Document:

SWITCHON NETWORKS, INC.

                                 1998 STOCK PLAN

                             STOCK OPTION AGREEMENT

         Unless  otherwise  defined herein,  the terms defined in the 1998 Stock
Plan shall have the same defined  meanings in this Stock Option  Agreement  (the
"Option Agreement").
20.      NOTICE OF STOCK OPTION GRANT

        [Name]

         You have  been  granted  an  option  to  purchase  Common  Stock of the
Company,  subject  to the  terms  and  conditions  of the Plan  and this  Option
Agreement, as follows:

         Date of Grant:                     [GrantDate]

         Vesting Commencement Date:         [Vesting]

         Exercise Price per Share:           $[ExercisePrice]

         Total Number of Shares Granted:    [TotalShares]

         Total Exercise Price:              [TotalPrice]

         Type                                of Option: This Option
                                             is an Incentive  Stock
                                             Option  except  to the
                                             extent   that   it  is
                                             exercised as to Shares
                                             that   have   not  yet
                                             vested  at the time of
                                             exercise.    In   such
                                             case, this Option will
                                             convert     into     a
                                             Nonstatutory     Stock
                                             Option for such Shares
                                             that   are   not   yet
                                             vested  at the time of
                                             exercise.

         Term/Expiration Date:              [TermDate]

         Exercise and Vesting Schedule:

         This Option shall be  exercisable  in whole or in part,  and shall vest
according to the following vesting schedule:

         25% of the Shares  subject to the Option shall vest twelve months after
the  Vesting  Commencement  Date,  and 1/48 of the Shares  subject to the Option
shall  vest each month  thereafter,  subject to  Optionee's  continuing  to be a
Service Provider on such dates.

<PAGE>

         Termination Period:

         This  Option may be  exercised,  to the extent it is then  vested,  for
three  months  after  Optionee  ceases to be a Service  Provider.  Upon death or
Disability  of the Optionee,  this Option may be exercised,  to the extent it is
then vested,  for one year after Optionee ceases to be Service  Provider.  In no
event  shall this Option be  exercised  later than the  Term/Expiration  Date as
provided above.

21.       AGREEMENT

         (a) Grant of Option.  The Administrator of the Company hereby grants to
the  Optionee  named in the Notice of Grant  (the  "Optionee"),  an option  (the
"Option") to purchase the number of Shares set forth in the Notice of Grant,  at
the  exercise  price per Share set forth in the Notice of Grant  (the  "Exercise
Price"),  and  subject  to the  terms  and  conditions  of the  Plan,  which  is
incorporated  herein by reference.  Subject to Section 12(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.

         If  designated  in the  Notice of Grant as an  Incentive  Stock  Option
("ISO"),  this  Option is intended to qualify as an  Incentive  Stock  Option as
defined in Section 422 of the Code. Nevertheless,  to the extent that it exceeds
the  $100,000  rule of Code  Section  422(d),  this Option shall be treated as a
Nonstatutory Stock Option ("NSO").

         (b)  Exercise of Option.  This Option shall be  exercisable  during its
term in accordance with the provisions of Section 9 of the Plan as follows:

         (i) Right to Exercise.

         (1) Subject to subsections  2(a)(ii) and 2(a)(iii)  below,  this Option
shall be exercisable cumulatively according to the vesting schedule set forth in
the Notice of Grant.  Alternatively,  at the election of the Optionee and if the
Optionee is an  "accredited  investor,"  as such term applies to an  individual,
within the meaning of Regulation D promulgated under the Securities Act of 1933,
as amended,  this Option may be  exercised in whole or in part at any time as to
Shares which have not yet vested.

         (2) Shares  which have not yet vested at the time of  exercise  of this
Option by Optionee  shall be subject to the Company's  repurchase  right (as set
forth in the Restricted  Stock Purchase  Agreement,  attached  hereto as Exhibit
C-1). As a condition to exercising this Option for unvested Shares, the Optionee
shall (A) execute the Restricted  Stock Purchase  Agreement and (B) complete and
execute an Accredited Investor Letter (attached hereto as Exhibit C-6).

         (3) This Option may not be exercised for a fraction of a Share.

         (ii) Method of Exercise.  This Option shall be  exercisable by delivery
of an exercise notice in the form attached as Exhibit A (the "Exercise  Notice")
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised,  and such other  representations
and agreements as may be required by the Company.  The Exercise  Notice shall be
accompanied  by  payment of the  aggregate  Exercise  Price as to all  Exercised
Shares.  This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed  Exercise  Notice  accompanied by the aggregate  Exercise
Price.

<PAGE>

         No Shares shall be issued  pursuant to the exercise of an Option unless
such issuance and such exercise  complies with  Applicable  Laws.  Assuming such
compliance,  for income tax purposes the Shares shall be considered  transferred
to the  Optionee on the date on which the Option is  exercised  with  respect to
such Shares.

         (c) Optionee's  Representations.  In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company,  concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment  Representation  Statement in the form attached hereto as Exhibit
B, and shall  read the  applicable  rules of the  Commissioner  of  Corporations
attached to such Investment Representation Statement.

         (d) Lock-Up Period. Optionee hereby agrees that, if so requested by the
Company or any  representative of the underwriters (the "Managing  Underwriter")
in connection  with any  registration  of the offering of any  securities of the
Company under the Securities Act, Optionee shall not sell or otherwise  transfer
any Shares or other securities of the Company during the 180-day period (or such
other  period as may be requested  in writing by the  Managing  Underwriter  and
agreed to in writing by the Company) (the "Market  Standoff  Period")  following
the effective  date of a  registration  statement of the Company filed under the
Securities  Act.  Such  restriction  shall apply only to the first  registration
statement  of the  Company to become  effective  under the  Securities  Act that
includes  securities  to be sold on behalf of the  Company  to the  public in an
underwritten  public  offering under the Securities  Act. The Company may impose
stop-transfer  instructions with respect to securities  subject to the foregoing
restrictions until the end of such Market Standoff Period.

         (e) Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the  following,  or a  combination  thereof,  at the  election  of the
Optionee:

         (i) cash;

         (ii) check;

         (iii)  consideration  received by the Company  under a formal  cashless
exercise program adopted by the Company in connection with the Plan; or

         (iv)  surrender  of  other  Shares  which,  (i) in the  case of  Shares
acquired  upon  exercise of an option,  have been owned by the Optionee for more
than six (6) months on the date of surrender,  and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate  Exercise Price of the Exercised
Shares.

         (f)  Restrictions  on Exercise.  This Option may not be exercised until
such time as the Plan has been approved by the  shareholders of the Company,  or
if the  issuance of such  Shares upon such  exercise or the method of payment of
consideration  for such shares would  constitute  a violation of any  Applicable
Law.

         (g)  Non-Transferability  of Option. This Option may not be transferred
in any manner  otherwise than by will or by the laws of descent or  distribution
and may be exercised during the lifetime of Optionee only by Optionee. The terms
of the Plan and this  Option  Agreement  shall be  binding  upon the  executors,
administrators,  heirs,  successors  and  assigns of the  Optionee.

<PAGE>

         (h) Term of Option.  This Option may be exercised  only within the term
set out in the Notice of Grant,  and may be  exercised  during such term only in
accordance with the Plan and the terms of this Option.

         (i) Tax Consequences. Set forth below is a brief summary as of the date
of this  Option of some of the  federal  tax  consequences  of  exercise of this
Option and  disposition of the Shares.  THIS SUMMARY IS NECESSARILY  INCOMPLETE,
AND THE TAX LAWS AND  REGULATIONS  ARE SUBJECT TO CHANGE.  THE  OPTIONEE  SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

         (i)  Exercise  of  NSO.  There  may be a  regular  federal  income  tax
liability  upon the exercise of an NSO.  The Optionee  will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess,  if any, of the Fair Market Value of the Exercised Shares on the date of
exercise  over the  Exercise  Price.  If  Optionee  is an  Employee  or a former
Employee, the Company will be required to withhold from Optionee's  compensation
or collect from Optionee and pay to the applicable taxing  authorities an amount
in cash  equal  to a  percentage  of this  compensation  income  at the  time of
exercise,  and may refuse to honor the exercise and refuse to deliver  Shares if
such withholding amounts are not delivered at the time of exercise.

         (ii) Exercise of ISO. If this Option qualifies as an ISO, there will be
no regular  federal  income  tax  liability  upon the  exercise  of the  Option,
although the excess, if any, of the Fair Market Value of the Exercised Shares on
the date of exercise over the Exercise Price will be treated as an adjustment to
the  alternative  minimum  tax for  federal  tax  purposes  and may  subject the
Optionee to the alternative minimum tax in the year of exercise.

         (iii) Exercise of ISO Following  Disability.  If the Optionee ceases to
be an Employee  as a result of a  disability  that is not a total and  permanent
disability as defined in Section  22(e)(3) of the Code, to the extent  permitted
on the date of  termination,  the  Optionee  must  exercise an ISO within  three
months of such termination for the ISO to be qualified as an ISO.

         (iv)  Disposition of Shares.  In the case of an NSO, if Shares are held
for at least one year,  any gain realized on  disposition  of the Shares will be
treated as long-term  capital gain for federal income tax purposes.  In the case
of an ISO,  if Shares  transferred  pursuant to the Option are held for at least
one year after exercise and at least two years after the Date of Grant, any gain
realized on disposition of the Shares will also be treated as long-term  capital
gain for  federal  income tax  purposes.  If Shares  purchased  under an ISO are
disposed of within one year after exercise or two years after the Date of Grant,
any gain realized on such  disposition  will be treated as  compensation  income
(taxable at ordinary  income rates) to the extent of the difference  between the
Exercise  Price of the  Exercised  Shares and the lesser of (i) the Fair  Market
Value of the Exercised Shares on the date of exercise, or (ii) the sale price of
the Exercised  Shares.  Different rules may apply if the Shares are subject to a
substantial risk of forfeiture (within the meaning of Section 83 of the Code) at
the time of  purchase.  Any  additional  gain  will be taxed  as  capital  gain,
short-term depending on the period that the ISO Shares were held.

         (v) Notice of  Disqualifying  Disposition of ISO Shares.  If the Option
granted  to  Optionee  herein  is an ISO,  and if  Optionee  sells or  otherwise
disposes  of any of the  Shares  acquired  pursuant  to the ISO on or before the
later of (i) the date two years  after  the Date of Grant,  or (ii) the date one
year after the date of  exercise,  the  Optionee  shall  immediately  notify the
Company in writing of such  disposition.  Optionee  agrees that  Optionee may be
subject to income tax  withholding  by the  Company on the  compensation  income
recognized by the  Optionee.

<PAGE>

         (vi) Section 83(b) Election for Unvested Shares  Purchased  Pursuant to
Options.  With  respect to the  exercise of an Option for  unvested  Shares,  an
election (the "Election") may be filed by the Optionee with the Internal Revenue
Service,  within 30 days of the  purchase  of the Shares,  electing  pursuant to
Section 83(b) of the Code to be taxed  currently on any  difference  between the
purchase  price  of the  Shares  and  their  Fair  Market  Value  on the date of
purchase.  In the case of an NSO, this will result in a  recognition  of taxable
income to the Optionee on the date of exercise,  measured by the excess, if any,
of the Fair  Market  Value of the  Exercised  Shares,  at the time the Option is
exercised  over the  purchase  price for the  Exercised  Shares.  Absent such an
election, taxable income will be measured and recognized by Optionee at the time
or times on which the Company's Repurchase Option lapses. In the case of an ISO,
such an election  will result in a  recognition  of income to the  Optionee  for
alternative  minimum  tax  purposes  on the date of  exercise,  measured  by the
excess,  if any, of the Fair Market Value of the Exercised  Shares,  at the time
the Option is  exercised,  over the  purchase  price for the  Exercised  Shares.
Absent such an election, alternative minimum taxable income will be measured and
recognized  by Optionee at the time or times on which the  Company's  Repurchase
Option lapses.  Optionee is strongly encouraged to seek the advice of his or her
own tax  consultants  in  connection  with the  purchase  of the  Shares and the
advisability  of filing of the Election  under Section 83(b) of the Code. A form
of Election under Section 83(b) is attached hereto as Exhibit C-5 for reference.

         OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY AND NOT
THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b),  EVEN IF OPTIONEE
REQUESTS  THE COMPANY OR ITS  REPRESENTATIVE  TO MAKE THIS FILING ON  OPTIONEE'S
BEHALF.

         (j) Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with  respect to the subject  matter  hereof and  supersede in their
entirety all prior  undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof,  and may not be modified  adversely to the
Optionee's  interest  except by means of a writing  signed  by the  Company  and
Optionee. This Option Agreement is governed by the internal substantive laws but
not the choice of law rules of California.

         (k) No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES  PURSUANT TO THE  VESTING  SCHEDULE  HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH
THE  ACT  OF  BEING  HIRED,  BEING  GRANTED  THIS  OPTION  OR  ACQUIRING  SHARES
HEREUNDER).  OPTIONEE FURTHER  ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT,  THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT  CONSTITUTE  AN EXPRESS OR IMPLIED  PROMISE  OF  CONTINUED  ENGAGEMENT  AS A
SERVICE  PROVIDER FOR THE VESTING PERIOD,  FOR ANY PERIOD,  OR AT ALL, AND SHALL
NOT  INTERFERE  IN ANY WAY  WITH  OPTIONEE'S  RIGHT  OR THE  COMPANY'S  RIGHT TO
TERMINATE  OPTIONEE'S  RELATIONSHIP  AS A SERVICE  PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

<PAGE>

         Optionee acknowledges receipt of a copy of the Plan and represents that
he or she is familiar with the terms and provisions thereof,  and hereby accepts
this Option  subject to all of the terms and  provisions  thereof.  Optionee has
reviewed the Plan and this Option in their  entirety,  has had an opportunity to
obtain  the  advice  of  counsel  prior  to  executing  this  Option  and  fully
understands  all provisions of the Option.  Optionee  hereby agrees to accept as
binding,   conclusive  and  final  all  decisions  or   interpretations  of  the
Administrator upon any questions arising under the Plan or this Option. Optionee
further  agrees to notify the Company upon any change in the  residence  address
indicated below.

OPTIONEE                                  SWITCHON NETWORKS, INC.

-------------------------------------     ----------------------
Signature                                 By

                                          President & CEO
-------------------------------------     -----------------------
[Name]                                    Title

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

-------------------------------------
Residence Address

<PAGE>

                                    EXHIBIT A

                                 1998 Stock Plan

                                 EXERCISE NOTICE

SwitchOn Networks, Inc.
830 Hillview Court, Suite 190
Milpitas, CA 95035

Attention:  Chief Financial Officer

1. Exercise of Option. Effective as of today, ___________, ____, the undersigned
("Optionee")  hereby  elects to exercise  Optionee's  option (the  "Option")  to
purchase  _________  shares of the  Common  Stock  (the  "Shares")  of  SwitchOn
Networks,  Inc. (the  "Company")  under and pursuant to the 1998 Stock Plan (the
"Plan")  and the  Stock  Option  Agreement  dated  ________,  ___  (the  "Option
Agreement").

2.       Delivery of  Payment.  Purchaser  herewith  delivers to the Company the
full purchase price of the Shares, as set forth in the Option Agreement.

3.       Representations  of Optionee.  Optionee  acknowledges that Optionee has
received,  read and understood  the Plan and the Option  Agreement and agrees to
abide by and be bound by their terms and conditions.

4.       Rights as  Shareholder.  Until the issuance of the Shares (as evidenced
by the  appropriate  entry on the books of the  Company or of a duly  authorized
transfer  agent of the  Company),  no right to vote or receive  dividends or any
other rights as a  shareholder  shall exist with respect to the optioned  stock,
notwithstanding  the  exercise of the Option.  The Shares shall be issued to the
Optionee as soon as  practicable  after the Option is  exercised.  No adjustment
shall be made for a dividend  or other  right for which the record date is prior
to the date of issuance except as provided in Section 12 of the Plan.

5.       Company's Right of First Refusal. Before any Shares held by Optionee or
any transferee  (either being sometimes  referred to herein as the "Holder") may
be sold or  otherwise  transferred  (including  transfer by gift or operation of
law),  the  Company or its  assignee(s)  shall have a right of first  refusal to
purchase the Shares on the terms and  conditions  set forth in this Section (the
"Right of First Refusal").

         (a) Notice of Proposed Transfer. The Holder of the Shares shall deliver
to the Company a written  notice (the "Notice")  stating:  (i) the Holder's bona
fide intention to sell or otherwise transfer such Shares;  (ii) the name of each
proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number
of Shares to be transferred to each Proposed Transferee;  and (iv) the bona fide
cash price or other  consideration for which the Holder proposes to transfer the
Shares  (the  "Offered  Price"),  and the Holder  shall  offer the Shares at the
Offered Price to the Company or its assignee(s).

         (b) Exercise of Right of First Refusal.  At any time within thirty (30)
days after receipt of the Notice,  the Company  and/or its  assignee(s)  may, by
giving  written  notice to the Holder,  elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees,  at the purchase price determined in accordance with subsection (c)
below.

<PAGE>

         (c) Purchase  Price.  The  purchase  price  ("Purchase  Price") for the
Shares  purchased by the Company or its assignee(s)  under this Section shall be
the Offered Price. If the Offered Price includes  consideration other than cash,
the cash equivalent value of the non-cash  consideration  shall be determined by
the Board of Directors of the Company in good faith.

         (d) Payment. Payment of the Purchase Price shall be made, at the option
of the Company or its assignee(s), in cash (by check), by cancellation of all or
a portion of any  outstanding  indebtedness of the Holder to the Company (or, in
the case of repurchase by an assignee,  to the assignee),  or by any combination
thereof  within 30 days after  receipt of the Notice or in the manner and at the
times set forth in the Notice.

         (e) Holder's  Right to Transfer.  If all of the Shares  proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section,  then the Holder may
sell or  otherwise  transfer  such  Shares to that  Proposed  Transferee  at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the Notice,  that any such sale or
other transfer is effected in accordance with any applicable securities laws and
that the  Proposed  Transferee  agrees in writing  that the  provisions  of this
Section  shall  continue  to apply to the  Shares in the hands of such  Proposed
Transferee.  If the Shares  described in the Notice are not  transferred  to the
Proposed  Transferee  within  such  period,  a new Notice  shall be given to the
Company,  and the Company and/or its assignees  shall again be offered the Right
of First  Refusal  before any Shares held by the Holder may be sold or otherwise
transferred.

         (f) Exception for Certain  Family  Transfers.  Anything to the contrary
contained  in this  Section  notwithstanding,  the transfer of any or all of the
Shares  during the  Optionee's  lifetime or on the  Optionee's  death by will or
intestacy to the Optionee's  immediate  family or a trust for the benefit of the
Optionee's immediate family shall be exempt from the provisions of this Section.
"Immediate  Family" as used  herein  shall mean  spouse,  lineal  descendant  or
antecedent,  father,  mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred  subject to the
provisions  of this  Section,  and there  shall be no further  transfer  of such
Shares except in accordance with the terms of this Section.

         (g)  Termination of Right of First Refusal.  The Right of First Refusal
shall  terminate  as to any Shares  upon the first  sale of Common  Stock of the
Company to the general public  pursuant to a registration  statement  filed with
and declared  effective by the  Securities  and  Exchange  Commission  under the
Securities Act of 1933, as amended.

6.       Tax Consultation. Optionee understands that Optionee may suffer adverse
tax  consequences  as a result of  Optionee's  purchase  or  disposition  of the
Shares. Optionee represents that Optionee has consulted with any tax consultants
Optionee deems  advisable in connection  with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice.

<PAGE>

7.       Restrictive Legends and Stop-Transfer Orders.

         (a) Legends.  Optionee  understands  and agrees that the Company  shall
cause the legends set forth below or legends  substantially  equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any  other  legends  that may be  required  by the  Company  or by state or
federal securities laws:

                  THE  SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED
                  UNDER THE  SECURITIES  ACT OF 1933 (THE  "ACT") AND MAY NOT BE
                  OFFERED,   SOLD   OR   OTHERWISE   TRANSFERRED,   PLEDGED   OR
                  HYPOTHECATED  UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN
                  THE OPINION OF COMPANY  COUNSEL  SATISFACTORY TO THE ISSUER OF
                  THESE  SECURITIES,  SUCH OFFER,  SALE OR  TRANSFER,  PLEDGE OR
                  HYPOTHECATION IS IN COMPLIANCE THEREWITH.

                  THE SHARES  REPRESENTED  BY THIS  CERTIFICATE  ARE  SUBJECT TO
                  CERTAIN  RESTRICTIONS  ON TRANSFER AND RIGHT OF FIRST  REFUSAL
                  OPTIONS HELD BY THE ISSUER OR ITS  ASSIGNEE(S) AS SET FORTH IN
                  THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
                  OF  THESE  SHARES,  A COPY OF  WHICH  MAY BE  OBTAINED  AT THE
                  PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND
                  RIGHT OF FIRST  REFUSAL  ARE BINDING ON  TRANSFEREES  OF THESE
                  SHARES.

                  IT IS  UNLAWFUL  TO  CONSUMMATE  A SALE  OR  TRANSFER  OF THIS
                  SECURITY,   OR  ANY  INTEREST  THEREIN,   OR  TO  RECEIVE  ANY
                  CONSIDERATION  THEREFOR,  WITHOUT THE PRIOR WRITTEN CONSENT OF
                  THE  COMMISSIONER  OF CORPORATIONS OF THE STATE OF CALIFORNIA,
                  EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

         Optionee  understands  that transfer of the Shares may be restricted by
Section 260.141.11 of the Rules of the California Corporations  Commissioner,  a
copy of which is attached to Exhibit B, the Investment Representation Statement.

         (b)  Stop-Transfer  Notices.  Optionee  agrees that, in order to ensure
compliance  with the  restrictions  referred  to herein,  the  Company may issue
appropriate  "stop  transfer"  instructions  to its transfer  agent, if any, and
that,  if the Company  transfers  its own  securities,  it may make  appropriate
notations to the same effect in its own records.

         (c)  Refusal to  Transfer.  The Company  shall not be  required  (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the  provisions of this Exercise  Notice or (ii) to treat as
owner of such  Shares or to accord  the  right to vote or pay  dividends  to any
purchaser  or  other   transferee  to  whom  such  Shares  shall  have  been  so
transferred.

8.       Successors and Assigns.  The Company may assign any of its rights under
this  Exercise  Notice  to  single  or  multiple  assignees,  and the  terms and
conditions of this Exercise  Notice shall inure to the benefit of the successors
and assigns of the Company.  Subject to the  restrictions on transfer herein set
forth,  the terms and  conditions of this Exercise  Notice shall be binding upon
Optionee  and  his or  her  heirs,  executors,  administrators,  successors  and
assigns.

9.       Interpretation.  Any  dispute  regarding  the  interpretation  of  this
Exercise  Notice shall be  submitted by Optionee or by the Company  forthwith to
the  Administrator  which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and binding
on all  parties.

<PAGE>

10.      Governing Law;  Severability.  This Exercise  Notice is governed by the
internal substantive laws, but not the choice of law rules, of California.

11.      Entire Agreement. The Plan and Option Agreement are incorporated herein
by reference.  This Exercise  Notice,  the Plan, the  Restricted  Stock Purchase
Agreement,  the Option  Agreement and the  Investment  Representation  Statement
constitute  the entire  agreement  of the  parties  with  respect to the subject
matter  hereof  and  supersede  in their  entirety  all prior  undertakings  and
agreements  of the  Company and  Optionee  with  respect to the  subject  matter
hereof, and may not be modified  adversely to the Optionee's  interest except by
means of a writing signed by the Company and Optionee.

<PAGE>

Submitted by:                                 Accepted by:

OPTIONEE:                                     SWITCHON NETWORKS, INC.

--------------------------------------        --------------------------------
Signature                                     By

--------------------------------------        --------------------------------
[Name]                                        Its

Address:                                      Address:
-------                                       -------

                                              SwitchOn Networks, Inc.
--------------------------------------
                                              830 Hillview Court, Suite 190
                                              Milpitas, CA 95035
--------------------------------------

                                                   Date Received

<PAGE>

                                    EXHIBIT B

                       INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:                 [Name]

COMPANY:                  SWITCHON NETWORKS, INC.

SECURITY:                 COMMON STOCK

AMOUNT:                   [TotalShares]

DATE:

         In connection  with the purchase of the  above-listed  Securities,  the
undersigned Optionee represents to the Company the following:

         (a) Optionee is aware of the Company's  business  affairs and financial
condition and has acquired sufficient  information about the Company to reach an
informed  and  knowledgeable  decision  to acquire the  Securities.  Optionee is
acquiring  these  Securities  for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the  Securities  Act of 1933, as amended (the  "Securities
Act").

         (b)  Optionee   acknowledges   and  understands   that  the  Securities
constitute  "restricted  securities"  under the Securities Act and have not been
registered  under the  Securities  Act in  reliance  upon a  specific  exemption
therefrom,  which  exemption  depends upon,  among other  things,  the bona fide
nature of Optionee's  investment intent as expressed herein. In this connection,
Optionee   understands  that,  in  the  view  of  the  Securities  and  Exchange
Commission,  the  statutory  basis  for such  exemption  may be  unavailable  if
Optionee's representation was predicated solely upon a present intention to hold
these  Securities  for the minimum  capital  gains  period  specified  under tax
statutes,  for a deferred  sale,  for or until an  increase  or  decrease in the
market price of the  Securities,  or for a period of one year or any other fixed
period in the future.  Optionee further  understands that the Securities must be
held indefinitely  unless they are subsequently  registered under the Securities
Act or an  exemption  from such  registration  is  available.  Optionee  further
acknowledges and understands that the Company is under no obligation to register
the  Securities.  Optionee  understands  that  the  certificate  evidencing  the
Securities  will be imprinted with a legend which  prohibits the transfer of the
Securities  unless they are registered or such  registration  is not required in
the opinion of counsel  satisfactory to the Company,  a legend prohibiting their
transfer without the consent of the Commissioner of Corporations of the State of
California and with any other legend required under  applicable state securities
laws.

         (c) Optionee is familiar with the  provisions of Rule 701 and Rule 144,
each promulgated  under the Securities Act, which, in substance,  permit limited
public resale of "restricted  securities" acquired,  directly or indirectly from
the issuer  thereof,  in a non-public  offering  subject to the  satisfaction of
certain  conditions.  Rule 701 provides that if the issuer  qualifies under Rule
701 at the time of the grant of the Option to the Optionee, the exercise will be
exempt  from  registration  under the  Securities  Act. In the event the Company
becomes  subject  to the  reporting  requirements  of Section 13 or 15(d) of the
Securities  Exchange Act of 1934,  ninety (90) days  thereafter  (or such longer
period as any market  stand-off  agreement  may require) the  Securities  exempt
under Rule 701 may be  resold,  subject  to the  satisfaction  of certain of the
conditions specified by Rule 144, including: (1) the resale being made through a
broker in an unsolicited "broker's transaction" or in transactions directly with
a market  maker (as said term is defined  under the  Securities  Exchange Act of
1934); and, in the case of an affiliate,  (2) the availability of certain public
information  about the Company,  (3) the amount of Securities  being sold during
any three month period not exceeding the  limitations  specified in Rule 144(e),
and (4) the timely filing of a Form 144, if applicable.

<PAGE>

         In the event that the Company  does not  qualify  under Rule 701 at the
time of grant of the  Option,  then the  Securities  may be  resold  in  certain
limited  circumstances subject to the provisions of Rule 144, which requires the
resale  to  occur  not  less  than  one  year  after  the  later of the date the
Securities  were sold by the Company or the date the Securities  were sold by an
affiliate  of the Company,  within the meaning of Rule 144;  and, in the case of
acquisition  of  the  Securities  by an  affiliate,  or by a  non-affiliate  who
subsequently  holds the Securities less than two years,  the satisfaction of the
conditions  set  forth  in  sections  (1),  (2),  (3) and  (4) of the  paragraph
immediately above.

         (d)  Optionee  further  understands  that  in  the  event  all  of  the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act,  compliance  with  Regulation A, or some other  registration
exemption will be required;  and that,  notwithstanding  the fact that Rules 144
and 701 are not exclusive,  the Staff of the Securities and Exchange  Commission
has  expressed  its opinion  that persons  proposing  to sell private  placement
securities  other than in a registered  offering and otherwise  than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective  brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.

         (e)  Optionee  agrees  that,  if so  requested  by the  Company  or any
representative  of the underwriters  (the "Managing  Underwriter") in connection
with any registration of the offering of any securities of the Company under the
Securities Act,  Optionee shall not sell or otherwise  transfer any of the above
listed  Securities or other  securities of the Company during the 180-day period
(or such other period as may be requested in writing by the Managing Underwriter
and  agreed  to in  writing  by the  Company)  (the  "Market  Standoff  Period")
following the effective  date of a  registration  statement of the Company filed
under  the  Securities  Act.  Such  restriction  shall  apply  only to the first
registration  statement of the Company to become  effective under the Securities
Act that  includes  securities to be sold on behalf of the Company to the public
in an  underwritten  public  offering under the Securities  Act. The Company may
impose  stop-transfer  instructions  with respect to  securities  subject to the
foregoing restrictions until the end of such Market Standoff Period.

         (f) Optionee understands that the certificate evidencing the Securities
will be imprinted  with a legend which  prohibits the transfer of the Securities
without the consent of the Commissioner of Corporations of California.  Optionee
has read the applicable Commissioner's Rules with respect to such restriction, a
copy of which is attached.

                                    Signature of Optionee:

                                    ------------------------
                                    Date:

<PAGE>

                                  ATTACHMENT 1
              STATE OF CALIFORNIA - CALIFORNIA ADMINISTRATIVE CODE
         Title 10. Investment - Chapter 3. Commissioner of Corporations

         260.141.11:  Restriction  on  Transfer.

         (a) The issuer of any security upon which a restriction on transfer has
         been  imposed  pursuant to Sections  260.102.6,  260.141.10  or 260.534
         shall cause a copy of this  section to be  delivered  to each issuee or
         transferee of such security at the time the certificate  evidencing the
         security is delivered to the issuee or transferee.

         (b) It is unlawful for the holder of any such  security to consummate a
         sale or transfer of such security, or any interest therein, without the
         prior  written  consent of the  Commissioner  (until this  condition is
         removed pursuant to  Section 260.141.12 of these rules), except:
         (1)      to the issuer;
         (2)      pursuant to the order or process of any court;
         (3) to any person  described in Subdivision (i) of Section 25102 of the
         Code or Section  260.105.14  of these  rules;
         (4)  to the  transferor's  ancestors,  descendants  or  spouse,  or any
         custodian  or  trustee  for  the  account  of  the  transferor  or  the
         transferor's ancestors, descendants, or spouse; or to a transferee by a
         trustee  or  custodian  for  the  account  of  the  transferee  or  the
         transferee's ancestors, descendants or spouse;
         (5)      to holders of securities of the same class of the same issuer;
         (6)      by way of gift or donation inter vivos or on death;
         (7) by or  through a  broker-dealer  licensed  under  the Code  (either
         acting  as such or as a  finder)  to a  resident  of a  foreign  state,
         territory  or  country  who is neither  domiciled  in this state to the
         knowledge of the  broker-dealer,  nor actually present in this state if
         the sale of such  securities is not in violation of any  securities law
         of the foreign state, territory or country concerned;
         (8)  to  a  broker-dealer  licensed  under  the  Code  in  a  principal
         transaction,  or  as  an  underwriter  or  member  of  an  underwriting
         syndicate or selling group;
         (9) if the interest sold or transferred is a pledge or other lien given
         by the  purchaser  to the seller upon a sale of the  security for which
         the  Commissioner's  written consent is obtained or under this rule not
         required;
         (10) by way of a sale qualified under Sections 25111,  25112,  25113 or
         25121 of the Code, of the securities to be  transferred,  provided that
         no order under Section 25140 or subdivision  (a) of Section 25143 is in
         effect with respect to such qualification;
         (11) by a corporation to a wholly owned subsidiary of such corporation,
         or by a wholly owned subsidiary of a corporation to such corporation;
         (12) by way of an exchange  qualified  under  Section  25111,  25112 or
         25113 of the  Code,  provided  that no  order  under  Section  25140 or
         subdivision  (a) of  Section  25143 is in effect  with  respect to such
         qualification;
         (13) between residents of foreign states,  territories or countries who
         are neither domiciled nor actually present in this state;
         (14) to the State Controller  pursuant to the Unclaimed Property Law or
         to the administrator of the unclaimed property law of another state; or
         (15) by the State Controller  pursuant to the Unclaimed Property Law or
         by the administrator of the unclaimed property law of another state if,
         in either such case, such person (i) discloses to potential  purchasers
         at the sale that transfer of the  securities  is restricted  under this
         rule,  (ii) delivers to each  purchaser a copy of this rule,  and (iii)
         advises the Commissioner of the name of each purchaser;
         (16) by a trustee to a successor  trustee when such  transfer  does not
         involve a change in the beneficial ownership of the securities;
         (17) by way of an offer and sale of outstanding securities in an issuer
         transaction that is subject to the qualification requirement of Section
         25110 of the Code but exempt  from that  qualification  requirement  by
         subdivision (f) of Section 25102; provided that any such transfer is on
         the condition that any  certificate  evidencing the security  issued to
         such transferee shall contain the legend required by this section.
         (c)The certificates  representing all such securities subject to such a
         restriction  on transfer,  whether  upon  initial  issuance or upon any
         transfer  thereof,  shall  bear on  their  face a  legend,  prominently
         stamped or printed thereon in capital letters of not less than 10-point
         size, reading as follows:

"IT IS  UNLAWFUL TO  CONSUMMATE  A SALE OR  TRANSFER  OF THIS  SECURITY,  OR ANY
INTEREST THEREIN,  OR TO RECEIVE ANY CONSIDERATION  THEREFOR,  WITHOUT THE PRIOR
WRITTEN CONSENT OF THE  COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."

<PAGE>

                                   EXHIBIT C-1

                             SWITCHON NETWORKS, INC.
                                 1998 Stock Plan
                       RESTRICTED STOCK PURCHASE AGREEMENT

         THIS  AGREEMENT is made between [Name] (the  "Purchaser")  and SwitchOn
Networks, Inc. (the "Company") as of ------------------, -------.

         Unless  otherwise  defined herein,  the terms defined in the 1998 Stock
Plan shall have the same defined meanings in this Agreement.

                                    RECITALS

         A.  Pursuant to the exercise of the option  granted to Purchaser  under
the Plan and pursuant to the Option  Agreement dated  ___________ by and between
the Company and Purchaser with respect to such grant (the "Option"),  which Plan
and Option Agreement are hereby incorporated by reference, Purchaser has elected
to  purchase  _________  of those  shares of Common  Stock which have not become
vested under the vesting schedule set forth in the Option  Agreement  ("Unvested
Shares").  The Unvested  Shares and the shares  subject to the Option  Agreement
which have become  vested are sometimes  collectively  referred to herein as the
"Shares".

         B. As required by the Option  Agreement,  as a condition to Purchaser's
election to exercise the option,  Purchaser must execute this  Agreement,  which
sets forth the rights and  obligations  of the  parties  with  respect to Shares
acquired upon exercise of the Option.

1.       Repurchase Option.

         (a) If Purchaser's  status as a Service  Provider is terminated for any
reason,  including for cause, death, and Disability,  the Company shall have the
right  and  option  to  purchase  from   Purchaser,   or  Purchaser's   personal
representative, as the case may be, all of the Purchaser's Unvested Shares as of
the date of such  termination at the price paid by the Purchaser for such Shares
(the "Repurchase Option").

         (b) Upon the occurrence of such  termination,  the Company may exercise
its  Repurchase  Option by  delivering  personally  or by  registered  mail,  to
Purchaser  (or his  transferee  or  legal  representative,  as the case may be),
within ninety (90) days of the termination,  a notice in writing  indicating the
Company's  intention to exercise the Repurchase  Option and setting forth a date
for closing not later than thirty (30) days from the mailing of such notice. The
closing shall take place at the Company's office. At the closing,  the holder of
the  certificates  for the Unvested Shares being  transferred  shall deliver the
stock  certificate  or  certificates  evidencing  the Unvested  Shares,  and the
Company shall deliver the purchase price therefor.

         (c) At its  option,  the  Company  may  elect to make  payment  for the
Unvested  Shares to a bank  selected by the  Company.  The  Company  shall avail
itself of this option by a notice in writing to  Purchaser  stating the name and
address of the bank,  date of closing,  and waiving the closing at the Company's
office.

         (d) If the Company  does not elect to exercise  the  Repurchase  Option
conferred above by giving the requisite notice within ninety (90) days following
the termination, the Repurchase Option shall terminate.

         (e) The  Repurchase  Option  shall  terminate  in  accordance  with the
vesting schedule contained in Optionee's Option Agreement.

2.       Transferability of the Shares; Escrow.

         (a)  Purchaser  hereby  authorizes  and  directs the  Secretary  of the
Company,  or such other  person  designated  by the  Company,  to  transfer  the
Unvested  Shares as to which  the  Repurchase  Option  has been  exercised  from
Purchaser to the Company.

         (b) To insure the  availability  for delivery of  Purchaser's  Unvested
Shares upon  repurchase by the Company  pursuant to the Repurchase  Option under
Section  1,  Purchaser  hereby  appoints  the  Secretary,  or any  other  person
designated  by the Company as escrow  agent,  as its  attorney-in-fact  to sell,
assign and transfer unto the Company,  such Unvested Shares, if any, repurchased
by the Company  pursuant to the Repurchase  Option and shall,  upon execution of
this Agreement,  deliver and deposit with the Secretary of the Company,  or such
other person designated by the Company, the share certificates  representing the
Unvested  Shares,  together  with the stock  assignment  duly endorsed in blank,
attached hereto as Exhibit C-2. The Unvested Shares and stock  assignment  shall
be held by the secretary in escrow, pursuant to the Joint Escrow Instructions of
the Company  and  Purchaser  attached  as Exhibit C-3 hereto,  until the Company
exercises its Repurchase Option, until such Unvested Shares are vested, or until
such time as this  Agreement no longer is in effect.  As a further  condition to
the Company's obligations under this Agreement,  the spouse of the Purchaser, if
any,  shall  execute and  deliver to the Company the Consent of Spouse  attached
hereto as Exhibit C-4.  Upon vesting of the  Unvested  Shares,  the escrow agent
shall  promptly  deliver  to  the  Purchaser  the  certificate  or  certificates
representing  such  Shares in the escrow  agent's  possession  belonging  to the
Purchaser,  and the escrow agent shall be discharged of all further  obligations
hereunder;  provided,  however,  that the escrow agent shall nevertheless retain
such  certificate  or  certificates  as escrow agent if so required  pursuant to
other restrictions imposed pursuant to this Agreement.

         (c) The Company,  or its  designee,  shall not be liable for any act it
may do or omit to do with  respect  to  holding  the  Shares in escrow and while
acting in good faith and in the exercise of its judgment.

         (d)  Transfer  or sale of the  Shares is  subject  to  restrictions  on
transfer  imposed by any  applicable  state and  federal  securities  laws.  Any
transferee  shall hold such Shares subject to all the provisions  hereof and the
Exercise  Notice  executed by the Purchaser with respect to any Unvested  Shares
purchased by Purchaser and shall  acknowledge the same by signing a copy of this
Agreement.

3.       Ownership,  Voting Rights,  Duties.  This Agreement shall not affect in
any way the  ownership,  voting  rights or other rights or duties of  Purchaser,
except as specifically provided herein.

4.       Legends.  The share certificate  evidencing the Shares issued hereunder
shall be endorsed with the following  legend (in addition to any legend required
under applicable federal and state securities laws):

         THE  SHARES  REPRESENTED  BY THIS  CERTIFICATE  ARE  SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT
BETWEEN  THE COMPANY  AND THE  STOCKHOLDER,  A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
<PAGE>

5.       Adjustment for Stock Split.  All references to the number of Shares and
the  purchase  price of the  Shares  in this  Agreement  shall be  appropriately
adjusted  to reflect any stock  split,  stock  dividend  or other  change in the
Shares which may be made by the Company pursuant to Section 12 of the Plan after
the date of this Agreement.

6.       Notices.  Notices  required  hereunder  shall be given in  person or by
registered mail to the address of Purchaser shown on the records of the Company,
and to the Company at their respective principal executive offices.

7.       Survival of Terms. This Agreement shall apply to and bind Purchaser and
the Company and their respective  permitted  assignees and  transferees,  heirs,
legatees, executors, administrators and legal successors.

8.       Section 83(b) Election.  Purchaser hereby  acknowledges  that he or she
has been informed  that,  with respect to the exercise of an Option for Unvested
Shares,  an election (the  "Election")  may be filed by the  Purchaser  with the
Internal  Revenue  Service,  within  30 days of the  purchase  of the  exercised
Shares,  electing pursuant to Section 83(b) of the Code to be taxed currently on
any difference between the purchase price of the exercised Shares and their Fair
Market  Value  on the date of  purchase.  In the  case of a  Nonstatutory  Stock
Option,  this will result in a recognition of taxable income to the Purchaser on
the date of exercise,  measured by the excess,  if any, of the Fair Market Value
of the exercised  Shares,  at the time the Option is exercised over the purchase
price for the exercised Shares. Absent such an Election,  taxable income will be
measured and recognized by Purchaser at the time or times on which the Company's
Repurchase  Option  lapses.  In the case of an Incentive  Stock Option,  such an
Election will result in a recognition of income to the Purchaser for alternative
minimum tax purposes on the date of exercise, measured by the excess, if any, of
the Fair  Market  Value of the  exercised  Shares,  at the  time the  option  is
exercised,  over the purchase  price for the  exercised  Shares.  Absent such an
Election,  alternative minimum taxable income will be measured and recognized by
Purchaser at the time or times on which the Company's  Repurchase Option lapses.
Purchaser  is  strongly  encouraged  to seek  the  advice  of his or her own tax
consultants in connection  with the purchase of the Shares and the  advisability
of filing of the Election  under  Section  83(b) of the Code. A form of Election
under Section 83(b) is attached hereto as Exhibit C-5 for reference.

         PURCHASER  ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE  RESPONSIBILITY AND
NOT THE  COMPANY'S TO FILE TIMELY THE ELECTION  UNDER SECTION 83(b) OF THE CODE,
EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING
ON PURCHASER'S BEHALF.

9.       Representations.  Purchaser  has reviewed with his own tax advisors the
federal,  state,  local and foreign tax  consequences of this investment and the
transactions contemplated by this Agreement. Purchaser is relying solely on such
advisors and not on any statements or  representations  of the Company or any of
its  agents.  Purchaser  understands  that he (and  not the  Company)  shall  be
responsible  for his own tax  liability  that  may  arise  as a  result  of this
investment or the transactions contemplated by this Agreement.

10.      Governing  Law.  This  Agreement  shall  be  governed  by the  internal
substantive laws, but not the choice of law rules, of California.

         Purchaser  represents  that he has read this  Agreement and is familiar
with its terms and  provisions.  Purchaser  hereby  agrees to accept as binding,
conclusive  and final all  decisions  or  interpretations  of the Board upon any
questions arising under this Agreement.

         IN WITNESS WHEREOF,  this Agreement is deemed made as of the date first
set forth above.

OPTIONEE                                  SWITCHON NETWORKS, INC.

-------------------------------------     ----------------------
Signature                                 By

-------------------------------------     -----------------------
[Name]                                    Title

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

-------------------------------------
Residence Address

Date: ------------------,-----

<PAGE>

                                   EXHIBIT C-2

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

         FOR VALUE RECEIVED I,  __________________________,  hereby sell, assign
and transfer  unto__________________________  (__________)  shares of the Common
Stock  of  SwitchOn  Networks,  Inc.  standing  in my name of the  books of said
corporation  represented  by  Certificate  No.  _____  herewith  and  do  hereby
irrevocably constitute and appoint _______________ to transfer the said stock on
the books of the within named corporation with full power of substitution in the
premises.

         This  Stock  Assignment  may  be  used  only  in  accordance  with  the
Restricted Stock Purchase  Agreement  between SwitchOn  Networks,  Inc.. and the
undersigned dated ______________, _____.

Dated: _______________,______              Signature:
                                           -------------------------------------

         INSTRUCTIONS: Please do not fill in any blanks other than the signature
line.  The purpose of this  assignment  is to enable the Company to exercise its
"repurchase option," as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.

<PAGE>

                                   EXHIBIT C-3

                            JOINT ESCROW INSTRUCTIONS

                                                            ----------, ---

Corporate Secretary
SwitchOn Networks, Inc.
830 Hillview Court, Suite 190
Milpitas, CA 95035
Attention:  Secretary

Dear ______________:

         As Escrow Agent for both SwitchOn Networks,  Inc. (the "Company"),  and
the  undersigned  purchaser of stock of the Company (the  "Purchaser"),  you are
hereby  authorized and directed to hold the documents  delivered to you pursuant
to the terms of that certain Restricted Stock Purchase  Agreement  ("Agreement")
between  the Company  and the  undersigned,  in  accordance  with the  following
instructions:

         1.  In the  event  the  Company  and/or  any  assignee  of the  Company
(referred to collectively for convenience herein as the "Company") exercises the
Company's  repurchase option set forth in the Agreement,  the Company shall give
to Purchaser and you a written  notice  specifying the number of shares of stock
to be purchased, the purchase price, and the time for a closing hereunder at the
principal  office of the Company.  Purchaser and the Company hereby  irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.

         2. At the closing,  you are directed (a) to date the stock  assignments
necessary  for the  transfer  in  question,  (b) to fill in the number of shares
being transferred,  and (c) to deliver the stock assignments,  together with the
certificate evidencing the shares of stock to be transferred,  to the Company or
its assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check,  or some  combination  thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's repurchase option.

         3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates  evidencing  shares  of stock to be held by you  hereunder  and any
additions  and  substitutions  to  said  shares  as  defined  in the  Agreement.
Purchaser  does hereby  irrevocably  constitute  and appoint you as  Purchaser's
attorney-in-fact  and agent for the term of this escrow to execute  with respect
to  such  securities  all  documents  necessary  or  appropriate  to  make  such
securities  negotiable  and to complete  any  transaction  herein  contemplated,
including  but not  limited to the  filing  with any  applicable  state blue sky
authority of any required applications for consent to, or notice of transfer of,
the  securities.  Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and  privileges  of a  stockholder  of the Company while the
stock is held by you.

         4. Upon  written  request of the  Purchaser,  but no more than once per
calendar year, unless the Company's  repurchase  option has been exercised,  you
will deliver to Purchaser a certificate  or  certificates  representing  so many
shares of stock as are not then  subject  to the  Company's  repurchase  option.
Within 120 days after  cessation  of  Purchaser's  continuous  employment  by or
services to the Company,  or any parent or subsidiary  of the Company,  you will
deliver to Purchaser a certificate or  certificates  representing  the aggregate
number of shares held or issued  pursuant to the  Agreement and not purchased by
the Company or its assignees  pursuant to exercise of the  Company's  repurchase
option.
<PAGE>

         5. If at the time of termination of this escrow you should have in your
possession any documents,  securities, or other property belonging to Purchaser,
you shall  deliver all of the same to Purchaser  and shall be  discharged of all
further obligations hereunder.

         6. Your duties hereunder may be altered,  amended,  modified or revoked
only by a writing signed by all of the parties hereto.

         7. You shall be obligated  only for the  performance  of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining  from acting on any  instrument  reasonably  believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as  attorney-in-fact  for Purchaser  while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own  attorneys
shall be conclusive evidence of such good faith.

         8.  You  are  hereby  expressly  authorized  to  disregard  any and all
warnings  given  by  any  of the  parties  hereto  or by  any  other  person  or
corporation,  excepting  only  orders or process of courts of law and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order,  judgment or decree,  you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation  by  reason  of such  compliance,  notwithstanding  any such  order,
judgment or decree being subsequently reversed,  modified,  annulled, set aside,
vacated or found to have been entered without jurisdiction.

         9. You shall not be liable in any  respect on account of the  identity,
authorities  or rights of the parties  executing or  delivering or purporting to
execute or deliver the Agreement or any documents or papers  deposited or called
for hereunder.

         10. You shall not be liable for the  outlawing  of any rights under the
Statute of Limitations  with respect to these Joint Escrow  Instructions  or any
documents deposited with you.

         11.  You shall be  entitled  to employ  such  legal  counsel  and other
experts as you may deem necessary properly to advise you in connection with your
obligations  hereunder,  may rely upon the advice of such  counsel,  and may pay
such counsel reasonable compensation therefor.

         12. Your  responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall  resign
by  written  notice to each  party.  In the event of any such  termination,  the
Company shall appoint a successor Escrow Agent.

         13.  If  you  reasonably  require  other  or  further   instruments  in
connection  with these  Joint  Escrow  Instructions  or  obligations  in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

         14. It is  understood  and agreed that  should any  dispute  arise with
respect  to  the  delivery  and/or  ownership  or  right  of  possession  of the
securities  held by you hereunder,  you are authorized and directed to retain in
your possession  without  liability to anyone all or any part of said securities
until such disputes shall have been settled  either by mutual written  agreement
of the parties  concerned or by a final order,  decree or judgment of a court of
competent  jurisdiction  after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
<PAGE>

         15.  Any  notice  required  or  permitted  hereunder  shall be given in
writing and shall be deemed  effectively  given upon  personal  delivery or upon
deposit in the United States Post Office,  by registered or certified  mail with
postage  and fees  prepaid,  addressed  to each of the other  parties  thereunto
entitled at the  following  addresses or at such other  addresses as a party may
designate  by ten days'  advance  written  notice  to each of the other  parties
hereto.

         16. By signing  these  Joint  Escrow  Instructions,  you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.

         17.This  instrument  shall be binding  upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.

         18.These Joint  Escrow  Instructions  shall be governed by the internal
substantive laws, but not the choice of law rules, of California.

<PAGE>

PURCHASER                                  SWITCHON NETWORKS, INC.

-------------------------------------     ----------------------
Signature                                 By

-------------------------------------     -----------------------
[Name]                                    Title

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

-------------------------------------
Residence Address

ESCROW AGENT

Corporate Secretary

Dated: _______________, _____

<PAGE>

                                   EXHIBIT C-4

                                CONSENT OF SPOUSE

         I, ____________________,  spouse of ___________________,  have read and
approve the foregoing Restricted Stock Purchase Agreement (the "Agreement").  In
consideration  of  granting  of the  right to my spouse  to  purchase  shares of
____________________________, as set forth in the Agreement, I hereby appoint my
spouse as my attorney-in-fact in respect to the exercise of any rights under the
Agreement and agree to be bound by the provisions of the Agreement  insofar as I
may have any rights in said  Agreement  or any shares  issued  pursuant  thereto
under the community  property laws or similar laws relating to marital  property
in effect in the state of our  residence  as of the date of the  signing  of the
foregoing Agreement.

Dated: _______________, ____                         Signature:
                        ----                         ---------------------------

<PAGE>

                                   EXHIBIT C-5

                          ELECTION UNDER SECTION 83(b)
                      OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Sections 55 and 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
or  alternative  minimum  taxable  income,  as the case may be, for the  current
taxable year the amount of any  compensation  taxable to taxpayer in  connection
with taxpayer's receipt of the property described below:

1.      The name, address,  taxpayer  identification number and taxable year of
the undersigned are as follows:

        NAME:  [Name]             TAXPAYER:                SPOUSE:

        ADDRESS:

        IDENTIFICATION NO.:        TAXPAYER:                SPOUSE:

        TAXABLE YEAR:

2.       The property with respect to which the election is made is described as
follows:  shares (the  -------------  "Shares")  of the Common Stock of SwitchOn
Networks, Inc. (the "Company").

3.       The  date  on  which  the   property   was   transferred   is:  ,  ___.

4.       The property is subject to the following restrictions:

         The Shares may not be transferred  and are subject to forfeiture  under
         the terms of an agreement  between the taxpayer and the Company.  These
         restrictions   lapse  upon  the  satisfaction  of  certain   conditions
         contained in such agreement.

5.       The  fair  market  value at the time of  transfer,  determined  without
         regard to any restriction  other than a restriction  which by its terms
         will never lapse, of such property is:

         $----------------------.

6.       The amount (if any) paid for such property is:

         $----------------------.

The  undersigned  has submitted a copy of this  statement to the person for whom
the services were performed in connection with the undersigned's  receipt of the
above-described  property.  The  transferee  of  such  property  is  the  person
performing the services in connection with the transfer of said property.

The  undersigned  understands  that the  foregoing  election  may not be revoked
except with the consent of the Commissioner.

Dated:
        --------------------'--------        ----------------------------
                                              Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated:
      ----------------------'--------         ---------------------------

<PAGE>

                                   EXHIBIT C-6

                           ACCREDITED INVESTOR LETTER

                                ---------, ------

TO SwitchOn Networks, Inc.:

The undersigned hereby represents and warrants to SwitchOn  Networks,  Inc. (the
"Company")  that the  undersigned  is an  "accredited  investor,"  as such  term
applies  to an  individual,  within  the  meaning  of Rule 501 of  Regulation  D
promulgated  under the Securities Act of 1933, as amended (the "Act"),  and that
the undersigned makes such  representation  and warranty because it comes within
the category checked below. (Please check the box which applies to you.)

 [  ]     (1)     Any director,  executive  officer,  or general  partner of the
                  Company or any director, executive officer, or general partner
                  of a general partner of the Company;

 [  ]     (2)     Any natural person whose  individual  net worth,  or joint net
                  worth with that person's  spouse,  at the time of his purchase
                  exceeds $1,000,000 (for purposes of this section,  "net worth"
                  means  the  excess  of  total  assets  at  fair  market  value
                  (including equity in a home, home furnishings and automobiles)
                  over total liabilities); and

 [  ]    (3)      Any natural  person who had an individual  income in excess of
                  $200,000 in each of the two most recent  years or joint income
                  with that  person's  spouse in excess of  $300,000  in each of
                  those years and has a reasonable  expectation  of reaching the
                  same income level in the current year.

(PLEASE PROVIDE THE EXACT NAME AS IT SHOULD APPEAR ON YOUR STOCK CERTIFICATE(S).

                             Signature:
                                        ----------------------------------------

                             Print Name:
                                          --------------------------------------Exhibit 4.1

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

                                RIGHTS AGREEMENT

                                     between

                         WARWICK COMMUNITY BANCORP, INC.

                                       and

                 REGISTRAR AND TRANSFER COMPANY, AS RIGHTS AGENT

                          Dated as of October 17, 2000

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

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page
<S>                                                                                                            <C>
Section 1.        Certain Definitions...........................................................................-1-

Section 2.        Appointment of Rights Agent...................................................................-5-

Section 3.        Issue of Right Certificates...................................................................-5-

Section 4.        Form of Right Certificates....................................................................-7-

Section 5.        Countersignature and Registration.............................................................-7-

Section 6.        Transfer, Split Up, Combination and Exchange of Right Certificates;
                  Mutilated, Destroyed, Lost or Stolen Right Certificates.......................................-8-

Section 7.        Exercise of Rights; Purchase Price; Expiration Date...........................................-9-

Section 8.        Cancellation and Destruction of Right Certificates...........................................-10-

Section 9.        Reservation and Availability of Capital Stock................................................-10-

Section 10.       Preferred Shares Record Date.................................................................-11-

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

Section 12.       Certificate of Adjusted Purchase Price or Number of Shares...................................-17-

Section 13.       Consolidation, Merger or Sale or Transfer of Assets or Earning Power.........................-17-

Section 14.       Fractional Rights and Fractional Shares......................................................-18-

Section 15.       Rights of Action.............................................................................-19-

Section 16.       Agreement of Right Holders...................................................................-20-

Section 17.       Right Certificate Holder Not Deemed a Stockholder............................................-20-

Section 18.       Concerning the Rights Agent..................................................................-20-

Section 19.       Merger or Consolidation or Change of Name of Rights Agent....................................-21-

Section 20.       Terms and Conditions of Rights Agent's Appointment...........................................-22-

Section 21.       Change of Rights Agent.......................................................................-24-

                                       (i)

<PAGE>

                                                                                                               Page
                                                                                                               ----

Section 22.       Issuance of New Right Certificates...........................................................-24-

Section 23.       Redemption...................................................................................-25-

Section 24.       Exchange.....................................................................................-25-

Section 25.       Notice of Certain Events.....................................................................-27-

Section 26.       Notices......................................................................................-27-

Section 27.       Supplements and Amendments...................................................................-28-

Section 28.       Successors...................................................................................-28-

Section 29.       Determinations and Actions by the Board of Directors.........................................-29-

Section 30.       Benefits of this Agreement...................................................................-29-

Section 31.       Severability.................................................................................-29-

Section 32.       Governing Law................................................................................-29-

Section 33.       Counterparts.................................................................................-30-

Section 34.       Descriptive Headings.........................................................................-30-

Signatures ....................................................................................................-31-
</TABLE>

Exhibit A --      Form of Certificate of Designations, Preferences and
                  Rights of Series A Junior Participating Preferred Stock of
                  Warwick Community Bancorp, Inc.

Exhibit B --      Form of Right Certificate

Exhibit C --      Summary of Rights to Purchase Preferred Shares or Common Stock

                                      (ii)

<PAGE>

                                RIGHTS AGREEMENT
                                ----------------

                  This Rights Agreement ("Agreement"), is made as of the 17th
day of October, 2000, by and between Warwick Community Bancorp, Inc., a Delaware
corporation having an office at 18 Oakland Avenue, Warwick, New York 10990-0591
("Company"), and Registrar and Transfer Company, a corporation organized under
the laws of the State of New Jersey, with its principal office at 10 Commerce
Drive, Cranford, New Jersey 07016-3572 ("Rights Agent").

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

                  WHEREAS, the Board of Directors of the Company desires to
provide all shareholders of the Company with the opportunity to benefit from the
long-term prospects and value of the Company and to ensure that all shareholders
of the Company receive fair and equal treatment in the event of any proposed
takeover of the Company; and

                  WHEREAS, on October 17, 2000, the Board of Directors of the
Company authorized and declared a dividend of one preferred share purchase right
("Right") for each share of common stock of the Company outstanding on November
1, 2000, each Right representing the right to purchase a one one-hundredth
(1/100) interest (subject to adjustment) in a Preferred Share (as defined
below), upon the terms and subject to the conditions set forth herein, and the
Company's Board has further authorized and directed the issuance of one Right
(subject to adjustment) with respect to each share of common stock of the
Company that shall become outstanding between the Record Date and the earliest
of the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are defined below);

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, 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. The term "Acquiring Person" shall mean
any Person who or which, together with all Affiliates and Associates of such
Person, is the Beneficial Owner of 10% or more of the Company's Common Shares
then outstanding, but shall not include the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company or any entity holding Common Shares of the Company for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, no Person shall
become an Acquiring Person as the result of an acquisition of Common Shares by
the Company which, by reducing the number of Common Shares outstanding,
increases the proportionate number of Common Shares beneficially owned by such
Person to 10% or more of the Common Shares then outstanding; PROVIDED, HOWEVER,
that if a Person becomes the Beneficial Owner of 10% or more of the Common
Shares then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company,

<PAGE>

become the Beneficial Owner of any additional Common Shares, then such Person
shall be deemed to be an Acquiring Person unless, upon the consummation of the
acquisition of such additional Common Shares, such Person does not own 10% or
more of the Common Shares then outstanding.

                  Notwithstanding the foregoing, if (i) a Person who would
otherwise be an Acquiring Person became such inadvertently (including, without
limitation, because (A) such Person was unaware that it beneficially owned a
percentage of Common Shares that would otherwise cause such Person to be an
Acquiring Person, or (B) such Person was aware of the existence of its
Beneficial Ownership of Common Shares but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, but in no event if
such Person beneficially owned or owns in excess of 11% of the Common Shares
then outstanding, and if such Person as promptly as practicable, but in no event
later than 10 business days after becoming aware of such ownership of Common
Shares or of such consequences, divested or divests itself of Beneficial
Ownership of a sufficient number of Common Shares so that such Person would no
longer be an Acquiring Person, or (ii) the Company's Board of Directors
otherwise determines in good faith that a Person who would otherwise be an
Acquiring Person became such inadvertently, then such Person shall not be deemed
to be or to have become an Acquiring Person for any purposes of this Agreement.

                  (b) AFFILIATE. The term "Affiliate" (whether referred to as an
"affiliate" of, or a Person "affiliated" with, a specified Person) shall mean a
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.

                  (c) ASSOCIATE. The term "Associate," when used to indicate a
relationship with any Person, shall mean:

                           (i) any corporation or organization of which such
         Person is an officer or partner or is, directly or indirectly, either
         alone or together with one or more members of such Person's immediate
         family, the Beneficial Owner of 10% or more of any class of equity
         securities;

                           (ii) any trust or other estate in which such Person
         has a substantial beneficial interest or as to which such Person serves
         as a trustee or in a similar fiduciary capacity; and

                           (iii) any relative or spouse of such Person, or any
         relative of such spouse who has the same home as such Person or who is
         a director or officer of such Person or any of its Subsidiaries or
         Affiliates.

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

                           (i) which such Person or any of such Person's
         Affiliates or Associates beneficially owns, directly or indirectly;

                                       -2-

<PAGE>

                           (ii) which such Person or any of such Person's
         Affiliates or Associates has (A) the right to acquire (whether such
         right is exercisable immediately or only after the passage of time)
         pursuant to any agreement, arrangement or understanding (other than
         customary agreements with and between underwriters and selling group
         members with respect to a bona fide public offering of securities), or
         upon the exercise of conversion rights, exchange rights, rights (other
         than the Rights issued hereunder), warrants or options, or otherwise;
         PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial
         Owner of, or to beneficially own, securities tendered pursuant to a
         tender offer or exchange offer made by or on behalf of such Person or
         any of such Person's Affiliates or Associates until such tendered
         securities are accepted for purchase or exchange; or (B) the right to
         vote pursuant to any agreement, arrangement or understanding; PROVIDED,
         HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or
         to beneficially own, any security if the agreement, arrangement or
         understanding to vote such security (1) arises solely from a revocable
         proxy or consent given to such Person in response to a public proxy or
         consent solicitation made pursuant to, and in accordance with, the
         applicable Rules and Regulations promulgated under the Exchange Act,
         and (2) is not also then reportable under the Exchange Act on Schedule
         13D under the Rules and Regulations (or any comparable or successor
         reports); or

                           (iii) which are beneficially owned, directly or
         indirectly, by any other Person with which such Person or any of such
         Person's Affiliates or Associates has any agreement, arrangement or
         understanding (other than customary agreements with and between
         underwriters and selling group members with respect to a bona fide
         public offering of securities) for the purpose of acquiring, holding,
         voting (except to the extent contemplated by the proviso to Section
         1(d)(ii)(B) hereof) or disposing of such securities.

                  Notwithstanding the foregoing, none of the Company's
directors, officers, employees or financial advisors shall be deemed to be the
Beneficial Owner of, or to beneficially own, any Common Shares owned by any
other director, officer, employee or financial advisor of the Company by virtue
of such persons acting in their capacities as such, including, without
limitation, in connection with any formulation and publication of the Board of
Directors' recommendation of a position, and any actions taken in furtherance
thereof, with respect to any acquisition proposal relating to the Company, any
tender offer or exchange offer for the Common Shares, or any solicitation of
proxies with respect to the Common Shares.

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

                  (f) CLOSE OF BUSINESS. The term "Close of Business" on any
given date shall mean 5:00 P.M., New York City time, on such date; PROVIDED,
HOWEVER, that if such date is not a Business Day it shall mean 5:00 P.M., New
York City time, on the next succeeding Business Day.

                  (g) COMMON SHARES. The term "Common Shares" when used with
reference to the Company shall mean the shares of common stock, par value $0.01
per share, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall mean the capital stock (or equity interest)
with the greatest voting power of such other Person or, if such other

                                       -3-

<PAGE>

Person is a Subsidiary of another Person, the Person or Persons that ultimately
control such first-mentioned Person.

                  (h) DISTRIBUTION DATE. The term "Distribution Date" shall have
the meaning set forth in Section 3(b) hereof.

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

                  (j) EXCHANGE RATIO. The term "Exchange Ratio" shall have the
meaning set forth in Section 24(a) hereof.

                  (k) FINAL EXPIRATION DATE. The term "Final Expiration Date"
shall have the meaning set forth in Section 7(a) hereof.

                  (l) NASDAQ. The term "Nasdaq" shall mean The Nasdaq Stock
Market, Inc.

                  (m) PERSON. The term "Person" shall mean any individual, firm,
corporation, partnership, trust, association or other entity, and shall include
any successor (by merger or otherwise) of such entity.

                  (n) PREFERRED SHARES. The term "Preferred Shares" shall mean
shares of Series A Junior Participating Preferred Stock, par value $0.01 per
share, of the Company having the rights and preferences set forth in the form of
Exhibit A hereto.

                  (o) PURCHASE PRICE. The term "Purchase Price" shall have the
meaning set forth in Section 4 hereof.

                  (p) REDEMPTION DATE. The term "Redemption Date" shall have the
meaning set forth in Section 7(a) hereof.

                  (q) REDEMPTION PRICE. The term "Redemption Price" shall have
the meaning set forth in Section 23(b) hereof.

                  (r) RECORD DATE. The term "Record Date" shall mean the Close
of Business on November 1, 2000.

                  (s) RIGHT CERTIFICATE. The term "Right Certificate" shall have
the meaning set forth in Section 3(a) hereof.

                  (t) RULES AND REGULATIONS. The term "Rules and Regulations"
shall mean the applicable rules and regulations promulgated by the Securities
and Exchange Commission, or any applicable federal or state regulatory agency or
authority that has jurisdiction over the Company at the relevant time.

                                       -4-

<PAGE>

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

                  (v) SECURITY. The term "Security" shall have the meaning set
forth in Section 11(d)(i) hereof.

                  (w) SHARES ACQUISITION DATE. The term "Shares Acquisition
Date" shall mean the first date of public announcement (which, for purposes of
this definition, shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.

                  (x) SUBSIDIARY. The term "Subsidiary" with respect to any
Person shall mean any corporation or other entity of which a majority of the
voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by such Person.

                  (y) SUMMARY OF RIGHTS. The term "Summary of Rights" shall have
the meaning set forth in Section 3(c) hereof.

                  (z) TRADING DAY. The term "Trading Day" with respect to a
Security shall mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.

                  (aa) VOTING STOCK. The term "Voting Stock" shall mean (i) the
Common Shares of the Company and (ii) any other shares of capital stock of the
Company entitled to vote generally in the election of directors or entitled to
vote together with the Common Shares in respect of any merger, consolidation,
sale of all or substantially all of the Company's assets, liquidation,
dissolution or winding up.

         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. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable upon 10
days' prior written notice to the Rights Agent. The Rights Agent shall have no
liability for or duty to supervise any such co-Rights Agent.

         Section 3.        ISSUE OF RIGHT CERTIFICATES.

                  (a) From the date hereof until, but not including, the
Distribution Date, (i) the Rights will be evidenced (subject to the provisions
of Section 3(c) hereof) by the certificates for Common Shares registered in the
names of the holders thereof and not by separate Right Certificates, and (ii)
the right to receive Right Certificates will be transferable only in connection
with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will notify the Rights Agent of the occurrence of
the Distribution Date, and the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights

                                       -5-

<PAGE>

Agent will, if requested, at the Company's expense, send) by first-class,
insured, postage-paid mail, to each record holder of Common Shares as of the
Close of Business on the Distribution Date, at the address of such holder shown
in the records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment) for each Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.

                  (b) For purposes of the foregoing, the Distribution Date shall
be the earlier of (i) the Close of Business on the 20th Business Day after the
Shares Acquisition Date or (ii) the Close of Business on the 20th Business Day
(or such later date as may be determined by the Board of Directors of the
Company, in its sole discretion) after the date of the commencement by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) of, or of
the first public announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares of the
Company for or pursuant to the terms of any such plan) to commence, a tender
offer or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares of the Company aggregating 10% or
more of the then outstanding Common Shares (including any such date that is
after the date of this Agreement and prior to the issuance of the Rights).

                  (c) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred Shares
or Common Shares, in substantially the form of Exhibit C hereto ("Summary of
Rights"), by first-class, postage-paid mail, to each record holder of Common
Shares as of the Close of Business on the Record Date, at the address of such
holder shown in the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, with or without a copy of the Summary of Rights,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.

                  (d) Certificates for Common Shares that become outstanding
(including, without limitation, reacquired Common Shares referred to in this
paragraph (d)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:

                  This certificate also evidences and entitles the holder hereof
                  to certain rights as set forth in a Rights Agreement, dated as
                  of October 17, 2000, by and between Warwick Community Bancorp,
                  Inc. and Registrar and Transfer Company, as Rights Agent (as
                  the same may be amended from time to time, the "Rights
                  Agreement"), the terms of which are hereby incorporated herein
                  by reference and a copy of which is on file at the principal
                  executive offices of Warwick

                                       -6-

<PAGE>

                  Community Bancorp, Inc. Under certain circumstances, as set
                  forth in the Rights Agreement, such Rights will be evidenced
                  by separate certificates and will no longer be evidenced by
                  this certificate. Warwick Community Bancorp, Inc. will mail to
                  the holder of this certificate a copy of the Rights Agreement
                  without charge after receipt of a written request therefor. As
                  described in the Rights Agreement, Rights owned by any Person
                  who is or becomes an Acquiring Person (as defined in the
                  Rights Agreement) and certain transferees thereof will become
                  null and void.

With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificates shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares that are no
longer outstanding. The Rights Agent shall deem any such Rights not outstanding
if it has actual knowledge that they are owned by the Company.

         Section 4.        FORM OF RIGHT CERTIFICATES.

                  The Right Certificates (and the form of election to purchase
Preferred Shares and the form of assignment printed on the reverse thereof)
shall be substantially in the form of Exhibit B hereto. The Right Certificates
shall be in machine printable format and in a form reasonably satisfactory to
the Rights Agent, and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any Rule or
Regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one one-hundredth
interests in a Preferred Share as shall be set forth therein at the price per
one one-hundredth interest in a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredth interests in a Preferred Share
and the Purchase Price shall be subject to adjustment as provided herein.

         Section 5.        COUNTERSIGNATURE AND REGISTRATION.

                  (a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof and shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned and dated by an
authorized signatory of the Rights Agent either manually or by facsimile
signature and shall not be valid for any purpose unless countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such an officer of the Company before countersignature by the
Rights Agent and issuance and

                                       -7-

<PAGE>

delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such an officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, on the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although on the date of
the execution of this Rights Agreement any such person was not such an officer.

                  (b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its designated office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates. In case any authorized signatory of the
Rights Agent who shall have countersigned any of the Right Certificates shall
cease to be such a signatory before delivery of the Right Certificates by the
Company, such Right Certificates, nevertheless, may be issued and delivered by
the Company with the same force and effect as though the person who
countersigned such Right Certificates had not ceased to be such a signatory; and
any Right Certificate may be countersigned on behalf of the Rights Agent by any
person who, on the actual date of the countersignature of such Right
Certificate, shall be a proper signatory of the Rights Agent to countersign such
Right Certificate, although on the date of the execution of this Agreement any
such person was not such a signatory.

         Section 6.        TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
                           CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN
                           RIGHT CERTIFICATES.

                  (a) Subject to the provisions of Section 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
one one-hundredth interests in a Preferred Share as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
designated office of the Rights Agent, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably require.
Thereupon the Rights Agent shall countersign and deliver to the person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so
requested from the holders of such Right Certificate. The Company may require
payment from the holders of Rights 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 Right Certificates.

                  (b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the

                                       -8-

<PAGE>

Company's or the Rights Agent's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon surrender
of the Right Certificate and a signature guarantee and such other and further
documentation as the Rights Agent may reasonably require to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

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

                  (a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the designated office of the
Rights Agent, together with payment of the Purchase Price for each one
one-hundredth interest in a Preferred Share as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of Business on November
1, 2010 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof. The
Company shall provide the Rights Agent with a prompt written notice of the
occurrence of any of the events provided for in this Section 7(a).

                  (b) The Purchase Price for each one one-hundredth interest in
a Preferred Share pursuant to the exercise of a Right shall initially be $50.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.

                  (c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred Shares certificates for the number of Preferred Shares to
be purchased, and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) requisition from the depositary agent
depositary receipts representing interests in such number of one one-hundredth
interests in a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent), and the Company
hereby directs the depositary agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate. The provisions of
this Section 7(c) shall apply whenever cash or securities (such as Common
Shares) may be received in lieu of the Preferred Shares upon exercise of the
Rights and surrender of the Right Certificates.

                                       -9-

<PAGE>

                  (d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.

                  (e) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
or any Preferred Shares held in its treasury, the number of Preferred Shares
that will be sufficient to permit the exercise in full of all outstanding Rights
in accordance with this Section 7.

         Section 8.        CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.

                  All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall
be canceled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Rights Agreement.
The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Right
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 covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares delivered
upon exercise of Rights (and, following the date on which a person becomes an
Acquiring Person, out of its authorized and unissued Common Shares and/or other
securities or out of its authorized and issued shares held in the treasury)
shall, at the time of delivery of the certificates for such Preferred Shares or
Common Shares (subject to payment of the Purchase Price), be duly authorized,
validly issued and fully paid and nonassessable shares.

                  (b) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares or Common Shares upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of certificates
or depositary receipts for the Preferred Shares or Common Shares in a name other
than that of, the registered holder of the Right Certificates evidencing Rights
surrendered for transfer, delivery or exercise or to issue or to deliver any
certificates or depositary receipts for Preferred Shares or Common Shares upon
the exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificates at the time of surrender)
or until it has been established to the Company's reasonable satisfaction that
no such tax is due.

                                      -10-

<PAGE>

         Section 10.       PREFERRED SHARES RECORD DATE.

                  Each person in whose name any certificate for Preferred Shares
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares represented thereby on, and
such certificate shall be dated, the date upon which the Right 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 Shares
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Shares transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

         Section 11.       ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
                           SHARES OR NUMBER OF RIGHTS.

                  The Purchase Price, the number of Preferred Shares or other
securities or interests therein 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 Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
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 capital stock or interests therein issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock or interests therein which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Shares transfer
books of the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock or interests therein of the
Company issuable upon exercise of one Right.

                           (ii) Subject to Section 24 hereof, in the event any
Person shall become an Acquiring Person, each holder of a Right shall have the
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredth interests in a
Preferred Share for which a Right is then exercisable (regardless of whether the
Right is then exercisable), in accordance with the terms of this Agreement and
in lieu of interests in

                                      -11-

<PAGE>

Preferred Shares, such number of Common Shares of the Company as shall equal the
result obtained by (A) multiplying the then current Purchase Price by the number
of one one-hundredth interests in a Preferred Share for which a Right is then
exercisable (regardless of whether the Right is then exercisable) and dividing
that product by (B) 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 11(d) hereof) on the
date such Person became an Acquiring Person; provided, however, that the
Purchase Price and the number of Common Shares so purchasable upon exercise of a
Right shall, following the occurrence of such event, be subject to further
adjustment as appropriate in accordance with Section 11(f) hereof. In the event
that any Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action (except as permitted under
Sections 24 and 27 hereof) that would eliminate or diminish the benefits
intended to be afforded by the Rights, except as provided in Section 23(b)
hereof. Notwithstanding anything in this Agreement to the contrary, from and
after the time any Person becomes an Acquiring Person, any Rights that are or
were acquired or beneficially owned by such Acquiring Person (or any Associate
or Affiliate of such Acquiring Person) shall be void, and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person or any Associate or Affiliate thereof whose Rights would be void pursuant
to the preceding sentence; no Right Certificate shall be issued at any time upon
the transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate whose
Rights would be void pursuant to the preceding sentence. Where a Right
Certificate is delivered to the Rights Agent for transfer to an Acquiring Person
or an Associate or Affiliate thereof, and the Rights Agent has actual knowledge
or has received notice from the Company that the transferee is an Acquiring
Person or an Associate or Affiliate thereof, that Right Certificate shall be
canceled. The Rights Agent shall have no liability for canceling Right
Certificates so delivered for transfer.

                           (iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with the foregoing subparagraph
(ii) of this paragraph (a), (A) the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance upon exercise of
the Rights or (B) the Company, at its option, notwithstanding any other
provision of this Agreement, with respect to each Right, to the extent permitted
by applicable law and any agreements or instruments in effect on the
Distribution Date to which the Company is a party, upon exercise of the Rights,
may pay cash and/or securities equal to the Purchase Price per Right, in lieu of
issuing such additional Common Shares and requiring payment therefor. To the
extent that any legal or contractual restrictions prevent the Company from
paying the full amount of cash and/or securities payable in accordance with the
foregoing sentence, the Company shall pay to holders of the Rights as to which
such payments are being made all amounts which are not then restricted on a pro
rata basis. The Company shall continue to make payments on a pro rata basis as
funds become available until such payments have been paid in full. The Company
shall provide the Rights Agent with written notice of any election made pursuant
to this Section 11(a)(iii).

                           (iv) In the event that the Rights become exercisable
or exchangeable under the provisions of this Agreement, the Company covenants
and agrees to use its best efforts to (A) cause a registration statement under
the Securities Act, or, if the Securities Act is not applicable,

                                      -12-

<PAGE>

under the comparable federal or state securities laws applicable to the Common
Shares and Preferred Shares, as in effect on the date in question, and under the
applicable Rules and Regulations thereunder, on an appropriate form, with
respect to the shares purchasable upon exercise of the Rights or exchangeable
for such Rights, to remain effective (with a prospectus or offering circular at
all times meeting the requirements of the Securities Act or any other applicable
federal or state law) until the Final Expiration Date; (B) qualify or register
the Common Shares or Preferred Shares purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be necessary or
appropriate; and (C) list the shares purchasable upon exercise of the Rights on
each national securities exchange on which shares of the same class or series
were listed prior to exercisability of the Rights or, if such shares are not
listed or admitted to the trading on any national securities exchange, on Nasdaq
or such other system then in use. The Company covenants and agrees to bear the
full cost of any registration, qualification or listing required under this
Section 11(a)(iv).

                  (b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
then current per share market price of the Preferred Shares (as defined in
Section 11(d) hereof) 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 number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion 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 Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
or interests therein of the Company issuable upon exercise of one Right. In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
binding upon the Rights Agent and the holders of the Rights. Preferred Shares
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.

                  (c) In case the Company shall fix a record date for the making
of a distribution of evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section

                                      -13-

<PAGE>

11(b) hereof) to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), 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 then current per share market price of the
Preferred Shares on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and binding upon
the Rights Agent and the holders of the Rights) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which shall be
such current per share market price of the Preferred Shares; PROVIDED, HOWEVER,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock (or
interests therein) of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed.

                  (d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days immediately prior to such date; PROVIDED, HOWEVER, that in the event that
the current per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last 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 on Nasdaq or such other system then in use, or, if on any
such date the Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Security selected by the Board of Directors of the
Company.

                           (ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares shall be determined
in accordance with the method set forth in Section 11(d)(i) hereof. If the
Preferred Shares are not publicly traded, the "current per share market price"
of the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i)
hereof (appropriately

                                      -14-

<PAGE>

adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by 100. If neither the Common
Shares nor the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
binding upon the Rights Agent and the holders of the Preferred Shares.

                  (e) 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 that 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 one-millionth
interest in a Preferred Share or one ten-thousandth interest in any other share
or security 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
requires such adjustment or (ii) the date of the expiration of the right to
exercise any Rights.

                  (f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares or interests therein, thereafter the Purchase Price and the number of
such other shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
Sections 11(a), (b), (c), (e), (h), (i) and (m) hereof, as applicable, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares. The Company shall
provide the Rights Agent with prompt written notice of any such election to
utilize other securities, the type of securities and the exchange ratio of Right
Certificates therefor.

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

                  (h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, 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
one one-hundredth interests in a Preferred Share (calculated to the nearest one
one-millionth interest in a Preferred Share) obtained by (i) multiplying (x) the
number of one one-hundredths interests 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 substitution
for any adjustment in the number of one one- hundredth interests in a Preferred
Share purchasable upon the exercise of a Right. Each of the Rights

                                      -15-

<PAGE>

outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredth interests in a Preferred Share for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-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 and shall simultaneously provide the Rights Agent
with written notice of such election to adjust, which announcement and notice
shall indicate 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 Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right 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 Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably require, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. The Company shall
provide the Rights Agent with written notice of the occurrence of any
distribution effected pursuant to the foregoing. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.

                  (j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredth interests in a Preferred Share issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-hundredth interests in a Preferred Share that were expressed in the
initial Right Certificates issued hereunder but shall be deemed to represent the
Purchase Price and the number of one one-hundredth interests in a Preferred
Share as adjusted pursuant to the terms hereof.

                  (k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted 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 issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and 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

                                      -16-

<PAGE>

other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
The Company shall give the Rights Agent prompt written notice of its election to
defer the issuance of Preferred Shares.

                  (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 it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
that by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to above in Section 11(b) hereof, hereafter made by
the Company to holders of its Preferred Shares shall not be taxable to such
shareholders.

                  (n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (i) the
number of one one-hundredth interests in a Preferred Share purchasable after
such event upon proper exercise of each Right shall be determined by multiplying
the number of one one-hundredth interests in a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (ii) each Common Share outstanding immediately after such
event shall have issued with respect to it that number of Rights that each
Common Share outstanding immediately prior to such event had issued with respect
to it. The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.

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

                  Whenever an adjustment is made as provided in Sections 11 and
13 hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, including, but not limited to, the adjusted Purchase Price and
a brief statement of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares or the Preferred
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof. The Rights
Agent may rely, and shall incur no liability for relying upon, the most recent
such certificate that it has received.

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

                  In the event, directly or indirectly, at any time after a
Person has become an Acquiring Person, (a) the Company shall consolidate with,
or merge with and into, any other Person, (b) any Person shall consolidate with
the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities

                                      -17-

<PAGE>

of any other Person (or the Company) or cash or any other property, or (c) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person other than
the Company or one or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredth interests in a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement, and in lieu of Preferred Shares, such number of Common Shares of
such other Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (A) multiplying the
then current Purchase Price by the number of one one-hundredth interests in a
Preferred Share for which a Right is then exercisable and (B) dividing that
product by 50% of the then current per share market price of the Common Shares
of such other Person (determined pursuant to Section 11(d) hereof) on the date
of consummation of such consolidation, merger, sale or transfer; (ii) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof and the making
of payments in cash and/or securities equal to the Purchase Price in accordance
with Section 11(a)(iii) hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights. The Company shall not consummate
any such consolidation, merger, sale or transfer unless prior thereto the
Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The prior written consent of the Rights
Agent must be obtained in connection with any such supplemental agreement that
alters the rights or duties of the Rights Agent. The Company shall not enter
into any transaction of the kind referred to in this Section 13 if at the time
of such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements that, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers. The Rights Agent may rely, and shall be fully protected in
relying, on a certificate of the Company stating that the provisions of this
Section 13 have been fulfilled.

         Section 14.       FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

                  (a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates that evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average

                                      -18-

<PAGE>

of the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported on Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.

                  (b) The Company shall not be required to issue fractional
interests in Preferred Shares (other than fractional interests that are integral
multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights
or to distribute certificates that evidence fractional interests in Preferred
Shares (other than fractions that are integral multiples of one one-hundredth of
a Preferred Share). Fractional interests in Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided, that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts, and provided, further, that the Company shall notify the Rights Agent
of any such election pursuant to this Section 14(b). In lieu of fractional
interests in Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one Preferred Share. For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.

                  (c) Upon accepting a Right, the holder of such Right expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).

         Section 15.       RIGHTS OF ACTION.

                  All rights of action in respect of this Agreement, excepting
the rights of action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding

                                      -19-

<PAGE>

against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.

         Section 16.       AGREEMENT OF RIGHT HOLDERS.

                  Every holder of a Right, by accepting the same, consents and
agrees with the Company and the Rights Agent and with every other holder of a
Right that:

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

                  (b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the designated office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer along with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably require; and

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

         Section 17.       RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.

                  No holder, as such, of any Right Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
Preferred Shares or interests therein or any other securities of the Company
that may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to 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 Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right 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 such
compensation as shall be agreed to in writing between the Company and the Rights
Agent for all services rendered by it

                                      -20-

<PAGE>

hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements (including reasonable
attorneys' disbursements) incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense incurred without 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 reasonable attorneys' fees and expenses and the costs and
expenses of defending against any claim of liability in the premises. In no case
will the Rights Agent be liable for special, indirect, incidental or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the possibility
of such damages. Any liability of the Rights Agent will be limited to the amount
of fees paid by the Company hereunder. This Section 18(a) shall survive the
termination of this Agreement.

                  (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 Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, instructions or other paper or document believed by it
to be genuine and to be signed and executed by the proper person or persons and,
where necessary, verified or acknowledged, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.

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

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

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

                                      -21-

<PAGE>

in all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.

         Section 20.       TERMS AND CONDITIONS OF RIGHTS AGENT'S APPOINTMENT.

                  The Rights Agent undertakes the duties and obligations imposed
by this Agreement upon the following terms and conditions, to all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:

                  (a) The Rights Agent may consult with legal counsel of its
selection (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 be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.

                  (c) The Rights Agent shall be liable only for its own
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
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.

                  (e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining
of the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice that such change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.

                                      -22-

<PAGE>

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

                  (g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof 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 is authorized 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 such
instructions of any such officer. An application by the Rights Agent for
instructions may set forth in writing any action proposed to be taken or omitted
by the Rights Agent with respect to its duties and obligations under this
Agreement and the date on and/or after which such actions shall be taken, and
the Rights Agent shall not be liable for any action taken or omitted in
accordance with a proposal included in any such application on or after the date
specified therein (which date shall not be less than one Business Day after the
Company receives such application) without the consent of the Company unless
prior to taking or omitting such action, the Rights Agent has received written
instructions in response to such application specifying the actions 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 Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.

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

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

                  (k) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement in
reliance upon (i) the proper execution of the certification concerning
beneficial ownership appended to the Form of Assignment and the Form of Election
to Purchase included as part of Exhibit B hereto (the "Certification"), unless
the Rights Agent shall

                                      -23-

<PAGE>

have actual knowledge that, as executed, the Certification is untrue or (ii) the
non-execution or failure to complete the Certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such nonexecution or failure.

                  (l) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership that comes to the Company's attention that
would prohibit the exercise or transfer of the Rights Certificates.

         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' notice in
writing mailed to the Company and, at the Company's expense, to each transfer
agent of the Common Shares or Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right 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 Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the Company shall become the Rights Agent, and the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or any State of the United States,
in good standing, that is authorized under such laws to exercise the powers of
the Rights Agent contemplated by this Agreement and is subject to supervision or
examination by federal or state authority. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

         Section 22.       ISSUANCE OF NEW RIGHT CERTIFICATES.

                  Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the

                                      -24-

<PAGE>

Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.

         Section 23.       REDEMPTION.

                  (a) The Rights may be redeemed by action of the Board of
Directors of the Company pursuant to paragraph (b) of this Section 23 and shall
not be redeemed in any other manner. The Rights Agent shall be given written
notice of any such redemption.

                  (b) The Board of Directors of the Company may, at its option,
at any time prior to such time as any Person becomes an Acquiring Person, redeem
all but not less than all of the then outstanding Rights at a redemption price
of $.01 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").

                  (c) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph (b) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate, and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption; PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights pursuant to Section 23(b)
hereof, the Company shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice 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.       EXCHANGE.

                  (a) The Board of Directors of the Company may, at its sole
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii)
hereof) for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). The Rights Agent shall be
given written notice of any such exchange and the Exchange Ratio pursuant to
which such exchange is effected. Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.

                                      -25-

<PAGE>

                  (b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate, and the only right thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange, and the
Rights Agent shall be given written notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. 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
exchange will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number of
Rights that will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights that have become void pursuant
to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

                  (c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute interests in Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for Common
Shares exchangeable for Rights, at the initial rate of one one- hundredth
interest in a Preferred Share (or equivalent preferred share) for each Common
Share, as appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Shares pursuant to Section 3(a) of Exhibit A hereto so that the
fraction of a Preferred Share delivered in lieu of each Common Share shall have
the same voting rights as one Common Share. The Rights Agent shall be given
written notice of any such substitution.

                  (d) In the event that there shall not be sufficient Common
Shares or Preferred Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this Section
24, (i) the Company shall take all such action as may be necessary to authorize
additional Common Shares or Preferred Shares for issuance upon exchange of the
Rights or (ii) the Company, at is option, notwithstanding any other provision of
this Agreement, with respect to each Right, to the extent permitted by
applicable law and any agreements or instruments in effect on the Distribution
Date to which the Company is a party, upon exercise of the Rights, may pay cash
and/or securities equal to the Purchase Price per Right, in lieu of issuing such
additional Common Shares and requiring payment therefor. To the extent that any
legal or contractual restrictions prevent the Company from paying the full
amount of cash payable in accordance with the foregoing sentence, the Company
shall pay to holders of the Rights as to which such payments are being made all
amounts that are not then restricted on a pro rata basis. The Company shall
continue to make payments on a pro rata basis as funds become available until
such payments have been paid in full. The Company shall provide the Rights Agent
with written notice of any election made pursuant to this Section 24(d).

                  (e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates that evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the

                                      -26-

<PAGE>

same fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.

         Section 25.       NOTICE OF CERTAIN EVENTS.

                  (a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, 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 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate and the Rights Agent, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or 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 Common
Shares and/or Preferred Shares, 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 10 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be earlier.

                  (b) In case an event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.

         Section 26.       NOTICES.

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

                                      -27-

<PAGE>

                  Warwick Community Bancorp, Inc.
                  18 Oakland Avenue
                  Warwick, New York 10990-0591
                  Attn:    Timothy A. Dempsey
                           Chairman and Chief Executive Officer

Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:

                  Registrar and Transfer Company
                  10 Commerce Drive
                  Cranford, New Jersey 07016-3572
                  Attn:    Vice President, Corporate Relations

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

         Section 27.       SUPPLEMENTS AND AMENDMENTS.

                  The Company may, at any time prior to the time a Person
becomes an Acquiring Person, by resolution of its Board of Directors, from time
to time supplement or amend this Agreement without the approval of any holders
of Right Certificates in any respect, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; PROVIDED,
HOWEVER, that from and after such time as any Person becomes an Acquiring
Person, this Agreement may be amended by the Board of Directors of the Company
in any manner which would not adversely affect the interests of any holders of
Right Certificates (other than an Acquiring Person or an Affiliate of Associate
thereof.). Upon the delivery of a certificate from an executive officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment, provided that the Rights Agent shall not be required to
consent to any amendment or supplement that is adverse to its interests. Without
limiting the foregoing, the Company may, at any time prior to such time as any
Person becomes an Acquiring Person, amend this Agreement to lower the thresholds
set forth in Sections 1(a) and 3(b) hereof to not less than the largest
percentage of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person.

         Section 28.       SUCCESSORS.

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

                                      -28-

<PAGE>

         Section 29.       DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.

                  (a) 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 such Board of Directors or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors of the Company 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 of Directors of the Company to any liability to the holders of
the Rights.

                  (b) In taking any action referred to in Section 29(a), the
Board of Directors shall be entitled to consider, without limitation, the
financial and managerial resources and future prospects of an Acquiring Person,
the possible effects of the action on the business of the Company and its
Subsidiaries and on the employees, customers, suppliers and creditors of the
Company and its Subsidiaries and the effects on the communities in which the
Company's and its Subsidiaries' facilities are located.

         Section 30.       BENEFITS OF THIS AGREEMENT.

                  Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) 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 Right
Certificates (and, prior to the Distribution Date, the Common Shares).

         Section 31.       SEVERABILITY.

                  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

         Section 32.       GOVERNING LAW.

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

                                      -29-

<PAGE>

         Section 33.       COUNTERPARTS.

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

         Section 34.       DESCRIPTIVE HEADINGS.

                  Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

                                      -30-

<PAGE>

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

                                   WARWICK COMMUNITY BANCORP, INC.

                                   By:/s/ Timothy A. Dempsey
                                      ----------------------------------------
                                          Timothy A. Dempsey
                                          Chairman and Chief Executive Officer

Attest:

By:/s/ Nancy L. Sobotor-Littell
   -------------------------------
       Nancy L. Sobotor-Littell
       Director of Human Resources
        and Corporate Secretary

                                      REGISTRAR AND TRANSFER COMPANY,
                                      as Rights Agent

                                      By:/s/ William P. Tatler
                                         -------------------------------------
                                             William P. Tatler
                                             Vice President and Chief of Staff

Attest:

By:/s/ Diane Sayer
   -------------------------------
   Name:  Diane Sayer
   Title: Vice President

                                      -31-

<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

             CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       OF

                         WARWICK COMMUNITY BANCORP, INC.

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

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

                  We, Ronald J. Gentile and Nancy L. Sobotor-Littell, being the
President and Chief Operating Officer and the Corporate Secretary, respectively,
of Warwick Community Bancorp, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware ("Corporation"), in
accordance with the provisions of Sections 103 and 151 thereof, DO HEREBY
CERTIFY:

                  That, pursuant to the authority conferred upon the Board of
Directors of the Corporation ("Board") by the Corporation's Certificate of
Incorporation ("Certificate of Incorporation"), at a meeting duly called and
held on October 17, 2000, at which a quorum was present and acting throughout,
the Board duly adopted the following resolution creating a series of 150,000
shares of preferred stock, par value $0.01 per share, designated "Series A
Junior Participating Preferred Stock":

                  RESOLVED, that, pursuant to the authority vested in the Board
         of Directors of the Corporation ("Board") by the Corporation's
         Certificate of Incorporation ("Certificate of Incorporation"), the
         Board does hereby provide for the issuance of a series of preferred
         stock, par value $0.01 per share, of the Corporation, to be designated
         "Series A Junior Participating Preferred Stock," initially consisting
         of one hundred fifty thousand (150,000) shares, and to the extent that
         the designations, powers, preferences and relative and other special
         rights and the qualifications, limitations and restrictions thereof are
         not stated and expressed in the Certificate of Incorporation, does
         hereby fix and herein state and express such designations, powers,
         preferences and relative and other special rights and the
         qualifications, limitations and restrictions thereof, as follows:

         Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock," par value $0.01
per share ("Series A Preferred Stock"), and the number of shares constituting
such series shall be 150,000. Such number of shares may be increased or
decreased by resolution of the Board; PROVIDED, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

<PAGE>

         Section 2.        DIVIDENDS AND DISTRIBUTIONS.

                  (a) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of shares of common stock
of the Corporation, par value $0.01 per share ("Common Stock"), and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board out of funds legally available therefor, quarterly dividends payable in
cash on the first day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of: (a) $1.00 and (b)
subject to the provision for adjustment set forth herein, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

                  (b) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (a) of this section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); PROVIDED, that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.

                  (c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board may fix a record date
for the determination of holders of shares of Series A Preferred Stock

                                       -2-

<PAGE>

entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to the date fixed for the
payment thereof.

         Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:

                  (a) Subject to the provision for adjustment hereinafter set
         forth, each share of Series A Preferred Stock shall entitle the holder
         thereof to 100 votes on all matters submitted to a vote of the
         stockholders of the Corporation. In the event the Corporation shall at
         any time declare or pay any dividend on the Common Stock payable in
         shares of Common Stock, or effect a subdivision or combination or
         consolidation of the outstanding shares of Common Stock (by
         reclassification or otherwise than by payment of a dividend in shares
         of Common Stock) into a greater or lesser number of shares of Common
         Stock, then in each such case the number of votes per share to which
         holders of shares of Series A Preferred Stock were entitled immediately
         prior to such event shall be adjusted by multiplying such number by a
         fraction, the numerator of which is the number of shares of Common
         Stock outstanding immediately after such event and the denominator of
         which is the number of shares of Common Stock that were outstanding
         immediately prior to such event.

                  (b) Except as otherwise provided herein, in any other
         resolution creating a series of preferred stock or any similar stock,
         in any amendment to the Certificate of Incorporation or by law, the
         holders of shares of Series A Preferred Stock and the holders of shares
         of Common Stock and any other capital stock of the Corporation having
         general voting rights shall vote together as one class on all matters
         submitted to a vote of stockholders of the Corporation.

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

         Section 4.        CERTAIN RESTRICTIONS.

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

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

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

                                       -3-

<PAGE>

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

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

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

         Section 5. REACQUIRED SHARES. Any shares of Series A 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
shares shall, upon their cancellation, become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
subject to the conditions and restrictions on issuance set forth herein, in a
resolution of the Board, in the Certificate of Incorporation or in any other
Certificate of Amendment creating a series of preferred stock or any similar
stock or as otherwise required by law.

         Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the greater of: (i) $100.00 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, and (ii) an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (b) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (a) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the

                                       -4-

<PAGE>

denominator of which is 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
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

         Section 8. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable, except as otherwise provided herein.

         Section 9. RANK. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all other
series of the Corporation's preferred stock.

         Section 10. AMENDMENT. At any time that any shares of Series A
Preferred Stock are outstanding, the Certificate of Incorporation shall not be
amended in any manner, nor shall the Board take any action, which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.

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

                                       -5-

<PAGE>

         IN WITNESS WHEREOF, Warwick Community Bancorp, Inc. has caused this
certificate to be executed by its President and Chief Operating Officer, and
attested by its Corporate Secretary, this 17th day of October, 2000.

                                    WARWICK COMMUNITY BANCORP, INC.

                                    By :  /s/ Ronald J. Gentile
                                          ---------------------
                                          Ronald J. Gentile
                                          President and Chief Operating Officer

Attest:

By:      /s/ Nancy L. Sobotor-Littell
         ----------------------------
         Nancy L. Sobotor-Littell
         Corporate Secretary

                                       -6-

<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                            FORM OF RIGHT CERTIFICATE

Certificate No. R-                                     RIGHTS
                                                 -----

                  NOT EXERCISABLE AFTER NOVEMBER 1, 2010, OR,
                  IF EARLIER, IF REDEMPTION OR EXCHANGE
                  OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION
                  AT $0.01 PER RIGHT AND TO EXCHANGE ON THE
                  TERMS SET FORTH IN THE RIGHTS AGREEMENT. ANY
                  RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED
                  TO AN ACQUIRING PERSON OR AN AFFILIATE OR
                  ASSOCIATE THEREOF OR ANY SUBSEQUENT HOLDER
                  OF SUCH RIGHTS MAY BECOME VOID AND WILL NO
                  LONGER BE TRANSFERABLE.

                                RIGHT CERTIFICATE

                         WARWICK COMMUNITY BANCORP, INC.

                  This certifies that _____________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of October 17, 2000,( as the same
may be amended from time to time, "Rights Agreement"), by and between Warwick
Community Bancorp, Inc., a Delaware corporation ("Company"), and Registrar and
Transfer Company ("Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on November 1, 2010 at the
designated office of the Rights Agent, or at the office of its successor as
Rights Agent, a one one-hundredth interest in a fully-paid, non-assessable share
of Series A Junior Participating Preferred Stock, par value $0.01 per share
("Preferred Shares"), of the Company, at a purchase price of $50.00 ("Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably require. The
number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths interests in Preferred Shares that may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of ______________ __, 20 , based on the Preferred Shares
as constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredth interests in Preferred Shares that may
be purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.

<PAGE>

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

                  This Right Certificate, with or without other Right
Certificates, upon surrender at the designated office of the Rights Agent, along
with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably require, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of interests in
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive, upon surrender hereof, another Right Certificate or Right Certificates
for the number of whole Rights not exercised.

                  Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be, and under certain circumstances are
required to be, redeemed by the Company at a redemption price of $0.01 per Right
or (ii) may be exchanged in whole or in part for Preferred Shares or shares of
the Company's common stock, par value $0.01 per share.

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

                  No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a 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 Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.

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

                                       -2-

<PAGE>

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

                                      WARWICK COMMUNITY BANCORP, INC.

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

Attest:

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

Countersigned:

REGISTRAR AND TRANSFER COMPANY,
  AS RIGHTS AGENT

By:
   --------------------------------
   Authorized Signatory

Dated:___________ ___, 20__

                                       -3-

<PAGE>

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT
                               ------------------

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

                  FOR VALUE RECEIVED ___________________________________________
hereby sell(s), assign(s) and transfer(s) unto _________________________________
________________________________________________________________________________
                  (Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
do(es) hereby irrevocably constitute(s) and appoint(s) ______________________ as
Attorney, to transfer the within Right Certificate on the books of Warwick
Community Bancorp, Inc. with full power of substitution.

Dated: ______________________, 20__

                                               _________________________________
                                               Signature

                                               _________________________________
                                               Signature

Signature Guarantee:

                  Signatures must be guaranteed by an eligible financial
institution or broker who is a member/participant in a Medallion Program
approved by the Securities Transfer Association, Inc.

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

                  The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).

                                               _________________________________
                                               Signature

                                               _________________________________
                                               Signature

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

                                       -4-

<PAGE>

            [Form of Reverse Side of Right Certificate -- continued]

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------

                  (To be executed by registered holder if such
               holder desires to exercise the Right Certificate.)

To:      WARWICK COMMUNITY BANCORP, INC.

                  The undersigned hereby irrevocably elects to exercise
_____________ Rights represented by this Right Certificate to purchase the
interests in Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such interests in Preferred Shares be issued in
the name of:

__________________________
__________________________
__________________________

(Please insert social security or
other taxpayer identification number)

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

__________________________
__________________________
__________________________

(Please print name and address)

__________________________
(Please insert social security or
other taxpayer identification number)

Dated: ____________________, 20__

                                               _________________________________
                                               Signature

                                               _________________________________
                                               Signature

                                       -5-

<PAGE>

            [Form of Reverse Side of Right Certificate -- continued]

Signature Guarantee:

                  Signatures must be guaranteed by an eligible financial
institution or broker who is a member/participant in a Medallion Program
approved by the Securities Transfer Association, Inc.

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

                  The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).

                                               _________________________________
                                               Signature

                                               _________________________________
                                               Signature

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

                                     NOTICE

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

                  In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement), and such
Assignment or Election to Purchase will not be honored.

                                       -6-

<PAGE>

                                                                       EXHIBIT C
                                                                       ---------

                 [LETTERHEAD OF WARWICK COMMUNITY BANCORP, INC.]

                          SUMMARY OF RIGHTS TO PURCHASE
                        PREFERRED SHARES OR COMMON SHARES

         1. IN GENERAL. On October 17, 2000, the Board of Directors of Warwick
Community Bancorp, Inc. declared a dividend of one preferred share purchase
right ("Right") for each share of Warwick's common stock. The dividend is
payable on November 1, 2000 ("Record Date") to the shareholders of record on
that date. Each Right entitles the registered holder to purchase, after the
Distribution Date (as defined below), a one one-hundredth (1/100) interest in a
share of Series A Junior Participating Preferred Stock ("Preferred Shares"), of
Warwick, at a price of $50.00 ("Purchase Price"), subject to adjustment.

         The terms of the Rights are set forth in a Rights Agreement, dated as
of October 17, 2000, by and between the Warwick and Registrar and Transfer
Company, as rights agent. A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated October ___, 2000. You can obtain a copy of the Rights Agreement,
free of charge, by calling (914) 986-2206.

         Set forth below is a summary description of the Rights. This
description is only a summary, is not complete and is qualified in its entirety
by reference to the Rights Agreement.

         2. DISTRIBUTION DATE. Until the Distribution Date (as defined below),
the Rights will be attached to and traded with the common stock and will be
evidenced by the certificates for the common stock. The Rights "detach" from the
common stock on the Distribution Date. After the Distribution Date, separate
Right Certificates will be mailed to shareholders, and all Rights held by an
Acquiring Person (as defined below) will become null and void.

         "Distribution Date" means the earlier of (a) the close of business on
the 20th business day following a public announcement that a person or group of
persons has acquired beneficial ownership of 10% or more of the outstanding
common stock ("Acquiring Person") or (b) the 20th business day following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person.

         3. TRANSFER OF RIGHTS AND CERTIFICATES. Until the Distribution Date,
(a) the Rights will be transferred with and only with the common stock, (b)
common stock certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference, and (c) the surrender for
transfer of any common stock certificates, even without such notation, will also
constitute the transfer of the Rights associated with common stock represented
by such certificates. After the Distribution Date, the Right Certificates alone
will evidence the Rights.

         4. EXPIRATION. The Rights will expire on November 1, 2010, unless such
date is extended or the Rights are earlier redeemed by the Company.

         5. ANTI-DILUTION ADJUSTMENTS. The Purchase Price, the number of
interests in Preferred Shares issuable and the number of outstanding Rights may
be adjusted from time to time to prevent

<PAGE>

dilution from certain events, such as a stock dividend, a stock split or a
reclassification of the Preferred Shares or the common stock. Adjustments to the
Purchase Price will not be made until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price.

         6. PREFERRED SHARES. Interests in Preferred Shares purchasable upon
exercise of the Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment in an amount per
share equal to the greater of (a) $1.00 and (b) 100 times the dividend declared
per Common Share for such quarter. In the event of liquidation, the holders of
the interests in Preferred Shares will be entitled to a minimum preferential
liquidation payment in an amount per share equal to the greater of (i) $100.00
and (ii) 100 times the payment made per Common Share. Each Preferred Share will
have 100 votes, voting together with the Common Shares. In the event of any
merger, consolidation or other transaction in which Common Shares are exchanged,
each Preferred Share will be entitled to receive 100 times the amount received
per Common Share. These rights are protected by customary anti-dilution
provisions.

         Because of the nature of the dividend, liquidation and voting rights of
the Preferred Shares, the value of the 1/100 interest in a Preferred Share
purchasable upon exercise of a Right should approximate the value of one Common
Share.

         7. EXERCISE OF RIGHTS FOR COMMON SHARES. If any person becomes an
Acquiring Person, proper provision will be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will have the right to receive, upon the exercise thereof
at the then-current Purchase Price, that number of Common Shares having a market
value of two times the Purchase Price. In the event that the Company is acquired
in a merger or other business combination transaction or 50% or more of its
consolidated assets or earning power is sold, proper provision will be made so
that each holder of a Right will have the right to receive, upon the exercise
thereof at the then-current Purchase Price, that number of shares of common
stock of the acquiring company that, at the time of such transaction, has a
market value of two times the Purchase Price.

         8. OPTIONAL EXCHANGE OF RIGHTS. After any person or group becomes an
Acquiring Person, but before an Acquiring Person acquires 50% or more of the our
common stock, our Board may extinguish the Rights by exchanging one share of
common stock (or equivalent preferred stock) for each Right (other than Rights
owned by an Acquiring Person, which shall be void).

         9. REDEMPTION OF RIGHTS. At any time before a person or group becomes
an Acquiring Person, the Company's Board of Directors may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate, and
the only right of the holders of Rights will be to receive the redemption price.

         10. AMENDMENTS. The terms of the Rights may be amended by the Company's
Board of Directors without the consent of the holders of the Rights; PROVIDED,
HOWEVER, that, after a person or group becomes an Acquiring Person, the Board
may not amend the terms of the Rights in any manner that adversely affects the
holders of the Rights.

         11. RIGHTS PRIOR TO EXERCISE. Until a Right is exercised, the holder
thereof, as such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends.

                                       -2-

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