Document:

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                                                                     EXHIBIT 4.1

                                RIGHTS AGREEMENT

                                 by and between

                      TECHNICAL COMMUNICATIONS CORPORATION

                                       and

            AMERICAN STOCK TRANSFER & TRUST COMPANY, as Rights Agent

                                   Dated as of

                                 August 6, 2004

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                                TABLE OF CONTENTS

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Section                                                                                                           Page
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Section 1.        Certain Definitions.......................................................................       1

Section 2.        Appointment of Rights Agent...............................................................       6

Section 3.        Issuance of Right Certificates............................................................       6

Section 4.        Form of Right Certificates................................................................       8

Section 5.        Countersignature and Registration.........................................................       9

Section 6.        Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
                  Destroyed, Lost or Stolen Right Certificates..............................................       9

Section 7.        Exercise of Rights; Exercise Price; Expiration Date of Rights; Invalidation of
                  Certain Rights............................................................................      10

Section 8.        Cancellation and Destruction of Right Certificates........................................      12

Section 9.        Reservation and Availability of Shares of Common Stock....................................      13

Section 10.       Stock Record Date.........................................................................      14

Section 11.       Adjustment of Exercise Price or Number of Shares..........................................      14

Section 12.       Certification of Adjusted Exercise Price or Number of Shares..............................      20

Section 13.       Consolidation, Merger or Sale or Transfer of Assets or Earning Power......................      20

Section 14.       Fractional Rights and Fractional Shares...................................................      24

Section 15.       Rights of Action..........................................................................      25

Section 16.       Agreement of Right Holders................................................................      25

Section 17.       Right Certificate Holder Not Deemed a Stockholder.........................................      26

Section 18.       Concerning the Rights Agent...............................................................      26

Section 19.       Merger or Consolidation of, or Change in Name of, the Rights Agent........................      27

Section 20.       Duties of Rights Agent....................................................................      27
</TABLE>

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                                TABLE OF CONTENTS
                                    (cont'd)

<TABLE>
<CAPTION>
Section                                                                                                          Page
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<S>                                                                                                              <C>
Section 21.       Change of Rights Agent....................................................................      30

Section 22.       Issuance of New Right Certificates........................................................      31

Section 23.       Redemption................................................................................      31

Section 24.       Notice of Proposed Actions................................................................      32

Section 25.       Notices...................................................................................      33

Section 26.       Supplements and Amendments................................................................      33

Section 27.       Exchange..................................................................................      34

Section 28.       Successors................................................................................      35

Section 29.       Benefits of the Agreement.................................................................      35

Section 30.       Massachusetts Contract....................................................................      35

Section 31.       Counterparts..............................................................................      35

Section 32.       Descriptive Headings......................................................................      35

Section 33.       Severability..............................................................................      35

Section 34.       Determinations and Actions by the Board of Directors......................................      36

Exhibit A         -Summary of Rights

Exhibit B         -Form of Right Certificate
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                                RIGHTS AGREEMENT

      Rights Agreement (this "AGREEMENT"), dated as of August 6, 2004, by and
between TECHNICAL COMMUNICATIONS CORPORATION, a Massachusetts corporation (the
"CORPORATION"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York
corporation (the "RIGHTS AGENT").

                               W I T N E S S E T H

      WHEREAS, on August 5, 2004 the Board of Directors of the Corporation
authorized the issuance of, and declared, a dividend payable in one right (a
"RIGHT") for each share of common stock, $.10 par value per share ("COMMON
STOCK"), of the Corporation outstanding as of close of business on August 13,
2004 (the "RECORD DATE"), each such Right representing the right to purchase one
share of Common Stock of the Corporation, upon the terms and subject to the
conditions hereinafter set forth; and

      WHEREAS, on such date, the Board of Directors of the Corporation further
authorized the issuance of one Right (subject to adjustment) with respect to
each share of Common Stock which may be issued between the Record Date and the
earliest to occur of the Distribution Date, the Expiration Date or the Final
Expiration Date (as such terms are hereinafter defined); provided, however, that
Rights may be issued with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the Expiration Date in
accordance with Section 22 hereof;

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

            Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings provided by this Section 1, any
capitalized term defined in this Section 1 and used in the following definitions
having the meaning provided by this Section 1:

            (a) "ACQUIRING PERSON" shall mean any Person who or which, together
      with all Affiliates and Associates of such Person, shall be the Beneficial
      Owner of 15% or more of the Voting Stock then outstanding; provided,
      however, that an Acquiring Person shall not include: (i) an Exempt Person;
      or (ii) any Person who or which, together with all Affiliates and
      Associates of such Person, would be an Acquiring Person solely by reason
      of (A) being the Beneficial Owner of shares of Voting Stock, the
      Beneficial Ownership of which was acquired by such Person (together with
      all Affiliates and Associates of such Person) pursuant to any action or
      transaction or series of related actions or transactions approved by the
      Board of Directors of the Corporation before such Person (together with
      all Affiliates and Associates of such Person) otherwise became an
      Acquiring Person or (B) a reduction in the number of issued and
      outstanding shares of Voting Stock pursuant to a transaction or a series
      of related transactions approved by the Board of Directors of the
      Corporation; provided, further, that in the event a Person described in
      this clause (ii) does not become an Acquiring Person by reason of
      subclause (A) or (B) of this clause (ii), such Person nonetheless shall
      become an Acquiring Person in the event such Person

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      (together with all Affiliates and Associates of such Person) thereafter
      acquires Beneficial Ownership of an additional 1% or more of the Voting
      Stock, unless the acquisition of such additional Voting Stock would not
      result in such Person becoming an Acquiring Person by reason of subclause
      (A) or (B) of this clause (ii). Notwithstanding the foregoing, if the
      Board of Directors of the Corporation determines in good faith that a
      Person who would otherwise be an "Acquiring Person" as defined pursuant to
      the foregoing provisions of this paragraph (a) has become such
      inadvertently, and, within 10 Business Days of being requested by the
      Corporation to advise it regarding the same, certifies to the Corporation
      that such Person acquired shares of Common Stock in excess of 14.9%
      inadvertently or without knowledge of the terms of the Rights, and who,
      together with all Affiliates and Associates, thereafter does not acquire
      additional shares of Common Stock while the Beneficial Owner of 15% of
      more of the shares of Common Stock then outstanding, and such Person
      divests as promptly as practicable (as determined in good faith by the
      Board of Directors of the Corporation) a sufficient number of shares of
      Voting Stock so that such Person would no longer be an "Acquiring Person"
      as defined pursuant to the foregoing provisions of this paragraph (a),
      then such Person shall not be deemed an "Acquiring Person" for any
      purposes of this Agreement; provided, however, that if the Person
      requested to so certify fails to do so within 10 Business Days, then such
      Person shall become an Acquiring Person immediately after such
      10-Business-Day period.

            (b) "AFFILIATE" shall have the meaning ascribed to such term in Rule
      12b-2 of the General Rules and Regulations under the Exchange Act, as in
      effect on the date of this Agreement.

            (c) "ASSOCIATE" of a Person shall mean (i) with respect to a
      corporation, any officer or director thereof or any Associate of any
      Subsidiary thereof, or any Beneficial Owner of 10% or more of any class of
      equity security thereof, (ii) with respect to an association, any officer
      or director thereof or any Associate of a Subsidiary thereof, (iii) with
      respect to a partnership, any general partner thereof or any limited
      partner thereof who is, directly or indirectly, the Beneficial Owner of a
      10% or greater ownership interest therein, and any Associate of any
      Subsidiary thereof, (iv) with respect to a limited liability company, any
      manager or managing member thereof and any Beneficial Owner of 10% or more
      or any class of membership interest therein or other equity security
      thereof, and any Associate of any Subsidiary thereof, (v) with respect to
      a business trust, any officer or trustee thereof or any Associate of any
      Subsidiary thereof, (vi) with respect to any other trust or an estate, any
      trustee, executor or similar fiduciary and any Person who has a 15% or
      greater interest as a beneficiary in the income from or principal of such
      trust or estate, (vii) with respect to a natural person, the parents and
      children thereof and any spouse or relative thereof, or any relative of
      such spouse, who has the same home as such person, and (viii) any
      Affiliate of such Person.

            (d) A person shall be deemed the "BENEFICIAL OWNER" of, or to
      "BENEFICIALLY OWN", any securities (and correlative terms shall have
      correlative meanings):

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                  (i) which such Person or any of such Person's Affiliates or
            Associates beneficially owns, directly or indirectly, for purposes
            of Section 13(d) of the Exchange Act and Regulations 13D and 13G
            thereunder, in each case as in effect on the date of this Agreement;
            or

                  (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 or the
            fulfillment of a condition or both) pursuant to any agreement,
            arrangement or understanding (whether or not in writing), or upon
            the exercise of conversion rights, exchange rights, other rights
            (other than the Rights), 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 or exchange offer made by such Person or any of such
            Person's Affiliates or Associates until such tendered securities are
            accepted for purchase or exchange or (B) the right to vote, alone or
            in concert with others, pursuant to any agreement, arrangement or
            understanding (whether or not in writing); provided, however, that a
            Person shall not be deemed the "Beneficial Owner" of, or to
            "Beneficially Own", any securities if the agreement, arrangement or
            understanding to vote such security (1) arises solely from a
            revocable proxy or consent given in response to a proxy or consent
            solicitation made pursuant to, and in accordance with, the
            applicable rules and regulations under the Exchange Act and (2) is
            not at the time reportable by such Person on a Schedule 13D report
            under the Exchange Act (or any comparable or successor report),
            other than by reference to a proxy or consent solicitation being
            conducted by such Person; 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 (whether or not in writing) for the purpose of
            acquiring, holding, voting (except as described in clause (B) of
            subparagraph (ii) of this paragraph (d)) or disposing of any
            securities of the Corporation; provided, however, that for purposes
            of determining Beneficial Ownership of securities under this
            Agreement, officers and directors of the Corporation solely by
            reason of their status as such shall not constitute a group
            (notwithstanding that they may be Associates of one another or may
            be deemed to constitute a group for purposes of Section 13(d) of the
            Exchange Act) and shall not be deemed to own shares owned by another
            officer or director of the Corporation.

            Notwithstanding anything in this paragraph (d) to the contrary, a
Person engaged in the business of underwriting securities shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own," any securities acquired or
otherwise beneficially owned in good faith in a firm commitment underwriting
until the expiration of 40 days after the date of the sale of securities to the
public pursuant to such firm commitment underwriting.

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

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

            (g) "COMMON STOCK" when used with reference to the Corporation shall
      collectively mean the Common Stock of the Corporation as defined in the
      first recital hereof and any other common stock of the Corporation into or
      for which it is changed, converted or exchanged. "COMMON STOCK" when used
      with reference to any Person other than the Corporation which shall be
      organized in corporate form shall mean the capital shares or other equity
      security having of all classes of capital shares or equity securities of
      such corporation the greatest aggregate voting power in the election of
      directors. "COMMON STOCK" when used with reference to any Person which
      shall not be organized in corporate form shall mean units of beneficial
      interest in the profits or losses of such Person or other equity security
      of such Person having of all classes of equity securities of such Person
      the greatest aggregate voting power in the election of the directors,
      trustees, managers or other Persons performing like governance functions
      for such Person.

            (h) "CORPORATION," shall have the meaning provided at the beginning
      hereof; provided, however, that "Corporation" shall also include any
      successors to the Corporation as provided by Section 28 hereof and shall
      mean a Principal Party as provided by Section 13(a) and 13(b) hereof.

            (i) "DISTRIBUTION DATE" shall have the meaning set forth in Section
      3(b) hereof.

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

            (k) "EXCHANGE RATIO" shall have the meaning set forth in Section 27
      hereof.

            (1) "EXEMPT PERSON" shall mean (i) the Corporation, (ii) any
      subsidiary of the Corporation, or (iii) any employee benefit plan or
      employee stock plan of the Corporation or any Subsidiary of the
      Corporation or any trust or other entity organized, appointed, established
      or holding Voting Stock for or pursuant to the terms of any such plan.

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

            (n) "EXPIRATION DATE" shall have the meaning set forth in Section
      7(a) hereof.

            (o) "FAIR MARKET VALUE" of any property shall mean fair market value
      of such property as determined in accordance with Section 11(b) hereof.

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            (p) "FINAL EXPIRATION DATE" shall have the meaning set forth in
      Section 7(a) hereof.

            (q) "NASDAQ" shall have the meaning set forth in Section 11(b)
      hereof.

            (r) "PERSON" shall mean any individual, company, firm, corporation
      or other entity.

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

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

            (u) "RIGHT CERTIFICATE" shall have the meaning set forth in Section
      3(d) hereof.

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

            (w) "SPREAD" shall mean the excess of (1) the Fair Market Value of
      Common Stock issuable upon the exercise of a Right in accordance with
      Section 11(a)(ii) over (2) the Exercise Price in effect at the time of
      determination of the Spread.

            (x) "STOCK ACQUISITION DATE" shall mean the first date in which
      there will shall be a 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 Corporation or an Acquiring
      Person that an Acquiring Person has become such or such earlier date as a
      majority of the Board of Directors of the Corporation shall become aware
      of the existence of an Acquiring Person as confirmed by action of the
      Board of Directors of the Corporation taken by the affirmative vote of a
      majority of the Board of Directors of the Corporation.

            (y) "SUBSIDIARY" of a Person shall mean any corporation or other
      entity of which securities or other ownership interests having ordinary
      voting power sufficient to elect a majority of the board of directors of
      such corporation or other entity or other persons performing similar
      functions are beneficially owned, directly or indirectly, by such Person
      or by any corporation or other entity that is otherwise controlled by such
      Person.

            (z) "SUMMARY OF RIGHTS" shall have the meaning set forth in Section
      3(a) hereof.

            (aa) "TRADING DAY" shall have the meaning set forth in Section 11(b)
      hereof.

            (bb) "TRANSFER TAX" shall mean any tax or charge, including any
      documentary stamp tax, imposed or collected by any governmental or
      regulatory authority in respect of any transfer of any security,
      instrument or right, including the Rights and shares of the Common Stock.

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            (cc) "VOTING STOCK" shall mean (i) the Common Stock of the
      Corporation and (ii) any other shares of capital stock of the Corporation
      entitled to vote generally in the election of directors or entitled
      generally to vote together with the Common Stock in respect of a merger,
      consolidation, sale of all or substantially all of the Corporation's
      assets, liquidation, dissolution or winding up. For purposes of this
      Agreement, a stated percentage of the Voting Stock shall mean a number of
      shares of the Voting Stock as shall equal in voting power that stated
      percentage of the total voting power of the then outstanding shares of
      Voting Stock in the election of a majority of the Board of Directors of
      the Corporation or in respect of a merger, consolidation, sale of all or
      substantially all of the Corporation's assets, liquidation, dissolution or
      winding up.

            Any determination required to be made by the Board of Directors of
the Corporation for purposes of applying the definitions contained in this
Section 1 shall be made by a majority of the Board of Directors of the
Corporation in its good faith judgment, which determination shall be binding on
the Rights Agent and the holders of the Rights.

      Section 2. Appointment of Rights Agent. The Corporation hereby appoints
the Rights Agent to act as the agent for the Corporation and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date be the holders of Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Corporation 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 duty to supervise, and shall in no event be
liable for, the acts or omissions of any such Co-Rights Agent.

      Section 3. Issuance of Right Certificates.

            (a) On the Record Date (or as soon as practical thereafter), the
      Corporation or the Rights Agent shall send a copy of a Summary of Rights,
      in substantially the form attached hereto as Exhibit A (the "SUMMARY OF
      RIGHTS"), by first class mail, postage prepaid, to each record holder of
      the Common Stock as of the Record Date, at the address of such holder
      shown on the records of the Corporation.

            (b) Until the Close of Business on the day which is the earlier of
      (i) the tenth Business Day after the Stock Acquisition Date and (ii) the
      tenth Business Day (or such later date as may be determined by action of
      the Board of Directors of the Corporation prior to such time as any Person
      becomes an Acquiring Person) after the date of the commencement (within
      the meaning of Rule 14d-2(a) of the General Rules and Regulations under
      the Exchange Act) by any Person (other than an Exempt Person) of a tender
      or exchange offer upon the successful consummation of which such Person,
      or any Affiliate or Associate of such Person, would be an Acquiring Person
      (including any such date which is after the date of this Agreement and
      prior to the issuance of the Rights; the earlier of such dates being
      herein referred to as the "DISTRIBUTION DATE"), (x) the Rights shall be
      evidenced by the certificates for Common Stock (or in the case of
      uncertificated shares of Common Stock, by the book-entry account that
      evidences record ownership for such shares) registered in the names of the
      holders of Common Stock (together with, in

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      the case of certificates for Common Stock outstanding as of the Record
      Date, the Summary of Rights) and not by separate Right certificates and
      the record holders of such certificates (or such book-entry accounts) for
      Common Stock shall be the record holders of the Rights represented thereby
      and (y) each Right shall be transferable only simultaneously and together
      with the transfer of a share of Common Stock (subject to adjustment as
      hereinafter provided). Until the Distribution Date (or, if earlier, the
      Expiration Date or Final Expiration Date), the surrender for transfer of
      any certificate for Common Stock (or the effectuation of a book-entry
      transfer of shares of Common Stock) shall constitute the surrender for
      transfer of the Right or Rights associated with the Common Stock evidenced
      thereby, whether or not accompanied by a copy of the Summary of Rights.

            (c) Rights shall be issued in respect of all shares of Common Stock
      that become outstanding after the Record Date but prior to the earliest of
      the Distribution Date, the Expiration Date or the Final Expiration Date.
      Certificates for Common Stock (including, without limitation, certificates
      issued upon original issuance, disposition from the Corporation's treasury
      or transfer or exchange of Common Stock) after the Record Date but prior
      to the earliest of the Distribution Date, the Expiration Date or the Final
      Expiration Date shall have impressed, printed, written or stamped thereon
      or otherwise affixed thereto the following legend:

                  This certificate also evidences and entitles the holder hereof
            to the same number of Rights (subject to adjustment) as the number
            of shares of Common Stock represented by this certificate, such
            Rights being on the terms provided under the Rights Agreement by and
            between Technical Communications Corporation (the "Corporation") and
            American Stock Transfer & Trust Company (the "Rights Agent"), dated
            as of August 6, 2004, as it may be amended from time to time (the
            "Agreement"), the terms of which are incorporated herein by
            reference and a copy of which is on file at the principal executive
            offices of the Corporation. Under certain circumstances, as set
            forth in the Agreement, such Rights shall be evidenced by separate
            certificates and shall no longer be evidenced by this certificate.
            The Corporation shall mail to the registered holder of this
            certificate a copy of the Agreement without charge within five days
            after receipt of a written request therefor. Under certain
            circumstances set forth in the Agreement, Rights issued to or
            Beneficially Owned by any Person who is, was or becomes an Acquiring
            Person or any Affiliate or Associate thereof (as such terms are
            defined in the Agreement), whether currently held by or on behalf of
            such Person or by any subsequent holder of such Rights, may become
            null and void.

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

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In the event that the Corporation purchases or otherwise acquires any Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so that
the Corporation shall not be entitled to exercise any Rights associated with the
Common Stock which are no longer outstanding. Notwithstanding this paragraph
(c), the omission of a legend shall not affect the enforceability of any part of
this Agreement or the rights of any holder of the Rights.

            (d) As soon as practicable after the Distribution Date, the
      Corporation will prepare and execute, the Rights Agent will countersign,
      and the Corporation will send or cause to be sent (and the Rights Agent
      will, if requested, send), by first class mail, postage prepaid, to each
      record holder of the Common Stock as of the Close of Business on the
      Distribution Date, as shown by the records of the Corporation, at the
      address of such holder shown on such records, a certificate in the form
      provided by Section 4 hereof (a "Right Certificate"), evidencing one Right
      (subject to adjustment as provided herein) for each share of Common Stock
      so held. As of and after the Distribution Date, the Rights shall be
      evidenced solely by Right Certificates and may be transferred by the
      transfer of the Right Certificate as permitted hereby, separately and
      apart from any transfer of one or more shares of Common Stock.

      Section 4. Form of Right Certificates.

            (a) The Right Certificates (and the forms of election to purchase
      shares, certificate and assignment to be printed on the reverse thereof),
      when, as and if issued shall be substantially in the form set forth in
      Exhibit B hereto and may have such marks of identification or designation
      and such legends, summaries or endorsements printed thereon as may be
      required to comply with any law or with any rule or regulation made
      pursuant thereto or with any rule or regulation of any stock exchange on
      which the Common Stock or the Rights may from time to time be listed or as
      the Corporation may deem appropriate to conform to usage or otherwise and
      as are not inconsistent with the provisions of this Agreement. Subject to
      the provisions of Section 22 hereof, Right Certificates evidencing Rights
      whenever issued, (i) shall be dated as of the date of issuance of the
      Rights they represent and (ii) subject to adjustment from time to time as
      provided herein, on their face shall entitle the holders thereof to
      purchase such number of shares of Common Stock as shall be set forth
      thereon at the price per share of Common Stock payable upon exercise of a
      Right provided by Section 7(b) hereof, as the same may from time to time
      be adjusted as provided herein (the "EXERCISE PRICE").

            (b) Any Right Certificate issued pursuant to Section 3(a), Section
      11(f) or Section 22 hereof that represents Rights beneficially owned by:
      (i) an Acquiring Person or an Affiliate of an Acquiring Person, (ii) a
      transferee of an Acquiring Person (or of any such Associate or Affiliate)
      who becomes a transferee after the Acquiring Person becomes such, or (iii)
      a transferee of an Acquiring Person (or of any such Associate or
      Affiliate) who becomes a transferee prior to or concurrently with the
      Acquiring Person becoming such and receives such Rights pursuant to either
      (A) a transfer (whether or not for consideration) from the Acquiring
      Person to holders of equity interests in such Acquiring Person or to any
      Person with whom such Acquiring Person has any continuing

                                       8
<PAGE>

      agreement, arrangement or understanding regarding the transferred Rights
      or (B) a transfer which the Board has determined is part of a plan,
      arrangement or understanding which has a primary purpose or effect
      avoidance of Section 7(e) hereof, and any Right Certificate issued
      pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
      replacement or adjustment of any other Right Certificate referred to in
      this sentence, shall contain (to the extent feasible) the following
      legend:

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

      Section 5. Countersignature and Registration.

            (a) Each Right Certificate shall be executed on behalf of the
      Corporation by its Chairman of the Board, President or any Vice President,
      either manually or by facsimile signature, and have affixed thereto the
      Corporation's seal or a facsimile thereof which shall be attested by the
      Secretary or an Assistant Secretary of the Corporation, either manually or
      by facsimile signature. Each Right Certificate shall be countersigned by
      the Rights Agent either manually or by facsimile signature and shall not
      be valid for any purpose unless so countersigned. In case any officer of
      the Corporation who shall have signed any Right Certificate shall cease to
      be such officer of the Corporation before countersignature by the Rights
      Agent and issuance and delivery of the certificate by the Corporation,
      such Right Certificate, nevertheless, may be countersigned by the Rights
      Agent and issued and delivered with the same force and effect as though
      the person who signed such Right Certificates had not ceased to be such
      officer of the Corporation. Any Right Certificate may be signed on behalf
      of the Corporation by any person who, on the date of the execution of such
      Right Certificate, shall be a proper officer of the Corporation to sign
      such Right Certificate, although at the date of the execution of this
      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 principal office or one or more offices
      designated as the appropriate place for surrender of Right Certificates
      upon exercise or transfer, and in such other locations as may be required
      by law, 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.

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

            (a) Subject to the provisions of Sections 4(b), 7(e), 7(f) and 14
      hereof, at any time after the Close of Business on the Distribution Date,
      and at or prior to the Close of

                                       9
<PAGE>

      Business on the earlier of the Expiration Date or the Final Expiration
      Date, any Right Certificate, may be (i) transferred or (ii) split up,
      combined or exchanged for one or more other Right Certificates, entitling
      the registered holder (or former holder in the case of a transfer) to
      purchase a like number of shares of Common Stock 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 shall surrender the Right Certificate at the office
      of the Rights Agent designated for the surrender of Right Certificates
      with the form of certificate and assignment on the reverse side thereof
      duly endorsed (or enclose with such Right Certificate a written instrument
      of transfer in form satisfactory to the Corporation and the Rights Agent),
      duly executed by the registered holder thereof or his attorney duly
      authorized in writing, and with such signature duly guaranteed, and shall
      have provided such additional evidence of the identity of the Beneficial
      Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
      the Corporation shall reasonably request. Any registered holder desiring
      to split up, combine or exchange any Right Certificate shall make such
      request in writing delivered to the Rights Agent, and shall surrender the
      Right Certificate to be split up, combined or exchanged at the office of
      the Rights Agent designated therefore. Thereupon, the Rights Agent shall,
      subject to Sections 4(b), 7(e), 7(f), 14 and 27 hereof, countersign and
      deliver to the person entitled thereto a Right Certificate or Right
      Certificates, as the case may be, as so requested. The Corporation may
      require payment of a sum sufficient to cover any Transfer Tax that may be
      imposed in connection with any transfer, split up, combination or exchange
      of any Right Certificates.

            (b) Subject to the provisions of Sections 7(e), 7(f) and 14 hereof,
      at any time after the Distribution Date and prior to the Expiration Date,
      upon receipt by the Corporation 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,
      if requested by the Corporation, reimbursement to the Corporation and the
      Rights Agent of all reasonable expenses incidental thereto, or upon
      surrender to the Rights Agent and cancellation of the Right Certificate if
      mutilated, the Corporation shall cause a new Right Certificate of like
      tenor to be issued and delivered to the registered owner in lieu of the
      Right Certificate so lost, stolen, destroyed or mutilated.

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

            (a) The Rights shall not be exercisable until, and shall become
      exercisable on, the Distribution Date (unless otherwise provided herein,
      including, without limitation, the restrictions on exercisability set
      forth in Sections 7(c), 7(e), 23(a) and 27(b) hereof). Except as otherwise
      provided herein, the Rights may be exercised in whole or in part, at any
      time commencing with the Distribution Date upon surrender of the Right
      Certificate, with the form of election to purchase and certificate on the
      reverse side thereof duly executed (with signatures duly guaranteed), to
      the Rights Agent at the designated office of the Rights Agent in New York,
      together with payment of the Exercise Price for each Right exercised (as
      the same may have been adjusted as hereinafter provided), at or prior

                                       10
<PAGE>

      to the Close of Business on the earlier of (i) August 5, 2014 (the "FINAL
      EXPIRATION DATE") or (ii) the date on which the Rights are redeemed as
      provided in Section 23 hereof or the date on which the Rights are
      exchanged as provided in Section 27 hereof (such earlier date being herein
      referred to as the "EXPIRATION DATE").

            (b) The Exercise Price shall initially be $25 for each share of
      Common Stock issued pursuant to the exercise of a Right. The Exercise
      Price and the number of shares of Common Stock or other securities or
      property to be acquired upon exercise of a Right shall be subject to
      adjustment from time to time as provided in Sections 11 and 13 hereof. The
      Exercise Price shall be payable in lawful money of the United States of
      America, in accordance with paragraph (c) below.

            (c) Except as otherwise provided herein, upon receipt of a Right
      Certificate representing exercisable Rights with the form of election to
      purchase and certificate duly executed, accompanied by payment by
      certified check, cashier's check, bank draft or money order payable to the
      Corporation or the Rights Agent of the Exercise Price for the shares of
      Common Stock to be purchased and an amount equal to any applicable
      Transfer Tax required to be paid by the holder of the Right Certificate in
      accordance with Section 9(e) hereof, the Rights Agent shall thereupon
      promptly (i) requisition from any transfer agent of the Common Stock of
      the Corporation (or make available, if the Rights Agent is the transfer
      agent for such shares) one or more certificates representing the number of
      shares of Common Stock to be so purchased, and the Corporation hereby
      authorizes and directs such transfer agent to comply with all such
      requests, (ii) requisition from the Corporation the amount of cash to be
      paid in lieu of the issuance of fractional shares in accordance with
      Section 14(b) hereof, (iii) after receipt of such Common Stock
      certificates, 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, promptly deliver such cash to or upon the order of the registered
      holder of such Right Certificate; provided, however, that in the case of a
      purchase of securities other than Common Stock, pursuant to Section 13
      hereof, the Rights Agent shall promptly take the appropriate actions
      corresponding in such case to that referred to in the foregoing clauses
      (i) through (iv) of this Section 7(c). Notwithstanding the foregoing
      provisions of this Section 7(c), the Corporation may suspend the issuance
      of shares of Common Stock and other securities upon exercise of a Right
      for a reasonable period, not in excess of 90 days, during which the
      Corporation seeks to register under the Securities Act, and any applicable
      securities law of any other jurisdiction, the shares of Common Stock or
      other securities to be issued pursuant to the Rights; provided, however,
      that nothing contained in this Section 7(c) shall relieve the Corporation
      of its obligations under Section 9(d) hereof. Upon any such suspension,
      the Corporation shall issue a public announcement stating that the
      exercisability of the Rights has been temporarily suspended, as well as a
      public announcement at such time as the suspension is no longer in effect.

            (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

                                       11
<PAGE>

      holder of such Right Certificate or his assign, subject to the provisions
      of Section 14(b) hereof. The Corporation reserves the right to require
      prior to the occurrence of an event described in Sections 11(a)(ii) or
      13(a), that, upon any exercise of Rights, a number of Rights be exercised
      so that only whole shares of Common Stock would be issued.

            (e) Notwithstanding any provision of this Agreement to the contrary,
      from and after the time when any Person first becomes an Acquiring Person
      (the "INVALIDATION TIME"), any Rights that are Beneficially Owned by (x)
      such Acquiring Person (or any Associate or Affiliate of such Acquiring
      Person), (y) a transferee of such Acquiring Person (or any such Associate
      or Affiliate) who becomes a transferee after the invalidation time or (z)
      a transferee of such Acquiring Person (or any such Associate or Affiliate)
      who becomes a transferee prior to or concurrently with the invalidation
      time pursuant to either (I) a transfer from the Acquiring Person (or any
      such Associate or Affiliate) to holders of its equity securities or to any
      Person with whom it has any continuing agreement, arrangement or
      understanding regarding the transferred Rights or (II) a transfer which
      the Board of Directors of the Corporation has determined is part of a
      plan, arrangement or understanding which has the purpose or effect of
      avoiding the provisions of this Section 7(e), and subsequent transferees
      of such Persons referred to in clause (y) and (z) above, shall be null and
      void without any further action and any holder of such Rights shall
      thereafter have no rights whatsoever with respect to such Rights under any
      provision of this Agreement or otherwise. The Corporation shall use all
      reasonable efforts to ensure that the provisions of this Section 7(e) and
      Section 4(b) are complied with, but it shall have no liability to any
      holder of Right Certificates or any other Person as a result of its
      failure to make any determination with respect to an Acquiring Person or
      its Affiliates, Associates or transferees hereunder.

            (f) Notwithstanding anything in this Agreement to the contrary,
      neither the Rights Agent nor the Corporation shall be obligated to
      undertake any action with respect to a registered holder upon the
      occurrence of any purported exercise as set forth in this Section 7 unless
      such registered holder shall have (i) completed and signed the certificate
      following the form of election to purchase set forth on the reverse side
      of the Right Certificate surrendered for such exercise and (ii) provided
      such additional evidence of the identity of the Beneficial Owner (or
      former Beneficial Owner) or Affiliates or Associates thereof and such
      other information as the Corporation or the Rights Agent shall reasonably
      request.

      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 Corporation or to any of
its agents be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Corporation shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall cancel
and retire, any Right Certificate purchased or acquired by the Corporation
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Corporation, or shall, at the written

                                       12
<PAGE>

request of the Corporation, destroy such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the Corporation.

      Section 9. Reservation and Availability of Shares of Common Stock.

            (a) The Corporation covenants and agrees that it will cause to be
      reserved and kept available out of the authorized and unissued shares of
      Common Stock or out of authorized and issued shares of Common Stock held
      in its treasury, such number of shares of Common Stock as will from time
      to time be sufficient to permit the exercise in full of all outstanding
      Rights.

            (b) The Corporation shall use its best efforts to cause, from and
      after such time as the Rights become exercisable, all shares of Common
      Stock issued or reserved for issuance in accordance with this Agreement to
      be listed, upon official notice of issuance, upon the principal national
      securities exchange, if any, upon which the Common Stock is listed or, if
      the principal market for the Common Stock is not on any national
      securities exchange, to be eligible for quotation in the National
      Association of Securities Dealers' Automated Quotation System or any
      successor thereto or other comparable quotation system.

            (c) The Corporation covenants and agrees that it will take all such
      action as may be necessary to endure that all shares of Common Stock
      delivered upon exercise of Rights shall, at the time of delivery of the
      certificates for such shares (subject to payment of the Exercise Price in
      respect thereof), be duly and validly authorized and issued and dully paid
      and nonassessable shares.

            (d) The Corporation shall use its best efforts to (i) file, as soon
      as practicable following the occurrence of the event described in Section
      11(a)(ii), or as soon as is required by law following the Distribution
      Date, as the case may be, a registration statement under the Securities
      Act, with respect to the shares of Common Stock purchasable upon exercise
      of the Rights on an appropriate form, (ii) cause such registration
      statement to become effective as soon as practicable after such filing,
      and (iii) cause such registration statement to remain effective (with a
      prospectus at all times meeting the requirements of the Securities Act)
      until the earlier of (a) the date as of which the Rights are no longer
      exercisable for Common Stock and (b) the earlier of the Expiration Date
      and the Final Expiration Date. The Corporation may temporarily suspend,
      for a period of time not to exceed 90 days, the issuance of shares of
      Common Stock upon exercise of a Right in order to prepare and file a
      registration statement under the Securities Act and permit it to become
      effective. The Corporation will also take such action as may be
      appropriate under, or to ensure compliance with, the securities or "blue
      sky" laws of the various states in connection with the exercisability of
      the Rights. Notwithstanding any provision of this Agreement to the
      contrary, the Rights shall not be exercisable in any jurisdiction unless
      the requisite qualification in such jurisdiction shall have been obtained
      and such exercise shall be permitted under applicable law, and until a
      registration statement under the Securities Act (if required) shall have
      been declared effective.

                                       13
<PAGE>

            (e) The Corporation covenants and agrees that, except as set forth
      in Section 6(a) hereof or in this Section 9(e), it will pay when due and
      payable any and all United States federal and state Transfer Taxes which
      may be payable in respect of the issuance or delivery of the Right
      Certificates or of any shares of Common Stock issued or delivered upon the
      exercise of Rights. The Corporation shall not, however, be required to pay
      any Transfer Tax which may be payable in respect of any transfer or
      delivery of a Right Certificate to a Person other than, or the issuance or
      delivery of certificates for Common Stock upon exercise of Rights in a
      name other than that of, the registered holder of the Right Certificate,
      and the Corporation shall not be required to issue or deliver a Right
      Certificate or certificate for Common Stock to a Person other than such
      registered holder until any such Transfer Tax shall have been paid (any
      such Transfer Tax being payable by the holder of such Right Certificate at
      the time of surrender) or until it has been established to the
      Corporation's satisfaction that no such Transfer Tax is due.

      Section 10. Stock Record Date. Each Person in whose name any certificate
for shares of Common Stock is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common Stock
represented thereby on, and such certificate shall be dated as of, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Exercise 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 stock transfer books of the Corporation are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated as of, the next succeeding Business Day on which
stock transfer books of the Corporation 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 stockholder of the Corporation with respect to
shares for which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Corporation, except as provided herein.

      Section 11. Adjustment of Exercise Price or Number of Shares. The Exercise
Price and the number of shares of Common Stock which may be purchased upon
exercise of a Right are subject to adjustment from time to time as provided in
this Section 11.

                  (a) (i) In the event the Corporation shall at any time after
            the date of this Agreement (A) declare or pay any dividend on Common
            Stock payable in shares of Common Stock, (B) subdivide or split the
            outstanding shares of Common Stock into a greater number of shares,
            (C) combine or consolidate the outstanding shares of Common Stock
            into a smaller number of shares or effect a reverse split of the
            outstanding shares of Common Stock, or (D) issue any shares of its
            capital stock in a reclassification of the Common Stock (including
            any such reclassification in connection with a consolidation or
            merger in which the Corporation is the continuing or surviving
            corporation), except as otherwise provided in this Section 11(a) and
            Section 7(e) hereof, then and in each such event the number of
            shares of Common Stock issuable upon the exercise of a Right after
            the record date for such event (if one shall have been established
            or, if

                                       14
<PAGE>

            not, after the date of such event) or the effective date of such
            subdivision, combination or reclassification, shall be the number of
            shares of Common Stock issuable immediately prior to such event
            multiplied by a fraction, the numerator of which is the number of
            shares of Common Stock outstanding immediately prior to such event
            and the denominator of which is the number of shares of Common Stock
            outstanding immediately after such event, and the Exercise Price to
            be in effect after the record date for such event (if one shall have
            been established or, if not, after the date of such event) or the
            effective date of such subdivision, combination or reclassification,
            shall be determined by multiplying the Exercise Price in effect
            prior to such event by such fraction. If an event occurs which would
            require an adjustment under both this Section 11(a)(i) and Section
            11(a)(ii) hereof, the adjustment provided for in this Section
            11(a)(i) shall be in addition to, and shall be made prior to any
            adjustment required pursuant to Section 11(a)(ii).

                  (ii) Subject to Section 27 hereof, in the event that any
            Person shall become an Acquiring Person, then, subject to the last
            sentence of Section 23(a) hereof and except as otherwise provided in
            this Section 11, each holder of a Right, except as provided in
            Section 7(e) hereof, shall thereafter have the right to receive upon
            exercise of such Right in accordance with the terms of this
            Agreement and payment of the Exercise Price, such number of shares
            of Common Stock as shall equal the result obtained by (1)
            multiplying the then current Exercise Price by the number of share
            of Common Stock for which a Right would, absent adjustment pursuant
            to this Section 11(a)(ii), be then exercisable and dividing the
            product by (2) 50% of the proportionate Fair Market Value of share
            of the Common Stock (determined pursuant to Section 11(b) hereof) on
            the Stock Acquisition Date in respect of such event; provided,
            however, if the transaction that would otherwise give rise to the
            foregoing adjustment is also subject to the provisions of Section 13
            hereof, then only the provisions of Section 13 hereof shall apply
            and no adjustment shall be made pursuant to this Section 11(a)(ii).

                  (iii) In the event that the Corporation does not have
            available sufficient authorized but unissued Common Stock to permit
            the exercise in full of the Rights in accordance with the foregoing
            subparagraph (ii), the Corporation shall take all such action as may
            be necessary to authorize and reserve for issuance such number of
            additional shares of Common Stock as may from time to time be
            required to be issued upon the exercise in full of all Rights from
            time to time outstanding and, if necessary, shall use its best
            efforts to obtain stockholder approval thereof. In lieu of issuing
            shares of Common Stock in accordance with the foregoing subparagraph
            (ii), the Corporation may, if the Board of Directors of the
            Corporation determines that such action is necessary or appropriate,
            elect to issue or pay, upon the exercise of the Rights, cash,
            property, shares of Common Stock, or any combination thereof, having
            an aggregate Fair Market Value equal to the Fair Market Value of the
            shares of Common Stock which otherwise would have been issuable
            pursuant to Section 11(a)(ii) hereof as of the date the Board of
            Directors of the Corporation makes such election (which Fair Market
            Value shall be determined as provided by Section 11(b) hereof).
            Subject to Section 23 hereof,

                                       15
<PAGE>

            any such election by the Board of Directors of the Corporation must
            be made and publicly announced within thirty (30) days after the
            date on which the event described in Section 11(a)(ii) occurs and
            shall be applicable with respect to all Rights exercised after such
            public announcement. Notice of such election shall promptly be given
            to the Rights Agent.

            (b) For the purpose of this Agreement, the "FAIR MARKET VALUE" of
      any share of Common Stock or any other stock or Right or other security or
      any other property on any date shall be determined as provided in this
      Section 11(b). In the case of a publicly traded (as such term is
      hereinafter defined) stock or other security, the Fair Market Value
      thereof on any date shall be deemed to be the average of the daily closing
      prices per share of such stock or per unit of such other security for the
      30 consecutive Trading Days (as such term is hereinafter defined)
      immediately prior to but not including such date; provided, however, that
      in the event that the Fair Market Value of any share of Common Stock is to
      be determined as of a date that is within 30 Trading Days after (i) the
      ex-dividend date for a dividend or distribution on the Common Stock
      payable in shares of Common Stock or securities convertible into shares of
      Common Stock or (ii) the effective date of any subdivision, split,
      combination, consolidation, reverse stock split or reclassification of the
      Common Stock, then, and in each such case, the Fair Market Value shall be
      appropriately adjusted by the Board of Directors of the Corporation to
      take into account such dividend, distribution, subdivision, split,
      combination, consolidation, reverse stock split or reclassification. 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 of the closing
      bid and asked prices, regular way (in either case, as reported in the
      applicable transaction reporting system with respect to securities listed
      or admitted to trading on the New York Stock Exchange), or, if the
      securities are not listed or admitted to trading on the New York Stock
      Exchange, as reported in the applicable transaction reporting system with
      respect to securities listed on the principal national securities exchange
      (which, if approved by the Board of Directors of the Corporation, may be a
      securities exchange of a country other than the United States of America)
      on which such security is listed or admitted to trading; or, if not listed
      or admitted to trading on any such national securities exchange, the last
      quoted price (or, if not so quoted, the average of the high bid and low
      asked prices) in the over-the-counter market, as reported by the National
      Association of Securities Dealers, Inc. Automated Quotation System
      ("NASDAQ") or such other quotation reporting system then in use in the
      United States of America; or, if no bids for such security are so quoted,
      the average of the closing bid and asked prices as furnished by a
      professional market maker making a market in such security selected by the
      Board of Directors of the Corporation. The term "TRADING DAY" shall mean a
      day on which the principal national securities exchange on which such
      security is listed or admitted to trading is open for the transaction of
      business or, if such security is not listed or admitted to trading on any
      national securities exchange, a Business Day. For purposes of this Section
      11(b), a stock or other security shall be considered "PUBLICLY TRADED"
      only (i) if registered under Section 12 of the Exchange Act or exempt from
      such registration pursuant to Section 12(g)(2)(B), (C) or (G) of the
      Exchange Act or (ii) if traded on a national securities exchange of a
      country other than the United States of America approved by the Board of
      Directors of the Corporation or (iii) if, in the judgment of the

                                       16
<PAGE>

      Board of Directors of the Corporation, there is sufficient active trading
      in such stock or other security that reported trading transactions therein
      fairly reflect the fair market value thereof. If a security is not
      publicly traded, "Fair Market Value" shall mean the fair value per share
      of stock or per other unit of such other security, as determined by an
      independent investment banking firm experienced in the valuation of
      securities selected in good faith by the Board of Directors of the
      Corporation, or, if no such investment banking firm is, in the good faith
      judgment of the Board of Directors of the Corporation, available to make
      such determination, as determined in good faith by the Board of Directors
      of the Corporation; provided, however, that for purposes of making the
      adjustment provided for by Section 11(a)(ii) hereof, the Fair Market Value
      of a share of Common Stock, unless the Common Stock shall at the time be
      publicly traded (in which case its Fair Market Value shall be determined
      pursuant to the foregoing provisions of this Section 11(b)), shall be 100%
      of the product of the Fair Market Value of a share of Common Stock
      multiplied by the higher of the then Dividend Multiple or Vote Multiple
      applicable to the Common Stock; provided, however, that the Board of
      Directors of the Corporation may, by resolution, determine that the Fair
      Market Value of a share of Common Stock shall be more than such amount but
      not more than 110% of the product of the then Fair Market Value of a share
      of Common Stock multiplied by the higher of the then Dividend Multiple or
      Vote Multiple applicable to the Common Stock. In the case of property
      other than securities, the "Fair Market Value" thereof shall be determined
      in good faith by the Board of Directors of the Corporation based upon such
      appraisals or valuation reports of such independent experts as the Board
      of Directors of the Corporation shall in good faith determine to be
      appropriate in accordance with good business practices and fair to the
      interests of the holders of Rights. Any determination made by the Board of
      Directors of the Corporation as provided for by this Section 11(b) shall
      be described in a statement filed by the Corporation with the Rights
      Agent, shall be effective thereupon and only thereupon and shall be
      binding upon the Rights Agent and, as provided by Section 34 hereof, all
      holders of Rights.

            (c) In case the Corporation shall fix a record date for the issuance
      of rights, options or warrants to all holders of Common Stock entitling
      them (for a period expiring within 45 calendar days after such record
      date) to subscribe for or purchase Common Stock or securities convertible
      into Common Stock at a price per share (or having a conversion price per
      share, if a security convertible into Common Stock) less than the then
      current per share Fair Market Value of the Common Stock on such record
      date, the Exercise Price to be in effect after such record date shall be
      determined by multiplying the Exercise Price in effect immediately prior
      to such record date by a fraction, the numerator of which shall be the
      number of shares of Common Stock outstanding on such record date plus the
      number of shares of Common Stock which the aggregate offering price of the
      total number of shares of Common Stock so to be offered (and/or the
      aggregate initial conversion price of the convertible securities so to be
      offered) would purchase at such current Fair Market Value and the
      denominator of which shall be the number of shares of Common Stock
      outstanding on such record date plus the number of additional shares of
      Common Stock to be offered for subscription or purchase (or into which the
      convertible securities so to be offered are initially convertible). In
      case such subscription price may be paid in a consideration part or all of
      which shall be in a form

                                       17
<PAGE>

      other than cash, the value of such consideration shall be as determined in
      good faith by the Board of Directors of the Corporation, whose
      determination shall be described in a statement filed with the Rights
      Agent. Shares of Common Stock owned by or held for the account of the
      Corporation shall not be deemed outstanding for the purpose of any such
      computation. Such adjustment shall be made successively whenever such a
      record date is fixed and in the event that such rights, options or
      warrants are not so issued, the Exercise Price shall be adjusted to be the
      Exercise Price which would then be in effect if such record date had not
      been fixed.

            (d) In case the Corporation shall fix a date for the making of a
      distribution to all holders of Common Stock (including any such
      distribution made in connection with a consolidation or merger in which
      the Corporation is the continuing or surviving corporation) of evidences
      of indebtedness of the Corporation or any of its Subsidiaries, cash (other
      than a regular quarterly cash dividend not in excess of 150% of the
      previous regular quarterly cash dividend), other assets (other than a
      dividend payable in shares of Common Stock) or options, rights or warrants
      to subscribe for shares of the Corporation or any Subsidiary (excluding
      those referred to in Section 11(c) hereof), the Exercise Price to be in
      effect after such record date shall be determined by multiplying the
      Exercise Price in effect immediately prior to such record date by a
      fraction, the numerator of which shall be the Fair Market Value of the
      shares of Common Stock on such record date, less the fair market value (as
      determined in good faith by the Board of Directors of the Corporation,
      whose determination shall be described in a statement filed with the
      Rights Agent) of the portion of the assets or evidences of indebtedness or
      options, rights or warrants so to be distributed in respect of one share
      of Common Stock, and the denominator of which shall be such current Fair
      Market Value of the shares of Common Stock. Such adjustment shall be made
      successively whenever such a record date is fixed, and, in the event that
      such distribution is not so made notwithstanding the setting of a record
      date therefore, the Exercise Price shall again be adjusted to be the
      Exercise Price which would then be in effect if such record date had not
      been fixed.

            (e) Unless the Corporation shall have exercised its election as
      provided in Section 11(f), upon each adjustment of the Exercise Price as a
      result of the calculations made in Section 11(c) or (d), each Right
      outstanding immediately prior to the making of such adjustment shall
      thereafter evidence the right to purchase, at the adjusted Exercise Price,
      that number of shares of Common Stock obtained by (i) multiplying (x) the
      number of shares of Common Stock that could be purchased upon exercise of
      a Right immediately prior to the adjustment pursuant to this Section 11(e)
      by (y) the Exercise Price in effect immediately prior to such adjustment
      of the Exercise Price and (ii) dividing the product so obtained by the
      Exercise Price in effect immediately after such adjustment of the Exercise
      Price.

            (f) The Corporation may elect, on or after the date of any
      adjustment of the Exercise Price pursuant to Section 11(c) or 11(d), to
      adjust the number of Rights in substitution for any adjustment pursuant to
      Section 11(e) in the number of shares of Common Stock purchasable upon the
      exercise of a Right. Each of the Rights outstanding after such adjustment
      of the number of Rights shall be exercisable for the number of

                                       18
<PAGE>

      shares of Common Stock for which a Right was exercisable immediately prior
      to such adjustment. Each Right held of record prior to such adjustment of
      the number of Rights shall become that number of Rights obtained by
      dividing the Exercise Price in effect immediately prior to adjustment of
      the Exercise Price by the Exercise Price in effect immediately after
      adjustment of the Exercise Price. The Corporation shall make a public
      announcement of its election to adjust the number of Rights, indicating
      the record date for the adjustment, and, if known at the time, the amount
      of the adjustment to be made. This record date may be the date on which
      the Exercise 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 the Right Certificates have been
      issued, upon each adjustment of the number of Rights pursuant to this
      Section 11(f), the Corporation 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, if any, to which such holders shall be entitled as a
      result of such adjustment, or, at the option of the Corporation, 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, if required by the
      Corporation, new Right Certificates evidencing all the Rights to which
      such holders shall be entitled after such adjustment. 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.

            (g) Anything herein to the contrary notwithstanding, no adjustment
      in the Exercise Price shall be required unless such adjustment would
      require an increase or decrease of at least one percent (1%) in the
      Exercise Price; provided, however, that any adjustments which by reason of
      this Section 11(g) 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. Notwithstanding
      the first sentence of this Section 11(g), any adjustment required by this
      Section 11 shall be made no later than the earlier of (i) three (3) years
      from date of the transaction which mandates such adjustment, or (ii)
      Expiration Date.

            (h) Irrespective of any adjustment or change in Exercise Price or
      the number of shares of Common Stock issuable upon the exercise of the
      Rights, the Right Certificates theretofore and thereafter issued may
      continue to express the Exercise Price and the number of shares to be
      issued upon exercise of the Rights as in the initial Right Certificates
      issued hereunder but, nevertheless, shall represent the Rights as so
      adjusted.

            (i) Before taking any action that would cause an adjustment reducing
      the Exercise Price of the number of shares of Common Stock issuable upon
      exercise of the Rights below the consideration required by applicable law,
      the Corporation shall use its best efforts to take any corporate action
      which may, in the opinion of its counsel, be necessary in order that the
      Corporation may validly and legally issue fully paid and non-assessable
      shares of such Common Stock at such adjusted purchase price per share.

                                       19
<PAGE>

            (j) Anything in this Section 11 to the contrary notwithstanding, in
      the event of any reclassification of stock of the Corporation or any
      recapitalization, reorganization or partial liquidation of the Corporation
      or similar transaction, the Corporation shall be entitled to make such
      further adjustments in the number of shares of Common Stock which may be
      acquired upon exercise of the Rights, and such adjustments in the Exercise
      Price therefor, in addition to those adjustments expressly required by the
      other paragraphs of this Section 11, as the Board of Directors of the
      Corporation shall determine to be necessary or appropriate in order for
      the holders of the Rights in such event to be treated equitably and in
      accordance with the purpose and intent of this Agreement or in order that
      any such event shall not, but for such adjustment, in the opinion of
      counsel to the Corporation, result in the stockholders of the Corporation
      being subject to any United States federal income tax liability by reason
      thereof.

            (k) 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 Corporation other than the
      Common Stock, thereafter the Exercise Price and the number of such other
      shares so receivable upon exercise of a 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 Common Stock
      contained in Sections 11(a), 11(c), 11(d), 11(e), 11(f) and 11(j) hereof,
      as applicable, and the provisions of Sections 7, 9, 10, 13 and 14 hereof
      with respect to the Common Stock shall apply on like terms to any such
      other shares.

      Section 12. Certification of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11, 13, 23(c) or 27
hereof, the Corporation shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts giving rise to such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Common Stock a copy of such certificate and (c) if a Distribution Date
has occurred, mail a brief summary thereof to each holder of a Right Certificate
in accordance with Section 25. Notwithstanding the foregoing sentence, the
failure of the Corporation to make such certification or give such notice shall
not affect the validity of or the force or effect of the requirement for such
adjustment. Any adjustment to be made pursuant to Section 11, 13, 23(c) or 27
hereof shall be effective as of the date of the event giving rise to such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of any adjustment unless and until it shall have received such
certificate.

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

            (a) In the event that, at any time after the Stock Acquisition Date,
      (x) the Corporation shall, directly or indirectly, consolidate with, or
      merge with and into, any other Person or Persons (other than an Exempt
      Person) and the Corporation shall not be surviving or continuing
      corporation of such consolidation or merger, or (y) any Person or Persons
      (other than an Exempt Person) shall, directly or indirectly, consolidate
      with, or merge with and into, the Corporation, and the Corporation shall
      be the continuing of surviving corporation of such consolidation or merger
      and, in connection with such

                                       20
<PAGE>

      consolidation or merger, all or part of the outstanding shares of Common
      Stock shall be changed or converted into or exchanged for stock or other
      securities of any other Person (other than an Exempt Person) or of the
      Corporation or cash or any other property, or (z) the Corporation or one
      or more of its Subsidiaries shall, directly or indirectly, sell or
      otherwise transfer to any other Person (other than an Exempt Person) in
      one or more transactions, assets or earning power aggregating more than
      50% of the assets or earning power of the Corporation and its Subsidiaries
      (taken as a whole), then, on the first occurrence of any such event,
      proper provision shall be made so that: (i) each holder of record of a
      Right, except as provided in Section 7(e) hereof, shall thereafter have
      the right to receive, upon the exercise thereof at a price equal to the
      then current Exercise Price multiplied by the number of shares of Common
      Stock for which a Right is then exercisable, in accordance with the terms
      of this Agreement and in lieu of shares of Common Stock, such number of
      shares of validly issued, fully paid, non-assessable and freely tradeable
      Common Stock of the Principal Party (as defined in Section 13(b) hereof),
      not subject to any liens, encumbrances, rights of first refusal or other
      adverse claims, as shall equal the result obtained by (1) multiplying the
      then current Exercise Price by the number of shares of Common Stock for
      which a Right is then exercisable immediately prior to the first
      occurrence of an event described in this Section 13 (or, if an event
      described in Section 11(a)(ii) has occurred prior to the first occurrence
      of an event described in this Section 13, multiplying the number of shares
      for which a Right was exercisable immediately prior to the first
      occurrence of an event described in Section 11(a)(ii) by the Exercise
      Price in effect immediately prior to such first occurrence), and dividing
      that product by (2) 50% of the then per share Fair Market Value of the
      Common Stock of the Principal Party on the date of the consummation of
      such consolidation, merger, sale or transfer; provided, however, that the
      Exercise Price (as adjusted) and the number of shares of Common Stock of
      such Principal Party so receivable upon exercise of a Right shall be
      subject to further adjustment as appropriate in accordance with Section 11
      hereof to reflect any events occurring in respect of the Common Stock of
      such Principal Party after the occurrence of such consolidation, merger,
      sale or transfer; (ii) such Principal Party shall thereafter be liable
      for, and shall assume, by virtue of such consolidation, merger, sale or
      transfer, all the obligations and duties of the Corporation pursuant to
      this Agreement; (iii) the term "Corporation" for all purposes of this
      Agreement shall thereafter be deemed to refer to such Principal Party;
      (iv) such Principal Party shall take such steps (including, but not
      limited to, the reservation of a sufficient number of shares of its Common
      Stock in accordance with the provisions of Section 9 hereof applicable to
      the reservation of Common Stock) 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 its shares of
      Common Stock thereafter deliverable upon the exercise of the Rights;
      provided, however, that, upon the subsequent occurrence of any merger,
      consolidation, sale of all or substantially all of the assets,
      recapitalization, reclassification of shares, reorganization or other
      extraordinary transaction in respect of such Principal Party, each holder
      of a Right shall thereupon be entitled to receive, upon exercise of a
      Right and payment of the Exercise Price, such cash, shares, rights,
      warrants and other property which such holder would have been entitled to
      receive had it, at the time of such transaction, owned the shares of
      Common Stock of the Principal Party purchasable upon the exercise of a
      Right, and such Principal Party shall

                                       21
<PAGE>

      take such steps (including, but not limited to, reservation of shares of
      stock) as may be necessary to permit the subsequent exercise of the Rights
      in accordance with the terms hereof for such cash, shares, rights,
      warrants and other property; and (v) the provisions of Section 11(a)(ii)
      hereof shall be of no effect following the occurrence of any event
      described in clause (x), (y) or (z) above of this Section 13(a).

            (b) "PRINCIPAL PARTY" shall mean

                  (i) in the case of any transaction described in clause (x) or
            (y) of the first sentence of Section 13(a) hereof: (A) the Person
            that is the issuer of the securities into which shares of Common
            Stock of the Corporation are changed or otherwise exchanged,
            converted in such merger or consolidation, or, if there is more than
            one such issuer, the issuer of the Common Stock of which has the
            greatest market value or (B) if no securities are issued, (I) the
            Person that is the other party to the merger or consolidation and
            that survives such merger or consolidation or, if there is more than
            one such Person, the Person the Common Stock of which has the
            greatest market value or (II) if the Person that is the other party
            to the merger or consolidation, the Person that does survive the
            merger or consolidation (including the Corporation if it survives);
            and

                  (ii) in the case if any transaction described in clause (z) of
            the first sentence in Section 13(a), the Person that is the party
            receiving the greatest portion of the assets or earning power
            transferred pursuant to such transaction or transactions, or, if
            each Person that is a party to such transaction or transactions,
            receives the same portion of the assets or earning power so
            transferred or if the Person receiving the greatest portion of the
            assets or earning power cannot be determined, whichever of such
            Persons as is the issuer of Common Stock having the greatest market
            value of shares outstanding;

      provided, however, that in any such case, if the Common Stock of such
      Person is not at such time and has not been continuously over the
      preceding 12-month period registered under Section 12 of the Exchange Act,
      then (1) if such Person is a direct or indirect Subsidiary of another
      Person the Common Stock of which is and has been so registered, the term
      "Principal Party" shall refer to such other Person, or (2) if such Person
      is a Subsidiary, directly or indirectly, of more than one Person, the
      Common Stocks of all of which are and have been so registered, the term
      "Principal Party" shall refer to whichever of such Persons is the issuer
      of the Common Stock having the greatest market value of shares
      outstanding, or (3) if such Person is owned, directly or indirectly, by a
      joint venture formed by two or more Persons that are not owned, directly
      or indirectly, by the same Person, the rules set forth in clauses (1) and
      (2) above shall apply to each of the owners having an interest in the
      venture as if the Person owned by the joint venture was a Subsidiary of
      both or all of such joint venturers, and the Principal Party in each such
      case shall bear the obligations set forth in this Section 13 in the same
      ratio as its interest in such Person bears to the total of such interests.

                                       22
<PAGE>

            (c) The Corporation shall not consummate any consolidation, merger
      or sale or transfer of assets or earning power referred to in Section
      13(a) unless the Principal Party shall have a sufficient number of
      authorized shares of its Common Stock that have not been issued or
      reserved for issuance to permit exercise in full of all Rights in
      accordance with this Section 13 and unless prior thereto the Corporation
      and the Principal Party involved therein shall have executed and delivered
      to the Rights Agent an agreement confirming that the Principal Party
      shall, upon consummation of such consolidation, merger or sale or transfer
      of assets or earning power, assume this Agreement in accordance with
      Section 13(a) hereof and that all rights of first refusal or preemptive
      rights in respect of the issuance of shares of Common Stock of the
      Principal Party upon exercise of outstanding Rights have been waived and
      that such transaction shall not result in a default by the Principal Party
      under this Agreement, and further providing that, as soon as practicable
      after the date of any consolidation, merger or sale or transfer of assets
      or earning power referred to in Section 13(a) hereof, the Principal Party
      will:

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

                  (ii) take all such other action as may be necessary to enable
            the Principal Party to issue the securities purchasable upon
            exercise of the Rights, including but not limited to using its best
            efforts to list (or continue the listing of) the Rights and the
            securities purchasable upon exercise of the Rights on a national
            securities exchange or to meet the eligibility requirements for
            quotation on NASDAQ;

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

                  (iv) obtain waivers of any rights of first refusal or
            preemptive rights in respect of the Common Stock of the Principal
            Party subject to purchase upon exercise of the outstanding Rights.

      The provisions of Section 13 shall similarly apply to successive mergers
      or consolidations or sales or other transfers. In the event that any of
      the transactions described in Section 13 hereof shall occur at any time
      after the occurrence of a transaction described in Section 11(a)(ii)
      hereof, the Rights which have not theretofore been exercised shall,
      subject to the provisions of Section 7(e) hereof, thereafter be
      exercisable in the manner described in Section 13.

            (d) In case the Principal Party which is to be a party to a
      transaction referred to in this Section 13 has a provision in any of its
      authorized securities or in its charter or By-

                                       23
<PAGE>

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

            (e) The Corporation covenants and agrees that it shall not, at any
      time after any Person becomes an Acquiring Person, enter into any
      transaction of the type described in clauses (x) through (z) of the first
      sentence of Section 13(a) hereof if (i) at the time of or immediately
      after such consolidation, merger, sale, transfer or other transaction
      there are any rights, warrants or other instruments or securities
      outstanding or agreements in effect which would substantially diminish or
      otherwise eliminate the benefits intended to be afforded by the Rights,
      (ii) prior to, simultaneously with or immediately after such
      consolidation, merger, sale, transfer or other transaction, the
      stockholders of the Person who constitutes, or would constitute, the
      Principal Party for purposes of Section 13(a) hereof shall have received a
      distribution of Rights previously owned by such Person or any of its
      Affiliates or Associates or (iii) the form or nature of organization of
      the Principal Party would preclude or limit the exercisability of the
      Rights.

      Section 14. Fractional Rights and Fractional Shares.

            (a) The Corporation shall not be required to issue fractions of
      Rights or to distribute Right Certificates which evidence fractional
      Rights (i.e., Rights to acquire less than one share of Common Stock),
      unless such fractional Rights result from a transaction referred to in
      Section 11(a)(i) or 11(f) hereof. If the Corporation shall determine not
      to issue such fractional Rights, then, in lieu of such fractional Rights,
      there shall be paid to the holders of record 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 Fair Market Value of a
      whole Right.

            (b) The Corporation shall not be required to issue fractions of
      shares of Common Stock upon exercise of the Rights or to distribute
      certificates which evidence fractional shares. In lieu of issuing
      fractions of shares of Common Stock, there shall be paid to the holders of
      record of Right Certificates at the time such Right Certificates are
      exercised as herein provided an amount in cash equal to the same fraction
      of the Fair Market Value of a share of Common Stock.

                                       24
<PAGE>

            (c) The holder of a Right by the acceptance of a Right expressly
      waives his right to receive any fractional Right or any fractional shares
      of Common Stock upon exercise of a Right.

      Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent in Section 18
hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock), and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), 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 Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, his 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. Each holder of a Right, by
accepting the same, consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:

            (a) prior to the Distribution Date, the Rights shall be evidenced by
      the certificates for Common Stock (or in the case of uncertificated shares
      of Common Stock, by the book-entry account that evidences record ownership
      of such shares) registered in the name of the holders of Common Stock
      (together, as applicable, with the Summary of Rights), which certificates
      for Common Stock (or book-entry account) shall also constitute
      certificates for Rights, and not by separate Right Certificates, and each
      Right shall be transferable only simultaneously and together, with the
      transfer of shares of Common Stock;

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

            (c) the Corporation 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 Stock certificate or, in the case of
      uncertificated shares of Common Stock, the book-entry account evidencing
      record ownership of such shares) 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
      Stock certificate made by anyone other than the Corporation or the Rights
      Agent) for all purposes whatsoever, and neither the Corporation nor the
      Rights Agent, subject to the last

                                       25
<PAGE>

      sentence of Section 7(e) hereof, shall be required to be affected by any
      notice to the contrary; and

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

      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 Common Stock or any other securities
which 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 or other security holder of the Corporation or of a
security holder of any other Person or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action or security holder
action, or to receive notice of meetings or other actions affecting stockholders
or security holders (except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, except in any such case the
rights, if any, in respect thereof provided by this Agreement, until the Right
or Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof for such stock or other security.

      Section 18. Concerning the Rights Agent.

            (a) The Corporation agrees to pay to the Rights Agent reasonable
      compensation for all services rendered by it hereunder and, from time to
      time, on demand of the Rights Agent, its reasonable expenses and counsel
      fees and other disbursements incurred in the administration and execution
      of this Agreement and the exercise and performance of its duties
      hereunder. The Corporation also agrees to indemnify the Rights Agent, its
      directors, officers, employees, and agents for, and to hold each of them
      harmless against, any loss, liability, or expense, incurred without gross
      negligence, bad faith or willful misconduct on the part of the Rights
      Agent, for anything done or omitted to be done by the Rights Agent or such
      other indemnified party in connection with the acceptance and
      administration of this Agreement or the performance of the Rights Agent's
      duties hereunder, including the cost and expenses of defending against any
      claim of liability relating to the Rights or this Agreement.

            (b) The Rights Agent shall be protected against, 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 or the
      performance of the Rights Agent's duties

                                       26
<PAGE>

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

            (c) The indemnity provided in this Section 18 shall survive the
      expiration of the Rights, the resignation or removal of the Rights Agent
      and the termination of this Agreement.

      Section 19. Merger or Consolidation of, or Change in Name of, the Rights
Agent.

            (a) Any corporation into which the Rights Agent or any successor
      Rights Agent may be merged or with which it may be consolidated, or any
      corporation resulting from any merger or consolidation to which the Rights
      Agent or any successor Rights Agent shall be a party, or any corporation
      succeeding to the corporate trust or stock transfer 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 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; 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; in all such
      cases such Right Certificates shall have the full force provided in the
      Right Certificates and in this Agreement.

      Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Corporation and the holders of Right
Certificates by their acceptance thereof shall be bound:

            (a) The Rights Agent may consult with legal counsel (who may be an
      employee of or outside legal counsel for the Corporation or the Rights
      Agent), and the advice or opinion of such counsel shall be full and
      complete authorization and protection to the

                                       27
<PAGE>

      Rights Agent as to any action taken or omitted by it in good faith and in
      accordance with such advice or opinion.

            (b) Whenever in the performance of its duties under this Agreement
      the Rights Agent shall deem it necessary or desirable that any fact or
      matter be proved or established by the Corporation 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 the
      Chairman of the Board, the President or any Vice President and by the
      Treasurer or any Assistant Treasurer or the Secretary or any Assistant
      Secretary of the Corporation and delivered to the Rights Agent. Any such
      certificate shall be full authorization to the Rights Agent for any action
      taken or suffered in good faith by it under the provisions of this
      Agreement in reliance upon such certificate.

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

            (d) The Rights Agent shall not be liable for or by reason of any of
      the statements of fact or recitals contained in this Agreement or in the
      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 Corporation 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 Corporation of any covenant or condition contained in this Agreement
      or in any Right Certificate; nor shall it be responsible for any
      adjustment required under the provisions of Section 11, 13 or 27 hereof or
      responsible for the manner, method or amount of any such adjustment or the
      ascertaining of the existence of facts that would require any such
      adjustment (except with respect to the exercise of Rights evidenced by
      Right Certificates after receipt of a certificate describing any such
      adjustment); nor shall it by any act hereunder be deemed to make any
      representation or warranty as to the authorization or reservation of any
      shares of Common Stock or other security to be delivered pursuant to the
      exercise of any Right or as to whether any shares of Common Stock or other
      security will, when issued, be validly authorized and issued, fully paid
      and nonassessable.

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

            (g) The Rights Agent is hereby authorized and directed to accept
      instructions with respect to the performance of its duties hereunder from
      the Chairman of the Board,

                                       28
<PAGE>

      the President or any Vice President or the Secretary or the Treasurer of
      the Corporation, and to apply to such officers for advice or instructions
      in connection with its duties, and it shall not be liable for any action
      taken or suffered to be taken by it in good faith in accordance with
      instructions of any such officer or for any delay in acting while waiting
      for those instructions. Any application by the Rights Agent for written
      instructions from the Corporation may, at the option of the Rights Agent,
      set forth in writing any action proposed to be taken or omitted by the
      Rights Agent under this Agreement and the date on and/or after which such
      action shall be taken or such omission shall be effective. The Rights
      Agent shall not be liable for any action taken by, or omission of, the
      Rights Agent in accordance with a proposal included in any such
      application on or after the date specified in such application (which date
      shall not be less than three Business Days after the date any officer of
      the Corporation actually receives such application unless any such officer
      shall have consented in writing to an earlier date) unless, prior to
      taking any such action (or the effective date in the case of an omission),
      the Rights Agent shall have received written instructions in response to
      such application specifying the action to be taken or omitted.

            (h) The Rights Agent and any shareholder, director, officer or
      employee of the Rights Agent may buy, sell, or deal in any of the Rights
      or other securities of the Corporation or become pecuniarily interested in
      any transaction in which the Corporation may be interested, or contract
      with or lend money to the Corporation or otherwise act as fully and freely
      as though it were not the Rights Agent under this Agreement. Nothing
      herein shall preclude the Rights Agent from acting in any other capacity
      for the Corporation 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 Corporation resulting
      from any such act, default, neglect or misconduct, provided, however,
      reasonable care was exercised by the Rights Agent in the selection and
      continued employment thereof.

            (j) If, with respect to any Rights Certificate surrendered to the
      Rights Agent for exercise or transfer, the certificate contained in the
      form of assignment or the form of election to purchase set forth on the
      reverse thereof, as the case may be, has not been completed to certify the
      holder is not an Acquiring Person (or an Affiliate or Associate thereof),
      a Rights Agent shall not take any further action with respect to such
      requested exercise or transfer without first consulting with the
      Corporation.

            (k) The Rights Agent undertakes only the express duties and
      obligations imposed on it by this Agreement and no implied duties or
      obligations shall be read into this Agreement against the Rights Agent.

                                       29
<PAGE>

            (l) Anything in this Agreement to the contrary notwithstanding, in
      no event shall the Rights Agent be liable for special, indirect or
      consequential loss or damage of any kind whatsoever (including but not
      limited to lost profits).

      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 Corporation and to each transfer
agent of the Common Stock by registered or certified mail, and, if such
resignation occurs after the Distribution Date, to the registered holders of the
Rights Certificates by first-class mail. In the event the Registrar, Transfer
Agency and Service Agreement between the Corporation and American Stock Transfer
& Trust Company dated March 31, 1986 terminates, the Rights Agent will be deemed
to resign automatically on the effective date of such termination; and any
required notice will be sent by the Corporation. The Corporation may remove the
Rights Agent or any successor Rights Agent (with or without cause) 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 Stock by registered or
certified mail, and, if such resignation occurs after the Distribution Date, to
the registered holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Corporation shall appoint a successor to the Rights Agent. If the
Corporation shall fail to make such appointment within a period of 30 days after
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 Corporation), then the incumbent Rights Agent or the holder of
record 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 Corporation or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any state
thereof, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination in the conduct of its corporate trust or stock transfer business by
federal or state authorities and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000, (b) an
Affiliate controlled by or under common control with one or more corporations
described in clause (a) of this sentence or (c) the transfer agent for the
Common Stock of the Corporation. 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 Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock, 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.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Corporation shall have the authority to
act as the Rights Agent until a successor Rights Agent shall have assumed the
duties of the Rights Agent hereunder.

                                       30
<PAGE>

      Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Corporation
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 Exercise Price per share and the number or kind or class of shares of
stock or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of Voting Stock following the Distribution
Date and prior to the Expiration Date, the Corporation may with respect to
shares of Voting Stock so issued or sold pursuant to (i) the exercise of stock
options, (ii) under any employee plan or arrangement, (iii) upon the exercise,
conversion or exchange of securities, notes or debentures issued by the
Corporation or (iv) a contractual obligation of the Corporation, in each case
existing prior to the Distribution Date, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale.

      Section 23. Redemption.

            (a) The Corporation may, at its option, but only by the vote of a
      majority of its Board of Directors, redeem all but not less than all of
      the then outstanding Rights at any time prior to the earlier of (i) the
      Close of Business on the tenth Business Day following the Stock
      Acquisition Date (subject to extension by the Corporation as provided in
      Section 26 hereof) or (ii) the Final Expiration Date, at a redemption
      price of $.001 per Right, subject to adjustment as provided in Section
      23(c) hereof (the "REDEMPTION PRICE"). The redemption of the Rights by the
      Board of Directors of the Corporation may be made effective at such time
      after the Board's action to redeem the Rights on such basis and subject to
      such conditions, as the Board of Directors of the Corporation in its sole
      and absolute discretion may establish. Notwithstanding anything contained
      in this Agreement to the contrary, the Rights shall not be exercisable
      after the first occurrence of an event as described in Section 11(a)(ii)
      until such time as the Corporation's right of redemption hereunder has
      expired. The Corporation may, at its option, pay the Redemption Price in
      cash, shares of Common Stock of the Corporation (based on the Fair Market
      Value of the Common Stock of the Corporation at the time of redemption) or
      any other form of consideration deemed appropriate by the Board of
      Directors.

            (b) Without any further action and without any notice, the right to
      exercise the Rights will terminate effective at the time so designated by
      action of the Board of Directors of the Corporation ordering the
      redemption of the Rights, evidence of which shall have been filed with the
      Rights Agent, and the only right thereafter of the holders of Rights shall
      be to receive the Redemption Price. Within 10 days after the effective
      time of the action of the Board of Directors of the Corporation ordering
      the redemption of the Rights, the Corporation shall give notice of such
      redemption to the Rights Agent and the holders of the then outstanding
      Rights by mailing such notice to all such holders at their last addresses
      as they appear upon the registry books of the Rights Agent or, prior to
      the Distribution Date, on the registry books of the transfer agent for the
      Common Stock. Any notice which is mailed in the manner herein provided
      shall be deemed given, whether or not the holder receives the notice. Each
      notice of redemption will state the method by which the payment of the
      Redemption Price will be made. At the option of

                                       31
<PAGE>

      the Board of Directors of the Corporation, the Redemption Price may be
      paid in cash to each Rights holder or by the issuance of shares (and cash
      in lieu of fractions of shares) of Common Stock having a Fair Market Value
      equal to such cash payment.

            (c) In the event the Corporation shall at any time after the date of
      this Agreement but before the Close of Business on the tenth Business Day
      following the Stock Acquisition Date (or such extension thereof by the
      Corporation as provided in Section 26 hereof) (A) pay any dividend on
      Common Stock in shares of Common Stock, (B) subdivide or split the
      outstanding shares of Common Stock into a greater number of shares or (C)
      combine or consolidate the outstanding shares of Common Stock into a
      smaller number of shares or effect a reverse split of the outstanding
      shares of Common Stock and as a consequence thereof the number of Rights
      outstanding shall change, then, and in each such event, the Redemption
      Price may, by action of the Board of Directors of the Corporation in its
      discretion, be appropriately adjusted in respect of such transaction so as
      to maintain the aggregate Redemption Price of all Rights after such
      transaction at the same amount, insofar as practicable, as before the
      transaction.

      Section 24. Notice of Proposed Actions.

            (a) In case the Corporation, after the Distribution Date, shall
      propose (i) to effect any of the transactions referred to in Section
      11(a)(i) hereof or to pay any dividend to the holders of record of its
      shares of Common Stock payable in shares of capital stock of any class or
      to make any other distribution to the holders of record of its Common
      Stock (other than a regular periodic cash dividend at a rate not in excess
      of 150% of the rate of the last cash dividend theretofore paid), or (ii)
      to offer to the holders of record of its Common Stock options, warrants,
      or other rights to subscribe for or to purchase shares of Common Stock
      (including any security convertible into or exchangeable for Common Stock)
      or shares of stock of any class or any other securities, options,
      warrants, convertible or exchangeable securities or other rights, or (iii)
      to effect any reclassification of its Common Stock or any recapitalization
      or reorganization of the Corporation, or (iv) to effect any consolidation
      or merger with or into, or to effect any sale or other transfer (or to
      permit one or more of its Subsidiaries to effect any sale or other
      transfer), in one or more transactions, of more than 50% of the assets or
      earning power of the Corporation and its Subsidiaries (taken as a whole)
      to, any other Person or Persons, or (v) to effect the liquidation,
      dissolution or winding up of the Corporation, then, in each such case, the
      Corporation shall give to each holder of record of a Right Certificate, to
      the extent feasible and in accordance with Section 25 hereof, notice of
      such proposed action, which shall specify the record date for the purposes
      of such transaction referred to in Section 11(a)(i) or such dividend or
      distribution, or the date on which such reclassification,
      recapitalization, reorganization, consolidation, merger, sale or transfer
      of assets, liquidation, dissolution, or winding up is to take place and
      the record date for determining participation therein by the holders of
      record of Common Stock, such date is to be fixed, and such notice shall be
      so given in the case of any action covered by clause (i) or (ii) above at
      least 20 days prior to the record date for determining holders of record
      of the Common Stock for purposes of such action, and in the case of any
      such other action, at least 20 days prior to the date of the taking of
      such proposed action or the date of

                                       32
<PAGE>

      participation therein by the holders of record of Common Stock. The
      failure to give notice required by this Section 24 or any defect therein
      shall not affect the legality or validity of the action taken by the
      Corporation or the vote upon any such action.

            (b) In case the event referred to in Section 11(a)(ii) hereof shall
      occur, then the Corporation shall as soon as practicable thereafter, in
      accordance with Section 25 hereof, give to each holder of a Right notice
      of the occurrence of such an event, which notice shall describe the event
      and the consequences of the event to holders of Rights under Section
      11(a)(ii) hereof.

      Section 25. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on the Corporation shall be in writing and shall be
considered given upon receipt or seven Business Days after being sent by
first-class mail, postage prepaid, in any case addressed (until another address
is filed in writing with the Rights Agent) as follows:

                      Technical Communications Corporation
                                100 Domino Drive
                              Concord MA 01742-2892
                              Attention: President

Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation or by the holder of record of
any Right Certificate or Right to or on the Rights Agent shall be in writing and
shall be considered given upon receipt or seven Business Days after being sent
by first-class mail, postage prepaid, in any case addressed (until another
address is filed in writing with the Corporation) as follows:

                     American Stock Transfer & Trust Company
                                 59 Maiden Lane
                               New York, NY 10038
                      Attention: Corporate Trust Department

Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of record of any Right Certificate
or Right shall be in writing and shall be considered given upon receipt or seven
Business Days after being sent by first-class mail, postage prepaid, addressed
to such holder at the address of such holder as shown in the registry books of
the Corporation.

      Section 26. Supplements and Amendments. For as long as the Rights are then
redeemable and except as provided in the penultimate sentence of this Section
26, the Corporation may, in its sole and absolute discretion, and the Rights
Agent shall if the Corporation so directs, supplement or amend any provision of
this Agreement without the approval of any holders of the Rights. At any time
when the Rights are not then redeemable and except as provided in the last
sentence of this Section 26, the Corporation may, and the Rights Agent shall if
the Corporation so directs, supplement or amend this Agreement without the
approval of any holders of Right Certificates (i) to cure any ambiguity, (ii) to
correct or

                                       33
<PAGE>

supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein or (iii) to change or supplement the provisions
hereunder in any manner which the Corporation may deem necessary or desirable,
provided that no such supplement or amendment pursuant to this clause (iii)
shall materially adversely affect the interest of the holders of Right
Certificates (other than an Acquiring Person or any other Person in whose hands
Rights are null and void under the provisions of Section 7(e) hereof). Upon the
delivery of a certificate from an appropriate officer of the Corporation which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price; it
being understood that an adjustment of the Redemption Price in accordance with
Section 23 shall not be considered a supplement or amendment of this Agreement.
In addition, notwithstanding anything in this Agreement to the contrary, no
supplement or amendment that materially changes the rights, duties or
liabilities of the Rights Agent under this Agreement shall be effective without
the consent of the Rights Agent.

      Section 27. Exchange.

            (a) The Board of Directors of the Corporation may, at its option at
      any time after any Person becomes an Acquiring Person, exchange all or
      part of the then outstanding and exercisable Rights (which shall not
      include Rights that have become null and void pursuant to the provisions
      of Section 7(e) hereof) by exchanging for each such Right a number of
      shares of Common Stock having an aggregate Fair Market Value on the date
      such Person became an Acquiring Person equal to the Spread, appropriately
      adjusted to reflect any stock split, stock dividend or similar transaction
      occurring after the date hereof (such number of shares of Common Stock per
      Right being hereinafter referred to as the "EXCHANGE RATIO").
      Notwithstanding the foregoing, the Board of Directors of the Corporation
      shall not be empowered to effect such exchange at any time after any
      Person (other than an Exempt Person), together with all Affiliates and
      Associates of such Person, becomes the Beneficial Owner of 50% or more of
      the Voting Stock then outstanding. From and after the occurrence of an
      event specified in Section 13(a) hereof, any Rights that theretofore have
      not been exchanged pursuant to this Section 27(a) shall thereafter be
      exercisable only in accordance with Section 13 and may not be exchanged
      pursuant to this Section 27(a).

            (b) Immediately upon the action of the Board of Directors of the
      Corporation ordering the exchange of any Rights pursuant to paragraph (a)
      of this Section 27 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
      shares of Common Stock equal to the number of such Rights held by such
      holder multiplied by the Exchange Ratio. The Corporation shall promptly
      give public notice of any such exchange; provided, however, that the
      failure to give, or any defect in, such notice shall not affect the
      validity of such exchange. The Corporation promptly shall mail a notice of
      any such exchange to all of the holders of such Rights at their last
      addresses as they appear upon the registry books of the Rights Agent. Any
      notice which is mailed in the manner herein provided shall be deemed
      given, whether or not the holder

                                       34
<PAGE>

      receives the notice. Each such notice of exchange will state the method by
      which the exchange of the shares of Common Stock for Rights will be,
      effected and, in the event of any partial exchange, the number of Rights
      which will be exchanged. Any partial exchange shall be effected pro rata
      based on the number of Rights (other than Rights which have become null
      and void pursuant to the provisions of Section 7(e) hereof) held by each
      holder of Rights.

            (c) The Corporation shall not be required to issue fractions of
      shares of Common Stock or to distribute certificates which evidence
      fractional shares. In lieu of such fractional shares, the Corporation
      shall pay to the registered holders of the Right Certificates with regard
      to which such fractional shares of Common Stock would otherwise be
      issuable an amount in cash equal to the same fraction of the Fair Market
      Value of a whole share of Common Stock. For the purposes of this paragraph
      (d), the Fair Market Value of a whole share of Common Stock shall be the
      closing price of a share of Common Stock for the Trading Day immediately
      prior to the date of exchange pursuant to this Section 27, or as otherwise
      determined in accordance with Section 11(b) hereof.

      Section 28. Successors. All of the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.

      Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Corporation, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the holders of Common Stock in their capacity as holders of the Rights)
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Corporation, the
Rights Agent and the holders of record of the Right Certificates (and, prior to
the Distribution Date, the holders of Common Stock in their capacity as holders
of the Rights).

      Section 30. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Massachusetts and for all purposes shall be governed
by and construed and enforced in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such state.

      Section 31. 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 32. 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.

      Section 33. 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

                                       35
<PAGE>

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

      Section 34. Determinations and Actions by the Board of Directors. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock of the Corporation outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of the Corporation of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board of Directors of
the Corporation shall have the exclusive power and authority to administer,
interpret and apply this Agreement and to exercise the rights and powers
specifically granted to the Board of Directors of the Corporation or to the
Corporation by this Agreement or by law and may take such action as may be
necessary or advisable in the administration of this Agreement or to amend or
supplement this Agreement in accordance with its terms, including, without
limitation, the right and power (i) to make all determinations deemed necessary
or advisable for the administration of this Agreement, (ii) to decide to redeem
the Rights and (iii) to decide to amend or supplement this Agreement. All such
actions, calculations, interpretations and determinations (including any
decision not to take any action) done or made by the Board of Directors of the
Corporation in good faith shall (x) be final, conclusive and binding on the
Corporation, the Rights Agent, the holders of the Rights, as such, and all other
Persons and (y) not subject any member of the Board of Directors of the
Corporation to any liability to the holders of Rights.

                                       36
<PAGE>

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

                                            TECHNICAL COMMUNICATIONS
                                            CORPORATION

                                            By: ________________________________
                                            Name: Carl H. Guild, Jr.
                                            Title: Chairman, President and Chief
                                                   Executive Officer

                                            AMERICAN STOCK TRANSER & TRUST
                                            COMPANY, as Rights Agent

                                            By: ________________________________
                                            Name:
                                            Title:

                                       37

<PAGE>

                                                                       EXHIBIT A

                AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED
                TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED
                   BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
                  ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
                  RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
                 SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT
                   BE EXERCISED OR TRANSFERRED TO ANY PERSON.

                      TECHNICAL COMMUNICATIONS CORPORATION

                          SUMMARY OF RIGHTS TO PURCHASE
                                  COMMON STOCK

      On August 5, 2004, the Board of Directors of Technical Communications
Corporation, a Delaware corporation (the "Corporation"), declared a dividend
distribution of one Common Stock Purchase Right for each outstanding share of
common stock, par value $.10 per share (the "Common Stock"), of the Corporation.
The distribution was made payable as of August 13, 2004 to stockholders of
record on that date (the "Record Date"). Each Right, once exercisable, entitles
the registered holder to purchase from the Corporation one share of common stock
of the Corporation, at a price of $25 per share ("Exercise Price"), subject to
certain adjustments. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") by and between the Corporation and
American Stock Transfer and Trust Company, as Rights Agent (the "Rights Agent").

      As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will automatically
trade with the Common Stock.

      The Rights, unless earlier redeemed by the Board of Directors, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth business day following a public
announcement that a person or group of affiliated or associated persons, with
certain exceptions set forth below, has acquired beneficial ownership of 15% or
more of the outstanding voting stock of the Corporation (an "Acquiring Person")
and (ii) the tenth business day (or such later date as may be determined by the
Board of Directors prior to such time as any person or group of affiliated or
associated persons becomes an Acquiring Person) after the date of the
commencement by any person of a tender or exchange offer, the consummation of
which would result in such person or group of affiliated or associated persons
becoming an Acquiring Person.

      An Acquiring Person does not include (A) the Corporation, (B) any
subsidiary of the Corporation, (C) any employee benefit plan or employee stock
plan of the Corporation or of any subsidiary of the Corporation, or any trust or
other entity organized, appointed, established or holding voting stock for or
pursuant to the terms of any such plan or (D) any person or group of affiliated
or associated persons whose ownership of 15% or more of the shares of voting
stock of

<PAGE>

the Corporation then outstanding results solely from (i) any action or
transaction or transactions approved by the Board of Directors before such
person or group became an Acquiring Person or (ii) a reduction in the number of
issued and outstanding shares of voting stock of the Corporation pursuant to a
transaction or transactions approved by the Board of Directors (provided that
any person or group that does not become an Acquiring Person by reason of clause
(i) or (ii) above shall become an Acquiring Person upon acquisition of an
additional 1% or more of the Corporation's voting stock unless such acquisition
of additional voting stock would not result in such person becoming an Acquiring
Person by reason of clause (i) or (ii) above).

      Prior to the Distribution Date, the Rights will not be exercisable, will
not be represented by a separate certificate, and will not be transferable apart
from the Corporation's Common Stock, but will instead be evidenced, with respect
to any of the Common Stock certificates outstanding as of the Record Date, by
such Common Stock certificate with a copy of this Summary of Rights attached
thereto. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), new Common Stock certificates issued after the Record
Date will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption, exchange or expiration of
the Rights), the surrender for transfer of any of the Common Stock certificates
outstanding as of the Record Date, with or without a copy of this Summary of
Rights attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date, and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.

      The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on August 5, 2014, unless earlier redeemed
or exchanged by the Corporation as described below.

      Shares of Common Stock purchasable upon exercise of the Rights will be
non-redeemable. The Exercise Price of the Rights and the number of shares of
Common Stock issuable upon exercise of the Rights are subject to certain
adjustments from time to time in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock. The Exercise Price for the
Rights also is subject to adjustment in the event of extraordinary distributions
of cash or other property to holders of Common Stock.

      Unless the Rights are earlier redeemed, in the event that a person or
group becomes an Acquiring Person, the Rights Agreement provides that proper
provisions will be made so that each holder of record of a Right (other than
Rights beneficially owned by an Acquiring Person and certain affiliates,
associates and transferees thereof, whose Rights will thereupon become null and
void), will thereafter have the right to receive, upon payment of the Exercise
Price, that number of shares of the Common Stock having a fair market value
determined in accordance with the Rights Agreement at the time of the
transaction equal to approximately two times the Exercise Price.

      In addition, unless the Rights are earlier redeemed or exchanged, in the
event that, after the time that a person or group becomes an Acquiring Person,
the Corporation were to be acquired in a merger or other business combination
(in which any shares of Common Stock are

                                        2
<PAGE>

changed into or exchanged for other securities or assets) or more than 50% of
the assets or earning power of the Corporation and its subsidiaries (taken as a
whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right (other than Rights beneficially owned
by an Acquiring Person and certain affiliates, associates and transferees
thereof, whose Rights will thereupon become null and void) will from and after
such date have the right to receive, upon payment of the Exercise Price, that
number of shares of common stock of the acquiring company having a fair market
value at the time of such transaction determined in accordance with the Rights
Agreement equal to approximately two times the Exercise Price.

      At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding voting stock, the Board of Directors of the Corporation may exchange
the Rights (other than Rights owned by such person or group which will have
become null and void), in whole or in part, for that number of shares of the
Corporation's Common Stock having a fair market value on the date such person or
group became an Acquiring Person equal to the excess of (i) the fair market
value of Common Stock issuable upon the exercise of the Rights over (ii) the
Exercise Price of the Rights, in each case subject to anti-dilution adjustments.

      The Corporation may issue cash in lieu of fractional shares of Common
Stock issuable upon exercise of Rights.

      At any time prior to the close of business on the tenth business day after
there has been a public announcement that a person has become an Acquiring
Person or such earlier date as a majority of the Board of Directors of the
Corporation shall become aware of the existence of an Acquiring Person, the
Corporation may redeem the Rights in whole, but not in part, at a price of $.001
per Right (the "Redemption Price"). Immediately upon the effective time of the
action of the Board of Directors of the Corporation authorizing 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.

      For as long as the Rights are then redeemable, the Corporation may, except
with respect to the Redemption Price, amend the Rights in any manner, including
an amendment to extend the time period in which the Rights may be redeemed. At
any time when the Rights are not then redeemable, the Corporation may amend the
Rights in any manner that does not materially adversely affect the interests of
holders of the Rights as such.

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

      A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission on August 6, 2004, as an Exhibit to the Corporation's
Current Report on Form 8-K. A copy of the Rights Agreement is available free of
charge from the Corporation. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement which is incorporated in this summary description herein by
reference.

                                        3

<PAGE>

                                                                       EXHIBIT B

                           [Form of Right Certificate]

Certificate No. R -                                                ______ Rights

      NOT EXERCISABLE AFTER AUGUST 5, 2014 OR EARLIER IF EXCHANGED OR REDEEMED.
      THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION AND
      UNDER CERTAIN OTHER CIRCUMSTANCES, AT $.001 PER RIGHT (SUBJECT TO
      ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE RIGHTS
      AGREEMENT. AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO BELOW)
      RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR
      AFFILIATES OR ASSOCIATES OR TRANSFEREES THEREOF (AS SUCH TERMS ARE DEFINED
      IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE
      NULL AND VOID AND MAY NOT BE EXERCISED OR TRANSFERRED TO ANY PERSON.

                                Right Certificate

            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 August 6, 2004 (the "Rights
      Agreement") by and between Technical Communications Corporation, a
      Massachusetts corporation (the "Corporation"), and American Stock Transfer
      & Trust Company, as Rights Agent, or its successor in interest as Rights
      Agent (the "Rights Agent"), to purchase from the Corporation at any time
      after the Distribution Date (as such term is defined in the Rights
      Agreement) and prior to 5:00 P.M. (Eastern time) on August 5, 2014 at the
      office of the Rights Agent designated in the Rights Agreement for such
      purpose, one fully paid and nonassessable share of the Corporation's
      Common Stock ($.10 par value per share, the "Common Stock"), or other
      securities or property in lieu thereof as provided by the Rights
      Agreement, at a purchase price of $25, as the same may from time to time
      be adjusted in accordance with the Rights Agreement (the "Exercise
      Price"), upon presentation and surrender of this Right Certificate with
      the Form of Election to Purchase attached hereto duly executed.

            As provided in the Rights Agreement, the Exercise Price and the
      number of shares of Common Stock which 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 and, upon
      the happening of certain events, securities other than shares of Common
      Stock, or other property, may be acquired upon exercise of the Rights
      evidenced by this Right Certificate, as provided in the Rights Agreement.

            This Right Certificate is subject to all of the terms, provisions
      and conditions of the Rights Agreement, which terms, provisions and
      conditions are incorporated herein by reference and made a part hereof and
      to which Rights Agreement reference is hereby made for a full description
      of the rights, limitations of rights, obligations, duties and immunities
      of the Rights

<PAGE>

      Agent, the Corporation and the holders of record of Right Certificates.
      Copies of the Rights Agreement are on file at the principal executive
      office of the Corporation.

            This Right Certificate, with or without other Right Certificates,
      upon surrender at the office of the Rights Agent designated in the Rights
      Agreement for such purpose, may be exchanged for another Right Certificate
      or Right Certificates of like tenor and date evidencing Rights entitling
      the holder of record to purchase a like aggregate number of shares of
      Common Stock 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 may be redeemed by the Corporation at its
      option or under certain other circumstances at a redemption price of $.001
      per Right.

            No fractional shares of Common Stock are required to be issued upon
      the exercise of any Right or Rights evidenced hereby, and in lieu thereof
      the Corporation may cause a cash payment may be made, as provided in the
      Rights Agreement.

            No holder of this Right Certificate, as such, shall be entitled to
      vote or receive dividends or be deemed for any purpose the holder of
      Common Stock or of any other securities of the Corporation which may at
      any time be issuable on the exercise hereof, nor shall anything contained
      in the Rights Agreement or herein be construed to confer upon the holder
      hereof, as such, any of the rights of a stockholder of the Corporation or
      any right to vote for the election of directors or upon any matter
      submitted to stockholders at meeting thereof, or to give or withhold
      consent to any corporate action or to receive notice of meetings or other
      actions affecting stockholders (except as provided in 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
      Corporation and its corporate seal. Dated as of ___________ __, 20__.

ATTEST:                                             TECHNICAL COMMUNICATIONS
                                                    CORPORATION

____________________________                        By _________________________
[Assistant] Secretary                                          Title:

Countersigned:

________________________

By _____________________
    Authorized Signature

                                        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 Certificates.)

      FOR VALUE RECEIVED _______________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
                  (Please print name and address of transferee)

________________________________________________________________________________

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

Dated:_______ ___, 20____

                                            __________________________
                                            Signature

Signature Guaranteed:

                                        4

<PAGE>

                                   Certificate

      The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:_________ ___, 20___                  __________________________
                                            Signature

                                     NOTICE

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

                                        5

<PAGE>

                          FORM OF ELECTION TO PURCHASE

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

TO _____________________:

      The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of such Rights and requests that certificates
for such share(s) be issued in the following name:

Please insert social security
or other identifying number: __________________________________________________

_______________________________________________________________________________
                         (Please print name and address)
_______________________________________________________________________________

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

Please insert social security
or other identifying number: __________________________________________________

_______________________________________________________________________________
                         (Please print name and address)

Dated: ________ ___, 20____

                                    _______________________________
                                    Signature
                                    (Signature must conform in all respects to
                                    name of holder as specified on the face of
                                    this Right Certificate)

Signature Guaranteed:

                                        6<PAGE>

                                                                   Exhibit 10.30

                             SUBSCRIPTION AGREEMENT

         SUBSCRIPTION AGREEMENT (the "Agreement"), dated as of July 23, 2004,
between Robotic Vision Systems, Inc., a Delaware corporation (the "Company"),
and the subscriber whose name appears on the signature page hereof (the
"Subscriber").

         The Company is offering for sale to the Subscriber, on the terms and
conditions set forth below, a number of shares (the "Shares") of the common
stock of the Company, par value $.01 per share (the "Common Stock"), equal to
the total dollar amount listed on the signature page hereof divided by $2.05 per
share (the "Offering Price"), and a warrant (the "Warrant") expiring on July 31,
2007, to acquire 45% of such number of shares of Common Stock (the "Warrant
Shares") at an exercise price of $2.50 per share on or before January 31, 2005,
and $3.05 per share thereafter.

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

I.       SUBSCRIPTION FOR SHARES; REPRESENTATIONS BY SUBSCRIBER

         1.1      Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase from the Company, and
the Company agrees to issue and sell to the Subscriber, at the Offering Price,
the Shares and the Warrant. The closing of the purchase of the Shares shall
occur on the date hereof (the "Closing Date"). On the Closing Date, the
Subscriber shall pay the aggregate Offering Price by wire transfer to the
Company in accordance with instructions to be given by the Company to the
Subscriber on or before the Closing Date, the Company shall cause its counsel to
deliver a legal opinion letter in form and substance reasonably acceptable to
the Subscriber, and the parties shall enter into a Registration Rights Agreement
substantially in the form of Exhibit A hereto. The Warrant (in substantially the
form attached hereto as Exhibit B) and certificates evidencing the Shares will
be issued to the Subscriber within five (5) Business Days after receipt and
collection by the Company of payment for the Shares.

         1.2      The Subscriber recognizes that the purchase of the Shares and
the Warrant entails elements of risk in that (i) it may not be able to readily
liquidate its investment; (ii) transferability is restricted; and (iii) in the
event of a disposition, it could sustain the loss of its entire investment.

         1.3      The Subscriber acknowledges that it is an "Accredited
Investor" as such term is defined in Regulation D under the Securities Act of
1933, as amended (the "Securities Act"), that it has prior investment experience
such that it is able to evaluate the merits and risks of an investment in the
Company, or that it has employed the services of an investment advisor to read
the Disclosure Documents (as hereinafter defined) and to evaluate the merits and
risks of such an investment on its behalf; that it recognizes the speculative
nature of this investment; and that it is able to bear the economic risk it
hereby assumes. The Company's (i) Annual Report on Form 10-K for the year ended
September 30, 2003, as filed with the U.S. Securities and Exchange Commission
("SEC"), and (ii) any other reports filed by the Company with the SEC pursuant
to the Securities Exchange Act of 1934 (the "Exchange Act") between January 13,
2004 and the

<PAGE>

date of this Agreement, are collectively referred to as the "Disclosure
Documents." The Subscriber acknowledges that it or its representative(s) have
read the Disclosure Documents. The Subscriber also acknowledges that it and its
representative(s) have been afforded the opportunity to make, and has made, all
inquiries as it and its representatives deemed appropriate with respect to the
Company's affairs and prospects.

         1.4      The Subscriber hereby acknowledges that the Offering has not
been reviewed by the SEC because of the Company's representation that it is
intended to be a non-public offering pursuant to Section 4(2) of the Securities
Act. The Subscriber represents that the Shares are being purchased for its own
account, for investment and not for public distribution. The Subscriber
understands that the Shares, upon their issuance, will not be registered under
the Securities Act and may be required to be held indefinitely unless they are
subsequently registered under the Securities Act, or an exemption from such
registration is available.

         1.5      The Subscriber acknowledges that the certificates representing
the shares of Common Stock issued hereunder or on exercise of the Warrants and
Additional Warrants shall bear a legend in substantially the following form:

                  "This security has not been registered under the Securities
                  Act of 1933, as amended (the "Securities Act"). The holder
                  hereof, by purchasing this security, agrees for the benefit of
                  Robotic Vision Systems, Inc. that this security may be resold,
                  pledged or otherwise transferred only pursuant to an effective
                  registration statement under the Securities Act or exemption
                  therefrom, in each case in accordance with any applicable
                  securities laws of any state of the United States. This
                  security may be pledged, but not transferred in violation of
                  the foregoing, in connection with a bona fide margin account
                  or other loan secured by such securities."

Such legend shall cease to be required: (i) following any sale of such shares
pursuant to the Registration Statement, or (ii) following any sale of such
shares pursuant to Rule 144, or (iii) while such shares are eligible for sale
under Rule 144(k), (iv) while the Registration Statement covering such Shares is
effective under the Securities Act or (v) if such legend is not required under
applicable requirements of the Securities Act. At such time as a legend is no
longer required under this Section, the Company will, as promptly as practicable
following the delivery by the Subscriber to the Company or the Company's
transfer agent of a certificate representing shares containing a restrictive
legend, deliver or cause to be delivered to the Subscriber a certificate
representing such shares that is free from all such legends. If the Company
fails to deliver or cause to be delivered to the Subscriber a certificate
representing such shares that is free from all such legends within seven (7)
Business Days following the delivery by the Subscriber to the Company or the
Company's transfer agent of a certificate representing shares containing a
restrictive legend, the Company shall pay to the Subscriber, as liquidated
damages and not as a penalty, in cash, an amount equal to (x) one percent (1%)
of the Offering Price per share, times (y) the total number of shares included
on such certificate, times (z) the number of Business Days from such seventh
(7th) Business Day until the date that the Company delivers such certificate.

                                     - 2 -

<PAGE>

         1.6      The Subscriber represents and warrants that as of the Closing
Date neither it nor any of its affiliates has a "short" position in the Common
Stock.

II.      REPRESENTATION AND WARRANTIES BY THE COMPANY

         The Company represents and warrants to the Subscriber as follows:

         2.1      The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has
the corporate power and authority to own, lease and operate its properties and
to conduct the business which it presently conducts. The Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, except for such
jurisdictions where the failure to be so qualified or in good standing would not
have a material adverse effect on the condition, financial or otherwise, or on
the results of operations, business affairs or business prospects of the
Company.

         2.2      The execution, delivery and performance of this Agreement by
the Company (a) has been duly authorized and approved by the Board of Directors
of the Company and all other necessary corporate action on the part of the
Company in connection therewith has been taken and (b) will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to (i) the charter documents or by-laws of the Company, (ii)
any material contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company is a party or by which it may be
bound or to which any of its properties may be subject or (iii) any law,
administrative regulation or court decree applicable to or binding upon the
Company. This Agreement has been duly and validly executed and delivered by the
Company and constitutes the legal, valid and binding agreement of the Company,
enforceable in accordance with its terms, except that (i) any enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceedings therefor may be brought.

         2.3      The Shares shall, upon the consummation of the transactions
contemplated hereby and the payment of the purchase price therefore, be duly and
validly authorized and issued, fully paid and non-assessable and not subject to
any preemptive rights. The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock necessary in order to issue
the Shares, the Additional Shares and the shares of Common Stock issuable upon
exercise of the Warrants and the Additional Warrants.

         2.4      The Disclosure Documents are true, correct and complete in all
material respects, and do not contain an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.

         2.5      The Company shall use the proceeds from the sale of the Common
Shares hereunder for general working capital purposes.

                                     - 3 -

<PAGE>

         2.6      Since the respective dates as of which information was given
in the Disclosure Documents, except as otherwise stated therein: (i) there has
been no material adverse change in the financial condition, or in the results of
operations, affairs or prospects of the Company, whether or not arising in the
ordinary course of business; and (ii) there have been no transactions entered
into by the Company, other than those in the ordinary course of business, which
are material to the Company.

         2.7      Except as set forth on Schedule 2.7 hereto, there are no
outstanding rights (either pre-emptive or other) or options to subscribe for or
purchase from the Company, or any warrants or other agreements providing for or
requiring the issuance or purchase by the Company of, any shares of Common
Stock, or any obligations or securities convertible into or exchangeable, for,
or exercisable into, Common Stock, or any voting trusts, proxies, agreements or
understandings relating to the voting of the Common Stock nor any restrictions
on the transferability or sale of such shares or other equity or member
interests except under the Securities Act, and state "blue sky" or securities
laws.

         2.8      Except as set forth in Schedule 2.8 hereto, in the past three
years, the Company has timely filed all documents required to be filed with the
SEC pursuant to the Exchange Act and the rules and regulations thereunder, and
all such documents, when so filed, complied as to form in all material respects
with the Exchange Act.

         2.9      The Company maintains insurance with respect to property and
risks of a character usually maintained by corporations in the same or similar
business similarly situated, against loss, damage and liability of the kinds and
in the amounts customarily maintained by such corporations, including director
and officer liability insurance.

         2.10     The Company is not, and is not an affiliate of, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

         2.11     Except as set forth in Schedule 2.11 hereto or as disclosed in
the Disclosure Documents, the Company is not a party to any suit, claim, action,
proceeding or investigation which is reasonably likely to have a Material
Adverse Effect or which concerns this Agreement and the transactions
contemplated hereby nor is any such suit, claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened in writing
by or against the Company.

         2.12     Except as set forth in Schedule 2.12 hereto, no brokerage or
finder's fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
this Agreement.

         2.13     Except as set forth in Schedule 2.13 hereto, no Person has any
right to cause the Company to effect the registration under the Securities Act
of any securities of the Company.

         2.14     The Company understands and confirms that the Subscriber will
rely on the foregoing representations and covenants in effecting transactions in
securities of the Company.

                                     - 4 -

<PAGE>

III.     COVENANTS OF THE COMPANY

         3.1      Not later than 5:30 P.M., New York time, on the next Business
Day after the Closing Date, the Company will issue a press release disclosing
the transactions contemplated hereby and any other similar transactions
occurring on or about the Closing Date and, as promptly as possible thereafter,
file such press release in a Current Report on Form 8-K with the SEC. The
Subscriber agrees that, prior to the issuance of such press release by the
Company, it shall not make any public announcement or other disclosure regarding
the transactions contemplated hereby without the prior consent of the Company.

         3.2      The Company covenants and agrees that, after the date hereof,
neither it nor any other person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information; provided that the Company may issue a Pre-Notice and
Subsequent Financing Notice as provided in Section 4.2 hereof. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company

         3.3      The Company covenants and agrees that until the earlier of the
effective date of the Registration Statement or sixty (60) days following the
Closing Date, it shall not make any offer for the sale of equity securities or
securities convertible into equity securities; provided, however, this Section
shall not restrict the offer or sale of (a) any securities issued or sold in
connection with the refinancing, replacement, increase or amendment of the
Company's credit line with PNC Bank, National Association and/or RVSI Investors,
L.L.C., (b) the grant of stock options to any director, officer or consultant of
the Company in connection with services rendered to the Company, (c) any shares
issued upon the exercise of any stock options, warrants or other convertible
securities, (c) any securities issued in connection with the satisfaction of
trade debt or other obligations of the Company, or (d) the issuance of shares
pursuant to Section 4.3 hereof or any pursuant to rights of other investors in
the Company similar to those provided by Section 4.3 hereof.

         3.4      The Company hereby agrees to indemnify, exonerate and hold the
Subscriber and its (if applicable) controlling persons and their respective
shareholders, officers, directors, employees and agents free and harmless from
and against any and all losses, damages, costs, expenses and liabilities
(including reasonable attorney's fees and disbursements) (collectively,
"Damages"), directly or indirectly resulting from, based upon or arising out of
(i) any breach of any representation or warranty made by the Company contained
in this Agreement or any other agreement, document or certificate annexed hereto
or delivered to Purchaser pursuant hereto or (ii) any breach of any covenant
made by the Company under this Agreement or any other agreement delivered to
Purchaser pursuant hereto, except where such Damages are caused by the actions
of the Subscriber, as indemnitee, in violation of its obligations under such
agreements.

IV.      ANTI-DILUTION; ADDITIONAL SUBSCRIPTION RIGHTS

         4.1      If, during the period ending on the date that the Registration
Statement has been effective for an aggregate of twelve (12) months, the Company
(a) issues Common Stock for a

                                     - 5 -

<PAGE>

price per share less than the Offering Price (a "Lesser Price"), (b) issues
securities convertible into Common Stock where the consideration for such
securities plus the exercise price thereof is a Lesser Price, or (c) amends the
terms of existing convertible securities so that the exercise price thereof is a
Lesser Price, the Company shall issue additional shares of Common Stock to the
Subscriber such that the Subscriber shall have received an aggregate number of
shares of Common Stock equal to the amount paid by such Subscriber pursuant to
Section 1.1 divided by such Lesser Price. In consideration for such issuance,
the Subscriber shall pay to the Company the par value of any shares so issued
pursuant to this Section. The obligations of the Company pursuant to this
Section shall not be triggered by (a) any securities issued or sold in
connection with the refinancing, replacement, increase or amendment of the
Company's credit line with PNC Bank, National Association and/or RVSI Investors,
L.L.C., (b) any shares issued upon the exercise of any stock options, warrants
or other convertible securities, (c) any securities issued in connection with
the satisfaction of trade debt or other obligations of the Company, or (d) the
issuance of shares pursuant to Section 4.3 hereof or any pursuant to rights of
other investors in the Company similar to those provided by Section 4.3 hereof.

         4.2      If, during the period ending on the date that the Registration
Statement has been effective for an aggregate of twelve (12) months, the Company
offers additional equity for sale (a "Subsequent Financing"), the Company shall
offer to sell to the Subscribers, in proportion to the shares of Common Stock
sold to them at the Closing Date, an aggregate number of shares equal to 50% of
the shares proposed to be sold to other potential offerees in such offering, on
substantially similar terms as the Company may, in its discretion, offer to
other potential offerees. At least five (5) trading days prior to the closing of
the Subsequent Financing, the Company shall deliver to each Subscriber a written
notice of its intention to effect a Subsequent Financing ("Pre-Notice"), which
Pre-Notice shall ask such Subscriber if it wants to review the details of such
financing (such additional notice, a "Subsequent Financing Notice"). Upon the
request of a Subscriber, and only upon a request by such Subscriber, for a
Subsequent Financing Notice, the Company shall promptly, but no later than one
(1) trading day after such request, deliver a Subsequent Financing Notice to
such Subscriber. The Subsequent Financing Notice shall describe in reasonable
detail the proposed terms of such Subsequent Financing, the amount of proceeds
intended to be raised thereunder, and attached to which shall be a term sheet or
similar document relating thereto. If the Company receives no notice from a
Subscriber as of such 5th trading day, such Subscriber shall be deemed to have
notified the Company that it does not elect to participate. The Company must
provide the Subscribers with a second Subsequent Financing Notice, and the
Subscribers will again have the right of participation set forth above in this
Section 4.2, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within sixty (60) trading days after the date
of the initial Subsequent Financing Notice. The obligations of the Company
pursuant to this Section 4.2 shall not be triggered by (a) any securities issued
or sold in connection with the refinancing, replacement increase or amendment of
the Company's credit line with PNC Bank, National Association and/or RVSI
Investors, L.L.C., (b) any shares issued upon the exercise of any stock options,
warrants or other convertible securities, (c) any securities issued in
connection with the satisfaction of trade debt or other obligations of the
Company, (d) the issuance of shares pursuant to Section 4.3 hereof or any
pursuant to rights of other investors in the Company similar to those provided
by Section 4.3 hereof, or (e) any shares issued in connection with rights of
other investors in the Company similar to those provided by this Section 4.2.

                                     - 6 -

<PAGE>

         4.3      During the period ending thirty (30) days after the
Registration Statement covering the Common Stock issued at the Closing Date
becomes effective, the Subscriber shall have the right (but not the obligation)
to purchase (i) up to 25% of the number of shares subscribed for at the Closing
Date (the "Additional Shares") at the Offering Price per share specified in
Section 2.1, and (ii) Warrants to purchase a number of shares of Common Stock
equal to 45% of the number of Additional Shares subscriber for pursuant to the
previous clause (the "Additional Warrants"). The Additional Warrants shall have
an expiration date, exercise price and other terms substantially identical to
those of the Warrants issuable pursuant to Section 2.1. The Subscriber shall
give the Company at least one Business Day's notice of its election to purchase
Additional Shares and Additional Warrants, which notice shall state the date of
such purchase and the dollar amount to be invested by the Subscriber. On the
date specified in the notice, the Subscriber shall pay the aggregate Offering
Price for the Additional Shares and Additional Warrants by wire transfer to the
Company in accordance with instructions to be given by the Company to the
Subscriber on or before such date. The Additional Warrants and certificates
evidencing the Additional Shares will be issued to the Subscriber within five
(5) Business Days after receipt and collection by the Company of payment for the
Additional Shares and Additional Warrants. If the Subscriber does not purchase
the full amount of Additional Shares and Additional Warrants to which it is
entitled pursuant to this Section, the Company reserves the right to offer such
Additional Shares and Additional Warrants to other persons entering into
Subscription Agreements substantially similar to this Agreement on or about the
date hereof.

V.       DEFINITIONS

         5.1      For purposes of this Agreement, the following terms shall have
the meanings set forth below:

         "Business Day" means any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required by law to be closed
for business in New York, New York.

         "Material Adverse Effect" means (a) an adverse effect on the validity
or enforceability of this Agreement in any material respect, (b) a material
adverse effect on the financial condition, business, results of operations or
properties of the Company, except for any change, event or effect to the extent
arising from or relating to (i) general business or economic conditions
(including prevailing interest rate and stock market levels or general market
disruptions), and (ii) the general state of the industries and market sectors in
which the Company operates, or (c) an impairment of the ability of the Company
to fulfill its obligations under this Agreement in any material respect.

         "Registration Statement" shall have the meaning provided in the
Registration Right Agreement attached hereto as Exhibit A.

VI.      MISCELLANEOUS

         6.1      Any notice, request, advice, consent or other communication
given hereunder shall be given in writing and sent by overnight delivery service
or registered or certified mail,

                                     - 7 -

<PAGE>

return receipt requested, and addressed as follows: if to the Company, to it at
486 Amherst Street, Nashua, New Hampshire 03063, Attention: President; and if to
the Subscriber, to it at its address indicated below its signature to this
Agreement. Notices so given shall be deemed to have been given on the earlier to
occur of actual receipt or three business days after the date of such mailing,
except for notices of change of address, which shall be deemed to have been
given when received.

         6.2      This Agreement shall not be changed, modified or amended
except by a writing signed by the parties hereto.

         6.3      This Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter thereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.

         6.4      This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of New York. The
parties hereto hereby consent to the exclusive jurisdiction of the state and
Federal courts sitting in and for New York County, New York, for the purpose of
any suit, action or other proceeding arising out of or in connection with this
Agreement or any of the transactions contemplated hereby.

         6.5      This Agreement may be executed in counterparts. The parties
agree that the facsimile signature of any party hereto shall constitute a legal,
valid, and binding execution hereof by such party.

                               [signatures follow]

                                     - 8 -

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.

                                                  ROBOTIC VISION SYSTEMS, INC.

                                                  By:___________________________
                                                     Name:
                                                     Title:
ACCEPTED AND AGREED TO:

NAME OF SUBSCRIBER:

By:__________________________
   Name:
   Title:

Total Dollar Amount of Shares Subscribed for:___________________

__________________________
Address

                                     - 9 -

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