Document:

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                                                                     EXHIBIT 4.1

                      BROCADE COMMUNICATIONS SYSTEMS, INC.

                                       AND

                            WELLS FARGO BANK, MN N.A.

                                  RIGHTS AGENT

                        PREFERRED STOCK RIGHTS AGREEMENT

                          DATED AS OF FEBRUARY 7, 2002

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                                TABLE OF CONTENTS
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                                                                                                PAGE
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<S>          <C>                                                                                 <C>
Section 1.   Certain Definitions ............................................................     1

Section 2.   Appointment of Rights Agent ....................................................     7

Section 3.   Issuance of Rights Certificates ................................................     7

Section 4.   Form of Rights Certificates ....................................................     9

Section 5.   Countersignature and Registration ..............................................    10

Section 6.   Transfer, Split Up, Combination and Exchange of Rights Certificates;
             Mutilated, Destroyed, Lost or Stolen Rights Certificates .......................    10

Section 7.   Exercise of Rights; Exercise Price; Expiration Date of Rights ..................    11

Section 8.   Cancellation and Destruction of Rights Certificates ............................    13

Section 9.   Reservation and Availability of Preferred Shares ...............................    14

Section 10.  Record Date ....................................................................    15

Section 11.  Adjustment of Exercise Price, Number of Shares or Number of Rights .............    15

Section 12.  Certificate of Adjusted Exercise Price or Number of Shares .....................    22

Section 13.  Consolidation, Merger or Sale or Transfer of Assets or Earning Power ...........    22

Section 14.  Fractional Rights and Fractional Shares ........................................    26

Section 15.  Rights of Action ...............................................................    27

Section 16.  Agreement of Rights Holders ....................................................    27

Section 17.  Rights Certificate Holder Not Deemed a Stockholder .............................    27

Section 18.  Concerning the Rights Agent ....................................................    28

Section 19.  Merger or Consolidation or Change of Name of Rights Agent ......................    28

Section 20.  Duties of Rights Agent .........................................................    29

Section 21.  Change of Rights Agent .........................................................    31
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                                TABLE OF CONTENTS
                                  (CONTINUED)
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<S>          <C>                                                                                 <C>
Section 22.  Issuance of New Rights Certificates ............................................    32

Section 23.  Redemption .....................................................................    32

Section 24.  Exchange .......................................................................    33

Section 25.  Notice of Certain Events .......................................................    35

Section 26.  Notices ........................................................................    36

Section 27.  Supplements and Amendments .....................................................    36

Section 28.  Successors .....................................................................    37

Section 29.  Determinations and Actions by the Board of Directors, etc. .....................    37

Section 30.  Benefits of this Agreement .....................................................    37

Section 31.  Severability ...................................................................    37

Section 32.  Governing Law ..................................................................    37

Section 33.  Counterparts ...................................................................    38

Section 34.  Descriptive Headings ...........................................................    38

EXHIBITS

Exhibit A    Form of Certificate of Designation

Exhibit B    Form of Rights Certificate

Exhibit C    Summary of Rights
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<PAGE>

                                                                     EXHIBIT 4.1

                        PREFERRED STOCK RIGHTS AGREEMENT

        This Preferred Stock Rights Agreement is dated as of February 7, 2002,
between Brocade Communications Systems, Inc., a Delaware corporation, and Wells
Fargo Bank, MN N.A.

        On February 5, 2002 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board
of Directors of the Company authorized and declared a dividend of one Preferred
Share Purchase Right (a "RIGHT") for each Common Share (as hereinafter defined)
of the Company outstanding as of the Close of Business (as hereinafter defined)
on February 19, 2002 (the "RECORD DATE"), each Right representing the right to
purchase one one-thousandth (0.001) of a share of Series A Participating
Preferred Stock (as such number may be adjusted pursuant to the provisions of
this Agreement), having the rights, preferences and privileges set forth in the
form of Certificate of Designations of Rights, Preferences and Privileges of
Series A Participating Preferred Stock attached hereto as Exhibit A, upon the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right (as such number may be adjusted pursuant to
the provisions of this Agreement) with respect to each Common Share that shall
become outstanding between the Record Date and the earlier of the Distribution
Date and the Expiration Date (as such terms are hereinafter defined), and in
certain circumstances after the Distribution Date.

        NOW, THEREFORE, in consideration of the promises 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 Common Shares then outstanding, but shall
not include the Company, any Subsidiary of the Company or any employee benefit
plan of the Company or of any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall be deemed to be an Acquiring Person as the result of
an acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional Common Shares of
the Company (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), then such Person shall
be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of
such additional Common Shares of the Company such Person does not beneficially
own 15% or more of the Common Shares of the Company then outstanding.
Notwithstanding the

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foregoing, (i) if the Company's Board of Directors determines in good faith that
a Person who would otherwise be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), has become such inadvertently
(including, without limitation, because (A) such Person was unaware that it
beneficially owned a percentage of the Common Shares that would otherwise cause
such Person to be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), or (B) such Person was aware of the extent of
the Common Shares it beneficially owned but had no actual knowledge of the
consequences of such beneficial ownership under this Agreement) and without any
intention of changing or influencing control of the Company, and if such Person
divested or divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement including, without limitation Section 1(hh) hereof;
and (ii) if, as of the date hereof, any Person is the Beneficial Owner of 15% or
more of the Common Shares outstanding, such Person shall not be or become an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), unless and until such time as such Person shall become the
Beneficial Owner of additional Common Shares (other than pursuant to a dividend
or distribution paid or made by the Company on the outstanding Common Shares in
Common Shares or pursuant to a split or subdivision of the outstanding Common
Shares), unless, upon becoming the Beneficial Owner of such additional Common
Shares, such Person is not then the Beneficial Owner of 15% or more of the
Common Shares then outstanding.

               (b) "ADJUSTMENT FRACTION" shall have the meaning set forth in
Section 11(a)(i) hereof.

               (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, as in effect on the date of this Agreement.

               (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 beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or
successor law or regulation);

                       (ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed pursuant to this Section
1(d)(ii)(A) to be the Beneficial Owner of, or to beneficially own, (1)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (2) securities
which a Person or any of such Person's Affiliates or Associates may be

                                                                             -2-

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deemed to have the right to acquire pursuant to any merger or other acquisition
agreement between the Company and such Person (or one or more of its Affiliates
or Associates) if such agreement has been approved by the Board of Directors of
the Company prior to there being an Acquiring Person; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any security under this Section 1(d)(ii)(B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report); or

                       (iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding, whether or not in writing (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(d)(ii)(B)) or disposing of any securities of the Company; provided,
however, that in no case shall an officer or director of the Company be deemed
(x) the Beneficial Owner of any securities beneficially owned by another officer
or director of the Company solely by reason of actions undertaken by such
persons in their capacity as officers or directors of the Company or (y) the
Beneficial Owner of securities held of record by the trustee of any employee
benefit plan of the Company or any Subsidiary of the Company for the benefit of
any employee of the Company or any Subsidiary of the Company, other than the
officer or director, by reason of any influence that such officer or director
may have over the voting of the securities held in the plan.

               (e) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in 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 time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next succeeding
Business Day.

               (g) "COMMON SHARES" when used with reference to the Company shall
mean the shares of Common Stock of the Company, par value $0.001 per share.
Common Shares when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.

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

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               (i) "COMPANY" shall mean Brocade Communications Systems, Inc., a
Delaware corporation, subject to the terms of Section 13(a)(iii)(C) hereof.

               (j) "CURRENT PER SHARE MARKET PRICE" of any security (a
"Security" for purposes of this definition), for all computations other than
those made pursuant to Section 11(a)(iii) hereof, shall mean the average of the
daily closing prices per share of such Security for the thirty (30) consecutive
Trading Days immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price
of any Security on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the ten (10) consecutive Trading
Days immediately prior to such date; provided, however, that in the event that
the Current Per Share Market Price of the Security is determined during a period
following the announcement by the issuer of such Security of (i) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of the applicable
thirty (30) Trading Day or ten (10) Trading Day period, after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported 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 Security is 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 Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not reported, 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
Security is 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 Security selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Security, the fair value of such
shares on such date as determined in good faith by the Board of Directors of the
Company shall be used. If the Preferred Shares are not publicly traded, the
Current Per Share Market Price of the Preferred Shares shall be conclusively
deemed to be (x) the Current Per Share Market Price of the Common Shares as
determined pursuant to this Section 1(j), as appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof, multiplied by (y) 1,000. If the Security is not publicly held or so
listed or traded, Current Per Share Market Price shall mean the fair value per
share 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 conclusive for all purposes.

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

                                                                             -4-

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               (l) "DISTRIBUTION DATE" shall mean the earlier of (i) the Close
of Business on the tenth day (or such later date as may be determined by action
of the Company's Board of Directors) after the Shares Acquisition Date (or, if
the tenth day after the Shares Acquisition Date occurs before the Record Date,
the Close of Business on the Record Date) or (ii) the Close of Business on the
tenth Business Day (or such later date as may be determined by action of the
Company's Board of Directors) 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, assuming the successful consummation thereof, such Person would be an
Acquiring Person.

               (m) "EQUIVALENT SHARES" shall mean Preferred Shares and
any other class or series of capital stock of the Company which is entitled to
the same rights, privileges and preferences as the Preferred Shares.

               (n) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.

               (o) "EXCHANGE RATIO" shall have the meaning set forth in Section
24(a) hereof.

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

               (q) "EXPIRATION DATE" shall mean the earliest to occur of: (i)
the Close of Business on the Final Expiration Date, (ii) the Redemption Date, or
(iii) the time at which the Board of Directors orders the exchange of the Rights
as provided in Section 24 hereof.

               (r) "FINAL EXPIRATION DATE" shall mean February 19, 2012.

               (s) "NASDAQ" shall mean The NASDAQ Stock Market, Inc.

               (t) "PERSON" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.

               (u) "POST-EVENT TRANSFEREE" shall have the meaning set forth in
Section 7(e) hereof.

               (v) "PREFERRED SHARES" shall mean shares of Series A
Participating Preferred Stock, par value $0.001 per share, of the Company.

               (w) "PRE-EVENT TRANSFEREE" shall have the meaning set forth in
Section 7(e) hereof.

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

                                                                             -5-

<PAGE>

               (y) "RECORD DATE" shall have the meaning set forth in the
recitals at the beginning of this Agreement.

               (z) "REDEMPTION DATE" shall have the meaning set forth in Section
23(a) hereof.

               (aa) "REDEMPTION PRICE" shall have the meaning set forth in
Section 23(a) hereof.

               (bb) "RIGHTS AGENT" shall mean (i) Wells Fargo Bank, MN N.A.,
(ii) its successor or replacement as provided in Sections 19 and 21 hereof or
(iii) any additional Person appointed pursuant to Section 2 hereof

               (cc) "RIGHTS CERTIFICATE" shall mean a certificate
substantially in the form attached hereto as Exhibit B.

               (dd) "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning
set forth in the recitals at the beginning of this Agreement.

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

               (ff) "SECTION 13 EVENT" shall mean any event described in clause
(i), (ii) or (iii) of Section 13(a) hereof.

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

               (hh) "SHARES ACQUISITION DATE" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such; provided that, if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a) hereof, then no Shares Acquisition
Date shall be deemed to have occurred by virtue of such event and no
Distribution Date shall be deemed to have occurred by virtue of such event.

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

               (jj) "SUBSIDIARY" of any Person shall mean any corporation or
other entity of which an amount of voting securities sufficient to elect a
majority of the directors or Persons having similar authority of such
corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or any corporation or other entity otherwise controlled by such
Person.

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<PAGE>

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

               (ll) "SUMMARY OF RIGHTS" shall mean a summary of this Agreement
substantially in the form attached hereto as Exhibit C.

               (mm) "TOTAL EXERCISE PRICE" shall have the meaning set forth in
Section 4(a) hereof.

               (nn) "TRADING DAY" shall mean a day on which the principal
national securities exchange on which a referenced security is listed or
admitted to trading is open for the transaction of business or, if a referenced
security is not listed or admitted to trading on any national securities
exchange, a Business Day.

               (oo) A "TRIGGERING EVENT" shall be deemed to have occurred upon
any Person becoming an Acquiring Person.

        Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable, upon ten (10) days' prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be liable
for, the acts or omissions of any co-Rights Agent.

        Section 3. Issuance of Rights Certificates.

               (a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates
for Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Rights Certificates) and not by separate
Rights Certificates and (ii) the right to receive Rights Certificates will be
transferable only in connection with the transfer of Common Shares. Until the
earlier of the Distribution Date or the Expiration Date, the surrender for
transfer of certificates for Common Shares shall also constitute the surrender
for transfer of the Rights associated with the Common Shares represented
thereby. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Rights Certificate evidencing one Right
for each Common Share so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per Common Share has been made
pursuant to Section 11 hereof, then at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in

                                                                             -7-
<PAGE>

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 the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates and may be transferred by the transfer of the
Rights Certificates as permitted hereby, separately and apart from any transfer
of Common Shares, and the holders of such Rights Certificates as listed in the
records of the Company or any transfer agent or registrar for the Rights shall
be the record holders thereof.

               (b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of the Summary of Rights by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company's transfer agent and registrar. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights.

               (c) Unless the Board of Directors by resolution adopted at or
before the time of the issuance of any Common Shares after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date (or, in
certain circumstances provided in Section 22 hereof, after the Distribution
Date) specifies to the contrary, Rights shall be issued in respect of all Common
Shares that are so issued, and Certificates representing such Common Shares
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 A RIGHTS AGREEMENT BETWEEN BROCADE
        COMMUNICATIONS SYSTEMS, INC. AND WELLS FARGO BANK, MN N.A., AS THE
        RIGHTS AGENT, DATED AS OF FEBRUARY 7, 2002, (THE "RIGHTS AGREEMENT"),
        THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A
        COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF BROCADE
        COMMUNICATIONS SYSTEMS, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH
        IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE
        CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE.
        BROCADE COMMUNICATIONS SYSTEMS, INC. WILL MAIL TO THE HOLDER OF THIS
        CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT
        OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN
        THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS,
        WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF
        (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
        HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
        BECOME NULL AND VOID.

                                                                             -8-
<PAGE>

With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Shares represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.

               (d) In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.

        Section 4 Form of Rights Certificates.

               (a) The Rights Certificates (and the forms of election to
purchase Common Shares and of assignment to be printed on the reverse thereof)
shall be substantially in the form of Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or a national market system, on which
the Rights may from time to time be listed or included, 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 (or in
the case of Rights issued with respect to Common Shares issued by the Company
after the Record Date, as of the date of issuance of such Common Shares) and on
their face shall entitle the holders thereof to purchase such number of
one-thousandths of a Preferred Share as shall be set forth therein at the price
set forth therein (such exercise price per one one-thousandth of a Preferred
Share being hereinafter referred to as the "EXERCISE PRICE" and the aggregate
Exercise Price of all Preferred Shares issuable upon exercise of one Right being
hereinafter referred to as the "TOTAL EXERCISE PRICE"), but the number and type
of securities purchasable upon the exercise of each Right and the Exercise Price
shall be subject to adjustment as provided herein.

               (b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a Post-Event
Transferee, (iii) a Pre-Event Transferee or (iv) any subsequent transferee
receiving transferred Rights from a Post-Event Transferee or a Pre-Event
Transferee, either directly or through one or more intermediate transferees, 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

                                                                             -9-
<PAGE>

        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 Chief Executive Officer, its Chief
Financial Officer, its President or any Vice President, either manually or by
facsimile signature, and by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal (if any) or a facsimile thereof. The Rights
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless 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 on behalf of the Company had not ceased to be such officer of the
Company; and any Rights Certificate 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.

               (b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office designated for such purposes, 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 Sections 7(e), 14 and 24 hereof,
at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Rights Certificate or
Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of one-thousandths of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Rights Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be transferred, split
up, combined or exchanged at the office of the Rights Agent

                                                                            -10-
<PAGE>

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 shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 7(e), 14 and 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.

               (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, at the Company's request,
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 make and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.

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

               (a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Close of Business on the Expiration
Date by surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office of the Rights Agent designated for such purpose, together with payment of
the Exercise Price for each one-thousandth of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) as
to which the Rights are exercised.

        The Exercise Price for each one-thousandth of a Preferred Share issuable
pursuant to the exercise of a Right shall initially be Two Hundred and Eighty
Dollars ($280), shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.

               (b) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Exercise Price for the number of one-thousandths of a Preferred
Share (or, following a Triggering Event, other securities, cash or other assets
as the case may be) to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Rights Certificate in
accordance with Section 9(e) hereof, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i)(A) requisition from any transfer agent of
the Preferred Shares (or make available, if the Rights Agent is the transfer
agent for the Preferred Shares) a certificate or certificates for the number of

                                                                            -11-
<PAGE>

one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) 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
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) issuable upon exercise of
the Rights hereunder with a depository agent, requisition from the depository
agent depository receipts representing such number of one-thousandths of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) as are to be purchased (in which case
certificates for the Preferred Shares (or, following a Triggering Event, other
securities, cash or other assets as the case may be) represented by such
receipts shall be deposited by the transfer agent with the depository agent) and
the Company hereby directs the depository agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depository 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) when appropriate, after receipt thereof, deliver such cash
to or upon the order of the registered holder of such Rights Certificate. The
payment of the Exercise Price (as such amount may be reduced (including to zero)
pursuant to Section 11(a)(iii) hereof) and an amount equal to any applicable
transfer tax required to be paid by the holder of such Rights Certificate in
accordance with Section 9(e) hereof, may be made in cash or by certified bank
check, cashier's check or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue securities of the Company other
than Preferred Shares, 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 appropriate.

               (c) 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 to the registered holder of such Rights Certificate or to
his or her duly authorized assigns, subject to the provisions of Section 14
hereof.

               (d) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering 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 (a "POST-EVENT TRANSFEREE"), (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Company's Board of Directors has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e) (a "PRE-EVENT TRANSFEREE") or (iv) any subsequent
transferee

                                                                            -12-
<PAGE>

receiving transferred Rights from a Post-Event Transferee or a Pre-Event
Transferee, either directly or through one or more intermediate transferees,
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 ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights Certificates or to any other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any of such Acquiring
Person's Affiliates, Associates or transferees hereunder.

               (e) 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, in
addition to having complied with the requirements of Section 7(a), have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company 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 to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no 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 Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Company, or shall, at the written request of the
Company and after any Securities and Exchange Commission required retention
period, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate evidencing the destruction thereof to the Company.

        Section 9. Reservation and Availability of Preferred Shares.

               (a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept available out of its authorized and
unissued Preferred Shares not reserved for another purpose (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities), the number of Preferred Shares (and, following
the occurrence of the Triggering Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.

               (b) If the Company shall hereafter list any of its Preferred
Shares on a national securities exchange, then so long as the Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and

                                                                            -13-
<PAGE>

after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange 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
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the date of expiration of the
Rights. The Company may temporarily suspend, for a period 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, and notify
the Rights Agent, that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notification to the Rights Agent
at such time as the suspension is no longer in effect. 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. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction, unless
the requisite qualification in such jurisdiction shall have been obtained, or an
exemption therefrom shall be available, and until a registration statement has
been declared and remains effective.

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

               (e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the original issuance or delivery of the
Rights Certificates or of any Preferred Shares (or other securities of the
Company) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Rights Certificates to a person other than, or the issuance or
delivery of certificates or depository receipts for the Preferred Shares (or
other securities of the Company) in a name other than that of, the registered
holder of the Rights Certificate evidencing Rights surrendered for exercise or
to issue or to deliver any certificates or depository receipts for Preferred
Shares (or other securities of the

                                                                            -14-
<PAGE>

Company) upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.

        Section 10. Record Date Each Person in whose name any certificate for a
number of one-thousandths of a Preferred Share (or other securities of the
Company) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of Preferred Shares (or other securities of
the Company) 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 Total Exercise Price with respect to which the
Rights have been exercised (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the transfer books of the Company are closed, such Person shall be deemed
to have become the record holder of such shares on, and such certificate shall
be dated, the next succeeding Business Day on which the transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a holder
of Preferred Shares (or other securities of the Company) for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.

        Section 11. Adjustment of Exercise Price, Number of Shares or Number of
Rights. The Exercise Price, the number and kind of shares or other property
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) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares (by reverse stock split or otherwise) into a
smaller number of Preferred Shares, or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such event,
except as otherwise provided in this Section 11 and Section 7(e) hereof: (1) the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification shall be
adjusted so that the Exercise Price thereafter shall equal the result obtained
by dividing the Exercise Price in effect immediately prior to such time by a
fraction (the "ADJUSTMENT FRACTION"), the numerator of which shall be the total
number of Preferred Shares (or shares of capital stock issued in such
reclassification of the Preferred Shares) outstanding immediately following such
time and the denominator of which shall be the total number of Preferred Shares
outstanding immediately prior to such time; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (2) the number of one-thousandths of a
Preferred Share (or share of such other capital stock) issuable upon the
exercise of each Right shall equal the number of one-thousandths of a Preferred
Share (or share

                                                                            -15-
<PAGE>

of such other capital stock) as was issuable upon exercise of a Right
immediately prior to the occurrence of the event described in clauses (A)-(D) of
this Section 11(a)(i), multiplied by the Adjustment Fraction; provided, however,
that, no such adjustment shall be made pursuant to this Section 11(a)(i) to the
extent that there shall have simultaneously occurred an event described in
clause (A), (B), (C) or (D) of Section 11(n) with a proportionate adjustment
being made thereunder. Each Common Share that shall become outstanding after an
adjustment has been made pursuant to this Section 11(a)(i) shall have associated
with it the number of Rights, exercisable at the Exercise Price and for the
number of one-thousandths of a Preferred Share (or shares of such other capital
stock) as one Common Share has associated with it immediately following the
adjustment made pursuant to this Section 11(a)(i).

                      (ii) Subject to Section 24 of this Agreement, in the event
that a Triggering Event shall have occurred, then promptly following such
Triggering Event each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive for each Right, upon exercise
thereof in accordance with the terms of this Agreement and payment of the
Exercise Price in effect immediately prior to the occurrence of the Triggering
Event, in lieu of a number of one-thousandths of a Preferred Share, such number
of Common Shares of the Company as shall equal the quotient obtained by dividing
(A) the product obtained by multiplying (1) the Exercise Price in effect
immediately prior to the occurrence of the Triggering Event by (2) the number of
one-thousandths of a Preferred Share for which a Right was exercisable (or would
have been exercisable if the Distribution Date had occurred) immediately prior
to the first occurrence of a Triggering Event, by (B) 50% of the Current Per
Share Market Price for Common Shares on the date of occurrence of the Triggering
Event; provided, however, that the Exercise Price and the number of Common
Shares of the Company so receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with Section 11(e) hereof to
reflect any events occurring in respect of the Common Shares of the Company
after the occurrence of the Triggering Event.

                      (iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if the Company's Board of Directors
determines that such action is necessary or appropriate and not contrary to the
interest of holders of Rights and, in the event that the number of Common Shares
which are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights, or
if any necessary regulatory approval for such issuance has not been obtained by
the Company, the Company shall: (A) determine the excess of (1) the value of the
Common Shares issuable upon the exercise of a Right (the "CURRENT VALUE") over
(2) the Exercise Price (such excess, the "SPREAD") and (B) with respect to each
Right, make adequate provision to substitute for such Common Shares, upon
exercise of the Rights, (1) cash, (2) a reduction in the Exercise Price, (3)
other equity securities of the Company (including, without limitation, shares or
units of shares of any series of preferred stock which the Company's Board of
Directors has deemed to have the same value as Common Shares (such shares or
units of shares of preferred stock are herein called "COMMON STOCK
EQUIVALENTS")), except to the extent that the Company has not obtained any
necessary stockholder or regulatory approval for such issuance, (4) debt
securities of the Company, except to the extent that the Company has not
obtained any necessary stockholder or regulatory approval for such issuance, (5)
other assets or (6) any

                                                                            -16-
<PAGE>

combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Company's Board of
Directors based upon the advice of a nationally recognized investment banking
firm selected by the Company's Board of Directors; 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 Triggering Event and (y) the date on which the Company's right
of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "SECTION 11(a)(ii) TRIGGER DATE"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Exercise Price, Common Shares (to the extent
available), except to the extent that the Company has not obtained any necessary
stockholder or regulatory approval for such issuance, and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread. If
the Company's Board of Directors shall determine in good faith that it is likely
that sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights or that any necessary regulatory approval for
such issuance will be obtained, 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 or take
action to obtain such regulatory approval (such period, as it may be extended,
the "SUBSTITUTION PERIOD"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares, to
take any action to obtain any required regulatory approval 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. For purposes of this Section 11(a)(iii),
the value of the Common Shares shall be the Current Per Share Market Price of
the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any
Common Stock Equivalent shall be deemed to have the same value as the Common
Shares on such date.

               (b) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the issuance of rights, options or warrants to
all holders of Preferred Shares entitling such holders (for a period expiring
within forty-five (45) calendar days after such record date) to subscribe for or
purchase Preferred Shares or Equivalent Shares or securities convertible into
Preferred Shares or Equivalent Shares at a price per share (or having a
conversion price per share, if a security convertible into Preferred Shares or
Equivalent Shares) less than the then Current Per Share Market Price of the
Preferred Shares or Equivalent Shares on such record date, then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record date,
plus the number of Preferred Shares or Equivalent Shares, as the case may be,
which the aggregate offering price of the total number of Preferred Shares or
Equivalent Shares, as the case may be, to be offered or issued (and/or the
aggregate initial conversion price of the convertible

                                                                            -17-
<PAGE>

securities to be offered or issued) would purchase at such current market price,
and the denominator of which shall be the number of Preferred Shares and
Equivalent Shares (if any) outstanding on such record date, plus the number of
additional Preferred Shares or Equivalent Shares, as the case may be, to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Company's
Board of Directors, 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. Preferred Shares and Equivalent Shares 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 in the event that such rights, options or warrants are
not so issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.

               (c) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the making of a distribution to all holders of
the Preferred Shares or of any class or series of Equivalent Shares (including
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend, if any, or
a dividend payable in Preferred Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b)), then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Per Share
Market Price of a Preferred Share or an Equivalent Share on such record date,
less the fair market value per Preferred Share or Equivalent Share (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 Preferred
Share or Equivalent Share, as the case may be, and the denominator of which
shall be such Current Per Share Market Price of a Preferred Share or Equivalent
Share on such record date; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution is not so made,
the Exercise Price shall be adjusted to be the Exercise Price which would have
been in effect if such record date had not been fixed.

               (d) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1.0%) of the Exercise
Price; provided, however, that any adjustments which by reason of this Section
11(d) are not required to be made shall be carried forward and taken into

                                                                            -18-
<PAGE>

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 Common
Share or other share or one hundred-thousandth of a Preferred Share, as the case
may be. Notwithstanding the first sentence of this Section 11(d), 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 requires such adjustment or
(ii) the Expiration Date.

               (e) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right and, if required, the Exercise 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 Shares
contained in Sections 11(a), 11(b), 11(c), 11(d), 11(g), 11(h), 11(i), 11(j),
11(k) and 11(l), and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Preferred Shares shall apply on like terms to any such other shares.

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

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

               (h) The Company may elect on or after the date of any adjustment
of the Exercise Price as a result of the calculations made in Section 11(b) or
(c) to adjust the number of Rights, in substitution for any adjustment in the
number of Preferred Shares purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one-thousandths of a Preferred Share for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one hundred-thousandth) obtained by
dividing the Exercise Price in effect immediately prior to adjustment of the
Exercise Price by the Exercise Price in effect immediately after adjustment of
the Exercise Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the

                                                                            -19-
<PAGE>

adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if any 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(h), 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 prior to 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 Exercise 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.

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

               (j) Before taking any action that would cause an adjustment
reducing the Exercise Price below the par or stated value, if any, of the number
of one-thousandths of a Preferred Share 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 as
fully paid and nonassessable shares such number of one-thousandths of a
Preferred Share at such adjusted Exercise Price.

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

               (l) Anything in this Section 11 to the contrary notwithstanding,
prior to the Distribution Date, the Company shall be entitled to make such
reductions in the Exercise Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any (i) consolidation or
subdivision of

                                                                            -20-
<PAGE>

the Preferred or Common Shares, (ii) issuance wholly for cash of any Preferred
or Common Shares at less than the current market price, (iii) issuance wholly
for cash of Preferred or Common Shares or securities which by their terms are
convertible into or exchangeable for Preferred or Common Shares, (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 or Common
Shares shall not be taxable to such stockholders.

               (m) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take (or
permit to be taken) 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.

               (n) In the event that the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares (by reverse stock split or otherwise) into a smaller
number of Common Shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (1) each Common Share
(or shares of capital stock issued in such reclassification of the Common
Shares) outstanding immediately following such time shall have associated with
it the number of Rights as were associated with one Common Share immediately
prior to the occurrence of the event described in clauses (A)-(D) above; (2) the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification shall be
adjusted so that the Exercise Price thereafter shall equal the result obtained
by multiplying the Exercise Price in effect immediately prior to such time by a
fraction, the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the event described in clauses (A)-(D) above,
and the denominator of which shall be the total number of Common Shares
outstanding immediately after such event; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of one-thousandths of a
Preferred Share (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number of
one-thousandths of a Preferred Share (or shares of such other capital stock) as
were issuable with respect to one Right immediately prior to such event. Each
Common Share that shall become outstanding after an adjustment has been made
pursuant to this Section 11(n) shall have associated with it the number of
Rights, exercisable at the Exercise Price and for the number of one-thousandths
of a Preferred Share (or shares of such other capital stock) as one Common Share
has associated with it immediately following the adjustment made pursuant to
this Section 11(n). If an event occurs which would require an adjustment under
both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(n) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.

                                                                            -21-
<PAGE>

        Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Preferred Shares a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to make such certification or give such
notice shall not affect the validity of such adjustment or the force or effect
of the requirement for such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment contained
therein and shall not be deemed to have knowledge of such adjustment unless and
until it shall have received such certificate.

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

               (a) In the event that, following a Triggering Event, directly or
indirectly:

                      (i) the Company shall consolidate with, or merge with and
into, any other Person (other than a wholly-owned Subsidiary of the Company in a
transaction the principal purpose of which is to change the state of
incorporation of the Company and which complies with Section 11(m) hereof);

                      (ii) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or exchanged
for stock or other securities of any other person (or the Company); or

                      (iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company or one or more of its wholly
owned Subsidiaries in one or more transactions, each of which individually (and
together) complies with Section 11(m) hereof),

                           then, concurrent with and in each such case,

                           (A) 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 a price equal to the Total Exercise Price applicable
immediately prior to the occurrence of the Section 13 Event in accordance with
the terms of this Agreement, such number of validly authorized and issued, fully
paid, nonassessable and freely tradeable Common Shares of the Principal Party
(as hereinafter defined), free of any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by
dividing such Total Exercise Price by an amount equal to fifty percent (50%) of
the Current Per Share Market Price of the Common Shares of such Principal Party
on the date of consummation of such Section 13 Event, provided, however, that
the Exercise Price and the

                                                                            -22-
<PAGE>

number of Common Shares of such Principal Party so receivable upon exercise of a
Right shall be subject to further adjustment as appropriate in accordance with
Section 11(e) hereof;

                           (B) 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;

                           (C) 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;

                           (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares) in connection with the consummation of any such transaction as
may be necessary to ensure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights; and

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

                           (F) For purposes hereof, the "earning power" of the
Company and its Subsidiaries shall be determined in good faith by the Company's
Board of Directors on the basis of the operating income of each business
operated by the Company and its Subsidiaries during the three fiscal years
preceding the date of such determination (or, in the case of any business not
operated by the Company or any Subsidiary during three full fiscal years
preceding such date, during the period such business was operated by the Company
or any Subsidiary).

               (b) For purposes of this Agreement, the term "PRINCIPAL PARTY"
shall mean:

                      (i) in the case of any transaction described in clause (i)
or (ii) of Section 13(a) hereof: (A) the Person that is the issuer of the
securities into which the Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Shares of which have the greatest aggregate market value of shares outstanding,
or (B) if no securities are so issued, (x) the Person that is the other party to
the merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the Common Shares of which have the greatest aggregate
market value of shares outstanding or (y) if the Person that is the other party
to the merger does not survive the merger, the Person that does survive the
merger (including the Company if it survives) or (z) the Person resulting from
the consolidation; and

                                                                            -23-
<PAGE>

                      (ii) in the case of any transaction described in clause
(iii) of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if more than one Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred and each such portion would, were it not for the other
equal portions, constitute the greatest portion of the assets or earning power
so transferred, or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the issuer of
Common Shares having the greatest aggregate market value of shares outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Shares of such Person are not at such time or
have not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of Common Shares
having the greatest aggregate market value of shares outstanding, or (3) if such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly by the same Person, the
rules set forth in clauses (1) and (2) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture
was a Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13 in the
same ration as its interest in such Person bears to the total of such interests.

               (c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized Common Shares
that 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 issuer shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance with
Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive
rights in respect of the issuance of Common Shares of such Principal Party upon
exercise of outstanding Rights have been waived, that there are no rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights and that such transaction shall not result in a default by such Principal
Party under this Agreement, and further providing that, as soon as practicable
after the date of such Section 13 Event, such Principal Party will:

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

                                                                            -24-
<PAGE>

                      (ii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on Nasdaq and list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on Nasdaq; and

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

        In the event that at any time after the occurrence of a Triggering Event
some or all of the Rights shall not have been exercised at the time of a
transaction described in this Section 13, the Rights which have not theretofore
been exercised shall thereafter be exercisable in the manner described in
Section 13(a) (without taking into account any prior adjustment required by
Section 11(a)(ii)).

               (d) In case the "Principal Party" for purposes of Section 13(b)
hereof has provision in any of its authorized securities or in its certificate
of incorporation or by-laws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such Principal Party to
issue (other than to holders of Rights pursuant to Section 13 hereof), in
connection with, or as a consequence of, the consummation of a Section 13 Event,
Common Shares or Equivalent Shares of such Principal Party at less than the then
Current Per Share Market Price thereof or securities exercisable for, or
convertible into, Common Shares or Equivalent Shares of such Principal Party at
less than such then Current Per Share Market Price, or (ii) providing for any
special payment, tax or similar provision in connection with the issuance of the
Common Shares of such Principal Party pursuant to the provisions of Section 13
hereof, then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with or as a consequence of, the consummation of
the proposed transaction.

               (e) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, effect or permit to occur any Section 13
Event, if (i) at the time or immediately after such Section 13 Event there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Section 13 Event, the stockholders
of the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(b) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or (iii)
the form or nature of organization of the Principal Party would preclude or
limit the exercisability of the Rights.

                                                                            -25-
<PAGE>

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

        Section 14. Fractional Rights and Fractional Shares.

               (a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable, as determined pursuant to
the second sentence of Section 1(j) hereof.

               (b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share). Interests in fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depository receipts, pursuant to an appropriate agreement between
the Company and a depository selected by it; provided, that such agreement shall
provide that the holders of such depository receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares represented by such depository receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one
one-thousandth of a Preferred Share, the Company shall 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 a Preferred Share. For purposes of this Section 14(b), the current
market value of a Preferred Share shall be (x) one thousand multiplied by (y)
the closing price of a Common Share (as determined pursuant to the second
sentence of Section 1(j) hereof) for the Trading Day immediately prior to the
date of such exercise.

               (c) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares upon the exercise or exchange of Rights. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of 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 a Common
Share. For purposes of this Section 14(c), the current market value of a Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 1(j) hereof) for the Trading Day immediately
prior to the date of such exercise.

                                                                            -26-
<PAGE>

               (d) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any
fractional shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of a Right.

        Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his or her own behalf and for
his or her 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 or her 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 will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.

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

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

               (c) subject to Sections 6(a) and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated Common Shares 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 Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.

        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 to be the holder of the Preferred Shares
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

                                                                            -27-
<PAGE>

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 specifically 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
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises. In no event will the Rights Agent be liable for
special, indirect, incidental or consequential loss or damage of any kind
whatsoever, even if the Rights Agent has been advised of the possibility of such
loss or damage.

               (b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Rights Certificate or certificate for the Preferred Shares or Common Shares 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 reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.

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

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

                                                                            -28-
<PAGE>

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

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

        Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement 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:

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

               (b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of Current Per Share Market Price) be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Chief Financial Officer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

               (c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct.

               (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 (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.

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

                                                                            -29-
<PAGE>

countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections 3, 11,
13, 23 or 24, or the ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of a
certificate furnished pursuant to Section 12 describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.

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

               (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five (5) Business Days after the
date on which any officer of the Company actually receives such application,
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.

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

                                                                            -30-
<PAGE>

               (i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised 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 there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.

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

        Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the 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 Preferred
Shares and the Common Shares by registered or certified mail, and 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 or her Rights
Certificate for inspection by the Company), then the 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 corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, which is authorized under such laws to exercise
corporate trust or stockholder services powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder,

                                                                            -31-
<PAGE>

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 Preferred Shares and the Common Shares, and mail
a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.

        Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Exercise 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 Common Shares following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement or upon the exercise,
conversion or exchange of other securities of the Company outstanding at the
date hereof 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 and this sentence shall be null and void ab initio if, and to
the extent that, such issuance or this sentence would create a significant risk
of or result in material adverse tax consequences to the Company or the Person
to whom such Rights Certificate would be issued or would create a significant
risk of or result in such options' or employee plans' or arrangements' failing
to qualify for otherwise available special tax treatment 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.

               (a) The Company may, at its option and with the approval of the
Board of Directors, at any time prior to the Close of Business on the earlier of
(i) the fifth day following the Shares Acquisition Date (or such later date as
may be determined by action of the Company's Board of Directors and publicly
announced by the Company) and (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $0.001 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
herein referred to as the "REDEMPTION PRICE") and the Company may, at its
option, pay the Redemption Price either in Common Shares (based on the Current
Per Share Market Price thereof at the time of redemption) or cash. Such
redemption of the Rights by the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. The date on which the Board of Directors elects to
make the redemption effective shall be referred to as the "REDEMPTION DATE."

                                                                            -32-
<PAGE>

               (b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within ten (10) days 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 their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.

        Section 24. Exchange.

               (a) Subject to applicable laws, rules and regulations, and
subject to subsection 24(c) below, the Company may, at its option, by action of
the Board of Directors, at any time after the occurrence of a Triggering Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "EXCHANGE RATIO"). Notwithstanding the foregoing,
the Board of Directors 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 entity
holding Common Shares 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 Shares then outstanding.

               (b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection 24(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 a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company shall mail a notice of any such exchange to all of
the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given,

                                                                            -33-
<PAGE>

whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Shares for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.

               (c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with Section 24(a), the Company shall
either take such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights or alternatively, at the option
of a majority of the Board of Directors, with respect to each Right (i) pay cash
in an amount equal to the Current Value (as hereinafter defined), in lieu of
issuing Common Shares in exchange therefor, or (ii) issue debt or equity
securities or a combination thereof, having a value equal to the Current Value,
in lieu of issuing Common Shares in exchange for each such Right, where the
value of such securities shall be determined by a nationally recognized
investment banking firm selected by majority vote of the Board of Directors, or
(iii) deliver any combination of cash, property, Common Shares and/or other
securities having a value equal to the Current Value in exchange for each Right.
For purposes of this Section 24(c) only, the Current Value shall mean the
product of the Current Per Share Market Price of Common Shares on the date of
the occurrence of the event described above in subparagraph (a), multiplied by
the number of Common Shares for which the Right otherwise would be exchangeable
if there were sufficient shares available. To the extent that the Company
determines that some action need be taken pursuant to clauses (i), (ii) or (iii)
of this Section 24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following the
date on which the event described in Section 24(a) shall have occurred, in order
to seek any authorization of additional Common Shares and/or to decide the
appropriate form of distribution to be made pursuant to the above provision and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended.

               (d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Common Share (as
determined pursuant to the second sentence of Section 1(j) hereof).

               (e) The Company may, at its option, by majority vote of the Board
of Directors, at any time before any Person has become an Acquiring Person,
exchange all or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by the Board of
Directors based upon the advice of one or more nationally recognized investment
banking firms.

                                                                            -34-
<PAGE>

               (f) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection 24(e) 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 a holder of such
Rights shall be to receive that number of rights in exchange therefor as has
been determined by the Board of Directors in accordance with subsection 24(e)
above. The Company shall give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the transfer agent for the Common Shares
of the Company. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Rights will be
effected.

        Section 25. Notice of Certain Events.

               (a) In case the Company shall propose to effect or permit to
occur any Triggering Event or Section 13 Event, the Company shall give notice
thereof to each holder of Rights in accordance with Section 26 hereof at least
twenty (20) days prior to occurrence of such Triggering Event or such Section 13
Event.

               (b) In case any Triggering Event or Section 13 Event shall occur,
then, in any such case, the Company shall as soon as practicable thereafter give
to each holder of a Rights Certificate, 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 Sections 11(a)(ii) and 13
hereof.

        Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any 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 with
the Rights Agent) as follows:

                                 Brocade Communications Systems, Inc.
                                 1745 Technology Drive
                                 San Jose, CA 95110

                                                                            -35-
<PAGE>

                                 with a copy to:
                                 Wilson Sonsini Goodrich & Rosati
                                 Professional Corporation
                                 650 Page Mill Road
                                 Palo Alto, California 94304-1050
                                 Attention: Katharine A. Martin

        Subject to the provisions of Section 21 hereof, 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 with the Company) as follows:

                                 Wells Fargo Bank, MN N.A.
                                 c/o Wells Fargo Shareowner Services
                                 161 N. Concord Exchange Street
                                 South St. Paul, MN 55075-1139
                                 Attention: Corporate Actions Department

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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

        Section 27. Supplements and Amendments. Prior to the occurrence of a
Distribution Date, the Company may supplement or amend this Agreement in any
respect without the approval of any holders of Rights and the Rights Agent
shall, if the Company so directs, execute such supplement or amendment. From and
after the occurrence of a Distribution Date, the Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) shorten or lengthen any time period
hereunder or (iv) to change or supplement the provisions hereunder in any manner
that the Company may deem necessary or desirable and that shall not adversely
affect the interests of the holders of Rights (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, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon the
delivery of a certificate from an appropriate officer of the Company that 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.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares.

                                                                            -36-
<PAGE>

        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 Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the 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 the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power (i) to interpret the provisions of this
Agreement and (ii) to 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 Certificates and all other parties and
(y) not subject the Board to any liability to the holders of the Rights.

        Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim pursuant to 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, prior to the Distribution Date, the Common
Shares).

        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
shall be reinstated and shall not expire until the Close of Business on the
tenth day following the date of such determination by the Board of Directors.

        Section 32. Governing Law. This Agreement and 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 to
be made and performed entirely within such State.

                                                                            -37-
<PAGE>

        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.

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

"COMPANY"                             Brocade Communications Systems, Inc.

                                      By:    /s/ Antonio Canova
                                         ---------------------------------------

                                      Name:  Antonio Canova
                                           -------------------------------------

                                      Title: Vice President, Finance and
                                             Chief Financial Officer
                                            ------------------------------------

"RIGHTS AGENT"                        Wells Fargo Bank, MN N.A.

                                      By:    /s/ Corbin B. Connell
                                         ---------------------------------------

                                      Name:  Corbin B. Connell
                                           -------------------------------------

                                      Title: Vice President
                                            ------------------------------------

                                                                            -38-
<PAGE>

                                   EXHIBIT A

               CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
            AND PRIVILEGES OF SERIES A PARTICIPATING PREFERRED STOCK
                    OF BROCADE COMMUNICATIONS SYSTEMS, INC.

        The undersigned, _____________ does hereby certify:

        1. That he is the duly elected and acting Vice President, Finance and
Chief Financial Officer of Brocade Communications Systems, Inc., a Delaware
corporation (the "CORPORATION").

        2. That pursuant to the authority conferred upon the Board of Directors
by the Amended and Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on February 5, 2002 adopted the
following resolution creating a series of 800,000 shares of Preferred Stock
designated as Series A Participating Preferred Stock:

        "RESOLVED, that pursuant to the authority vested in the Board of
Directors of the corporation by the Restated Certificate of Incorporation, the
Board of Directors does hereby provide for the issue of a series of Preferred
Stock of the Corporation and does hereby fix and herein state and express the
designations, powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions of such series of Preferred Stock
as follows:

        Section 1. Designation and Amount. The shares of such series shall be
designated as "SERIES A PARTICIPATING PREFERRED STOCK." The Series A
Participating Preferred Stock shall have a par value of $0.001 per share, and
the number of shares constituting such series shall be 800,000.

        Section 2. Proportional Adjustment. In the event that the Corporation
shall at any time after the issuance of any share or shares of Series A
Participating Preferred Stock (i) declare any dividend on Common Stock of the
Corporation ("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 Corporation shall
simultaneously effect a proportional adjustment to the number of outstanding
shares of Series A Participating Preferred Stock.

        Section 3. Dividends and Distributions.

               (a) Subject to the prior and superior right of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Participating Preferred Stock with respect to dividends, the holders
of shares of Series A 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 last day
of February, May, August and November 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

<PAGE>

issuance of a share or fraction of a share of Series A Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to 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 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 Participating Preferred Stock.

               (b) The Corporation shall declare a dividend or distribution on
the Series A 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).

               (c) Dividends shall begin to accrue on outstanding shares of
Series A Participating Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Participating
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A
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 from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A 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 Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for the
payment thereof.

        Section 4. Voting Rights. The holders of shares of Series A
Participating Preferred Stock shall have the following voting rights:

               (a) Each share of Series A 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.

               (b) Except as otherwise provided herein or by law, the holders of
shares of Series A 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) Except as required by law, the holders of Series A
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent that they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.

                                                                             -2-
<PAGE>

        Section 5. Certain Restrictions.

               (a) The Corporation shall not declare any dividend on, make any
distribution on, or redeem or purchase or otherwise acquire for consideration
any shares of Common Stock after the first issuance of a share or fraction of a
share of Series A Participating Preferred Stock unless concurrently therewith it
shall declare a dividend on the Series A Participating Preferred Stock as
required by Section 3 hereof.

               (b) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred Stock as provided
in Section 3 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series A
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 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 Participating
Preferred Stock, except dividends paid ratably on the Series A 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 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 Participating Preferred
Stock;

                      (iv) purchase or otherwise acquire for consideration any
shares of Series A Participating Preferred Stock, or any shares of stock ranking
on a parity with the Series A 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.

               (c) 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 5, purchase or otherwise acquire such shares at such time and in
such manner.

        Section 6. Reacquired Shares. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and

                                                                             -3-
<PAGE>

canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein and in the Restated Certificate of
Incorporation, as then amended.

        Section 7. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Participating Preferred Stock shall be entitled to receive an aggregate amount
per share equal to 1,000 times the aggregate amount to be distributed per share
to holders of shares of Common Stock plus an amount equal to any accrued and
unpaid dividends on such shares of Series A Participating Preferred Stock.

        Section 8. 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 Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share 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.

        Section 9. No Redemption. The shares of Series A Participating Preferred
Stock shall not be redeemable.

        Section 10. Ranking. The Series A 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 11. Amendment. The Restated Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preference or special rights of the Series A
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority of the outstanding shares of
Series A Participating Preferred Stock, voting separately as a series.

        Section 12. Fractional Shares. Series A 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 Participating Preferred Stock.

                                                                             -4-
<PAGE>

        RESOLVED FURTHER, that the President, Chief Operating Officer or any
Vice President and the Secretary or any Assistant Secretary of this corporation
be, and they hereby are, authorized and directed to prepare and file a
Certificate of Designation of Rights, Preferences and Privileges in accordance
with the foregoing resolution and the provisions of Delaware law and to take
such actions as they may deem necessary or appropriate to carry out the intent
of the foregoing resolution."

        I further declare under penalty of perjury that the matters set forth in
the foregoing Certificate of Designation are true and correct of my own
knowledge.

        Executed at San Jose, California on ______, 2002.

                             ---------------------------------------------------
                             Vice President, Finance and Chief Financial Officer

                                                                             -5-
<PAGE>

                                    EXHIBIT B

                           FORM OF RIGHTS CERTIFICATE

Certificate No. R-                                              _________ Rights

        NOT EXERCISABLE AFTER THE EARLIER OF (i) FEBRUARY 19, 2012, (ii) THE
        DATE TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES
        THE RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
        REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE
        TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
        RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
        ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
        RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
        NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
        WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
        PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
        TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
        CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
        IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH RIGHTS
        AGREEMENT.]*

                               RIGHTS CERTIFICATE

                      BROCADE COMMUNICATIONS SYSTEMS, 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 February 7, 2002, (the "RIGHTS
AGREEMENT"), between Brocade Communications Systems, Inc., a Delaware
corporation (the "COMPANY"), and Wells Fargo Bank, MN N.A. (the "RIGHTS AGENT"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M., New York time,
on February 19, 2012 at the office of the Rights Agent designated for such
purpose, or at the office of its successor as Rights Agent, one one-

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

<PAGE>

thousandth (1/1,000) of a fully paid and non-assessable share of Series A
Participating Preferred Stock, par value $0.001 per share (the "PREFERRED
SHARES"), of the Company, at an Exercise Price of __________($___.00) per
one-thousandth of a Preferred Share (the "EXERCISE PRICE"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of one-thousandths of a Preferred Share which
may be purchased upon exercise hereof) set forth above are the number and
Exercise Price as of February 19, 2002 based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Exercise
Price and the number and kind of Preferred Shares 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.

               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 principal
executive offices of the Company and the above-mentioned office of the Rights
Agent.

               Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate (i) may be redeemed by the Company, at its
option, at a redemption price of $0.001 per Right or (ii) may be exchanged by
the Company in whole or in part for Common Shares, substantially equivalent
rights or other consideration as determined by the Company.

               This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office 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 amount of securities 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.

               No fractional portion of less than one one-thousandth of a
Preferred Share will be issued upon the exercise of any Right or Rights
evidenced hereby but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.

               No holder of this Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares 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 or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except

                                                                             -2-
<PAGE>

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.

        WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _______________, _____.

ATTEST:                                  Brocade Communications Systems, Inc.

                                         By:
-----------------------------------         ------------------------------------
Secretary

                                         Its:
                                             -----------------------------------
Countersigned:

Wells Fargo Bank, MN N.A.
as Rights Agent

By:
   --------------------------------

Its:
    -------------------------------

                                                                             -3-
<PAGE>

                   FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE

                               FORM OF ASSIGNMENT

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

               FOR VALUE RECEIVED _______________ hereby sells, assigns and
transfers unto

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

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

Dated:                ,
       ---------------  ----

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

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<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 Person (as such terms are
defined in 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 any such Person.

Dated:                ,
       ---------------  ----

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

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                          FORM OF ELECTION TO PURCHASE

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

To:___________________________

               The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Rights Certificate to
purchase the number of one-thousandths of a Preferred Share issuable upon the
exercise of such Rights and requests that certificates for such number of
one-thousandths of a Preferred Share issued in the name of:

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 remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

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

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

Dated:                ,
       ---------------  ----

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

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   CERTIFICATE

        The undersigned hereby certifies by checking the appropriate boxes that:

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

Dated:                ,
       ---------------  ----

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

Signature Guaranteed:

        Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                                     NOTICE

               The signature in the foregoing Forms of Assignment and Election
must conform 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

                             STOCKHOLDER RIGHTS PLAN
                      BROCADE COMMUNICATIONS SYSTEMS, INC.

                                SUMMARY OF RIGHTS

<TABLE>
<CAPTION>
<S>                           <C>
DISTRIBUTION AND              The Board of Directors has declared a dividend of
TRANSFER OF RIGHTS;           one Right for each share of Common Stock of
RIGHTS CERTIFICATE:           Brocade Communications Systems, Inc. (the
                              "COMPANY") outstanding. Prior to the Distribution
                              Date referred to below, the Rights will be
                              evidenced by and trade with the certificates for
                              the Common Stock. After the Distribution Date, the
                              Company will mail Rights certificates to the
                              Company's stockholders and the Rights will become
                              transferable apart from the Common Stock.

DISTRIBUTION DATE:            Rights will separate from the Common Stock and
                              become exercisable following (a) the tenth day (or
                              such later date as may be determined by the
                              Company's Board of Directors) after a person or
                              group acquires beneficial ownership of 15% or more
                              of the Company's Common Stock or (b) the tenth day
                              (or such later date as may be determined by the
                              Company's Board of Directors) after a person or
                              group announces a tender or exchange offer, the
                              consummation of which would result in ownership by
                              a person or group of 15% or more of the Company's
                              Common Stock.

PREFERRED STOCK               After the Distribution Date, each Right will
PURCHASABLE UPON              entitle the holder to purchase for $280 (the
EXERCISE OF RIGHTS:           "EXERCISE PRICE"), a fraction of a share of the
                              Company's Preferred Stock with economic terms
                              similar to that of one share of the Company's
                              Common Stock.

FLIP-IN:                      If an acquirer (an "ACQUIRING PERSON") obtains 15%
                              or more of the Company's Common Stock, then each
                              Right (other than Rights owned by an Acquiring
                              Person or its affiliates) will entitle the holder
                              thereof to purchase, for the Exercise Price, a
                              number of shares of the Company's Common Stock
                              having a then-current market value of twice the
                              Exercise Price.

FLIP-OVER:                    If, after an Acquiring Person obtains 15% or more
                              of the Company's Common Stock, (a) the Company
                              merges into another entity, (b) an acquiring
                              entity merges into the Company or (c) the Company
                              sells more than 50% of the Company's assets or
                              earning power, then each Right (other than Rights
                              owned by an Acquiring Person or its affiliates)
                              will entitle the holder thereof to purchase, for
                              the Exercise Price, a number of shares of Common
                              Stock of the person engaging in the transaction
                              having a then current market value of twice the
                              Exercise Price.

EXCHANGE                      At any time after the date on which an Acquiring
PROVISION:                    Person obtains 15% or more of the Company's Common
                              Stock and prior to the acquisition by the
                              Acquiring Person of 50% of the outstanding Common
                              Stock, a majority of the Board of Directors and
                              the Board of Directors of the Company may exchange
                              the Rights (other than Rights owned by the
                              Acquiring Person or its affiliates), in whole or
                              in part, for shares of Common Stock of the Company
                              at an exchange ratio of one share of Common Stock
                              per Right (subject to
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                           <C>
                              adjustment).

REDEMPTION OF THE             Rights will be redeemable at the Company's option
RIGHTS:                       for $0.001 per Right at any time on or prior to
                              the fifth day (or such later date as may be
                              determined by the Company's Board of Directors)
                              after public announcement that a Person has
                              acquired beneficial ownership of 15% or more of
                              the Company's Common Stock (the "SHARES
                              ACQUISITION DATE").

EXPIRATION OF THE             The Rights expire on the earliest of (a) February
RIGHTS:                       19, 2012 or (b) exchange or redemption of the
                              Rights as described above.

AMENDMENT OF                  The terms of the Rights and the Rights Agreement
TERMS OF RIGHTS:              may be amended in any respect without the consent
                              of the Rights holders on or prior to the
                              Distribution Date; thereafter, the terms of the
                              Rights and the Rights Agreement may be amended
                              without the consent of the Rights holders in order
                              to cure any ambiguities or to make changes which
                              do not adversely affect the interests of Rights
                              holders (other than the Acquiring Person).

VOTING RIGHTS:                Rights will not have any voting rights.

ANTI-DILUTION                 Rights will have the benefit of certain customary
PROVISIONS:                   anti-dilution provisions.

TAXES:                        The Rights distribution should not be taxable for
                              federal income tax purposes. However, following an
                              event that renders the Rights exercisable or upon
                              redemption of the Rights, stockholders may
                              recognize taxable income.
</TABLE>

The foregoing is a summary of certain principal terms of the Stockholder Rights
Plan only and is qualified in its entirety by reference to the Preferred Stock
Rights Agreement dated as of February 7, 2002 between the Company and Wells
Fargo Bank, MN N.A., as Rights Agent (the "RIGHTS AGREEMENT"). The Rights
Agreement may be amended from time to time. A copy of the Rights Agreement was
filed with the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated February 11, 2002. A copy of the
Rights Agreement is available free of charge from the Company.

                                                                             -2-<PAGE>

EXHIBIT 10.11
                      SECOND AMENDMENT TO CREDIT AGREEMENT

                  This SECOND AMENDMENT TO CREDIT AGREEMENT is made and entered
into as of February 6, 2002, by and among ENTERCOM RADIO, LLC, a Delaware
limited liability company (the "Borrower"), ENTERCOM COMMUNICATIONS CORP., a
Pennsylvania corporation (the "Parent"), the FINANCIAL INSTITUTIONS listed on
the signature pages hereof (the "Lenders"), KEY CORPORATE CAPITAL INC., as
Administrative Agent and Co-Documentation Agent (the "Administrative Agent"),
and BANK OF AMERICA, N.A., as Syndication Agent and Co-Documentation Agent (the
"Syndication Agent").

                                    RECITALS

                  A. The Borrower, the Parent, the Lenders, the Administrative
Agent and the Syndication Agent entered into a Credit Agreement dated as of
December 16, 1999, as amended by the First Amendment to Credit Agreement, dated
as of May 31, 2001 (the "Original Agreement"), pursuant to which the Lenders
agreed to make available to the Borrower loans of up to $650,000,000 (subject to
increase under certain circumstances up to $1,000,000,000). The Original
Agreement, as amended hereby, may be referred to hereinafter as the "Credit
Agreement." Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Credit Agreement.

                  B. The Borrower and the Parent have requested that certain
changes be made to the Original Agreement. Subject to the terms and conditions
of this Amendment, the Agents and the Lenders have agreed to such request.

                                   AGREEMENTS

                  In consideration of the foregoing Recitals and of the
covenants and representations contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower, the Parent, the Agents and the Lenders agree as follows:

         1. Amendments. Subject to the satisfaction of the conditions set forth
in Section 2 of this Amendment, the Original Agreement shall be amended as
follows:

         (a) Section 1.1 shall be amended by adding the following new definition
of "Financing Subsidiary" in proper alphabetical order:

                           "Financing Subsidiary" means a wholly owned corporate
                  Subsidiary of the Parent or the Borrower created for purposes
                  of incurring Subordinated Debt pursuant to Section 8.1(g) that
                  holds no capital stock or other equity interests in any
                  Subsidiary or other Person, that has no operating assets or
                  other material assets (other than (i) the proceeds of such
                  Subordinated Debt, which proceeds shall immediately be
                  transferred to the Borrower, and (ii) amounts received from
                  the Borrower to pay interest on such Subordinated Debt to the
                  extent such interest payment is permitted pursuant to the
                  subordination provisions of such Subordinated Debt), and that
                  conducts no business other than in connection with the
                  issuance of such Subordinated Debt and the payment of
                  interest, from amounts received from the Borrower, on such
                  Subordinated Debt to the extent such interest payment is
                  permitted pursuant to the subordination provisions of such
                  Subordinated Debt.

         (b) The definition of the term "Leverage Ratio" in Section 1.1 shall be
amended and restated in its entirety to read as follows:

                           "Leverage Ratio", as of any date, means the ratio of
                  Total Debt, as of such date, to Operating Cash Flow for the
                  four fiscal quarter period then ended or most recently ended;
                  provided, however, that, solely for purposes of calculating
                  the Leverage Ratio at any time prior to December 31, 2002,
                  Total Debt as of any date of determination shall be reduced
                  (but not below zero) by the amount of cash and cash
                  equivalents of the Borrower and its Subsidiaries as of such
                  date in excess of $3,000,000, as certified by the chief
                  financial officer of the Borrower.

         (c) The definition of the term "Subordinated Debt" in Section 1.1 shall
be amended and restated in its entirety to read as follows:

                                       90
<PAGE>

                           "Subordinated Debt" means the unsecured Indebtedness
                  of the Parent in respect of the TIDES Subordinated Debentures
                  and all other unsecured Indebtedness of the Borrower, the
                  Parent and any Financing Subsidiary incurred pursuant to the
                  provisions of Section 8.1(g).

         (d) Section 5.27 shall be amended in its entirety to read as follows:

                           5.27 License Subsidiaries. No Loan Party (other than
                  a License Subsidiary) holds any License (other than an
                  Excluded License) issued by the FCC. No License Subsidiary (a)
                  has any Indebtedness (other than (i) pursuant to the
                  Subsidiary Guaranty, (ii) the Subsidiary Security Agreement,
                  (iii) Indebtedness owing by a License Subsidiary to another
                  Loan Party, and (iv) any guaranty permitted pursuant to
                  Section 8.3), (b) has any assets other than FCC Licenses, (c)
                  is a party to or bound by any contract or agreement (other
                  than (i) agreements pursuant to which Loan Parties that are
                  not License Subsidiaries manage and operate the Stations, (ii)
                  the Subsidiary Guaranty, (iii) the Subsidiary Security
                  Agreement, (iv) agreements evidencing Indebtedness owing by a
                  License Subsidiary to another Loan Party, and (v) any guaranty
                  permitted pursuant to Section 8.3), (d) conducts any business
                  or (e) has any employees, and there are no Liens of any nature
                  whatsoever on any of the property or assets of any License
                  Subsidiary except in favor of the Administrative Agent, for
                  the benefit of the Lenders. All of the Licenses issued by the
                  FCC in connection with the ownership and operation of each
                  Station (other than the Excluded Licenses), have been, or at
                  the applicable closing of the acquisition of such Station will
                  be, duly assigned to a License Subsidiary.

         (e) Section 5.29 shall be amended in its entirety to read as follows:

                           5.29 The Parent. After giving effect to the Drop
                  Down, the Parent (a) has no Indebtedness (other than (i)
                  pursuant hereto, (ii) pursuant to the TIDES Subordinated
                  Debentures and the TIDES Indenture and the guaranties and
                  other documents and instruments entered into in connection
                  therewith, (iii) certain trade payables reasonably incurred in
                  the ordinary course of the operation of the Stations and of
                  the Parent's corporate headquarters, and (iv) guaranties
                  permitted pursuant to Section 8.3), (b) has no assets other
                  than (i) furniture, fixtures and equipment located in its
                  corporate office and certain other non-material assets not
                  used in the operation of any Station and (ii) its equity
                  interests in the TIDES Trust, the Borrower, and Financing
                  Subsidiaries, (c) is not a party to or bound by any contract
                  or agreement other than the Station Contracts, certain
                  contracts relating to the TIDES Subordinated Debentures,
                  certain contracts relating to Subordinated Debt permitted
                  pursuant to Section 8.1(g) and guaranties permitted pursuant
                  to Section 8.3, and (d) does not conduct any business other
                  than holding the Membership Interests in the Borrower and the
                  common securities of the TIDES Trust and entering into and
                  performing the Station Contracts, and there are no Liens of
                  any nature whatsoever on any of the property or assets of the
                  Parent except Permitted Liens.

         (f) Section 8.1(b) shall be amended and restated in its entirety to
read as follows:

                           (b) Indebtedness permitted under Sections 8.3, 8.4,
                  8.5 or 8.6 hereof and any other Indebtedness secured by a
                  Permitted Lien;

         (g) Section 8.1(g) shall be amended and restated in its entirety to
read as follows:

                           (g) Subordinated Debt incurred by the Parent, the
                  Borrower (other than the indebtedness evidenced by the TIDES
                  Subordinated Debentures referred to in clause (f) above) or a
                  Financing Subsidiary, so long as (i) no principal is payable
                  (whether by scheduled amortization, mandatory redemption or
                  otherwise, other than pursuant to customary change of control
                  and asset sale redemption provisions) on such Indebtedness
                  prior to the date that is at least six months after the
                  Termination Date, (ii) the aggregate principal amount of all
                  Indebtedness incurred pursuant to this clause 8.1(g) does not
                  exceed at any time $250,000,000, (iii) the interest rate on
                  such Indebtedness (without regard to any financing costs or
                  expenses that may be characterized as interest) shall not
                  exceed 11%, (iv) the terms and conditions of such
                  Indebtedness, including the terms and conditions of
                  subordination, shall be no more onerous (taken as a whole) to
                  the Borrower or the Parent or any Financing Subsidiary or the
                  Borrower's Subsidiaries and no less favorable (taken as a
                  whole) to the Lenders, than the terms and conditions of
                  comparable Indebtedness issued by other similarly situated
                  companies in the broadcasting industry and shall be reasonably
                  satisfactory to the Agents, (v) the Borrower shall have
                  delivered to the Administrative Agent and the Lenders revised
                  projections for the period from the incurrence of such
                  Indebtedness through the Termination Date which shall be in
                  form and substance reasonably satisfactory to the
                  Administrative Agent, and the Borrower shall have demonstrated
                  to the satisfaction of the Administrative Agent that the
                  Borrower will be in compliance with all of the covenants
                  contained herein after giving effect to the incurrence of such
                  Indebtedness, (vi) no Possible Default or Event

                                       91

<PAGE>

                  of Default exists at the time of incurrence of such
                  Indebtedness or would exist after giving effect thereto, (vii)
                  the Borrower shall have delivered to the Administrative Agent
                  a certificate executed by an executive officer of the Borrower
                  in form and substance satisfactory to the Administrative Agent
                  which shall contain calculations demonstrating on a pro forma
                  basis the Borrower's compliance with the financial covenants
                  set forth in this Section 8 after giving effect to the
                  incurrence of such Indebtedness, and (viii) if such
                  Subordinated Debt is incurred by the Parent or a Financing
                  Subsidiary, the Parent shall contribute, or cause the
                  Financing Subsidiary to contribute, the net proceeds thereof
                  to the Borrower promptly upon receipt;

         (h) Section 8.2 shall be amended and restated in its entirety to read
as follows:

                           8.2 Liens. The Parent and the Borrower shall not, and
                  shall not permit any of the Borrower's Subsidiaries or any
                  Financing Subsidiary to, incur, create, assume or permit to
                  exist any Lien of any nature whatsoever on any property or
                  assets, whether real, personal or mixed, now owned or
                  hereafter acquired by such Loan Party, other than Permitted
                  Liens. From and after the Closing Date, the Parent and the
                  Borrower shall not, and shall not permit any of the Borrower's
                  Subsidiaries or any Financing Subsidiary to, enter into or
                  permit to exist any arrangement or agreement, other than
                  pursuant to this Agreement or any Collateral Document, which
                  directly or indirectly prohibits any Loan Party from creating
                  or incurring any Lien on any of its assets, other than (a)
                  leases and agreements regarding purchase money Indebtedness
                  permitted pursuant to Section 8.4 (so long as such prohibition
                  only relates to the asset that is subject to such lease or
                  that secures such Indebtedness and proceeds thereof), (b)
                  provisions in agreements which prohibit the assignment of such
                  agreements and (c) negative pledges and other agreements not
                  to create Liens contained in the documentation governing any
                  Subordinated Debt permitted pursuant to Section 8.1(g) (so
                  long as no such negative pledge or other agreement shall
                  prohibit any Lien securing any of the Obligations).

         (i) Section 8.3 shall be amended and restated in its entirety to read
as follows:

                           8.3 Guaranties. The Parent and the Borrower shall
                  not, and shall not permit any of the Borrower's Subsidiaries
                  or any Financing Subsidiary to, become a Guarantor for any
                  Person, except for (a) the guaranty by the Parent of the TIDES
                  Preferred Securities, (b) guaranties by a Loan Party of
                  obligations of the Borrower or the Borrower's Subsidiaries
                  entered into in the ordinary course of business, (c)
                  endorsements of negotiable instruments for collection in the
                  ordinary course of business, (d) the Subsidiary Guaranty and
                  the Parent's guaranty pursuant to Section 11, (e) contingent
                  obligations incurred in the ordinary course of business of the
                  operation of the Stations with respect to surety and appeal
                  bonds, performance and return-of-money bonds and other similar
                  obligations not exceeding at any time outstanding $5,000,000
                  in aggregate liability, and (f) guaranties by the Parent, the
                  Borrower and the Borrower's Subsidiaries of any Subordinated
                  Debt incurred pursuant to Section 8.1(g) provided that each
                  such guaranty shall be in form and substance reasonably
                  satisfactory to the Administrative Agent, such guaranty of
                  Subordinated Debt shall be subordinated to the Obligations on
                  terms no less favorable to the Lenders than the subordination
                  provisions of the Subordinated Debt, and no Subsidiary shall
                  guarantee any Subordinated Debt unless (i) such Subsidiary
                  also has guaranteed the Obligations pursuant to the Subsidiary
                  Guaranty, and (ii) such guarantee of Subordinated Debt
                  provides for the release and termination thereof, without
                  action by any party, upon any sale, transfer or other
                  disposition (other than pursuant to a time brokerage agreement
                  permitted pursuant to Section 8.14(b)) of substantially all of
                  the assets of such Subsidiary, or any sale, transfer or other
                  disposition of substantially all of the capital stock or other
                  equity interests of such Subsidiary or of any direct or
                  indirect parent of such Subsidiary, in any such case, to a
                  Person that is not the Parent, the Borrower or a Subsidiary of
                  the Borrower.

         (j) Section 8.7(b) shall be amended and restated in its entirety to
read as follows:

                           (b) Neither the Parent, nor the Borrower nor any of
                  the Borrower's Subsidiaries nor any Financing Subsidiary shall
                  redeem, discharge, pay, prepay or defease all or any portion
                  of the principal of any Subordinated Debt (or of any guaranty
                  of any Subordinated Debt), including the TIDES Subordinated
                  Debentures, prior to the payment in full in cash of all
                  Obligations. Neither the Parent, the Borrower nor any of the
                  Borrower's Subsidiaries nor any Financing Subsidiary shall
                  make any interest payment on any Subordinated Debt (or on any
                  guaranty of any Subordinated Debt), other than the TIDES
                  Subordinated Debentures, except in accordance with the
                  provisions of the agreements, instruments and other
                  documentation governing such Subordinated Debt and approved by
                  the Agents pursuant to Section 8.1(g).

         (k) Section 8.9(b) shall be amended and restated in its entirety to
read as follows:

                                      92
<PAGE>

                           (b) The Borrower shall not permit any of its
                  Subsidiaries, and the Parent shall not permit any Financing
                  Subsidiary, to agree to or to be subject to any restriction on
                  its ability to make Capital Distributions or loans or other
                  asset transfers to the Borrower or any Subsidiary of the
                  Borrower, other than (i) restrictions imposed by applicable
                  law, (ii) the restrictions set forth in this Section and (iii)
                  customary restrictions contained in the documentation
                  governing any Subordinated Debt permitted pursuant to Section
                  8.1(g).

         (l) Section 8.13(c) shall be amended and restated in its entirety to
read as follows:

                           (c) Pro Forma Debt Service Ratio. The Borrower shall
                  not permit the ratio of Operating Cash Flow for any four
                  fiscal quarter period ending during any period listed in
                  Column A below to Pro Forma Debt Service as of the end of such
                  period to be less than the ratio set forth in Column B below
                  opposite such period:

<TABLE>
<CAPTION>
                  Column A                                     Column B
                  --------                                     --------
                  Period:                                      Permitted Ratio:
                  ------                                       ---------------
<S>                                                            <C>
                  Closing through March 31, 2000:              1.50:1.00
                  April 1, 2000 through December 31, 2001:     1.75:1.00
                  January 1, 2002 through December 31, 2002:   1.25:1.00
                  January 1, 2003 and thereafter:              1.75:1.00
</TABLE>

         (m) Section 8.19 shall be amended and restated in its entirety to read
as follows:

                           8.19 Amendments or Waivers. The Parent and the
                  Borrower shall not, and shall not permit any of the Borrower's
                  Subsidiaries or any Financing Subsidiary to, amend, alter or
                  modify, or consent to or suffer any amendment, alteration or
                  modification of, the TIDES Indenture, the TIDES Subordinated
                  Debentures, the TIDES Trust Declaration or the TIDES Preferred
                  Securities or any notes or other documents, instruments or
                  agreements relating thereto, or any indenture, agreement,
                  instrument or guaranty relating to any Subordinated Debt
                  incurred pursuant to Section 8.1(g) or guaranty thereof
                  permitted pursuant to Section 8.3 or any notes or other
                  documents, instruments or agreements relating thereto, or any
                  Acquisition Agreement, License or Operating Agreement to which
                  such Loan Party is a party without the prior written consent
                  of the Required Lenders if such amendment, alteration or
                  modification imposes any significantly more onerous term or
                  condition on a Loan Party than is contained in such agreement,
                  note, document, License or contract as of the date hereof, or
                  affects in any way the subordination provisions of the
                  agreement or instrument governing or evidencing any
                  Subordinated Debt, or is otherwise materially adverse to the
                  Lenders, in either case as reasonably determined by the
                  Administrative Agent.

         (n) Section 8.21 shall be amended and restated in its entirety to read
as follows:

                           8.21 Change in, and Conduct of, Business. The
                  Borrower shall not, and shall not permit any of its
                  Subsidiaries to, and the Parent shall not permit any Financing
                  Subsidiary to, change the nature of its business in any
                  material respect. The Borrower shall not permit its pro forma
                  consolidated revenues from the broadcasting operations of the
                  Stations to be less than 80% of its total pro forma
                  consolidated revenues. The Parent shall not engage in any
                  business other than (a) entering into and performing contracts
                  (i) on behalf of the Borrower and its Subsidiaries in
                  connection with the ordinary course of operation of the
                  Stations ("Station Contracts"), (ii) the contracts relating to
                  the TIDES Subordinated Debentures as in effect as of the date
                  hereof or as amended, altered or modified in accordance with
                  Section 8.19, and (iii) certain contracts relating to
                  Subordinated Debt permitted pursuant to Section 8.1(g) and
                  guaranties permitted pursuant to Section 8.3, and (b) holding
                  the Membership Interests in the Borrower, the common
                  securities of the TIDES Trust and the capital stock of
                  Financing Subsidiaries. The Parent shall not hold any material
                  assets other than the assets referred to in Section 5.29.

                                      93
<PAGE>

         (o) Section 8.23 shall be amended and restated in its entirety to read
as follows:

                           8.23 License Subsidiaries. The Parent and the
                  Borrower shall not, and shall not permit any of their
                  Subsidiaries (other than a License Subsidiary) to, hold any
                  FCC Licenses (other than Excluded Licenses), but rather shall
                  cause all FCC Licenses relating to the Stations (other than
                  Excluded Licenses) to be issued to and held by a License
                  Subsidiary. The Borrower shall not permit any License
                  Subsidiary to (a) incur, create, assume or permit to exist any
                  Indebtedness, other than pursuant to the Subsidiary Guaranty
                  and the other Collateral Documents or pursuant to guaranties
                  of Subordinated Debt permitted pursuant to Section 8.3(f), (b)
                  incur, create, assume or permit to exist any Lien of any
                  nature whatsoever on any property or assets now owned or
                  hereafter acquired by it except in favor of the Administrative
                  Agent, for the benefit of the Lenders, (c) make any Capital
                  Expenditures, (d) acquire any assets other than the Licenses,
                  (e) conduct any business, or (f) hire or engage any employees.

         (p) Section 8 shall be amended by adding a new Section 8.24 at the end
thereof which shall read as follows:

                           8.24 Financing Subsidiaries. The Parent and the
                  Borrower shall not permit any Financing Subsidiary to acquire
                  any operating assets or other material assets (other than (i)
                  the proceeds of Subordinated Debt permitted pursuant to
                  Section 8.1(g), which proceeds shall immediately be
                  transferred to the Borrower, and (ii) amounts received from
                  the Borrower to pay interest on such Subordinated Debt to the
                  extent such interest payment is permitted pursuant to the
                  subordination provisions of such Subordinated Debt) or hold
                  any capital stock or other equity interests in any Subsidiary
                  or other Person or conduct any business other than in
                  connection with the issuance of Subordinated Debt permitted
                  pursuant to Section 8.1(g) and the payment of interest, from
                  amounts received from the Borrower, on such Subordinated Debt
                  to the extent such interest payment is permitted pursuant to
                  the subordination provisions of such Subordinated Debt. The
                  Parent and the Borrower shall not permit any Financing
                  Subsidiary that is not a Subsidiary of the Borrower to fail to
                  take any action that would be required by it pursuant to this
                  Agreement if it were a Subsidiary of the Borrower or to take
                  any action that would be prohibited to be taken by it pursuant
                  to this Agreement if it were a Subsidiary of the Borrower.

         2. Conditions to Effectiveness. The amendment set forth in Section 1
shall be effective on such date on which all of the following conditions are
satisfied:

         (a) the Borrower, the Parent, the Agents and the Required Lenders shall
have executed this Amendment and delivered counterpart signature pages to the
Administrative Agent or its counsel; and

         (b) The Borrower shall have paid to the Administrative Agent, for the
accounts of the Lenders entitled thereto, a fee in an amount equal to 0.05% of
the outstanding Loans and unused Commitments of each Lender that executes and
delivers to the Administrative Agent (or its counsel) a signature page to this
Amendment no later than 2:00 P.M. Eastern Time on Wednesday, February 6, 2002.
This fee shall be payable promptly following the satisfaction of the conditions
set forth in Section 2(a). Once paid, this fee shall not be refundable under any
circumstances.

         3. Representations, Warranties and Events of Default.

         (a) Each and every representation and warranty of the Borrower and the
Parent set forth in the Original Agreement (other than those which by their
terms are limited to a specific date) is hereby confirmed and ratified in all
material respects, and such representations and warranties as so confirmed and
ratified shall be deemed to have been made and undertaken as of the date of this
Amendment as well as at the time they were made and undertaken, except to the
extent such representations and warranties have been affected by events
permitted pursuant to the Credit Agreement.

         (b) Each of the Borrower and the Parent represents and warrants that:

                  (i) No Event of Default or Possible Default now exists or will
exist immediately following the execution hereof.

                  (ii) All necessary corporate, member, stockholder or other
actions on the part of the Borrower, the Members of the Borrower, the Parent and
the stockholders of the Parent to authorize the execution, delivery and
performance of this Amendment have been taken; each of this Amendment and the
Original Agreement as amended hereby has been duly and validly executed and
delivered and, upon the effectiveness of this Amendment pursuant to Section 2
hereof, is

                                      94
<PAGE>

legally valid and binding upon the Borrower and the Parent and enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by bankruptcy, insolvency or like laws or by general equitable
principles.

                  (iii) The execution, delivery and performance of this
Amendment and of the Original Agreement as amended hereby and all actions and
transactions contemplated hereby will not (A) violate, be in conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under (I) any provision of any Organizational Document of any Loan
Party, (II) any arbitration award or any order of any court or of any other
governmental agency or authority binding on any Loan Party, (III) any license,
permit or authorization granted to any Loan Party or under which any Loan Party
operates, or (IV) any applicable law, rule, order or regulation, or any material
indenture, agreement or other instrument to which any Loan Party is a party or
by which any Loan Party or any of their respective properties is bound and which
has not been waived or consented to, or (B) result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties of any Loan Party.

                  (iv) No consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority (including,
without limitation, the FCC and any other Licensing Authority) is required to be
obtained by any Loan Party in connection with the execution, delivery or
performance of this Amendment or any document or instrument required in
connection herewith which has not already been obtained or completed.

         4. Affirmation of the Borrower and the Parent. Each of the Borrower and
the Parent has executed this Amendment to consent to the amendment to the
Original Agreement made pursuant hereto and to acknowledge that the security
interests and liens granted by the Borrower and the Parent to the Administrative
Agent, for the benefit of the Lenders, pursuant to the Parent Security
Agreement, the Parent Pledge Agreement, the Borrower Security Agreement, the
Borrower Pledge Agreement and the other Collateral Documents to which the
Borrower or the Parent is a party remain in full force and effect and shall
continue to secure all Obligations and are hereby ratified and reaffirmed. The
Parent, as a guarantor, ratifies and reaffirms all of its payment and
performance obligations, contingent or otherwise, under Section 11 of the Credit
Agreement. The execution of this Amendment shall not operate as a waiver of any
right, power or remedy of the Agents or the Lenders, constitute a waiver of any
provision of any of the Collateral Documents or serve to effect a novation of
the Obligations.

         5. Fees and Expenses. As required under the Original Agreement, the
Borrower will reimburse the Administrative Agent upon demand for all
out-of-pocket costs, charges and expenses of the Administrative Agent (including
reasonable fees and disbursements of special counsel to the Administrative
Agent) in connection with the preparation, negotiation, execution and delivery
of this Amendment and the other agreements or documents relating hereto or
required hereby.

         6. Counterparts. This Amendment may be executed in as many counterparts
as may be convenient and shall become binding when the Borrower, the Parent, the
Agents and the Required Lenders have executed at least one counterpart. This
Amendment may be delivered by facsimile transmission of the relevant signature
pages hereof.

         7. Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of New York, without regard to the conflicts
of law provisions thereof.

         8. Binding Effect. This Amendment shall be binding upon and shall inure
to the benefit of the Borrower, the Parent, the Agents, the Lenders and their
respective successors and assigns.

         9. No other Changes; Confirmation; Reference to Original Agreement.
Except as amended hereby, the terms, provisions, conditions and agreements of
the Original Agreement are hereby ratified and confirmed and shall remain in
full force and effect. On and after the effectiveness of the amendment to the
Original Agreement accomplished hereby, each reference in the Original Agreement
to "this Agreement," "hereunder," "hereof," "herein" or words of like import,
and each reference to the Original Agreement in any Note or other Collateral
Document, or other agreement, document or instrument executed and delivered
pursuant to the Original Agreement, shall be deemed a reference to the Original
Agreement, as amended hereby.

                            [SIGNATURE PAGES FOLLOW]

                                      95
<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this Second
Amendment to Credit Agreement as of the date first above written.

BORROWER:

ENTERCOM RADIO, LLC

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

PARENT:

ENTERCOM COMMUNICATIONS CORP.

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

LENDERS:

KEY CORPORATE CAPITAL INC.

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

ALLFIRST BANK

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

BANK OF AMERICA, N.A.

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

BANK OF MONTREAL

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

THE BANK OF NOVA SCOTIA

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

                                      96
<PAGE>

BNP PARIBAS

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

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

JPMORGAN CHASE BANK

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

CITIZENS BANK OF MASSACHUSETTS

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

COMPAGNIE FINANCIERE de CIC
et de l'UNION EUROPEENNE

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

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

CREDIT SUISSE FIRST BOSTON

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

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

THE DAI-ICHI KANGYO BANK, LTD.

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

DEUTSCHE BANK

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

                                      97
<PAGE>

ERSTE BANK

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

FIRST HAWAIIAN BANK

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

FLEET BANK, N.A.

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

THE FUJI BANK LIMITED

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

THE INDUSTRIAL BANK OF JAPAN, LTD

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

ING (U.S.) CAPITAL LLC

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

THE MITSUBISHI TRUST AND
  BANKING CORPORATION

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

PNC BANK, NATIONAL ASSOCIATION

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

                                      98
<PAGE>

RABOBANK NEDERLAND

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

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

STANDARD FEDERAL BANK, F/K/A
MICHIGAN NATIONAL BANK

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

SUNTRUST BANK

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

UNION BANK OF CALIFORNIA, N.A.

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

U.S. BANK NATIONAL ASSOCIATION

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

WEBSTER BANK

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

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

ISSUING BANK:

KEY CORPORATE CAPITAL INC.

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

                                      99
<PAGE>

ADMINISTRATIVE AGENT:

KEY CORPORATE CAPITAL INC.

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

SYNDICATION AGENT:

BANK OF AMERICA, N.A.

By:
   ---------------------------------
Name:
     -------------------------------
TITLE:
      ------------------------------

                                     100

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