Document:

Right to
                                                                Purchase _______
                                                                Shares of
                                                                Common Stock,
                                                                par value $0.001
                                                                per share

                         COMMON STOCK PURCHASE WARRANT C

         THIS CERTIFIES THAT, for value received,  ________________  (the
"Holder") or its registered  assigns,  is entitled to purchase from Geron
Corporation,  a Delaware  corporation (the "Company"),  at any time or from time
to time  during the period  specified  in  Paragraph 2  hereof,  _______________
____________  (______)  fully paid and nonassessable  shares of the  Company's
common  stock,  par value  $0.001 per share (the  "Common  Stock"),  at an
exercise  price of $0.01 per share (the "Exercise  Price").  The term "Warrant
Shares," as used herein,  refers to the shares of Common Stock  purchasable
hereunder.  The Warrant  Shares are subject to  adjustment  as provided in
Paragraph 4  hereof.  The term "Warrants"  means this Warrant and the other
warrants  (including the A Warrants and the B Warrants (each as defined in the
Purchase  Agreement))  issued pursuant to that certain  Securities  Purchase
Agreement,  dated  December 13, 2006, by and among the Company and the Buyers
listed on the execution  page thereof (the "Purchase Agreement").

         This Warrant is subject to the following terms, provisions, and
conditions:

1.       Manner of Exercise; Issuance of Certificates; Payment for Warrant
Shares.

        (a) Subject to the  provisions  hereof,  this Warrant may be exercised
by the Holder,  in whole or in part, by the  surrender of this  Warrant,
together with a completed  exercise  agreement in the form  attached  hereto
(the "Exercise  Agreement"),  to the Company during normal business hours on any
business day at the Company's principal executive  offices (or such other
office or agency of the Company as it may  designate  by notice to the  Holder),
and upon payment to the Company in cash,  by certified or official  bank check
or by wire  transfer for the account of the Company of the  Exercise  Price for
the Warrant  Shares  specified in the  Exercise  Agreement.  The Warrant Shares
so purchased  shall be deemed to be issued to the Holder or such holder's
designee,  as the record owner of such  shares,  as of the close of  business on
the date on which this  Warrant  shall have been  surrendered,  the completed
Exercise  Agreement shall have been  delivered, and payment shall have been made
for such shares as set forth  above. In the event of any exercise  of the rights
represented  by this  Warrant in  accordance  with and subject to the terms and
conditions  hereof,  the Warrant  Shares shall be issued and delivered to the
Depository Trust Company account on the Holder's behalf via the Deposit
Withdrawal Agent Commission  system ("DWAC Transfer") within a reasonable  time,
not  exceeding  two (2) trading days after such  exercise  (or, if DWAC Transfer
is not available or Holder requests in writing otherwise,  certificates for the
Warrant Shares shall be issued,  dated the date of such  exercise and  delivered
to the Holder  hereof  within a reasonable  time,  not  exceeding  three (3)
trading days after such  exercise),  and the Holder hereof shall be deemed for
all purposes to be the holder of the Warrant  Shares so purchased as of the date

<PAGE>

of such  exercise.  Any  certificates  requested  shall be delivered in such
denominations as may be requested by the Holder and shall be  registered  in the
name of such holder or such other name as shall be designated by such holder. If
this Warrant shall have been  exercised  only in part, then, unless this Warrant
has expired, the Company shall, at its expense,  at the time of delivery of such
certificates, deliver to the holder a new Warrant  representing  the number of
shares with  respect to which this  Warrant shall not then have been  exercised.
In the event an Exercise  Agreement is delivered and the Company is unable to
issue the Warrant  Shares,  the Holder may, its option,  rescind such  Exercise
Agreement and such  rescission  will not effect the  Holder's  right to an
extension  of the  Exercise  Period  pursuant  to Section  4.13 of the  Purchase
Agreement.

        (b) Notwithstanding  anything in this  Warrant to the  contrary,  in no
event shall the Holder of this Warrant be  entitled  to  exercise a number of
Warrants  (or  portions  thereof)  in excess of the number of  Warrants  (or
portions thereof)  upon exercise of which the sum of (i) the number of shares of
Common Stock  beneficially  owned by the Holder and its  affiliates  (other than
shares of Common Stock which, but for this  proviso,  may be deemed beneficially
owned through the ownership of the unexercised  Warrants and the  unexercised or
unconverted  portion of any other  securities  of the  Company  subject to a
limitation  on  conversion  or exercise  analogous  to the limitation  contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise of
the Warrants (or portions  thereof)  with respect to which the  determination
described  herein is being made,  would result in beneficial  ownership  by the
Holder and its affiliates of more than 4.9% of the outstanding  shares of Common
Stock.  For  purposes  of  the  immediately  preceding  sentence,  beneficial
ownership  shall  be  determined  in accordance  with  Section  13(d) of the
Securities  Exchange  Act of  1934,  as  amended,  and  Regulations  13D-G
thereunder, except as otherwise  provided in clause (i) hereof.  Notwithstanding
anything in this Warrant to the contrary, the  restrictions  on exercise of this
Warrant set forth in this paragraph shall not be amended without (i) the written
consent of the Holder and the  Company  and (ii) the  approval of the holders of
a majority of the Common Stock present, or  represented by proxy,  and voting at
any meeting called to vote on the amendment of such restriction.

2.       Period of Exercise. This Warrant is exercisable at any time or from
time to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Purchase Agreement (the "Issue Date") and before
5:00 p.m., New York City time on the second (2nd) anniversary of the Issue Date
(the "Exercise Period"); provided, however, that the Exercise Period may be
extended pursuant to Section 4.13 of the Purchase Agreement.

3.       Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:

        (a) Shares to be Fully Paid. All Warrant Shares will,  upon  issuance in
accordance  with the terms of this Warrant, be validly issued,  fully paid,  and
nonassessable  and free from all taxes,  liens,  and charges with respect to the
issue thereof.

        (b) Reservation of Shares. During the Exercise Period, the Company shall
at all times have  authorized,  and reserved for the purpose of issuance upon
exercise of this Warrant,  a sufficient  number of shares of Common Stock to
provide for the full exercise of this Warrant.

                                       2
<PAGE>

        (c) Listing.  The  Company  shall  promptly  secure  the  listing of the
Warrant  Shares  upon each  national securities  exchange or automated quotation
system,  if any,  upon which  shares of Common Stock are then listed (subject to
official notice of issuance upon exercise of this  Warrant) and shall  maintain,
so long as any other shares of Common Stock shall be so listed,  such listing of
all Warrant  Shares;  and the Company shall so list on each national  securities
exchange or automated quotation system,  as the case may be, and shall  maintain
such listing of, any other shares of capital stock of the Company  issuable upon
the exercise of this Warrant if and so long as any shares of the same class
shall be listed on such national  securities  exchange or automated  quotation
system.

        (d) Certain Actions Prohibited. The Company will not, by amendment of
its  charter  or  through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or  performance  of any of the terms to be
observed or performed by it  hereunder,  but will at all times in good faith
assist in the carrying out of all the  provisions of this Warrant and in the
taking of all such action as may  reasonably  be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against  dilution or other impairment, consistent  with the tenor and purpose of
this  Warrant.  Without  limiting the  generality of the  foregoing, the Company
(i) will not  increase  the par value of any shares of Common  Stock  receivable
upon the exercise of this Warrant above the  Exercise Price then in effect,  and
(ii) will take all such  actions  as may be  necessary  or appropriate in order
that the Company may validly and legally issue fully paid and  nonassessable
shares of Common Stock upon the exercise of this Warrant.

        (e) Successors  and  Assigns.  This  Warrant  will be binding  upon any
entity  succeeding  to the  Company by merger, consolidation, or acquisition of
all or substantially all the Company's assets.

4.       Antidilution Provisions. During the Exercise Period, the number of
Warrant Shares shall be subject to adjustment from time to time as provided in
this Paragraph 4.

        (a) Subdivision  or Combination  of Common Stock.  If the Company at any
time  subdivides (by any stock split, stock  dividend,  recapitalization,
reorganization,  reclassification  or  otherwise)  the shares of Common  Stock
acquirable  hereunder  into a  greater  number  of  shares, then, after the date
of  record  for  effecting  such subdivision, the number  of  shares  of  Common
Stock  issuable  upon  exercise  of this Warrant prior to such subdivision  will
be increased accordingly.  If the  Company  at any  time  combines  (by  reverse
stock  split, recapitalization,  reorganization,  reclassification or otherwise)
the shares of Common Stock acquirable  hereunder into a smaller number of
shares,  then,  after the date of record for effecting  such  combination,  the
number of shares of Common Stock issuable upon exercise of this Warrant prior to
such  subdivision  will be  decreased accordingly. "Common  Stock," for purposes
of this  Paragraph 4, includes the Common  Stock,  par value $0.001 per share,
and any additional  class of stock of the Company having no preference as to
dividends or distributions on liquidation, provided that the shares  purchasable
pursuant to this Warrant  shall include only shares of Common Stock,  par value
$0.001 per share, in respect of which this Warrant is exercisable,  or shares
resulting from any subdivision  or  combination  of  such  Common  Stock,  or in
the  case  of any  reorganization, reclassification, consolidation,  merger,  or
sale of the  character  referred  to in  Paragraph  4(c)  hereof,  the  stock or
other securities or property provided for in such Paragraph.

                                       3
<PAGE>

        (b) Consolidation,  Merger  or Sale.  In case of any  consolidation  of
the  Company  with,  or  merger of the Company  into any  other  corporation, or
in case of any sale or  conveyance  of all or  substantially  all of the assets
of the Company  other than in  connection  with a plan of complete  liquidation
of the  Company,  then as a condition of such consolidation,  merger or sale or
conveyance,  adequate provision will be made whereby the holder of this Warrant
will have the right to acquire and receive upon exercise of this Warrant in lieu
of the shares of Common  Stock  immediately  theretofor  acquirable  upon the
exercise  of this  Warrant, such shares of stock, securities or assets as may be
issued or payable with respect  to or in  exchange  for the  number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise  of
this  Warrant  had  such consolidation,  merger or sale or conveyance not taken
place.  In any such case, the Company will make  appropriate provision to insure
that the provisions of this Paragraph 4 hereof will  thereafter be applicable as
nearly as may be in relation to any shares of stock or  securities  thereafter
deliverable  upon the  exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or  conveyance  unless  prior to the  consummation
thereof,  the  successor  or  acquiring  entity (if other than the Company) and,
if an entity different from the successor or acquiring entity, the entity  whose
capital  stock or assets the holders of the Common Stock of the Company  are
entitled  to  receive  as a result of such  consolidation,  merger or sale or
conveyance  assumes by written instrument the obligations under this Paragraph 4
and the  obligations to deliver to the holder of this Warrant such shares of
stock,  securities or assets as, in accordance  with the  foregoing  provisions,
the holder may be entitled to acquire.

        (c) Distribution  of  Assets.  In case the  Company  shall  declare  or
make any  distribution  of its  assets (including  cash) to  holders of Common
Stock as a partial  liquidating  dividend,  by way of return of capital or
otherwise, then, after the date of record for determining  stockholders entitled
to such distribution, but prior to the date of distribution,  the holder of this
Warrant  shall be entitled upon exercise of this Warrant for the purchase of any
or all of the shares of Common Stock  subject  hereto,  to receive the amount of
such assets which would have been  payable  to the holder had such  holder  been
the holder of such shares of Common Stock on the record date for the
determination of stockholders entitled to such distribution.

        (d) Notice of  Adjustment.  Upon the  occurrence  of any event which
requires any  adjustment of the Exercise Price,  then,  and in each such case,
the Company shall give notice  thereof to the holder of this Warrant,  which
notice shall state the Exercise  Price  resulting  from such  adjustment and the
increase or decrease in the number of Warrant Shares  purchasable  at such price
upon  exercise,  setting  forth in  reasonable  detail the method of calculation
and the facts upon which such calculation is based.  Such  calculation  shall be
certified by the chief financial officer of the Company.

        (e) Minimum Adjustment of Exercise Price.  No adjustment of the Exercise
Price shall be made in an amount of less than 1% of the Exercise Price in effect
at the time such  adjustment  is otherwise  required to be made,  but any such
lesser  adjustment  shall be carried  forward  and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward,  shall amount to not less than 1% of such
Exercise Price.

                                       4
<PAGE>

        (f) No  Fractional  Shares.  No  fractional  shares of Common Stock are
to be issued upon the exercise of this Warrant. If the exercise of this  Warrant
would result in a fractional  share of Common Stock, such fractional share shall
be disregarded and the number of shares of Common Stock  issuable  upon exercise
of the Warrant shall be the next higher number of shares.

        (g) Other Notices.  In case at any time:

                (i) the Company shall declare any dividend upon the Common Stock
        payable in shares of stock of any class or make any  other  distribution
        (including dividends or distributions  payable  in cash out of  retained
        earnings) to the holders of the Common Stock;

                (ii) the Company  shall offer for  subscription  pro rata to the
        holders of the Common  Stock any additional shares of stock of any class
        or other rights;

                (iii) there shall be any capital reorganization  of the Company,
        or  reclassification  of the Common Stock, or consolidation or merger of
        the Company with or into, or sale of all or substantially all its assets
        to, another corporation or entity; or

                (iv) there shall be a voluntary or involuntary dissolution,
        liquidation or winding-up of the Company;

then,  in each such case,  the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for  determining  the holders of Common Stock entitled to receive
any such dividend,  distribution,  or subscription rights or for determining the
holders of Common Stock entitled  to  vote  in  respect  of  any  such
reorganization,  reclassification,   consolidation,  merger,  sale, dissolution,
liquidation  or  winding-up  and  (b)  in the  case  of any such reorganization,
reclassification, consolidation,  merger, sale, dissolution,  liquidation or
winding-up, notice of the date (or, if not then known, a reasonable
approximation  thereof by the Company)  when the same shall take place. Such
notice shall also specify the date on which the  holders of Common  Stock  shall
be  entitled  to receive  such  dividend,  distribution,  or subscription rights
or to exchange their Common Stock for stock or other  securities or property
deliverable upon such reorganization,  reclassification, consolidation,  merger,
sale, dissolution,  liquidation, or winding-up, as the case may be. Such  notice
shall be given at least 30 days prior to the  record  date or the date on which
the Company's  books are closed in respect  thereto.  Failure to give any such
notice or any defect  therein  shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.

        (h) Certain Events. If any event occurs of the type contemplated  by the
adjustment  provisions  of this Paragraph 4 but not  expressly  provided  for by
such  provisions,  the  Company  will give notice of such event as provided in
Paragraph 4(e) hereof,  and the Company's  Board of Directors  will make an
appropriate adjustment in the Exercise  Price and the number of shares of Common
Stock  acquirable upon exercise of this Warrant so that the rights of the Holder
shall be neither enhanced nor diminished by such event.

                                       5
<PAGE>

        (i) Withholding Taxes. In the event that an  adjustment to the  Exercise
Price (or a failure to adjust the Exercise  Price) results in a  constructive
distribution  to the Holder of the Warrants  under  Section 305 of the Internal
Revenue Code of 1986, as amended,  the Company may withhold,  to the extent
required by applicable  law, any applicable  United States federal  withholding
tax from any subsequent  distributions  of cash or property made to the Holder,
including any Common Stock issued by the Company upon the exercise of this
Warrant.

5.       Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

6.       No Rights or Liabilities as a Stockholder. This Warrant shall not
entitle the Holder to any voting rights, dividend rights or other rights as a
stockholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the Holder to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of such holder for the Exercise Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

7.       Transfer, Exchange, and Replacement of Warrant.

        (a) Transfer.  This Warrant and the rights granted to the Holder are
transferable, in whole or in part, upon surrender of this Warrant, together with
a properly  executed  assignment  in the form  attached  hereto,  at the office
or agency of the Company  referred to in  Paragraph 7(e)  below.  Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered  Holder as the owner and Holder for all
purposes, and the Company shall not be affected by any notice to the contrary.

        (b) Warrant  Exchangeable  for Different Denominations.  This Warrant is
exchangeable,  upon the  surrender hereof by the Holder at the office or agency
of the Company  referred to in Paragraph 7(e) below,  for new Warrants of like
tenor  representing  in the aggregate the right to purchase the number of shares
of Common Stock which may be  purchased hereunder,  each of such new Warrants to
represent  the right to purchase such number of shares as shall be designated by
the Holder at the time of such surrender.

        (c) Replacement  of Warrant.  Upon  receipt of evidence  reasonably
satisfactory  to the Company of the loss, theft,  destruction,  or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction,  upon
delivery of an indemnity agreement  reasonably  satisfactory in form and amount
to the Company,  or, in the case of any such mutilation,  upon surrender and
cancellation of this Warrant,  the Company,  at its expense,  will execute
and deliver, in lieu thereof, a new Warrant of like tenor.

        (d) Cancellation; Payment of Expenses.  Upon the surrender of this
Warrant in  connection  with any transfer, exchange,  or replacement as provided
in this  Paragraph  7, this Warrant shall be  promptly  canceled by the Company.
The Company shall pay all taxes (other than  securities transfer  taxes) and all
other  expenses  (other than legal expenses,  if any,  incurred by the Holder or
transferees)  and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Paragraph 7.

                                       6
<PAGE>

        (e) Register. The Company shall  maintain,  at its  principal  executive
offices  (or such other  office or agency of the Company as it may  designate by
notice to the  Holder),  a register  for this  Warrant,  in which the Company
shall  record the name and address of the person in whose name this  Warrant has
been  issued,  as well as the name and address of each transferee and each prior
owner of this Warrant.

8.       Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 230 Constitution Drive,
Menlo Park, California 94025, Attn: David Greenwood, fax no. (650) 473-7701 with
copies to Latham & Watkins LLP, 140 Scott Drive, Menlo Park, California 94025,
Attn: Alan C. Mendelson, Esq., fax no. (650) 463-2600, or at such other address
as shall have been furnished to the holder of this Warrant by notice from the
Company. Any such notice, request, or other communication may be sent by
facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 8, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.

9.       Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS). BOTH PARTIES IRREVOCABLY CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE COURTS LOCATED IN
DELAWARE WITH RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS
AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER.

                                       7
<PAGE>

10.      Miscellaneous.

        (a) Amendments.  This  Warrant  and any  provision  hereof  may only be
amended  by an  instrument  in writing signed by the Company and the Holder.

        (b) Descriptive  Headings.  The  descriptive  headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.

        (c) Remedies.  The  Company  acknowledges  that a  breach  by it of  its
obligations  hereunder  will  cause irreparable  harm to the  holder  of  this
Warrant  by  vitiating  the intent and purpose of the transactions contemplated
hereby. Accordingly,  the Company  acknowledges  that  the  remedy  at  law  for
a  breach  of  its obligations under this Warrant will be inadequate and agrees,
in the event of a breach or threatened  breach by the Company of the  provisions
of this Warrant, that the holder of this Warrant shall be entitled,  in addition
to all other available  remedies in law or in equity,  to an injunction or
injunctions to prevent or cure any breaches of the provisions of this Agreement
and to enforce  specifically the terms and provisions of this Warrant,  without
the necessity of showing economic loss and without any bond or other security
being required.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       8
<PAGE>

        IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                           GERON CORPORATION

                                           By:
                                              ----------------------------------
                                           Name:    David L. Greenwood
                                           Title:   Executive Vice President and
                                                    Chief Financial Officer

                                           Dated as of December 15, 2006

                                       9
<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                       Dated:  ________ __, 200_

To:  GERON CORPORATION

         The undersigned,  pursuant to the provisions set forth in the Warrant
attached  hereto,  hereby agrees to purchase  ________ shares of Common Stock
covered by such Warrant,  and makes payment  herewith in full therefor at the
price per share  provided  by such  Warrant in cash or by  certified or official
bank check in the amount of $_________.  Please  issue a  certificate  or
certificates for such shares of Common Stock in the name of and pay any cash for
any fractional share to:

                                  Name:

                                  Signature:
                                            ------------------------------------
                                  Address:
                                            ------------------------------------

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

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

                                  Note:  The above signature  should  correspond
                                         exactly with the name on the face of
                                         the Warrant attached hereto.

and, if said number of shares of Common Stock shall not be all the shares
purchasable  under the Warrant  attached hereto,  a new  Warrant is to be issued
in the name of said  undersigned  covering  the  balance  of the  shares
purchasable thereunder less any fraction of a share paid in cash.

<PAGE>

                               FORM OF ASSIGNMENT

         FOR  VALUE  RECEIVED,  the  undersigned  hereby  sells,  assigns,  and
transfers  all the  rights  of the undersigned  under the  Warrant  attached
hereto,  with  respect to the number of shares of Common  Stock  covered thereby
set forth hereinbelow, to:

Name of Assignee                  Address                      No of Shares
----------------                  -------                      ------------

,  and  hereby   irrevocably   constitutes  and  appoints   ____________________
__________________   as  agent  and attorney-in-fact  to transfer  said  Warrant
on the books of the  within-named  corporation,  with full power of substitution
in the premises.

Dated:  ________ __, 200_

In the presence of:

_________________________

                                  Name:

                                  Signature:
                                            ------------------------------------
                                  Address:
                                            ------------------------------------

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

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

                                  Note: The above signature should correspond
                                        exactly with the name on the face of the
                                        Warrant attached hereto.Exhibit 4.1

                      AMENDED AND RESTATED RIGHTS AGREEMENT

         AMENDED AND  RESTATED  RIGHTS  AGREEMENT  dated as of December 15, 2006
(the  "Agreement"),   between   INTERDIGITAL   COMMUNICATIONS   CORPORATION,   a
Pennsylvania  corporation  (the "Company") and AMERICAN STOCK TRANSFER AND TRUST
COMPANY, a New York corporation(the "Rights Agent").

         WHEREAS,  effective December 13, 1996 (the "Rights Dividend Declaration
Date"),  the  Board of  Directors  of the  Company  authorized  and  declared  a
distribution  of one right for each  share of common  stock,  par value $.01 per
share, of the Company (the "Company  Common Stock")  outstanding at the Close of
Business (as hereinafter  defined) on January 3, 1997 (the "Record  Date"),  and
has  authorized  the  issuance of one right (as such number may  hereinafter  be
adjusted  pursuant hereto) for each share of Company Common Stock issued between
the Record Date  (whether  originally  issued or  delivered  from the  Company's
treasury) and, except as otherwise provided in Section 22, the Distribution Date
(as  hereinafter  defined),  each right  issued in respect of a share of Company
Common Stock ("Right")  initially  representing the right to purchase,  upon the
terms and subject to the conditions  hereinafter set forth, one Unit of Series B
Junior Participating Preferred Stock;

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

         SECTION 1. CERTAIN  DEFINITIONS.  For purposes of this  Agreement,  the
following terms have the meanings indicated:

                  (a)  "Acquiring  Person"  means  any  Person  (other  than the
Company,  any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its  Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) that shall be the Beneficial  Owner of 10%
or more of the shares of Common Stock then outstanding;  provided, however, that
the term "Acquiring Person" shall not include an Exempt Person.  Notwithstanding
the foregoing,  if a majority of the  Independent  Directors  determines in good
faith that a Person who would  otherwise be an Acquiring  Person has become such
inadvertently  and without any intention of changing or  influencing  control of
the  Company,  and if such  Person  divests  himself  or itself as  promptly  as
practicable  of a sufficient  number of such shares of Common Stock so that such
Person  would no longer be the  Beneficial  Owner of that  percentage  of shares
which would otherwise result in him or it being an Acquiring  Person,  then such
Person shall not be deemed to be or to have become an  Acquiring  Person for any
purposes of this Agreement. A majority of the Independent Directors may make all
determinations  of fact and  intent  necessary  for  purposes  of the  preceding
exception so long as made by them in good faith.

                  (b) "Affiliate" and "Associate"  have the respective  meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations  under
the  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  as in
effect on the date hereof.

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

<PAGE>

                           (i) of  which  such  Person  or any of such  Person's
Affiliates or  Associates  is  considered to be a "beneficial  owner" under Rule
13d-3 of the General Rules and Regulations under the Exchange Act (the "Exchange
Act  Regulations") as in effect on the date hereof;  provided,  however,  that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially  own",
any  securities  under  this  subparagraph  (i)  as a  result  of an  agreement,
arrangement  or  understanding  to  vote  such  securities  if  such  agreement,
arrangement or  understanding  (A) arises solely from a revocable proxy given in
response to a proxy or consent  solicitation made pursuant to, and in accordance
with,  the  applicable  provisions  of the  Exchange  Act and the  Exchange  Act
Regulations,  and (B) is not reportable by such Person on Schedule 13D under the
Exchange  Act  (or any  comparable  or  successor  report),  but  the  foregoing
exception shall not apply,  whether or not reportable by such Person on Schedule
13D under the Exchange  Act, if such voting power arises from a revocable  proxy
(unless such proxy has been effectively revoked) given in response to a proxy or
consent  solicited  by or on behalf of such  Person and in  furtherance  of such
Person's  publicly  announced  intention to acquire control,  through any means,
over the Company or its Board of Directors or in  furtherance  of such  Person's
publicly announced and unsolicited intention to acquire all or substantially all
of the assets or stock of the Company;

                           (ii)  which  are  beneficially  owned,   directly  or
indirectly,  by any other  Person (or any  Affiliate  or Associate of such other
Person)  with  which  such  Person  (or  any  of  such  Person's  Affiliates  or
Associates) has any agreement,  arrangement or understanding  (whether or not in
writing),  for the purpose of acquiring,  holding,  voting (except pursuant to a
revocable  proxy  as  described  in the  proviso  to  subparagraph  (i) of  this
paragraph (c) of Section 1) or disposing of such securities; or

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

         Notwithstanding the foregoing, an employee,  officer or director of the
Company shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
any  securities  which such  Person has the right to  acquire  from the  Company
(whether such right is exercisable immediately or only after the passage of time
or upon the  satisfaction  of  conditions)  pursuant to any stock option plan or

                                      -2-
<PAGE>

other employee benefit plan (the "Underlying  Securities";  the right to acquire
the  Underlying  Securities  shall  hereinafter  be  referred  to as a  "Company
Option");  provided that such Person has no intention of changing or influencing
control of the Company at the time of the  acquisition  of the Company Option or
at any time  during  which such  Person has the right to  exercise  the  Company
Option;  provided,  further,  that if,  notwithstanding the foregoing proviso, a
Person would be deemed to be an  "Acquiring  Person" and such Person  thereafter
becomes the beneficial owner of one or more additional  shares of Company Common
Stock other than pursuant to the exercise of a Company Option,  such Person will
immediately  and  thereafter  be  deemed  the  "Beneficial  Owner"  of,  and  to
"beneficially own," the Underlying Securities under all Company Options owned by
such  Person.  An  employee,  officer,  or director of the Company  exercising a
Company  Option  shall  not  be  deemed  the   "Beneficial   Owner"  of,  or  to
"beneficially own," the Underlying Securities;  provided that such Person has no
intention of changing or  influencing  control of the Company at the time of the
acquisition  of  the  Underlying   Securities;   provided,   further,  that  if,
notwithstanding  the  foregoing  proviso,  a  Person  would be  deemed  to be an
"Acquiring  Person" and such Person  thereafter  becomes the beneficial owner of
one or more additional shares of Company Common Stock other than pursuant to the
exercise of a Company  Option,  such Person will  immediately  and thereafter be
deemed  the  "Beneficial  Owner"  of,  and  "beneficially  own," the  Underlying
Securities.  Any Person  other than an  employee,  officer  or  director  of the
Company  (including  a former  employee,  officer or  director  of the  Company)
exercising a Company Option will not be deemed the "Beneficial  Owner" of, or to
"beneficially own," the Underlying Securities;  provided that such Person has no
intention of changing or  influencing  control of the Company at the time of the
acquisition  of the  Underlying  Securities;  and provided,  further,  that such
Person acquires such Underlying Securities with the intention of effecting their
resale  (within  five (5) days of so  acquiring  them) to a Person other than an
Affiliate or an Associate of such Person or to another  Person which would be an
Acquiring  Person (or an  Affiliate or an  Associate  thereof),  and such Person
actually disposes of such Underlying Securities within such five-day period.

                  (d) "Business Day" means any day other than a Saturday, Sunday
or a day on which  banking  institutions  in New York  City  are  authorized  or
obligated by law or executive order to be closed.

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

                  (f) "Common  Stock" of any Person other than the Company means
the capital  stock of such Person with the greatest  voting  power,  or, if such
Person  shall  have no capital  stock,  the equity  securities  or other  equity
interest having power to control or direct the management of such Person.

                  (g)  "Company  Common  Stock" has the meaning set forth in the
Recital.

                  (h)  "Company  Option"  has the  meaning  set forth in Section
1(c).

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

                  (j) "Exempt Person" means:

                  (i) the Company,  any Subsidiary of the Company,  any employee
benefit plan or employee  stock plan of the Company or of any  Subsidiary of the
Company,  or any person or entity organized,  appointed,  established or holding
Company Common Stock for or pursuant to the terms of any such plan; and

                                      -3-
<PAGE>

                           (ii)  any  Person  who  would  otherwise   become  an
Acquiring  Person  solely by virtue of a reduction in the number of  outstanding
shares of Company  Common  Stock;  (whether  resulting  from a repurchase of its
Common Stock by the Company or otherwise);  provided,  however, that such Person
shall not be an Exempt  Person if,  subsequent  to such  reduction,  such Person
shall become the  Beneficial  Owner of any  additional  shares of Company Common
Stock  (unless  such shall arise solely by reason of a  recapitalization,  stock
dividend or stock split declared by the Company with respect to all  outstanding
shares of its Common stock).

                  (k)  "Expiration  Date" has the  meaning  set forth in Section
7(a).

                  (l)  "Independent  Director"  means a member  of the  Board of
Directors of the Company who is not an officer or employee of the  Company,  who
is not an Acquiring  Person or an Affiliate or Associate of an Acquiring  Person
or a  representative  or nominee of an Acquiring Person or of any such Affiliate
or  Associate,  and who either (i) was a member of the Board of Directors of the
Company prior to the date hereof or (ii)  subsequently  became a director of the
Company and whose election or nomination for election is approved or recommended
by a vote of a majority of the Board of Directors of the Company, which majority
includes a majority of the  Independent  Directors  then serving on the Board of
Directors.

                  (m)  "Person"  means  any   individual,   partnership,   firm,
corporation, association, trust, unincorporated organization or other entity, as
well as any syndicate or group deemed to be a person under  Section  14(d)(2) of
the Exchange Act.

                  (n) "Preferred Stock" means the Series B Junior  Participating
Preferred   Stock  of  the  Company  having  the  voting  powers,   designation,
preferences  and relative,  participating,  optional or other special rights and
qualifications,  limitations  and  restrictions  described in the Certificate of
Designation set forth as Exhibit B.

                  (o)  "Purchase  Price"  has the  meaning  set forth in Section
7(b).

                  (p) "Record Date" has the meaning set forth in the Recital.

                  (q) "Right" has the meaning set forth in the Recital.

                  (r) "Rights  Certificate" has the meaning set forth in Section
3(a).

                  (s)  "Rights  Dividend  Declaration  Date" has the meaning set
forth in the Recital.

                                      -4-
<PAGE>

                  (t) "Section  11(a)(ii)  Event"  means any event  described in
Section 11(a)(ii)(A), (B) or (C).

                  (u)  "Section 13 Event"  means any event  described  in clause
(x), (y) or (z) of Section 13(a).

                  (v) "Stock  Acquisition  Date"  means the first date of public
announcement (including,  without limitation,  the filing of any report pursuant
to  Section  13(d) of the  Exchange  Act),  or any press  release  issued by the
Company or any Person,  or the filing of any  periodic or interim  report by the
Company or any Person or the filing of any Schedule TO or  Amendment  thereto by
any Person with the Securities and Exchange Commission) that an Acquiring Person
has become such.

                  (w)  "Subsidiary"  means,  with  reference to any Person,  any
other  Person  of which an  amount of  voting  securities  or  equity  interests
sufficient to elect at least a majority of the directors or equivalent governing
body of such other Person is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such first-mentioned Person.

                  (x)  "Summary  of Rights" has the meaning set forth in Section
3(b).

                  (y)  "Triggering  Event" means any Section  11(a)(ii) Event or
any Section 13 Event.

                  (z)  "Underlying  Securities"  has the  meaning  set  forth in
Section 1(c).

                  (aa) "Unit" has the meaning set forth in Section 7(b).

         SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights  Agent to act as agent for the Company in  accordance  with the terms and
conditions  hereof,  and the Rights Agent hereby accepts such appointment.  With
the consent of the Rights Agent,  the Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.

         SECTION 3. ISSUE OF RIGHTS CERTIFICATES.

         (a) Until (i) the  earliest  of (x) the Close of  Business on the tenth
Business Day after the Stock  Acquisition Date, (y) the Close of Business on the
tenth  Business Day after the date that a tender or exchange offer by any Person
(other than the Company,  any  Subsidiary of the Company,  any employee  benefit
plan  maintained  by the  Company or any of its  Subsidiaries  or any trustee or
fiduciary with respect to such plan acting in such capacity) is commenced within
the meaning of Rule 14d-2(a) of the Exchange Act  Regulations  or upon the first
pre-tender  offer  commencement  communication  made  publicly  pursuant to Rule
14d-2(b) of such  Regulations or any successor  rule,  whichever is earlier,  if
upon  consummation  thereof such Person would be the Beneficial  Owner of 10% or
more of the shares of Company Common Stock then outstanding, or (z) the Close of
Business on the tenth  Business Day after the first date that any Person  (other
than the  Company,  any  Subsidiary  of the Company,  any employee  benefit plan

                                      -5-
<PAGE>

maintained by the Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity)  publicly announces an intent
to  acquire  control  over  the  Company  and  proposes  in a proxy  or  consent
solicitation  (including a public announcement of such intent or the preliminary
filing of a proxy or consent  solicitation  statement  with the  Securities  and
Exchange  Commission pursuant to Regulation 14A of the Exchange Act Regulations,
or any successor  rule,  whichever is earlier) to elect such number of directors
as, were they elected, would represent a change of control in the composition of
the Board of Directors of the Company such that the nominees of such Person,  if
elected,  would outnumber the Independent Directors on the Board of Directors of
the  Company,  or (ii)  such  later  date as may be  determined  by  action of a
majority of the Independent  Directors (such  determination  to be made prior to
either of the dates  specified  in (i) above) and of which the Company will give
the Rights Agent prompt written notice (such date above being the  "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the  certificates  for shares of Company  Common Stock
registered  in the names of the holders of shares of Company  Common Stock as of
and  subsequent  to the Record  Date (which  certificates  for shares of Company
Common  Stock  shall be deemed  also to be  certificates  for Rights) and not by
separate  certificates,  and  (y)  the  Rights  will  be  transferable  only  in
connection  with the transfer of the  underlying  shares of Company Common Stock
(including  a  transfer  to the  Company).  As soon  as  practicable  after  the
Distribution Date, the Rights Agent will send by first-class,  insured,  postage
prepaid mail, to each record holder of shares of Company  Common Stock as of the
Close of Business on the Distribution  Date, at the address of such holder shown
on the records of the Company, one or more rights certificates, in substantially
the form of Exhibit A (the "Rights Certificates"), evidencing one Right for each
share of Company Common Stock so held, subject to adjustment as provided herein.
In the event  that an  adjustment  in the  number of Rights per share of Company
Common  Stock  has  been  made  pursuant  to  Section  11(p),  at  the  time  of
distribution of the Rights Certificates,  the Company may make the necessary and
appropriate  rounding  adjustments  (in accordance with Section 14(a) hereof) so
that  Rights  Certificates   representing  only  whole  numbers  of  Rights  are
distributed and cash is paid in lieu of any fractional  Rights.  As of and after
the  Distribution  Date,  the Rights  will be  evidenced  solely by such  Rights
Certificates.

         (b) [Reserved]

         (c) Rights shall,  without any further action,  be issued in respect of
all shares of Company  Common  Stock  that are issued  (including  any shares of
Company  Common Stock held in treasury)  after the Record Date (but prior to the
earlier  of  the  Distribution  Date  and  the  Expiration  Date).  Certificates
evidencing  such shares of Company  Common  Stock  issued  after the Record Date
shall bear the following legend:

         "This  certificate  also  evidences  and entitles the holder  hereof to
         certain   Rights  as  set  forth  in  the  Rights   Agreement   between
         InterDigital  Communications  Corporation  (the "Company") and American
         Stock  Transfer  and Trust  Company (the  "Rights  Agent")  dated as of
         December  31,  1996  (the  "Rights  Agreement),  the terms of which are
         hereby  incorporated herein by reference and a copy of which is on file
         at the principal office of the stock transfer  administration office of
         the Rights  Agent.  Under  certain  circumstances,  as set forth in the
         Rights   Agreement,   such  Rights  will  be   evidenced   by  separate
         certificates and will no longer be evidenced by this  certificate.  The
         Company  will  mail to the  holder  of this  certificate  a copy of the
         Rights Agreement,  as in effect on the date of mailing,  without charge
         promptly  after receipt of a written  request  therefor.  Under certain
         circumstances set forth in the Rights  Agreement,  Rights issued to, or
         held by, any Person who is, was or becomes an  Acquiring  Person or any
         Affiliate or Associate thereof (as such terms are defined in the Rights
         Agreement), whether currently held by or on behalf of such Person or by
         any subsequent holder, may become null and void."

                                      -6-
<PAGE>

         With respect to certificates  evidencing shares of Company Common Stock
(whether or not such certificates  include the foregoing legend or have appended
to them the Summary of Rights),  until the earlier of the Distribution  Date and
the  Expiration  Date, the Rights  associated  with the shares of Company Common
Stock  evidenced by such  certificates  shall be evidenced by such  certificates
alone and registered holders of the shares of Company Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any of such
certificates  shall also  constitute the transfer of the Rights  associated with
the shares of Company Common Stock evidenced by such certificates.

         SECTION 4. FORM OF RIGHTS CERTIFICATES.

         (a) The Rights  Certificates  (and the forms of election  to  purchase,
assignment and  certificate to be printed on the reverse  thereof) shall each be
substantially  in the form set forth in Exhibit A hereto and may have such marks
of  identification  or designation  and such legends,  summaries or endorsements
printed thereon as the Company may deem  appropriate and as are not inconsistent
with the provisions of this Agreement,  or as may be required to comply with any
applicable  law or any  rule  or  regulation  thereunder  or  with  any  rule or
regulation  of any stock  exchange  on which the Rights may from time to time be
listed or to  conform  to usage.  Subject  to the  provisions  of Section 11 and
Section 22, the Rights Certificates,  whenever distributed, shall be dated as of
the Record Date and on their face shall entitle the holders  thereof to purchase
such  number of Units of  Preferred  Stock as shall be set forth  therein at the
price set forth therein,  but the amount and type of  securities,  cash or other
assets that may be  acquired  upon the  exercise of each Right and the  Purchase
Price thereof shall be subject to adjustment as provided herein.

         (b) Any Rights  Certificate  issued  pursuant  hereto  that  represents
Rights  beneficially  owned by:  (i) an  Acquiring  Person or any  Associate  or
Affiliate of an Acquiring  Person,  (ii) a transferee of an Acquiring Person (or
of any such  Associate  or  Affiliate)  that  becomes  a  transferee  after  the
Acquiring  Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such  Associate  or  Affiliate)  that  becomes a  transferee  prior to or
concurrently  with the  Acquiring  Person  becoming  such and that receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring  Person (or any such  Associate or Affiliate) to holders of equity
interests in such  Acquiring  Person (or such  Associate or Affiliate) or to any
Person with whom such Acquiring  Person (or such Associate or Affiliate) has any
continuing  agreement,   arrangement  or  understanding   regarding  either  the
transferred  Rights,  shares of  Company  Common  Stock or the  Company or (B) a
transfer that a majority of the  Independent  Directors  has  determined in good
faith,  following a reasonable review of the applicable facts and circumstances,
to be part of a plan, arrangement or understanding that has as a primary purpose
or effect the avoidance of Section 7(e) shall,  upon the written  direction of a
majority of the  Independent  Directors,  contain (to the extent  feasible)  the
following legend:

                                      -7-
<PAGE>

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

         SECTION 5. COUNTERSIGNATURE AND REGISTRATION.

         (a) Rights  Certificates  shall be executed on behalf of the Company by
its Chairman of the Board,  the President or one of its Vice  Presidents,  under
its corporate seal  reproduced  thereon  attested by its Secretary or one of its
Assistant  Secretaries.  The  signature  of any of these  officers on the Rights
Certificates may be manual or facsimile.  Rights Certificates bearing the manual
or  facsimile  signatures  of the  individuals  who were at any time the  proper
officers  of the  Company  shall  bind the  Company,  notwithstanding  that such
individuals  or any of them  have  ceased  to hold  such  offices  prior  to the
countersignature of such Rights Certificates or did not hold such offices at the
date of such Rights Certificates. No Rights Certificate shall be entitled to any
benefit under this Agreement or be valid for any purpose unless there appears on
such Rights Certificate a countersignature  duly executed by the Rights Agent by
manual signature of an authorized signatory,  and such countersignature upon any
Rights  Certificate shall be conclusive  evidence,  and the only evidence,  that
such Rights Certificate has been duly countersigned as required hereunder.

         (b)  Following  the  Distribution  Date,  the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights  Certificates
upon exercise or transfer,  books for  registration and registration of transfer
of the Rights Certificates issued hereunder.  Such books shall show the name and
address  of each  holder  of the  Rights  Certificates,  the  number  of  Rights
evidenced  on its face by each  Rights  Certificate  and the date of each Rights
Certificate.

         SECTION 6.  TRANSFER,  SPLIT UP,  COMBINATION  AND  EXCHANGE  OF RIGHTS
CERTIFICATES: MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.

         (a) Subject to the  provisions  of Sections  4(b),  7(e) and 14, at any
time after the Close of Business on the  Distribution  Date,  and at or prior to
the  Close of  Business  on the  Expiration  Date,  any  Rights  Certificate  or
Certificates  may be  transferred,  split up,  combined or exchanged for another
Rights Certificate or Certificates,  entitling the registered holder to purchase
a like number of Units of Preferred  Stock (or,  following a  Triggering  Event,
other  securities,  cash or other  assets,  as the  case  may be) as the  Rights
Certificate or Certificates  surrendered  then entitled such holder to purchase.
Any registered  holder  desiring to transfer,  split up, combine or exchange any
Rights  Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights  Certificate or Certificates
to be  transferred,  split up, combined or exchanged at the office of the Rights
Agent  designated  for such  purpose.  Neither the Rights  Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered  Rights  Certificate until the registered holder shall have
completed  and executed the  certificate  set forth in the form of assignment on
the  reverse  side of such  Rights  Certificate  and shall  have  provided  such
additional  evidence  of  the  identity  of  the  Beneficial  Owner  (or  former
Beneficial  Owner) of the  Rights  represented  by such  Rights  Certificate  or
Affiliates  or  Associates  thereof as the  Company  shall  reasonably  request;
whereupon  the Rights Agent shall,  subject to the  provisions  of Section 4(b),
Section  7(e) and Section  14,  countersign  and deliver to the Person  entitled
thereto, a Rights Certificate or Rights Certificates,  as the case may be, as so
requested.  The Company may require payment of a sum sufficient to cover any tax
or  governmental  charge that may be imposed in  connection  with any  transfer,
split up, combination or exchange of Rights Certificates.

                                      -8-
<PAGE>

         (b) If a  Rights  Certificate  shall  be  mutilated,  lost,  stolen  or
destroyed,  upon  request by the  registered  holder of the  Rights  represented
thereby and upon payment to the Company and the Rights  Agent of all  reasonable
expenses  incident  thereto,  there shall be issued,  in  exchange  for and upon
cancellation of the mutilated  Rights  Certificate,  or in substitution  for the
lost,  stolen or destroyed  Rights  Certificate,  a new Rights  Certificate,  in
substantially  the form of the  prior  Rights  Certificate,  of like  tenor  and
evidencing the equivalent  number of Rights,  but, in the case of loss, theft or
destruction,  only upon receipt of evidence  satisfactory to the Company and the
Rights Agent of such loss, theft or destruction of such Rights  Certificate and,
if requested by the Company or the Rights Agent,  indemnity also satisfactory to
it.

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

         (a)  Prior to the  earlier  of (i) the Close of  Business  on the tenth
anniversary of this Amended and Restated Rights Agreement (the "Final Expiration
Date"),  and (ii) the time at which the  Rights  are  redeemed  as  provided  in
Section  23 (the  earlier  of (i) and (ii)  being the  "Expiration  Date"),  the
registered  holder of any Rights  Certificate  may, subject to the provisions of
Sections  7(e) and 9(c),  exercise the Rights  evidenced  thereby in whole or in
part at any time  after the  Distribution  Date  upon  surrender  of the  Rights
Certificate,  with the form of election to purchase and the  certificate  on the
reverse  side thereof  duly  executed,  to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the aggregate
Purchase  Price (as  hereinafter  defined)  for the number of Units of Preferred
Stock (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) for which such surrendered Rights are then exercisable.

         (b) The  purchase  price for each one  one-thousandth  of a share (each
such one  one-thousandth  of a share  being a "Unit")  of  Preferred  Stock upon
exercise of Rights shall be $200.00,  subject to adjustment from time to time as
provided in Sections 11 and 13(a) (such purchase  price,  as so adjusted,  being
the "Purchase  Price"),  and shall be payable in accordance  with  paragraph (c)
below.

                                      -9-
<PAGE>

         (c)  As  promptly  as  practicable  following  the  occurrence  of  the
Distribution Date, the Company shall deposit with a corporation in good standing
organized under the laws of the United States or any State of the United States,
which  is  authorized  under  such  laws to  exercise  corporate  trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority  (such   institution  being  the  "Depositary   Agent")   certificates
evidencing  the shares of Preferred  Stock that may be acquired upon exercise of
the Rights  and shall  cause such  Depositary  Agent to enter into an  agreement
pursuant to which the Depositary Agent shall issue receipts evidencing interests
in the  shares  of  Preferred  Stock  so  deposited.  Upon  receipt  of a Rights
Certificate evidencing exercisable Rights, with the form of election to purchase
and the certificate duly executed,  accompanied by payment, with respect to each
Right so exercised,  of the Purchase Price for the Units of Preferred Stock (or,
following a Triggering  Event,  other  securities,  cash or other assets, as the
case may be) to be  purchased  thereby as set forth below and an amount equal to
any applicable  transfer tax or evidence  satisfactory to the Company of payment
of such tax,  the  Rights  Agent  shall,  subject to  Section  20(k),  thereupon
promptly  (i)  requisition  from  the  Depositary   Agent  depositary   receipts
evidencing  such number of Units of Preferred  Stock as are to be purchased  and
the Company will direct the Depositary  Agent to comply with such request,  (ii)
requisition  from the Company the amount of cash,  if any, to be paid in lieu of
fractional  shares in  accordance  with Section 14, (iii) after  receipt of such
depositary receipts,  cause the same to be delivered to or upon the order of the
registered holder of such Rights  Certificate,  registered in such name or names
as may be designated by such holder,  and (iv) after  receipt  thereof,  deliver
such cash, if any, to or upon the order of the registered  holder of such Rights
Certificate.  In the event that the Company is obligated to issue Company Common
Stock,  other  securities  of the  Company,  pay cash  and/or  distribute  other
property  pursuant  to Section  11(a),  the Company  will make all  arrangements
necessary so that such Company Common Stock, other securities, cash and/or other
property  are  available  for  distribution  by the  Rights  Agent,  if and when
appropriate.  The payment of the  Purchase  Price (as such amount may be reduced
pursuant to Section  11(a)(iii)  hereof) may be made in cash or by  certified or
bank check or money order payable to the order of the Company.

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

         (e)  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) an Acquiring  Person or any Associate or Affiliate of
an Acquiring  Person,  (ii) a transferee of an Acquiring  Person (or of any such
Associate or Affiliate)  that becomes a transferee  after the  Acquiring  Person
becomes  such,  or (iii) a  transferee  of an  Acquiring  Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently  with
the Acquiring  Person  becoming  such and that receives such Rights  pursuant to
either (A) a transfer  (whether  or not for  consideration)  from the  Acquiring
Person (or any such  Associate or Affiliate)  to holders of equity  interests in
such Acquiring Person (or any such Associate or Affiliate) or to any Person with
whom the Acquiring  Person (or such  Associate or Affiliate)  has any continuing
agreement, arrangement or understanding regarding the transferred Rights, shares
of Company  Common Stock or the Company or (B) a transfer that a majority of the
Independent  Directors  has  determined  in good faith,  following a  reasonable
review  of the  applicable  facts  and  circumstances,  to be  part  of a  plan,
arrangement  or  understanding  that has as a  primary  purpose  or  effect  the
avoidance  of this  Section  7(e),  shall be null and void  without  any further
action,  and no holder of such  Rights  shall  have any rights  whatsoever  with
respect  to such  Rights,  whether  under any  provision  of this  Agreement  or
otherwise.  The  Company  shall use all  reasonable  efforts to ensure  that the
provisions  of this Section 7(e) and Section 4(b) are complied  with,  but shall
have no liability to any holder of Rights or any other Person as a result of its
failure to make any  determination  under this Section 7(e) or such Section 4(b)
with  respect  to  an  Acquiring   Person  or  its  Affiliates,   Associates  or
transferees.

                                      -10-
<PAGE>

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

         SECTION 8.  CANCELLATION  AND DESTRUCTION OF RIGHTS  CERTIFICATES.  All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination  or  exchange  shall,  if  surrendered  to the Company or any of its
agents,  be delivered to the Rights Agent for  cancellation or in canceled form,
or, if surrendered  to the Rights Agent,  shall be canceled by it, and no Rights
Certificates  shall be issued in lieu thereof  except as expressly  permitted by
this Agreement.  The Company shall deliver to the Rights Agent for  cancellation
and  retirement,  and the Rights  Agent shall so cancel and  retire,  any Rights
Certificates  acquired by the Company  otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights  Certificates to the Company,
or shall,  at the written  request of the Company,  destroy such canceled Rights
Certificates,  and in such case  shall  deliver  a  certificate  of  destruction
thereof to the Company.

         SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

         (a) The Company shall at all times prior to the  Expiration  Date cause
to be reserved and kept available,  out of its authorized and unissued shares of
Preferred  Stock,  the number of shares of Preferred  Stock that, as provided in
this  Agreement,  will be  sufficient  to  permit  the  exercise  in full of all
outstanding  Rights.  Upon the occurrence of any events resulting in an increase
in the aggregate number of shares of Preferred Stock (or other equity securities
of the  Company)  issuable  upon  exercise of all  outstanding  Rights above the
number then reserved, the Company shall make appropriate increases in the number
of shares so reserved.

         (b) If the shares of Preferred  Stock to be issued and  delivered  upon
the  exercise of the Rights may be listed on any national  securities  exchange,
the Company  shall  during the period  from the  Distribution  Date  through the
Expiration  Date use its best efforts to cause all securities  reserved for such
issuance to be listed on such  exchange  upon  official  notice of issuance upon
such exercise.

                                      -11-
<PAGE>

         (c) The Company  shall use its best efforts (i) as soon as  practicable
following the  occurrence of a Section 11 (a)(ii) Event and a  determination  by
the Company in accordance  with Section  11(a)(iii) of the  consideration  to be
delivered by the Company upon  exercise of the Rights or, if so required by law,
as soon as  practicable  following  the  Distribution  Date (such date being the
"Registration  Date"),  to file a registration  statement on an appropriate form
under the  Securities  Act of 1933,  as amended  (the  "Securities  Act"),  with
respect to the securities  that may be acquired upon exercise of the Rights (the
"Registration  Statement"),  (ii) to cause the Registration  Statement to become
effective  as  soon as  practicable  after  such  filing,  (iii)  to  cause  the
Registration  Statement to continue to be effective (and to include a prospectus
complying with the  requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights  are no longer  exercisable  for the  securities
covered by the Registration  Statement,  and (B) the Expiration Date and (iv) to
take as soon as practicable  following the Registration  Date such action as may
be required to ensure that any  acquisition  of securities  upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws.

         (d) The Company  shall take such action as may be  necessary  to ensure
that  all  shares  of  Preferred  Stock  (and,  following  the  occurrence  of a
Triggering  Event,  any other  securities that may be delivered upon exercise of
Rights)  shall be, at the time of delivery  of the  certificates  or  depositary
receipts for such securities,  duly and validly  authorized and issued and fully
paid and non-assessable.

         (e) The  Company  shall  pay any  documentary,  stamp or  transfer  tax
imposed in connection  with the issuance or delivery of the Rights  Certificates
or upon the exercise of Rights; provided, however, that the Company shall not be
required to pay any such tax imposed in connection with the issuance or delivery
of Units of Preferred Stock, or any certificates or depositary receipts for such
Units of Preferred  Stock (or,  following the occurrence of a Triggering  Event,
any other  securities,  cash or assets,  as the case may be) to any person other
than the  registered  holder of the Rights  Certificates  evidencing  the Rights
surrendered for exercise.  The Company shall not be required to issue or deliver
any  certificates  or  depositary  receipts  for Units of  Preferred  Stock (or,
following the occurrence of a Triggering  Event, any other  securities,  cash or
assets,  as the case may be) to, or in a name other than that of, the registered
holder upon the  exercise of any Rights  until any such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificate at the time
of surrender)  or until it has been  established  to the Company's  satisfaction
that no such tax is due.

         SECTION 10.  PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate  for Units of Preferred  Stock (or,  following  the  occurrence of a
Triggering Event,  other securities) is issued upon the exercise of Rights shall
for all  purposes  be deemed to have become the holder of record of the Units of
Preferred  Stock (or,  following  the  occurrence of a Triggering  Event,  other
securities)  evidenced thereby on, and such certificate shall be dated, the date
upon which the Rights  Certificate  evidencing such Rights was duly  surrendered
and payment of the Purchase Price (and any applicable  transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or,  following the occurrence of a Triggering  Event,
other securities) transfer books of the Company are closed, such Person shall be
deemed  to have  become  the  record  holder  of such  securities  on,  and such
certificate  shall be  dated,  the next  succeeding  Business  Day on which  the
Preferred  Stock (or,  following  the  occurrence of a Triggering  Event,  other
securities)  transfer  books of the  Company  are open  and;  provided  further,
however,  that if delivery of Units of  Preferred  Stock is delayed  pursuant to
Section 9(c),  such Persons shall be deemed to have become the record holders of
such Units of  Preferred  Stock only when such Units first  become  deliverable.
Prior to the exercise of the Rights  evidenced  thereby,  the holder of a Rights
Certificate  shall not be entitled to any rights of a shareholder of the Company
with respect to securities for which the Rights shall be exercisable, including,
without   limitation,   the  right  to  vote,  to  receive  dividends  or  other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.

                                      -12-
<PAGE>

         SECTION 11. ADJUSTMENT OF PURCHASE PRICE,  NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.  The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights  outstanding  are  subject to  adjustment
from time to time as provided in this Section 11.

         (a) (i) In the event the  Company  shall at any time  after the date of
this  Agreement (A) declare a dividend on the Preferred  Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C)
combine  the  outstanding  shares of  Preferred  Stock into a smaller  number of
shares,  or (D) issue any shares of its capital stock in a  reclassification  of
the Preferred Stock  (including any such  reclassification  in connection with a
consolidation  or merger in which the  Company is the  continuing  or  surviving
corporation),  except as otherwise  provided in this Section 11(a), the Purchase
Price in  effect  at the time of the  record  date for such  dividend  or of the
effective date of such  subdivision,  combination or  reclassification,  and the
number and kind of shares of Preferred  Stock or capital stock,  as the case may
be, issuable on such date upon exercise of the Rights,  shall be proportionately
adjusted  so that the  holder of any Right  exercised  after  such time shall be
entitled to receive,  upon  payment of the  Purchase  Price then in effect,  the
aggregate  number and kind of shares of Preferred Stock or capital stock, as the
case may be, which, if such Right had been exercised  immediately  prior to such
date,  such  holder  would have owned upon such  exercise  and been  entitled to
receive   by   virtue   of   such   dividend,   subdivision,    combination   or
reclassification. If an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section  11(a)(i)  shall be in  addition  to,  and shall be made  prior to,  any
adjustment required pursuant to Section 11(a)(ii).

             (ii) In the event:

                  (a) any Acquiring  Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date hereof, directly or indirectly, (1)
shall  merge into the  Company or  otherwise  combine  with the  Company and the
Company  shall be the  continuing  or  surviving  corporation  of such merger or
combination and Company Common Stock shall remain outstanding and unchanged, (2)
shall,  in one transaction or a series of  transactions,  transfer any assets to
the Company or to any of its  Subsidiaries in exchange (in whole or in part) for
shares of Company  Common Stock,  for other equity  securities of the Company or

                                      -13-
<PAGE>

any such  Subsidiary,  or for securities  exercisable  for or  convertible  into
shares of equity  securities of the Company or any of its Subsidiaries  (whether
Company  Common Stock or otherwise) or otherwise  obtain from the Company or any
of its  Subsidiaries,  with or without  consideration,  any additional shares of
such equity  securities or securities  exercisable for or convertible  into such
equity securities (other than pursuant to a pro rata distribution to all holders
of Company Common Stock), (3) shall sell, purchase,  lease, exchange,  mortgage,
pledge,  transfer or otherwise  acquire or dispose of, in one  transaction  or a
series of transactions,  to, from or with the Company or any of its Subsidiaries
or  any  employee  benefit  plan  maintained  by  the  Company  or  any  of  its
Subsidiaries  or any trustee or  fiduciary  with  respect to such plan acting in
such  capacity,  assets  (including  securities)  on terms and  conditions  less
favorable to the Company or such  Subsidiary  or plan than those that could have
been obtained in arm's- length  negotiations  with an unaffiliated  third party,
other than pursuant to a transaction set forth in Section 13(a), (4) shall sell,
purchase,  lease, exchange,  mortgage,  pledge, transfer or otherwise acquire or
dispose of, in one transaction or a series of transactions, to, from or with the
Company  or any of the  Company's  Subsidiaries  or any  employee  benefit  plan
maintained by the Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity (other than  transactions,  if
any, consistent with those engaged in, as of the date hereof, by the Company and
such  Acquiring  Person  or such  Associate  or  Affiliate),  assets  (including
securities) having an aggregate fair market value of more than $5 million, other
than  pursuant  to a  transaction  set forth in Section  13(a),  (5) shall sell,
purchase,  lease, exchange,  mortgage,  pledge, transfer or otherwise acquire or
dispose of, in one transaction or a series of transactions, to, from or with the
Company or any of its  Subsidiaries  or any employee  benefit plan maintained by
the Company or any of its  Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity, any material trademark or material service
mark, other than pursuant to a transaction set forth in Section 13(a), (6) shall
receive,  or any designee,  agent or  representative of such Acquiring Person or
any  Affiliate  or  Associate  of  such  Acquiring  Person  shall  receive,  any
compensation from the Company or any of its Subsidiaries other than compensation
for full-time  employment as a regular  employee at rates in accordance with the
Company's  (or its  Subsidiaries')  past  practices,  or (7) shall  receive  the
benefit,  directly or indirectly (except  proportionately as a holder of Company
Common Stock or as required by law or  governmental  regulation),  of any loans,
advances,  guarantees,  pledges or other financial assistance or any tax credits
or other tax advantage provided by the Company or any of its Subsidiaries or any
employee  benefit plan  maintained by the Company or any of its  Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity; or

                  (b) any Person shall become an  Acquiring  Person,  other than
pursuant to any transaction set forth in Section 13(a); or

                  (c) during such time as there is an  Acquiring  Person,  there
shall be any reclassification of securities (including any reverse stock split),
or  recapitalization  of the  Company,  or any  merger or  consolidation  of the
Company  with any of its  Subsidiaries  or any  other  transaction  or series of
transactions  involving  the  Company or any of its  Subsidiaries,  other than a
transaction  or  transactions  to which the  provisions  of Section  13(a) apply
(whether or not with or into or otherwise involving an Acquiring Person),  which
has the  effect,  directly  or  indirectly,  of  increasing  by more than 1% the
proportionate  share of the outstanding shares of any class of equity securities
of the  Company  or any of its  Subsidiaries  that  is  directly  or  indirectly
beneficially  owned by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person; then,  immediately upon the date of the occurrence of an event
described in Section 11 (a)(ii)(a)-(c)  (a "Section  11(a)(ii)  Event"),  proper
provision shall be made so that each holder of a Right (except as provided below
and in Section 7(e) hereof)  shall  thereafter  have the right to receive,  upon
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of the number of Units of Preferred Stock for which a
Right was  exercisable  immediately  prior to the first  occurrence of a Section
11(a)(ii)  Event,  such  number of Units of  Preferred  Stock as shall equal the
result obtained by (x)  multiplying the then current  Purchase Price by the then
number of Units of Preferred Stock for which a Right was exercisable immediately
prior to the  first  occurrence  of a  Section  11(a)(ii)  Event  (such  product
thereafter  being, for all purposes of this Agreement other than Section 13, the
"Purchase  Price"),  and (y)  dividing  that  product by 50% of the then current
market price (determined pursuant to Section 11(d) hereof) per Unit of Preferred
Stock on the date of such first  occurrence (such Units of Preferred Stock being
the "Adjustment Shares").

                                      -14-
<PAGE>

                           (iii) In the  event  that the  number  of  shares  of
Preferred   Stock  that  are   authorized  by  the  Company's   Certificate   of
Incorporation  but not  outstanding  or reserved for issuance for purposes other
than upon  exercise of the Rights is not  sufficient  to permit the  exercise in
full of the Rights in accordance  with the foregoing  subparagraph  (ii) of this
Section  11(a),  the  Company,  by the  vote of a  majority  of the  Independent
Directors,  shall:  (A) determine the excess of (1) the value of the  Adjustment
Shares issuable upon the exercise of a Right (the "Current  Value") over (2) the
Purchase  Price (such excess being the  "Spread"),  and (B) with respect to each
Right, make adequate  provision to substitute for such Adjustment  Shares,  upon
payment of the  applicable  Purchase  Price,  (1) cash,  (2) a reduction  in the
Purchase  Price,  (3) Company  Common  Stock or other equity  securities  of the
Company (including, without limitation, shares, or units of shares, of preferred
stock  (such  other  shares  being  "preferred  stock  equivalents")),  (4) debt
securities  of the Company,  (5) other  assets,  or (6) any  combination  of the
foregoing,  having an  aggregate  value equal to the Current  Value,  where such
aggregate value has been determined by a majority of the Independent  Directors,
after receiving  advice from a nationally  recognized  investment  banking firm;
provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within 30 days following the later of
(x) the first occurrence of a Section  11(a)(ii) Event and (y) the date on which
the Company's  right of redemption  pursuant to Section 23(a) expires (the later
of (x) and (y)  being  referred  to herein as the  "Section  11(a)(iii)  Trigger
Date"),  then the Company shall be obligated to deliver,  upon the surrender for
exercise of a Right and without requiring  payment of the Purchase Price,  Units
of Preferred Stock (to the extent available) and then, if necessary, cash, which
Units of Preferred  Stock and/or cash shall have an aggregate value equal to the
Spread. To the extent that the Company determines that some action need be taken
pursuant to the first  sentence of this Section  11(a)(iii),  the Company  shall
provide,  subject to Section 7(e), that such action shall apply uniformly to all
outstanding Rights. For purposes of this Section 11(a)(iii), the value of a Unit
of Preferred Stock shall be the current market price (as determined  pursuant to
Section  11(d)  hereof) per Unit of  Preferred  Stock on the Section  11(a)(iii)
Trigger Date and the value of any preferred stock  equivalent shall be deemed to
have the same value as the Preferred Stock on such date.

                                      -15-
<PAGE>

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

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

                                      -16-
<PAGE>

                  (d) (i) For the  purpose  of any  computation  hereunder,  the
"current  market price" per share of Company Common Stock or Common Stock on any
date shall be deemed to be the average of the daily closing  prices per share of
such shares for the 10  consecutive  Trading  Days (as such term is  hereinafter
defined) immediately prior to such date; provided, however, that if prior to the
expiration of such requisite ten Trading  Day-period the issuer announces either
(A) a  dividend  or  distribution  on such  shares  payable  in such  shares  or
securities  convertible  into such shares  (other than the  Rights),  or (B) any
subdivision, combination or reclassification of such shares, then, following the
ex- dividend date for such dividend or the record date for such subdivision,  as
the case may be, the "current  market price" shall be properly  adjusted to take
into account such event.  The closing price for each day shall be, if the shares
are  listed and  admitted  to trading  on a  national  securities  exchange,  as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which such
shares are listed or  admitted  to trading  or, if such shares are not listed or
admitted to trading on any national securities  exchange,  the last quoted price
or, if not so quoted,  the  average of the high bid and low asked  prices in the
over-the-counter  market,  as reported by the NASDAQ Stock Market LLC ("Nasdaq")
or such other  system  then in use,  or, if on any such date such shares are not
quoted by any such organization, the average of the closing bid and asked prices
as  furnished  by a  professional  market  maker  making a market in such shares
selected  by a majority  of the  Independent  Directors.  If on any such date no
market maker is making a market in such shares, the fair value of such shares on
such date as determined in good faith by a majority of the Independent Directors
shall be used.  If such shares are not publicly held or not so listed or traded,
"current  market  price"  per  share  shall  mean the fair  value  per  share as
determined  in good  faith by a majority  of the  Independent  Directors,  whose
determination  shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. The term "Trading Day" shall mean, if such
shares are listed or admitted to trading on any national securities  exchange, a
day on which the principal national securities exchange on which such shares are
listed or admitted  to trading is open for the  transaction  of business  or, if
such shares are not so listed or admitted, a Business Day.

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

                                      -17-
<PAGE>

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

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

                  (g) All Rights originally issued by the Company  subsequent to
any adjustment  made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Preferred Stock
(or  other  securities  or amount of cash or  combination  thereof)  that may be
acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.

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

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

                                      -18-
<PAGE>

                  (j)  Irrespective  of any adjustment or change in the Purchase
Price or the number of Units of Preferred  Stock  issuable  upon the exercise of
the  Rights,  the Rights  Certificates  theretofore  and  thereafter  issued may
continue  to  express  the  Purchase  Price per Unit and the  number of Units of
Preferred  Stock that were expressed in the initial Rights  Certificates  issued
hereunder.

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

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

                                      -19-
<PAGE>

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

                  (n) The Company shall not, at any time after the  Distribution
Date,  (i)  consolidate  with any other Person  (other than a Subsidiary  of the
Company in a transaction  that complies with Section 11(o)  hereof),  (ii) merge
with or into any other  Person  (other  than a  Subsidiary  of the  Company in a
transaction which complies with Section 11(o) hereof), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction,  or a series
of transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its  Subsidiaries  (taken as a whole) to any
other Person or Persons (other than the Company  and/or any of its  Subsidiaries
in one or more  transactions  each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately  after such  consolidation,  merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect that would  substantially  diminish or otherwise  eliminate
the  benefits   intended  to  be  afforded  by  the  Rights  or  (y)  prior  to,
simultaneously with or immediately after such consolidation, merger or sale, the
Person  which  constitutes,  or would  constitute,  the  "Principal  Party"  for
purposes of Section 13(a) shall have distributed or otherwise transferred to its
shareholders or other persons holding an equity interest in such Person,  Rights
previously  owned  by  such  Person  or any of its  Affiliates  and  Associates;
provided,  however,  that this Section 11(n) shall not affect the ability of any
Subsidiary of the Company to  consolidate  with,  merge with or into, or sell or
transfer assets or earning power to, any other Subsidiary of the Company.

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

                  (p)    Anything   in   this    Agreement   to   the   contrary
notwithstanding,  in the  event  that the  Company  shall at any time  after the
Rights Dividend  Declaration Date and prior to the Distribution Date (i) declare
a dividend on the  outstanding  shares of Company Common Stock payable in shares
of Company Common Stock, (ii) subdivide the outstanding shares of Company Common
Stock,  (iii)  combine the  outstanding  shares of Company  Common  Stock into a
smaller  number of shares,  or (iv) issue any shares of its  capital  stock in a
reclassification of Company Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving  corporation),  the number of Rights  associated with each share of
Company  Common Stock then  outstanding,  or issued or delivered  thereafter but
prior to the Distribution  Date, shall be  proportionately  adjusted so that the
number of Rights  thereafter  associated with each share of Company Common Stock
following  any such event shall equal the result  obtained  by  multiplying  the
number of Rights  associated with each share of Company Common Stock immediately
prior to such event by a  fraction,  the  numerator  of which shall be the total
number of shares of Company Common Stock  outstanding  immediately  prior to the
occurrence of the event and the  denominator  of which shall be the total number
of  shares  of  Company  Common  Stock  outstanding  immediately  following  the
occurrence of such event.

                                      -20-
<PAGE>

         SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.

         Whenever an adjustment is made as provided in Section 11 or Section 13,
the  Company  shall  (a)  promptly  prepare a  certificate  setting  forth  such
adjustment and a brief  statement of the facts  accounting for such  adjustment,
(b) promptly  file with the Rights Agent,  and with each transfer  agent for the
Preferred  Stock and the Company Common Stock, a copy of such  certificate,  and
(c) mail a brief summary thereof to each holder of a Rights  Certificate (or, if
prior to the  Distribution  Date,  to each  holder of a  certificate  evidencing
shares of Company Common Stock) in accordance  with Section 25. The Rights Agent
shall  be  fully  protected  in  relying  on  any  such  certificate  and on any
adjustment  therein  contained and shall not be deemed to have  knowledge of any
such adjustment unless and until it shall have received such certificate.

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

         (a) In the event that,  following the Stock Acquisition Date,  directly
or indirectly,  either (x) the Company shall consolidate with, or merge with and
into,  any other Person (other than a Subsidiary of the Company in a transaction
which  complies  with Section  11(o)  hereof),  and the Company shall not be the
continuing or surviving  corporation of such  consolidation  or merger,  (y) any
Person (other than a Subsidiary of the Company in a transaction  which  complies
with Section 11(o) hereof) shall  consolidate  with, or merge with or into,  the
Company,  and the Company shall be the  continuing or surviving  corporation  of
such  consolidation  or merger and, in  connection  with such  consolidation  or
merger,  all or part of the outstanding  shares of Company Common Stock shall be
converted into or exchanged for stock or other securities of any other Person or
cash or any other property,  or (z) the Company shall sell or otherwise transfer
(or one or more of its  Subsidiaries  shall sell or  otherwise  transfer) to any
Person or Persons (other than the Company or any of its  Subsidiaries  in one or
more transactions  each of which complies with Section 11(o) hereof),  in one or
more  transactions  assets or  earning  power  aggregating  more than 50% of the
assets or earning power of the Company and its  Subsidiaries  (taken as a whole)
(any such event being a "Section 13 Event"), then, and in each such case, proper
provision shall be made so that: (i) each holder of a Right,  except as provided
in Section 7(e), shall  thereafter have the right to receive,  upon the exercise
thereof at the then current  Purchase Price,  such number of validly  authorized
and issued, fully paid and nonassessable shares of Common Stock of the Principal
Party (as such term is hereinafter  defined),  which shares shall not be subject
to any liens,  encumbrances,  rights of first refusal,  transfer restrictions or
other  adverse  claims,  as  shall  be  equal  to  the  result  obtained  by (1)
multiplying the then current  Purchase Price by the number of Units of Preferred
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section  11(a)(ii)  Event has occurred  prior to
the first occurrence of a Section 13 Event, multiplying the number of such Units
for which a Right would be exercisable  hereunder but for the occurrence of such
Section 11(a)(ii) Event by the Purchase Price which would be in effect hereunder
but for such first  occurrence) and (2) dividing that product (which,  following
the first  occurrence of a Section 13 Event,  shall be the "Purchase  Price" for
all purposes of this  Agreement) by 50% of the current market price  (determined
pursuant  to  Section  11(d)  hereof)  per  share  of the  Common  Stock of such
Principal Party on the date of consummation of such Section 13 Event;  (ii) such
Principal Party shall  thereafter be liable for, and shall assume,  by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement;  (iii) the term "Company" shall thereafter be deemed to refer to
such  Principal  Party,  it being  specifically  intended that the provisions of
Section  11  shall  apply  only to such  Principal  Party  following  the  first
occurrence  of a Section 13 Event;  (iv) such  Principal  Party  shall take such
steps  (including,  but not limited to the reservation of a sufficient number of
shares of its Common  Stock) in  connection  with the  consummation  of any such
transaction  as may be necessary to ensure that the provisions of this Agreement
shall  thereafter  be  applicable  to its  shares  of  Common  Stock  thereafter
deliverable  upon the exercise of the Rights;  and (v) the provisions of Section
11(a)(ii)  shall be of no further effect  following the first  occurrence of any
Section 13 Event.

                                      -21-
<PAGE>

         (b) "Principal Party" means:

                  (i) in the case of any transaction  described in clause (x) or
(y) of the first sentence of Section 13(a), (A) the Person that is the issuer of
any  securities  into which shares of Company Common Stock are converted in such
merger or consolidation,  or, if there is more than one such issuer,  the issuer
of Common Stock that has the highest  aggregate current market price (determined
pursuant to Section 11(d) hereof) and (B) if no  securities  are so issued,  the
Person that is the other party to such merger or consolidation,  or, if there is
more than one such Person,  the Person the Common Stock of which has the highest
aggregate  current market price  (determined  pursuant to Section 11(d) hereof);
and

                  (ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a),  the Person that is the party receiving the
largest  portion of the assets or earning  power  transferred  pursuant  to such
transaction  or  transactions,  or,  if each  Person  that  is a  party  to such
transaction or  transactions  receives the same portion of the assets or earning
power transferred  pursuant to such transaction or transactions or if the Person
receiving  the  largest  portion  of the  assets  or  earning  power  cannot  be
determined, whichever Person the Common Stock of which has the highest aggregate
current market price  (determined  pursuant to Section 11(d) hereof);  provided,
however, that in any such case, (1) if the Common Stock of such Person is not at
such  time and has not been  continuously  over the  preceding  12-month  period
registered under Section 12 of the Exchange Act ("Registered  Common Stock"), or
such  Person is not a  corporation,  and such  Person  is a direct  or  indirect
Subsidiary  of another  Person that has  Registered  Common  Stock  outstanding,
"Principal  Party" shall refer to such other Person;  (2) if the Common Stock of
such Person is not Registered  Common Stock or such Person is not a corporation,
and such Person is a direct or indirect  Subsidiary of another Person but is not
a direct or indirect  Subsidiary of another Person which has  Registered  Common
Stock  outstanding,  "Principal Party" shall refer to the ultimate parent entity
of such  first-mentioned  Person;  (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation,  and such Person is
directly or indirectly  controlled  by more than one Person,  and one or more of
such other Persons has Registered  Common Stock  outstanding,  "Principal Party"
shall refer to whichever of such other  Persons is the issuer of the  Registered
Common  Stock having the highest  aggregate  current  market  price  (determined
pursuant to Section 11(d) hereof); and (4) if the Common Stock of such Person is
not Registered Common Stock or such Person is not a corporation, and such Person
is directly or indirectly  controlled by more than one Person,  and none of such
other Persons have Registered Common Stock outstanding,  "Principal Party" shall
refer to whichever ultimate parent entity is the corporation having the greatest
shareholders'  equity or, if no such ultimate  parent  entity is a  corporation,
shall  refer to  whichever  ultimate  parent  entity is the  entity  having  the
greatest net assets.

                                      -22-
<PAGE>

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

                  (i) (A) file on an  appropriate  form, as soon as  practicable
following the execution of such  agreement,  a registration  statement under the
Securities  Act with  respect to the  Common  Stock  that may be  acquired  upon
exercise  of the  Rights,  (B)  cause  such  registration  statement  to  remain
effective (and to include a prospectus  complying with the  requirements  of the
Securities  Act)  until  the  Expiration  Date,  and (C) as soon as  practicable
following the execution of such  agreement,  take such action as may be required
to ensure that any  acquisition  of such Common  Stock upon the  exercise of the
Rights complies with any applicable state security or "blue sky" laws; and

                  (ii)  deliver to holders  of the Rights  historical  financial
statements for the Principal  Party and each of its  Affiliates  which comply in
all  respects  with the  requirements  for  registration  on Form 10  under  the
Exchange Act.

         (d) In case the Principal  Party that is to be a party to a transaction
referred  to in  this  Section  13 has a  provision  in  any  of its  authorized
securities or in its Certificate of Incorporation or By-laws or other instrument
governing its corporate  affairs,  which  provision would have the effect of (i)
causing such Principal Party to issue,  in connection  with, or as a consequence
of, the consummation of a transaction  referred to in this Section 13, shares of
Common Stock of such Principal  Party at less than the then current market price
per  share   (determined   pursuant  to  Section  11(d)  hereof)  or  securities
exercisable  for, or convertible  into Common Stock of such  Principal  Party at
less than such then  current  market  price  (other  than to  holders  of Rights
pursuant to this Section 13) or (ii) providing for any special  payment,  tax or
similar  provisions in connection  with the issuance of the Common Stock of such
Principal  Party  pursuant to the  provisions  of this Section 13; then, in such
event,  the Company  shall not  consummate  any such  transaction  unless  prior
thereto the Company and such  Principal  Party shall have executed and delivered
to the Rights Agent a  supplemental  agreement  providing  that the provision in
question of such Principal Party shall have been canceled, waived or amended, or
that the  authorized  securities  shall  be  redeemed,  so that  the  applicable
provision  will have no effect in connection  with, or as a consequence  of, the
consummation of the proposed transaction.

                                      -23-
<PAGE>

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

         SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

         (a) The Company  shall not be required to issue  fractions of Rights or
to distribute Rights  Certificates that evidence  fractional  Rights. In lieu of
such  fractional  Rights,  there  shall be paid to the  Persons  to  which  such
fractional  Rights would otherwise be issuable,  an amount in cash equal to such
fraction of the market  value of a whole  Right.  For  purposes of this  Section
14(a),  the market  value of a whole  Right  shall be the  closing  price of the
Rights  for  the  Trading  Day  immediately  prior  to the  date on  which  such
fractional Rights would have been otherwise  issuable.  The closing price of the
Rights for any day shall be, if the Rights are listed or  admitted to trading on
a national  securities  exchange,  as  reported  in the  principal  consolidated
transaction  reporting system with respect to securities listed on the principal
national  securities  exchange  on which the Rights are  listed or  admitted  to
trading or, if the Rights are not listed or admitted to trading on any  national
securities exchange,  the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter  market as reported by
Nasdaq or such other  system  then in use or, if on any such date the Rights are
not quoted by any such  organization,  the  average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by a majority of the Independent Directors. If on any such date no such
market  maker is making a market in the Rights,  the fair value of the Rights on
such date as determined in good faith by a majority of the Independent Directors
shall be used and such  determination  shall be described  in a statement  filed
with the Rights Agent and the holders of the Rights.

         (b) The Company  shall not be required to issue  fractions of shares of
Preferred  Stock  (other  than  fractions  that are  integral  multiples  of one
one-thousandth  of a share of Preferred Stock) upon exercise of the Rights or to
distribute  certificates that evidence such fractional shares of Preferred Stock
(other than fractions which are integral  multiples of one  one-thousandth  of a
share of Preferred  Stock). In lieu of such fractional shares of Preferred Stock
that are not integral  multiples of one  one-thousandth  of a share, the Company
may pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of
the  then  current  market  price of a share  of  Preferred  Stock on the day of
exercise, determined in accordance with Section 11(d).

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

                                      -24-
<PAGE>

         SECTION 15.  RIGHTS OF ACTION.  All rights of action in respect of this
Agreement,  other than rights of action  vested in the Rights Agent  pursuant to
Section  18,  are  vested in the  respective  registered  holders  of the Rights
Certificates  (and,  prior to the Distribution  Date, the registered  holders of
certificates  evidencing  shares of Company  Common  Stock);  and any registered
holder  of a Rights  Certificate  (or,  prior  to the  Distribution  Date,  of a
certificate  evidencing shares of Company Common Stock),  without the consent of
the Rights Agent or of the holder of any other Rights  Certificate (or, prior to
the  Distribution  Date, of a certificate  evidencing  shares of Company  Common
Stock),  may, in his or her own behalf and for his or her own benefit,  enforce,
and may  institute  and  maintain  any suit,  action or  proceeding  against the
Company or any other Person to enforce,  or otherwise  act in respect of, his or
her right to exercise  the Rights  evidenced by such Rights  Certificate  in the
manner  provided  in such  Rights  Certificate  and in this  Agreement.  Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically  acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.

         SECTION 16.  AGREEMENT  OF RIGHTS  HOLDERS.  Every holder of a Right by
accepting  the same consents to and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

         (a) prior to the  Distribution  Date,  the Rights will be  transferable
only in connection with the transfer of Company Common Stock;

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

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

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

                                      -25-
<PAGE>

         SECTION 17.  RIGHTS  CERTIFICATE  HOLDER NOT DEEMED A  SHAREHOLDER.  No
holder, as such, of any Rights  Certificate  shall be entitled to vote,  receive
dividends  or be deemed  for any  purpose  the holder of the number of shares of
Preferred  Stock or any other  securities of the Company that may at any time be
issuable on the exercise of the Rights  evidenced  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 shareholder of
the  Company  or any right to vote for the  election  of  directors  or upon any
matter submitted to shareholders at any meeting thereof,  or to give or withhold
consent to any  corporate  action,  or,  except as  provided  in Section  24, to
receive  notice of  meetings  or other  actions  affecting  shareholders,  or to
receive  dividends or  subscription  rights,  or  otherwise,  until the Right or
Rights  evidenced  by such  Rights  Certificate  shall  have been  exercised  in
accordance with the provisions hereof.

         SECTION 18. CONCERNING THE RIGHTS AGENT.

         (a)  The  Company  agrees  to  pay  to  the  Rights  Agent   reasonable
compensation  for all services  rendered by it hereunder and, from time to time,
on demand of the Rights Agent,  its reasonable  expenses,  including  reasonable
fees and disbursements of its counsel, incurred in connection with the execution
and  administration  of this  Agreement and the exercise and  performance of its
duties hereunder.  The Company shall indemnify the Rights Agent for, and hold it
harmless  against,  any loss,  liability,  or expense,  incurred  without  gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection  with the  acceptance
and  administration  of this  Agreement,  including  the costs and  expenses  of
defending against any claim of liability hereunder.

         (b) The Rights  Agent shall be  protected  and shall incur no liability
for or in respect of any action  taken,  suffered or omitted by it in connection
with  its   administration  of  this  Agreement  in  reliance  upon  any  Rights
Certificate or certificate  for Preferred  Stock or for other  securities of the
Company,  instrument of assignment or transfer, power of attorney,  endorsement,
affidavit, letter, notice, direction, consent,  certificate,  statement or other
paper or document  believed  by it to be genuine and to have been signed  and/or
executed or made by the proper Person or Persons.

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

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

                                      -26-
<PAGE>

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

         SECTION 20. DUTIES OF RIGHTS  AGENT.  The Rights Agent  undertakes  the
duties and  obligations  imposed by this Agreement upon the following  terms and
conditions,  by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

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

         (b) Whenever in the  performance of its duties under this Agreement the
Rights  Agent  shall  deem it  necessary  or  desirable  that any fact or matter
(including,  without  limitation,  the identity of any Acquiring  Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action  hereunder,  such fact or matter (unless
other  evidence  in respect  thereof be  specified  herein)  may be deemed to be
conclusively  proved and established by a certificate  signed by the Chairman of
the Board, the Chief Executive Officer, the President,  any Vice President,  the
Treasurer,  any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent;  provided,  however, that so long
as any Person is an Acquiring Person hereunder, such certificate shall be signed
and delivered by a majority of the Independent  Directors;  and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.

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

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

                                      -27-
<PAGE>

         (e) The Rights Agent shall not have any responsibility for the validity
of this Agreement or the execution and delivery hereof (except the due execution
hereof by the  Rights  Agent) or for the  validity  or  execution  of any Rights
Certificate (except its countersignature  thereof);  nor shall it be responsible
for any breach by the  Company  of any  covenant  or  failure by the  Company to
satisfy conditions contained in this Agreement or in any Rights Certificate; nor
shall it be  responsible  for any  adjustment  required  under the provisions of
Section  11 or  Section  13 or for the  manner,  method  or  amount  of any such
adjustment or the  ascertaining of the existence of facts that would require any
such  adjustment  (except with  respect to the  exercise of Rights  evidenced by
Rights  Certificates  after  receipt  by the  Rights  Agent  of the  certificate
describing any such adjustment  contemplated by Section 12); nor shall it by any
act  hereunder  be  deemed  to make any  representation  or  warranty  as to the
authorization  or  reservation  of any  shares of  Preferred  Stock or any other
securities to be issued pursuant to this Agreement or any Rights  Certificate or
as to whether any shares of Preferred Stock or any other  securities  will, when
so issued, be validly authorized and issued, fully paid and nonassessable.

         (f) The Company  shall  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  performance  by the  Rights  Agent  of its  duties  under  this
Agreement.

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

         (h) The Rights Agent and any shareholder, director, officer or employee
of the  Rights  Agent  may  buy,  sell  or deal in any of the  Rights  or  other
securities of the Company or become pecuniarily interested in any transaction in
which the  Company  may be  interested,  or  contract  with or lend money to the
Company  or  otherwise  act as fully and freely as though it were not the Rights
Agent  under this  Agreement,  provided  that such  Rights  Agent shall not have
received confidential  information from the Company in its capacity hereunder or
otherwise  as a result  of which  such  actions  would  violate  the  rules  and
regulations  of the  Securities  and Exchange  Commission.  Nothing herein shall
preclude the Rights  Agent from acting in any other  capacity for the Company or
for any other legal entity.

                                      -28-
<PAGE>

         (i) The Rights  Agent may  execute  and  exercise  any of the rights or
powers hereby vested in it or perform any duty hereunder  either itself or by or
through its attorneys or agents.

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

         (k) If,  with  respect to any  Rights  Certificate  surrendered  to the
Rights Agent for exercise or transfer,  the certificate  attached to the form of
assignment  or form of election to purchase,  as the case may be, has either not
been  completed,  not signed or  indicates an  affirmative  response to clause 1
and/or 2 thereof,  the  Rights  Agent  shall not take any  further  action  with
respect to such requested exercise or transfer without first consulting with the
Company.  If such certificate has been completed and signed and shows a negative
response to clauses 1 and 2 of such certificate,  unless  previously  instructed
otherwise in writing by the Company (which instructions may impose on the Rights
Agent   additional   ministerial   responsibilities,    but   no   discretionary
responsibilities),  the Rights Agent may assume without further inquiry that the
Rights Certificate is not owned by a person described in Section 4(b) or Section
7(e) and shall not be charged with any knowledge to the contrary.

         SECTION 21. CHANGE OF RIGHTS  AGENT.  The Rights Agent or any successor
Rights Agent may resign and be discharged  from its duties under this  Agreement
upon 30 days'  prior  notice  in  writing  mailed  to the  Company,  and to each
transfer  agent  of the  Preferred  Stock  and  the  Company  Common  Stock,  by
registered or certified  mail, and to the holders of the Rights  Certificates by
first-class  mail.  The  Company  may remove the Rights  Agent or any  successor
Rights Agent upon 30 days' prior  notice in writing,  mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the
Preferred  Stock and the Company Common Stock,  by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise  become incapable of acting,
the Company shall appoint a successor to the Rights Agent.  If the Company shall
fail to make such appointment  within a period of 30 days after giving notice of
such  removal or after it has been  notified in writing of such  resignation  or
incapacity by the resigning or incapacitated  Rights Agent or by the holder of a
Rights  Certificate  (who  shall,  with such  notice,  submit  his or her Rights
Certificate  for inspection by the Company),  then any registered  holder of any
Rights  Certificate  may apply to any court of  competent  jurisdiction  for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the  Company or by such a court,  shall be (a) a  corporation  organized  and
doing  business  under the laws of the United  States or any state of the United
States  in good  standing,  shall be  authorized  to do  business  as a  banking
institution in the State of New York or the Commonwealth of Pennsylvania,  shall
be  authorized  under such laws to exercise  corporate  trust or stock  transfer
powers,  shall be  subject to  supervision  or  examination  by federal or state
authorities  and shall  have at the time of its  appointment  as Rights  Agent a
combined  capital and surplus of at least  $100,000,000 or (b) an Affiliate of a
corporation  described in clause (a). After  appointment,  the successor  Rights
Agent shall be vested with the same powers,  rights, duties and responsibilities
as if it had been originally  named as Rights Agent without further act or deed;
but the  predecessor  Rights Agent shall  deliver and transfer to the  successor
Rights  Agent any  property  at the time held by it  hereunder,  and execute and
deliver  any  further  assurance,  conveyance,  act or  deed  necessary  for the
purpose. Not later than the effective date of any such appointment,  the Company
shall file notice thereof in writing with the predecessor  Rights Agent and each
transfer agent of the Preferred  Stock and the Company Common Stock,  and mail a
notice thereof in writing to the registered holders of the Rights  Certificates.
Failure to give any notice  provided  for in this  Section 21,  however,  or any
defect therein,  shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent.

                                      -29-
<PAGE>

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

         SECTION 23. REDEMPTION AND TERMINATION.

         (a) Subject to Section 30, the Company may, at its option, by action of
a majority of the Independent  Directors,  at any time prior to (i) the Close of
Business on the tenth Business Day following the Stock Acquisition Date, or (ii)
such later date as a majority of the Independent Directors shall determine (such
determination  to be made prior to the date specified in (i) above) and of which
the Company will give the Rights Agent prompt  written  notice,  but in no event
later than the Final Expiration Date,  redeem all but not less than all the then
outstanding  Rights at a redemption price of $.001 per Right, as such amount may
be appropriately  adjusted to reflect any stock split, stock dividend or similar
transaction  occurring  after the date hereof (such  redemption  price being the
"Redemption Price"), and the Company may, at its option, by action of a majority
of the  Independent  Directors,  pay the  Redemption  Price  either in shares of
Company Common Stock (based on the "current  market price" as defined in Section
11(d), of the shares of Company Common Stock at the time of redemption) or cash.

                                      -30-
<PAGE>

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

         SECTION 24. NOTICE OF CERTAIN EVENTS.

         (a)  In  case  the  Company  shall  propose,  at  any  time  after  the
Distribution  Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred  Stock or to make any other  distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained  earnings of the  Company),  (ii) to offer to the holders of  Preferred
Stock rights or warrants to subscribe for or to purchase any  additional  shares
of  Preferred  Stock or shares  of stock of any  class or any other  securities,
rights or options,  (iii) to effect any  reclassification of its Preferred Stock
(other than a  reclassification  involving  only the  subdivision of outstanding
shares of Preferred  Stock),  (iv) to effect any consolidation or merger into or
with any other Person  (other than a Subsidiary  of the Company in a transaction
which  complies  with  Section  11(o)  hereof),  or to effect  any sale or other
transfer  (or to permit  one or more of its  Subsidiaries  to effect any sale or
other transfer), in one or more transactions,  of more than 50% of the assets or
earning  power of the  Company  and its  Subsidiaries  (taken as a whole) to any
other Person or Persons (other than the Company  and/or any of its  Subsidiaries
in one or more  transactions  each of which complies with Section 11(o) hereof),
or (v) to effect the  liquidation,  dissolution  or  winding up of the  Company,
then,  in each such case,  the  Company  shall  give to each  holder of a Rights
Certificate,  to the extent feasible and in accordance with Section 25, a notice
of such proposed action, which shall specify the record date for the purposes of
such stock dividend,  distribution  of rights or warrants,  or the date on which
such  reclassification,  consolidation,  merger,  sale,  transfer,  liquidation,
dissolution,  or  winding  up is to take  place  and the  date of  participation
therein by the holders of the shares of Preferred  Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause  (i) or (ii)  above  at  least  20 days  prior  to the  record  date  for
determining  holders  of the  shares of  Preferred  Stock for  purposes  of such
action,  and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation  therein
by the holders of the shares of Preferred  Stock whichever shall be the earlier;
provided,  however,  that no such  notice  shall be  required  pursuant  to this
Section 24 if any Subsidiary of the Company effects a  consolidation  or  merger
with or into,  or effects a sale or other  transfer of assets or earnings  power
to, any other Subsidiary of the Company.

                                      -31-
<PAGE>

         (b) In case any of the  events  set forth in  Section  11(a)(ii)  shall
occur,  then,  in any such case,  (i) the Company  shall as soon as  practicable
thereafter give to each holder of a Rights  Certificate,  to the extent feasible
and in  accordance  with Section 25, a notice of the  occurrence  of such event,
which shall  specify the event and the  consequences  of the event to holders of
Rights under Section 11(a)(ii).

         SECTION 25. NOTICES. All notices and other communications  provided for
hereunder shall,  unless otherwise  stated herein,  be in writing  (including by
telex, telegram or cable) and mailed or sent or delivered, if to the Company, at
its address at:

                  InterDigital Communications Corporation
                  781 Third Avenue
                  King of Prussia, PA  19406-1409
                  Attention:  General Counsel
                  Fax: (610) 878-7844

and if to the Rights Agent, at its address at:

                  American Stock Transfer and Trust Company
                  6201 15th Avenue
                  Brooklyn, NY  11219
                  Attention:  Carlos A. Pinto
                  Fax: (718) 921-8336

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

         SECTION 26. SUPPLEMENTS AND AMENDMENTS.  Prior to the Distribution Date
and subject to the penultimate  sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates evidencing
shares of  Company  Common  Stock.  From and after the  Distribution  Date,  the
Company and the Rights Agent  shall,  if the Company so directs,  supplement  or
amend this Agreement without the approval of any holders of Rights  Certificates
in order (i) to cure any ambiguity,  (ii) to correct or supplement any provision
contained herein that may be defective or inconsistent with any other provisions
herein,  (iii) to shorten or  lengthen  any time  period  hereunder,  or (iv) to
change or supplement the provisions hereunder in any manner that the Company may
deem  necessary or desirable and that shall not  adversely  affect the interests
which the holders of Rights  Certificates  (other than an Acquiring Person or an
Affiliate  or  Associate  of an  Acquiring  Person)  have in  common;  provided,
however,  that this  Agreement may not be  supplemented  or amended to lengthen,
pursuant  to clause  (iii) of this  sentence,  (A) subject to Section 30, a time
period  relating  to when the Rights may be  redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits the holders of the Rights have in common. The foregoing to the contrary
notwithstanding,  from and  after  the  Distribution  Date,  any  supplement  or
amendment not restricted only to clauses (i) and (ii) of the preceding  sentence
shall be effective only if there are Independent  Directors then in office,  and
such supplement or amendment shall also have been approved by a majority of such
Independent  Directors.  Upon the delivery of a certificate  from an appropriate
officer of the  Company or, in any case where the  concurrence  of a majority of
the  Independent  Directors  is required,  from the majority of the  Independent
Directors,  that  states  that  the  proposed  supplement  or  amendment  is  in
compliance  with the terms of this  Section 26, the Rights  Agent shall  execute
such  supplement  or  amendment,  subject to the Right Agent's right to apply to
counsel by the Right  Agent and the Right Agent being  reasonably  assured  that
such supplement or amendment is no way detrimental to the Right Agent's right or
interest.  Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made at any time that changes the Redemption
Price,  the  Purchase  Price,  the  Expiration  Date or the  number  of Units of
Preferred  Stock for which a Right is  exercisable  without  the  approval  of a
majority of the  Independent  Directors.  Prior to the  Distribution  Date,  the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Company Common Stock.

                                      -32-
<PAGE>

         SECTION  27.  SUCCESSORS.  All the  covenants  and  provisions  of this
Agreement  by or for the benefit of the  Company or the Rights  Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

         SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,  ETC.
For all purposes of this  Agreement,  any calculation of the number of shares of
Company Common Stock outstanding at any particular time,  including for purposes
of determining the particular  percentage of such outstanding  shares of Company
Common  Stock of which any  Person  is the  Beneficial  Owner,  shall be made in
accordance  with the last  sentence of Rule  13d-3(d)(1)(i)  of the Exchange Act
Regulations  as in effect on the date hereof.  Except as otherwise  specifically
provided herein,  the Board of Directors of the Company shall have the exclusive
power and authority to administer  this Agreement and to exercise all rights and
powers  specifically  granted  to  the  Board  or to the  Company,  or as may be
necessary or  advisable  in the  administration  of this  Agreement,  including,
without limitation,  the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or advisable for
the   administration  of  this  Agreement.   All  such  actions,   calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
or by a majority of the Independent  Directors in good faith shall (x) be final,
conclusive  and binding on the  Company,  the Rights  Agent,  the holders of the
Rights  and all other  parties,  and (y) not  subject  the  Board or any  member
thereof to any liability to the holders of the Rights.

SECTION  29.  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,  registered  holders  of  shares of  Company  Common  Stock)  any legal or
equitable right, remedy or claim under this Agreement;  but this Agreement shall
be for the sole and exclusive  benefit of the Company,  the Rights Agent and the
registered  holders of the Rights  Certificates  (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock).

         SECTION  30.  SEVERABILITY.   If  any  term,  provision,   covenant  or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,  impaired or invalidated;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court or authority to be invalid,  void or  unenforceable  and a majority of the
Independent  Directors  determines in its good faith  judgment that severing the
invalid  language  from this  Agreement  would  adversely  affect the purpose or
effect of this Agreement and the Rights shall not then be redeemable,  the right
of redemption  set forth in Section 23 hereof shall be reinstated  and shall not
expire until the Close of Business on the tenth  Business Day following the date
of such determination by a majority of the Independent Directors.

                                      -33-
<PAGE>

         SECTION 31.  GOVERNING  LAW. This  Agreement each Right and each Rights
Certificate  issued  hereunder shall be governed by, and construed in accordance
with,  the laws of the  Commonwealth  of  Pennsylvania  applicable  to contracts
executed in and to be performed entirely in such Commonwealth.

         SECTION 32. COUNTERPARTS.  This Agreement may be executed (including by
facsimile) in one or more  counterparts  and by the different  parties hereto in
separate  counterparts,  each of which  when  executed  shall be deemed to be an
original,  but all of which taken  together  shall  constitute  one and the same
instrument.

         SECTION  33.  DESCRIPTIVE  HEADINGS.  The  headings  contained  in this
Agreement are for descriptive  purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         SECTION 34. EXCHANGE.

         (a) The  Company  may at any time  after the  Distribution  Date,  upon
resolution of a majority of the Independent  Directors,  exchange all or part of
the then  outstanding  exercisable  Rights (which shall not include  Rights that
have become void  pursuant to Section 7(e) hereof) for Units of Preferred  Stock
at an exchange  ratio  specified in the  following  sentence,  as  appropriately
adjusted  to reflect any stock  split,  stock  dividend  or similar  transaction
occurring  after  the  date  hereof.  Subject  to  such  adjustment,  upon  such
resolution  each Right may be  exchanged  for that number of Units of  Preferred
Stock obtained by dividing the Adjustment  Spread (as defined below) by the then
current market price  (determined  pursuant to Section 11(d) hereof) per Unit of
Preferred  Stock on the  earlier of (i) the date on which any Person  becomes an
Acquiring  Person and (ii) the date on which a tender or  exchange  offer by any
Person  (other than the Company,  any  Subsidiary  of the Company,  any employee
benefit plan maintained by the Company or any of its Subsidiaries or any trustee
or  fiduciary  with  respect  to such  plan  acting in such  capacity)  is first
published or sent or given  within the meaning of Rule  14d-4(a) of the Exchange
Act Regulations or any successor rule, if upon consummation  thereof such Person
would be the  Beneficial  Owner of 15% or more of the shares of  Company  Common
Stock then  outstanding  (such exchange ratio being the "Exchange  Ratio").  The
"Adjustment  Spread" shall equal (x) the  aggregate  market price on the date of
such event of the number of  Adjustment  Shares  determined  pursuant to Section
11(a)(ii), minus (y) the Purchase Price.

                                      -34-
<PAGE>

         (b)  Immediately  upon the  action  of a  majority  of the  Independent
Directors  ordering  the  exchange of any Rights  pursuant to Section  34(a) and
without any further  action and without any notice,  the right to exercise  such
Rights shall terminate and the only right  thereafter of a holder of such Rights
shall be to receive that number of Units of Preferred  Stock equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange;  provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange.  The Company promptly shall mail a notice of any such exchange
to all the  holders of such Rights at their last  addresses  as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein  provided shall be deemed given,  whether or not the holder  receives the
notice.  Each  such  notice of  exchange  shall  state  the  method by which the
exchange of Units of  Preferred  Stock for Rights  will be effected  and, in the
event of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void  pursuant to the  provisions  of Section 7(e)
hereof) held by each holder of Rights.

         (c) In the event that the number of shares of Preferred  Stock that are
authorized by the Company's  Certificate of Incorporation but not outstanding or
reserved for issuance  for purposes  other than upon  exercise of the Rights are
not  sufficient to permit any exchange of Rights as  contemplated  in accordance
with this Section 34, the Company shall take all such action as may be necessary
to authorize  additional shares of Preferred Stock for issuance upon exchange of
the Rights or make adequate provision to substitute (1) cash, (2) Company Common
Stock or other equity  securities  of the Company,  (3) debt  securities  of the
Company,  (4) other assets,  or (5) any combination of the foregoing,  having an
aggregate value equal to the Adjustment  Spread,  where such aggregate value has
been determined by a majority of the Independent Directors.

         (d) The Company  shall not be required to issue  fractions  of Units of
Preferred Stock or to distribute certificates that evidence fractional Units. In
lieu of  fractional  Units,  the  Company may pay to the  registered  holders of
Rights  Certificates at the time such Rights are exchanged as herein provided an
amount  in  cash  equal  to the  same  fraction  of  the  current  market  price
(determined pursuant to Section 11(d) hereof) of one Unit of Preferred Stock.

         SECTION  35.  THREE  YEAR  INDEPENDENT  DIRECTOR   EVALUATION.   It  is
understood  that a Committee of Independent  Directors (as defined below) of the
Board of  Directors  of the  Company  shall  review  and  evaluate  this  Rights
Agreement in order to consider  whether the maintenance of this Rights Agreement
continues to be in the interests of the Company,  its shareholders and its other
corporate  constituencies,  at least once every three (3) years,  or sooner than
that if any Person shall have made a proposal to the Company,  or taken any such
other action, that, if effective, could cause such Person to become an Acquiring
Person  hereunder,  if a majority  of the members of the  Independent  Directors
Committee  shall deem such review and  evaluation  appropriate  after giving due
regard  to  all  relevant   circumstances.   Following  each  such  review,  the
Independent  Directors  Committee will  communicate  its conclusions to the full
Board of Directors,  including any recommendation in light thereof as to whether
this Rights Agreement  should be modified or the rights should be redeemed.  The
Independent Directors' Committee shall be comprised of no less than three and no
more than five directors of the Company who are independent of the management of
the Company and free from any relationship  that, in the opinion of its Board of
Directors, would interfere with the exercise of independent judgment as a member
of the  Independent  Directors  Committee  provided  that any director who is an
Affiliate  of the  Company or any  officer  or  employee  of the  Company or its
subsidiaries  shall not  qualify for  membership  on the  Independent  Directors
Committee; provided, however, that a director who was formerly an officer of the
Company or any of its  subsidiaries may qualify for membership even though he or
she may be receiving pension or deferred compensation payments from the Company,
if,  in the  opinion  of the  Board of  Directors,  such  Person  will  exercise
independent  judgment and will materially assist the function of the Independent
Directors Committee;  but provided,  however,  that a majority of the members of
the Independent  Directors  Committee shall, at all times,  consist of directors
who are not formerly officers of the Company or any of its subsidiaries.

                                      -35-
<PAGE>

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

ATTEST:                            INTERDIGITAL COMMUNICATIONS CORPORATION

By:  /s/ Lisa Axt Alexander        By:  /s/ William J. Merritt
    ----------------------------       ---------------------------------
Lisa Axt Alexander                 William J. Merritt
Corporate Secretary                President and Chief Executive Officer

ATTEST:                            AMERICAN STOCK TRANSFER AND TRUST COMPANY

By:  /s/ Susan Silber              By:  /s/ Herbert J. Lemmer
    ----------------------------       ---------------------------------
Susan Silber                       Herbert J. Lemmer
Assistant Secretary                Senior Vice President and General Counsel

                                      -36-
<PAGE>

                                                                       EXHIBIT A

                           FORM OF RIGHTS CERTIFICATE

                  Certificate No. R-______  __________ Rights

                  NOT  EXERCISABLE  AFTER THE EXPIRATION DATE (AS DEFINED IN THE
RIGHTS AGREEMENT  REFERRED TO BELOW).  THE RIGHTS ARE SUBJECT TO REDEMPTION,  AT
THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES  (SPECIFIED IN THE RIGHTS AGREEMENT),  RIGHTS BENEFICIALLY
OWNED  BY  ACQUIRING  PERSONS  (AS  DEFINED  IN  THE  RIGHTS  AGREEMENT)  OR ANY
SUBSEQUENT  HOLDER  OF SUCH  RIGHTS  MAY  BECOME  NULL  AND  VOID.  [THE  RIGHTS
REPRESENTED  BY THIS  RIGHTS  CERTIFICATE  ARE OR WERE  BENEFICIALLY  OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING  PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT  REFERRED TO
BELOW).  ACCORDINGLY,  THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE  CIRCUMSTANCES  SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.](1)1

                               RIGHTS CERTIFICATE

                     INTERDIGITAL COMMUNICATIONS CORPORATION

                  This  certifies  that  _____________________,   or  registered
assigns,  is the registered holder of the number of Rights set forth above, each
of which  entitles  the  registered  holder  thereof,  subject  to the terms and
conditions  of the Rights  Agreement  dated as of December 15, 2006 (the "Rights
Agreement";  terms defined  therein are used herein with the same meaning unless
otherwise defined herein) between  INTERDIGITAL  COMMUNICATIONS  CORPORATION,  a
Pennsylvania corporation (the "Company"),  and American Stock Transfer and Trust
Company,  a New York corporation,  as Rights Agent (which term shall include any
successor Rights Agent under the Rights Agreement), to purchase from the Company
at any time after the Distribution  Date and prior to the Expiration Date at the
office  of  the  Rights  Agent,  one   one-thousandth  of  one  fully  paid  and
nonassessable  share of  Series  B Junior  Participating  Preferred  Stock  (the
"Preferred  Stock"),  of the Company at the Purchase Price  initially of $200.00
per one  one-thousandth  share (each such one  one-thousandth of a share being a
"Unit") of  Preferred  Stock,  upon  presentation  and  surrender of this Rights
Certificate with the Election to Purchase and related certificate duly executed.
The number of Rights  evidenced  by this Rights  Certificate  (and the number of
Units that may be purchased  upon  exercise  thereof)  set forth above,  and the
Purchase  Price per Unit set forth  above  shall be  subject  to  adjustment  in
certain events as provided in the Rights Agreement.

--------------------
         (1) The  portion of the legend in brackets  shall be  inserted  only if
applicable and shall replace the preceding sentence.

                                      -37-
<PAGE>

                  Upon the  occurrence  of a  Section  11(a)(ii)  Event,  if the
Rights  evidenced  by this  Rights  Certificate  are  beneficially  owned  by an
Acquiring  Person or an Affiliate or Associate of any such Acquiring  Person or,
under certain circumstances  described in the Rights Agreement,  a transferee of
any such Acquiring Person, Associate or Affiliate, such Rights shall become null
and void and no holder  hereof  shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.

                  In certain  circumstances  described in the Rights  Agreement,
the rights  evidenced  hereby  may  entitle  the  registered  holder  thereof to
purchase  capital  stock of an entity  other than the Company or receive  common
stock, cash or other assets, all as provided in the Rights Agreement.

                  This  Rights  Certificate  is  subject  to all the  terms  and
conditions  of the  Rights  Agreement,  which  terms and  conditions  are hereby
incorporated  herein by  reference  and made a part  hereof and to which  Rights
Agreement  reference  is  hereby  made  for a full  description  of the  rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights Agent, the Company and the holders of the Rights Certificates.  Copies of
the Rights  Agreement are on file at the principal office of the Company and are
available from the Company upon written request.

                  This  Rights   Certificate,   with  or  without  other  Rights
Certificates,  upon  surrender at the office of the Rights Agent  designated for
such  purpose,  may be  exchanged  for  another  Rights  Certificate  or  Rights
Certificates  of like tenor and date  evidencing  an aggregate  number of Rights
equal to the aggregate number of Rights  evidenced by the Rights  Certificate or
Rights Certificates  surrendered.  If this Rights Certificate shall be exercised
in part,  the  registered  holder shall be entitled to receive,  upon  surrender
hereof,  another  Rights  Certificate or Rights  Certificates  for the number of
whole Rights not exercised.

                  Subject to the provisions of the Rights Agreement,  the Rights
evidenced  by this  Certificate  may be redeemed by the  Company  under  certain
circumstances at its option at a redemption price of $.001 per Right, payable at
the  Company's  option in cash or in common  stock of the  Company,  subject  to
adjustment in certain events as provided in the Rights Agreement.

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

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

                                      -38-
<PAGE>

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

                  WITNESS the facsimile  signature of the proper officers of the
Company and its corporate seal. Dated as of
____________ ___, 20__.

ATTEST:                              INTERDIGITAL COMMUNICATIONS CORPORATION
By:                                  By:
     ----------------------------
Name:                                Name:
Title:                               Title:

Countersigned:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
as Rights Agent
By:
Name:
Title:

                                      -39-
<PAGE>

                  [FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]

                               FORM OF ASSIGNMENT

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

FOR  VALUE  RECEIVED  hereby  sells,  assigns  and  transfers  unto  -----------
------------------------------------------------------------------ (Please print
name and address of  transferee)  this  Rights  Certificate,  together  with all
right, title and interest therein,  and does hereby  irrevocably  constitute and
appoint  __________  Attorney,  to transfer the within Rights Certificate on the
books of the  within-named  Company,  with full  power of  substitution.  Dated:
____________ __, 20__  ______________________  Signature

Signature  Guaranteed:

                                  CERTIFICATE

                  The undersigned  hereby  certifies by checking the appropriate
boxes that:

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

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

Dated:  ____________ __, 20__        ______________________
                                    Signature
Signature Guaranteed:

                                     NOTICE

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

                  Signatures  must be guaranteed  by a member in the  Securities
Transfer Agents Medallion  Program,  the Stock Exchange Medallion Program or the
New York Stock Exchange Medallion Program.

                  In  the  event  the  certification  set  forth  above  is  not
completed, the Company will deem the beneficial owner of the Rights evidenced by
this Rights  Certificate to be an Acquiring  Person or an Affiliate or Associate
thereof (as defined in the Rights  Agreement) and, in the case of an Assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.

<PAGE>

                          FORM OF ELECTION TO PURCHASE

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

To:  INTERDIGITAL COMMUNICATIONS CORPORATION

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

(Please print name and address)

Please insert social security
or other identifying number:
                             ---------------------------------

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

(Please print name and address)

Please insert social security
or other identifying number:
                              --------------------------------
                              Signature

Signature Guaranteed:

                                   CERTIFICATE

                  The undersigned  hereby  certifies by checking the appropriate
boxes that:

                  (1) the Rights  evidenced by this Rights  Certificate  |_| are
|_| are not  beneficially  owned by an  Acquiring  Person or an  Affiliate or an
Associate thereof (as defined in the Rights Agreement); and

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

Dated:  ____________ __, 20__        ______________________
                                    Signature
Signature Guaranteed:

                                     NOTICE

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

                  Signatures  must be guaranteed  by a member in the  Securities
Transfer Agents Medallion  Program,  the Stock Exchange Medallion Program or the
New York Stock Exchange Medallion Program.

                  In  the  event  the  certification  set  forth  above  is  not
completed, the Company will deem the beneficial owner of the Rights evidenced by
this Rights  Certificate to be an Acquiring  Person or an Affiliate or Associate
thereof (as defined in the Rights  Agreement) and, in the case of an Assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.

<PAGE>

                                                                       EXHIBIT B

         DESIGNATION OF THE VOTING POWERS, DESIGNATIONS PREFERENCES AND
          RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
       QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS OF THE SERIES B JUNIOR
                          PARTICIPATING PREFERRED STOCK

                         Pursuant to Section 1522 of the
          Business Corporation Law of the Commonwealth of Pennsylvania

                  I,  _________________________,   [President]  of  InterDigital
Communications  Corporation,  a  corporation  organized  and existing  under the
Business   Corporation   Law   of  the   Commonwealth   of   Pennsylvania   (the
"Corporation"),  DO HEREBY CERTIFY:  that,  pursuant to authority conferred upon
the Board of Directors of the Corporation by its Articles of Incorporation  (the
"Articles"),  and,  pursuant to the  provisions  of Section 1522 of the Business
Corporation Law of the Commonwealth of Pennsylvania, such Board of Directors, at
a duly called  meeting held on December 13, 1996,  at which a quorum was present
and acted  throughout,  adopted the  following  resolutions,  which  resolutions
remain in full force and effect on the date  hereof  creating a series of 90,000
shares of Preferred Stock designated as Series B Junior Participating  Preferred
Stock (the "Series B Preferred  Stock") out of the class of 14,398,600 shares of
preferred stock (the "Preferred Stock"):

                  RESOLVED, that in order to effect the Rights Plan and pursuant
to the  authority  vested  in the  Board of  Directors  in  accordance  with the
provisions of the Articles, the Board of Directors does hereby create, authorize
and provide for the  issuance of the Series B Preferred  Stock having the voting
powers, designation, relative, participating, optional and other special rights,
preferences,  and qualifications,  limitations and restrictions thereof that are
set forth as follows:

                  Section 1.  Designation and Amount.  The shares of such series
shall be designated as "Series B Junior  Participating  Preferred Stock" and the
number of shares constituting such series shall be 90,000.

                  Section 2. Dividends and Distributions.

                  (A) Subject to the prior and superior rights of the holders of
any  shares  of any  other  series of  Preferred  Stock or any  other  shares of
preferred stock of the  Corporation  ranking prior and superior to the shares of
Series  B  Preferred  Stock  with  respect  to  dividends,  each  holder  of one
one-thousandth  (1/1000) of a share (a "Unit") of Series B Preferred Stock shall
be entitled to receive,  when,  as and if declared by the Board of Directors out
of funds legally available for that purpose,  (i) dividends payable in cash when
and if declared by the Board of Directors of the  Corporation  in respect of the
Common Stock (each such date being a "Dividend  Payment Date") commencing on the
first  Dividend  Payment Date after the first  issuance of such Unit of Series B
Preferred  Stock,  in an amount per Unit (rounded to the nearest cent) equal to,
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends  declared on shares of the Common Stock since
the immediately  preceding  Dividend Payment Date, or, with respect to the first
Dividend  Payment Date, since the first issuance of a Unit of Series B Preferred
Stock,  and (ii) subject to the provision for adjustment  hereinafter set forth,
distributions  (payable in kind) on each Dividend  Payment Date in an amount per
Unit equal to the aggregate  per share amount of all noncash  dividends or other
distributions  (other  than a dividend  payable  in shares of Common  Stock or a
subdivision of the outstanding  shares of Common Stock, by  reclassification  or
otherwise)  declared on shares of common stock since the  immediately  preceding
Dividend Payment Date, or with respect to the first Dividend Payment Date, since
the first issuance of a Unit of Series B Preferred  Stock. In the event that the
Corporation  shall at any time after December 13, 1996 (the "Rights  Declaration
Date"),  (i) declare any dividend on outstanding  shares of Common Stock payable
in shares of common stock, (ii) subdivide  outstanding shares of Common Stock or
(iii)  combine  outstanding  shares of  Common  Stock  into a smaller  number of
shares,  then in each  such case the  amount  to which  the  holder of a Unit of
Series B Preferred Stock was entitled  immediately  prior to such event pursuant
to the next preceding sentence shall be adjusted by multiplying such amount by a
fraction  the  numerator  of which shall be the number of shares of Common Stock
that are 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.

<PAGE>
                  (B) The  Corporation  shall declare a dividend or distribution
on Units  of  Series B  Preferred  Stock as  provided  in  paragraph  (A)  above
immediately after it declares a dividend or distribution on the shares of Common
Stock (other than a dividend payable in shares of Common Stock).

                  Section 3. Voting Rights.

                  The  holders of Units of Series B  Preferred  Stock shall have
the following voting rights:

                  (A) Subject to the provision for  adjustment  hereinafter  set
forth, each Unit of Series B Preferred Stock shall entitle the holder thereof to
one vote on all matters  submitted  to a vote of the holders of Common  Stock of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding  shares of Common Stock
payable in shares of Common Stock, (ii) subdivide  outstanding  shares of Common
Stock or (iii)  combine the  outstanding  shares of Common  Stock into a smaller
number of  shares,  then in each such case the number of votes per Unit to which
holders of Units of Series B Preferred Stock were entitled  immediately prior to
such event  shall be  adjusted  by  multiplying  such  number 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) Except as otherwise provided herein or by law, the holders
of Units of Series B Preferred  Stock and the holders of shares of Common  Stock
shall vote  together as one class on all matters  submitted to a vote of holders
of Common Stock of the Corporation.

                  (C) Except as set forth  herein,  holders of Units of Series A
Preferred Stock shall have no special voting rights and their consents shall not
be  required  (except to the extent they are  entitled  to vote with  holders of
shares of Common Stock as set forth herein) for taking any corporate action.

<PAGE>
                  Section 4. Certain Restrictions.

                  (A) Whenever any dividends or distributions  payable, on Units
of Series B Preferred Stock as provided in Section 2 have not been paid in full,
thereafter  and until all such accrued and unpaid  dividends and  distributions,
whether or not declared,  on outstanding Units of Series B Preferred Stock shall
have been paid in full, the Corporation shall not:

                  (i) declare or pay dividends on, make any other  distributions
on, or redeem or repurchase or otherwise acquire for  consideration,  any shares
of junior stock;

                  (ii)   declare  or  pay   dividends   on  or  make  any  other
distributions  on any shares of parity stock,  except  dividends paid ratably on
Units of Series B Preferred  Stock and shares of all such parity  stock on which
dividends  are payable or in arrears in proportion to the total amounts to which
the holders of such Units and all such shares are then entitled;

                  (iii)  redeem  or   repurchase   or   otherwise   acquire  for
consideration  shares  of  any  parity  stock;   provided,   however,  that  the
Corporation  may at any time redeem,  repurchase or otherwise  acquire shares of
any such parity stock in exchange for shares of any junior stock;

                  (iv) repurchase or otherwise acquire for consideration  (other
than shares of junior  stock) any Units of Series B Preferred  Stock,  except in
accordance  with a  repurchase  offer  made in  writing  or by  publication  (as
determined  by the Board of  Directors) to all holders of such Units on the same
terms.

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

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

                  Section 6. Liquidation, Dissolution or Winding Up.

                  (A) Upon any voluntary or involuntary liquidation, dissolution
or  winding  up of the  Corporation,  no  distribution  shall be made (i) to the
holders  of shares of  junior  stock  unless  the  holders  of Units of Series B
Preferred  Stock  shall have  received,  subject to  adjustment  as  hereinafter
provided in paragraph  (B), the amount,  per Unit,  equal to the  aggregate  per
share amount to be distributed to holders of shares of common stock,  or (ii) to
the  holders  of  shares  of  parity  stock,  unless  simultaneously   therewith
distributions  are made  ratably  on Units of Series B  Preferred  Stock and all
other shares of such parity stock in  proportion  to the total  amounts to which
the holders of Units of Series B Preferred  Stock are entitled  under clause (i)
of this  sentence  and to which the holders of shares of such  parity  stock are
entitled, in each case upon such liquidation, dissolution or winding up.

<PAGE>
                  (B) In the event the  Corporation  shall at any time after the
Rights Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock,  (ii) subdivide  outstanding  shares of
Common Stock, or (iii) combine outstanding shares of Common Stock into a smaller
number of shares,  then in each such case the aggregate  amount to which holders
of Units of Series B Preferred  Stock were  entitled  immediately  prior to such
event  pursuant to clause  (i)(b) of  paragraph  (A) of this  Section 6 shall be
adjusted by  multiplying  such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are 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 case the Corporation
shall enter into any consolidation,  merger, combination or other transaction in
which the shares of Common Stock are exchanged for or converted into other stock
or securities,  cash and/or any other  property,  then in any such case Units of
Series B Preferred  Stock shall at the same time be similarly  exchanged  for or
converted  into an amount per Unit  (subject  to the  provision  for  adjustment
hereinafter set forth) equal to the aggregate amount of stock, securities,  cash
and/or any other property  (payable in kind),  as the case may be, into which or
for which each share of Common Stock is converted or exchanged. In the event the
Corporation shall at any time after the Rights  Declaration Date (i) declare any
dividend  on  outstanding  shares of Common  Stock  payable  in shares of Common
Stock,  (ii)  subdivide  outstanding  shares of Common  Stock,  or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the immediately  preceding  sentence with respect to the
exchange or conversion of Units of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be the number
of shares of Common Stock that are 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. Redemption. The Units  of Series  B Preferred Stock
shall not be redeemable.

                  Section  9.  Ranking.  The Units of Series B  Preferred  Stock
shall rank junior to all other  series of the  Preferred  Stock and to any other
class of preferred  stock that hereafter may be issued by the  Corporation as to
the payment of dividends and the distribution of assets, unless the terms of any
such series or class shall provide otherwise.

                  Section  10.  Amendment.  The  Articles,   including,  without
limitation, this resolution,  shall not hereafter be amended, either directly or
indirectly,  or through merger or consolidation with another  corporation in any
manner that would alter or change the powers,  preferences  or special rights of
the  Series B  Preferred  Stock  so as to  affect  them  adversely  without  the
affirmative  vote of the holders of a majority or more of the outstanding  Units
of Series B Preferred Stock, voting separately as a class.

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

                  Section 12. Certain  Definitions.  As used herein with respect
to the Series B Preferred  Stock,  the following  terms shall have the following
meanings:

                  (A) The term  "Common  Stock"  means the class of common stock
designated as the Common Stock,  par value $.01 per share, of the Corporation at
the date hereof or any other class of stock resulting from successive changes or
reclassification of the common stock.

                  (B) The term "junior stock" (i) as used in Section 4 means the
common stock and any other class or series of capital  stock of the  Corporation
hereafter  authorized  or issued  over  which the Series B  Preferred  Stock has
preference  or  priority  as to the  payment  of  dividends  and (ii) as used in
Section 6, shall mean the common  stock and any other class or series of capital
stock of the Corporation  over which the Series B Preferred Stock has preference
or priority in the  distribution  of assets on any  liquidation,  dissolution or
winding up of the Corporation.

                  (C) The term  "parity  stock"  (i) as used in Section 4, means
any class or series of stock of the Corporation  hereafter  authorized or issued
ranking pari passu with the Series B Preferred Stock as to dividends and (ii) as
used in Section 6, shall mean any class or series of capital  stock ranking pari
passu with the Series B  Preferred  Stock in the  distribution  of assets on any
liquidation, dissolution or winding up.

                  IN WITNESS WHEREOF,  InterDigital  Communications  Corporation
has caused this Certificate to be signed by its [President], and attested by its
[Assistant] Secretary as of the _____ day of December, 1996.

                  INTERDIGITAL COMMUNICATIONS CORPORATION

By:
    ----------------------------
         [name, title]

Attest:
By:
    ----------------------------
         [name, title]

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