.  Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

 34.  Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . 83


                                    EXHIBITS

 Exhibit A --   Form of Certificate of Designation,
                Preferences and Rights

 Exhibit B --   Form of Rights Certificates

 Exhibit C --   Form of Summary of Rights


<PAGE>

                                RIGHTS AGREEMENT


           RIGHTS  AGREEMENT,  dated as of October 14,  1999 (the  "Agreement"),
 between  HomeServices.Com  Inc., a Delaware  corporation (the  "Company"),  and
 ChaseMellon  Shareholder  Services,  L.L.C.,  a New  Jersey  limited  liability
 company (the "Rights Agent").

                               W I T N E S S E T H

           WHEREAS, on October 6, 1999 (the "Rights Dividend Declaration Date"),
 the Board of  Directors  of the  Company  authorized  and  declared  a dividend
 distribution  of one Right (as  hereinafter  defined)  for each share of Common
 Stock (as  hereinafter  defined)  of the  Company  outstanding  at the close of
 business on the date of the  consummation of the initial public offering of the
 Common  Stock of the  Company  (the  "Record  Date"),  and has  authorized  the
 issuance of one Right (as such number may  hereinafter be adjusted  pursuant to
 the  provisions  of Section 11(p) hereof) for each share of Common Stock of the
 Company issued between the Record Date (whether  originally issued or delivered
 from  the  Company's  treasury)  and  the  Distribution  Date  (as  hereinafter
 defined),   each  Right  initially  representing  the  right  to  purchase  one
 one-thousandth of a share of Series A Junior  Participating  Preferred Stock of
 the Company (the "Preferred  Stock") having the rights,  powers and preferences
 set forth in the form of Certificate  of  Designation,  Preferences  and Rights
 attached  hereto as  Exhibit A, upon the terms and  subject  to the  conditions
 hereinafter set forth (the "Rights");
<PAGE>

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

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

                (a)  "Acquiring  Person"  shall  mean any  Person  who or which,
 together  with all  Affiliates  and  Associates  of such  Person,  shall be the
 Beneficial Owner of 15% or more of the shares of Common Stock then outstanding,
 but shall not include (i) the  Company,  (ii) any  Subsidiary  of the  Company,
 (iii) any employee  benefit plan of the Company,  or of any  Subsidiary  of the
 Company,  or any Person or entity  organized,  appointed or  established by the
 Company for or pursuant to the terms of any such plan, (iv) MidAmerican  Energy
 Holdings  Company,  an  Iowa  corporation  ("MidAmerican  Holdings"),  and  its
 affiliates  and  any  successors  thereof,  (v)  any  Person  who  becomes  the
 Beneficial Owner of fifteen percent (15%) or more of the shares of Common Stock
 then  outstanding  as a result of a reduction in the number of shares of Common
 Stock  outstanding  due to the  repurchase  of shares  of  Common  Stock by the
 Company unless and until such Person, after becoming aware that such Person has
 become  the  Beneficial  Owner  of  fifteen  percent  (15%) or more of the then
 outstanding shares of Common Stock, acquires beneficial ownership of additional
 shares of Common Stock  representing  one percent (1%) or more of the shares of
 Common Stock then  outstanding,  (vi) any Person who acquires  shares of Common
 Stock from the Beneficial Owner of at least 15% or more of the shares of Common
 Stock that was outstanding  immediately upon consummation of the initial public
 offering  of  the  Common  Stock  of  the  Company,  and as a  result  of  such
 acquisition such Person also becomes the Beneficial Owner of 15% or more of the
 then  outstanding  shares of Common  Stock,  or (vii) any such  Person  who has
 reported  or is  required  to  report  such  ownership  (but  less than 20%) on
 Schedule 13G under the  Securities  and Exchange Act of 1934, as amended and in
 effect on the date of the Agreement (the "Exchange  Act") (or any comparable or
 successor  report) or on Schedule 13D under the Exchange Act (or any comparable
 or successor  report)  which  Schedule  13D does not state any  intention to or
 reserve the right to control or  influence  the  management  or policies of the
 Company or engage in any of the actions  specified  in Item 4 of such  schedule
 (other than the  disposition of the Common Stock) and,  within 10 Business Days
 of being requested by the Company to advise it regarding the same, certifies to
 the Company that such Person acquired shares of Common Stock in excess of 14.9%
 inadvertently or without knowledge of the terms of the Rights and who, together
 with all  Affiliates and  Associates,  thereafter  does not acquire  additional
 shares of Common Stock while the Beneficial  Owner of 15% or more of the shares
 of  Common  Stock  then  outstanding;  provided,  however,  that if the  Person
 requested  to so  certify  fails to do so within 10  Business  Days,  then such
 Person shall become an Acquiring Person immediately after such 10-Business- Day
 period.
<PAGE>

           (b) "Act" shall mean the Securities Act of 1933, as amended.

                (c)  "Affiliate"  and  "Associate"  shall  have  the  respective
 meanings  ascribed  to such  terms  in Rule  12b-2  of the  General  Rules  and
 Regulations under the Exchange Act.

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

                     (i) which such Person or any of such Person's Affiliates or
      Associates, directly or indirectly, has the right to acquire (whether such
      right is  exercisable  immediately  or only  after  the  passage  of time)
      pursuant to any agreement, arrangement or understanding (whether or not in
      writing)  or upon the  exercise of  conversion  rights,  exchange  rights,
      rights,  warrants or options,  or  otherwise;  provided,  however,  that a
      Person shall not be deemed the "Beneficial  Owner" of, or to "beneficially
      own," (A) securities  tendered pursuant to a tender or exchange offer made
      by such Person or any of such Person's Affiliates or Associates until such
      tendered securities are accepted for purchase or exchange,  (B) securities
      issuable  upon  exercise of Rights at any time before the  occurrence of a
      Triggering Event (as hereinafter defined), or (C) securities issuable upon
      exercise of Rights from and after the  occurrence  of a  Triggering  Event
      which  Rights  were  acquired  by  such  Person  or any of  such  Person's
      Affiliates  or Associates  before the  Distribution  Date (as  hereinafter
      defined) or pursuant to Section  3(a) or Section 22 hereof (the  "Original
      Rights")  or  pursuant  to  Section  11(i)  hereof in  connection  with an
      adjustment made with respect to any Original Rights;

                     (ii) which such Person or any of such  Person's  Affiliates
      or Associates, directly or indirectly, has the right to vote or dispose of
      or has "beneficial  ownership" of (as determined pursuant to Rule 13d-3 of
      the General  Rules and  Regulations  under the  Exchange  Act),  including
      pursuant to any agreement, arrangement or understanding, whether or not in
      writing;  provided,  however,  that  a  Person  shall  not be  deemed  the
      "Beneficial  Owner" of, or to "beneficially  own," any security under this
      subparagraph   (ii)  as  a  result  of  an   agreement,   arrangement   or
      understanding  to vote such  security if such  agreement,  arrangement  or
      understanding:  (A) arises solely from a revocable proxy given in response
      to a  public  proxy or  consent  solicitation  made  pursuant  to,  and in
      accordance  with,  the  applicable  provisions  of the  General  Rules and
      Regulations  under the Exchange Act, (B) is not  reportable by such Person
      on Schedule  13D under the Exchange  Act (or any  comparable  or successor
      report) and (C) does not constitute a trust,  proxy,  power of attorney or
      other device with the purpose or effect of allowing  two or more  persons,
      acting in  concert,  to avoid  being  deemed  "beneficial  owners" of such
      security or otherwise  avoid the status of  "Acquiring  Person"  under the
      terms  of this  Agreement  or as part of a plan or  scheme  to  evade  the
      reporting requirements under Schedule 13D or Section 13(d) or 13(g) of the
      Exchange Act; or
<PAGE>

                     (iii) which are beneficially owned, directly or indirectly,
      by any other Person (or any  Affiliate or  Associate  thereof)  with which
      such Person (or any of such  Person's  Affiliates or  Associates)  has any
      agreement,  arrangement or understanding  (whether or not in writing), for
      the purpose of acquiring,  holding, voting (except pursuant to a revocable
      proxy as described in the proviso to  subparagraph  (ii) of this paragraph
      (d)) or  disposing  of any voting  securities  of the  Company;  provided,
      however,  that nothing in this  paragraph (d) shall cause a Person engaged
      in business as an underwriter of securities to be the  "Beneficial  Owner"
      of,  or to  "beneficially  own,"  any  securities  acquired  through  such
      Person's  participation  in good faith in a firm  commitment  underwriting
      until the expiration of forty days after the date of such acquisition, and
      then only if such  securities  continue to be owned by such Person at such
      expiration  of  forty  days  and  provided  further,   however,  that  any
      stockholder  of the  Company,  with  affiliate(s),  associate(s)  or other
      person(s) who may be deemed  representatives  of it serving as director(s)
      of the Company, shall not be deemed to beneficially own securities held by
      other  Persons  as  a  result  of  (i)  persons  affiliated  or  otherwise
      associated with such stockholder serving as directors or taking any action
      in connection therewith, (ii) discussing the status of its shares with the
      Company or other  stockholders of the Company similarly  situated or (iii)
      voting or  acting  in a manner  similar  to other  stockholders  similarly
      situated,  absent a  specific  finding  by the  Board of  Directors  of an
      express  agreement  among such  stockholders  to act in  concert  with one
      another as  stockholders so as to cause, in the good faith judgment of the
      Board of Directors,  each such  stockholder to be the Beneficial  Owner of
      the shares held by the other stockholder(s).
<PAGE>

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

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

                (g) "Common  Stock"  shall mean,  when used in  reference to the
 Company,  the common stock,  par value $0.01 per share, of the Company,  except
 that  "Common  Stock"  when used with  reference  to any Person  other than the
 Company  shall mean the capital  stock of such Person with the greatest  voting
 power,  or the equity  securities  or other  equity  interest  having  power to
 control or direct the management, of such Person.

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

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

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

                (k)  "Distribution  Date"  shall have the  meaning  set forth in
 Section 3(a) hereof.
<PAGE>

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

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

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

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

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

                (q)  "Person"  shall  mean any  individual,  firm,  corporation,
 partnership, limited liability company or other entity.

                (r)  "Preferred  Stock"  shall  mean  shares  of Series A Junior
 Participating  Preferred Stock, par value $0.01 per share, of the Company, and,
 to the  extent  that  there are not a  sufficient  number of shares of Series A
 Junior Participating  Preferred Stock authorized to permit the full exercise of
 the Rights,  any other series of preferred stock of the Company  designated for
 such purpose containing terms substantially  similar to the terms of the Series
 A Junior Participating Preferred Stock.

                (s)  "Principal  Party"  shall  have the  meaning  set  forth in
 Section 13(b) hereof.
<PAGE>

                (t) "Purchase Price" shall have the meaning set forth in Section
 7(b) hereof.

                (u)  "Qualified  Offer"  shall  have the  meaning  set  forth in
 Section 11(a)(ii) hereof.

                (v)  "Record  Date"  shall  have the  meaning  set  forth in the
 Recitals at the beginning of this Agreement.

                (w) "Rights" shall have the meaning set forth in the Recitals at
 the beginning of this Agreement.

                (x)  "Rights  Agent"  shall  have the  meaning  set forth in the
 parties clause at the beginning of this Agreement.

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

                (z) "Rights  Dividend  Declaration  Date" shall have the meaning
 set forth in the Recitals at the beginning of this Agreement.

                (aa) "Section 11(a)(ii) Event" shall mean any event described in
 Section 11(a)(ii) hereof.

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

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

                (dd)  "Stock  Acquisition  Date"  shall  mean the first  date of
 public  announcement  (which,  for purposes of this definition,  shall include,
 without  limitation,  a report filed or amended pursuant to Section 13(d) under
 the  Exchange  Act) by the Company or an  Acquiring  Person  that an  Acquiring
 Person has become such other than pursuant to a Qualified Offer.

                (ee) "Subsidiary"  shall mean, with reference to any Person, any
 corporation  of which an  amount of voting  securities  sufficient  to elect at
 least a majority of the directors of such  corporation is  beneficially  owned,
 directly or indirectly, by such Person, or otherwise controlled by such Person.

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

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

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

                (ii) "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 rights agent for the Company in accordance  with the
 terms  and  conditions  hereof,  and  the  Rights  Agent  hereby  accepts  such
 appointment. The Company may from time to time appoint such co-rights agents as
 it may deem necessary or desirable.
<PAGE>

           Section 3.  Issuance of Rights Certificates.

                (a) Until the  earlier of (i) the close of business on the tenth
 Business Day after the Stock  Acquisition Date or (ii) the close of business on
 the tenth Business Day (or such later date as the Board shall  determine) after
 the date that a tender or exchange offer by any Person (other than the Company,
 any Subsidiary of the Company,  any employee  benefit plan of the Company or of
 any Subsidiary of the Company, or any Person or entity organized,  appointed or
 established  by the  Company  for or pursuant to the terms of any such plan) is
 first  published  or sent or given  within the meaning of Rule  14d-2(a) of the
 General  Rules and  Regulations  under the Exchange  Act, if upon  consummation
 thereof, such Person would become an Acquiring Person, in either instance other
 than  pursuant to a Qualified  Offer (the  earlier of (i) and (ii) being herein
 referred  to as the  "Distribution  Date"),  (x) the Rights  will be  evidenced
 (subject  to  the  provisions  of  paragraph  (b)  of  this  Section  3) by the
 certificates for the Common Stock registered in the names of the holders of the
 Common  Stock (which  certificates  for Common Stock shall be deemed also to be
 certificates for Rights) and not by separate  certificates,  and (y) the Rights
 will be  transferable  only in connection  with the transfer of the  underlying
 shares of Common  Stock  (including  a  transfer  to the  Company).  As soon as
 practicable  after the  Distribution  Date,  the Company must notify the Rights
 Agent of the  Distribution  Date and request that the Company's  transfer agent
 provide a list of the Company's stockholders.  As soon as practicable after the
 Rights Agent receives such notice from the Company,  the Rights Agent will send
 by  first-class,  insured,  postage-prepaid  mail, to each record holder of the
 Common  Stock as of the close of  business  on the  Distribution  Date,  at the
 address of such holder shown on the records of the  Company,  one or more right
 certificates,  in  substantially  the form of  Exhibit  B hereto  (the  "Rights
 Certificates"),  evidencing  one Right for each share of Common  Stock so held,
 subject to  adjustment  as provided  herein.  If an adjustment in the number of
 Rights  per share of  Common  Stock has been made  pursuant  to  Section  11(p)
 hereof,  at the time of  distribution of the Rights  Certificates,  the Company
 shall make the necessary and  appropriate  rounding  adjustments (in accordance
 with Section 14(a) hereof) so that Rights Certificates  representing only whole
 numbers of Rights are  distributed  and cash is paid in lieu of any  fractional
 Rights.  As of and after the  Distribution  Date,  the Rights will be evidenced
 solely by such Rights Certificates.

                (b) The  Company  will make  available  a copy of a  Summary  of
 Rights, in substantially the form attached hereto as Exhibit C (the "Summary of
 Rights"),  to any holder of Rights who may so request  from time to time before
 the  Expiration  Date.  With  respect  to  certificates  for the  Common  Stock
 outstanding as of the Record Date, until the Distribution Date, the Rights will
 be  evidenced  by such  certificates  for the Common  Stock and the  registered
 holders  of the  Common  Stock  shall  also be the  registered  holders  of the
 associated Rights. Until the earlier of the Distribution Date or the Expiration
 Date (as such term is defined in Section  7(a)  hereof),  the  transfer  of any
 certificates  representing  shares of Common  Stock in respect of which  Rights
 have been issued shall also  constitute  the transfer of the Rights  associated
 with such shares of Common Stock.
<PAGE>

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

           This  certificate  also  evidences  and entitles the holder hereof to
      certain  Rights as set forth in the Rights  Agreement  between the Company
      and the Rights Agent  thereunder  (the "Rights  Agreement"),  the terms of
      which are hereby  incorporated  herein by reference and a copy of which is
      on file at the  principal  offices of the Company and may be obtained upon
      written  request.  Under  certain  circumstances  set forth in the  Rights
      Agreement, Rights issued to, or held by, any Person who is, was or becomes
      an Acquiring  Person or any Affiliate or Associate  thereof (as such terms
      are  defined in the Rights  Agreement),  whether  currently  held by or on
      behalf of such  Person or by any  subsequent  holder,  may become null and
      void.

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

           Section 4.  Form of Rights Certificates.

                (a) The  Rights  Certificates  (and  the  forms of  election  to
 purchase and of assignment to be printed on the reverse  thereof) shall each be
 substantially in the form set forth in Exhibit B hereto and may have such marks
 of  identification  or designation and such legends,  summaries or endorsements
 printed thereon as the Company may deem appropriate and as are not inconsistent
 with the  provisions  of this  Agreement  and which do not affect  the  rights,
 duties, or responsibilities of the Rights Agent or as may be required to comply
 with any applicable law or with any rule or regulation made pursuant thereto or
 with any rule or regulation of any stock  exchange on which the Rights may from
 time to time be listed,  or to conform to usage.  Subject to the  provisions of
 Section  11  and  Section  22  hereof,   the  Rights   Certificates,   whenever
 distributed,  shall be  dated as of the  Record  Date and on their  face  shall
 entitle the holders thereof to purchase such number of one one-thousandths of a
 share of Preferred  Stock as shall be set forth  therein at the Purchase  Price
 per one  one-thousandth  of a share,  but the  amount  and  type of  securities
 purchasable  upon the  exercise of each Right and the  Purchase  Price  thereof
 shall be subject to adjustment as provided herein.
<PAGE>

                (b) Any Rights  Certificate  issued  pursuant  to Section  3(a),
 Section 11(i) or Section 22 hereof that represents  Rights  beneficially  owned
 by: (i) an  Acquiring  Person or any  Associate  or  Affiliate  of an Acquiring
 Person,  (ii) a transferee of an Acquiring  Person (or of any such Associate or
 Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
 (iii)  a  transferee  of an  Acquiring  Person  (or of any  such  Associate  or
 Affiliate) who becomes a transferee  before or concurrently  with the Acquiring
 Person becoming such and receives such Rights pursuant to either (A) a transfer
 (whether  or not for  consideration)  from the  Acquiring  Person to holders of
 equity  interests  in such  Acquiring  Person or to any  Person  with whom such
 Acquiring  Person has any continuing  agreement,  arrangement or  understanding
 regarding the transferred Rights or (B) a transfer which the Board of Directors
 of  the  Company  has  determined  is  part  of an  agreement,  arrangement  or
 understanding  which has as a primary  purpose or effect  avoidance  of Section
 7(e) hereof  (provided  that the Company  shall have  notified the Rights Agent
 that this Section 4(b) applies),  and any Rights Certificate issued pursuant to
 Section  6 or  Section  11  hereof  upon  transfer,  exchange,  replacement  or
 adjustment of any other Rights Certificate referred to in this sentence,  shall
 contain (to the extent feasible) the following legend:

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

           Section 5.  Countersignature and Registration.

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

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

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

                (a) Subject to the provisions of Section 4(b),  Section 7(e) and
 Section 14 hereof,  at any time after the close of business on the Distribution
 Date, and at or before the close of business on the Expiration Date, any Rights
 Certificate or Certificates (other than Rights Certificates representing Rights
 that may have been exchanged pursuant to Section 24 hereof) may be transferred,
 split up, combined or exchanged for another Rights Certificate or Certificates,
 entitling   the   registered   holder  to   purchase  a  like   number  of  one
 one-thousandths  of a share of  Preferred  Stock (or,  following  a  Triggering
 Event,  Common Stock,  other securities,  cash or other assets, as the case may
 be) as the Rights  Certificate or Certificates  surrendered  then entitles such
 holder (or former holder in the case of a transfer) to purchase. Any registered
 holder  desiring  to  transfer,  split  up,  combine  or  exchange  any  Rights
 Certificate or Certificates shall make such request in writing delivered to the
 Rights Agent, and shall surrender the Rights  Certificate or Certificates to be
 transferred,  split up,  combined or  exchanged at the 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 Rights Certificate until the registered holder
 shall  have  completed  and  signed the  certificate  contained  in the form of
 assignment  on the  reverse  side of such  Rights  Certificate  and shall  have
 provided such additional  evidence of the identity of the Beneficial  Owner (or
 former Beneficial Owner) or Affiliates or Associates  thereof as the Company or
 the Rights Agent shall  reasonably  request.  Thereupon the Rights Agent shall,
 subject to Section 4(b), Section 7(e), Section 14 hereof and Section 24 hereof,
 countersign and deliver to the Person entitled thereto a Rights  Certificate or
 Rights  Certificates,  as the case may be, as so  requested.  The  Company  may
 require  payment of a sum  sufficient to cover any tax or  governmental  charge
 that may be imposed in connection with any transfer,  split up,  combination or
 exchange  of  Rights  Certificates.  The  Rights  Agent  shall  have no duty or
 obligation  under this Section  6(a) unless and until it is satisfied  that all
 such taxes and/or governmental charges have been paid.
<PAGE>

                (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 Rights  Certificate,  and,  in case of  loss,  theft  or  destruction,  of
 indemnity or security reasonably 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 Rights  Certificate
 if mutilated,  the Company will execute and deliver a new Rights Certificate of
 like  tenor to the  Rights  Agent  for  countersignature  and  delivery  to the
 registered owner in lieu of the Rights Certificate so lost,  stolen,  destroyed
 or mutilated.

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

                (a)  Subject  to  Section  7(e)  hereof,  at any time  after the
 Distribution Date the registered holder of any Rights  Certificate may exercise
 the Rights evidenced  thereby (except as otherwise  provided herein  including,
 without  limitation,  the restrictions on  exercisability  set forth in Section
 9(c),  Section  11(a)(iii)  and Section  23(a) hereof) in whole or in part upon
 surrender of the Rights Certificate,  with the form of election to purchase and
 the certificate on the reverse side thereof duly executed,  to the Rights Agent
 at the  office or  offices of the Rights  Agent  designated  for such  purpose,
 together with payment of the aggregate Purchase Price with respect to the total
 number of one  one-thousandths  of a share (or other securities,  cash or other
 assets,  as the case  may be) as to  which  such  surrendered  Rights  are then
 exercisable,  at or before the earlier of (i) 5:00 p.m., New York City time, on
 the tenth  anniversary  of the date of the  consummation  of the initial public
 offering  of the  Common  Stock of the  Company,  or such  later date as may be
 established by the Board of Directors before the expiration of the Rights (such
 date, as it may be extended by the Board,  the ("Final  Expiration  Date"),  or
 (ii) the time at which the Rights are  redeemed  or  exchanged  as  provided in
 Section 23 and  Section  24 hereof  (the  earlier of (i) and (ii) being  herein
 referred to as the "Expiration Date").
<PAGE>

                (b) The Purchase Price for each one one-thousandth of a share of
 Preferred  Stock  pursuant to the  exercise of a Right shall  initially  be the
 amount equal to the product of four times the average  daily  closing  price of
 the  Common  Stock  for the  first  five  days  of  trading  subsequent  to the
 consummation  of the initial  public  offering of the Common Stock and shall be
 subject to  adjustment  from time to time as provided in Section 11 and Section
 13(a) hereof and shall be payable in accordance with paragraph (c) below.

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

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

                (e) Notwithstanding  anything in this Agreement to the contrary,
 from and after the first  occurrence of a Section  11(a)(ii)  Event, any Rights
 beneficially  owned by (i) an Acquiring  Person or an Associate or Affiliate of
 an Acquiring  Person,  (ii) a transferee of an Acquiring Person (or of any such
 Associate or Affiliate)  who becomes a transferee  after the  Acquiring  Person
 becomes  such,  or (iii) a transferee  of an  Acquiring  Person (or of any such
 Associate or Affiliate) who becomes a transferee  before or  concurrently  with
 the Acquiring  Person becoming such and receives such Rights pursuant to either
 (A) a transfer (whether or not for consideration)  from the Acquiring Person to
 holders of equity interests in such Acquiring Person or to any Person with whom
 the Acquiring Person has any continuing agreement, arrangement or understanding
 regarding the transferred Rights or (B) a transfer which the Board of Directors
 of  the  Company  has  determined  is  part  of an  agreement,  arrangement  or
 understanding  which has as a primary  purpose or effect the  avoidance of this
 Section  7(e),  shall  become null and void  without any further  action and no
 holder of such Rights  shall have any rights  whatsoever  with  respect to such
 Rights, whether under any provision of this Agreement or otherwise. The Company
 shall use all reasonable  efforts to insure that the provisions of this Section
 7(e) and Section 4(b) hereof are complied with, but neither the Company nor the
 Rights Agent shall have any liability to any holder of Rights  Certificates  or
 any  other  Person  as  a  result  of  the   Company's   failure  to  make  any
 determinations   with  respect  to  an  Acquiring  Person  or  its  Affiliates,
 Associates or transferees hereunder.
<PAGE>

                (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 upon the occurrence of any purported
 exercise as set forth in this  Section 7 unless such  registered  holder  shall
 have (i) properly completed and signed the certificate contained in the form of
 election to purchase  set forth on the reverse  side of the Rights  Certificate
 surrendered for such exercise,  and (ii) provided such  additional  evidence of
 the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
 or  Associates  thereof as the  Company or the Rights  Agent  shall  reasonably
 request.

           Section 8. Cancellation and Destruction of Rights  Certificates.  All
 Rights  Certificates  surrendered  for  the  purpose  of  exercise,   transfer,
 split-up,  combination or exchange  shall, if surrendered to the Company or any
 of its  agents,  be  delivered  to the  Rights  Agent  for  cancellation  or in
 cancelled  form, or, if surrendered to the Rights Agent,  shall be cancelled by
 it,  and no  Rights  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 Rights Certificate purchased
 or acquired by the Company otherwise than upon the exercise thereof. The Rights
 Agent shall deliver all cancelled Rights Certificates to the Company, or shall,
 at  the  written  request  of  the  Company,   destroy  such  cancelled  Rights
 Certificates,  and in such case  shall  deliver a  certificate  of  destruction
 thereof to the Company.
<PAGE>

           Section 9.  Reservation and Availability of Capital 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 (and,  following the occurrence of a Triggering  Event,  out of
 its authorized and unissued  shares of Common Stock and/or other  securities or
 out of its authorized  and issued shares held in its  treasury),  the number of
 shares of Preferred Stock (and, following the occurrence of a Triggering Event,
 Common Stock  and/or  other  securities)  that,  as provided in this  Agreement
 including Section 11(a)(iii) hereof,  will be sufficient to permit the exercise
 in full of all outstanding Rights.

                (b) So long as the shares of Preferred Stock (and, following the
 occurrence  of a  Triggering  Event,  Common  Stock  and/or  other  securities)
 issuable and  deliverable  upon the exercise of the Rights may be listed on any
 national  securities  exchange or the Nasdaq National Market, the Company shall
 use its best  efforts to cause,  from and after such time as the Rights  become
 exercisable,  all  shares  reserved  for such  issuance  to be  listed  on such
 exchange upon official notice of issuance upon such exercise.

                (c) The Company  shall use its best efforts to (i) file, as soon
 as  practicable  following  the earliest  date after the first  occurrence of a
 Section  11(a)(ii)  Event on which the  consideration  to be  delivered  by the
 Company upon  exercise of the Rights has been  determined  in  accordance  with
 Section 11(a)(iii) hereof, a registration statement under the Act, with respect
 to the  securities  purchasable  upon exercise of the Rights on an  appropriate
 form,  (ii) cause such  registration  statement to become  effective as soon as
 practicable after such filing,  and (iii) cause such registration  statement to
 remain  effective  (with a prospectus at all times meeting the  requirements of
 the Act) until the earlier of (A) the date as of which the Rights are no longer
 exercisable  for such  securities,  and (B) the date of the  expiration  of the
 Rights.  The Company will also take such action as may be appropriate under, or
 to ensure  compliance  with,  the  securities or "blue sky" laws of the various
 states in connection  with the  exercisability  of the Rights.  The Company may
 temporarily  suspend, for a period of time not to exceed ninety (90) days after
 the date set forth in clause (i) of the first  sentence of this  Section  9(c),
 the exercisability of the Rights in order to prepare and file such registration
 statement  and permit it to become  effective.  Upon any such  suspension,  the
 Company shall issue a public  announcement  stating that the  exercisability of
 the Rights has been temporarily suspended,  as well as a public announcement at
 such time as the suspension  has been  rescinded.  In addition,  if the Company
 shall  determine  that a  registration  statement  is  required  following  the
 Distribution  Date, the Company may temporarily  suspend the  exercisability of
 the  Rights  until  such time as a  registration  statement  has been  declared
 effective. The Company shall notify the Rights Agent of any public announcement
 made by the Company  pursuant to this  Section 9(c) and will provide the Rights
 Agent with a copy of such public announcement. Notwithstanding any provision of
 this  Agreement to the  contrary,  the Rights shall not be  exercisable  in any
 jurisdiction if the requisite qualification in such jurisdiction shall not have
 been obtained,  the exercise  thereof shall not be permitted  under  applicable
 law, or a registration statement shall not have been declared effective.
<PAGE>

                (d) The Company  covenants and agrees that it will take all such
 action as may be necessary to ensure that all one one-thousandths of a share of
 Preferred Stock (and,  following the occurrence of a Triggering  Event,  Common
 Stock and/or other securities)  delivered upon exercise of Rights shall, at the
 time of delivery of the certificates for such shares (subject to payment of the
 Purchase Price),  be duly and validly  authorized and issued and fully paid and
 nonassessable.

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

           Section 10.  Preferred  Stock Record Date.  Each Person in whose name
 any  certificate  for a number of one  one-thousandths  of a share of Preferred
 Stock (or Common Stock and/or other  securities,  as the case may be) is issued
 upon the exercise of Rights shall for all purposes be deemed to have become the
 holder of record of such fractional  shares of Preferred Stock (or Common Stock
 and/or other securities,  as the case may be) represented  thereby on, and such
 certificate  shall be  dated,  the  date  upon  which  the  Rights  Certificate
 evidencing  such Rights was duly  surrendered and payment of the Purchase Price
 (and all  applicable  taxes  and  governmental  charges)  was  made;  provided,
 however,  that if the date of such  surrender  and payment is a date upon which
 the Preferred Stock (or Common Stock and/or other  securities,  as the case may
 be)  transfer  books of the Company are closed,  such Person shall be deemed to
 have become the record holder of such shares  (fractional or otherwise) on, and
 such certificate shall be dated, the next succeeding  Business Day on which the
 Preferred Stock (or Common Stock and/or other  securities,  as the case may be)
 transfer  books of the  Company  are open.  Before the  exercise  of the Rights
 evidenced thereby,  the holder of a Rights Certificate shall not be entitled to
 any rights of a stockholder 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.
<PAGE>

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

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

                     (ii) In the event any Person  shall,  at any time after the
      Rights Dividend  Declaration Date, become an Acquiring Person,  unless the
      event  causing such Person to become an Acquiring  Person is a transaction
      set forth in  Section  13(a)  hereof,  or is an  acquisition  of shares of
      Common  Stock  pursuant  to a tender  offer or an  exchange  offer for all
      outstanding  shares of Common Stock at a price and on terms  determined by
      at least a majority of the members of the Company's Board of Directors who
      are not officers of the Company and who are not representatives, nominees,
      Affiliates or Associates of an Acquiring  Person,  after receiving  advice
      from one or more  investment  banking firms, to be (a) at a price which is
      fair to stockholders  and not inadequate  (taking into account all factors
      which  such  members  of  the  Board  deem  relevant,  including,  without
      limitation,  prices which could  reasonably  be achieved if the Company or
      its  assets  were sold on an orderly  basis  designed  to realize  maximum
      value) and (b)  otherwise  in the best  interests  of the  Company and its
      stockholders  (a  "Qualified   Offer"),   then,   promptly  following  the
      occurrence  of such  event,  proper  provision  shall be made so that each
      holder of a Right  (except as provided  below and in Section  7(e) hereof)
      shall  thereafter have the right to receive,  upon exercise thereof at the
      then  current  Purchase  Price  in  accordance  with  the  terms  of  this
      Agreement,  in lieu of a  number  of one  one-  thousandths  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
      Purchase  Price by the then  number of one  one-thousandths  of a share of
      Preferred Stock for which a Right was exercisable  immediately  before the
      first  occurrence  of a Section  11(a)(ii)  Event,  and (y) dividing  that
      product  (which,  following  such first  occurrence,  shall  thereafter be
      referred to as the "Purchase Price" for each Right and for all purposes of
      this Agreement) by 50% of the Current Market Price (determined pursuant to
      Section  11(d) hereof) per share of Common Stock on the date of such first
      occurrence (such number of shares, the "Adjustment Shares").
<PAGE>

                     (iii) If the  number of shares  of Common  Stock  which are
      authorized by the Company's  Restated  Certificate of  Incorporation,  but
      which are not outstanding or reserved for issuance for purposes other than
      upon exercise of the Rights,  are not sufficient to permit the exercise in
      full of the Rights in accordance with the foregoing  subparagraph  (ii) of
      this  Section  11(a),  the Company  shall (A)  determine  the value of the
      Adjustment  Shares  issuable  upon the  exercise of a Right (the  "Current
      Value"),  and (B) with  respect to each  Right  (subject  to Section  7(e)
      hereof),  make adequate provision to substitute for the Adjustment Shares,
      upon the exercise of a Right and payment of the applicable Purchase Price,
      (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other
      equity securities of the Company (including,  without limitation,  shares,
      or units of shares, of preferred stock, such as the Preferred Stock, which
      the Board has deemed to have essentially the same value or economic rights
      as shares of Common Stock (such shares of preferred  stock being  referred
      to as "Common Stock  Equivalents")),  (4) debt  securities of the Company,
      (5) other  assets,  or (6) any  combination  of the  foregoing,  having an
      aggregate  value  equal to the  Current  Value  (less  the  amount  of any
      reduction  in the Purchase  Price),  where such  aggregate  value has been
      determined  by the Board based upon the advice of a nationally  recognized
      investment banking firm selected by the Board; 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 Purchase  Price,  shares of Common Stock (to the extent  available)
      and then, if necessary,  cash,  which shares and/or cash have an aggregate
      value equal to the Spread.  For purposes of the  preceding  sentence,  the
      term "Spread" shall mean the excess of (i) the Current Value over (ii) the
      Purchase  Price.  If the Board  determines in good faith that it is likely
      that sufficient  additional shares of Common Stock could be authorized for
      issuance upon  exercise in full of the Rights,  the thirty (30) day period
      set forth above may be extended to the extent necessary, but not more than
      ninety (90) days after the Section  11(a)(ii)  Trigger Date, in order that
      the Company may seek  stockholder  approval for the  authorization of such
      additional shares (such thirty (30) day period, as it may be extended,  is
      herein called the "Substitution  Period"). To the extent that action is to
      be taken  pursuant to the first  and/or  third  sentences  of this Section
      11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof,
      that such action shall apply uniformly to all outstanding  Rights, and (2)
      may suspend the  exercisability  of the Rights until the expiration of the
      Substitution  Period in order to seek such  stockholder  approval for such
      authorization  of additional  shares and/or to decide the appropriate form
      of  distribution  to be  made  pursuant  to  such  first  sentence  and to
      determine  the value  thereof.  In the event of any such  suspension,  the
      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.  The
      Company shall notify the Rights Agent of any public  announcement  made by
      the Company  pursuant to this  Section  11(a)(iii)  and shall  provide the
      Rights Agent with a copy of such public announcement. For purposes of this
      Section  11(a)(iii),  the  value  of each  Adjustment  Share  shall be the
      Current  Market  Price  per  share  of the  Common  Stock  on the  Section
      11(a)(ii)  Trigger  Date and the per share or per unit value of any Common
      Stock  Equivalent  shall be deemed to equal the Current  Market  Price per
      share of the Common Stock on such date.
<PAGE>

                (b) In case the Company shall fix a record date for the issuance
 of rights, options or warrants to all holders of Preferred Stock entitling them
 to subscribe  for or purchase (for a period  expiring  within  forty-five  (45)
 calendar  days after such record date)  Preferred  Stock (or shares  having the
 same  rights,  privileges  and  preferences  as the shares of  Preferred  Stock
 ("Equivalent  Preferred Stock")) or securities convertible into Preferred Stock
 or Equivalent  Preferred  Stock at a price per share of Preferred  Stock or per
 share of Equivalent Preferred Stock (or having a conversion price per share, if
 a security convertible into Preferred Stock or Equivalent Preferred Stock) less
 than the Current Market Price (as determined  pursuant to Section 11(d) hereof)
 per share of Preferred  Stock on such record date,  the Purchase Price to be in
 effect after such record date shall be determined by  multiplying  the Purchase
 Price  in  effect  immediately  before  such  record  date by a  fraction,  the
 numerator of which shall be the number of shares of Preferred Stock outstanding
 on such record  date,  plus the number of shares of  Preferred  Stock which the
 aggregate  offering  price of the total  number of  shares of  Preferred  Stock
 and/or  Equivalent  Preferred  Stock so to be  offered  (and/or  the  aggregate
 initial conversion price of the convertible  securities so to be offered) would
 purchase at such Current  Market Price,  and the  denominator of which shall be
 the number of shares of Preferred  Stock  outstanding on such record date, plus
 the number of additional shares of Preferred Stock and/or Equivalent  Preferred
 Stock to be offered for subscription or purchase (or into which the convertible
 securities  so  to  be  offered  are  initially  convertible).   In  case  such
 subscription  price may be paid by  delivery of  consideration,  part or all of
 which may be in a form other than cash, the value of such  consideration  shall
 be as determined in good faith by the Board of Directors of the Company,  whose
 determination shall be described in a statement filed with the Rights Agent and
 shall be binding on the Rights  Agent and the holders of the Rights.  Shares of
 Preferred  Stock owned by or held for the  account of the Company  shall not be
 deemed  outstanding  for the purpose of any such  computation.  Such adjustment
 shall be made  successively  whenever such a record date is fixed,  and if such
 rights or warrants are not so issued,  the Purchase  Price shall be adjusted to
 be the Purchase Price which would then be in effect if such record date had not
 been fixed.
<PAGE>

                (c)  In  case  the  Company  shall  fix  a  record  date  for  a
 distribution to all holders of Preferred Stock (including any such distribution
 made in connection with a  consolidation  or merger in which the Company is the
 continuing  corporation)  of  evidences  of  indebtedness,  cash  (other than a
 regular quarterly cash dividend out of the earnings or retained earnings of the
 Company),  OR assets  (other than a dividend  payable in Preferred  Stock,  but
 including  any  dividend  payable in stock  other than  Preferred  Stock) or of
 subscription  rights or warrants  (excluding those referred to in Section 11(b)
 hereof),  the  Purchase  Price to be in effect  after such record date shall be
 determined by multiplying the Purchase Price in effect  immediately before such
 record date by a fraction,  the numerator of which shall be the Current  Market
 Price (as  determined  pursuant to Section 11(d) hereof) per share of Preferred
 Stock on such record date,  less the fair market value (as  determined  in good
 faith by the Board of Directors of the Company,  whose  determination  shall be
 described  in a  statement  filed with the Rights  Agent) of the portion of the
 cash,  assets or  evidences of  indebtedness  so to be  distributed  or of such
 subscription  rights or warrants  applicable to a share of Preferred Stock, and
 the  denominator  of which shall be such Current  Market  Price (as  determined
 pursuant  to  Section  11(d)  hereof)  per  share  of  Preferred  Stock.   Such
 adjustments  shall be made  successively  whenever such a record date is fixed,
 and if such  distribution  is not so made, the Purchase Price shall be adjusted
 to be the  Purchase  Price  which would have been in effect if such record date
 had not been fixed.

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

                     (ii) For the  purpose  of any  computation  hereunder,  the
      Current  Market Price per share of Preferred  Stock shall be determined in
      the same manner as set forth  above for the Common  Stock in clause (i) of
      this Section 11(d) (other than the last sentence thereof).  If the Current
      Market Price per share of  Preferred  Stock  cannot be  determined  in the
      manner  provided  above or if the Preferred  Stock is not publicly held or
      listed or  traded in a manner  described  in  clause  (i) of this  Section
      11(d),  the Current  Market  Price per share of  Preferred  Stock shall be
      conclusively  deemed to be an amount equal to 1,000 (as such number may be
      appropriately  adjusted for such events as stock splits,  stock  dividends
      and recapitalizations with respect to the Common Stock occurring after the
      date of this  Agreement)  multiplied by the Current Market Price per share
      of the Common Stock.  If neither the Common Stock nor the Preferred  Stock
      is publicly held or so listed or traded, Current Market Price per share of
      the  Preferred  Stock shall mean the fair value per share as determined in
      good faith by the  Board,  whose  determination  shall be  described  in a
      statement  filed with the  Rights  Agent and shall be  conclusive  for all
      purposes. For all purposes of this Agreement,  the Current Market Price of
      one  one-thousandth  of a share of  Preferred  Stock shall be equal to the
      Current Market Price of one share of Preferred Stock divided by 1,000.

                (e)  Anything  herein  to  the  contrary   notwithstanding,   no
 adjustment in the Purchase Price shall be required unless such adjustment would
 require an increase or  decrease of at least one percent  (1%) in the  Purchase
 Price; provided,  however, that any adjustments which by reason of this Section
 11(e) are not  required  to be made  shall be  carried  forward  and taken into
 account in any subsequent  adjustment.  All calculations  under this Section 11
 shall be made to the nearest cent or to the nearest ten-  thousandth of a share
 of Common Stock or other share or  one-millionth of a share of Preferred Stock,
 as the case may be.  Notwithstanding  the first sentence of this Section 11(e),
 any  adjustment  required  by this  Section  11 shall be made no later than the
 earlier of (i) three (3) years from the date of the transaction  which mandates
 such adjustment, or (ii) the Expiration Date.
<PAGE>

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

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

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

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

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

                (k)  Before  taking any action  that would  cause an  adjustment
 reducing the Purchase Price below the then stated value,  if any, of the number
 of one  one-thousandths 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  such number of one  one-thousandths
 of a share of Preferred Stock at such adjusted Purchase Price.

                (l) In any case in which this  Section 11 shall  require that an
 adjustment  in the Purchase  Price be made  effective as of a record date for a
 specified  event,  the Company may elect to defer until the  occurrence of such
 event the issuance to the holder of any Right  exercised after such record date
 the  number  of one  one-thousandths  of a share of  Preferred  Stock and other
 capital stock or securities of the Company, if any, issuable upon such exercise
 over and above the number of one  one-thousandths 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  Purchase  Price  in  effect  before  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 (fractional or otherwise) or securities upon the
 occurrence of the event requiring such  adjustment;  and provided  further that
 the Company must give notice to the Rights Agent of any election  made pursuant
 to this Section 11(l).

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

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

                (o)  The  Company   covenants   and  agrees   that,   after  the
 Distribution Date, it will not, except as permitted by Section 23 or Section 26
 hereof,  take (or permit any Subsidiary to take) any action if at the time such
 action is taken it is  reasonably  foreseeable  that such action will  diminish
 substantially  or otherwise  eliminate the benefits  intended to be afforded by
 the Rights.

                (p) Anything in this Agreement to the contrary  notwithstanding,
 if the Company shall at any time after the Rights Dividend Declaration Date and
 before the Distribution  Date (i) declare a dividend on the outstanding  shares
 of  Common  Stock  payable  in  shares  of Common  Stock,  (ii)  subdivide  the
 outstanding  shares of Common Stock, or (iii) combine the outstanding shares of
 Common Stock into a smaller number of shares,  the number of Rights  associated
 with each  share of  Common  Stock  then  outstanding,  or issued or  delivered
 thereafter but before the Distribution Date, shall be proportionately  adjusted
 so that the number of Rights  thereafter  associated  with each share of Common
 Stock  following any such event shall equal the result  obtained by multiplying
 the number of Rights  associated  with each share of Common  Stock  immediately
 before such event by a fraction the  numerator  which shall be the total number
 of shares of Common Stock outstanding  immediately before the occurrence of the
 event  and the  denominator  of which  shall be the  total  number of shares of
 Common Stock outstanding immediately following the occurrence of such event.
<PAGE>

           Section  12.  Certificate  of  Adjusted  Purchase  Price or Number of
 Shares. Whenever an adjustment is made as provided in Section 11 and Section 13
 hereof, the Company shall (a) promptly prepare a certificate setting forth such
 adjustment  and a  brief,  reasonably  detailed  statement  of  the  facts  and
 computations accounting for such adjustment,  (b) promptly file with the Rights
 Agent,  and with each  transfer  agent for the  Preferred  Stock and the Common
 Stock, a copy of such certificate and (c) if a Distribution  Date has occurred,
 mail a brief  summary  thereof  to  each  holder  of a  Rights  Certificate  in
 accordance with Section 27 hereof. The Rights Agent shall be fully protected in
 relying on any such certificate and on any adjustment therein contained.

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

                (a) If,  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
 complies  with  Section  11(o)  hereof),  and  the  Company  shall  not  be the
 continuing or surviving  corporation of such  consolidation or merger,  (y) any
 Person (other than a Subsidiary of the Company in a transaction  which complies
 with Section 11(o) hereof) shall  consolidate  with, or merge with or into, the
 Company,  and the Company shall be the  continuing or surviving  corporation of
 such  consolidation  or merger and, in connection  with such  consolidation  or
 merger,  all or part of the outstanding shares of Common Stock shall be changed
 into or exchanged for stock or other  securities of any other Person or cash or
 any other property, or (z) the Company shall sell or otherwise transfer (or one
 or  more  of  its  Subsidiaries  shall  sell  or  otherwise  transfer),  in one
 transaction or a series of related  transactions,  assets, cash flow or earning
 power  aggregating  more than 50% of the assets,  cash flow or earning power of
 the  Company and its  Subsidiaries  (taken as a whole) to any Person or Persons
 (other  than  the  Company  or any  Subsidiary  of the  Company  in one or more
 transactions  each of which complies with Section 11(o)  hereof),  then, and in
 each such case (except as may be  contemplated  by Section 13(d) hereof) proper
 provision shall be made so that: (i) each holder of a Right, except as provided
 in Section 7(e) hereof,  shall  thereafter have the right to receive,  upon the
 exercise  thereof at the then current  Purchase  Price in  accordance  with the
 terms of this Agreement,  such number of validly  authorized and issued,  fully
 paid,  non-assessable  and  freely  tradeable  shares  of  Common  Stock of the
 Principal  Party (as such term is  hereinafter  defined),  not  subject  to any
 liens, encumbrances,  rights of first refusal or other adverse claims, as shall
 be equal to the result obtained by (1)  multiplying  the then current  Purchase
 Price by the number of one  one-thousandths  of a share of Preferred  Stock for
 which a Right is  exercisable  immediately  before  the first  occurrence  of a
 Section 13 Event (or,  if a Section  11(a)(ii)  Event has  occurred  before the
 first  occurrence  of a Section  13 Event,  multiplying  the number of such one
 one-thousandths of a share for which a Right was exercisable immediately before
 the first  occurrence  of a Section  11(a)(ii)  Event by the Purchase  Price in
 effect  immediately  before such first  occurrence),  and dividing that product
 (which, following the first occurrence of a Section 13 Event, shall be referred
 to as the  "Purchase  Price"  for  each  Right  and  for all  purposes  of this
 Agreement)  by (2) 50% of the  Current  Market  Price  (determined  pursuant to
 Section  11(d)(i) hereof) per share of the Common Stock of such Principal Party
 on the date of consummation of such Section 13 Event; (ii) such Principal Party
 shall thereafter be liable for, and shall assume,  by virtue of such Section 13
 Event,  all  the  obligations  and  duties  of the  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  only to such  Principal  Party  following  the  first
 occurrence  of a Section 13 Event;  (iv) such  Principal  Party shall take such
 steps (including, but not limited to, the reservation of a sufficient number of
 shares of its Common Stock) in  connection  with the  consummation  of any such
 transaction  as may be  necessary  to assure that the  provisions  hereof shall
 thereafter be  applicable,  as nearly as reasonably  may be, in relation to its
 shares of Common Stock thereafter  deliverable upon the exercise of the Rights;
 and (v) the  provisions  of  Section  11(a)(ii)  hereof  shall be of no  effect
 following the first occurrence of any Section 13 Event.
<PAGE>

                (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, and if no securities are so
      issued,   the  Person   that  is  the  other   party  to  such  merger  or
      consolidation; and

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

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

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

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

                     (ii) take such all such other action as may be necessary to
      enable  the  Principal  Party to issue  the  securities  purchasable  upon
      exercise of the Rights,  including but not limited to the  registration or
      qualification  of such securities  under all requisite  securities laws of
      jurisdictions  of the various states and the listing of such securities on
      such exchanges and trading markets as may be necessary or appropriate; and

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

                (d) Notwithstanding  anything in this Agreement to the contrary,
 Section 13 shall not be applicable to a transaction  described in subparagraphs
 (x) and (y) of Section  13(a) if (i) such  transaction  is  consummated  with a
 Person or Persons  who  acquired  shares of Common  Stock  pursuant to a tender
 offer or exchange offer for all  outstanding  shares of Common Stock which is a
 Qualified  Offer as such term is  defined  in  Section  11(a)(ii)  hereof (or a
 wholly  owned  subsidiary  of any such Person or  Persons),  (ii) the price per
 share of Common Stock  offered in such  transaction  is not less than the price
 per share of Common  Stock paid to all holders of shares of Common  Stock whose
 shares were purchased pursuant to such tender offer or exchange offer and (iii)
 the form of consideration  being offered to the remaining  holders of shares of
 Common  Stock  pursuant  to  such  transaction  is  the  same  as the  form  of
 consideration  paid  pursuant to such  tender  offer or  exchange  offer.  Upon
 consummation of any such  transaction  contemplated by this Section 13(d),  all
 Rights hereunder shall expire.

           Section 14.  Fractional Rights and Fractional Shares.

                (a) The  Company  shall not be required  to issue  fractions  of
 Rights,  except  before the  Distribution  Date as  provided  in Section  11(p)
 hereof, or to distribute Rights  Certificates which evidence fractional Rights.
 In lieu of such  fractional  Rights,  the Company  shall pay to the  registered
 holders of the Rights  Certificates with regard to which such fractional Rights
 would  otherwise be issuable,  an amount in cash equal to the same  fraction of
 the current market value of a whole Right.  For purposes of this Section 14(a),
 the current  market  value of a whole  Right shall be the closing  price of the
 Rights for the Trading Day immediately before the date on which such fractional
 Rights would have been otherwise issuable.  The closing price of the Rights for
 any day shall be the last sale  price,  regular  way,  or, in case no such sale
 takes  place on such day,  the  average of the  closing  bid and asked  prices,
 regular  way,  in  either  case  as  reported  in  the  principal  consolidated
 transaction  reporting system with respect to securities  listed or admitted to
 trading  on the New York  Stock  Exchange  or, if the  Rights are not listed or
 admitted  to  trading  on the New  York  Stock  Exchange,  as  reported  in the
 principal consolidated  transaction reporting system with respect to securities
 listed on the principal  national  securities  exchange on which the Rights are
 listed or admitted  to trading,  or if the Rights are not listed or admitted to
 trading on any national securities  exchange,  the last quoted price or, if not
 so  quoted,  the  average  of  the  high  bid  and  low  asked  prices  in  the
 over-the-counter market, as reported by NASDAQ or such other system then in use
 or, if on any such date the Rights are not quoted by any such organization, the
 average of the  closing bid and asked  prices as  furnished  by a  professional
 market maker making a market in the Rights,  selected by the Board of Directors
 of the Company.  If on any such date no such market maker is making a market in
 the  Rights,  the fair value of the Rights on such date as  determined  in good
 faith by the Board of Directors of the Company shall be used.

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

                (c) Following the occurrence of a Triggering  Event, the Company
 shall not be  required  to issue  fractions  of shares  of  Common  Stock  upon
 exercise of the Rights or to distribute  certificates which evidence fractional
 shares of Common  Stock.  In lieu of  fractional  shares of Common  Stock,  the
 Company may pay to the registered  holders of Rights  Certificates  at the time
 such  Rights are  exercised  as herein  provided an amount in cash equal to the
 same fraction of the current market value of one (1) share of Common Stock. For
 purposes of this Section 14(c), the current market value of one share of Common
 Stock shall be the closing  price of one share of Common  Stock (as  determined
 pursuant to Section 11(d)(i) hereof) for the Trading Day immediately before the
 date of such exercise.

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

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

           Section 16.  Agreement of Rights 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)  before  the   Distribution   Date,   the  Rights   will  be
 transferable only in connection with the transfer of Common Stock;

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

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

                (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 a result of its  inability to perform any of its
 obligations  under this  Agreement  by reason of any  preliminary  or permanent
 injunction or other order, decree, judgment or ruling (whether interlocutory or
 final)  issued  by a court  of  competent  jurisdiction  or by a  governmental,
 regulatory  or  administrative  agency or  commission,  or any  statute,  rule,
 regulation  or  executive  order  promulgated  or enacted  by any  governmental
 authority, prohibiting or otherwise restraining performance of such obligation;
 provided,  however,  the  Company  must use its best  efforts  to have any such
 order,  judgment,  decree or ruling  lifted or otherwise  overturned as soon as
 possible.

           Section 17. Rights  Certificate  Holder Not Deemed a Stockholder.  No
 holder, as such, of any Rights  Certificate shall be entitled to vote,  receive
 dividends  or be  deemed  for any  purpose  the  holder  of the  number  of one
 one-thousandths  of a share 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  Rights
 Certificate  be construed to confer upon the holder of any Rights  Certificate,
 as such, any of the rights of a stockholder of the Company or any right to vote
 for the election of directors or upon any matter  submitted to  stockholders at
 any meeting thereof, or to give or withhold consent to any corporate action, or
 to receive notice of meetings or other actions affecting  stockholders  (except
 as provided  in Section 25 hereof),  or to receive  dividends  or  subscription
 rights,  or  otherwise,  until  the Right or Rights  evidenced  by such  Rights
 Certificate shall have been exercised in accordance with the provisions hereof.

           Section 18.  Concerning the Rights Agent.

                (a) The  Company  agrees to pay to the Rights  Agent  reasonable
 compensation for all services  rendered by it hereunder and, from time to time,
 on demand of the Rights  Agent,  its  reasonable  expenses and counsel fees and
 disbursements and other  disbursements  incurred in the preparation,  delivery,
 amendment,  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, damage,
 judgment, fine, penalty, claim, demand, settlement,  cost or expense (including
 the  reasonable  fees and expenses of legal  counsel),  incurred  without gross
 negligence,  bad faith or willful  misconduct  on the part of the Rights Agent,
 for any action  taken,  suffered or omitted by the Rights  Agent in  connection
 with the acceptance and  administration of this Agreement,  including,  without
 limitation,  the costs and expenses of defending against any claim of liability
 in the premises.  Anything to the contrary  notwithstanding,  in no event shall
 the Rights Agent be liable for special,  punitive,  indirect,  consequential or
 incidental loss or damage of any kind whatsoever  (including but not limited to
 lost  profits),  even if the Rights Agent has been advised of the likelihood of
 such loss or damage.
<PAGE>

                (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 acceptance and administration of this Agreement in reliance
 upon any  Rights  Certificate  or  certificate  for  Common  Stock or for other
 securities  of the Company,  instrument  of  assignment  or transfer,  power of
 attorney,   endorsement,   affidavit,   letter,  notice,  direction,   consent,
 certificate, statement, or other paper or document believed by it to be genuine
 and to be signed, executed and, where necessary,  verified or acknowledged,  by
 the proper Person or Persons.

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

                (a) Any  Person  into which the  Rights  Agent or any  successor
 Rights Agent may be merged or with which it may be consolidated,  or any Person
 resulting  from any merger or  consolidation  to which the Rights  Agent or any
 successor  Rights  Agent  shall be a party,  or any  Person  succeeding  to the
 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;  but only if such Person would be eligible for appointment
 as a successor Rights Agent under the provisions of Section 21 hereof.  In case
 at the time such successor  Rights Agent shall succeed to the agency created by
 this Agreement,  any of the Rights  Certificates  shall have been countersigned
 but  not   delivered,   any  such   successor   Rights   Agent  may  adopt  the
 countersignature  of  a  predecessor  Rights  Agent  and  deliver  such  Rights
 Certificates  so  countersigned;  and in case at that  time  any of the  Rights
 Certificates shall not have been countersigned,  any successor Rights Agent may
 countersign such Rights  Certificates  either in the name of the predecessor or
 in the name of the successor  Rights  Agent;  and in all such cases such Rights
 Certificates shall have the full force provided in the Rights  Certificates and
 in this Agreement.

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

           Section 20.  Duties of Rights Agent.  The Rights Agent  undertakes to
 perform only the duties and  obligations  expressly  imposed by this  Agreement
 (and no other  implied  duties or  obligations)  upon the  following  terms and
 conditions, by all of which the Company and the holders of Rights Certificates,
 by their acceptance thereof, shall be bound:
<PAGE>

                (a) The Rights Agent may consult with legal  counsel (who may be
 legal counsel for the Company), and the advice or opinion of such counsel shall
 be full and complete  authorization and protection to the Rights Agent, and the
 Rights  Agent shall incur no liability  for or in respect of any action  taken,
 suffered or omitted by it in good faith and in  accordance  with such advice or
 opinion.

                (b)  Whenever  in the  performance  of  its  duties  under  this
 Agreement  the Rights Agent shall deem it necessary or desirable  that any fact
 or matter (including,  without limitation, the identity of any Acquiring Person
 and the  determination of Current Market Price) be proved or established by the
 Company before taking, suffering or omitting any action hereunder, such fact or
 matter  (unless  other  evidence  in  respect  thereof  be herein  specifically
 prescribed)  may be deemed  to be  conclusively  proved  and  established  by a
 certificate  signed by the  Chairman  of the  Board,  the  President,  any Vice
 President,  the  Treasurer,  any  Assistant  Treasurer,  the  Secretary  or any
 Assistant  Secretary of the Company and delivered to the Rights Agent; and such
 certificate shall be full authorization and protection to the Rights Agent, and
 the  Rights  Agent  shall  incur no  liability  for or in respect of any action
 taken,  suffered  or omitted in good faith by it under the  provisions  of this
 Agreement in reliance upon such certificate.

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

                (d) The Rights Agent shall not be liable for or by reason of any
 of the  statements  of fact or recitals  contained in this  Agreement or in the
 Rights  Certificates  or be  required  to  verify  the same  (except  as to its
 countersignature  on such Rights  Certificates),  but all such  statements  and
 recitals are and shall be deemed to have been made by the Company only.

                (e) The  Rights  Agent  shall not have any  liability  for or be
 under any  responsibility  in respect of the validity of this  Agreement or the
 execution and delivery  hereof  (except the due execution  hereof by the Rights
 Agent) or in respect of the  validity or  execution  of any Rights  Certificate
 (except its  countersignature  thereof);  nor shall it be  responsible  for any
 breach by the Company of any covenant or condition  contained in this Agreement
 or in any Rights  Certificate;  nor shall it be responsible  for any adjustment
 required under the provisions of Section 11, Section 13 or Section 24 hereof or
 responsible  for the  manner,  method or amount of any such  adjustment  or the
 ascertaining  of the existence of facts that would require any such  adjustment
 (except with respect to the exercise of Rights evidenced by Rights Certificates
 after actual notice of any such adjustment);  nor shall it by any act hereunder
 be deemed to make any  representation  or warranty as to the  authorization  or
 reservation  of any  shares of  Common  Stock or  Preferred  Stock to be issued
 pursuant  to this  Agreement  or any Rights  Certificate  or as to whether  any
 shares of Common  Stock or  Preferred  Stock will,  when so issued,  be validly
 authorized and issued, fully paid and nonassessable.
<PAGE>

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

                (g) The Rights Agent is hereby authorized and directed to accept
 instructions  with respect to the performance of its duties  hereunder from the
 Chairman of the Board, the President,  any Vice President,  the Secretary,  any
 Assistant  Secretary,  the Treasurer or any Assistant Treasurer of the Company,
 and to apply to such officers for advice or instructions in connection with its
 duties,  such advice or instructions shall be full authorization and protection
 to the Rights  Agent and the Rights  Agent shall incur no  liability  for or in
 respect  of any  action  taken,  suffered  or  omitted  by it in good  faith in
 accordance with instructions of any such officer.

                (h) The Rights Agent and any stockholder,  Affiliate,  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 Rights Agent under this  Agreement.  Nothing herein shall preclude the
 Rights Agent from acting in any other capacity for the Company or for any other
 Person.

                (i) The Rights  Agent may execute and exercise any of the rights
 or powers hereby vested in it or perform any duty hereunder either itself or by
 or  through  its  attorneys  or  agents,  and the  Rights  Agent  shall  not be
 answerable or accountable  for any act,  default,  neglect or misconduct of any
 such  attorneys  or agents or for any loss to the  Company or any other  Person
 resulting  from any such act,  default,  neglect  or  misconduct  absent  gross
 negligence,  bad faith or willful  misconduct  in the  selection  and continued
 employment thereof.

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

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

           Section 21. Change of Rights Agent. The Rights Agent or any successor
 Rights Agent may resign and be discharged  from its duties under this Agreement
 upon thirty (30) days'  notice in writing  mailed to the  Company,  and to each
 transfer  agent of the Common  Stock and  Preferred  Stock,  by  registered  or
 certified mail, and, if such resignation occurs after the Distribution Date, to
 the registered  holders of the Rights  Certificates  by  first-class  mail. The
 Company may remove the Rights Agent or any  successor  Rights Agent upon thirty
 (30) days' notice in writing,  mailed to the Rights  Agent or successor  Rights
 Agent,  as the case may be, and to each transfer  agent of the Common Stock and
 Preferred  Stock,  by registered or certified mail, and, if such removal occurs
 after the  Distribution  Date,  to the  holders of the Rights  Certificates  by
 first-class  mail.  If the  Rights  Agent  shall  resign or be removed or shall
 otherwise become incapable of acting,  the Company shall appoint a successor to
 the Rights Agent. If the Company shall fail to make such  appointment  within a
 period of thirty (30) days after giving  notice of such removal or after it has
 been notified in writing of such  resignation or incapacity by the resigning or
 incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
 with such notice, submit his Rights Certificate for inspection by the Company),
 then any registered holder of any Rights  Certificate may apply to any court of
 competent jurisdiction for the appointment of a new Rights Agent. Any successor
 Rights Agent, whether appointed by the Company or by such a court, shall be (a)
 a Person  organized and doing  business  under the laws of the United States or
 any state of the United States, in good standing, having an office in the State
 of New York,  which is authorized  under such laws to exercise  stock  transfer
 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  $50,000,000  or (b) an  Affiliate of
 such 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  Agent  shall  deliver  and
 transfer  to the  successor  Rights  Agent any  property at the time held by it
 hereunder,  and execute and deliver any further assurance,  conveyance,  act or
 deed  necessary for the purpose.  Not later than the effective date of any such
 appointment,  the  Company  shall  file  notice  thereof  in  writing  with the
 predecessor  Rights Agent and each  transfer  agent of the Common Stock and the
 Preferred Stock, and, if such appointment  occurs after the Distribution  Date,
 mail a notice  thereof  in  writing  to the  registered  holders  of the Rights
 Certificates.  Failure  to give any notice  provided  for in this  Section  21,
 however,  or any defect  therein,  shall not affect the legality or validity of
 the  resignation  or  removal  of the Rights  Agent or the  appointment  of the
 successor Rights Agent, as the case may be.
<PAGE>

           Section 22. Issuance of New Rights Certificates.  Notwithstanding any
 of the  provisions  of this  Agreement  or of the Rights to the  contrary,  the
 Company may, at its option, issue new Rights Certificates  evidencing Rights in
 such  form  as may be  approved  by the  Board  of  Directors  to  reflect  any
 adjustment  or change in the Purchase  Price and the number or kind or class of
 shares  or  other   securities  or  property   purchasable   under  the  Rights
 Certificates  made in  accordance  with the  provisions of this  Agreement.  In
 addition,  in  connection  with the  issuance or sale of shares of Common Stock
 following the Distribution  Date and before the redemption or expiration of the
 Rights, the Company (a) shall, with respect to shares of Common Stock so issued
 or sold pursuant to the exercise of stock options or under any employee plan or
 arrangement,  granted  or  awarded  as of the  Distribution  Date,  or upon the
 exercise,  conversion  or  exchange  of  securities  hereinafter  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 Rights Certificates  representing
 the  appropriate  number of Rights in  connection  with such  issuance or sale;
 provided,  however, that (i) no such Rights Certificate shall be issued if, and
 to the extent that,  the 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 Rights Certificate would be issued, and (ii)
 no such  Rights  Certificate  shall  be  issued  if,  and to the  extent  that,
 appropriate  adjustment  shall otherwise have been made in lieu of the issuance
 thereof.

           Section 23.  Redemption and Termination.

                (a) The Board of Directors of the Company may, at its option, at
 any time before the earlier of (i) the close of business on the tenth  Business
 Day following the Stock  Acquisition  Date or (ii) the close of business on the
 Final Expiration Date, redeem all but not less than all of the then outstanding
 Rights  at a  redemption  price  of  $.01  per  Right,  as such  amount  may be
 appropriately  adjusted to reflect any stock split,  stock  dividend or similar
 transaction  occurring  after the date  hereof  (such  redemption  price  being
 hereinafter  referred to as the "Redemption Price").  Notwithstanding  anything
 contained  in  this  Agreement  to  the  contrary,  the  Rights  shall  not  be
 exercisable  after the first occurrence of a Section 11(a)(ii) Event until such
 time as the Company's  right of redemption  hereunder has expired.  The Company
 may, at its option,  pay the Redemption  Price in cash,  shares of Common Stock
 (based on the Current Market Price, as defined in Section 11(d)(i)  hereof,  of
 the Common Stock at the time of redemption) or any other form of  consideration
 deemed appropriate by the Board of Directors.

                (b) Immediately upon the action of the Board of Directors of the
 Company  ordering the redemption of the Rights,  without any further action and
 without any notice,  the right to exercise  the Rights will  terminate  and the
 only  right  thereafter  of the  holders  of  Rights  shall be to  receive  the
 Redemption Price for each Right so held. Promptly after the action of the Board
 of Directors  ordering the  redemption  of the Rights,  the Company  shall give
 notice of such  redemption  to the  Rights  Agent and the  holders  of the then
 outstanding  Rights by mailing such notice to all such holders at each holder's
 last  address as it appears  upon the  registry  books of the Rights  Agent or,
 before the  Distribution  Date, on the registry books of the transfer agent for
 the Common  Stock.  Any notice  which is mailed in the manner  herein  provided
 shall be deemed given, whether or not the holder receives the notice. Each such
 notice of  redemption  will  state  the  method  by which  the  payment  of the
 Redemption Price will be made.
<PAGE>

           Section 24.  Exchange.

                (a) The Board of Directors of the Company may, at its option, at
 any time after any Person becomes an Acquiring Person,  exchange all or part of
 the then  outstanding  and  exercisable  Rights (which shall not include Rights
 that have  become  null and void  pursuant to the  provisions  of Section  7(e)
 hereof) for Common Stock at an exchange  ratio of one share of Common Stock per
 Right,  appropriately  adjusted to reflect any stock split,  stock  dividend or
 similar transaction  occurring after the date hereof (such exchange ratio being
 hereinafter   referred  to  as  the  "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 the Company,  any
 Subsidiary of the Company, any employee benefit plan of the Company or any such
 Subsidiary,  or any Person holding Common Stock for or pursuant to the terms of
 any such plan),  together with all  Affiliates  and  Associates of such Person,
 becomes  the  Beneficial  Owner  of  50%  or  more  of the  Common  Stock  then
 outstanding.

                (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  shall  terminate  and the only right  thereafter  of the
 holders  of such  Rights  shall be to receive  that  number of shares of Common
 Stock equal to the number of such Rights held by such holder  multiplied by the
 Exchange  Ratio.  The Company  shall  promptly  give public  notice of any such
 exchange (with prompt notice thereof to the Rights Agent);  provided,  however,
 that the failure to give,  or any defect in,  such notice  shall not affect the
 validity of such exchange. The Company promptly shall mail a notice of any such
 exchange to the Rights  Agent and 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 exchange
 will state the method by which the exchange of the Common Stock for Rights will
 be effected  and, in the event of any  partial  exchange,  the number of Rights
 which will be exchanged.  Any partial exchange shall be effected pro rata based
 on the number of Rights  (other than Rights which have become 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 Equivalent  Preferred Stock, as
 such term is defined in  paragraph  (b) of Section 11 hereof) for Common  Stock
 exchangeable for Rights,  at the initial rate of one  one-thousandth of a share
 of Preferred  Stock (or  Equivalent  Preferred  Stock) for each share of Common
 Stock, as appropriately  adjusted to reflect stock splits,  stock dividends and
 other similar transactions after the date hereof.

                (d) If there  shall not be  sufficient  shares  of Common  Stock
 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 for issuance upon exchange of the Rights.
<PAGE>

                (e) The  Company  shall not be required  to issue  fractions  of
 shares of Common Stock or to distribute  certificates which evidence fractional
 shares of Common  Stock.  In lieu of such  fractional  shares of Common  Stock,
 there shall be paid to the registered  holders of the Rights  Certificates with
 regard to which such  fractional  shares of Common  Stock  would  otherwise  be
 issuable,  an amount in cash equal to the same  fraction of the current  market
 value of a whole share of Common  Stock.  For the  purposes of this  subsection
 (e),  the current  market  value of a whole share of Common  Stock shall be the
 closing price of a share of Common Stock (as determined  pursuant to the second
 sentence of Section 11(d)(i) hereof) for the Trading Day immediately before 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  quarterly 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 any other Person (other than a Subsidiary
 of the Company in a transaction  which complies with Section 11(o) hereof),  or
 to  effect  any  sale  or  other  transfer  (or to  permit  one or  more of its
 Subsidiaries  to effect any sale or other  transfer),  in one  transaction or a
 series of related  transactions,  of more than 50% of the assets,  cash flow 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 Section 11(o) hereof),
 or (v) to effect the  liquidation,  dissolution  or winding up of the  Company,
 then,  in each such case,  the  Company  shall give to each  holder of a Rights
 Certificate, to the extent feasible, 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  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 before 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 before the date of the taking of such proposed action or
 the date of  participation  therein by the  holders of the shares of  Preferred
 Stock whichever shall be the earlier.
<PAGE>

                (b) In case any of the  events  set forth in  Section  11(a)(ii)
 hereof shall occur,  then,  in any such case,  (i) the Company shall as soon as
 practicable  thereafter  give to each  holder of a Rights  Certificate,  to the
 extent feasible,  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,
 and (ii) all references in the preceding  paragraph to Preferred Stock shall be
 deemed  thereafter  to refer to Common  Stock  and/or,  if  appropriate,  other
 securities.

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

           HomeServices.Com Inc.
           6800 France Avenue South, Suite 600
           Edina, Minnesota 55435
           Attention:  Corporate Secretary


 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
 Rights  Certificate  to or on the Rights Agent shall be  sufficiently  given or
 made if sent by first-class  mail,  postage  prepaid,  addressed (until another
 address is filed in writing by the Rights Agent with the Company) as follows:


           ChaseMellon Shareholder Services, L.L.C.
           2323 Bryan Street, Suite 2300
           Dallas, Texas 75201-2656
           Attention:  Relationship Manager

<PAGE>

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

           Section 27. Supplements and Amendments. Before the Distribution Date,
 and subject to the last sentence of this Section 27, the Company and the Rights
 Agent shall,  if the Company so directs,  supplement  or amend any provision of
 this Agreement without the approval of any holders of certificates representing
 shares of Common Stock.  From and after the Distribution  Date, the Company and
 the Rights Agent  shall,  if the Company so directs,  supplement  or amend this
 Agreement  without the approval of any holders of Rights  Certificates in order
 (i) to cure  any  ambiguity,  (ii)  to  correct  or  supplement  any  provision
 contained  herein  which  may be  defective  or  inconsistent  with  any  other
 provisions herein,  (iii) to shorten or lengthen any time period hereunder,  or
 (iv) to change or supplement the  provisions  hereunder in any manner which the
 Company may deem  necessary or desirable and which shall not  adversely  affect
 the  interests of the holders of Rights  Certificates  (other than an Acquiring
 Person or an Affiliate or Associate  of an Acquiring  Person);  provided,  this
 Agreement  may not be  supplemented  or amended  to  lengthen  any time  period
 hereunder,  pursuant to clause (iii) of this  sentence.  Upon the delivery of a
 certificate from an appropriate officer of the Company and, if requested by the
 Rights Agent, an opinion of counsel,  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. Before the Distribution Date,
 the  interests  of the holders of Rights  shall be deemed  coincident  with the
 interests of the holders of Common Stock.  Notwithstanding  anything  herein to
 the contrary,  (i) this  Agreement may not be amended at a time when the Rights
 are not  redeemable  and (ii) the Rights  Agent may, but shall not be obligated
 to, enter into any  supplement or amendment that affects the Rights Agents' own
 right, duties, obligations or immunities under this Agreement.

           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,
 etc.  For all  purposes of this  Agreement,  any  calculation  of the number of
 shares of Common  Stock  outstanding  at any  particular  time,  including  for
 purposes of determining the particular percentage of such outstanding shares of
 Common  Stock of which any  Person is the  Beneficial  Owner,  shall be made in
 accordance  with the last sentence of Rule 13d- 3(d)(1)(i) of the General Rules
 and  Regulations  under the Exchange Act. The Board of Directors of the Company
 shall have the exclusive  power and authority to administer  this Agreement and
 to exercise all rights and powers  specifically  granted to the Board or to the
 Company,  or as may be necessary or  advisable  in the  administration  of this
 Agreement,  including, without limitation, the right and power to (i) interpret
 the  provisions  of this  Agreement,  and (ii) make all  determinations  deemed
 necessary or advisable for the  administration  of this Agreement  (including a
 determination  to redeem or not redeem  the Rights or to amend the  Agreement).
 All such actions, calculations,  interpretations and determinations (including,
 for purposes of clause (y) below,  all omissions with respect to the foregoing)
 which  are  done or made  by the  Board  in good  faith,  shall  (x) be  final,
 conclusive  and binding on the Company,  the Rights  Agent,  the holders of the
 Rights and all other  Persons,  and (y) not  subject  the Board,  or any of the
 directors  on the Board to any  liability  to the  holders of the  Rights.  For
 purposes of clause (x) in the preceding  sentence,  the Rights Agent may assume
 that the Board of Directors acted in good faith.
<PAGE>

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

           Section  31.  Severability.  If  any  term,  provision,  covenant  or
 restriction of this Agreement is held by a court of competent  jurisdiction  or
 other  authority to be invalid,  void or  unenforceable,  the  remainder of the
 terms, provisions, covenants and restrictions of this Agreement shall remain in
 full force and effect and shall in no way be affected, impaired or invalidated;
 provided,  however,  that  notwithstanding  anything in this  Agreement  to the
 contrary, if any such term, provision,  covenant or restriction is held by such
 court or  authority  to be  invalid,  void or  unenforceable  and the  Board of
 Directors of the Company  determines  in its good faith  judgment that severing
 the invalid  language from this Agreement would adversely affect the purpose or
 effect of this  Agreement,  the right of  redemption  set forth in  Section  23
 hereof, if it had previously expired,  shall be reinstated and shall not expire
 until the close of business on the tenth  Business  Day  following  the date of
 such  determination by the Board of Directors.  Without limiting the foregoing,
 if any provision  requiring a specific group of Directors of the Company to act
 is held to by any court of  competent  jurisdiction  or other  authority  to be
 invalid,  void or unenforceable,  such determination  shall then be made by the
 Board of Directors of the Company in  accordance  with  applicable  law and the
 Company's Restated Certificate of Incorporation and Restated By-laws.

           Section 32. Governing Law. This Agreement, each Right and each Rights
 Certificate  issued  hereunder  shall be deemed to be a contract made under the
 laws of the State of  Delaware  and for all  purposes  shall be governed by and
 construed in  accordance  with the laws of such State  applicable  to contracts
 made and to be performed  entirely  within such State,  except that the rights,
 duties and  obligations  of the Rights Agent shall be governed by and construed
 in  accordance  with the laws of the State of New York  applicable to contracts
 made and to be performed within such State.

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

           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.

<PAGE>

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


                                HomeServices.Com Inc.


                                By   /s/ Steven A. McArthur
                                     ----------------------------
                                    Name:  Steven A. McArthur
                                    Title: Senior Vice President,
                                           General Counsel and
                                           Secretary


                                ChaseMellon Shareholder Services, L.L.C.


                                By   /s/ Cindy Bennett
                                     -------------------------------
                                    Name:  Cindy Bennett
                                    Title: Relationship Manager

<PAGE>

                                                                       Exhibit A


                                     FORM OF
                   CERTIFICATE OF DESIGNATION, PREFERENCES AND
          RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                              HomeServices.Com Inc.


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


           The   undersigned    officers   of    HomeServices.Com    Inc.   (the
 "Corporation"),   a  corporation  organized  and  existing  under  the  General
 Corporation Law of the State of Delaware,  in accordance with the provisions of
 Section 103 thereof, DO HEREBY CERTIFY:

           That pursuant to the authority  conferred upon the Board of Directors
 by the Restated Certificate of Incorporation of the said Corporation,  the said
 Board of  Directors  on October  6,  1999,  adopted  the  following  resolution
 creating a series of shares of Preferred  Stock  designated  as Series A Junior
 Participating Preferred Stock:

           RESOLVED,  that  pursuant  to the  authority  vested  in the Board of
 Directors of this Corporation in accordance with the provisions of its Restated
 Certificate of Incorporation, a series of Preferred Stock of the Corporation be
 and it hereby is created,  and that the  designation and amount thereof and the
 voting  powers,  preferences  and relative,  participating,  optional and other
 special  rights  of  the  shares  of  such  series,  and  the   qualifications,
 limitations or restrictions thereof are as follows:

           Section 1. Designation and Amount. The shares of such series shall be
 designated as "Series A Junior Participating Preferred Stock" and the number of
 shares constituting such series shall be 100,000.
<PAGE>

           Section 2.  Dividends and Distributions.

           (A)  Subject to the prior and  superior  rights of the holders of any
 shares of any series of  Preferred  Stock  ranking  prior and  superior  to the
 shares  of  Series A Junior  Participating  Preferred  Stock  with  respect  to
 dividends,  the  holders of shares of Series A Junior  Participating  Preferred
 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  January,  April,  July and October 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 Junior  Participating
 Preferred  Stock, in an amount per share (rounded to the nearest cent) equal to
 the  greater  of (a)  $10.00 or (b)  subject to the  provision  for  adjustment
 hereinafter  set forth,  1,000 times the aggregate per share amount of all cash
 dividends,  and 1,000 times the aggregate per share amount (payable in kind) of
 all non-cash dividends or other  distributions other than a dividend payable in
 shares of Common Stock or a  subdivision  of the  outstanding  shares of Common
 Stock (by  reclassification  or otherwise),  declared on the Common Stock,  par
 value  $0.01 per share,  of the  Corporation  (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 Junior  Participating  Preferred  Stock. In the
 event the  Corporation  shall at any time after  October 14, 1999 (the  "Rights
 Declaration  Date") (i) declare any dividend on Common Stock  payable in shares
 of Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine
 the outstanding Common Stock into a smaller number of shares, then in each such
 case the  amount to which  holders  of shares of Series A Junior  Participating
 Preferred Stock were entitled immediately before such event under clause (b) of
 the  preceding  sentence  shall be  adjusted  by  multiplying  such amount by a
 fraction  the  numerator  of which is the  number of  shares  of  Common  Stock
 outstanding  immediately  after such event and the  denominator of which is the
 number of shares of Common Stock that were outstanding  immediately before such
 event.

           (B) The  Corporation  shall declare a dividend or distribution on the
 Series A Junior  Participating  Preferred  Stock as provided in  Paragraph  (A)
 above  immediately  after it declares a dividend or  distribution on the Common
 Stock (other than a dividend payable in shares of Common Stock); provided that,
 in the event no dividend or distribution shall have been declared on the Common
 Stock during the period  between any  Quarterly  Dividend  Payment Date and the
 next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share
 on the Series A Junior  Participating  Preferred  Stock shall  nevertheless  be
 payable on such subsequent Quarterly Dividend Payment Date.

           (C) Dividends  shall begin to accrue and be cumulative on outstanding
 shares of Series A Junior  Participating  Preferred  Stock  from the  Quarterly
 Dividend Payment Date next preceding the date of issue of such shares of Series
 A Junior Participating Preferred Stock, unless the date of issue of such shares
 is before 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 Junior Participating  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
 Junior Participating Preferred Stock in an amount less than the total amount of
 such  dividends  at the  time  accrued  and  payable  on such  shares  shall be
 allocated pro rata on a share-by-share  basis among all such shares at the time
 outstanding. The Board of Directors may fix a record date for the determination
 of holders of shares of Series A Junior Participating  Preferred Stock entitled
 to receive payment of a dividend or distribution declared thereon, which record
 date  shall be no more  than 30 days  before  the date  fixed  for the  payment
 thereof.

           Section 3.  Voting Rights.  The holders of shares of Series A
 Junior Participating Preferred Stock shall have the following voting
 rights:

           (A) Subject to the provision for  adjustment  hereinafter  set forth,
 each share of Series A Junior  Participating  Preferred Stock shall entitle the
 holder  thereof  to  1,000  votes  on all  matters  submitted  to a vote of the
 stockholders of the Corporation. In the event the Corporation shall at any time
 after the Rights  Declaration  Date (i)  declare any  dividend on Common  Stock
 payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
 or (iii) combine the outstanding  Common Stock into a smaller number of shares,
 then in each such case the number of votes per share to which holders of shares
 of Series A Junior  Participating  Preferred  Stock were  entitled  immediately
 before such event shall be  adjusted by  multiplying  such number by a fraction
 the  numerator  of which is the  number of shares of Common  Stock  outstanding
 immediately  after  such  event and the  denominator  of which is the number of
 shares of Common Stock that were outstanding immediately before such event.
<PAGE>

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

           (C) (i) If at any time dividends on any Series A Junior Participating
 Preferred  Stock  shall be in arrears in an amount  equal to six (6)  quarterly
 dividends thereon,  the occurrence of such contingency shall mark the beginning
 of a period  (herein  called a "default  period") which shall extend until such
 time when all accrued and unpaid dividends for all previous  quarterly dividend
 periods and for the current quarterly dividend period on all shares of Series A
 Junior Participating  Preferred Stock then outstanding shall have been declared
 and paid or set apart for payment.  During each default period,  all holders of
 Preferred  Stock  (including  holders  of the  Series  A  Junior  Participating
 Preferred  Stock)  with  dividends  in  arrears  in an amount  equal to six (6)
 quarterly dividends thereon,  voting as a class,  irrespective of series, shall
 have the right to elect two (2) directors.

                (ii) During any default period, such voting right of the holders
 of Series A Junior Participating  Preferred Stock may be exercised initially at
 a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or
 at any annual meeting of  stockholders,  and  thereafter at annual  meetings of
 stockholders,  provided  that  neither  such voting  right nor the right of the
 holders of any other series of Preferred Stock, if any, to increase, in certain
 cases, the authorized number of directors shall be exercised unless the holders
 of ten percent (10%) in number of shares of Preferred Stock  outstanding  shall
 be present  in person or by proxy.  The  absence of a quorum of the  holders of
 Common Stock shall not affect the exercise by the holders of Preferred Stock of
 such voting right. At any meeting at which the holders of Preferred Stock shall
 exercise such voting right initially  during an existing  default period,  they
 shall  have the  right,  voting  as a class,  to elect  directors  to fill such
 vacancies,  if any, in the Board of  Directors  as may then exist up to two (2)
 directors or, if such right is exercised at an annual meeting, to elect two (2)
 directors.  If the number  which may be so elected at any special  meeting does
 not amount to the required  number,  the holders of the  Preferred  Stock shall
 have the right to make such  increase  in the number of  directors  as shall be
 necessary  to permit the  election by them of the  required  number.  After the
 holders of the  Preferred  Stock  shall  have  exercised  their  right to elect
 directors in any default period and during the continuance of such period,  the
 number of directors  shall not be increased or decreased  except by vote of the
 holders of Preferred  Stock as herein provided or pursuant to the rights of any
 equity  securities  ranking  senior to or pari  passu  with the Series A Junior
 Participating Preferred Stock.
<PAGE>

                (iii)  Unless the holders of Preferred  Stock  shall,  during an
 existing  default  period,  have  previously  exercised  their  right  to elect
 directors, the Board of Directors may order, or any stockholder or stockholders
 owning in the  aggregate not less than ten percent (10%) of the total number of
 shares of Preferred Stock outstanding, irrespective of series, may request, the
 calling of a special meeting of the holders of Preferred  Stock,  which meeting
 shall thereupon be called by the President,  a Vice-President  or the Secretary
 of the  Corporation.  Notice of such meeting and of any annual meeting at which
 holders of  Preferred  Stock are  entitled to vote  pursuant to this  Paragraph
 (C)(iii) shall be given to each holder of record of Preferred  Stock by mailing
 a copy of such  notice to him at his last  address  as the same  appears on the
 books of the  Corporation.  Such meeting shall be called for a time not earlier
 than 20 days and not later  than 60 days  after  such  order or  request  or in
 default  of the  calling  of such  meeting  within 60 days  after such order or
 request,  such meeting may be called on similar  notice by any  stockholder  or
 stockholders  owning in the  aggregate  not less than ten percent  (10%) of the
 total  number of shares of Preferred  Stock  outstanding.  Notwithstanding  the
 provisions of this Paragraph (C)(iii),  no such special meeting shall be called
 during the period within 60 days  immediately  preceding the date fixed for the
 next annual meeting of the stockholders.

                (iv) In any default  period,  the holders of Common  Stock,  and
 other classes of stock of the  Corporation if applicable,  shall continue to be
 entitled to elect the whole number of directors  until the holders of Preferred
 Stock shall have exercised  their right to elect two (2) directors  voting as a
 class,  after the  exercise of which right (x) the  directors so elected by the
 holders of  Preferred  Stock shall  continue in office  until their  successors
 shall have been elected by such holders or until the  expiration of the default
 period,  and (y) any vacancy in the Board of Directors  may (except as provided
 in Paragraph  (C)(ii) of this Section 3) be filled by vote of a majority of the
 remaining  directors  theretofore  elected by the holders of the class of stock
 which elected the director whose office shall have become vacant. References in
 this Paragraph (C) to directors elected by the holders of a particular class of
 stock shall include  directors  elected by such  directors to fill vacancies as
 provided in clause (y) of the foregoing sentence.
<PAGE>

                (v) Immediately upon the expiration of a default period, (x) the
 right of the holders of  Preferred  Stock as a class to elect  directors  shall
 cease, (y) the term of any directors  elected by the holders of Preferred Stock
 as a class  shall  terminate,  and (z) the  number of  directors  shall be such
 number as may be provided for in the  certificate of  incorporation  or by-laws
 irrespective  of any  increase  made  pursuant to the  provisions  of Paragraph
 (C)(ii)  of this  Section 3 (such  number  being  subject,  however,  to change
 thereafter in any manner provided by law or in the certificate of incorporation
 or by-laws). Any vacancies in the Board of Directors effected by the provisions
 of clauses (y) and (z) in the preceding sentence may be filled by a majority of
 the remaining directors.

           (D)  Except  as  set  forth  herein,   holders  of  Series  A  Junior
 Participating  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 quarterly  dividends or other dividends or distributions
 payable on the Series A Junior  Participating  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 Junior
 Participating  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 Junior
      Participating 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 up) with the Series
      A Junior  Participating  Preferred Stock, except dividends paid ratably on
      the  Series A Junior  Participating  Preferred  Stock and all such  parity
      stock on which  dividends  are payable or in arrears in  proportion to the
      total amounts to which the holders of all such shares are then entitled;

                     (iii)   redeem  or  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 Junior Participating  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 Junior Participating Preferred Stock; or
<PAGE>

                     (iv) purchase or otherwise  acquire for  consideration  any
      shares of Series A Junior Participating  Preferred Stock, or any shares of
      stock ranking on a parity with the Series A Junior Participating 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 Paragraph (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  Junior
 Participating   Preferred  Stock   purchased  or  otherwise   acquired  by  the
 Corporation in any manner  whatsoever  shall be retired and cancelled  promptly
 after the acquisition  thereof.  All such shares shall upon their  cancellation
 become authorized but unissued shares of Preferred Stock and may be reissued as
 part of a new  series  of  Preferred  Stock  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. (A) Upon any
 liquidation  (voluntary  or  otherwise),  dissolution  or  winding  up  of  the
 Corporation,  no  distribution  shall be made to the holders of shares of stock
 ranking  junior  (either as to dividends or upon  liquidation,  dissolution  or
 winding up) to the Series A Junior Participating  Preferred Stock unless, prior
 thereto, the holders of shares of Series A Junior Participating Preferred Stock
 shall  have  received  an  amount  equal  to  $1,000  per  share  of  Series  A
 Participating  Preferred  Stock,  plus an amount  equal to  accrued  and unpaid
 dividends and distributions  thereon,  whether or not declared,  to the date of
 such payment (the "Series A Liquidation Preference").  Following the payment of
 the  full  amount  of  the  Series  A  Liquidation  Preference,  no  additional
 distributions  shall  be made to the  holders  of  shares  of  Series  A Junior
 Participating  Preferred Stock unless,  prior thereto, the holders of shares of
 Common Stock shall have received an amount per share (the "Common  Adjustment")
 equal to the  quotient  obtained  by  dividing  (i) the  Series  A  Liquidation
 Preference  by  (ii)  1,000  (as   appropriately   adjusted  as  set  forth  in
 subparagraph (C) below to reflect such events as stock splits,  stock dividends
 and recapitalizations  with respect to the Common Stock) (such number in clause
 (ii), the "Adjustment Number"). Following the payment of the full amount of the
 Series A  Liquidation  Preference  and the Common  Adjustment in respect of all
 outstanding shares of Series A Junior Participating  Preferred Stock and Common
 Stock,  respectively,  holders of Series A Junior Participating Preferred Stock
 and  holders  of  shares  of Common  Stock  shall  receive  their  ratable  and
 proportionate  share of the remaining  assets to be distributed in the ratio of
 the  Adjustment  Number to 1 with  respect to such  Preferred  Stock and Common
 Stock, on a per share basis, respectively.
<PAGE>

           (B) In the  event,  however,  that  there are not  sufficient  assets
 available to permit payment in full of the Series A Liquidation  Preference and
 the  liquidation  preferences of all other series of preferred  stock,  if any,
 which rank on a parity with the Series A Junior Participating  Preferred Stock,
 then such remaining assets shall be distributed  ratably to the holders of such
 parity shares in proportion to their respective liquidation preferences. In the
 event,  however,  that  there are not  sufficient  assets  available  to permit
 payment in full of the Common  Adjustment,  then such remaining assets shall be
 distributed ratably to the holders of Common Stock.

           (C) In the event the  Corporation  shall at any time after the Rights
 Declaration  Date (i) declare any dividend on Common Stock payable in shares of
 Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
 outstanding  Common  Stock into a smaller  number of shares,  then in each such
 case the  Adjustment  Number in effect  immediately  before such event shall be
 adjusted by multiplying  such Adjustment  Number by a fraction the numerator of
 which is the number of shares of Common  Stock  outstanding  immediately  after
 such event and the denominator of which is the number of shares of Common Stock
 that were outstanding immediately before such event.

           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  Junior  Participating  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 1,000 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.  In the event the  Corporation  shall at any time  after the  Rights
 Declaration  Date (i) declare any dividend on Common Stock payable in shares of
 Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
 outstanding  Common  Stock into a smaller  number of shares,  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 Junior  Participating  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 before such event.
<PAGE>

           Section 8.  No Redemption.  The shares of Series A Junior
 Participating Preferred Stock shall not be redeemable.

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

           Section 10. Amendment. At any time when any shares of Series A Junior
 Participating Preferred Stock are outstanding, neither the Restated Certificate
 of Incorporation  of the Corporation nor this Certificate of Designation  shall
 be amended in any manner  which  would  materially  alter or change the powers,
 preferences  or special rights of the Series A Junior  Participating  Preferred
 Stock so as to  affect  them  adversely  without  the  affirmative  vote of the
 holders  of a  majority  or more of the  outstanding  shares of Series A Junior
 Participating Preferred Stock, voting separately as a class.

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

<PAGE>

           IN WITNESS WHEREOF, HomeServices.Com Inc. has caused this
 Certificate of Designation to be executed in its corporate name this 14th
 day of  October, 1999.


                              HOMESERVICES.COM INC.


                             By:
                                 -------------------------------
                               Name:   Steven A. McArthur
                               Title:  Senior Vice President,
                                       General Counsel and
                                       Secretary


<PAGE>
                                                                       Exhibit B



                          [Form of Rights Certificate]


 Certificate No. R-                                         ________ Rights


 NOT  EXERCISABLE  AFTER OCTOBER 14, 2009 (THE TENTH  ANNIVERSARY OF THE DATE OF
 THE  CONSUMMATION  OF THE INITIAL  PUBLIC  OFFERING OF THE COMMON  STOCK OF THE
 COMPANY)  UNLESS EXTENDED PRIOR THERETO BY THE BOARD OF DIRECTORS OR EARLIER IF
 REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
 THE COMPANY,  AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
 UNDER CERTAIN  CIRCUMSTANCES,  RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
 (AS SUCH TERM IS DEFINED IN THE RIGHTS  AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
 SUCH RIGHTS MAY BECOME NULL AND VOID.

                               Rights Certificate


                              HomeServices.Com Inc.


           This certifies that , or registered  assigns, is the registered owner
 of the  number of Rights  set forth  above,  each of which  entitles  the owner
 thereof,  subject  to the  terms,  provisions  and  conditions  of  the  Rights
 Agreement,  dated as of October  14,  1999 (the  "Rights  Agreement"),  between
 HomeServices.Com Inc., a Delaware corporation (the "Company"),  and ChaseMellon
 Shareholder  Services,  L.L.C.,  a New Jersey  limited  liability  company (the
 "Rights Agent"), to purchase from the Company at any time before 5:00 p.m. (New
 York City  time) on October  14,  2009 (the  tenth  anniversary  of the date of
 consummation  of the initial public  offering of the Common Stock) (unless such
 date is  extended  prior  thereto by the Board of  Directors)  at the office or
 offices of the Rights Agent  designated for such purpose,  or its successors as
 Rights  Agent,  one  one-thousandth  of a fully paid,  non-assessable  share of
 Series A Junior  Participating  Preferred Stock (the "Preferred  Stock") of the
 Company,  at the  Purchase  Price (as defined in the Rights  Agreement),  which
 shall initially be $_____ [insert the amount equal to the product of four times
 the average  daily closing price of the Common Stock for the first five days of
 trading  subsequent to the  consummation  of the initial public offering of the
 Common  Stock]  per  one  one-thousandth  of a  share,  upon  presentation  and
 surrender of this Rights  Certificate with the Form of Election to Purchase and
 related  Certificate  duly  executed.  The number of Rights  evidenced  by this
 Rights  Certificate  (and the  number of shares  which  may be  purchased  upon
 exercise  thereof) set forth above,  and the Purchase Price per share set forth
 above,  are the number and Purchase Price as of October __, 1999, [the close of
 business  on the fifth day of trading  subsequent  to the  consummation  of the
 initial  public  offering of the Common Stock] based on the Preferred  Stock as
 constituted at such date. The Company  reserves the right to require before the
 occurrence  of a  Triggering  Event  (as such  term is  defined  in the  Rights
 Agreement)  that a number of Rights be  exercised  so that only whole shares of
 Preferred Stock will be issued.
<PAGE>

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

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

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

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

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

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

           No holder of this  Rights  Certificate  shall be  entitled to vote or
 receive  dividends  or be  deemed  for any  purpose  the  holder  of  shares of
 Preferred Stock or of any other securities of the Company which may at any time
 be issuable on the exercise hereof,  nor shall anything contained in the Rights
 Agreement or herein be construed to confer upon the holder hereof, as such, any
 of the  rights of a  stockholder  of the  Company  or any right to vote for the
 election of  directors  or upon any matter  submitted  to  stockholders  at any
 meeting  thereof,  or to give consent to or withhold consent from any corporate
 action,   or,  to  receive  notice  of  meetings  or  other  actions  affecting
 stockholders  (except  as  provided  in the  Rights  Agreement),  or to receive
 dividends  or  subscription  rights,  or  otherwise,  until the Right or Rights
 evidenced by this Rights  Certificate  shall have been exercised as provided in
 the Rights Agreement.

           This  Rights  Certificate  shall not be valid or  obligatory  for any
 purpose until it shall have been countersigned by the Rights Agent.
<PAGE>

           WITNESS the facsimile signature of the proper officers of the Company
 and its corporate seal.

 Dated as of _______________________



 ATTEST:                       HomeServices.Com Inc.



 ________________________      By___________________________
         Secretary                Title:


 Countersigned:

 ChaseMellon Shareholder Services, L.L.C.


 By _____________________________
    Authorized Signature


<PAGE>
                [Form of Reverse Side of Rights Certificate]



                               FORM OF ASSIGNMENT


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


                FOR VALUE RECEIVED _________________________________________
 hereby sells, assigns and transfers unto __________________________________
 ---------------------------------------------------------------------------
               (Please print name and address of transferee)
 ---------------------------------------------------------------------------
 this Rights  Certificate,  together with all right, title and interest therein,
 and does hereby irrevocably constitute and appoint __________________ Attorney,
 to transfer  the within  Rights  Certificate  on the books of  HomeServices.Com
 Inc., with full power of substitution.

 Dated: ______________________



                                 ------------------------
                                    Signature


 Signature Guaranteed:

<PAGE>

                                   Certificate

           The undersigned  hereby  certifies by checking the appropriate  boxes
 that:

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

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


 Dated:_______________              ________________________
                                    Signature

 Signature Guaranteed:



<PAGE>

                                     NOTICE


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



<PAGE>

                          FORM OF ELECTION TO PURCHASE

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


 To: HomeServices.Com Inc.:

           The  undersigned  hereby  irrevocably  elects to exercise  __________
 Rights  represented  by this  Rights  Certificate  to  purchase  the  shares of
 Preferred  Stock  issuable  upon the  exercise  of the  Rights  (or such  other
 securities of the 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 and delivered to:


 Please insert social security
 or other identifying number

 ---------------------------------------------------------------------------
                         (Please print name and address)

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


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

 Please insert social security
 or other identifying number

 ---------------------------------------------------------------------------
                         (Please print name and address)

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

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

 Dated: ___________________




                               ------------------------------
                               Signature



 Signature Guaranteed:



                                   Certificate

           The undersigned  hereby  certifies by checking the appropriate  boxes
 that:

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

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


 Dated:____________                 _______________________
                                    Signature



 Signature Guaranteed:



<PAGE>

                                     NOTICE



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


<PAGE>

                                                                       Exhibit C


                          SUMMARY OF RIGHTS TO PURCHASE
                            SERIES A PREFERRED STOCK


           On October 6, 1999 , the Board of Directors of HomeServices.Com  Inc.
 (the  "Company")  declared  a  dividend  distribution  of one  Right  for  each
 outstanding  share of Company  Common  Stock to  stockholders  of record at the
 close of  business on October  14,  1999 (the date of the  consummation  of the
 initial public offering of the Common Stock ) (the "Record  Date").  Each Right
 entitles the registered  holder to purchase from the Company a unit  consisting
 of one  one-thousandth  of a share (a "Unit") of Series A Junior  Participating
 Preferred Stock, par value $0.01 per share (the "Series A Preferred  Stock") at
 a Purchase  Price equal to the product of four times the average  daily closing
 price of the Common Stock for the first five days of trading  subsequent to the
 consummation  of the initial  public  offering of the Common Stock,  subject to
 adjustment.  The  description and terms of the Rights are set forth in a Rights
 Agreement  (the  "Rights   Agreement")  between  the  Company  and  ChaseMellon
 Shareholder Services, L.L.C., as Rights Agent.

           Initially,   the  Rights  will  be  attached  to  all  Common   Stock
 certificates  representing  shares then  outstanding,  and no  separate  Rights
 Certificates will be distributed.  Subject to certain  exceptions  specified in
 the Rights  Agreement,  the Rights will  separate  from the Common  Stock and a
 Distribution Date will occur upon the earlier of (i) 10 business days following
 a public  announcement  that a person  or group  of  affiliated  or  associated
 persons (an  "Acquiring  Person") has acquired  beneficial  ownership of 15% or
 more of the outstanding  shares of Common Stock (the "Stock  Acquisition Date")
 and (ii) 10  business  days (or such later date as the Board  shall  determine)
 following  the  commencement  of a tender  offer or  exchange  offer that would
 result in a person or group becoming an Acquiring  Person.  An Acquiring Person
 shall not,  however,  include any of the  following:  (A) the Company,  (B) any
 subsidiary of the Company,  (C) any employee benefit plan of the Company or any
 subsidiary  of the  Company,  or any person or entity  organized,  appointed or
 established  by the Company for or pursuant to the terms of any such plan,  (D)
 MidAmerican  Energy  Holdings  Company and its  affiliates  and any  successors
 thereof,  (E)  persons  who acquire  15%  beneficial  ownership  as a result of
 repurchases  of  stock  by  the  Company  or  certain  inadvertent  actions  by
 institutional or certain other  stockholders,  except in certain  circumstances
 specified in the Rights Plan, (F) in certain circumstances, persons who acquire
 shares of Common Stock from the beneficial owner of at least 15% or more of the
 shares of Common Stock that were outstanding  immediately upon  consummation of
 the initial public offering of the Common Stock of the Company, and as a result
 of such  acquisition such acquiring person also becomes the Beneficial Owner of
 15% or more of the then  outstanding  shares of Common  Stock or (G) in certain
 circumstances, persons who inadvertently purchase more than 14.9% but less than
 20%  beneficial  ownership  and who  report  or are  required  to  report  such
 ownership on Schedule 13G or Schedule 13D under the Securities and Exchange Act
 of 1934,  as  amended  and in effect on the date of the Rights  Agreement,  and
 which  Schedule does not state any intention to or reserve the right to control
 or influence the  management or policies of the Company or engage in any of the
 actions specified in Item 4 of such Schedule (other than the disposition of the
 Common Stock).
<PAGE>

           Until the Distribution  Date, (i) the Rights will be evidenced by the
 Common  Stock  certificates  and will be  transferred  with and only  with such
 Common Stock certificates,  (ii) new Common Stock certificates issued after the
 Record  Date will  contain a notation  incorporating  the Rights  Agreement  by
 reference and (iii) the surrender for transfer of any  certificates  for Common
 Stock  outstanding  will also constitute the transfer of the Rights  associated
 with the Common Stock represented by such  certificate.  Pursuant to the Rights
 Agreement, the Company reserves the right to require before the occurrence of a
 Triggering Event (as defined below) that, upon any exercise of Rights, a number
 of Rights be exercised  so that only whole  shares of  Preferred  Stock will be
 issued.

           The Rights are not exercisable  until the Distribution  Date and will
 expire at 5:00 p.m.  (New York City  time) on  October  14,  2009,  (the  tenth
 anniversary of the date of the  consummation  of the initial public offering of
 the Common  Stock)  unless  such date is  extended  or the  Rights are  earlier
 redeemed or exchanged by the Company as described below.
<PAGE>

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

           If a Person becomes an Acquiring Person,  except pursuant to an offer
 for all  outstanding  shares of Common  Stock which the  independent  directors
 determine  to be fair and not  inadequate  to and to  otherwise  be in the best
 interests of the Company and its stockholders,  after receiving advice from one
 or more investment banking firms (a "Qualified Offer"),  each holder of a Right
 will thereafter have the right to receive, upon exercise,  Common Stock (or, in
 certain  circumstances,  cash,  property or other  securities  of the  Company)
 having  a  value  equal  to  two  times  the  exercise   price  of  the  Right.
 Notwithstanding any of the foregoing, following the occurrence of the event set
 forth in this paragraph,  all Rights that are, or (under certain  circumstances
 specified in the Rights  Agreement) were,  beneficially  owned by any Acquiring
 Person will be null and void. However, Rights are not exercisable following the
 occurrence  of the event set forth  above  until such time as the Rights are no
 longer redeemable by the Company as set forth below.
<PAGE>

           If, at any time following the Stock Acquisition Date, (i) the Company
 engages  in a merger or other  business  combination  transaction  in which the
 Company  is not the  surviving  corporation  (other  than with an entity  which
 acquired the shares pursuant to a Qualified Offer), (ii) the Company engages in
 a merger or other business combination  transaction in which the Company is the
 surviving  corporation  and the  Common  Stock of the  Company  is  changed  or
 exchanged,  or (iii) 50% or more of the Company's assets,  cash flow or earning
 power is sold or transferred,  each holder of a Right (except Rights which have
 previously  been voided as set forth above) shall  thereafter have the right to
 receive,  upon exercise,  common stock of the acquiring  company having a value
 equal to two times the  exercise  price of the  Right.  The events set forth in
 this  paragraph  and in the second  preceding  paragraph are referred to as the
 "Triggering Events."

           At any time after a person becomes an Acquiring Person and before the
 acquisition  by such  person  or group of  fifty  percent  (50%) or more of the
 outstanding  Common Stock, the Board may exchange the Rights (other than Rights
 owned by such person or group which have become void),  in whole or in part, at
 an exchange  ratio of one share of Common  Stock,  or one  one-thousandth  of a
 share of Preferred  Stock (or of a share of a class or series of the  Company's
 preferred stock having  equivalent  rights,  preferences and  privileges),  per
 Right (subject to adjustment).

           At any time until ten business days  following the Stock  Acquisition
 Date,  the Company may redeem the Rights in whole,  but not in part, at a price
 of $.01 per Right (payable in cash, Common Stock or other consideration  deemed
 appropriate  by the Board of  Directors).  Immediately  upon the  action of the
 Board of Directors ordering redemption of the Rights, the Rights will terminate
 and the  only  right of the  holders  of  Rights  will be to  receive  the $.01
 redemption price.
<PAGE>

           Until a Right is exercised, the holder thereof, as such, will have no
 rights as a stockholder  of the Company,  including,  without  limitation,  the
 right to vote or to receive  dividends.  While the  distribution  of the Rights
 will not be  taxable  to  stockholders  or to the  Company,  stockholders  may,
 depending upon the circumstances, recognize taxable income if the Rights become
 exercisable  for Common  Stock (or other  consideration)  of the Company or for
 common stock of the acquiring  company or in the event of the redemption of the
 Rights as set forth above.

           Any of the  provisions of the Rights  Agreement may be amended by the
 Board of  Directors  of the Company  before the  Distribution  Date.  After the
 Distribution Date, the provisions of the Rights Agreement may be amended by the
 Board in order to cure any  ambiguity,  to make changes  which do not adversely
 affect the  interests of holders of Rights,  or to shorten or lengthen any time
 period under the Rights Agreement. The foregoing notwithstanding,  no amendment
 may be made at such time as the Rights are not redeemable.

           A form of the Rights  Agreement will be filed with the Securities and
 Exchange  Commission  as an Exhibit  to a  Registration  Statement  on Form S-1
 (Registration No. 333-82997).  A copy of the Rights Agreement is available free
 of charge from the Rights Agent.  This summary  description  of the Rights does
 not purport to be complete and is qualified in its entirety by reference to the
 Rights Agreement, which is incorporated herein by reference.