Document:

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                                                                     Exhibit 4.1

                              AMENDED AND RESTATED

                          STOCKHOLDERS RIGHTS AGREEMENT

                    amended and restated as of April 13, 2000

                                     between

                                  PEAPOD, INC.

                                       and

                    FIRST CHICAGO TRUST COMPANY OF NEW YORK,
                             A DIVISION OF EQUISERVE

                                 as Rights Agent
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<TABLE>
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                                TABLE OF CONTENTS
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<S>     <C>                                                                                 <C>
Section 1.    Certain Definitions............................................................2
Section 2.    Appointment of Rights Agent....................................................6
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..............................13
Section 10.  Record Date of Preferred Share Ownership.......................................15
Section 11.  Adjustment of Exercise Price, Number and Kind of Shares and Number of
                 Rights.....................................................................15
Section 12.  Certificate of Adjusted Exercise Price or Number of Shares.....................21
Section 13.  Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........22
Section 14.  Fractional Rights and Fractional Shares........................................25
Section 15.  Rights of Action...............................................................25
Section 16.  Agreements of Holders of Rights................................................26
Section 17.  Rights Certificate Holder Not Deemed a Stockholder.............................26
Section 18.  Concerning the Rights Agent....................................................27
Section 19.  Merger or Consolidation of the Rights Agent....................................27
Section 20.  Duties of the Rights Agent.....................................................28
Section 21.  Resignation or Removal of the Rights Agent.....................................30
Section 22.  Issuance of New Rights Certificates............................................31
Section 23.  Redemption.....................................................................31
Section 24.  Exchange.......................................................................32
Section 25.  Notice to Holders of Rights Certificates of Certain Events.....................34
Section 26.  Other Notices..................................................................34
Section 27.  Supplements and Amendments.....................................................35
Section 28.  Successors.....................................................................36
Section 29.  Certain Determinations and Actions by the Board................................36
Section 30.  Benefits of this Agreement.....................................................36
Section 31.  Severability...................................................................36
Section 32.  Governing Law..................................................................37
Section 33.  Counterparts...................................................................37
Section 34.  Descriptive Headings...........................................................37
Exhibit A  -  Form of Certificate of Designations of Series A Junior Participating
               Preferred Stock  ...........................................................A-1
Exhibit B  -  Form of Rights Certificate.................................................. B-1
Exhibit C  -  Summary of Rights to Purchase Shares of Series A Junior Participating
              Preferred Stock..............................................................C-1
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                          STOCKHOLDERS RIGHTS AGREEMENT

               Amended and Restated Stockholders Rights Agreement dated as of
June 9, 1997 and amended and restated as of April 13, 2000 (this "Agreement")
between Peapod, Inc., a Delaware corporation (the "Company"), and First Chicago
Trust Company of New York, a division of Equiserve (the "Rights Agent").

                              W I T N E S S E T H:
                              --------------------

               WHEREAS, the Company and the Rights Agent entered into a
Stockholders Rights Agreement, dated as of June 9, 1997, which, among other
things, governs the terms and conditions under which the Rights are exercisable
by the holders of Common Stock of the Company;

               WHEREAS, on May 29, 1997, the Board of Directors of the Company
authorized and declared a dividend of one preferred stock purchase right
(individually a "Right" and collectively the "Rights") for each share of Common
Stock (as hereinafter defined) of the Company outstanding at the Close of
Business on the effective date of the Company's initial public offering
registration statement, file no. 333-24341 (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined) upon the terms and subject to the conditions herein after
set forth, and contemplates that one Right will be issued with respect to each
share of Common Stock which shall become outstanding after the Record Date and
prior to the earlier of the Redemption Date and the Final Expiration Date (as
such terms are hereinafter defined), including any shares of Common Stock issued
by reason of the exercise of any option, warrant, right (other than the Rights)
or conversion or exchange privilege contained in any option, warrant, right
(other than the Rights) or convertible or exchangeable security issued by the
Company prior to the Distribution Date, unless the Board (as hereinafter
defined) shall expressly provide to the contrary at the time of issuance of any
such option, warrant, right or convertible or exchangeable security;

               WHEREAS, the Company proposes to enter into a Purchase Agreement
(the "Purchase Agreement") with Koninklijke Ahold N.V. (the "Investor") pursuant
to which, among other things, the Investor will purchase shares of Series B
Convertible Preferred Stock, $.01 par value, of the Company ("Series B Preferred
Stock") and warrants to purchase Common Stock (as hereinafter defined) of the
Company;

               WHEREAS, the Board of Directors of the Company authorized and
declared a dividend on April 13, 2000 of Rights with respect to the Series B
Preferred Stock, and contemplates the issuance of a number of Rights equal to
the number of shares of Common Stock that such Series B Preferred Stock are
convertible into in accordance with the Certificate of Designation for the
Series B Preferred Stock (the "Series B Certificate of Designations") will be
issued with respect to each share of Series B Preferred Stock which shall become
outstanding on the first Closing Date (as defined in the Purchase Agreement) and
at any time thereafter and prior to the earlier of the Redemption Date and the
Final Expiration Date (as such terms are hereinafter defined), including any
shares of Series B Preferred Stock issued by reason of the
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exercise of any option, warrant, right (other than the Rights) or conversion or
exchange privilege contained in any option, warrant, right (other than the
Rights) or convertible or exchangeable security issued by the Company prior to
the Distribution Date, unless the Board (as hereinafter defined) shall expressly
provide to the contrary at the time of issuance of any such option, warrant,
right or convertible or exchangeable security.

               WHEREAS, the Company and the Rights Agent desire to amend and
restate the Agreement (i) to provide that the Investor shall not be deemed an
Acquiring Person in certain circumstances, (ii) to provide for the issuance of
Rights with respect to the Series B Preferred Stock and (ii) to make certain
other administrative changes.

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

               Section 1. Certain Definitions. For all purposes of this
Agreement, unless the context otherwise requires, the following terms shall have
the respective meanings set forth below:

               (a)    "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the shares of Common Stock of the Company
then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan or other compensation program or
arrangement of the Company or of any such Subsidiary, (iv) any Person holding
such shares of Common Stock for or pursuant to the terms of any such plan,
program or arrangement and each Affiliate and Associate thereof, and (v) Andrew
B. Parkinson and Thomas L. Parkinson, and each Affiliate and Associate thereof
(the Persons specified in clauses (i) through (v) being hereinafter collectively
called "Exempt Persons"). Notwithstanding the preceding sentence, no Person
shall become an "Acquiring Person" as the result of an acquisition by the
Company of shares of its Common Stock which, by reason of reducing the number of
its then outstanding shares of Common Stock, increases the percentage of its
then outstanding shares of Common Stock Beneficially Owned by such Person to 15%
or more; provided, however, that if such Person shall, after such purchase by
the Company, become the Beneficial Owner of any additional shares of Common
Stock of the Company, then such Person shall be deemed to be an "Acquiring
Person."

               Notwithstanding the foregoing, (A) on or prior to the Final
Closing (as defined in the Purchase Agreement) none of the Investor or any of
its Affiliates or Associates shall be deemed an Acquiring Person as a result of
the execution and delivery of the Purchase Agreement or any of the Documents (as
defined in the Purchase Agreement) or the consummation of the transactions
contemplated therein, including, without limitation the acquisition of (i)
shares of Series B Preferred Stock and Warrants (as defined in the Purchase
Agreement) issued and sold by the Company to the Investor under the Purchase
Agreement (the "Investor Securities"), (ii) any securities acquired by the
Investor pursuant to their exercise of preemptive rights pursuant to the Series
B Certificate of Designations, (iii) shares of Common Stock or any other
security received or receivable upon conversion or exercise of any Investor
Securities, (iv) any security received in exchange for or in replacement of any
Investor Securities, or (v) any security issued

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or issuable with respect to any Investor Securities as a result of a change or
reclassification of Investor Securities, a stock split, stock dividend or
similar recapitalization of the Company or any capital reorganization of the
Company; provided, however, that (i) if the Investor would have been an
Acquiring Person but for the foregoing and the Investor becomes the Beneficial
Owner of any additional securities of the Company (other than as expressly
contemplated by the Purchase Agreement) and (B) after the Final Closing (as
defined in the Purchase Agreement) none of the Investor, any of its Affiliates
or Associates or any Permitted Transferee (as defined in the Purchase Agreement)
shall be deemed an Acquiring Person.

               Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares of Common Stock so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purpose of this Agreement.

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

               (c)    "Beneficial Owner" (including the terms "Beneficially Own"
and "Beneficial Ownership"), when used with respect to any Person, shall be
deemed to include any securities which:

               (i) such Person or any of such Person's Affiliates or Associates
        beneficially owns, directly or indirectly (determined as provided in
        Rule 13d-3, as in effect on the date of this Agreement, under the
        Exchange Act);

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

                      (A) the right to acquire (whether such right is
               exercisable immediately or only after the passage of time or upon
               the satisfaction of any conditions, or both) pursuant to any
               written or oral agreement, arrangement or understanding (other
               than customary agreements with and among underwriters and selling
               group members with respect to a bona fide public offering of
               securities), upon the exercise of any options, warrants, rights
               (other than the Rights) or conversion or exchange privileges or
               otherwise; provided, however, that a Person shall not be deemed
               the Beneficial Owner of, or to Beneficially Own: (I) 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 (II) securities issuable upon exercise of
               the Rights at any time prior to the Distribution Date; or

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                      (B) the right to vote pursuant to any written or oral
               agreement, arrangement or understanding; provided, however, that
               a Person shall not be deemed the Beneficial Owner of, or to
               Beneficially Own, any security otherwise subject to this item (B)
               if such agreement, arrangement or understanding to vote (I)
               arises solely from a revocable proxy or consent given to such
               Person or any of such Person's Affiliates or Associates in
               response to a public proxy or consent solicitation made pursuant
               to, and in accordance with, the applicable rules and regulations
               under the Exchange Act and (II) is not also then reportable by
               such Person on Schedule 13D (or any comparable or successor
               report then in effect) under the Exchange Act; or

                      (C) the right to dispose of pursuant to any written or
               oral agreement, arrangement or understanding (other than
               customary agreements with and among underwriters and selling
               group members with respect to a bona fide public offering of
               securities); or

            (iii) are beneficially owned, directly or indirectly, by any other
        Person with which such Person or any of such Person's Affiliates or
        Associates has any written or oral agreement, arrangement or
        understanding (other than customary agreements with and among
        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 item (B) of
        subparagraph (ii) of the first paragraph of this definition) or
        disposing of any securities of the Company.

               Notwithstanding the first paragraph of this definition, no
director or officer of the Company shall be deemed to be the "Beneficial Owner"
of, or to "Beneficially Own," shares of Common Stock or other securities of the
Company beneficially owned by any other director or officer of the Company
solely as a result of his or her being a director or officer of the Company.

               (d)    "Board" shall mean the Board of Directors of the Company.

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

               (f)    "Certificate of Designations" shall mean the Certificate
of Designations for the Preferred Shares previously filed with the Secretary of
State of the State of Delaware on June 4, 1997, in substantially the form
attached hereto as Exhibit A.

               (g)    "Close of Business" on any given date shall mean 5:00
P.M., Chicago time, on such date or, if such date is not a Business Day, then
5:00 P.M., Chicago time, on the next succeeding Business Day.

               (h)    "Common Stock," when used with reference to the Company,
shall mean the Common Stock, $.01 par value, of the Company. "Common Stock,"
when used with reference to any Person other than the Company, shall mean the
capital stock with the greatest

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voting power (or the other equity securities or equity interests having the
power to control or direct management) of such Person or, if such Person is a
Subsidiary of another Person, of the Person which ultimately controls such
first-mentioned Person and which has issued and outstanding such capital stock,
equity securities or equity interests.

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

               (j)    "Equivalent Preferred Shares" shall have the meaning set
forth in Section 11(b).

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

               (l)    "Exchange Rate" shall have the meaning set forth in
Section 24(a).

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

               (n)    "Exercise Price" shall have the meaning set forth in
Section 7(b).

               (o)    "Fair Market Value" shall have the meaning and be
determined as set forth in Section 11(d).

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

               (q)    "Interested Stockholder" shall mean any Restricted Person
or any Affiliate or Associate of any other Person in which such Restricted
Person has an interest, or any Person acting, directly or indirectly, on behalf
of or in concert with any such Restricted Person.

               (r)    "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of any of the foregoing.

               (s)    "Preferred Shares" shall mean the Series A Junior
Participating Preferred Stock of the Preferred Stock, which series shall have
the powers, preferences and other rights set forth in the Certificate of
Designations.

               (t)    "Preferred Stock," when used with reference to the
Company, shall mean the Preferred Stock, $.01 par value, of the Company.

               (u)    "Principal Party" shall have the meaning set forth in
Section 13(e).

               (v)    "Record Date" shall have the meaning set forth in the
second recital clause of this Agreement.

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

               (x)    "Redemption Price" shall have the meaning set forth in
Section 23(a).

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               (y)    "Restricted Person" shall mean an Acquiring Person or any
Affiliate or Associate of an Acquiring Person.

               (z)    "Rights" shall have the meaning set forth in the second
recital clause of this Agreement.

               (aa)   "Rights Certificates" shall mean the certificates
evidencing the Rights after the Distribution Date.

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

               (cc)   "Section 13 Event" shall mean any transaction described
in Section 13(a).

               (dd)   "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.

               (ee)   "Security" shall have the meaning set forth in Section
11(d).

               (ff)   "Series B Preferred Stock" shall have the meaning set
forth in the second recital of this Agreement.

               (gg)   "Share Acquisition Date" shall mean the first date on
which there shall be a public announcement (which shall include, without
limitation, any press release or publicly available filing with the Securities
and Exchange Commission or any other federal or state governmental authority or
agency) by the Company or an Acquiring Person that an Acquiring Person has
become such.

               (hh)   "Stock" shall have the meaning set forth in Section 11(d).

               (ii)   "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power or the other equity
securities or equity interests having the power to control or direct management)
is owned, directly or indirectly, by such Person.

               (jj)   "Summary of Rights" shall mean the Summary of Rights to
Purchase shares of Series A Junior Participating Preferred Stock in
substantially the form attached hereto as Exhibit C.

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

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

Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (which
holders, as provided in Section 3, shall, prior to the Distribution Date, also
be the holders of the Common Stock of the Company) in accordance with the terms
and conditions of this Agreement. The

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Rights Agent hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or desirable. In the
event the Company appoints one or more Co-Rights Agents, the respective
obligations and duties of the Rights Agent and of any Co-Rights Agent shall be
as the Company shall specify in writing. The Rights Agent shall have no duty to
supervise, and shall not be liable for the acts or omissions of, any Co-Rights
Agent.

               Section 3.     Issuance of Rights Certificates.
                              --------------------------------

               (a)    Until the earliest of (i) the Close of Business on the
10th Business Day after the Share Acquisition Date or (ii) the Close of Business
on the 10th Business Day (or, anything in Section 27 to the contrary
notwithstanding, such other Business Day as may be determined by action of the
Board prior to the occurrence of any Section 11(a)(ii) Event) after the date of
the commencement by any Person (other than an Exempt Person) of, or the first
public announcement of the intention of any Person (other than an Exempt Person)
to commence, a tender or exchange offer if, upon the consummation thereof, such
Person would be the Beneficial Owner of 15% or more of the shares of Common
Stock of the Company then outstanding (the earliest of the dates specified
clauses (i) and (ii) being hereinafter called the "Distribution Date"), the
Rights shall be evidenced and be transferable only as provided in Section 3(b).
As soon as practicable after the Distribution Date or, in the case of any shares
of Common Stock of the Company which are issued or otherwise become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date, including any shares of Common Stock issued by reason
of the exercise of any option, warrant, right (other than the Rights) or
conversion or exchange privilege contained in any option, warrant, right (other
than the Rights) or convertible or exchangeable security issued by the Company
prior to the Distribution Date, unless the Board shall have expressly provided
to the contrary at the time of issuance of any such option, warrant, right or
convertible or exchangeable security, simultaneously with the issuance of stock
certificates for such shares of Common Stock, the Company shall prepare and
execute, the Rights Agent shall countersign and the Company shall deliver or
cause to be delivered (or the Rights Agent shall, if requested, deliver), by
first-class mail, postage prepaid, to each record holder of shares of Common
Stock or Series B Preferred Stock of the Company as of the Close of Business on
the Distribution Date or, in the case of shares of Common Stock or Series B
Preferred Stock issued or otherwise becoming outstanding after the Distribution
Date (unless otherwise provided with respect thereto as aforesaid), to each
record holder of the shares of Common Stock or Series B Preferred Stock so being
issued or becoming outstanding at the time of such occurrence, at its last
address shown on the registry books of the transfer agent for the Common Stock
and the Series B Preferred Stock (if any) of the Company, one or more Rights
Certificates evidencing (i) one Right for each share of Common Stock of the
Company so held, issued or becoming outstanding and (ii) the number of Rights
equal to the number of shares of Common Stock that each share of Series B
Preferred Stock so held, issued or becoming outstanding is convertible into in
accordance with the Series B Certificate of Designations. As of and after the
Distribution Date, the Rights shall be evidenced solely by the Rights
Certificates.

               (b)    Until the Distribution Date: no Rights Certificates shall
be issued; each stock certificate for shares of Common Stock or Series B
Preferred Stock of the Company

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outstanding as of the Record Date, until the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date, shall be deemed also to
constitute a certificate for the Rights associated with the shares represented
thereby, together with a copy of the Summary of Rights attached thereto; and the
registered holder of such shares shall also be the registered holder of the
associated Rights. Until the earliest of the Distribution Date, the Redemption
Date and the Final Expiration Date, the surrender for transfer of any such stock
certificate, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the shares of
Common Stock or Series B Preferred Stock represented thereby.

               (c)    Any stock certificate for shares of Common Stock or Series
B Preferred Stock of the Company which shall be delivered by or on behalf of the
Company (including, without limitation, stock certificates for shares of Common
Stock or Series B Preferred Stock which are reacquired by the Company and then
transferred) after the Record Date and prior to the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date shall have impressed,
printed or written thereon, or otherwise affixed thereto, the following legend:

               "This certificate also evidences and entitles the holder hereof
        to certain Rights as set forth in the Amended and Restated Stockholders
        Rights Agreement dated as of April 13, 2000, as it may be amended from
        time to time (the "Rights Agreement") between Peapod, Inc. (the
        "Company") and First Chicago Trust Company of New York, a division of
        Equiserve, as Rights Agent, the terms, provisions and conditions of
        which are incorporated herein by reference and made a part hereof. The
        Rights Agreement is on file at the principal office of the Company and
        the principal office of such Rights Agent, and the Company will mail to
        the holder of this certificate a copy without charge after receipt of a
        written request therefor. Under certain circumstances, as set forth in
        the Rights Agreement, such Rights will be evidenced by separate
        certificates and will no longer be evidenced by this certificate. The
        Rights (i) may be redeemed at a redemption price (subject to adjustment)
        of $.01 per Right or (ii) under certain circumstances, may be exchanged,
        in whole or in part, for shares of Common Stock of the Company at an
        exchange rate (subject to adjustment) of one share of Common Stock per
        Right, all as set forth in the Rights Agreement. Under certain
        circumstances, as set forth in the Rights Agreement, Rights Beneficially
        Owned by a Restricted Person (as such terms are defined in the Rights
        Agreement), or by specified transferees from a Restricted Person, shall
        be or become void."

               Each stock certificate containing the foregoing legend, until the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date, shall be deemed also to constitute a certificate for the Rights associated
with the shares represented thereby, and the registered holder of such shares
shall also be the registered holder of the associated Rights. Until the earliest
of the Distribution Date, the Redemption Date and the Final Expiration Date, the
surrender for transfer of any such stock certificate shall also constitute the
transfer of the Rights associated with the shares of Common Stock or Series B
Preferred Stock represented thereby. The omission of the foregoing legend shall
not in any manner whatsoever affect the application or interpretation of Section
7(d).

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               (d)    In the event that the Company shall reacquire any shares
of its Common Stock or Series B Preferred Stock after the Record Date and prior
to the Distribution Date, the Rights associated with such shares shall be deemed
cancelled and retired, the Company not being entitled to exercise any Rights
associated with shares of its Common Stock or Series B Preferred Stock which are
no longer outstanding.

               Section 4.     Form of Rights Certificates.
                              ---------------------------

               (a)    The Rights Certificates (including the Form of Election to
Purchase and Certification of Status and the Form of Assignment and
Certification of Status to be set forth on the reverse side thereof) shall be in
substantially the form attached hereto as Exhibit B and may have such marks of
identification or designation and such legends, summaries or endorsements set
forth thereon as the Company may deem appropriate and are not inconsistent with
the provisions of this Agreement, or as may be required to conform to customary
practice or to comply with any applicable law or any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed. Subject to Sections 11 and 22, the
Rights Certificates, whenever distributed, shall be dated as of the Record Date
(or, in the case of Rights with respect to shares of Common Stock or Series B
Preferred Stock issued or becoming outstanding after the Record Date, the same
date as the stock certificate evidencing such shares), shall (if the Company
shall so require) indicate the date of countersignature by the Rights Agent and
shall entitle the holders thereof to purchase such number of one one-hundredths
of a Preferred Share at the Exercise Price as shall be set forth therein, but
the number of such one one-hundredths of a Preferred Share 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 that represents Rights Beneficially Owned by: (i) a Restricted
Person, (ii) a transferee from a Restricted Person who becomes a transferee
after the Acquiring Person becomes such or (iii) a transferee from a Restricted
Person who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from such Acquiring Person (or any Affiliate
or Associate thereof) to holders of equity interests in such Acquiring Person
(or any such Affiliate or Associate) or to any Person with whom such Acquiring
Person (or any such Affiliate or Associate) has any continuing written or oral
agreement, arrangement or understanding regarding the transferred Rights or (B)
a transfer which the Board has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section
7(d), and any Rights Certificate issued pursuant to Section 6, 11 or 22 upon the
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall have deleted therefrom the second sentence
of the legend on the Form of Rights Certificate attached hereto as Exhibit B
and, in lieu thereof, shall contain the following two sentences:

               "The Rights represented by this Rights Certificate are or were
        Beneficially Owned by a Restricted Person (as such term is defined in
        such Agreement). This Rights Certificate and the Rights represented
        hereby shall be or become void under the circumstances specified in
        Section 7(d) of such Agreement."

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               The Company shall give prompt written notice to the Rights Agent
after becoming aware of the existence and identity of any Restricted Person. The
failure to insert the foregoing sentences on any such Rights Certificate or any
defect therein shall not in any manner whatsoever affect the application or
interpretation of Section 7(d). The Company shall specify to the Rights Agent in
writing which Rights Certificates are to be so legended.

               Section 5.     Countersignature and Registration.
                              ---------------------------------

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

               (b)    After the Distribution Date, the Rights Agent shall keep
or cause to be kept, at its principal office, 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 Rights Certificate, the date of
each Rights Certificate and (if required by the Company) the date of
countersignature by the Rights Agent.

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

               (a)    Subject to Sections 4(b), 7(d) and 14, at any time after
the Close of Business on the Distribution Date and prior to the Close of
Business on the earlier of the Redemption Date and the Final Expiration Date,
any Rights Certificate (other than any Rights Certificate which shall have been
exchanged pursuant to Section 24) may be transferred, split up, combined or
exchanged for one or more other Rights Certificates, entitling the registered
holder to purchase the same number of one one-hundredths of a Preferred Share
(or after a Triggering Event, the securities, cash and other property
purchasable in lieu thereof) as the Rights Certificate or Rights Certificates
surrendered entitled such registered holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange one or more Rights
Certificates shall make such request in a writing delivered to the Rights Agent,
and shall

                                       10
<PAGE>

surrender the Rights Certificates to be transferred, split up, combined or
exchanged, with the Form of Assignment and Certification of Status on the
reverse side thereof duly executed, together with such signature guarantees and
other documentation as the Rights Agent may reasonably request, at the principal
office of the Rights Agent. Thereupon the Company shall prepare and execute, the
Rights Agent shall countersign and the Company shall deliver or cause to be
delivered (or the Rights Agent shall, if requested, deliver) to the person
entitled thereto one or more Rights Certificates 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 and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto.

               (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 the case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them or, in the
case of mutilation, upon surrender to the Rights Agent of the mutilated Rights
Certificate, and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, the Company shall
prepare and execute, the Rights Agent shall countersign and the Company shall
deliver or cause to be delivered (or the Rights Agent shall, if requested,
deliver) to the registered holder thereof a new Rights Certificate of like tenor
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 Section 7(d), 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 earliest of (i) the Close of Business on the
tenth anniversary of the Record Date (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 (the "Redemption
Date") and (iii) the time at which such Rights are exchanged as provided in
Section 24, upon surrender of such Rights Certificate, with the Form of Election
to Purchase and Certification of Status on the reverse side thereof duly
executed, together with such signature guarantees and other documentation as the
Rights Agent may reasonably request, to the Rights Agent at its principal
office, accompanied by payment (as provided in subsection (c) of this Section 7)
of the Exercise Price for each one one-hundredth of a Preferred Share (or after
a Triggering Event, the securities, cash and other property purchasable in lieu
thereof) as to which the surrendered Rights are then being exercised.

               (b)    The price (the "Exercise Price") for each one
one-hundredth of a Preferred Share purchased upon exercise of the Rights shall
initially be $98.00 shall be subject to adjustment from time to time as provided
in Sections 11 and 13 and shall be payable in lawful money of the United States
of America in accordance with subsection (c) of this Section 7.

               (c)    Upon receipt of a Rights Certificate representing then
exercisable Rights, with the Form of Election to Purchase and Certification of
Status on the reverse side thereof duly executed, together with such signature
guarantees and other documentation as the Rights Agent may reasonably request,
accompanied by payment of the Exercise Price for the number of one
one-hundredths of a Preferred Share (or after a Triggering Event, the
securities, cash and other

                                       11
<PAGE>

property purchasable in lieu thereof) being purchased, plus the amount of any
applicable transfer tax (as determined by the Rights Agent) required to be paid
by the holder of such Rights Certificate in accordance with Section 9, by
certified or cashier's check or money order payable to the order of the Company,
the Rights Agent shall, subject to the terms and conditions of this Agreement,
thereupon promptly (i) requisition from any transfer agent for the Preferred
Shares (or, if the Rights Agent is such a transfer agent, make available) stock
certificates for the number of one one-hundredths of a Preferred Share being
purchased, the Company hereby irrevocably authorizing any such transfer agent to
comply with all such requests, (ii) if the Company shall have elected to deposit
the Preferred Shares issuable upon exercise of the Rights with a depository
agent, requisition from the depository agent depository receipts for the number
of one one-hundredths of a Preferred Share being purchased (in which case stock
certificates for the Preferred Shares represented by such depository receipts
shall be deposited by the transfer agent for the Preferred Shares with the
depository agent), the Company hereby irrevocably authorizing any such
depository agent to comply with all such requests, (iii) after a Triggering
Event, requisition or obtain from the appropriate Person or Persons such
securities, cash and other property as may then be purchasable in lieu of
Preferred Shares, the Company hereby irrevocably authorizing all such requests,
(iv) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of the issuance of any fractional share in accordance with Section
14 and (v) promptly after receipt of such stock certificates, depository
receipts, securities, cash and/or other property, cause the same to be delivered
to or upon the order of the registered holder of such Rights Certificate,
registered (when appropriate) in such name or names as may be designated by such
registered holder.

               (d)    Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of any Section 11(a)(ii) Event,
any Rights Beneficially Owned by: (i) a Restricted Person, (ii) a transferee
from a Restricted Person who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee from a Restricted Person who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from such Acquiring Person (or any Affiliate or Associate
thereof) to holders of equity interests in such Acquiring Person (or any such
Associate or Affiliate) or to any Person with whom such Acquiring Person (or any
such Associate or Affiliate) has any continuing written or oral agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(d)
shall be or become 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, from and after such first occurrence.
The Company shall use all reasonable efforts to ensure that the provisions of
this Section 7(d) and Section 4(b) are complied with, but shall have no
liability to any holder of the Rights Certificates or to any other Person as a
result of the Company's failure to make any applicable finding or determination
with respect to any Restricted Person, or any transferee therefrom.

               (e)    Notwithstanding subsection (a) of this Section 7, a Right
may be exercised by the holder thereof on or after the Distribution Date and
prior to the receipt of the associated Rights Certificate by notifying the
Rights Agent in writing and furnishing to the Rights Agent such information and
evidence as to such election as the Rights Agent may reasonably request;

                                       12
<PAGE>

provided, however, that the Rights Agent shall not be required to take any of
the actions specified in subsection (c) of this Section 7 until such holder
shall have fully satisfied the applicable requirements specified therein.

               (f)    Neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to any Rights or Rights
Certificate upon the purported exercise or transfer thereof unless the
registered holder thereof shall have (i) completed and signed the Certification
of Status following the Form of Election to Purchase or the Form of Assignment,
as the case may be, set forth on the reverse side of the Rights Certificate
surrendered for such exercise or transfer and (ii) provided such additional
evidence as to the identity of the Beneficial Owner (or former Beneficial Owner)
thereof or the Affiliates or Associates thereof as the Company shall reasonably
request.

               (g)    In case the registered holder of any Rights Certificate
shall exercise less than all of the Rights evidenced thereby, then, subject to
the provisions of Section 14, a new Rights Certificate evidencing the Rights
remaining unexercised shall be prepared and executed by the Company and
countersigned and delivered by the Rights Agent to the registered holder of such
surrendered Rights Certificate or to such registered holder's duly authorized
assigns.

               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 cancelled
form or, if surrendered to the Rights Agent, shall be cancelled by it; and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by this Agreement. The Company shall deliver to the Rights Agent for
cancellation, and the Rights Agent shall cancel, any other Rights Certificate
purchased or reacquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates and deliver a certificate of the destruction thereof to the
Company.

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

               (a)    The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares,
or any authorized and issued Preferred Shares held in its treasury, the number
of Preferred Shares required to permit the exercise in full of all outstanding
Rights.

               (b)    The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares delivered
upon exercise of the Rights shall, at the time of delivery of the stock
certificates therefor in accordance with Section 7(c) (including the receipt of
payment of the Exercise Price), be duly and validly authorized and issued and
fully paid and nonassessable.

               (c)    The Company covenants and agrees that it will use its best
efforts to cause, from and after such time as the Rights shall become
exercisable, all Preferred Shares issued or reserved for issuance to be listed,
upon official notice of issuance, on the principal

                                       13
<PAGE>

national securities exchange, if any, on which its Common Stock is listed or, if
the principal market for Common Stock is not on any national securities
exchange, to be eligible for quotation on The NASDAQ National Market or any
successor thereto or other comparable quotation system.

               (d)    The Company covenants and agrees that it will use its best
efforts to (i) file, as soon as practicable after the occurrence of any Section
11(a)(ii) Event for which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iv),
or as soon as required by law after the Distribution Date, as the case may be, a
registration statement on an appropriate form under the Securities Act with
respect to the securities purchasable upon exercise of the Rights, (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 which at all times meets the requirements of the Securities
Act) until the earliest of (A) the date as of which the Rights are no longer
exercisable for such securities, (B) the Redemption Date and (C) the Final
Expiration Date. The Company further covenants and agrees that it will take such
action as may be appropriate under, and which will ensure compliance with, the
securities or "blue sky" laws of such jurisdictions as may be necessary or
appropriate in connection with the exercisability of the Rights. The Company may
temporarily suspend, for not more than 90 days after the applicable date
specified in the first sentence of this subsection (d), the exercisability of
the Rights in order to prepare and file such registration statement and permit
it to become effective and to complete such securities or "blue sky" law action.
Upon such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, and the Company
shall also issue a public announcement at such time as the suspension shall no
longer be in effect. Failure of the Company to notify the Rights Agent of any
such suspension shall not affect the effectiveness thereof. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification or exemption in such
jurisdiction shall have been effected. Until otherwise notified in writing by
the Company, the Rights Agent may assume that each purported exercise of the
Rights is permitted by this Agreement and by applicable law, and the Rights
Agent shall not be liable for acting in reliance upon such assumption.

               (e)    The Company covenants and agrees that, subject to Section
6, it will pay when due and payable any and all federal and state original issue
or transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Rights or the Rights Certificates or of any stock certificate
for Preferred Shares issued upon exercise of the 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 any Rights Certificate to a Person other than, or
the issuance of any stock certificate for Preferred Shares upon exercise of any
of the Rights represented by such Rights Certificate in a name other than, the
registered holder of such Rights Certificate or to issue or deliver any Rights
Certificate or stock certificate for Preferred Shares upon such transfer or
exercise 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 thereof) or until
it has been established to the Company's reasonable satisfaction that no such
tax is due.

                                       14
<PAGE>

               (f)    After a Triggering Event, the provisions of this Section 9
shall apply, to the extent applicable and appropriate, to all shares of capital
stock and other securities then purchasable upon exercise of the Rights.

               Section 10. Record Date of Preferred Share Ownership. The Person
in whose name any stock certificate for Preferred Shares is issued upon exercise
of any of the Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares represented thereby on, and such stock
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered to the Rights Agent with proper
payment of the Exercise Price (and all applicable transfer taxes, if any);
provided, however, that if the date of such surrender and payment shall be a
date upon which the registry books of the transfer agent for the Preferred
Shares are closed, such Person shall be deemed to have become the record holder
of such Preferred Shares on, and such stock certificate shall be dated, the next
succeeding Business Day on which such registry books are open.

               Section 11. Adjustment of Exercise Price, Number and Kind of
Shares and Number of Rights. The Exercise Price, the number and kind of shares
of capital stock for which each Right is exercisable and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.

               (a)    (i) In the event 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 into
a greater number of Preferred Shares, (C) combine or consolidate the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D) issue any
shares of capital stock of any class in a reclassification of the Preferred
Shares (including any such reclassification in connection with a combination or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and in Section 7(d), the Exercise
Price in effect at the Close of Business on the record date for such dividend or
at the effective time of such subdivision, combination, consolidation or
reclassification, and the number and kind of shares of capital stock issuable
upon exercise of the Rights at such date or time, shall be proportionately
adjusted so that the registered holder of each Right exercised after such date
or time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date or time and at a time when the registry books of the transfer agent for the
Preferred Shares were open, such registered holder would have been entitled to
receive by reason of such dividend, subdivision, combination, consolidation or
reclassification; 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 the exercise thereof.
If an event shall occur which would require an adjustment under both this
paragraph (i) and paragraph (ii) of this subsection (a), the adjustment provided
for in this paragraph (i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to such paragraph (ii).

          (ii) Subject to Section 24, in the event that any Person, either alone
     or together with its Affiliates and Associates, shall become an Acquiring
     Person, then, in such case and promptly following such occurrence, proper
     provision shall be made so that the

                                       15
<PAGE>

     registered holder of each Right, except as otherwise provided in Section
     7(d), shall thereafter have the right to receive, upon exercise thereof and
     payment of an amount equal to the product determined by multiplying the
     then current Exercise Price by the number of one one-hundredths of a
     Preferred Share for which such Right was exercisable immediately prior to
     such occurrence, in accordance with this Agreement, in lieu of Preferred
     Shares, the number of shares of Common Stock determined by dividing such
     product by 50% of the Fair Market Value (determined as provided in
     subsection (d) of this Section 11) of one share of Common Stock on the date
     of such occurrence.

          (iii) In the event that there shall not be sufficient authorized and
     unissued or treasury shares of Common Stock to permit the exercise in full
     of the Rights in accordance with paragraph (ii) of this subsection (a), the
     Company shall take all necessary action to authorize and reserve for
     issuance such number of additional shares of Common Stock as may from time
     to time be required to be issued upon the exercise in full of all
     outstanding Rights and, if necessary, shall use its best efforts to obtain
     stockholder approval thereof. Notwithstanding the preceding sentence, if
     the Board shall determine that such action is necessary or appropriate and
     is not contrary to the best interests of the holders of the Rights, the
     Board may cause the Company, in lieu of issuing shares of Common Stock in
     accordance with such paragraph (ii), to distribute, or if a sufficient
     number of shares of Common Stock cannot be issued for such purpose in
     accordance with the provisions hereof, the Company shall distribute, upon
     the exercise of each Right, cash, debt securities, Preferred Shares, other
     shares of Preferred Stock, other property or any combination thereof having
     an aggregate Fair Market Value (determined as provided in subsection (d) of
     this Section 11) equal to the Fair Market Value (as so determined) of the
     number of shares of Common Stock which otherwise would have been issuable
     pursuant to such paragraph (ii). Any such decision by the Board must be
     made and publicly announced within 30 days after the occurrence of any
     Section 11(a)(ii) Event.

               (b)    In the event that the Company shall fix a record date for
the making of any distribution to all registered holders of Preferred Shares of
options, warrants or rights entitling them (for a period expiring not later than
45 calendar days after such record date) to subscribe for or purchase Preferred
Shares (or shares of capital stock of any class of the Company having the same
(or more favorable) powers, preferences and rights as the Preferred Shares
("Equivalent Preferred Shares"), or securities convertible into or exchangeable
for Preferred Shares or Equivalent Preferred Shares, at a price per Preferred
Share or per Equivalent Preferred Share (or having a conversion or exchange
price per share, in the case of securities convertible into or exchangeable for
Preferred Shares or Equivalent Preferred Shares) less than the Fair Market Value
(determined as provided in subsection (d) of this Section 11) of one Preferred
Share on such record date, the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date, plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or Equivalent Preferred Shares so to be offered (and/or the
aggregate initial conversion or exchange price, in the case of convertible or
exchangeable securities so to be offered) would purchase at such Fair Market
Value, and the denominator of which shall be the

                                       16
<PAGE>

number of Preferred Shares outstanding on such record date, plus the total
number of Preferred Shares and/or Equivalent Preferred Shares so to be offered
(and/or into or for which the convertible or exchangeable securities so to be
offered are initially convertible or exchangeable); 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 the exercise thereof. In case all or part of such subscription
price may be paid in a form other than cash, the value of such non-cash
consideration shall be its Fair Market Value (determined as provided in such
subsection (d)). Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any computation
provided for in this subsection (b). The adjustment required by this subsection
(b) 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 the Exercise Price which would have been in effect if such record
date had not been fixed.

               (c)    In the event that the Company shall fix a record date for
the making of any distribution to all registered holders of Preferred Shares
(including any such distribution made in connection with a combination or merger
in which the Company is the continuing or surviving corporation) of cash (other
than a regular quarterly cash dividend), options, warrants, rights (other than
those referred to in subsection (b) of this Section 11), securities, evidences
of indebtedness or other property (excluding any dividend payable in Preferred
Shares, but including any dividend payable in other shares of capital stock),
the Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Fair Market Value (determined
as provided in subsection (d) of this Section 11) of one one-hundredth of a
Preferred Share on such record date, less the Fair Market Value (as so
determined) of the cash, options, warrants, rights, securities, evidences of
indebtedness or other property so to be distributed and properly attributable to
one one-hundredth of a Preferred Share, and the denominator of which shall be
such Fair Market Value of one one-hundredth of a Preferred Share; 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 the exercise thereof. The adjustment required by
this subsection (c) 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 the Exercise Price which would have been in effect if
such record date had not been fixed.

               (d)    For the purpose of any computation required under this
Agreement, "Fair Market Value," when used with respect to Preferred Shares or
shares of Common Stock or other capital stock of any class (collectively, a
"Stock"), with respect to any option, warrant, right or other security or
evidence of indebtedness (collectively, a "Security") or with respect to any
other property, shall be determined as provided in this subsection (d):

          (i) In the case of any Stock or Security which is publicly traded, the
     Fair Market Value on any date shall be deemed to be the average of the
     daily closing prices per share of such Stock or per unit of such Security
     for the 30 consecutive Trading Days immediately prior to such date;
     provided, however, that in the event that the Fair Market Value per share
     of any Stock is determined during a period commencing after the public

                                       17
<PAGE>

     announcement by its issuer of (A) a dividend or distribution on such Stock
     payable in shares of such Stock or securities convertible into or
     exchangeable for shares of such Stock or (B) a subdivision, combination,
     consolidation or reclassification of such Stock, and ending prior to the
     expiration of the 30 Trading Days after the ex-dividend date for such
     dividend or distribution, or the record date for such subdivision,
     combination, consolidation or reclassification, then, in each such case,
     the Fair Market Value of such Stock shall be properly adjusted to take into
     account "ex-dividend" trading. The closing price for each day shall be the
     last sale price, regular way, or, in case no such sale shall take 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 such Stock or 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
     or admitted to trading on the principal national securities exchange on
     which such Stock or Security is listed or admitted to trading; or if such
     Stock or Security is not listed or admitted to trading on any national
     securities exchange, the last quoted price or, if not so quoted, the
     average of the last quoted high bid and low asked prices in the
     over-the-counter market, as reported by the NASDAQ National Market or any
     other similar system then in use; or if on any such day no bid for such
     Stock or Security is quoted by any such organization, the average of the
     closing bid and asked prices, as furnished by a professional market maker
     making a market in such Stock or Security selected by the Board. If during
     any relevant period no market maker is making a market in such Stock or
     Security, its Fair Market Value on a specified date shall be determined
     reasonably and with utmost good faith to the holders of the Rights by the
     Board; provided, however, that if at the time of such determination there
     shall be an Acquiring Person, the Fair Market Value of such Stock or
     Security on such date shall be determined by a nationally recognized
     investment banking firm selected by the Board, which determination shall be
     described in a statement filed with the Rights Agent and shall be binding
     on the Company, the Rights Agent and the holders of the Rights. The term
     "Trading Day" shall mean a day on which the principal national securities
     exchange on which such Stock or Security is listed or admitted to trading
     is open for the transaction of business or, if such Stock or Security is
     not listed or admitted to trading on any national securities exchange, a
     Business Day.

          (ii) In the case of any Stock or Security which is not publicly
     traded, the Fair Market Value on any date shall be the fair value per share
     of such Stock or per unit of such Security as determined reasonably and
     with utmost good faith to the holders of the Rights by the Board; provided,
     however, that if at the time of such determination there shall be an
     Acquiring Person, the Fair Market Value of such Stock or Security on such
     date shall be determined by a nationally recognized investment banking firm
     selected by the Board, which determination shall be described in a
     statement filed with the Rights Agent and shall be binding on the Company,
     the Rights Agent and the holders of the Rights.

          (iii) In the case of any property which is not a Stock or a Security,
     the Fair Market Value on any date shall be determined reasonably and with
     utmost good faith to

                                       18
<PAGE>

     the holders of Rights by the Board; provided, however, that if at the time
     of such determination there shall be an Acquiring Person, the Fair Market
     Value of such property on such date shall be determined by a nationally
     recognized investment banking firm selected by the Board, which
     determination shall be described in a statement filed with the Rights Agent
     and shall be binding on the Company, the Rights Agent and the holders of
     the Rights.

               (e)    No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Exercise Price then in effect; provided, however, that any adjustments which
by reason of this subsection (e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest whole cent, to the nearest
one ten-thousandth of a share of Common Stock or other capital stock of any
class (other than Preferred Shares) or to the nearest one one-millionth of a
Preferred Share, as the case may be. Notwithstanding the first sentence of this
subsection (e), any adjustment required by this Section 11 shall be made no
later than the earliest of (i) three years after the date of the occurrence
requiring such adjustment, (ii) the Redemption Date and (iii) the Final
Expiration Date.

               (f)    If as a result of an adjustment required by any Triggering
Event the holder of any Rights thereafter exercised shall become entitled to
receive any shares of capital stock of any class of the Company (other than
Preferred Shares), the number of such other shares so receivable upon exercise
of any Rights shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as reasonably possible to the provisions with
respect to the Preferred Shares contained in this Section 11, 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.

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

               (h)    Unless the Company shall have exercised the option
provided in subsection (i) of this Section 11, upon each adjustment of the
Exercise Price as a result of the calculations required by subsection (b) or (c)
of this Section 11, each Right outstanding immediately prior to the making of
such Exercise Price adjustment shall thereafter evidence the right to purchase,
at the adjusted Exercise Price, the number of one one-hundredths of a Preferred
Share (calculated to the nearest one one-millionth) determined by (i)
multiplying the number of one one-hundredths of a Preferred Share purchasable
upon exercise of such Right immediately prior to such adjustment by the Exercise
Price in effect immediately prior to such adjustment and (ii) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment.

               (i)    The Company may elect, on or after the date on which any
adjustment of the Exercise Price is required to be made hereunder, to adjust the
number of Rights outstanding in substitution for making an adjustment in the
number of one one-hundredths of a Preferred

                                       19
<PAGE>

Share purchasable upon exercise of each Right. Each Right outstanding after such
an adjustment in the number of Rights shall be exercisable for the same number
of one one-hundredths of a Preferred Share as such Right was exercisable for
immediately prior to such adjustment; but each Right held of record prior to
such adjustment shall become the number of Rights (calculated to the nearest one
ten-thousandth) determined by dividing the Exercise Price in effect immediately
prior to the occurrence requiring the adjustment of the Exercise Price by the
Exercise Price in effect immediately after such adjustment of the Exercise
Price. The Company shall make a prompt public announcement of its election to
adjust the number of Rights outstanding, indicating the record date for the
adjustment and, if known at the time of such announcement, the amount of the
adjustment to be made. Such record date may be the date on which the Exercise
Price is required to be adjusted or any day thereafter, unless the Rights
Certificates shall have been issued, in which case such record date shall be at
least 10 days after the date of such public announcement. If the Rights
Certificates shall have been issued, upon each adjustment of the number of
Rights outstanding pursuant to this subsection (i), the Company shall, as
promptly as practicable, cause to be distributed to each registered holder of
the Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14, the additional Rights to which such registered holder
shall be entitled as a result of such adjustment; or, at its option, the Company
shall cause to be distributed to each such registered holder, in substitution
and replacement for the Rights Certificates held by such registered holder prior
to the date of such adjustment, but only upon surrender thereof (if so required
by the Company), new Rights Certificates evidencing all the Rights to which such
registered holder shall be entitled after such adjustment. Rights Certificates
so distributed shall be executed and countersigned in the manner provided in
Section 5 (and may designate, at the option of the Company, the adjusted
Exercise Price) and shall be registered in the names of the registered holders
of the Rights Certificates on the record date specified in the aforesaid public
announcement.

               (j)    Irrespective of any adjustment or change in the Exercise
Price or the number of one one-hundredths of a Preferred Share issuable upon
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to designate the Exercise Price and the number of one
one-hundredths of a Preferred Share which were designated in the Rights
Certificates originally issued hereunder.

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

               (l)    In any case in which this Section 11 shall require an
adjustment of the Exercise Price effective as of the record date for a
particular event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Rights exercised after such record date
of the Preferred Shares (and/or the other shares of capital stock, securities or
other property of the Company, if any) issuable upon such exercise in excess of
the Preferred Shares (and/or the other shares of capital stock, securities or
other property of the Company, if any) issuable upon such exercise on the basis
of the Exercise Price in effect immediately prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or

                                       20
<PAGE>

other appropriate instrument evidencing such holder's right to receive such
excess upon the occurrence of such event.

               (m)    Anything in this Section 11 to the contrary
notwithstanding, the Board shall be entitled to make reductions in the Exercise
Price, in addition to the adjustments expressly required by this Section 11, as
and to the extent that the Board, in its sole discretion, shall determine to be
advisable in order that any dividend on the Preferred Shares payable in
Preferred Shares, any subdivision, combination or consolidation of the Preferred
Shares (by reclassification or otherwise than by payment of dividends in
Preferred Shares) into a greater or lesser number of Preferred Shares, any
issuance of Preferred Shares solely for cash at less than the Fair Market Value
thereof, any issuance solely for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares or any
issuance of options, warrants, rights, securities, evidences of indebtedness or
other property subject to subsection (b) or (c) of this Section 11, hereafter
made by the Company to the holders of the Preferred Shares, shall not be taxable
to such holders.

               (n)    In the event that the Company shall at any time after the
date of this Agreement and prior to the Distribution Date (i) declare a dividend
on its outstanding shares of Common Stock payable in shares of Common Stock or
(ii) effect a subdivision, combination or consolidation of its outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
dividends in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then, in each such case: (i) the number of one one-hundredths
of a Preferred Share purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event; and (ii)
each share of Common Stock and Series B Preferred Stock outstanding immediately
after such event shall have issued with respect to it the same number of Rights
which each share of Common Stock and Series B Preferred Stock outstanding
immediately prior to such event had issued with respect to it. The adjustment
required by this subsection (n) shall be made successively whenever such a
dividend is declared or such a subdivision, combination or consolidation is
effected.

               (o)    Except as permitted by Sections 23 and 27, the Company
covenants and agrees that, after the Distribution Date, it will not take, or
permit any of its Subsidiaries to take, any action if at the time such action
would be taken it is reasonably foreseeable that such action would eliminate or
substantially diminish the benefits intended to be afforded by the Rights.

               Section 12. Certificate of Adjusted Exercise Price or Number of
Shares. Whenever any adjustment shall be required by Section 11, 13 or 23(g),
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts requiring such adjustment, (b)
file with the Rights Agent and with each transfer agent for the Preferred
Shares, the Common Stock and the Series B Preferred Stock (if any) of the
Company a copy of such certificate and (c) mail a brief summary thereof to each
registered holder of the Rights in accordance with Section 26. The Rights Agent
shall be fully protected in relying on

                                       21
<PAGE>

any such certificate and on any adjustment described therein and shall not be
deemed to have knowledge of any such adjustment unless and until it shall have
received such certificate.

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

               (a)    In the event that, on or after the occurrence of any
Section 11(a)(ii) Event, directly or indirectly: (i) the Company shall
consolidate with, or merge with and into, any Interested Stockholder or, if in
such consolidation or merger all holders of the Common Stock of the Company are
not treated the same, any other Person (other than a wholly-owned Subsidiary of
the Company in a transaction not prohibited by Section 11(o)), so that the
Company shall not be the continuing or surviving corporation, (ii) any
Interested Stockholder or, if in such merger all holders of the Common Stock of
the Company are not treated the same, any other Person (other than a
wholly-owned Subsidiary of the Company in a transaction not prohibited by
Section 11(o)) shall merge with and into the Company, so that the Company shall
be the continuing or surviving corporation, and in connection with such merger
either (A) all or part of the outstanding shares of Common Stock of the Company
shall be converted or changed into or exchanged for capital stock or other
securities of any other Person (or the Company), cash and/or other property or
(B) such shares of Common Stock shall remain outstanding, unconverted and
unchanged, or (iii) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or a series of
related transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any Interested Stockholder or, if in such transaction or transactions the
holders of the Common Stock of the Company are not treated the same, 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 is not prohibited by
Section 11(o)), then, in each such case, proper provision shall be made so that
(w) the registered holder of each Right, except as otherwise provided in Section
7(d), shall thereafter have the right to receive, upon exercise thereof and
payment of an amount equal to the product determined by multiplying the then
current Exercise Price by the number of one one-hundredths of a Preferred Share
for which such Right is then exercisable, in accordance with this Agreement, in
lieu of Preferred Shares, the number of freely tradable shares (which shall be
duly authorized, validly issued, fully paid and non-assessable) of Common Stock
of the Principal Party or, in the case of a merger described in clause (ii) of
this sentence in which the Common Stock of the Company shall remain outstanding,
unconverted and unchanged, of the Company, free and clear of all rights of call
or first refusal, liens, encumbrances or other adverse claims, determined by
dividing such product by 50% of the Fair Market Value (determined as provided in
Section 11(d)) of the shares of Common Stock of such Principal Party (or, if
appropriate, the Company) on the date of consummation of such Section 13 Event;
(x) such Principal Party shall thereafter be liable for, and shall assume, by
reason of the consummation of such Section 13 Event, all the obligations and
duties of the Company under this Agreement; (y) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 shall apply to such Principal Party;
and (z) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of its shares of Common Stock to
permit exercise of all outstanding Rights in accordance with this subsection (a)
and the distribution of cash, debt securities, shares and other property in
accordance with Section

                                       22
<PAGE>

11(a)(iv))in connection with the consummation of such Section 13 Event as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably possible, in relation to the shares of Common Stock
thereafter deliverable upon exercise of the Rights.

               (b)    After the Distribution Date, the Company shall not
consolidate or merge with any other Person (other than a wholly-owned Subsidiary
of the Company in a transaction not prohibited by Section 11(o)), or sell or
otherwise transfer (or permit one or more of its Subsidiaries to sell or
otherwise transfer), in one or a series of related transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or one or more of its wholly-owned Subsidiaries in one
or more transactions, each of which is not prohibited by Section 11(o)), if (i)
at the time of or immediately after the consummation of such transaction there
are any options, warrants, rights, conversion or exchange privileges or
securities outstanding or any written or oral agreements, arrangements or
understandings (including provisions contained in the Company's Certificate of
Incorporation or By-laws) in effect which, as a result of the consummation of
such transaction, would eliminate or substantially diminish the benefits
intended to be afforded by the Rights, or (ii) prior to, at the time of or
immediately after the consummation of such transaction the stockholders of the
Person who constitutes, or would constitute, the Principal Party for the purpose
of subsection (a) of this Section 13 shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates or Associates.

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

                      (A) prepare and file a registration statement on an
               appropriate form under the Securities Act with respect to the
               Rights and the securities purchasable upon exercise thereof, and
               use its best efforts to cause such registration statement to
               become effective as soon as practicable after such filing and to
               remain effective (with a prospectus which at all times meets the
               requirements of the Securities Act) until the earliest of the
               date as of which the Rights are no longer exercisable for such
               securities, the Redemption Date and the Final Expiration Date;

                      (B) use its best efforts to qualify or register the Rights
               and the securities purchasable upon exercise thereof under the
               securities or "blue sky" laws of such jurisdictions as may be
               necessary or appropriate in connection with the exercisability of
               the Rights;

                                       23
<PAGE>

                      (C) use its best efforts to list (or continue the listing
               of) the Rights and the securities purchasable upon exercise
               thereof on a national securities exchange or to meet the
               eligibility requirements for quotation on The NASDAQ National
               Market; and

                      (D) deliver to the registered holders of the Rights
               historical financial statements for the Principal Party and each
               of its Affiliates complying in all material respects with the
               requirements for registration of securities on Form 10 under the
               Exchange Act.

               (d)    "Principal Party" shall mean: in the case of any
transaction described in clause (i) or (ii) of subsection (a) of this Section
13, the Person which is the issuer of the securities into which shares of Common
Stock of the Company are being converted or changed in such transaction or, if
there shall be more than one such issuer, the issuer having shares of Common
Stock with the greatest aggregate market value; or if no securities are being
issued in such transaction for shares of Common Stock of the Company, the Person
which is the other party to such transaction or, if there shall be more than one
such Person, the Person having shares of Common Stock with the greatest
aggregate market value; and in the case of any transaction described in clause
(iii) of such subsection (a), the Person which is the party receiving the
greatest portion of the assets or earning power sold or otherwise transferred
pursuant to such transaction or transactions; provided, however, that in any
such case (i) if the shares of Common Stock of such Person shall not at the time
of the consummation of such transaction have been continuously registered under
Section 12 of the Exchange Act during the immediately preceding 12-month period,
and such Person shall be a direct or indirect Subsidiary or Affiliate of another
Person the shares of Common Stock of which shall have been so registered,
"Principal Party" shall mean such other Person; and (ii) if such Person shall be
a direct or indirect Subsidiary or Affiliate of more than one other Person, the
shares of Common Stock of two or more of which shall have been so registered,
"Principal Party" shall mean whichever of such other Persons shall have Common
Stock with the greatest aggregate market value; and (iii) if such Person shall
be owned, directly or indirectly, by a joint venture formed by two or more
Persons which are not owned, directly or indirectly, by the same Person, the
rules set forth in clauses (i) and (ii) of this proviso shall apply to each
chain of ownership of any joint venturer as though such joint venture were a
"Subsidiary" of all of such joint venturers, and the Principal Party in each
such chain shall bear the obligations and duties set forth in this Section 13 in
the same proportion as their direct or indirect ownership interest in such
Person bears to the total of such ownership interests.

               (e)    If, in the case of any transaction described in clause
(iii) of subsection (a) of this Section 13, the Person or Persons to whom assets
or earning power are sold or otherwise transferred are individuals, then, in
lieu of any other payment or distribution required by this Section 13, and the
Company shall require as a condition to such transaction that, such Person or
Persons shall pay to each holder of a Rights Certificate, upon its surrender to
the Rights Agent and in exchange therefor (without requiring any payment by such
holder), cash in the amount determined by multiplying the then current Exercise
Price by the number of one one-hundredths of a Preferred Share for which a Right
is then exercisable.

                                       24
<PAGE>

               (f)    In no event shall the Rights Agent have any obligations or
duties in respect of any Section 13 Event, except as expressly set forth in this
Agreement. The Rights Agent may rely, and shall be fully protected in relying
upon, a certificate of the Company stating that the provisions of this Section
13 have been fulfilled. The prior written consent of the Rights Agent shall be
required in connection with any supplemental agreement which alters or impairs
the rights, obligations, duties or immunities of the Rights Agent hereunder.

               (g)    The provisions of this Section 13 shall similarly apply to
successive consolidations, mergers, sales or other transfers. In the event that
any Section 13 Event shall occur at any time after the occurrence of any Section
11(a)(ii) Event, the Rights which have not been theretofore exercised shall
thereafter be exercisable in the manner described in this Section 13.

               Section 14.    Fractional Rights and Fractional Shares.
                              ---------------------------------------

               (a)    The Company shall not be required to issue fractional
Rights or to distribute Rights Certificates which evidence fractional Rights. If
the Company shall determine not to issued fractional Rights, the Company shall
pay, in lieu of issuing fractional Rights, to the registered holders of the
Rights with respect to which fractional Rights would otherwise be issuable an
amount in cash equal to the same fraction of the Fair Market Value (determined
as provided in Section 11(d) for the Trading Day immediately prior to the date
on which such fractional Rights would otherwise have been issued) of one Right.

               (b)    The Company shall not be required to issue fractional
Preferred Shares (other than fractions which are multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute stock
certificates which evidence fractional Preferred Shares (other than fractions
which are multiples of one one-hundredth of a Preferred Share). If the Company
shall determine not to issue fractional Preferred Shares that are not multiples
of one one-hundredth of a Preferred Share, the Company shall pay to the
registered holders of the Rights Certificates at the time Rights represented
thereby are exercised, in lieu of such fractional Preferred Shares, an amount in
cash equal to the same fraction of the Fair Market Value (determined as provided
in Section 11(d) for the Trading Day immediately prior to the date of such
exercise) of one one-hundredth of a Preferred Share.

               (c)    Each holder of a Right, by accepting the same, expressly
waives such holder's right to receive or exercise any fractional Right or to
receive any fractional Preferred Share upon the exercise of such Right (except
as provided in this Section 14).

               Section 15. Rights of Action. All rights of action in respect
of this Agreement, other than rights of action which the Rights Agent may have
under Sections 18 and 20, are vested in the registered holders of the Rights
Certificates (or, prior to the Distribution Date, the registered holders of the
Common Stock and the Series B Preferred Stock of the Company); and the
registered holder of any Rights Certificate (or, prior to the Distribution Date,
of any stock certificate for shares of such Common Stock and Series B Preferred
Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of any other stock
certificate for shares of Common Stock or Series B

                                       25
<PAGE>

Preferred Stock), may, on such registered holder's own behalf and for such
registered holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such registered holder's right to exercise the Rights evidenced by
such Rights Certificate (or, prior to the Distribution Date, such stock
certificate) in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the generality of the foregoing or any remedies
available to the holders of the Rights, it is specifically acknowledged that the
registered holders of the 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 and duties under, and injunctive relief against any actual or
threatened violations of the obligations and duties of any Person subject to,
this Agreement.

               Section 16. Agreements of Holders of Rights. Each 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 shall be
transferable only simultaneously and together with the transfer of shares of
Common Stock or Series B Preferred Stock of the Company;

               (b)    after the Distribution Date, the Rights Certificates shall
be transferable on the registry books of the Rights Agent only if surrendered at
the principal office of the Rights Agent, with the Form of Assignment and
Certification of Status on the reverse side thereof duly executed, together with
such signature guarantees and other documentation as the Rights Agent may
reasonably request;

               (c)    subject to Sections 6 and 7(d), the Company and the Rights
Agent may deem and treat the Person in whose name any Rights Certificate (or,
prior to the Distribution Date, any stock certificate for Common Stock or Series
B Preferred Stock of the Company) is registered as the absolute owner thereof
and of the Rights represented thereby (notwithstanding any notations of
ownership or other writing on such Rights Certificate or stock certificate made
by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; and

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

               Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote, to
receive dividends or other distributions on or to exercise any preemptive rights
with respect to, or shall be deemed for any

                                       26
<PAGE>

other purpose to be the holder of, the Preferred Shares or other shares of
capital stock of any class of the Company which may at the time be issuable upon
exercise of the Rights represented thereby; nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company,
or any right to vote for the election of directors or upon any other matter
submitted to stockholders at any meeting thereof, to give or withhold consent to
any corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25) or to receive dividends,
subscription rights or other distributions, until the Rights represented by such
Rights Certificate shall have been exercised, in whole or in part, in accordance
with the provisions hereof.

               Section 18.    Concerning the Rights Agent.
                              ---------------------------

               (a)    The Company covenants and agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time on the written request of the Rights Agent, to reimburse it
for all reasonable expenses and counsel fees incurred in connection with the
acceptance and administration of this Agreement and the performance of its
obligations and duties hereunder. The Company also covenants and agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without negligence, bad faith or willful
misconduct on its part, for any action taken, suffered or omitted by it in
connection with the acceptance and administration of this Agreement and the
performance of its obligations and duties hereunder, including the costs and
expenses of defending against any claim of liability arising therefrom, directly
or indirectly.

               (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, stock certificate for Preferred Shares, Common Stock or other
shares of capital stock of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be executed and, where necessary, verified or acknowledged by the proper
Person or Persons.

               Section 19.    Merger or Consolidation of the 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 stockholder services or 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 that such corporation
would be eligible for appointment as successor Rights Agent under Section 21. In
case at the time any successor Rights Agent shall succeed to the agency created
by this Agreement any of the Rights Certificates countersigned by its
predecessor Rights Agent shall not have been delivered, such successor Rights
Agent may adopt the countersignature of its predecessor Rights Agent and deliver
the Rights Certificates so countersigned; or in case at such time any of the
Rights Certificates shall not have been

                                       27
<PAGE>

countersigned, such successor Rights Agent may countersign such Rights
Certificates either in the name of its predecessor Rights Agent or in the name
of such successor Rights Agent; and in all such cases, such Rights Certificates
shall have the full force and effect provided therein 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 the Rights Certificates so countersigned; or in
case at such 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 and effect provided therein and in this
Agreement.

               Section 20. Duties of the Rights Agent. The Rights Agent
undertakes the obligations and duties imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
the Rights Certificates (or, prior to the Distribution Date, the stock
certificates for Common Stock and Series B Preferred Stock of the Company), by
accepting the same, shall be bound, and no implied obligations or duties shall
be read into this Agreement against the Rights Agent:

               (a)    the Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the written opinion of such legal counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken, suffered 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 be proved or established by the Company prior to taking, suffering or
omitting any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate executed by any one of the
Chairman of the Board, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full and complete authorization and protection to the Rights Agent as
to any action taken, suffered or omitted by it in good faith 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 thereon) 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 responsible for the validity
of this Agreement or the execution and delivery hereof (except for its due
execution hereof) or for the validity or execution of any Rights Certificate
(except for its countersignature thereon); nor shall the Rights Agent be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall

                                       28
<PAGE>

the Rights Agent be responsible for any change in the exercisability of the
Rights (including Rights becoming void pursuant to Section 7(d)), for any
adjustment or change (or for the manner or method of determining same) in the
terms of the Rights (including any adjustment or change in the Exercise Price or
in the number or kind of shares, securities or other property issuable upon the
exercise thereof) required by Section 11, 13, 23 or 24 or for ascertaining the
existence of facts which would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates after
actual notice, in the manner provided in Section 12, that such change or
adjustment is required); nor shall the Rights Agent by any act hereunder be
deemed to have made any representation or warranty as to the authorization or
reservation of any Preferred Shares or shares of Common Stock to be issued
pursuant to this Agreement or any Rights Certificate or as to whether any
Preferred Shares or shares of Common Stock will, when issued, be validly
authorized and issued and 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 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 obligations and
duties hereunder from any one of the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its obligations and
duties; and the Rights Agent shall not be liable for any action taken, suffered
or omitted by it in good faith and in accordance with the written instructions
of any such officer or for any delay in acting while waiting for such
instructions;

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

               (i)    the Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any of its obligations or duties
hereunder either directly 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 attorney or agent or for any loss to the
Company resulting from any such act, default, neglect or misconduct, provided
the Rights Agent exercised reasonable care in the selection and continued
employment of such attorney or agent;

               (j)    if, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the Form of Certification of Status
attached to the Form of Election to

                                       29
<PAGE>

Purchase or the Form of Assignment, as the case may be, has either not been
completed or indicates an affirmative response to Question 1 and/or 2 thereof,
the Rights Agent shall not take any further action with respect to the requested
exercise or transfer without first consulting with the Company; and

               (k)    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 obligations or duties or in the exercise of its
rights or powers hereunder 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.

               Section 21. Resignation or Removal of the Rights Agent. The
Rights Agent or any successor Rights Agent may resign and be discharged from its
obligations and duties under this Agreement upon 30 days' prior notice to the
Company and to each transfer agent for the Preferred Shares, the Common Stock
and the Series B Preferred Stock (if any) of the Company, sent by registered or
certified mail, postage prepaid, and to each registered holder of the Rights
Certificates, sent by first-class mail, postage prepaid. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' prior notice to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent for the Preferred Shares, the Common Stock and the Series B Preferred
Stock (if any) of the Company, sent by registered or certified mail, postage
prepaid, and to each registered holder of the Rights Certificates, sent by
first-class mail, postage prepaid. If the Rights Agent or any successor Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor Rights Agent. If the Company shall fail to
make such appointment within 30 days after giving notice of such removal or
after receiving notice of such resignation or incapacity, either from the
resigning or incapacitated Rights Agent or from the registered holder of any
Rights Certificate (who shall, with such notice, submit its Rights Certificate
for inspection by the Company), then the incumbent Rights Agent or the
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a successor Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
of America, the State of Delaware, the State of New York or the State of
Illinois (or of any other state so long as such corporation is authorized to do
business as a banking institution in the State of Delaware, the State of New
York or the State of Illinois), be in good standing under the laws of the
jurisdiction of its incorporation, have an office in the State of Delaware, the
State of New York or the State of Illinois, be authorized under such laws to
exercise corporate trust or stock transfer powers, be subject to supervision or
examination by federal or state authority and have at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an affiliate of a corporation described in clause (a) of this
sentence. After its appointment, the successor Rights Agent shall be vested with
the same rights, powers, obligations, duties and immunities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent for
the Preferred Shares, the Common Stock and Series B

                                       30
<PAGE>

Preferred Stock (if any) of the Company, and mail notice thereof 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 any successor Rights Agent or the appointment of any successor thereto.

               Section 22. Issuance of New Rights Certificates. Notwithstanding
any provision of this Agreement or of the Rights Certificates to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing the
Rights in such form as may be approved by the Board to reflect any adjustment or
change in the Exercise Price or in the number or kind of shares, securities or
other property issuable upon exercise of the Rights in accordance with the
provisions of this Agreement; provided, however, that (a) no such Rights
Certificates shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance could create a significant risk of
material adverse tax consequences to the Company or to the Persons to whom such
Rights Certificates would be issued and (b) no such Rights Certificates 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 Board may, at its option, at any time prior to the
earliest of (i) the Close of Business on the 10th Business Day after the Share
Acquisition Date, (ii) the occurrence of any Section 13 Event and (iii) the
Final Expiration Date, redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $.01 per Right, adjusted as provided
in subsection (g) of this Section 23 (such redemption price being hereinafter
called the "Redemption Price").

               (b)    In addition to the right of redemption reserved in the
first sentence of subsection (a) of this Section 23, the Board may redeem all,
but not less than all, of the then outstanding Rights at the Redemption Price
after the Share Acquisition Date, but prior to the occurrence of any Section 13
Event, if either (i) the Person who is an Acquiring Person shall have
transferred or otherwise disposed of (either alone or together with its
Affiliates and Associates) such number of shares of Common Stock of the Company,
in one or a series of related transactions not directly or indirectly involving
the Company or any of its Subsidiaries or any Section 13 Event shall have
occurred, as shall result in such Person thereafter being a Beneficial Owner of
less than 10% of the then outstanding shares of Common Stock of the Company, and
after such transfer or other disposition there is no other Acquiring Person, or
(ii) any Section 13 Event shall have occurred which does not involve an
Interested Stockholder and in which all holders of the Common Stock of the
Company are treated the same.

               (c)    Notwithstanding any other provision of this Agreement, the
Rights shall not be exercisable after the first occurrence of any Section
11(a)(ii) Event until such time as the Company's right of redemption under this
Section 23 shall have expired.

               (d)    In considering whether to redeem the Rights, the Board may
consider the best long-term and short-term interests of the Company and its
stockholders, including, without limitation, the effects of the redemption of
the Rights upon employees, creditors, suppliers and

                                       31
<PAGE>

customers of the Company or of its Subsidiaries and upon the communities in
which offices or other establishments of the Company and such Subsidiaries are
located and all other pertinent factors. The redemption of the Rights by the
Board may be made effective at such time, on such basis and with such conditions
as the Board, in its sole discretion, may establish.

               (e)    Immediately after action by the Board directing the
redemption of the Rights pursuant to subsection (a) or (b) of this Section 23,
and without any further action and without any notice, the right to exercise the
Rights shall terminate, and thereafter each registered holder of the Rights
shall only be entitled to receive the Redemption Price therefor. The Company
shall give prompt written notice to the Rights Agent and prompt public notice to
the holders of the Rights 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 10 days after action by the Board directing the
redemption of the Rights, the Company shall mail (or cause the Rights Agent to
mail) a notice of redemption to each registered holder of the then outstanding
Rights, at its last address appearing on the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Stock and the Series B Preferred Stock (if any) of the Company.
Any notice which is mailed in the manner provided in this subsection (e) shall
be deemed given, whether or not received by the registered holder to whom sent.
Each notice of redemption shall state the method by which payment of the
Redemption Price is to be made. Neither the Company nor any of its Affiliates or
Associates may at any time redeem, acquire or purchase for value any Rights
other than in the manner set forth in this Section 23 and Section 24 or in
connection with any purchase of outstanding shares of its Common Stock and
Series B Preferred Stock prior to the Distribution Date.

               (f)    The Company may, at its option, pay the Redemption Price
in cash, shares of Common Stock (based on its Fair Market Value (determined as
provided in Section 11(d)) as of the date of redemption) or any other form of
consideration deemed appropriate by the Board.

               (g)    In the event that the Company shall at any time after the
date of this Agreement (i) declare a dividend on its outstanding shares of
Common Stock payable in shares of Common Stock or (ii) effect a subdivision,
combination or consolidation of its outstanding shares of Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then, in each
such case, the Redemption Price after such event shall equal the Redemption
Price in effect immediately prior to such event multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event; provided,
however, that such adjustment shall be made only if the amount of the Redemption
Price would be reduced or increased by at least $.001 per Right.

               Section 24.    Exchange.
                              --------

               (a)    The Board may, at its option, at any time on or after the
occurrence of any Section 11(a)(ii) Event, exchange all or any part of the then
outstanding and exercisable Rights (which shall not include any Rights which
have become void pursuant to Section 7(d)) for shares of Common Stock of the
Company at an exchange rate of one share of Common Stock per Right,

                                       32
<PAGE>

appropriately adjusted to reflect any event specified in clauses (A) through
(D), inclusive, of the first sentence of Section 11(a)(i) or in Section 11(n)
occurring after the date hereof (such exchange rate being hereinafter called the
"Exchange Rate"); provided, however, that the Board shall not be authorized to
effect such an exchange at any time after any Person (other than an Exempt
Person), together with the Affiliates and Associates of such Person, shall have
become the Beneficial Owner of 50% or more of the then outstanding shares of
Common Stock of the Company.

               (b)    Immediately after action by the Board directing the
exchange of any Rights pursuant to subsection (a) of this Section 24, and
without any further action and without any notice, the right to exercise such
Rights shall terminate, and thereafter each registered holder of such Rights
shall only be entitled to receive the number of shares of Common Stock of the
Company which shall equal the number of such Rights held by such registered
holder multiplied by the Exchange Rate then in effect. The Company shall give
prompt written notice to the Rights Agent and prompt public notice to the
holders of the Rights of any such exchange; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
exchange. Within 10 days after action by the Board directing the exchange of any
Rights, the Company shall mail (or cause the Rights Agent to mail) a notice of
exchange to each registered holder of such Rights, at its last address appearing
on the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Stock and the Series B
Preferred Stock (if any) of the Company. Any notice which is mailed in the
manner provided in this subsection (b) shall be deemed given, whether or not
received by the registered holder to whom sent. Each notice of exchange shall
state the method by which the exchange of shares of Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata among
the registered holders of the Rights based upon the number of Rights held
(excluding Rights which shall have become void pursuant to Section 7(d)); and,
in such case, a new Rights Certificate evidencing the Rights not being exchanged
shall be prepared and executed by the Company and countersigned and delivered by
the Rights Agent to the registered holder of such Rights.

               (c)    In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Shares (or Equivalent Preferred Shares)
for shares of Common Stock in effecting an exchange for Rights, at the initial
rate of one one-hundredth of a Preferred Share (or Equivalent Preferred Share)
for each share of Common Stock, appropriately adjusted to reflect any
adjustments in the voting rights of the Preferred Shares pursuant to the
Certificate of Designations attached hereto as Exhibit A, so that the fractional
Preferred Share delivered in lieu of each share of Common Stock shall have the
same voting rights as one share of Common Stock.

               (d)    In the event that there shall not be sufficient authorized
and unissued or treasury shares of Common Stock or Preferred Shares (or
Equivalent Preferred Shares) to permit the exchange of Rights directed by the
Board, the Company shall take all necessary action to authorize and reserve for
issuance such number of additional shares of Common Stock or Preferred Shares
(or Equivalent Preferred Shares) as may be required for issuance upon such
exchange and, if necessary, shall use its best efforts to obtain stockholder
approval thereof.

                                       33
<PAGE>

               (e)    The Company shall not be required to issue fractional
shares of Common Stock in exchange for Rights or to distribute stock
certificates which evidence fractional shares of Common Stock. If the Company
shall determine not to issue fractional shares of Common Stock, the Company
shall pay to the registered holders of the Rights with respect to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the Fair Market Value (determined as provided in Section 11(d)
for the Trading Day immediately prior to the date of such exchange) of one share
of Common Stock.

               Section 25.    Notice to Holders of Rights Certificates of
                              Certain Events.
                              -------------------------------------------

               (a)    In the event that at any time after the Distribution Date,
the Company shall propose: (i) to pay any dividend payable in shares of capital
stock of any class of the Company to the holders of Preferred Shares or to make
any other cash distribution to the holders of Preferred Shares (other than a
regular quarterly cash dividend); (ii) to effect any reclassification of the
Preferred Shares (other than a reclassification involving only the subdivision
of the outstanding Preferred Shares); (iii) to make any distribution to the
holders of Preferred Shares described in subsection (b) or (c) of Section 11;
(iv) to effect any Section 13 Event; (v) to pay any dividend on its shares of
Common Stock payable in shares of Common Stock or to effect a subdivision,
combination or consolidation of its outstanding shares of Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock); or (vi) to effect the liquidation, dissolution or winding up of the
Company; then, in each such case, the Company shall give to the Rights Agent and
each registered holder of the Rights, in the manner provided in Section 26,
written notice of such proposed action, which shall specify the record date for
such stock dividend or distribution or the date on which such reclassification,
Section 13 Event, liquidation, dissolution or winding up is expected to occur
(and the date for participation therein by the holders of the Common Stock
and/or Preferred Shares if any such date is to be fixed). Such notice shall be
given, in the case of any action described in clause (i) or (iii) of the
preceding sentence, at least 10 days prior to the record date and, in the case
of any other such action, at least 20 days prior to the date of taking of such
proposed action or the date for participation therein by the holders of
Preferred Shares, whichever shall be the earlier.

               (b)    In case any Section 11(a)(ii) Event shall occur, the
Company shall, as soon as practicable thereafter, give to the Rights Agent and
each registered holder of the Rights, in the manner provided in Section 26,
written notice of the occurrence thereof, which notice shall describe such
occurrence and its consequences in reasonable detail.

               Section 26. Other Notices. Except as otherwise provided herein,
notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the registered holder of any Rights, Rights Certificate or
stock certificate for shares of Common Stock or Series B Preferred Stock of the
Company to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address shall be
filed in writing with the Rights Agent) as follows:

                      Peapod, Inc.
                      9933 Woods Drive
                      Skokie, Illinois 60077

                                       34
<PAGE>

                      Attention:  President

               Except as otherwise provided herein, notices or demands
authorized by this Agreement to be given or made by the Company or by the
registered holder of any Rights, Rights Certificate or stock certificate for
shares of Common Stock or Series B Preferred Stock of the Company to or on the
Rights Agent shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address shall be filed in writing with
the Company) as follows:

               First Chicago Trust Company of New York, a division of Equiserve
               Suite 4660
               1525 Washington Boulevard
               Jersey City, NJ  07310
               Attention: Tenders & Exchange Administration

               Except as otherwise provided herein, notices or demands
authorized by this Agreement to be given or made by the Company or the Rights
Agent to the registered holder of any Rights, Rights Certificate or stock
certificate for shares of Common Stock or Series B Preferred Stock of the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at its last address appearing on the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock and the Series B Preferred
Stock (if any)of the Company.

               Section 27. Supplements and Amendments. Prior to the Distribution
Date, but subject to the last sentence of this Section 27, the Company and the
Rights Agent, if so directed in writing by the Company, shall supplement or
amend any term, provision or condition of this Agreement, without the approval
of the registered holders of the stock certificates representing the Common
Stock, the Series B Preferred Stock and the Rights. From and after the
Distribution Date, but subject to the last sentence of this Section 27, the
Company and the Rights Agent, if so directed in writing by the Company, shall
supplement or amend this Agreement, without the approval of the registered
holders of the Rights (however represented), in order: (a) to cure any
ambiguity, (b) to correct or supplement any term, provision or condition of this
Agreement which may be defective or inconsistent with any other term, provision
or condition hereof, (c) to shorten or lengthen any time period specified herein
or (d) to change or supplement one or more of the terms, provisions or
conditions hereof in any manner which the Company may deem necessary or
desirable and which shall not adversely affect, as determined by the Board, the
interests of the holders (other than any Restricted Person or the transferees
therefrom specified in Section 7(d) of the Rights (however represented);
provided, however, that this Agreement may not be supplemented or amended
pursuant to clause (c) of this sentence (i) to lengthen any time period (except
as permitted by Section 3(a)(ii)) unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders (other than any Restricted Person or the transferees therefrom specified
in Section 7(d)) of the Rights or (ii) to lengthen any time period relating to
when the Rights may be redeemed if at such time the Rights are not then
redeemable. Upon the delivery of a certificate from an appropriate officer of
the Company stating 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;

                                       35
<PAGE>

provided, however, that the Rights Agent shall not be required to execute any
supplement or amendment which affects any of the Rights Agent's rights, powers,
obligations, duties or immunities under this Agreement without its consent. On
and after the Distribution Date, no supplement or amendment shall be made which
changes the Exercise Price, the number of one one-hundredths of a Preferred
Share for which a Right is exercisable, the Redemption Price or the Final
Expiration Date. Prior to the Distribution Date, the interests of the holders of
the Rights shall be deemed coincident with the interests of the holders of the
Common Stock and the Series B Preferred Stock of the Company.

               Section 28. Successors. All of the terms, provisions and
conditions 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.

               Section 29. Certain Determinations and Actions by the Board.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including the determination of
the percentage of such outstanding 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), as in effect on the date hereof, under the Exchange Act. The
Board shall have the exclusive power and authority to interpret this Agreement
and to exercise all rights and powers specifically granted to the Board or to
the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to make all
determinations deemed necessary or advisable for such administration, including,
without limitation, a determination to redeem or not to redeem the Rights, to
exchange or not to exchange the Rights or to supplement or amend this Agreement.
All such calculations, determinations, interpretations and exercises (including,
for purposes of clause (b) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith shall (a) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and all
other Persons and (b) not subject any director to any liability to the holders
of the Rights or to any other Person.

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

               Section 31. Severability. If any term, provision or condition of
this Agreement shall be held by a court of competent jurisdiction or other
lawful authority to be invalid, void or unenforceable, the remaining terms,
provisions, and conditions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that if any such term, provision or condition is held by such court or
authority to be invalid, void or unenforceable and the Board shall determine in
good faith that severing the same from this Agreement would adversely affect the
purposes or effect of

                                       36
<PAGE>

this Agreement, the right of redemption set forth in Section 23 shall be
reinstated and shall not expire until the Close of Business on the 10th day
following the date of such determination by the Board.

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

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

                                       37
<PAGE>

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

                                     PEAPOD, INC.

                                     By:    ___________________________________
                                            Name:  Andrew B. Parkinson
                                            Title: Chairman
Attest:

By:     ____________________________
        Name:  Dan Rabinowitz
        Title: Chief Financial Officer
                                      FIRST CHICAGO TRUST COMPANY
                                      OF NEW YORK, A DIVISION OF EQUISERVE

                                      By:   ___________________________________
                                      Name:
                                      Title:
Attest:

By:     _________________________
        Name:
        Title:

                                       38
<PAGE>
                                                                       Exhibit A

                                     FORM OF

                           CERTIFICATE OF DESIGNATIONS

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                                  PEAPOD, INC.

                         (Pursuant to Section 151 of the

                General Corporation Law of the State of Delaware)

               Peapod, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Company"), does hereby
certify that, pursuant to authority conferred upon its Board of Directors by its
Restated Certificate of Incorporation, and by the provisions of Section 151 of
the General Corporation Law of the State of Delaware, the following resolution
was adopted by its Board of Directors at a meeting duly called and held on May
29, 1997:

               RESOLVED, that, pursuant to the authority conferred upon the
Board of Directors of the Company (the "Board") by the provisions of the
Restated Certificate of Incorporation of the Company and by the provisions of
Section 151 of the General Corporation Law of the State of Delaware, there is
hereby created a series of Preferred Stock of the Company, which series shall
have the following powers, designations, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations or restrictions thereof, in addition to those set forth in the
Restated Certificate of Incorporation of the Company:

               Section 1. Designation of Series; Number of Shares. The series of
Preferred Stock established hereby shall be designated the "Series A Junior
Participating Preferred Stock" (the "Series A Preferred Stock") and the
authorized number of shares constituting the Series A Preferred Stock shall be
500,000. Such number of authorized shares may be increased or decreased, from
time to time, by resolution of the Board; provided, however, that no such
decrease shall reduce the number of authorized shares of the Series A Preferred
Stock to a number less than the number of shares of the Series A Preferred Stock
then outstanding, plus the
<PAGE>

number of shares of the Series A Preferred Stock then reserved for issuance upon
the exercise of any outstanding options, warrants or rights or the exercise of
any conversion or exchange privilege contained in any outstanding security
issued by the Company.

               Section 2.  Dividends and Distributions.
                           ---------------------------

               (a)    Subject to the rights of the holders of shares of any
other series of the Preferred Stock (or shares of any other class of capital
stock of the Company) ranking senior to the Series A Preferred Stock with
respect to dividends, the holders of shares of the Series A Preferred Stock, in
preference to the holders of shares of Common Stock and of any other class of
capital stock of the Company ranking junior to the Series A Preferred Stock with
respect to dividends, shall be entitled to receive, when, as and if declared by
the Board out of funds legally available therefor, quarterly dividends payable
in cash on the first day of March, June, September, and December in each year
(each such date being a "Dividend Payment Date"), commencing on the first
Dividend Payment Date after the initial issuance of a share or fractional share
of the Series A Preferred Stock, in an amount per share (rounded to the nearest
whole cent) equal to 100 times the aggregate per share amount of all cash
dividends, plus 100 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions (other than a dividend payable in
shares of Common Stock or a distribution in connection with the subdivision of
the outstanding shares of Common Stock, by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Dividend Payment
Date or, with respect to the first Dividend Payment Date, since the initial
issuance of a share or fractional share of the Series A Preferred Stock. The
multiple of 100 (the "Dividend Multiple") set forth in the preceding sentence
shall be adjusted from time to time as hereinafter provided in this paragraph
(a). In the event that the Company shall at any time after the effective date of
this Certificate of Designations (i) declare or pay any dividend on the Common
Stock payable in shares of Common Stock or (ii) effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then, in each
such case, the Dividend Multiple thereafter applicable to the determination of
the amount of dividends per share which the holders of shares of the Series A
Preferred Stock shall be entitled to receive shall be the Dividend Multiple in
effect immediately prior to such event multiplied by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding immediately
after such event and the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such event.

               (b)    The Board shall declare, out of funds legally available
therefor, a dividend or distribution on the Series A Preferred Stock, as
provided in paragraph (a) of this Section 2, immediately after it has declared a
dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock).

               (c)    Dividends shall begin to accrue and be cumulative on the
outstanding shares of the Series A Preferred Stock from the Dividend Payment
Date next preceding the date of issuance of such shares, unless such date of
issuance shall be prior to the record date for the first Dividend Payment Date,
in which case dividends on such shares shall begin to accrue and be cumulative
from the date of issuance of such shares, or unless such date of issuance shall
be after the close of business on the record date with respect to any Dividend
Payment Date and on

                                      A-2
<PAGE>

or prior to such Dividend Payment Date, in which case dividends on such shares
shall begin to accrue and be cumulative from such Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on shares of the
Series A Preferred Stock in an amount less than the total amount of dividends
then accrued shall be allocated pro rata among such shares. The Board may fix a
record date for the determination of the holders of shares of the Series A
Preferred Stock entitled to receive payment of any dividend or distribution
declared thereon, which record date shall be not more than the number of days
prior to the date fixed for such payment permitted by applicable law.

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

               (d)    Each share of the Series A Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Company. The multiple of 100 (the "Voting Multiple") set
forth in the preceding sentence shall be adjusted from time to time as
hereinafter provided in this paragraph (a). In the event that the Company shall
at any time after the effective date of this Certificate of Designations (i)
declare or pay any dividend on the Common Stock payable in shares of Common
Stock or (ii) effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then, in each such case, the Voting Multiple
thereafter applicable to the determination of the number of votes per share to
which the holders of shares of the Series A Preferred Stock shall be entitled
shall be the Voting Multiple in effect immediately prior to such event
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately after such event and the denominator of
which shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.

               (e)    Except as otherwise provided in this Certificate of
Designations, in any other Certificate of Designations establishing another
series of the Preferred Stock (or any series of any other class of capital stock
of the Company) or by applicable law, the holders of the Series A Preferred
Stock, the holders of the Common Stock and the holders of any other class of
capital stock of the Company having general voting rights shall vote together as
a single class on all matters submitted to a vote of the stockholders of the
Company.

               (f)    Except as otherwise provided in this Certificate of
Designations or by applicable law, the holders of the Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent provided in paragraph (b) of this Section 3) for the
taking of any corporate action.

               Section 4.  Certain Restrictions.
                           --------------------

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

                                      A-3
<PAGE>

               (i) declare or pay dividends, or make any other distributions, on
        any shares of any class of capital stock of the Company ranking junior
        (either as to dividends or upon liquidation, dissolution or winding up
        of the Company) to the Series A Preferred Stock;

              (ii) declare or pay dividends, or make any other distributions, on
        any shares of any class of capital stock of the Company ranking on a
        parity (either as to dividends or upon liquidation, dissolution or
        winding up of the Company) with the Series A Preferred Stock, except
        dividends paid ratably on the Series A Preferred Stock and all such
        parity stock on which dividends are accrued and unpaid in proportion to
        the total amounts to which the holders of all such shares are then
        entitled;

            (iii) redeem, purchase or otherwise acquire for consideration any
        shares of any class of capital stock of the Company ranking junior
        (either as to dividends or upon liquidation, dissolution or winding up
        of the Company) to the Series A Preferred Stock, except that the Company
        may at any time redeem, purchase or otherwise acquire any shares of such
        junior stock in exchange for other shares of any class of capital stock
        of the Company ranking junior (both as to dividends and upon
        dissolution, liquidation or winding up of the Company) to the Series A
        Preferred Stock; or

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

               (h)    The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of any class of
capital stock of the Company unless the Company could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.

               Section 5. Reacquired Shares. Any shares of the Series A
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after such purchase or
acquisition. All such canceled shares shall thereupon become authorized and
unissued shares of Preferred Stock and may be reissued as part of any new series
of the Preferred Stock, subject to the conditions and restrictions on issuance
set forth in the Certificate of Incorporation of the Company, as amended from
time to time, in any other Certificate of Designations establishing another
series of the Preferred Stock (or any series of any other class of capital stock
of the Company) or in any applicable law.

               Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation (whether voluntary or otherwise), dissolution or winding up of the
Company, no distribution shall be made (a) to the holders of shares of any class
of capital stock of the Company ranking

                                     A-4
<PAGE>

junior (either as to dividends or upon liquidation, dissolution or winding up of
the Company) to the Series A Preferred Stock unless, prior thereto, the holder
of each outstanding share of the Series A Preferred Stock shall have received an
amount equal to the accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, plus an amount equal to an
aggregate amount, subject to adjustment as hereinafter provided in this Section
6, equal to 100 times the aggregate per share amount to be distributed to the
holders of the Common Stock or (b) to the holders of shares of any class of
capital stock of the Company ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up of the Company) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event that the Company shall at any time after the effective
date of this Certificate of Designations (a) declare or pay any dividend on the
Common Stock payable in shares of Common Stock or (b) effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then, in each
such case, the aggregate amount per share which the holders of shares of the
Series A Preferred Stock shall thereafter be entitled to receive pursuant to
clause (a)(ii) of the preceding sentence shall be the aggregate amount per share
in effect pursuant to such clause immediately prior to such event multiplied by
a fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.

               Section 7. Consolidation, Merger, etc. In the event that the
Company shall be a party to any consolidation, merger, combination or other
transaction in which the outstanding shares of Common Stock are converted or
changed into or exchanged for other capital stock, securities, cash or other
property, or any combination thereof, then, in each such case, each share of the
Series A Preferred Stock shall at the same time be similarly converted or
changed into or exchanged for an aggregate amount, subject to adjustment as
hereinafter provided in this Section 7, equal to 100 times the aggregate amount
of capital stock, securities, cash and/or other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is being
converted or changed or exchanged. In the event that the Company shall at any
time after the effective date of this Certificate of Designations (a) declare or
pay any dividend on the Common Stock payable in shares of Common Stock or (ii)
effect a subdivision, combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then, in each such case, the aggregate amount per share which the holders
of shares of the Series A Preferred Stock shall thereafter be entitled to
receive pursuant to the preceding sentence shall be the aggregate amount per
share in effect pursuant to such sentence immediately prior to such event
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately after such event and the denominator of
which shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.

               Section 8. No Redemption. The shares of the Series A Preferred
Stock shall not be redeemable at any time.

                                      A-5
<PAGE>

               Section 9. Rank. Unless otherwise provided in the Certificate of
Designations establishing another series of the Preferred Stock after the
effective date of this Certificate of Designations, the Series A Preferred Stock
shall rank, as to the payment of dividends and the making of any other
distribution of assets of the Company, senior to the Common Stock, but junior to
all other series of the Preferred Stock.

               Section 10. Amendments. The Certificate of Incorporation of the
Company shall not be amended in any manner which would materially alter or
change the powers, preferences and rights of the Series A Preferred Stock so as
to adversely affect any thereof without the affirmative vote of the holders of
at least two-thirds of the outstanding shares of the Series A Preferred Stock,
voting separately as a single class.

               Section 11. Fractional Shares. Fractional shares of the Series A
Preferred Stock may be issued, but, unless the Board shall otherwise determine,
only in multiples of one one-hundredth of a share. The holder of any fractional
share of the Series A Preferred Stock shall be entitled to receive dividends,
participate in distributions, exercise voting rights and have the benefit of all
other powers, preferences and rights relating to the Series A Preferred Stock in
the same proportion as such fractional share bears to a whole share.

                                      A-6
<PAGE>

     IN WITNESS WHEREOF, PEAPOD, INC. has caused this Certificate to be signed
by Thomas L. Parkinson, its Executive Vice President, Content and Consumer
Product Development this ___day of____________, 1997.

                                       PEAPOD, INC.

                                       By:_________________________________
                                          Thomas L. Parkinson
                                          Executive Vice President, Content
                                          and Consumer Product Development

<PAGE>

                                                                       Exhibit B

                                      FORM

                                       of

                               RIGHTS CERTIFICATE

Certificate No. R-                                             _________ Rights
_______ Aggregate Number of
Shares of Series A Junior
Participated Preferred Stock
Initially Purchasable

               NOT EXERCISABLE AFTER JUNE 10, 2007 OR EARLIER IF REDEMPTION OR
               EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
               OPTION OF PEAPOD, INC., AT $.01 PER RIGHT AND TO EXCHANGE ON THE
               TERMS SET FORTH IN THE AMENDED AND RESTATED STOCKHOLDERS RIGHTS
               AGREEMENT HEREINAFTER MENTIONED. UNDER CERTAIN CIRCUMSTANCES
               DESCRIBED IN SUCH AGREEMENT, RIGHTS BENEFICIALLY OWNED BY A
               RESTRICTED PERSON (AS SUCH TERM IS DEFINED IN SUCH AGREEMENT), OR
               BY SPECIFIED TRANSFEREES FROM A RESTRICTED PERSON, SHALL BE OR
               BECOME VOID.
<PAGE>

                               RIGHTS CERTIFICATE

                                  PEAPOD, 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, subject to the terms, provisions and conditions of
the Amended and Restated Stockholders Rights Agreement dated as of April 13,
2000, as it may be amended from time to time (the "Rights Agreement") between
Peapod, Inc., a Delaware corporation (the "Company"), and First ChicagoTrust
Company of New York, a division of Equiserve (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date and prior to the Close
of Business on June 10, 2007, at the principal office of the Rights Agent or its
successor as Rights Agent, one one-hundredth of a fully paid and nonassessable
share of Series A Junior Participating Preferred Stock, $.01 par value (the
"Preferred Shares"), of the Company at a price (the "Exercise Price") of $___
per one one-hundredth of a Preferred Share, upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase and the related
Form of Certification of Status duly executed, together with such signature
guarantees and other documentation as the Rights Agent may reasonably request.
The number of Rights evidenced by this Rights Certificate (as well as the number
of one one-hundredths of a Preferred Share which may be purchased upon the
exercise of each Right) set forth above, and the Exercise Price set forth above,
are the numbers and the Exercise Price as of ________________, based on the
Preferred Shares as constituted on such date. As provided in the Rights
Agreement, such number of Rights (and/or such number of one one-hundredths of a
Preferred Share) and such Exercise Price are subject to change and adjustment
upon the happening of certain events specified in the Rights Agreement.
Capitalized terms not defined herein have the respective meanings specified in
the Rights Agreement.

               From and after the first occurrence of any Section 11(a)(ii)
Event, if the Rights evidenced by this Rights Certificate are Beneficially Owned
by (i) a Restricted Person, (ii) a transferee from a Restricted Person who
becomes a transferee after the Acquiring Person becomes such or (iii) under
certain circumstances specified in the Rights Agreement, a transferee from a
Restricted Person who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such, such Rights shall be or become void, and no
holder hereof shall have any rights whatsoever with respect to such Rights.

               This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof, to which
Rights Agreement reference is hereby made for a full description of the rights,
powers, obligations, duties and immunities hereunder of the Company, the Rights
Agent and the holders of the Rights Certificates. Under the circumstances set
forth in the Rights Agreement, the exercisability of the Rights represented
hereby may be temporarily suspended. The Rights Agreement is on file at the
principal office of the Company and at the principal office of the Rights Agent,
and a copy will be provided upon written request to the Secretary of the
Company.

                                      B-1
<PAGE>

               Upon surrender at the principal office of the Rights Agent, this
Rights Certificate, with or without other Rights Certificates, may be exchanged
for one or more Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase the same aggregate number of one one-hundredths
of a Preferred Share as the Rights evidenced by the Rights Certificates so
surrendered. If this Rights Certificate shall be exercised in part, the holder
hereof shall be entitled to receive, upon surrender hereof, one or more Rights
Certificates for the number of whole Rights not exercised.

               Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate (i) may be redeemed, at the direction of
the Board, at a redemption price (subject to adjustment) of $.01 per Right
(payable in cash, shares of Common Stock of the Company or any other form of
consideration deemed appropriate by the Board) or (ii) under certain
circumstances, may be exchanged, in whole or in part, at the direction of the
Board, for shares of Common Stock of the Company or Preferred Shares at an
exchange rate (subject to adjustment) of one share of Common Stock or one
one-hundredth of a Preferred Share per Right.

               No fractional Preferred Share will be issued upon the exercise of
any Rights represented hereby (other than fractions which are a multiple of one
one-hundredth of a Preferred Share), but in lieu thereof a cash payment will be
made as provided in the Rights Agreement.

               No holder, as such, of this Rights Certificate shall be entitled
to vote, to receive dividends or other distributions on or to exercise any
preemptive rights with respect to, or shall be deemed for any other purpose to
be the holder of, the Preferred Shares or other shares of capital stock of any
class of the Company which may at any time be issuable upon exercise hereof; nor
shall anything contained herein or in the Rights Agreement 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
other matter submitted to stockholders at any meeting thereof, to give or
withhold consent to any corporate action, to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement) or
to receive dividends, subscription rights or other distributions, until the
Rights evidenced by this Rights Certificate shall have been exercised, in whole
or in part, in accordance with the provisions of 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.

                                      B-2
<PAGE>

               IN WITNESS WHEREOF, this Rights Certificate has been executed by
the Company by the duly authorized facsimile signature of a proper officer of
the Company and a facsimile of its corporate seal has been imprinted hereon and
duly attested by the duly authorized facsimile signature of a proper officer of
the Company.

Dated as of _______________, ____.

                                            PEAPOD, INC.

(Corporate Seal)                            By:
                                               --------------------------------
                                            Name:
                                            Title:

ATTEST:

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

Countersigned:

---------------------------------,
as Rights Agent

By
  -------------------------------
        Authorized Signature

                                      B-3
<PAGE>

                      [Reverse Side of Rights Certificate]

                          FORM OF ELECTION TO PURCHASE

                    (To be executed by the registered holder

                    if such holder desires to exercise Rights

                     represented by this Rights Certificate)

To Peapod, Inc.:

     The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase the Preferred Shares (or
other securities, cash or property) issuable upon the exercise of such Rights
and requests that certificates for such Preferred Shares be 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 represented by this Rights
Certificate, a new Rights Certificate for the remaining unexercised 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

                                      B-4
<PAGE>

Signature Guaranteed:
                      --------------------------------

     Signatures must be guaranteed by a participant in a recognized Signature
Guaranty Medallion Program.

                             CERTIFICATION OF STATUS

                      The undersigned hereby certifies by checking the
                      appropriate boxes that:

               (1)    this Rights Certificate

                              [ ] is

                              [ ] is not

being exercised by or on behalf of a Person who is or was a Restricted Person
(as such term is defined in the Rights Agreement); and

               (2)    after due inquiry and to the best knowledge of the
                      undersigned, it

                              [ ] did

                              [ ] did not

acquire, directly or indirectly, the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became a Restricted Person.

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

Date:  _______________, ____

                                      B-5
<PAGE>

                                     NOTICE

     The signature(s) on the foregoing Form of Election to Purchase and
Certification of Status must correspond to the name written upon the face of
this Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.

     In the event the Certification of Status set forth above is not completed,
the Company will deem the Beneficial Owner of the Rights represented by this
Rights Certificate to be a Restricted Person (as such term is defined in the
Rights Agreement), will not honor the Election to Purchase and will affix a
legend to such effect on this Rights Certificate and on any Rights Certificates
issued in exchange for this Rights Certificate.

                                      B-6
<PAGE>

                      [Reverse Side of Rights Certificate]

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such

               holder desires to transfer this 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 a participant in a recognized Signature
Guaranty Medallion Program.

                                      B-7
<PAGE>

                             CERTIFICATION OF STATUS

     The undersigned hereby certifies by checking the appropriate boxes that:

                      (1)    this Rights Certificate

                              [ ] is

                              [ ] is not

being sold, assigned or transferred by or on behalf of a Person who is or was a
Restricted Person (as such term is defined in the Rights Agreement); and

                      (2)    after due inquiry and to the best knowledge of the
                             undersigned, it

                              [ ] did

                              [ ] did not

acquire, directly or indirectly the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became a Restricted Person.

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

Date:  _______________, ____

                                      B-8
<PAGE>

                                     NOTICE

     The signature(s) on the foregoing Form of Assignment and Certification of
Status must correspond to the name written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

     In the event the Certification of Status set forth above is not completed,
the Company will deem the Beneficial Owner of the Rights represented by this
Rights Certificate to be a Restricted Person (as such term is defined in the
Rights Agreement), will not honor the Assignment and will affix a legend to such
effect on this Rights Certificate and any Rights Certificates issued in exchange
for this Rights Certificate.

                                      B-9
<PAGE>

                                                                       Exhibit C

                          SUMMARY OF RIGHTS TO PURCHASE

             SHARES OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

     On May 29, 1997, the Board of Directors (the "Board") of Peapod, Inc., a
Delaware corporation (the "Company"), declared a dividend of one preferred stock
purchase right (individually, a "Right" and collectively, the "Rights") for each
share of Common Stock, $.01 par value (the "Common Stock"), of the Company. The
dividend was paid to holders of record of the Common Stock on June 10, 1997, the
effective date of the Company's initial public offering registration statement,
file no. 333-24341 (the "Record Date") to the holders of record of the Common
Stock at the Close of Business on such date. On April 13, 2000, the Board
declared a dividend of Rights with respect to the Series B Convertible Preferred
Stock, par value $.01 per share, of the Company (the "Series B Preferred Stock")
of that the number of Rights equal to the number of shares of Common Stock that
such Series B Preferred Stock are convertible into in accordance with the
Certificate of Designation for the Series B Preferred Stock (the "Series B
Certificate of Designations").

     Each Right entitles the holder thereof (except as described below) to
purchase from the Company one one-hundredth of a share of the Series A Junior
Participating Preferred Stock, $.01 par value (the "Preferred Shares"), of the
Company at a price (the "Exercise Price") of $98 per one one-hundredth of a
Preferred Share, subject to adjustment. The terms of the Rights are set forth in
the Stockholders Rights Agreement dated as of April 13, 2000, as it may be
amended from time to time (the "Rights Agreement") between the Company and First
Chicago Trust Company of New York, a division of Equiserve, as Rights Agent (the
"Rights Agent"). The amended Rights Agreement provides that each share of Series
B Preferred Stock, par value $.01 per share, of the Company shall also have
associated therewith the number of Rights equal to the number of shares of
Common Stock that such Series B Preferred Stock are convertible into in
accordance with the Series B Certificate of Designations. Capitalized terms not
defined herein have the respective meanings specified in the Rights Agreement.

Distribution Date; Transfer of Rights

     Initially, the Rights associated with the Common Stock and the Series B
Preferred Stock outstanding will be evidenced solely by the stock certificates
for such Common Stock or Series B Preferred Stock. The Rights will separate from
the Common Stock and the Series B Preferred Stock upon the earliest to occur of
(i) 10 Business Days after the first public announcement that any Person (other
than an Exempt Person (as hereinafter defined)) has become an Acquiring Person
(as hereinafter defined) and (ii) 10 Business Days (or such other Business Day
as may be determined by action of the Board prior to the time that any Person
shall become an Acquiring Person (as hereinafter defined) after the commencement
by any Person (other than an Exempt Person) of, or the first public announcement
of its intention to commence, a tender or exchange offer if, upon the
consummation thereof, such Person would be the
<PAGE>

Beneficial Owner of 15% or more of the outstanding shares of Common Stock (the
earliest of the dates specified in clauses (i) and (ii) being hereinafter called
the "Distribution Date"). After the Distribution Date, the Rights will be
evidenced solely by separate certificates and will trade independently from the
Common Stock and the Series B Preferred Stock.

     An "Acquiring Person" is any Person who or which, together with its
Affiliates and Associates, has acquired 15% or more of the shares of Common
Stock then outstanding, but does not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan or other compensation
program or arrangement of the Company or of any such Subsidiary, (iv) any Person
holding shares of Common Stock for or pursuant to the terms of any such plan,
program or arrangement or (v) Andrew B. Parkinson or Thomas L. Parkinson, and
each Affiliate and Associate thereof (the Persons specified in clauses (i)
through (v) being herein collectively called "Exempt Persons"). Notwithstanding
the foregoing, neither the Investor, nor any of its Affiliates or Associates
shall be deemed an Acquiring Person as a result of the execution and delivery of
the Purchase Agreement or any of the Documents (as defined in the Purchase
Agreement) or the consummation of the transactions contemplated therein,
including, without limitation the acquisition of (i) shares of Series B
Preferred Stock and Warrants (as defined in the Purchase Agreement) issued and
sold by the Company to the Investor under the Purchase Agreement (the "Investor
Securities"), (ii) any securities acquired by the Investor pursuant to their
exercise of preemptive rights pursuant to the Series B Certificate of
Designations, (iii) shares of Common Stock or any other security received or
receivable upon conversion or exercise of any Investor Securities, (iv) any
security received or receivable as a dividend or other distribution with respect
to any Investor Securities, (v) any security received in exchange for or in
replacement of any Investor Securities, or (vi) any security issued or issuable
with respect to any Investor Securities as a result of a change or
reclassification of Investor Securities, a stock split, stock dividend or
similar recapitalization of the Company or any capital reorganization of the
Company; provided, however, that (i) if the Investor would have been an
Acquiring Person but for the foregoing and the Investor becomes the Beneficial
Owner of any additional securities of the Company (other than as expressly
contemplated by the Purchase Agreement) or (ii) if the Investor forms, joins or
in any way participates in a "group" as such term is defined in the Exchange Act
(other than with its Affiliates and Associates), then notwithstanding the
foregoing, the Investor shall be deemed an Acquiring Person. Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person," has become so
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no longer be an
"Acquiring Person," then such Person shall not be deemed to be an "Acquiring
Person."

     A "Restricted Person" is an Acquiring Person or any Affiliate or Associate
thereof.

     The Rights Agreement provides that, until the Distribution Date (or the
earlier redemption or expiration of the Rights), the Rights may be transferred
only with the associated shares of Common Stock and Series B Preferred Stock.
Until the Distribution Date (or the earlier redemption or expiration of the
Rights), stock certificates for Common Stock and Series B Preferred Stock issued
after the Record Date, either upon transfer of outstanding shares or original
issuance of additional shares of Common Stock or Series B Preferred Stock, will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or the

                                      C-2
<PAGE>

earlier redemption or expiration of the Rights), the surrender for transfer of
any stock certificate for shares of Common Stock or Series B Preferred Stock,
with or without such legend and whether or not a copy of this Summary of Rights
is attached thereto, will also constitute the transfer of the Rights associated
with the shares of Common Stock or Series B Preferred Stock represented by such
stock certificate.

     As soon as practicable after the Distribution Date, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to the holders of
record of the Common Stock and the Series B Preferred Stock as of the Close of
Business on the Distribution Date, which thereafter will constitute the sole
evidence of the Rights. Each share of Common Stock or Series B Preferred Stock
issued by the Company after the Distribution Date and prior to the earlier
redemption or expiration of the Rights, including any shares of Common Stock or
Series B Preferred Stock issued by reason of the exercise of any option,
warrant, right (other than the Rights) or conversion or exchange privilege
(however evidenced) issued by the Company prior to the Distribution Date, will
be accompanied by a Right (unless the Board expressly provides to the contrary
at the time of issuance of any such option, warrant, right or privilege), and
Rights Certificates evidencing such Rights will be issued at the same time as
the stock certificates for the associated shares of Common Stock or Series B
Preferred Stock.

     The Rights are not exercisable until the Distribution Date. Moreover, the
time when the Rights may be exercised is restricted as described in the next
paragraph. The Rights will expire on the tenth anniversary of the Record Date
(the "Final Expiration Date"), unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company, in each case
as described below.

Exercise of Rights Under Certain Circumstances

     In the event that any Person becomes an Acquiring Person, proper provision
will be made so that the registered holder of each Right (other than Rights
Beneficially Owned as described in the next sentence) will thereafter have the
right to receive, upon exercise thereof, the number of shares of Common Stock
which, at the time of the occurrence of such event, will have a market value
equal to two times the then current Exercise Price. After the first occurrence
of either of the events described in the preceding sentence, all Rights which
are, or (under certain circumstances specified in the Rights Agreement) were,
Beneficially Owned by a Restricted Person or specified transferees therefrom
will be or become void. Under no circumstances may a Right be exercised after
the occurrence of either such event unless the Company's right to redeem the
Rights (as described below) has expired.

     If, on or after the date on which any Person has become an Acquiring
Person, any of the following transactions occur: (i) the Company merges into or
consolidates with an Interested Stockholder (as hereinafter defined) or, unless
all holders of the Company's outstanding shares of Common Stock are treated the
same, another Person (with limited designated exceptions); (ii) an Interested
Stockholder or, unless all holders of the Company's outstanding shares of Common
Stock are treated the same, another Person (with limited designated exceptions)
merges into the Company and either (A) all or part of the outstanding shares of
Common Stock of the Company are converted into capital stock or other securities
of any other Person (or the Company), cash and/or other property or (B) such
shares remain

                                      C-3
<PAGE>

outstanding, unconverted and unchanged; or (iii) the Company sells or transfers
50% or more of its consolidated assets or earning power to an Interested
Stockholder (as hereinafter defined) or, unless all holders of the Company's
outstanding shares of Common Stock are treated the same, another Person (with
limited designated exceptions); proper provision will be made so that the
registered holder of each Right (other than Rights which have become void) will
thereafter have the right (the "Flip-Over Right") to receive, upon exercise
thereof, the number of common shares of the acquiror (or of another Person
affiliated therewith) which, at the time of consummation of such transaction,
will have a market value equal to two times the then current Exercise Price. An
"Interested Stockholder" is any Restricted Person or any Affiliate or Associate
of any other Person in which such Restricted Person has an interest, or any
Person acting, directly or indirectly, on behalf of or in concert with any such
Restricted Person.

Adjustments to Exercise Price and Stock Purchasable Upon Exercise

     The Exercise Price payable, the number and kind of shares of capital stock
issuable upon exercise of the Rights and the number of Rights outstanding are
subject to adjustment from time to time to prevent dilution (i) in the event of
a dividend payable in Preferred Shares on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to the holders of
the Preferred Shares of certain options, warrants or rights to subscribe for or
purchase Preferred Shares at a price, or securities convertible into or
exchangeable for Preferred Shares with a conversion or exchange price, less than
the then Fair Market Value of the Preferred Shares or (iii) upon the
distribution to the holders of the Preferred Shares of cash, securities,
evidences of indebtedness or other property (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or options, warrants or
rights (other than those referred to in clause (ii) above).

     The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a dividend on the Common Stock payable in shares of
Common Stock or a subdivision, combination or reclassification of the Common
Stock occurring, in any such case, prior to the Distribution Date.

     With certain specified exceptions, no adjustment in the Exercise Price will
be made until the cumulative adjustments required equal at least 1% of the
Exercise Price. The Company is not required to issue fractional Preferred Shares
(other than fractions which are multiples of one one-hundredth of a Preferred
Share), but in lieu thereof the Company would be required to make a cash payment
based on the Fair Market Value of the Preferred Shares on the trading day
immediately preceding the date of exercise.

Terms of Preferred Shares

     The Preferred Shares receivable upon exercise of the Rights will not be
redeemable. Each Preferred Share will entitle the holder thereof to receive a
preferential quarterly dividend equal to 100 times the aggregate per share
amount of all cash dividends, plus 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends and other distributions (other than
in shares of Common Stock), declared on the Common Stock during such quarter,
adjusted to give effect to any dividend on the Common Stock payable in shares of

                                      C-4

<PAGE>

Common Stock or any subdivision, combination or reclassification of the Common
Stock (a "Dilution Event"). Each Preferred Share will entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of the
Company, voting together as a single class with the holders of the Common Stock
and the holders of any other class of capital stock having general voting
rights, adjusted to give effect to any Dilution Event. In the event of
liquidation of the Company, the holder of each Preferred Share will be entitled
to receive a preferential liquidation payment equal to 100 times the aggregate
per share amount to be distributed to the holders of the Common Stock, adjusted
to give effect to any Dilution Event, plus an amount equal to accrued and unpaid
dividends and distributions on such Preferred Share, whether or not declared, to
the date of such payment. In the event of any merger, consolidation or other
transaction in which the outstanding shares of Common Stock of the Company are
exchanged for or converted into other capital stock, securities, cash and/or
other property, each Preferred Share will be similarly exchanged or converted
into 100 times the per share amount applicable to the Common Stock, adjusted to
give effect to any Dilution Event.

     Because of the nature of the dividend, voting, liquidation and other rights
accorded to each Preferred Share, the value of the one one-hundredth of a
Preferred Share receivable upon the exercise of each Right should approximate
the value of one share of Common Stock.

Redemption of Rights

     At any time prior to the earliest of (i) 10 Business Days after the first
public announcement that any Person (other than an Exempt Person) has become an
Acquiring Person, (ii) the occurrence of any transaction which permits the
exercise of the Flip-Over Right and (iii) the Final Expiration Date, the Board
may redeem the Rights in whole, but not in part, at the redemption price of $.01
per Right, adjusted to give effect to any Dilution Event (the "Redemption
Price"). The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board, in its sole discretion, may
establish. After the redemption period has expired, the Company's right of
redemption may be reinstated, under the circumstances specified in the Rights
Agreement, if either (i) the Person who became an Acquiring Person shall reduce,
in one or a series of related transactions not involving the Company or any
Subsidiary or the occurrence of any transaction which permits the exercise of
the Flip-Over Right, its Beneficial Ownership of the outstanding shares of
Common Stock to less than 10% of such outstanding shares or (ii) in connection
with any transaction which permits the exercise of the Flip-Over Right, which
does not involve an Interested Stockholder and in which all holders of the
Common Stock are treated the same. Immediately after action by the Board
directing the redemption of the Rights, the option to exercise the Rights will
terminate, and thereafter each registered holder of the Rights will only be
entitled to receive the Redemption Price therefor.

Exchange of Rights

     At any time after any Person has become an Acquiring Person and prior to
the time that any Person (other than an Exempt Person), together with its
Affiliates and Associates, has become the Beneficial Owner of 50% or more of the
outstanding shares of Common Stock, the Board may direct that all or any part of
the outstanding Rights (other than Rights which have

                                      C-5

<PAGE>

become void) be exchanged for shares of Common Stock at the exchange rate of one
share of Common Stock (or one one-hundredth of a Preferred Share or of another
share of capital stock of the Company having equivalent rights, preferences and
privileges) per Right, adjusted to give effect to any Dilution Event.

Amendment of the Rights and the Rights Agreement

     Prior to the Distribution Date, the terms of the Rights and the Rights
Agreement may be supplemented or amended by the Board in any manner. From and
after the Distribution Date, the Rights may be supplemented or amended by the
Board, without the approval of the holders of the Rights, in certain respects
which do not adversely affect, as determined by the Board, the interests of such
holders; provided, however, that the Rights Agreement cannot be amended to
lengthen (i) any time period unless such lengthening is for the benefit of the
holders of the Rights or (ii) any time period relating to when the Rights may be
redeemed if at such time the Rights are not then redeemable.

Miscellaneous

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

     A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.

                                      C-6<PAGE>   1
                                                                   EXHIBIT 10.15

                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                            GNA INVESTMENTS I, L. P.

                          (A TEXAS LIMITED PARTNERSHIP)

                           DATED AS OF APRIL 14, 2000

THE LIMITED PARTNERSHIP INTERESTS DESCRIBED HEREIN HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES
LAWS IN RELIANCE UPON EXEMPTIONS THEREFROM. THEY MAY NOT BE OFFERED FOR SALE,
SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND THE RESTRICTIONS ON TRANSFER SET
FORTH IN THIS AGREEMENT.

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page

<S>     <C>       <C>                                                                                          <C>
ARTICLE I.
         DEFINITIONS..............................................................................................1
         1.1      Certain Definitions.............................................................................1
         1.2      Terms Defined in Investment Management Agreement................................................5

ARTICLE II.
         FORMATION................................................................................................6
         2.1      Formation, Name and Principal Office............................................................6
         2.2      Office and Agent for Service of Process.........................................................6
         2.3      Purpose of the Partnership......................................................................6
         2.4      Names and Addresses of the Partners.............................................................6
         2.5      Term of the Partnership.........................................................................6
         2.6      Required Documents..............................................................................7

ARTICLE III.
         CAPITALIZATION...........................................................................................7
         3.1      Prior Capital Contributions.....................................................................7
         3.2      Additional Capital Contributions................................................................7
         3.3      Withdrawal and Return on Capital................................................................8
         3.4      Loans...........................................................................................8
         3.5      Limitation of Liability.........................................................................8

ARTICLE IV.
         ALLOCATIONS..............................................................................................8
         4.1      Allocation of Net Income and Net Loss...........................................................8
         4.2      Special Allocations.............................................................................8
         4.3      Other Allocation Rules..........................................................................9
         4.4      Allocations for Federal Income Tax Purposes.....................................................9
         4.5      Withholding Taxes..............................................................................10

ARTICLE V.
         DISTRIBUTIONS...........................................................................................10
         5.1      Distributions..................................................................................10

ARTICLE VI.
         ADMINISTRATIVE PROVISIONS...............................................................................11
         6.1      Rights of the Limited Partner..................................................................11
         6.2      Management by the General Partner..............................................................12
         6.3      Powers of the General Partner..................................................................12
         6.4      Limitations on Powers of the General Partner...................................................13
</TABLE>

                                        i

<PAGE>   3

<TABLE>
<S>     <C>       <C>                                                                                          <C>
         6.5      Other Ventures.................................................................................13
         6.6      Duties with Respect to Investment Decisions....................................................14
         6.7      Payment of Organization Costs and Expenses.....................................................15
         6.8      Partner Compensation...........................................................................15
         6.9      Filing of Tax Returns..........................................................................15
         6.10     Tax Matters Partner............................................................................16
         6.11     Records and Financial Statements...............................................................16
         6.12     Tax Reports to Partners........................................................................17
         6.13     Valuation of Partnership Assets................................................................18
         6.14     Confidentiality................................................................................18

ARTICLE VII.
         TRANSFER OF A PARTNERSHIP INTEREST; WITHDRAWALS.........................................................18
         7.1      Transfers by the Limited Partner...............................................................18
         7.2      Withdrawal by a Limited Partner................................................................19
         7.3      Transfers by the General Partner...............................................................20
         7.4      Withdrawal by the General Partner..............................................................20

ARTICLE VIII.
         DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP..........................................................20
         8.1      Dissolution Events.............................................................................20
         8.2      Conversion of General Partner Interest to a Limited Partner Interest...........................20
         8.3      Winding Up of the Partnership..................................................................20
         8.4      Application of Proceeds of Liquidation.........................................................21
         8.5      Restoration Obligation.........................................................................21
         8.6      Timing of Liquidating Distributions............................................................21
         8.7      Liquidating Trust..............................................................................21

ARTICLE IX.
                  LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNER...........................................22
         9.1      Liability......................................................................................22
         9.2      Indemnification................................................................................22

ARTICLE X.
         GENERAL PROVISIONS......................................................................................22
         10.1     Special Meetings...............................................................................22
         10.2     Entire Agreement...............................................................................22
         10.3     Amendments.....................................................................................22
         10.4     Governing Law..................................................................................23
         10.5     Severability...................................................................................23
         10.6     Counterparts...................................................................................23
         10.7     Survival of Rights.............................................................................23
         10.8     Notices........................................................................................23
</TABLE>

                                       ii

<PAGE>   4

<TABLE>
<S>     <C>       <C>                                                                                          <C>
         10.9     Consents.......................................................................................23
         10.10    No Partition...................................................................................23
         10.11    Representations by Limited Partner.............................................................23

Attachments:

         Schedule A    Investment Criteria

         Schedule B    Names, Addresses, Aggregate Committed Capital
                       Contributions and Sharing Ratios
</TABLE>

                                       iii

<PAGE>   5

                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                            GNA INVESTMENTS I, L. P.

                          (A TEXAS LIMITED PARTNERSHIP)

         THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"AGREEMENT") of GNA Investments I, L. P. a Texas limited partnership (the
"PARTNERSHIP"), is entered into as of April 14, 2000 by and among Goff Moore
Strategic Partners, L.P., a Texas limited partnership ("GMSP"), as the sole
General Partner, and GAINSCO, INC., a Texas corporation ("GNA") as the sole
Limited Partner.

         WHEREAS, GNA and GMSP have heretofore entered into an Agreement of
Limited Partnership dated as of November 30, 1999 (the "ORIGINAL AGREEMENT") for
the Partnership and desire to amend and restate it to read in its entirety as
set forth below.

         NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein and in the Original Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, GMSP and GNA hereby agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

         1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:

         "ACT" means the Texas Revised Limited Partnership Act, as amended.

         "AGREEMENT" has the meaning specified in the first paragraph hereof.

         "ASSIGNEE" means a Person who has acquired all or a portion of the
Limited Partner's Interest in the Partnership, but who has not become a
Substitute Limited Partner.

         "BANKRUPTCY" or "BANKRUPT" means, with respect to a Person, (i) the
making of a general assignment for the benefit of creditors, (ii) the entry of
an order for relief in any bankruptcy, reorganization or insolvency proceeding,
(iii) the filing or commencement by or against the Person of any application or
petition for the appointment of a trustee, receiver or other similar official
over the Person or any substantial part of the Person's assets, or of any
proceeding under any bankruptcy, insolvency or reorganization statute or under
any liquidation or other law relating to relief of debtors,

<PAGE>   6

unless, in the case of such an action or proceeding filed or commenced against
the Person without the Person's acquiescence or consent, the action or
proceeding is dismissed within ninety (90) days after the date of its filing or
commencement.

         "BOOK BASIS" means, with respect to any Partnership asset, the asset's
adjusted basis for federal income tax purposes, except that (i) the initial Book
Basis of a Partnership asset contributed by a Partner to the Partnership shall
be the gross Fair Market Value of the asset on the date of contribution, as
determined by the Valuation Partner in accordance with Section 6.13; (ii) upon
the occurrence of a Revaluation Event, the Book Basis of each Partnership asset
shall be adjusted to its respective Fair Market Value on such date, as
determined by the Valuation Partner in accordance with Section 6.13; and (iii)
if the Book Basis of any Partnership asset has been determined pursuant to
subsection (i) or (ii) above, the Book Basis of the asset shall thereafter be
adjusted by depreciation, amortization or other cost recovery deductions
determined in accordance with the provisions of Treasury regulations Section
1.704-1(b)(2)(iv)(g)(3) in lieu of any depreciation, amortization or other cost
recovery deductions allowable for federal income tax purposes.

         "CAPITAL ACCOUNT" means, for each Partner, a separate account that is:

                  (a) increased by (i) the amount of such Partner's Capital
Contributions and (ii) allocations of Net Income and items of Income to such
Partner pursuant to Article IV;

                  (b) decreased by (i) the amount of cash distributed to such
Partner by the Partnership, (ii) the Fair Market Value of any other property
distributed to such Partner by the Partnership (determined as of the date of
distribution, without regard to Code Section 7701(g), and net of liabilities
secured by such property that the Partner assumes or to which the Partner's
ownership of the property is subject), and (iii) allocations of Net Loss and
items of Loss to such Partner pursuant to Article IV; and

                  (c) otherwise adjusted so as to conform to the requirements of
Code Sections 704(b) and the Treasury regulations thereunder.

         "CAPITAL CONTRIBUTIONS" means, for a Partner, the amount of cash and
the Fair Market Value, without regard to Code Section 7701(g), of any other
property (determined as of the date of contribution and net of liabilities
secured by such property that the Partnership assumes or to which the
Partnership's ownership of the property is subject) contributed by the Partner
to the capital of the Partnership. Unless otherwise permitted by the General
Partner, all Capital Contributions shall be made in cash.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "EXPENSES" of the Partnership means all direct, out-of-pocket costs and
expenses reasonably incurred either by the Partnership or by the General Partner
or an Affiliate thereof on behalf of the

                                       2

<PAGE>   7

Partnership relating to (a) the fees and expenses associated with the
preparation of financial statements pursuant to Section 6.11 and the tax reports
described in Section 6.12, (b) the fees, costs and expenses incurred in
connection with investigating, negotiating, acquiring, holding, selling or
exchanging of Securities (including fees and expenses of lawyers, accountants,
consultants, brokerage fees, incentive fees or finder's fees, investment
banker's fees, commitment fees, underwriting discounts or sales fees), (c)
legal, audit and other expenses incurred in connection with the registration of
the offer and sale of Securities owned by the Partnership under the Securities
Act of 1933, as amended, and any applicable state or foreign securities laws,
and (d) other expenses described in Section 4(d) of the Investment Management
Agreement; provided, however, that in no event shall Expenses include any of the
following costs and expenses incurred by the Partnership or the General Partner
or any of its Affiliates: (i) the salaries, wages and employee benefits of all
officers, directors, and employees of the General Partner or an Affiliate
thereof, (ii) office rent, utility charges and equipment and furniture costs and
expenses, (iii) any other general, administrative and overhead expense,
including insurance premiums relating to the matters described in this clause
(iii) and the preceding clauses (i) and (ii), and (iv) amounts payable by the
Partnership (other than for the actual value of services rendered to or property
purchased by the Partnership) in consequence of any actual or alleged fraud,
negligence, breach of fiduciary duty, violation of any law, governmental rule or
regulation or other misconduct by the General Partner.

         "FAIR MARKET VALUE" has the meaning specified in the Investment
Management Agreement in the case of Securities and, in the case of any other
asset, means the price that would obtain in a transaction between a willing
buyer and a willing seller in which neither party was under any compulsion to
enter into the transaction.

         "FISCAL YEAR" means the period from January 1 through December 31 of
each year.

         "GENERAL PARTNER" means GMSP or any other Person admitted to the
Partnership as a general partner pursuant to Section 7.3 or 8.1(c).

         "GMSP" means Goff Moore Strategic Partners, L.P., a Texas limited
partnership.

         "GNA" means GAINSCO, INC., a Texas corporation.

         "INCOME" means, for each Fiscal Year, each item of income and gain as
determined, recognized and classified for federal income tax purposes, provided,
that (i) items of income or gain exempt from federal income tax shall be
included as items of Income, (ii) upon a disposition of any Partnership asset,
items of income or gain arising therefrom shall be computed by reference to the
asset's Book Basis on the date of disposition rather than the asset's adjusted
tax basis, (iii) upon a distribution of any Partnership asset, whether or not in
connection with the liquidation of the Partnership, any unrealized items of
income or gain inherent therein that have not previously been reflected in the
Partners' Capital Accounts shall be included as items of Income as if the asset
had been sold for its Fair Market Value on the date of its distribution, and
(iv) if the Book Basis of any

                                        3

<PAGE>   8

Partnership asset is adjusted upwards upon the occurrence of a Revaluation
Event, the amount of the adjustment shall be included as an item of Income.

         "INTEREST" means all of a Partner's interest in the Partnership,
including rights to distributions, allocations, information and reports, and to
vote, consent or approve.

         "INTEREST RATE" means a varying rate per annum equal to the lesser of
(i) the "prime rate" as quoted by the Wall Street Journal (Southwest Edition)
from time to time or (ii) the maximum nonusurious rate permitted from time to
time by Applicable Law.

         "INVESTMENT CRITERIA" has the meaning set forth in the second WHEREAS
clause of this Agreement.

         "INVESTMENT MANAGEMENT AGREEMENT" means the Investment Management
Agreement dated as of October 4, 1999 between GNA and GMSP.

         "LIMITED PARTNER" means GNA and any other Person admitted to the
Partnership as a limited partner or as a Substitute Limited Partner and which
has not withdrawn from the Partnership or transferred its entire Interest to a
Substitute Limited Partner pursuant to Article VII. Except where the context
requires otherwise, a reference in this Agreement to the "LIMITED PARTNER" shall
mean all of the Limited Partners of the Partnership at the time of
determination.

         "LIQUIDATOR" means the General Partner unless another Person is
selected pursuant to Section 8.3.

         "LOSS" means, for each Fiscal Year, each item of loss or deduction as
determined, recognized and classified for federal income tax purposes; provided
that (i) expenditures of the Partnership described in Code Section 705(a)(2)(B)
or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
regulations Section 1.704-1(b)(2)(iv)(i) shall be included as items of Loss,
(ii) upon a disposition of any Partnership asset, items of loss or deduction
arising therefrom shall be computed by reference to the asset's Book Basis on
the date of disposition rather than the asset's adjusted tax basis, (iii) upon a
distribution of any Partnership asset, whether or not in connection with the
liquidation of the Partnership, any unrealized items of loss or deduction
inherent therein which have not previously been reflected in the Partners'
Capital Accounts shall be included as items of Loss as if the asset had been
sold for its Fair Market Value on the date of distribution, (iv) if the Book
Basis of any Partnership asset is adjusted downwards upon the occurrence of a
Revaluation Event, the amount of the adjustment shall be included as an item of
Loss, and (v) if the Book Basis of any Partnership asset differs from the
adjusted tax basis of the asset, items of depreciation, amortization or other
cost recovery deductions attributable to the asset shall be determined in
accordance with the provisions of Treasury regulations Section
1.704-1(b)(2)(iv)(g)(3) in lieu of any depreciation, amortization or other cost
recovery deductions allowable for federal income tax purposes.

                                        4

<PAGE>   9

         "NET INCOME" and "NET LOSS" mean, for each Fiscal Year, the positive or
negative difference, as the case may be, between all items of Income for such
year and all items of Loss for such year; provided, that Net Income or Net Loss
for each Fiscal Year shall be computed by excluding from such computation any
item of Income or Loss specially allocated to a Partner under Section 4.2.

         "ORGANIZATION COSTS" shall mean all actual out-of-pocket legal fees,
costs and expenses of the General Partner and all filing fees payable to
governmental entities associated with the formation of the Partnership.

         "PARTNER" means the General Partner or the Limited Partner as the
context requires. Except where the context requires otherwise, a reference in
this Agreement to the "PARTNERS" shall mean all of the Partners of the
Partnership at the time of determination.

         "PARTNERSHIP" has the meaning set forth in the first paragraph hereof.

         "REVALUATION EVENT" means any of the following: (i) the acquisition of
an additional Interest by any new or existing Partner in exchange for more than
a de minimis Capital Contribution, (ii) a distribution to one or more Partners
of more than a de minimis amount of money or other property as consideration for
all or part of the Partner's Interest, or (iii) the liquidation of the
Partnership within the meaning of Treasury regulations Section
1.704-1(b)(2)(ii)(g); provided, that the General Partner may elect, in its
discretion, to treat other events as Revaluation Events or to treat any of the
above named events as not constituting Revaluation Events to the extent the
General Partner determines doing or not doing so better reflects the economic
interests of the Partners in the Partnership.

         "SHARING RATIOS" means, initially, the ratio of each Partner's initial
Capital Contribution to the total initial Capital Contributions of all Partners,
as reflected on Schedule B hereto. Upon the occurrence of a Revaluation Event,
the Sharing Ratios shall be redetermined by the General Partner based on the
ratio of each Partner's Capital Account balance (as adjusted to reflect the
Revaluation Event) to the total Capital Account balances (as adjusted to reflect
the Revaluation Event) of all Partners.

         "SUBSTITUTE LIMITED PARTNER" means an Assignee of a Limited Partner's
Interest that becomes a Limited Partner and succeeds, to the extent of the
Interest assigned, to the rights and powers and becomes subject to the
restrictions and liabilities of the assignor Limited Partner.

         "VALUATION PARTNER" has the meaning set forth in Section 6.13(a).

         1.2 TERMS DEFINED IN INVESTMENT MANAGEMENT AGREEMENT. Unless otherwise
defined in this Agreement or the context otherwise requires, terms used but not
otherwise defined in this Agreement shall have the meanings specified in the
Investment Management Agreement. The terms whose meaning is so incorporated by
reference from the Investment Management Agreement include without limitation:

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<PAGE>   10

                           Affiliate
                           Applicable Law
                           Associate
                           Confidential Information
                           GMSP Group
                           GMSP Principals
                           good faith
                           Governmental Authority
                           Person
                           Securities

                                   ARTICLE II.
                                    FORMATION

         2.1 FORMATION, NAME AND PRINCIPAL OFFICE. The Partners formed the
Partnership on November 30, 1999 for the limited purpose and scope set forth in
this Agreement, and the Partners hereby enter into this Agreement for the
purpose of amending and restating the Original Agreement in its entirety. The
Partnership shall be a limited partnership and, except as provided herein, shall
be governed by the Act. The name of the Partnership shall be "GNA Investments I,
L.P." The address of the principal office of the Partnership shall be 777 Main
Street, Suite 2250, Fort Worth, Texas 76102 or, upon notice to the Limited
Partner, at such other place as may be designated by the General Partner.

         2.2 OFFICE AND AGENT FOR SERVICE OF PROCESS. The Partnership shall have
a principal office located within the State of Texas at which shall be
maintained records and documents of the Partnership as required under Section
1.07 of the Act. Unless otherwise designated by the General Partner as provided
in the Act, the registered agent for service of process on the Partnership shall
be J. Randall Chappel and the street address of the registered office of the
Partnership shall be 777 Main Street, Suite 2250, Fort Worth, Texas 76102.

         2.3 PURPOSE OF THE PARTNERSHIP. The purpose of the Partnership shall be
to acquire, hold for investment, and distribute or otherwise dispose of
Securities which meet the Investment Criteria at the time of acquisition.

         2.4 NAMES AND ADDRESSES OF THE PARTNERS. The name and address of each
Partner shall be set forth on Schedule B.

         2.5 TERM OF THE PARTNERSHIP. The Partnership commenced on November 30,
1999 and, unless the Partnership is earlier dissolved pursuant to Article VIII,
shall continue until the close of business on November 30, 2010 or until the
close of business on such later date as is provided for in a consent executed by
the General Partner and the Limited Partner.

                                        6

<PAGE>   11

         2.6 REQUIRED DOCUMENTS.

                  (a) Partnership Documents. The General Partner filed the
Certificate of Limited Partnership of the Partnership with the Secretary of
State of the State of Texas on November 30, 1999, and shall cause any other
documents required to be filed, recorded or amended in connection with the
formation or operation of the Partnership pursuant to the laws of the State of
Texas or any other jurisdiction in which the Partnership's business is
conducted.

                  (b) Other Documents. The Limited Partner shall execute and
acknowledge as requested by the General Partner such documents as may be
necessary or desirable to (i) comply with legal requirements applicable to the
formation of the Partnership or the operation of the Partnership's business, or
(ii) otherwise give effect to the terms of this Agreement.

                  (c) Special Power of Attorney. The Limited Partner hereby
grants to the General Partner a special power of attorney (with full rights of
assignment) irrevocably appointing the General Partner as the Limited Partner's
attorney-in-fact with power and authority to execute and acknowledge, in the
Limited Partner's name and on its behalf, any document described in Section
2.6(a) or (b). Such special power of attorney is coupled with an interest and
shall not be revoked by the death or disability of any Limited Partner.

                                  ARTICLE III.
                                 CAPITALIZATION

         3.1 PRIOR CAPITAL CONTRIBUTIONS. Each Partner has heretofore made
Capital Contributions as are reflected in the books and records of the
Partnership in the ratio specified for that Partner on Schedule B.

         3.2 ADDITIONAL CAPITAL CONTRIBUTIONS.

                  (a) General. Except as otherwise provided in Section 3.2(b) or
(c) or any nonvariable provision of the Act, no Partner shall be permitted or
required to make any additional Capital Contributions to the Partnership.

                  (b) Required Additional Capital Contributions. In the event
that the General Partner determines that the Partnership needs additional
capital to acquire additional Securities, for the payment of Partnership
Expenses or for any other proper Partnership purpose, the General Partner may
from time to time request additional Capital Contributions by the Limited
Partner not to exceed its Aggregate Committed Capital Contribution set forth on
Schedule B, and the Limited Partner shall make the requested additional Capital
Contribution not later than the later of (i) the fifth (5th) business day after
its receipt of the request therefor or (ii) the date specified in the request.
The General Partner shall make additional Capital Contributions from time to
time to the extent necessary to cause its aggregate Capital Contributions to
equal 1.01% of the aggregate Capital Contributions of the Limited Partner.

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<PAGE>   12

                  (c) Voluntary Additional Capital Contributions. If the General
Partner determines that the Partnership needs additional capital to acquire
additional Securities, for the payment of Partnership Expenses or for any other
proper Partnership purpose after the Partnership's expenditure of the Aggregate
Committed Capital Contributions set forth on Schedule B, the General Partner may
so notify the Limited Partner and permit voluntary additional Capital
Contributions by the Limited Partner. The General Partner shall make additional
Capital Contributions from time to time to the extent necessary to cause its
aggregate Capital Contributions to equal 1.01% of the aggregate Capital
Contributions of the Limited Partner.

         3.3 WITHDRAWAL AND RETURN ON CAPITAL. Except as otherwise specifically
provided in this Agreement, no Partner shall (i) have the right or power to
withdraw all or any portion of its Capital Contributions without the prior
consent of the General Partner or (ii) be entitled to receive any return on any
portion of its Capital Contributions or Capital Account. Under circumstances
involving a return of any Capital Contribution, no Partner shall have the right
to receive property other than cash.

         3.4 LOANS. No Partner shall be required to lend any money to the
Partnership or to guarantee any Partnership indebtedness. Any loan by a Partner
or an Affiliate or Associate of a Partner to the Partnership shall be on
commercially reasonable terms and shall bear interest at the Interest Rate.
Loans by a Partner to the Partnership shall not be considered Capital
Contributions.

         3.5 LIMITATION OF LIABILITY. Except as otherwise provided by the Act or
Section 3.2, a Limited Partner shall have no liability as a Partner. A Partner
that receives a distribution (i) in violation of this Agreement or (ii) which is
required to be returned to the Partnership under the Act shall return the
distribution immediately upon demand therefor by the other Partner. A Partner
obligated to return property may, at its option, return cash equal to the Fair
Market Value of the property on the date of such return.

                                   ARTICLE IV.
                                   ALLOCATIONS

         4.1 ALLOCATION OF NET INCOME AND NET LOSS. For each Fiscal Year or
period thereof, after first giving effect to the special allocations set forth
in Section 4.2, Net Income or Net Loss, as applicable, shall be allocated to the
Partners in proportion to their Sharing Ratios.

         4.2 SPECIAL ALLOCATIONS. For each Fiscal Year or period thereof, the
following items of Income and Loss shall be specially allocated to the Partners
as follows, before allocations of Net Income or Net Loss are made pursuant to
Section 4.1:

                  (a) If a Partner unexpectedly receives any adjustment,
allocation or distribution described in Treasury regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of income and gain (including gross
income) shall be specially allocated to the Partner in an amount and manner
sufficient to eliminate, to the extent required by the Treasury regulations, the
deficit balance in the Partner's

                                        8

<PAGE>   13

Capital Account as quickly as possible. This Section 4.2(a) shall be interpreted
consistently with Treasury regulations Section 1.704-1(b)(2)(ii)(d).

                  (b) To the extent an adjustment to the adjusted tax basis of
any Partnership asset under Code Sections 734(b) or 743(b) is required to be
taken into account in determining Capital Accounts under Treasury regulations
Section 1.704-1(b)(2)(iv)(m), the amount of the Capital Account adjustment shall
be included in determining items of Income or Loss and treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases the basis of the asset) and shall be specially allocated to
the Partners consistent with the manner in which their Capital Accounts are
required to be adjusted by such Treasury regulation.

                  (c) To minimize any distortions in the manner that the
Partners would have shared distributions if the special allocations required by
Section 4.2(a) and Section 4.2(b) (the "REGULATORY ALLOCATIONS") had not been
part of this Agreement, the General Partner may specially allocate to the
Partners offsetting items of Income or Loss so that the net amounts allocated to
each Partner pursuant to Sections 4.1 and Section 4.2 will, to the extent
possible, equal the net amounts that would have been allocated to each Partner
pursuant to Section 4.1 if the Regulatory Allocations had not been part of this
Agreement.

         4.3 OTHER ALLOCATION RULES.

                  (a) To reflect any varying Interests during a Fiscal Year, Net
Income and Net Loss and items of Income and Loss shall be determined by the
General Partner on a daily, monthly or other basis using any convention or
method permitted under Code Section 706 and the Treasury regulations thereunder.

                  (b) If the Partnership borrows money or property on a
nonrecourse basis, the General Partner, in consultation with the Partnership's
tax advisors, shall modify the allocation provisions of this Article IV to the
minimum extent necessary to ensure that allocations relating to such nonrecourse
borrowing are respected for federal income tax purposes while preserving the
underlying economic objectives of the Partners as reflected in this Agreement.

         4.4 ALLOCATIONS FOR FEDERAL INCOME TAX PURPOSES.

                  (a) Subject to Section 4.4(b), for each Fiscal Year or period
thereof, all items of taxable income, gain, loss and deduction of the
Partnership, determined solely for federal income tax purposes, shall be
allocated to the Partners in the same manner as each correlative item of Income
and Loss and Net Income and Net Loss is allocated pursuant to the provisions of
Sections 4.1, 4.2 and 4.3.

                  (b) In accordance with Code Section 704(c) and the Treasury
regulations thereunder, items of income, gain, loss and deduction with respect
to any Partnership asset with a Book Basis that differs from its adjusted tax
basis shall, solely for federal income tax purposes, be

                                        9

<PAGE>   14

allocated among the Partners so as to take account of such difference at the
time it arose. Unless otherwise approved by the Partners, such allocations shall
be made utilizing the "Traditional Method with Curative Allocations" set forth
in Treasury regulations Section 1.704-3(c).

                  (c) Allocations pursuant to this Section 4.4 are solely for
federal income tax purposes and shall not affect the determination of the
Partners' Capital Accounts.

         4.5 WITHHOLDING TAXES. The Partnership shall withhold taxes from
distributions to, and allocations among, the Partners to the extent required by
law (as determined by the General Partner in its sole discretion). Any amount so
withheld by the Partnership with regard to a Partner shall be treated for
purposes of this Agreement as an amount actually distributed to such Partner in
accordance with the provisions of Article V. An amount shall be considered
withheld by the Partnership if, and at the time, remitted to a Governmental
Authority without regard to whether such remittance occurs at the same time as
the distribution or allocation to which it relates; provided, that an amount
actually withheld from a specific distribution or designated by the General
Partner as withheld from a specific allocation shall be treated as if
distributed at the time such distribution or allocation occurs. To the extent
operation of the foregoing provisions of this Section 4.5 would create or
increase a deficit balance in a Partner's Capital Account, the amount of the
deemed distribution shall instead be treated as a loan by the Partnership to
such Partner, which loan shall bear interest at the Interest Rate.

                                   ARTICLE V.
                                  DISTRIBUTIONS

         5.1 DISTRIBUTIONS.

                  (a) Operating Distributions. The General Partner may, from
time to time and in its sole discretion, cause the Partnership to distribute
cash or property (including Securities) to the Partners. All distributions
pursuant to this Section 5.1(a) shall be made to the Partners in proportion to
their Sharing Ratios.

                  (b) Liquidating Distributions. Notwithstanding the provisions
of Section 5.1(a), cash or property of the Partnership available for
distribution upon the dissolution of the Partnership (including cash or property
received upon the sale or other disposition of assets in anticipation of or in
connection with such dissolution) shall be distributed in accordance with the
provisions of Section 8.4.

                  (c) Limitation on Distributions. The General Partner shall use
its best efforts to ensure that no distribution shall be made to a Partner
pursuant to Section 5.1(a) or (b) if and to the extent that such distribution
would:

                           (i) create or increase a deficit balance in a
                  Partner's Capital Account;

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<PAGE>   15

                           (ii) cause the Partnership to be insolvent; or

                           (iii) render the Limited Partner liable for a return
                  of such distribution under the Act.

                                   ARTICLE VI.
                            ADMINISTRATIVE PROVISIONS

         6.1 RIGHTS OF THE LIMITED PARTNER.

                  (a) No Management. The Limited Partner shall take no part in
the management or control (within the meaning of the Act) of the Partnership's
business and shall have no right or authority to act for the Partnership or to
vote on Partnership matters other than as specifically set forth in this
Agreement or as required under the Act.

                  (b) Outside Activities. The Limited Partner may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition
with the Partnership. Neither the Partnership nor any of the Partners have any
rights by virtue of this Agreement in any business venture of any other Partner.

                  (c) Return of Capital. The Limited Partner is not entitled to
the withdrawal or return of its Capital Contribution, except to the extent, if
any, that distributions are made pursuant to this Agreement or upon termination
of the Partnership.

                  (d) Information. In addition to other rights provided by this
Agreement, the Investment Management Agreement or by Applicable Law, the Limited
Partner has the following rights relating to the Partnership:

                           (i) The Limited Partner has the right to inspect and
copy any of the Partnership's books for a proper purpose related to its interest
in the Partnership whenever circumstances render it just and reasonable, but
such inspection and copying is at the Limited Partner's own expense.

                           (ii) The Limited Partner has the right for a proper
purpose related to such Person's interest in the Partnership to have on demand
true and full information of all things affecting the Partnership and a formal
accounting of Partnership affairs whenever circumstances render it just and
reasonable, but the furnishing of such information or conducting such accounting
is at the Limited Partner's own expense.

                           (iii) The Limited Partner has the right, upon
notifying the General Partner of a proper purpose related to the Limited
Partner's interests in the Partnership, to have furnished to it, at its expense,
a copy of the names and amounts in interest of all Partners as of the date
specified in its written request.

                                       11

<PAGE>   16

                           (iv) The Limited Partner has the right to have, on
demand and without charge, true copies of: (i) this Agreement, the Certificate
of Limited Partnership and all amendments or restatements thereof; and (ii) any
of the tax returns of the Partnership.

         6.2 MANAGEMENT BY THE GENERAL PARTNER. The General Partner shall devote
such time and attention, and shall diligently perform those duties as are
reasonably necessary to manage effectively the Partnership's business; provided,
that to the extent not inconsistent with the foregoing requirements of this
Section 6.2 or the Investment Management Agreement, the General Partner shall be
permitted to conduct other affairs as described in Section 6.5.

         6.3 POWERS OF THE GENERAL PARTNER. Subject to the provisions of the
Act, this Agreement and the Investment Management Agreement, the General Partner
shall have the exclusive power to perform all acts associated with the
management and operation of the Partnership including, without limitation, the
right to:

                  (a) Receive, buy, sell, exchange, trade and otherwise deal in
and with Securities and other property of the Partnership;

                  (b) Acquire Securities on the basis of investment
representations and subject to transfer restrictions;

                  (c) Make all decisions with respect to the voting of
Partnership Securities;

                  (d) Cause the Partnership to enter into, make and perform such
contracts, agreements and other undertakings, and to do such other acts, as it
may deem necessary or advisable for, or as may be incidental to, the conduct of
the business of the Partnership;

                  (e) Open, conduct business regarding, draw checks or other
payment orders upon, and close cash, checking, custodial or similar accounts
with banks or brokers on behalf of the Partnership and pay the customary fees
and charges applicable to transactions in respect of all such accounts; and

                  (f) Assume and exercise all powers and responsibilities
granted a general partner by the laws of the State of Texas.

Without limitation upon the foregoing, any contract, agreement, deed, lease,
note or other document or instrument executed on behalf of the Partnership by
the General Partner shall be deemed to have been duly executed, the Limited
Partner's signature shall not be required in connection with the foregoing, and
third parties shall be entitled to rely upon the General Partner's authority
under the provisions of this sentence without otherwise ascertaining that the
requirements of this Agreement have been satisfied.

                                       12

<PAGE>   17

         6.4 LIMITATIONS ON POWERS OF THE GENERAL PARTNER. The General Partner,
without the prior consent of the Limited Partner, shall have no authority to:

                  (a) Perform any act in contravention of this Agreement or the
Investment Management Agreement or, subject to the provisions of Sections 6.5
and 6.6, any act which is detrimental to or incompatible with the business of
the Partnership;

                  (b) Possess Partnership property, or assign its General
Partner's rights in specific Partnership property, for other than a Partnership
purpose;

                  (c) Admit a Person as an additional General Partner of the
Partnership;

                  (d) Receive any compensation or benefit from any issuer of any
Securities held by the Partnership or any of its Affiliates or Associates that
is not shared pro rata with the Partnership in accordance with the amount
invested, other than as specifically permitted pursuant to Section 6.5(b);

                  (e) Cause the Partnership to make any borrowings for the
purpose of acquiring or carrying Securities, provided that any Partner may
advance funds to the Partnership in accordance with Section 3.4 for the purpose
of permitting the Partnership to meet its obligations to pay Expenses;

                  (f) Invest any Partnership funds in Securities of an issuer in
which the General Partner or any member of the GMSP Group is an investor on a
basis different from that on which the Partnership invests;

                  (g) Cause the Partnership to enter into any agreement that
would commit the Partnership to purchase Securities that are not fully paid and
non-assessable at the time of purchase or that would commit the Partnership to
make future "follow-on" investments in issuers in addition to the Securities
acquired pursuant to a specific purchase agreement; or

                  (h) Commit the Partnership to pay any net profits interest or
convey any participation or other contingent interest in Partnership Securities
to any investment banker, broker, finder or other person on account of the
Partnership's investment in such Securities.

         6.5 OTHER VENTURES.

                  (a) The Limited Partner (i) acknowledges that the General
Partner and its Affiliates, Associates, partners, officers, directors, agents
and employees are or may be involved in other financial, investment and
professional activities, including, but not limited to, management of other
investment funds, purchases and sales of Securities (including, without
limitation, venture capital and leveraged buy-out investment Securities),
investment and management counseling, and serving as officers, directors,
advisors and agents of other companies; and (ii) agrees that the General Partner
and its Affiliates, Associates, partners, officers, directors, agents and
employees may engage for their

                                       13

<PAGE>   18

own accounts and for the accounts of others in any such ventures and activities
as and to the full extent provided in this Agreement and in Section 5 of the
Investment Management Agreement.

                  (b) No provision of this Agreement or the Investment
Management Agreement shall be construed to preclude the partners, Affiliates or
employees of the General Partner from acting as a director or officer (or any
similar capacity) to any corporation, partnership, trust or other business
entity in which the Partnership has acquired Securities, or from receiving
compensation or profit therefor. In connection with the foregoing, the Partners
contemplate that partners, Affiliates or employees of the General Partner may
serve on the board of directors of companies in which the Partnership acquires
Securities, and any compensation received by such persons in connection with
such service on the board of directors of any such company, which compensation
is consistent with the compensation payable to other members of any such board
of directors, will not be payable to the Partnership or deemed a reduction from
the fees payable to the General Partner pursuant to the Investment Management
Agreement and is specifically authorized by the terms of this Agreement.

         6.6 DUTIES WITH RESPECT TO INVESTMENT DECISIONS.

                  (a) The Limited Partner recognizes that the Partnership will
participate with the General Partner as a co-investor in the acquisition of
certain Securities to the extent that the General Partner determines in its sole
discretion, provided that the General Partner shall have no obligation to offer
to the Partnership any particular co-investment opportunity in each Security
acquired by the General Partner that otherwise satisfies the Investment
Criteria. In the event that the General Partner does permit the Partnership to
co-invest with the General Partner, the amount of any such co-investment will be
set by the General Partner in its sole discretion, and the decision of the
General Partner shall be final. The terms of any co-investment by the
Partnership shall be on terms identical to or substantially similar and no less
favorable in any material respect than the terms of the investment made by the
General Partner. No such decisions by the General Partner shall be considered a
breach of this Agreement or its fiduciary duties to the Limited Partner or a
breach of the Investment Management Agreement. Furthermore, to the extent that
any decisions made pursuant to this Section 6.6(a) are deemed to involve an
actual or potential conflict of interest, such conflict of interest is hereby
specifically authorized pursuant to Section 5(b) of the Investment Management
Agreement.

                  (b) The Limited Partner recognizes that decisions concerning
investments and potential investments that meet the Investment Criteria involve
the exercise of judgment, are highly speculative and could involve the complete
loss of the Partnership's investment, and agrees that Investment Management
Agreement, as specifically modified by this Agreement, establishes the
parameters of the General Partner's duties and responsibilities with respect
thereto.

                  (c) The Partners also recognize that the General Partner in
its sole discretion may offer co-investment opportunities to its partners, its
designated Affiliates and/or any other person that the General Partner shall
determine in its sole discretion in the same manner as the Partnership will
co-invest with the General Partner. It is the intention of the General Partner
to so offer co-investment opportunities, when practicable and feasible, with
respect to each investment made by the Partnership,

                                       14

<PAGE>   19

provided that the General Partner shall be under no obligation to do so. The
amount of any such co-investment will be set by the General Partner in its sole
discretion, subject to acceptance by the potential investor.

         6.7 PAYMENT OF ORGANIZATION COSTS AND EXPENSES.

                  (a) The Partnership shall pay, or shall reimburse the General
Partner or any Affiliate thereof for its payment of, Organization Costs.

                  (b) The Partnership shall pay, or shall reimburse the General
Partner or any Affiliate thereof for its payment of, all Expenses.

                  (c) To the extent any Expenses or other costs are attributable
to any of the Partnership and other co-investors (including the General Partner
investing for its own account), such costs shall be allocated among such
entities based on their respective (i) interests in such Securities if such
Expenses are attributable to such Securities, or (ii) aggregate amounts of
capital agreed to be contributed and/or loaned to them by their respective
partners and Affiliates if such costs are not attributable to any specific
acquisition of Securities.

                  (d) Other than the compensation payable pursuant to Section 4
of the Investment Management Agreement (as described in Section 6.8 below) and
for the payment of Expenses described in above in this Section 6.7, the General
Partner shall not be entitled to any other payments from the Partnership or the
Limited Partner for its services as the General Partner of the Partnership.

         6.8 PARTNER COMPENSATION. No Partner shall be entitled to any
compensation for services provided by such Partner to, or for the benefit of,
the Partnership, except that the General Partner may receive and retain
compensation as provided in the Investment Management Agreement, and the Limited
Partner's Sharing Ratio of Securities acquired by the Partnership shall be taken
into consideration in calculating the compensation payable to the General
Partner pursuant to Section 4 of the Investment Management Agreement as if such
Securities were owned directly by the Limited Partner.

         6.9 FILING OF TAX RETURNS. The General Partner shall prepare and file,
or cause to be prepared and filed, a federal information tax return in
compliance with Code Section 6031 and all other returns or reports required to
be filed by the Partnership by any foreign, federal, state and local tax
authorities.

         6.10 TAX MATTERS PARTNER.

                  (a) General. The General Partner is hereby designated the "tax
matters partner" of the Partnership within the meaning of Code Section
6231(a)(7). Except as specifically provided in the Code and the regulations
issued thereunder, the General Partner in its sole discretion shall have

                                       15

<PAGE>   20

exclusive authority to act for or on behalf of the Partnership with regard to
tax matters, including, without limitation, the authority to make (or decline to
make) any available tax elections.

                  (b) Notice of Inconsistent Treatment of Partnership Item. No
Partner shall file a notice with the Internal Revenue Service under Code Section
6222(b) in connection with such Partner's intention to treat an item on such
Partner's federal income tax return in a manner which is inconsistent with the
treatment of such item on the Partnership's federal income tax return unless
such Partner has, not less than thirty (30) days prior to the filing of such
notice, provided the General Partner with a copy of the notice and thereafter in
a timely manner provides such other information related thereto as the General
Partner shall reasonably request.

                  (c) Notice of Settlement Agreement. Any Partner entering into
a settlement agreement with the Secretary of the Treasury which concerns a
Partnership item shall notify the other Partner of such settlement agreement and
its terms within sixty (60) days from the date thereof.

         6.11 RECORDS AND FINANCIAL STATEMENTS.

                  (a) The General Partner shall cause the Partnership to
maintain or cause to be maintained true and proper books, records, reports, and
accounts in which shall be entered all transactions of the Partnership. Such
books, records, reports and accounts shall be located at the principal place of
business of the Partnership and shall be available to any Partner for inspection
and copying during reasonable business hours.

                  (b) The books and records of the Partnership may in the
Limited Partner's discretion and at its expense be audited annually by an
independent accounting firm selected by the Limited Partner from time to time.
For purposes of determining and maintaining the Partners' Capital Accounts, the
books of account of the Partnership shall be maintained in accordance with
federal income tax principles (adjusted as provided in this Agreement) and the
accrual method of accounting. Additionally, the General Partner shall cause the
Partnership's financial books and records to be maintained in compliance with
GAAP.

                  (c) Within a reasonable time after each Fiscal Year, a copy of
the following shall be mailed or otherwise furnished to each Partner and shall
include (i) a balance sheet of the Partnership, (ii) income and cash flow
statements of the Partnership, (iii) a statement of changes in the Partners'
Capital Account balances from the last day of the prior Fiscal Year, and (iv) if
applicable, the report of the results of the examination by the Partnership's
independent auditors.

                  (d) Upon completion of any valuation of the Partnership's
assets in accordance with the provisions of Section 6.13, the Valuation Partner
shall furnish to each Partner a statement showing (i) the net worth of the
Partnership and the Fair Market Value of each Partnership asset and (ii) the
Capital Account balance of such Partner.

                                       16
<PAGE>   21

                  (e) The General Partner shall keep or cause to be kept the
following records at the principal office of the Partnership or make them
available at that office within five days after the date of receipt of a written
request therefor pursuant to Section 6.1:

                           (i) a current list that states (w) the name and
mailing address of each Partner, separately identifying in alphabetical order
each general partner and limited partner; (x) the last known street address of
the business or residence of each general partner; (y) the percentage or other
interest in the Partnership owned by each partner; and (z) the names of the
partners who are members of each specified class or group established pursuant
to this Agreement;

                           (ii) copies of the Partnership's federal, state, and
local information or income tax returns for each of the Partnership's six most
recent tax years;

                           (iii) a copy of this Agreement and the Certificate of
Limited Partnership, all amendments or restatements, executed copies of any
powers of attorney under which this Agreement, the Certificate of Limited
Partnership, and all amendments or restatements to this Agreement and the
Certificate have been executed, and copies of any document that creates, in the
manner provided by this Agreement, classes or groups of partners;

                           (iv) a written statement of: (x) the amount of the
cash contribution and a description and statement of the agreed value of any
other contribution made by each Partner, and the amount of the cash contribution
and a description and statement of the agreed value of any other contribution
that the Partner has agreed to make in the future as an additional contribution;
and (y) the date on which each Partner in the Partnership became a Partner; and

                           (v) books and records of account of the Partnership.

Any records maintained by the Partnership in the regular course of its business
may be kept on, or be in the form of, punch cards, magnetic tape, photographs,
micrographics, computer disks, or any other information storage device, if the
records so kept are convertible into clearly legible written form within a
reasonable period of time. The names, the business, residence, or mailing
addresses, and the capital contributions to the Partnership of the Partners are
as shown on the books and records of the Partnership.

         6.12 TAX REPORTS TO PARTNERS. Within ninety (90) days after the end of
each Fiscal Year, the Partnership shall prepare and mail, or cause to be
prepared and mailed, to each Partner and, to the extent necessary, to each
former Partner (or its legal representative), a report setting forth in
sufficient detail information which will enable the Partner or former Partner
(or its legal representative) to prepare their respective federal income tax
returns in accordance with the laws, rules and regulations then prevailing.

                                       17

<PAGE>   22

         6.13 VALUATION OF PARTNERSHIP ASSETS.

                  (a) The General Partner (or the Liquidator, if appropriate,
either being the "VALUATION PARTNER") shall value the Partnership's assets upon
(i) the occurrence of any Revaluation Event and (ii) whenever otherwise required
by this Agreement or determined by the Valuation Partner in its sole discretion.

                  (b) In determining the value of Partnership property or a
Partner's Interest, or in any accounting among the Partners:

                           (i) No value shall be placed on the goodwill, going
concern value, name, records, files, statistical data or similar assets of the
Partnership not normally reflected in the Partnership's accounting records, but
there shall be taken into consideration any items of income earned but not yet
received, expenses incurred but not yet paid, liabilities fixed or contingent,
and prepaid expenses to the extent not otherwise reflected in the books of
account as well as the Fair Market Value of options or commitments to purchase
or sell Securities pursuant to agreements entered into on or prior to the
valuation date; and

                           (ii) Securities held by the Partnership shall be
valued at their Fair Market Value as defined in the Investment Management
Agreement.

         6.14 CONFIDENTIALITY. The Partners acknowledge and agree that all
Confidential Information provided to or by them in respect of the Partnership
shall be kept confidential as provided in Section 11 of the Investment
Management Agreement.

                                  ARTICLE VII.
                 TRANSFER OF A PARTNERSHIP INTEREST; WITHDRAWALS

         7.1 TRANSFERS BY THE LIMITED PARTNER.

                  (a) The Limited Partner may transfer its Interest only with
the prior consent of the General Partner, which consent shall not unreasonably
be withheld.

                  (b) No Assignee of the Limited Partner shall become a
Substitute Limited Partner without the consent of the General Partner, which
consent shall not unreasonably be withheld.

                  (c) Notwithstanding any other provision hereof, any successor
to all or a portion of the Limited Partner's Interest shall be bound by the
provisions of this Agreement. Prior to recognizing any transfer in accordance
with this Article VII, the General Partner may require the transferring Limited
Partner to execute and acknowledge an instrument of assignment in form and
substance reasonably satisfactory to the General Partner and may require the
Assignee to execute an amendment to this Agreement and to assume all obligations
of the assigning Limited Partner. An Assignee who is not a Partner at the time
of the transfer shall be entitled to the allocations and

                                       18

<PAGE>   23

distributions attributable to the Interest assigned to it and to transfer and
assign such Interest in accordance with the terms of this Agreement; provided,
that such Assignee shall not be entitled to the other rights of a Limited
Partner unless and until such Assignee becomes a Substitute Limited Partner.
Notwithstanding the foregoing, the Partnership and the General Partner shall
incur no liability for allocations and distributions made in good faith to the
transferring Limited Partner until a written instrument of assignment (as
approved by the General Partner) has been received by the Partnership and
recorded on its books and the effective date of the assignment has passed.

         7.2 WITHDRAWAL BY A LIMITED PARTNER.

                  (a) The Interest of a Limited Partner may not be withdrawn
from the Partnership in whole or in part, other than with the consent of the
General Partner, which consent shall not unreasonably be withheld.

                  (b) In the event of the withdrawal of the Limited Partner, the
General Partner, with the approval of the Limited Partner which shall not
unreasonably be withheld, shall provide for payment to the withdrawing Limited
Partner for its withdrawn Interest by either of the following alternatives:

                           (i) The General Partner may cause the Partnership to
distribute to the withdrawing Limited Partner an amount equal to any positive
balance in the withdrawing Limited Partner's Capital Account. The General
Partner may cause the Partnership to make the distribution in respect of any
portion of the Interest of a withdrawing Limited Partner in cash or in kind;
provided, that unless the withdrawing Limited Partner otherwise consents, the
withdrawing Limited Partner shall not be required to receive an in kind
distribution of any asset which exceeds the portion of such asset that would
have been distributed to the withdrawing Limited Partner if the Partnership had
dissolved on the effective date of the withdrawal and undivided interests in all
Partnership assets were distributed to the Partners pro rata in proportion to
their respective interest in the liquidation proceeds under Section. 8.4. If a
distribution is to be made in kind and if such distribution cannot be made in
full because of restrictions on the transfer of Securities or for any other
reason, the distribution may be delayed until an effective transfer and
distribution may be made, and Securities for transfer in respect of the
withdrawing Limited Partner's Interest shall be designated as such. The
designated Securities may nevertheless be sold by the General Partner, provided
that the General Partner remits the cash proceeds therefrom to the withdrawing
Limited Partner.

                           (ii) The General Partner may sell the Interest of the
withdrawing Limited Partner for cash and remit the proceeds of such sale to the
withdrawing Limited Partner. The sale price for the Interest of the withdrawing
Limited Partner shall be an amount equal to the lesser of: (1) the withdrawing
Limited Partner's positive Capital Account balance, if any; or (2) the
withdrawing Limited Partner's aggregate Capital Contributions.

                                       19

<PAGE>   24

                           (iii) If only a portion of the Limited Partner's
Interest is withdrawn, payment under the foregoing provisions of this Section
7.2(b) shall be adjusted to provide for payment only in connection with such
withdrawn Interest.

         7.3 TRANSFERS BY THE GENERAL PARTNER. The General Partner shall not
transfer its Interest as General Partner without the prior consent of the
Limited Partner, which consent may be granted or withheld in the Limited
Partners's sole discretion.

         7.4. WITHDRAWAL BY THE GENERAL PARTNER. The General Partner may
withdraw as a General Partner at any time upon thirty (30) days' prior written
notice to the Limited Partner.

                                  ARTICLE VIII.
                 DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP

         8.1 DISSOLUTION EVENTS. The Partnership shall be dissolved only upon
the occurrence of any of the following events:

                  (a) Expiration of the Partnership term as provided in Section
2.5;

                  (b) the agreement of the General Partner and the Limited
Partner to dissolve the Partnership;

                  (c) the Bankruptcy, dissolution, termination of existence or
occurrence of any other event of withdrawal of a General Partner within the
meaning of Section 4.02 of the Act, unless (i) there remains at least one
General Partner that continues the Partnership's business, or (ii) within ninety
(90) days after the event of withdrawal, the Limited Partner agrees in writing
to continue the Partnership's business and to the appointment, effective as of
the date of the event of withdrawal, of one or more new General Partners; or

                  (d) the entry of a decree of judicial dissolution under
Section 8.02 of the Act.

         8.2 CONVERSION OF GENERAL PARTNER INTEREST TO A LIMITED PARTNER
INTEREST. Unless otherwise determined by the Limited Partner, if the Partnership
is continued and not wound up on the occurrence of an event of withdrawal of a
General Partner within the meaning of Section 4.02 of the Act, the Interest of
the withdrawn General Partner shall automatically be converted to a Limited
Partner Interest effective as of the date of the event of withdrawal; provided,
that this Section 8.2 shall not be construed to preclude or to be in lieu of any
cause of action the Partnership or the other Partner may have as a result of a
General Partner's wrongful withdrawal.

         8.3 WINDING UP OF THE PARTNERSHIP. Upon the occurrence of an event of
dissolution, the Partnership shall continue solely for the purposes of winding
up its business and affairs in an orderly manner, liquidating its assets and
satisfying the claims of its creditors and Partners, and no Partner shall take
any action that is inconsistent with such. To the extent consistent with the

                                       20

<PAGE>   25

foregoing, this Agreement shall continue in effect until the Partnership's
property has been distributed or applied in satisfaction of Partnership
liabilities and a certificate of cancellation has been filed for the Partnership
pursuant to the Act. The General Partner or, if the General Partner has
withdrawn, a liquidator or liquidating committee appointed by the Limited
Partner (in either case, the "LIQUIDATOR") shall be responsible for winding up
the Partnership. The Liquidator shall cause the Partnership's property to be
liquidated as promptly as is consistent with obtaining the Fair Market Value
thereof; provided, that (a) the Liquidator may distribute any assets of the
Partnership in kind and subject to any indebtedness secured thereby (except that
in kind distributions shall be subject to the provisions of Section 7.2(b)(i)),
and (b) the Liquidator may, in its sole and absolute discretion, retain and
distribute as collected any deferred payment obligation owed to the Partnership.
The Liquidator shall have all of the powers of the General Partner to the extent
consistent with the Liquidator's obligations and shall be entitled to the
benefit of the provisions of Article IX during the winding up.

         8.4 APPLICATION OF PROCEEDS OF LIQUIDATION. During or upon completion
of the winding up, the proceeds of liquidation and other assets of the
Partnership shall be applied and distributed in one or more installments in the
following order and priority:

                  (a) to the payment, or provision for payment, of the Expenses
of winding up;

                  (b) to the payment, or provision for payment, of creditors of
the Partnership (including Partners other than in respect of distributions) in
the order of priority provided by law;

                  (c) to the establishment of any reserves deemed necessary or
appropriate by the Liquidator to provide for contingent or unforeseen
liabilities of the Partnership; and

                  (d) the balance (including reductions in reserves established
pursuant to Section 8.4(c)) shall be distributed to the Partners in accordance
with the positive balances of their Capital Accounts, determined after taking
into account all Capital Account adjustments for the current and all prior
periods.

         8.5 RESTORATION OBLIGATION. No Partner shall have an obligation to
restore any deficit balance in its Capital Account.

         8.6 TIMING OF LIQUIDATING DISTRIBUTIONS. To the extent reasonably
practicable, the distributions described in Section 8.4(d), if any, shall be
made to the Partners before the end of the taxable year in which the Partnership
is liquidated (within the meaning of Treasury regulations Section
1.704-1(b)(2)(iv)(g)(3)) or, if later, within ninety (90) days after the date of
such liquidation.

         8.7 LIQUIDATING TRUST. In the discretion of the Liquidator, all or any
proportionate part of the distributions that would otherwise be made to the
Partners pursuant to Section 8.4(d) may be distributed to a trust established by
the Liquidator for the benefit of the Partners and for the purposes of
liquidating Partnership assets, collecting amounts owed to the Partnership or
paying any contingent

                                       21

<PAGE>   26

or unforeseen obligations of the Partnership. The assets of such trust shall be
distributed to the Partners from time to time, in the reasonable discretion of
the trustee (who may or may not be the Liquidator or an Affiliate of the
Liquidator), in the same proportions as the amounts distributed to such trust by
the Partnership would otherwise have been distributed to them pursuant to
Section 8.4(d).

                                   ARTICLE IX.
              LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNER

         9.1 LIABILITY.

                  (a) The liability of the General Partner, its officers,
directors and employees, and other members of the GMSP Group in respect of their
actions under this Agreement shall be limited as and to the extent provided in
Section 9 of the Investment Management Agreement.

                  (b) All debts and obligations of the Partnership shall be paid
or discharged first with the assets of the Partnership (including Capital
Contributions from the Partners), and the General Partner shall not be obligated
to pay or discharge any such debt or obligation with its personal assets unless
the General Partner is required to do so pursuant to the Act or other applicable
law and to the extent that the documents creating such debts or obligations do
not otherwise release the General Partner from such obligation.

         9.2 INDEMNIFICATION. The Partnership shall indemnify and hold harmless
the General Partner and the GMSP Principals in respect of their actions under
this Agreement as and to the extent provided in the Investment Management
Agreement.

                                   ARTICLE X.
                               GENERAL PROVISIONS

         10.1 SPECIAL MEETINGS. Subject to the provisions of the Act and subject
to the right of any Partner to waive notice of any meeting, the General Partner
may call a special meeting of all Partners at any reasonable time upon not less
than ten (10) nor more than sixty (60) days notice.

         10.2 ENTIRE AGREEMENT. This Agreement and the Investment Management
Agreement contain the entire understanding among the Partners and supersede any
prior written or oral agreement between them respecting the Partnership. There
are no representations, agreements, arrangements, or understandings, oral or
written, among the Partners relating to the Partnership which are not fully
expressed in this Agreement or the Investment Management Agreement.

         10.3 AMENDMENTS. This Agreement is subject to amendment only with the
consent of the General Partner and the Limited Partner.

                                       22

<PAGE>   27

         10.4 GOVERNING LAW. All questions with respect to the interpretation of
this Agreement and the rights and liabilities of the Partners shall be governed
by the laws of the State of Texas without regard to conflict of laws principles.

         10.5 SEVERABILITY. If any one or more of the provisions of this
Agreement is determined to be invalid or unenforceable, such provision or
provisions shall be deemed severable from the remainder of this Agreement and
shall not cause the invalidity or unenforceability of the remainder of this
Agreement.

         10.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and when so executed, all of such counterparts shall constitute a
single instrument binding upon all parties notwithstanding the fact that all
parties are not signatory to the original or to the same counterpart.

         10.7 SURVIVAL OF RIGHTS. Subject to the restrictions against
unauthorized assignment or transfer set forth in this Agreement, the provisions
of this Agreement shall inure to the benefit of and be binding upon each Partner
and such Partner's heirs, devised, legatees, personal representatives,
successors, and assigns.

         10.8 NOTICES. Any notice required or permitted to be given under this
Agreement or the Act shall be in writing and shall be deemed duly given when as
provided in Section 13 of the Investment Management Agreement.

         10.9 CONSENTS. All consents, agreements and approvals provided for or
permitted by this Agreement shall be in writing and signed copies thereof shall
be retained with the books of the Partnership.

         10.10 NO PARTITION. Except as otherwise permitted by this Agreement, no
Partner shall have the right, and each Partner does hereby agree that it shall
not seek, to cause a partition of the Partnership's property whether by court
action or otherwise.

         10.11 REPRESENTATIONS BY LIMITED PARTNER. The Limited Partner hereby
represents and warrants that, with respect to its Interest: (i) it is acquiring
or has acquired such Interest for purposes of investment only, for its own
account, and not with a view to resell or distribute the same or any part
thereof; and (ii) no other Person has any interest in such Interest or in the
rights of the Limited Partner under this Agreement. The Limited Partner also
represents and warrants to the Partnership and the other Partners that it
acknowledges that the Securities that may be purchased by the Partnership will
be speculative in nature and that it has the business and financial knowledge
and experience necessary to acquire its Interest in the amount of its Capital
Contributions to the Partnership on the terms contemplated herein and that it
has the ability to bear the risks of such investment (including the risk of
sustaining a complete loss of all such Capital Contributions) without the need
for the investor protections provided by the registration requirements of the
Securities Act of 1933, as amended.

                                       23

<PAGE>   28

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

                                      GENERAL PARTNER:

                                      GOFF MOORE STRATEGIC PARTNERS, L.P.

                                      By:  GMSP Operating Partners, L.P., its
                                             general partner
                                      By:  GMSP, L.L.C., its general partner

                                               By:  /s/ John C. Goff
                                                  -----------------------------
                                                    John C. Goff, Managing
                                                    Principal

                                               By:  /s/ J. Randall Chappel
                                                  -----------------------------
                                                    J. Randall Chappel,
                                                    Principal

                                      LIMITED PARTNER:

                                      GAINSCO, INC.

                                      By:  /s/ Glenn W. Anderson
                                         --------------------------------------
                                           Glenn W. Anderson, President

                                       24

<PAGE>   29

                                   SCHEDULE A

                               INVESTMENT CRITERIA

         The General Partner shall seek investments for the Partnership in
issuers related in any manner to the technology industry.

         The Partnership will invest in the Securities of issuers only in the
event that the General Partner is also acquiring Securities of such issuers for
its own account in the same transaction.

         The Partnership shall not invest more than $500,000 in Securities of
any particular issuer.

         The Partnership shall not invest more than $250,000 in any initial
investment in Securities of any particular issuer.

         Partnership investments will be highly speculative with a view towards
generating high rates of return.

         The Partnership expects to invest in Securities in private transactions
exempt from the registration requirements of the Securities Act of 1933, as
amended. Such Securities will typically have significant restrictions on
transfer, including restrictions imposed by contract and applicable securities
laws.

         Partnership investments will be made in issuers in various stages in
the venture capital financing process, including seed, early or late round
financings.

<PAGE>   30

                                   SCHEDULE B

<TABLE>
<CAPTION>
                                                        AGGREGATE COMMITTED
                                                        CAPITAL CONTRIBUTION                  SHARING RATIOS
                                                        --------------------                  --------------

<S>                                                     <C>                                   <C>
GENERAL PARTNER:

Goff Moore Strategic Partners, L.P.                         $    50,505                              1%
777 Main Street, Suite 2250
Fort Worth, Texas 76102

LIMITED PARTNER:

GAINSCO, INC.                                                 5,000,000                             99%
500 Commerce Street
Fort Worth, Texas  76102-5439
====================================================================================================================

Total Aggregate General and                                 $ 5,050,505                            100%
Limited Partner Contributions
</TABLE>

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