<PAGE>   1
                                  Exhibit 4.2

                   PREFERRED SHARE PURCHASE RIGHTS AGREEMENT

   
                          Dated as of June 11, 1997
    

                                    Between

                            CRESCENT OPERATING, INC.

                                      and

   
                              BANKBOSTON, N.A.
    

                                  Rights Agent


                               TABLE OF CONTENTS




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

Section 2.     Appointment of Rights Agent                                   4

Section 3.     Issue of Right Certificates                                   5

Section 4.     Form of Right Certificates                                    6

Section 5.     Countersignature and Registration                             6

Section 6.     Transfer, Split Up, Combination and Exchange of Right
               Certificates; Mutilated, Destroyed, Lost or Stolen Right
               Certificates                                                  7

Section 7.     Exercise of Rights; Purchase Price; Expiration 
               Date of Rights                                                8

Section 8.     Cancellation and Destruction of Right Certificates            9

Section 9.     Availability of Preferred Shares                              9

Section 10.    Preferred Shares Record Date                                  9

Section 11.    Adjustment of Purchase Price, Number of Shares or
               Number of Rights                                             10

Section 12.    Certificate of Adjusted Purchase Price or Number 
               of Shares                                                    16

Section 13.    Consolidation, Merger or Sale or Transfer of Assets
               or Earning Power                                             16
</TABLE>


                                       i
<PAGE>   2
<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>              <C>                                                       <C>
Section 14.       Fractional Rights and Fractional Shares                   17

Section 15.       Rights of Action                                          18

Section 16.       Agreement of Right Holders                                18

Section 17.       Right Certificate Holder Not Deemed a Stockholder         19

Section 18.       Concerning the Rights Agent                               19

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

Section 20.       Duties of Rights Agent                                    20

Section 21.       Change of Rights Agent                                    22

Section 22.       Issuance of New Right Certificates                        22

Section 23.       Redemption                                                22

Section 24.       Exchange                                                  23

Section 25.       Notice of Events                                          24

Section 26.       Notices                                                   25

Section 27.       Supplements and Amendments                                25

Section 28.       Successors                                                26

Section 29.       Benefits of this Agreement                                26

Section 30.       Severability                                              26

Section 31.       Governing Law                                             26

Section 32.       Counterparts                                              26

Section 33.       Descriptive Headings                                      26

Signatures.                                                                 27

Exhibit A         Form of Certificate of Designations                       28

Exhibit B         Form of Right Certificate                                 35

Exhibit C         Summary of Rights to Purchase Preferred Shares            41
</TABLE>


                                       ii
<PAGE>   3


This Rights Agreement (the "Agreement"), dated as of June 11, 1997, between
Crescent Operating, Inc., a Delaware corporation (the "Company"), and 
BankBoston, N.A. as Rights Agent (the "Rights Agent").


   
The board of directors of the Company (the "Board of Directors") has authorized
and declared a dividend of one preferred share purchase right (a "Right") for
each Common Share (as hereinafter defined) of the Company outstanding on the
date specified as the "Distribution Effective Date" in the Company's 
registration statement on Form S-1 (file no. 333-25223) as declared effective 
by the Securities and Exchange Commission (the "Record Date"), each Right 
representing the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record
Date and the earliest of the Rights Distribution Date, the Redemption Date and
the Final Expiration Date (as such terms are hereinafter defined). 
    

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


Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:

     (a) "Acquiring Person" shall mean any Person who or which, together with
     all Affiliates and Associates of such Person, shall be the Beneficial
     Owner of 10% or more of the Common Shares of the Company then outstanding
     but shall not include (i) the Company, (ii) any Subsidiary of the Company,
     (iii) any employee benefit plan of the Company or of any Subsidiary of the
     Company, or any entity holding Common Shares for or pursuant to the terms
     of any such plan, or (iv) Crescent and its affiliates. Notwithstanding
     anything in this definition of Acquiring Person to the contrary, no Person
     shall become an "Acquiring Person" as the result of an acquisition of
     Common Shares by the Company which, by reducing the number of shares
     outstanding, increases the proportionate number of shares beneficially
     owned by such Person to 10% or more of the Common Shares of the Company
     then outstanding; provided, however, that if a Person shall become the
     Beneficial Owner of 10% or more of the Common Shares of the Company then
     outstanding by reason of share purchases by the Company and shall, after
     such share purchases by the Company, become the Beneficial Owner of any
     additional Common Shares of the Company, then such Person shall be deemed
     to be an "Acquiring Person." Notwithstanding anything in this definition
     of Acquiring Person to the contrary, if the Board of Directors determines
     in good faith that a Person who would otherwise be an "Acquiring Person,"
     as defined pursuant to the foregoing provisions of this paragraph (a), has
     become such inadvertently, and such Person divests as promptly as
     practicable a sufficient number of Common Shares so that such Person would
     no longer be an "Acquiring Person," as defined pursuant to the foregoing
     provisions of this paragraph (a), then such Person shall not be deemed to
     be an "Acquiring Person" for any purposes of this Agreement.


                                      1
<PAGE>   4


     (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" 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.

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

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

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

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

Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, no Person (and no Affiliate or Associate of any Person) shall at any
time be deemed to be the "Beneficial 


                                       2
<PAGE>   5


   
Owner" of or to "beneficially own" any securities if such Person is the
Beneficial Owner of or "beneficially owns" such securities as a result of one
or more agreements, arrangements or understandings with any Crescent Affiliate
(whether or not the Company or any other Person is a party thereto) and if such
Person would not be the Beneficial Owner of or "beneficially own" such
securities if such agreements, arrangements or understandings were not then in
effect. Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
    

     (e) "Board of Directors" shall have the meaning set forth in the preamble
     hereof.

   
     (f) "Business Day" shall mean any day other than a Saturday, a Sunday, or
     a day on which banking institutions in New York are authorized or
     obligated by law or executive order to close.
    

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

     (h) "Common Shares" when used with reference to the Company shall mean the
     shares of common stock, par value $.01 per share, of the Company. "Common
     Shares" when used with reference to any Person other than the Company
     shall mean the capital stock (or equity interest) with the greatest voting
     power of such other Person or, if such other Person is a Subsidiary of
     another Person, the Person or Persons which ultimately control such
     first-mentioned Person.

     (i) "Company" shall have the meaning set forth in the preamble hereof.

     (j) "Current Per Share Market Price" shall have the meaning set forth in
     Section 11(d)(i) hereof.

     (k) "Rights Distribution Date" shall have the meaning set forth in Section
     3 hereof.

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

     (m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
     amended.

     (n) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
     hereof.

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


                                       3
<PAGE>   6


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

     (q) "Preferred Shares" shall mean shares of Series A Junior Participating
     Preferred Stock, par value $.01 per share, of the Company having the
     rights and preferences set forth in the Form of Certificate of
     Designations attached to this Agreement as Exhibit A.

     (r) "Purchase Price" shall have the meaning set forth in Section 4 hereof.

     (s) "Record Date" shall have the meaning set forth in the preamble hereof.

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

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

     (v) "Right" shall have the meaning set forth in the preamble hereof.

     (w) "Right Certificate" shall have the meaning set forth in Section 3(a)
     hereof.

     (x) "Rights Agent" shall have the meaning set forth in the preamble
     hereof.

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

     (z) "Shares Acquisition Date" shall mean the first date of public
     announcement by the Company or an Acquiring Person that an Acquiring
     Person has become such.

     (aa) "Subsidiary" of any Person shall mean any corporation or other entity
     of which a majority of the voting power of the voting equity securities or
     equity interest is owned, directly or indirectly, by such Person.

     (bb) "Summary of Rights" shall have the meaning set forth in Section 3(b)
     hereof.

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

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


                                       4
<PAGE>   7


Section 3. Issue of Right Certificates.

   
     (a) Until the earlier of (i) the tenth day after the Shares Acquisition
     Date or (ii) the tenth Business Day (or such later date as may be
     determined by action of the Board of Directors prior to such time as any
     Person becomes an Acquiring Person) after the date of the commencement by
     any Person (other than the Company, any Subsidiary of the Company, any
     employee benefit plan of the Company or of any Subsidiary of the Company,
     any entity holding Common Shares for or pursuant to the terms of any such
     plan, or, any Crescent Affiliate) of, or of the first public announcement 
     of the intention of any Person (other than the Company, any Subsidiary of
     the Company, any employee benefit plan of the Company or of any Subsidiary
     of the Company, any entity holding Common Shares for or pursuant to the 
     terms of any such plan or, any Crescent Affiliate) to commence, a tender
     or exchange offer the consummation of which would result in any Person
     becoming the Beneficial Owner of Common Shares aggregating 10% or more of
     the then outstanding Common Shares (the earlier of such dates being herein
     referred to as the "Rights Distribution Date"), (x) the Rights will be
     evidenced (subject to the provisions of Section 3(b) hereof) by the
     certificates for Common Shares registered in the names of the holders
     thereof (which certificates shall also be deemed to be Right Certificates)
     and not by separate Right Certificates, and (y) the right to receive Right
     Certificates will be transferable only in connection with the transfer of
     Common Shares. As soon as practicable after the Rights Distribution Date,
     the Company will prepare and execute, the Rights Agent will countersign,
     and the Company will send or cause to be sent (and the Rights Agent will,
     if requested, send) by first-class, postage-prepaid mail, to each record
     holder of Common Shares as of the Close of Business on the Rights
     Distribution Date, at the address of such holder shown on the records of
     the Company, a Right Certificate, in substantially the form of Exhibit B
     hereto (a "Right Certificate"), evidencing one Right for each Common Share
     so held. From and after the Rights Distribution Date, the Rights will be
     evidenced solely by such Right Certificates.
    

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


                                       5
<PAGE>   8


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

   
          This certificate also evidences and entitles the holder hereof to
          certain rights as set forth in a Rights Agreement between Crescent
          Operating, Inc. and BankBoston, N.A. dated as of June 11, 1997
          Rights Agreement"), the terms of which are hereby incorporated   
          herein by reference and a copy of which is on file at the principal
          executive offices of Crescent Operating, Inc. Under certain
          circumstances, as set forth in the Rights Agreement, such Rights will
          be evidenced by separate certificates and will no longer be evidenced
          by this certificate. Crescent Operating, Inc. will mail to the holder
          of this certificate a copy of the Rights Agreement without charge
          after receipt of a written request therefor. Under certain
          circumstances, as set forth in the Rights Agreement, Rights issued to
          any Person who becomes an Acquiring Person (as defined in the Rights
          Agreement) may become null and void.
    

With respect to such certificates containing the foregoing legend, until the
Rights Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares represented
thereby. In the event that the Company purchases or acquires any Common Shares
after the Record Date but prior to the Rights Distribution Date, any Rights
associated with such Common Shares shall be deemed cancelled and retired so
that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.

Section 4. Form of Right Certificates. The Right Certificates (and the forms of
election to purchase Preferred Shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of his Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or automated
quotation system on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.

Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President, any of its
Vice Presidents, or its Treasurer, either manually or by 


                                       6
<PAGE>   9


facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the individual who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any individual who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate although at the
date of the execution of this Agreement any such individual was not such an
officer.

Following the Rights Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.

Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the
provisions of Section 14 hereof, at any time after the Close of Business on the
Rights Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined, or exchanged for another Right Certificate or other Right
Certificates entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.

Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor 


                                       7
<PAGE>   10


to the Rights Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

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

   
     (a) The registered holder of any Right Certificate may exercise the Rights
     evidenced thereby (except as otherwise provided herein), in whole or in
     part, at any time after the Rights Distribution Date, upon surrender of
     the Right Certificate, with the form of election to purchase on the
     reverse side thereof duly executed, to the Rights Agent at the principal
     office of the Rights Agent, together with payment of the purchase Price
     for each one one-hundredth of a Preferred Share as to which the Rights are
     exercised, at or prior to the earliest of (i) the Close of Business on the
     date which is the tenth anniversary of the Record Date (the "Final 
     Expiration Date"), (ii) the time at which the Rights are redeemed as
     provided in Section 23 hereof (the "Redemption Date"), or (iii) the time
     at which such Rights are exchanged as provided in Section 24 hereof.
    

   
     (b) The Purchase Price for each one one-hundredth of a Preferred Share
     purchasable pursuant to the exercise of a Right shall initially be $5,
     and shall be subject to adjustment from time to time as provided in
     Section 11 or 13 hereof and shall be payable in lawful money of the United
     States of America in accordance with paragraph (c) below.
    

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

     (d) In case the registered holder of any Right Certificate shall exercise
     less than all the Rights evidenced thereby, a new Right Certificate
     evidencing Rights equivalent to the Rights remaining unexercised shall be
     issued by the Rights Agent to the registered holder 


                                       8
<PAGE>   11

     of such Right Certificate or to his duly authorized assigns, subject to
     the provisions of Section 14 hereof.

Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in 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 Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and,
in such case, shall deliver a certificate of destruction thereof to the
Company.

   
Section 9. Availability of Preferred Shares. The Company covenants and agrees
that it will cause to be reserved and kept available out of its authorized and
unissued Preferred Shares or any Preferred Shares held in its treasury, the
number of Preferred Shares that will be sufficient to permit the exercise in
full of all outstanding Rights in accordance with Section 7. The Company
covenants and agrees that it will take all such action as may be necessary to
ensure that all Preferred Shares delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such Preferred Shares (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares.
    

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

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


                                       9
<PAGE>   12


Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of Preferred Shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights.
The Purchase Price, the number of Preferred Shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

     (a) (i) In the event the Company shall at any time after the date of this
     Agreement (A) declare a dividend on the Preferred Shares payable in
     Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
     combine the outstanding Preferred Shares into a smaller number of
     Preferred Shares or (D) issue any shares of its capital stock in a
     reclassification of the Preferred Shares (including any such
     reclassification in connection with a consolidation or merger in which the
     Company is the continuing or surviving corporation), except as otherwise
     provided in this Section 11(a), the Purchase Price in effect at the time
     of the record date for such dividend or of the effective date of such
     subdivision, combination or reclassification, and the number and kind of
     shares of capital stock issuable on such date, shall be proportionately
     adjusted so that the holder of any Right exercised after such time shall
     be entitled to receive the aggregate number and kind of shares of capital
     stock which, if such Right had been exercised immediately prior to such
     date and at a time when the Preferred Shares transfer books of the Company
     were open, he would have owned upon such exercise and been entitled to
     receive by virtue of such dividend, subdivision, combination or
     reclassification; provided, however, that in no event shall the
     consideration to be paid upon the exercise of one Right be less than the
     aggregate par value of the shares of capital stock of the Company issuable
     upon exercise of one Right.

         (ii) Subject to Section 24 of this Agreement, in the event any Person
         becomes an Acquiring Person, each holder of a Right shall thereafter
         have a right to receive, upon exercise thereof at a price equal to the
         then current Purchase Price multiplied by the number of one
         one-hundredths of a Preferred Share for which a Right is then
         exercisable, in accordance with the terms of this Agreement and in
         lieu of Preferred Shares, such number of Common Shares of the Company
         as shall equal the result obtained by (A) multiplying the then current
         Purchase Price by the number of one one-hundredths of a Preferred
         Share for which a Right is then exercisable and dividing that product
         by (B) 50% of the then Current Per Share Market Price of the Company's
         Common Shares (determined pursuant to Section 11(d)(i) hereof) on the
         date of the occurrence of such event. In the event that any Person
         shall become an Acquiring Person and the Rights shall then be
         outstanding, the Company shall not take any action which would
         eliminate or diminish the benefits intended to be afforded by the
         Rights.


                                      10
<PAGE>   13


From and after the occurrence of such event, any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any provision of
this Agreement. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence, or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence shall be cancelled.

          (iii) In the event that there shall not be sufficient Common Shares
          issued but not outstanding or authorized but unissued to permit the
          exercise in full of the Rights in accordance with the foregoing
          subparagraph (ii), the Company shall take all such action as may be
          necessary to authorize additional Common Shares for issuance upon
          exercise of the Rights. In the event the Company shall, after good
          faith effort, be unable to take all such action as may be necessary
          to authorize such additional Common Shares, the Company shall
          substitute, for each Common Share that would otherwise be issuable
          upon exercise of a Right, a number of Preferred Shares or fraction
          thereof such that the Current Per Share Market Price of one Preferred
          Share multiplied by such number or fraction is equal to the Current
          Per Share Market Price of one Common Share as of the date of
          issuances of such Preferred Shares or fraction thereof.

     (b) In case the Company shall fix a record date for the issuance of
     rights, options or warrants to all holders of Preferred Shares entitling
     them (for a period expiring within 45 calendar days after such record
     date) to subscribe for or purchase Preferred Shares (or shares having the
     same rights, privileges and preferences as the Preferred Shares
     ("equivalent preferred shares")) or securities convertible into Preferred
     Shares or equivalent preferred shares at a price per Preferred Share or
     equivalent preferred share (or having a conversion price per share, if a
     security convertible into Preferred Shares or equivalent preferred shares)
     less than the then Current Per Share Market Price of the Preferred Shares
     on such record date, the Purchase Price to be in effect after such record
     date shall be determined by multiplying the Purchase Price in effect
     immediately prior to such record date by a fraction, the numerator of
     which shall be the number of Preferred Shares outstanding on such record
     date plus the number of Preferred Shares which the aggregate offering
     price of the total number of Preferred Shares and/or equivalent preferred
     shares so to be offered (and/or the aggregate initial conversion price of
     the convertible securities so to be offered) would purchase at such
     current market price and the denominator of which shall be the number of
     Preferred Shares outstanding on such record date plus the number of
     additional Preferred Shares and/or equivalent preferred shares to be
     offered for subscription or purchase (or into which the convertible
     securities so to be offered are initially convertible); provided, however,
     that in no event shall the 


                                      11
<PAGE>   14


     consideration to be paid upon the exercise of one Right be less than the
     aggregate par value of the shares of capital stock of the Company issuable
     upon exercise of one Right. In case such subscription price may be paid in
     a consideration part or all of which shall be in a form other than cash,
     the value of such consideration shall be as determined in good faith by
     the Board of Directors, whose determination shall be described in a
     statement filed with the Rights Agent and shall be binding on the Rights
     Agent and holders of the Rights. Preferred Shares owned by or held for the
     account of the Company shall not be deemed outstanding for the purpose of
     any such computation. Such 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 Purchase Price shall be adjusted to be the
     Purchase Price which would then be in effect if such record date had not
     been fixed.

     (c) In case the Company shall fix a record date for the making of a
     distribution to all holders of the Preferred Shares (including any such
     distribution made in connection with a consolidation or merger in which
     the Company is the continuing or surviving corporation) of evidences of
     indebtedness or assets (other than a regular quarterly cash dividend or a
     dividend payable in Preferred Shares) or subscription rights or warrants
     (excluding those referred to in Section 11(b) hereof), the Purchase Price
     to be in effect after such record date shall be determined by multiplying
     the Purchase Price in effect immediately prior to such record date by a
     fraction, the numerator of which shall be the then Current Per Share
     Market Price of the Preferred Shares on such record date, less the fair
     market value (as determined in good faith by the Board of Directors, whose
     determination shall be described in a statement filed with the Rights
     Agent and shall be binding on the Rights Agent and holders of the Rights) 
     of the portion of the assets or evidences of indebtedness so to be
     distributed or of such subscription rights or warrants applicable to one
     Preferred Share and the denominator of which shall be such Current Per
     Share Market Price of the Preferred Shares; provided, however, that in no
     event shall the consideration to be paid upon the exercise of one Right be
     less than the aggregate par value of the shares of capital stock of the
     Company to be issued upon exercise of one Right. Such adjustments shall be
     made successively whenever such a record date is fixed; and in the event
     that such distribution is not so made, the Purchase Price shall again be
     adjusted to be the Purchase Price which would then be in effect if such
     record date had not been fixed.

   
     (d) (i) For the purpose of any computation hereunder, the "Current Per
     Share Market Price" of any security (a "Security" for the purpose of this
     Section 11(d)(i)) on any date shall be deemed to be the average of the
     daily closing prices per share of such Security for the 30 consecutive
     Trading Days immediately prior to such date; provided, however, that in
     the event that the Current Per Share Market Price of the Security is
     determined during a period following the announcement by the issuer of
     such Security of (A) a dividend or distribution on such Security payable
     in shares of such Security or securities convertible into such shares, or
     (B) any subdivision, combination or reclassification of such Security and
     prior to the expiration of 30 Trading Days after the ex-dividend date for
     such dividend or distribution, or the record date for such Subdivision,
     combination or reclassification, then, and in each such case, the Current
     Per Share Market Price shall be 
    


                                      12
<PAGE>   15


     appropriately adjusted to reflect the current market price per share
     equivalent of such Security. The closing price for each day shall be the
     last sale price, regular way, or, in case no such sale takes place on such
     day, the average of the closing bid and asked prices, regular way, in
     either case, as reported in the principal consolidated transaction
     reporting system with respect to securities listed or admitted to trading
     on the New York Stock Exchange or, if the Security is not listed or
     admitted to trading on the New York Stock Exchange, as reported in the
     principal consolidated transaction reporting system with respect to
     securities listed on the principal national securities exchange on which
     the Security is listed or admitted to trading or, if the Security is not
     listed or admitted to trading on any national securities exchange, the
     last quoted price or, if not so quoted, the average of the high bid and
     low asked prices in the over-the-counter market, as reported on the Nasdaq
     National Market or such other system then in use, or, if on any such date
     the Security is not quoted by, any such organization, the average of the
     closing bid and asked prices as furnished by a professional market maker
     making a market in the Security selected by the Board of Directors. The
     term "Trading Day" shall mean a day on which the principal national
     securities exchange on which the Security is listed or admitted to trading
     is open for the transaction of business or, if the Security is not listed
     or admitted to trading on any national Securities exchange, a Business
     Day.

          (ii) For the purpose of any computation hereunder, the "Current Per
          Share Market Price" of the Preferred Shares shall be determined in
          accordance with the method set forth in Section 11(d)(i). If the
          Preferred Shares are not publicly traded, the "Current Per Share
          Market Price" of the Preferred Shares shall be conclusively deemed to
          be the Current Per Share Market Price of the Common Shares as
          determined pursuant to Section 11(d)(i) (appropriately adjusted to
          reflect any stock split, stock dividend or similar transaction
          occurring after the date hereof), multiplied by one hundred. If
          neither the Common Shares nor the Preferred Shares are publicly held
          or so listed or traded, "Current Per Share Market Price" shall mean
          the fair value per share as determined in good faith by the Board of
          Directors, whose determination shall be described in a statement
          filed with the Rights Agent and shall be binding on the Rights Agent
          and the holders of the Rights.

     (e) No adjustment in the Purchase Price shall be required unless such
     adjustment would require an increase or decrease of at least 1% in the
     Purchase Price; provided, however, that any adjustments which by reason of
     this Section 11(e) are not required to be made shall be carried forward
     and taken into account in any subsequent adjustment. All calculations
     under this Section 11 shall be made to the nearest cent or to the nearest
     one one-millionth of a Preferred Share or one ten-thousandth of any other
     share or security as the case may be. Notwithstanding the first sentence
     of this Section 11(e), any adjustment required by this Section 11 shall be
     made no later than the earlier of (i) three years from the date of the
     transaction which requires such adjustment or (ii) the date of the
     expiration of the right to exercise any Rights.


                                      13
<PAGE>   16


     (f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
     the holder of any Right thereafter exercised shall become entitled to
     receive any shares of capital stock of the Company other than Preferred
     Shares, thereafter the number of such other shares so receivable upon
     exercise of any Right shall be subject to adjustment from time to time in
     a manner and on terms as nearly equivalent as practicable to the
     provisions with respect to the Preferred Shares contained in Section 11(a)
     through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13
     with respect to the Preferred Shares shall apply on like terms to any such
     other shares.

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

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

     (i) The Company may elect on or after the date of any adjustment of the
     Purchase Price to adjust the number of Rights in substitution for any
     adjustment in the number of one one-hundredths of a Preferred Share
     purchasable upon the exercise of a Right. Each of the Rights outstanding
     after such adjustment of the number of Rights shall be exercisable for the
     number of one one-hundredths of a Preferred Share for which a Right was
     exercisable immediately prior to such adjustment. Each Right held of
     record prior to such adjustment of the number of Rights shall become that
     number of Rights (calculated to the nearest one ten-thousandth) obtained
     by, dividing the Purchase Price in effect immediately prior to adjustment
     of the Purchase Price by the Purchase Price in effect immediately after
     adjustment of the Purchase Price. The Company shall make a public
     announcement of its election to adjust the number of Rights, indicating
     the record date for the adjustment, and, if known at the time, the amount
     of the adjustment to be made. This record date may be the date on which
     the Purchase Price is adjusted or any day thereafter, but, if the Right
     Certificates have been issued, shall be at least 10 days later than the
     date of the public announcement. If Right Certificates have been issued,
     upon each adjustment of the number of Rights pursuant to this Section
     11(i), the Company shall, as promptly as practicable, cause to be
     distributed to holders of record of Right Certificates on such record date
     Right Certificates evidencing, subject to Section 14 hereof, the


                                      14
<PAGE>   17


   
     additional Rights to which such holders shall be entitled as a result of
     such adjustment, or, at the option of the Company, shall cause to be
     distributed to such holders of record in substitution and replacement for
     the Right Certificates held by such holders prior to the date of
     adjustment, and upon surrender thereof, if required by the Company, 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.
    

     (j) Irrespective of any adjustment or change in the Purchase Price or the
     number of one one-hundredths of a Preferred Share issuable upon the
     exercise of the Rights, the Right Certificates theretofore and thereafter
     issued may continue to express the Purchase Price and the number of one
     one-hundreths of a Preferred Share which were expressed in the initial
     Right Certificates issued hereunder.

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

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

     (m) Anything in this Section 11 to the contrary notwithstanding, the
     Company shall be entitled to make such reductions in the Purchase Price, in
     addition to those adjustments expressly required by this Section 11, as
     and to the extent that it, in its sole discretion, shall determine to be
     advisable in order that any consolidation or subdivision of the Preferred
     Shares, issuance wholly for cash of any Preferred Shares at less than the
     current market price, issuance wholly for cash of Preferred Shares or
     securities which by their terms are convertible into or exchangeable for
     Preferred Shares, dividends on Preferred Shares payable in Preferred
     Shares or issuance of rights, options or warrants referred to hereinabove
     in Section 11(b), hereafter made by the Company to holders of its
     Preferred Shares shall not be taxable to such stockholders.


                                      15
<PAGE>   18


   
     (n) In the event that at any time after the date of this Agreement and
     prior to the Rights Distribution Date, the Company shall (i) declare or 
     pay any dividend on the Common Shares payable in Common Shares, or (ii)
     effect a subdivision, combination or consolidation of the Common Shares
     (by reclassification or otherwise than by payment of dividends in Common
     Shares) into a greater or lesser number of Common Shares, then in any such
     case (A) the number of one one-hundredths of a Preferred Share purchasable
     after such event upon proper exercise of each Right shall be determined by
     multiplying the number of one one-hundredths of a Preferred Share so
     purchasable immediately prior to such event by a fraction, the numerator
     of which is the number of Common Shares outstanding immediately before
     such event and the denominator of which is the number of Common Shares
     outstanding immediately after such event, and (B) each Common Share
     outstanding immediately after such event shall have issued with respect to
     it that number of Rights which each Common Share outstanding immediately
     prior to such event had issued with respect to it. The adjustments 
     provided for in this Section 11(n) shall be made successively whenever
     such a dividend is declared or paid or such a subdivision, combination or
     consolidation is effected.
    
        
   
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof.
    

   
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event, directly or indirectly, at any time after a Person has
become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly owned
Subsidiaries (except, in the case of each of (a), (b) and (c) above, where such
other Person is a Crescent Affiliate), then, and in each such case, proper
provision shall be made so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other Person (including
the Company as successor thereto or as the surviving corporation) as shall
equal the result obtained by (A) multiplying the then current Purchase Price by
the number of one one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (B) 50% of the then 
    


                                      16
<PAGE>   19


Current Per Share Market Price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter
be deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and 
delivered to the Rights Agent a supplemental agreement so providing. The
Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.

   
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not
be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right Certificates with regard
to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Current market value of a whole Right. For
the purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately prior
to the date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case, as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported on the Nasdaq National Market or such
other system then in use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors shall be used.
    

     (b) The Company shall not be required to issue fractions of Preferred
     Shares (other than fractions which are integral multiples of one
     one-hundredth of a Preferred Share) 


                                      17
<PAGE>   20


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

     (c) The holder of a Right by the acceptance of the Right expressly waives
     his right to receive any fractional Rights or any fractional shares upon
     exercise of a Right (except as provided above).

   
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Rights Distribution Date, the registered
holders of the Common Shares), and any registered holder of any Right
Certificate (or, prior to the Rights Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Rights Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
    

Section 16. Agreement of Right Holders. Every holder of a Right, by accepting
the same, consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:

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


                                      18
<PAGE>   21


     (b) after the Rights Distribution Date, the Right Certificates are
     transferable only on the registry books of the Rights Agent if surrendered
     at the principal office of the Rights Agent, duly endorsed or accompanied
     by a proper instrument of transfer; and

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

Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as
such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

   
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services tendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
arid counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. The
Rights Agent shall be protected and shall incur no liability for, or in respect
of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, 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, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
    

Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may 


                                      19
<PAGE>   22


be consolidated, or any corporation resulting from any merger or consolidation
to which the Rights Agent or any successor Rights Agent shall be a party, or
any corporation succeeding to the stock transfer or corporate trust powers 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, and 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. In case at any time
the name of the Rights Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name, and 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 Company 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 legal
     counsel for the Company), and the opinion of such counsel shall be full
     and complete authorization and protection to the Rights Agent as to any
     action taken or omitted by it in good faith and in accordance with such
     opinion.

     (b) Whenever in the performance of its duties under this Agreement the
     Rights Agent shall deem it necessary or desirable that any fact or matter
     be proved or established by the Company prior to taking or suffering any
     Section hereunder, such fact or matter (unless other evidence in respect
     thereof be herein specifically prescribed) may be deemed to be
     conclusively proved and established by a certificate signed by any one of
     the Chairman of the Board, the Chief Executive Officer, the President, any
     Vice President, the Treasurer or the Secretary of the Company and
     delivered to the Rights Agent and such certificate shall be full
     authorization to the Rights Agent for any action taken or suffered in good
     faith by it under the provisions of this Agreement in reliance upon such
     certificate.

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

     (d) The Rights Agent shall not be liable for or by reason of any of the
     statements of fact or recitals contained in this Agreement or in the Right
     Certificates (except its 


                                      20
<PAGE>   23


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

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

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

   
     (g) The Rights Agent is hereby authorized and directed to accept
     instructions with respect to the performance of its duties hereunder from
     any one of the Chairman of the Board, the Chief Executive Officer, the
     President, any Vice President, the Secretary or the Treasurer of the
     Company, and to apply to such officers for advice or instructions in
     connection with its duties, and it shall not be liable for any action
     taken or suffered by it in good faith in accordance with instructions of
     any such officer or for any delay in acting while waiting for those
     instructions.
    

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

     (i) The Rights Agent may execute and exercise any of the rights or powers
     hereby vested in it or perform any duty hereunder either itself or by or
     through its attorneys or agents, and the Rights Agent shall not be
     answerable or accountable for any act, default, neglect or misconduct of
     any such attorneys or agents or for any loss to the Company


                                      21
<PAGE>   24


     resulting from any such act, default, neglect or misconduct, provided
     reasonable care was exercised in the selection and continued employment
     thereof.

   
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
days' notice in writing mailed to the Company and to each transfer agent of the
Common Shares or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares or Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any appointment of a
successor Rights Agent by such a court shall be subject to the prior approval
of the Company, which approval shall not be unreasonably withheld. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named, as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
    

Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by the Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.

Section 23. Redemption. (a) The Board of Directors may, at its option, at any
time prior to such time as any Person becomes an Acquiring Person, redeem all
but not less than all the then outstanding Rights at a redemption price of $.01
per Right, appropriately adjusted to reflect any stock split, stock dividend or 
similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by 


                                      22
<PAGE>   25


the Board of Directors may be made effective at such time, on such basis and
with such conditions as the Board of Directors, in its sole discretion, may
establish.

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

   
Section 24. Exchange. (a) The Board of Directors 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 void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan or, any
Crescent Affiliate), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
    

     (b) Immediately upon the action of the Board of Directors ordering the
     exchange of any Rights pursuant to paragraph (a) of this Section 24 and
     without any further action and without any notice, the right to exercise
     such Rights shall terminate and the only right thereafter of a holder of
     such Rights shall be to receive that number of Common Shares equal to the
     number of such Rights held by such holder multiplied by the Exchange
     Ratio. The Company shall promptly give public notice of any such exchange;
     provided, however, that the failure to give, or any defect in, such notice
     shall not affect the validity of such exchange. The Company promptly shall
     mail a notice of any such exchange to all of the holders of such Rights at
     their last addresses as they appear upon the registry books 


                                      23
<PAGE>   26


     of the Rights Agent. Any notice which is mailed in the manner herein
     provided shall be deemed given, whether or not the holder receives the
     notice. Each such notice of exchange will state the method by which the
     exchange of the Common Shares for Rights will be effected and, in the
     event of any partial exchange, the number of Rights which will be
     exchanged. Any partial exchange shall be effected pro rata based on the
     number of Rights (other than Rights which have become void pursuant to the
     provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

     (c) In the event that there shall not be sufficient Common Shares issued
     but not outstanding or authorized but unissued to permit any exchange of
     Rights as contemplated in accordance with this Section 24, the Company
     shall take all such action a may be necessary to authorize additional
     Common Shares for issuance upon exchange of the Rights. In the event the
     Company shall, after good faith effort, be unable to take all such action
     as may be necessary to authorize such additional Common Shares, the
     Company shall substitute, for each Common Share that would otherwise be
     issuable upon exchange of a Right, a number of Preferred Shares or
     fraction thereof such that the Current Per Share Market Price of one
     Preferred Share multiplied by such number or fraction is equal to the
     Current Per Share Market Price of one Common Share as of the date of
     issuance of such Preferred Shares or fraction thereof.

     (d) The Company shall not be required to issue fractions of Common Shares
     or to distribute certificates which evidence fractional Common Shares. In
     lieu of such fractional Common Shares, the Company shall pay to the
     registered holders of the Right Certificates with regard to which such
     fractional Common Shares would otherwise be issuable an amount in cash
     equal to the same fraction of the current market value of a whole Common
     Share. For the purposes of this paragraph (d), the current market value of
     a whole Common Share shall be the closing price of a Common Share (as
     determined pursuant to the second sentence of Section 11(d)(i) hereof) for
     the Trading Day immediately prior to the date of exchange pursuant to this
     Section 24.

Section 25. Notice of Events. (a) In case the Company shall propose (i) to pay
any dividend payable in stock of any class to the holders of its Preferred
Shares or to make any other distribution to the holders of its Preferred Shares
(other than a regular quarterly cash dividend), (ii) to offer to the holders of
its Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or
pay any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a 


                                      24
<PAGE>   27


notice of such proposed action, which shall specify the record date for the
purposes of such Stock dividend, or distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.

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

Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:

   
Crescent Operating, Inc.
777 Main Street
Fort Worth, Texas 76102
Attention: Corporate Secretary
    

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

   
BankBoston, N.A.
c/o Boston EquiServe Limited Partnership
150 Royall Street
Canton, MA 02021
    

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

   
Section 27. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with 
    


                                      25
<PAGE>   28


respect to the Rights which the Company may deem necessary or desirable, any
such supplement or amendment to be evidenced by a writing signed by the Company
and the Rights Agent; provided, however, that from and after such time as any
Person becomes an Acquiring Person, this Agreement shall not be amended in any
manner which would adversely affect the interests of the holders of Rights.

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

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

Section 30. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

Section 31. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State.

Section 32. 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 33. 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.


                                      26
<PAGE>   29


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




Attest:                                CRESCENT OPERATING, INC.


By                                     By

     Name:                                Name:
     Title:                               Title:

   
Attest:                                BANKBOSTON, N.A.
    


By                                     By

     Name:                                Name:
     Title:                               Title:



                                      27
<PAGE>   30



                                   Exhibit A

                                      FORM

                                       of

                          CERTIFICATE OF DESIGNATIONS

                                       of

   
                        SERIES A JUNIOR PREFERRED STOCK
    

                                       of

                            CRESCENT OPERATING, INC.

       (Pursuant to Section 151 of the Delaware General Corporation Law)


   
Crescent Operating, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
unanimous written consent of the Board of Directors of the Corporation as of 
June 3, 1997:
    

RESOLVED, that pursuant to the authority granted to and vested in the Board of
Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") in accordance with the provisions of the Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share, of the Corporation (the "Preferred Stock") and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:

   
                        Series A Junior Preferred Stock:
    

   
Section 1.  Designation and Amount. The shares of such series shall be 
designated as "Series A Junior Preferred Stock" (the "Series A Preferred
Stock") and the number of shares constituting the Series A Preferred Stock
shall be 225,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
    


                                      28
<PAGE>   31


Section 2. Dividends and Distributions.

     (a) Subject to the rights of the holders of any shares of any series of
     Preferred Stock (or any similar stock) ranking prior and superior to the
     Series A Preferred Stock with respect to dividends, the holders of shares
     of Series A Preferred Stock, in preference to the holders of Common Stock,
     par value $.01 per share (the "Common Stock"), of the Corporation, and of
     any other junior stock, shall be entitled to receive, when, as and if
     declared by the Board of Directors out of funds legally available for the
     purpose, quarterly dividends payable in cash on the first day of March,
     June, September and December in each year (each such date being referred
     to herein as a "Quarterly Dividend Payment Date"), commencing on the first
     Quarterly Dividend Payment Date after the first issuance of a share or
     fraction of a share of Series A Preferred Stock, in an amount per share
     (rounded to the nearest cent) equal to the greater of (i) $1 or (ii)
     subject to the provision for adjustment hereinafter set forth, 100 times
     the aggregate per share amount of all cash dividends, and 100 times the
     aggregate per share amount (payable in kind) of all non-cash dividends or
     other distributions, other than a dividend payable in shares of Common
     Stock or a subdivision of the outstanding shares of Common Stock (by
     reclassification or otherwise), declared on the Common Stock since the
     immediately preceding Quarterly Dividend Payment Date or, with respect to
     the first Quarterly Dividend Payment Date, since the first issuance of any
     share or fraction of a share of Series A Preferred Stock. In the event the
     Corporation shall at any time declare or pay any dividend on the Common
     Stock payable in shares of Common Stock, or effect a subdivision or
     combination or consolidation of the outstanding shares of Common Stock (by
     reclassification or otherwise than by payment of a dividend in shares of
     Common Stock) into a greater or lesser number of shares of Common Stock,
     then in each such case the amount to which holders of shares of Series A
     Preferred Stock were entitled immediately prior to such event under clause
     (ii) of the preceding sentence shall be adjusted by multiplying such
     amount by a fraction, the numerator of which is the number of shares of
     Common Stock outstanding immediately after such event and the denominator
     of which is the number of shares of Common Stock that were outstanding
     immediately prior to such event.

   
     (b) The Corporation shall declare a dividend or distribution on the Series
     A Preferred Stock as provided in paragraph (a) of this Section immediately
     after it declares a dividend or distribution on the Common Stock (other
     than a dividend payable in shares of Common Stock); provided that, in the
     event no dividend or distribution shall have been declared on the Common
     Stock during the period between any Quarterly Dividend Payment Date and
     the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per
     share on the Series A Preferred Stock shall nevertheless be payable on
     such subsequent Quarterly Dividend Payment Date.
    

     (c) Dividends shall begin to accrue and be cumulative on outstanding
     shares of Series A Preferred Stock from the Quarterly Dividend Payment
     Date next preceding the date of issue of such shares, unless the date of
     issue of such shares is prior to the record date for 


                                      29
<PAGE>   32


     the first Quarterly Dividend Payment Date, in which case dividends on such
     shares shall begin to accrue from the date of issue of such shares, or
     unless the date of issue is a Quarterly Dividend Payment Date or is a date
     after the record date for the determination of holders of shares of Series
     A Preferred Stock entitled to receive a quarterly dividend and before such
     Quarterly Dividend Payment Date, in either of which events such dividends
     shall begin to accrue and be cumulative from such Quarterly Dividend
     Payment Date. Accrued but unpaid dividends shall not bear interest.
     Dividends paid on the shares of Series A Preferred Stock in an amount less
     than the total amount of such dividends at the time accrued and payable on
     such shares shall be allocated pro rata on a share-by-share basis among
     all such shares at the time outstanding. The Board of Directors may fix a
     record date for the determination of holders of shares of Series A
     Preferred Stock entitled to receive payment of a dividend or distribution
     declared thereon, which record date shall be not more than 60 days prior
     to the date fixed for the payment thereof.

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

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

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

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


                                      30
<PAGE>   33


Section 4. Certain Restrictions.

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

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

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

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

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

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

   
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
    


                                      31
<PAGE>   34


subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.

   
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under
the proviso in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
    

Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed into
an amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the


                                      32
<PAGE>   35


denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

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

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

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


                                      33
<PAGE>   36


IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of
the Corporation by its _______________________ and attested by its
_________________ this ____ day of _________________, 1997.








Attest:









                                      34
<PAGE>   37

                                   Exhibit B

                           Form of Right Certificate

Certificate No. R-
                            _________________ Rights

               NOT EXERCISABLE AFTER _____ __, 2007 OR EARLIER IF
                 REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
                 SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
            EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

                               Right Certificate

                            CRESCENT OPERATING, INC.

This certifies that ______________ or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entities the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of _____ __, 1997 (the "Rights Agreement"), between
Crescent Operating, Inc., a Delaware corporation (the "Company"), and The First
National Bank Of Boston (the "Rights Agent"), to purchase from the Company at
any time after the Rights Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., New York time, on _____ __, 2007 at
the principal office of the Rights Agent, or at the office of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable share of Series
A Junior Participating Preferred Stock, par value $.01 per share, of the
Company (the "Preferred Shares"), at a purchase price of $__ per one
one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate (and
the number of one one-hundredths of a Preferred Share which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of _____ __, 1997, based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share 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.

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


                                      35
<PAGE>   38


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

   
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Right Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock.
    

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

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


                                      36
<PAGE>   39


WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal. Dated as of ________________________.


ATTEST:                             CRESCENT OPERATING, INC.


By:                                 By:

Name:                               Name:

Title:                              Title:


   
Countersigned:                      BANKBOSTON, N.A.
    



                                    By:

                                    Name:

                                    Title:


                                      37
<PAGE>   40


                   Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

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


FOR VALUE RECEIVED __________________  hereby sells, assigns and transfers unto


________________________________________________________________________________

(Please print name and address of transferee)


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 Company, with full
power of substitution.


Dated:  ____________________________


                                   Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States or by another eligible guarantor
institution, as defined in Rule 17Ad-15 under the Securities Exchange Act of
1934.

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


                                   Signature







                                      38
<PAGE>   41



             Form of Reverse Side of Right Certificate -- continued

                          FORM OF ELECTION TO PURCHASE

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


To:      CRESCENT OPERATING, INC.


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

Please insert social security or other identifying number


                        (Please print name and address)


If such number of Rights shall not be all the Rights 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:  ________________________

                                   Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States or by another eligible guarantor
institution, as defined in Rule 17Ad-15 under the Securities Exchange Act of
1934.

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


                                      39
<PAGE>   42


                                   Signature


                                     NOTICE


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

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


                                      40
<PAGE>   43


                                   Exhibit C
   
                                   FORM OF
                          SUMMARY OF RIGHT TO PURCHASE
                                PREFERRED SHARES
    

   
On _____ __, 1997, the Board of Directors of Crescent Operating, Inc. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.01 per share,
of the Company (the "Common Shares"). The dividend is payable on _____ __, 1997
(the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-hundredth
of a share of Series A Junior Participating Preferred Stock, par value $.01 per
share, of the Company (the "Preferred Shares") at a price of $5 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and The First National
Bank Of Boston, as Rights Agent (the "Rights Agent").
    

Until the earlier to occur of (i) 10 days following a public announcement that
a person or group of affiliated or associated persons (an "Acquiring Person")
has acquired beneficial ownership of 10% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as any
person or group of affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 10% or more of the outstanding Common Shares
(the earlier of such dates being the "Rights Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
Outstanding as of the Record Date, by such Common Share certificate with a copy
of this Summary of Rights attached thereto. The Rights Agreement contains
exceptions from its operating provision for Crescent and its affiliates and
associates.

The Rights Agreement provides that, until the Rights Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Rights Distribution Date (or
earlier redemption or expiration of the Rights), new Common Share certificates
issued after the Record Date upon transfer or new issuance of Common Shares
will contain a notation incorporating the Rights Agreement by reference. Until
the Rights Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificates.
As soon as practicable following the Rights Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Rights Distribution Date and such separate Right Certificates alone will
evidence the Rights.


                                      41
<PAGE>   44


   
The Rights are not exercisable until the Rights Distribution Date. The Rights
will expire on the date which is the tenth anniversary of the Record Date
(the "Final Expiration Date"), unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.
    

The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares; (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then-current market price of the Preferred Shares; or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).

The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Rights Distribution Date.

Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in
which Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights are
protected by customary antidilution provisions.

Because of the nature of the Preferred Shares' dividend, liquidation and voting
rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.

In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times the
exercise price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, 


                                      42
<PAGE>   45


proper provision shall be made so that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the
Right.

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
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one Common Share, or one
one-hundredth of a Preferred Share, per Right (subject to adjustment).

With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price.

No fractional Preferred Shares will be issued (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts) and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of exercise.

At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 10% or more of the then
Outstanding Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on
such basis with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders
of Rights will be to receive the Redemption Price.

The terms of the Rights may be amended by the Board of Directors of the Company
without the consent of the holders of the Rights, except that from and after
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights.

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

   
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form S-1 (Registration
No. 333-25223). A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
    


                                      43