<PAGE>
 
=========================================================================

                                  EXHIBIT 4.1



                                RIGHTS AGREEMENT


                          DATED AS OF DECEMBER 7, 1994


                                    BETWEEN



                              PROCYTE CORPORATION


                                      AND



                       AMERICAN SECURITIES TRANSFER, INC.

                                AS RIGHTS AGENT


=========================================================================

<PAGE>
 
                                    CONTENTS
<TABLE>
<S>          <C>                                                                           <C>
SECTION 1.   CERTAIN DEFINITIONS.........................................................   1
                                                                                         
SECTION 2.   APPOINTMENT OF RIGHTS AGENT.................................................   8
                                                                                         
SECTION 3.   ISSUE OF RIGHTS AND RIGHT CERTIFICATES......................................   8
                                                                                         
SECTION 4.   FORM OF RIGHT CERTIFICATES..................................................  10
                                                                                         
SECTION 5.   EXECUTION, COUNTERSIGNATURE AND REGISTRATION................................  10
                                                                                         
SECTION 6.   TRANSFER, SPLIT-UP, COMBINATION AND                                         
             EXCHANGE OF RIGHT CERTIFICATES; LOST,                                       
             STOLEN, DESTROYED OR MUTILATED RIGHT                                        
             CERTIFICATES; UNCERTIFICATED RIGHTS.........................................  11
                                                                                         
SECTION 7.   EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS...............................  12
                                                                                         
SECTION 8.   CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES..........................  14
                                                                                         
SECTION 9.   RESERVATION AND AVAILABILITY OF PREFERRED SHARES............................  14
                                                                                         
SECTION 10.  PREFERRED SHARES RECORD DATE................................................  15
                                                                                         
SECTION 11.  ADJUSTMENTS IN RIGHTS AFTER THERE IS AN                                     
             ACQUIRING PERSON; EXCHANGE OF RIGHTS                                        
             FOR SHARES; BUSINESS COMBINATIONS...........................................  16
                                                                                         
SECTION 12.  CERTAIN ADJUSTMENTS.........................................................  20
                                                                                         
SECTION 13.  CERTIFICATE OF ADJUSTMENT...................................................  22
                                                                                         
SECTION 14.  ADDITIONAL COVENANTS........................................................  22
                                                                                         
SECTION 15.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES.....................................  22
                                                                                         
SECTION 16.  RIGHTS OF ACTION............................................................  23
</TABLE>
                                                                         PAGE i
                                                                         
<PAGE>
 
<TABLE>                                                                  
<S>          <C>                                                                           <C>
SECTION 17.  TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT CERTIFICATES.....................  24
                                                                                         
SECTION 18.  RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER...........................  24
                                                                                         
SECTION 19.  CONCERNING THE RIGHTS AGENT.................................................  25
                                                                                         
SECTION 20.  MERGER OR CONSOLIDATION OR CHANGE OF RIGHTS AGENT...........................  25
                                                                                         
SECTION 21.  DUTIES OF RIGHTS AGENT......................................................  26
                                                                                         
SECTION 22.  CHANGE OF RIGHTS AGENT......................................................  28
                                                                                         
SECTION 23.  ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT CERTIFICATES........................  29
                                                                                         
SECTION 24.  REDEMPTION AND TERMINATION..................................................  29
                                                                                         
SECTION 25.  NOTICES.....................................................................  30
                                                                                         
SECTION 26.  SUPPLEMENTS AND AMENDMENTS..................................................  31
                                                                                         
SECTION 27.  SUCCESSORS..................................................................  32
                                                                                         
SECTION 28.  BENEFITS OF THIS RIGHTS AGREEMENT;                                          
             DETERMINATIONS AND ACTIONS BY THE                                           
             COMPANY'S BOARD OF DIRECTORS................................................  32
                                                                                         
SECTION 29.  SEVERABILITY................................................................  32
                                                                                         
SECTION 30.  GOVERNING LAW...............................................................  33
                                                                                         
SECTION 31.  COUNTERPARTS; EFFECTIVENESS.................................................  33
                                                                                         
SECTION 32.  DESCRIPTIVE HEADINGS........................................................  33
</TABLE>

Exhibits
--------

A  STATEMENT OF DESIGNATION OF RIGHTS AND PREFERENCES
B  FORM OF RIGHT CERTIFICATE
                                                                         PAGE ii
<PAGE>
 
                                RIGHTS AGREEMENT

          RIGHTS AGREEMENT dated as of December 7, 1994, between PROCYTE
          CORPORATION, a Delaware corporation (the "Company"), and AMERICAN
          SECURITIES TRANSFER, INC., as Rights Agent (the "Rights Agent").

     The Board of Directors of the Company has authorized and declared a
dividend of one Right (as hereinafter defined) for each share of Common Stock,
par value $.01 per share, of the Company (the "Common Stock") outstanding at the
Close of Business (as hereinafter defined) on December 8, 1994 (the "Record
Date") and has authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of this Rights Agreement) with
respect to each share of Common Stock that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date or
the Expiration Date (as such terms are hereinafter defined); provided, however,
                                                             --------  ------- 
that Rights may be issued with respect to shares of Common Stock that shall
become outstanding after the Distribution Date and prior to the earlier of the
Redemption Date or the Expiration Date in accordance with the provisions of
Section 23.  Each Right shall initially represent the right to purchase one one-
hundredth (1/100th) of a share of Series A Participating Cumulative Preferred
Stock, par value $0.01 per share, of the Company (the "Preferred Shares"),
having the powers, rights and preferences set forth in the Statement of
Designation of Rights and Preferences attached as Exhibit A.

     Accordingly, in consideration of the premises and the mutual agreements
set forth in this Rights Agreement, the Company and the Rights Agent hereby
agree as follows:

SECTION 1.  CERTAIN DEFINITIONS

     For purposes of this Rights Agreement, the following terms have the
meanings indicated:

     "Acquiring Person" shall mean any Person which, alone or together with all
      ----------------                                                         
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the Common Shares then outstanding, but shall not include (a) the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any of its Subsidiaries, or any Person holding Common Shares for or
pursuant to the terms of any such employee benefit plan or (b) any such Person
who has become such a Beneficial Owner solely because (i) of a change in the
aggregate number of Common Shares outstanding since the last date on which such
Person acquired Beneficial

                                                                           PAGE1
<PAGE>
 
Ownership of any Common Shares or (ii) it acquired such Beneficial Ownership in
the good-faith belief that such acquisition would not (y) cause such Beneficial
Ownership to exceed 15% of the Common Shares then outstanding and such Person
relied in good faith in computing the percentage of its Beneficial Ownership on
publicly filed reports or documents of the Company that are inaccurate or out-
of-date or (z) otherwise cause a Distribution Date or the adjustment provided
for in Section 11(a) to occur.  Notwithstanding clause (b) of the prior
sentence, if any Person that is not an Acquiring Person due to such clause (b)
does not reduce its percentage of Beneficial Ownership of Common Shares to below
15% by the Close of Business on the fifth Business Day after notice from the
Company (the date of notice being the first day) that such Person's Beneficial
Ownership of Common Shares so exceeds 15%, such Person shall, at the end of such
five Business Day period, become an Acquiring Person (and such clause (b) shall
no longer apply to such Person).  For purposes of this definition, the
determination whether any Person acted in "good faith" shall be conclusively
determined by the Company's Board of Directors, acting by a vote of those
directors of the Company whose approval would be required to redeem the Rights
under Section 24.

     "Affiliate" and "Associate," when used with reference to any Person, shall
      ---------       ---------                                                
have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, as in effect on the date of this
Rights Agreement.

     A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
                                   ----------------                            
"beneficially own," and shall be deemed to have "Beneficial Ownership" of, any
 ----------------                                --------------------         
securities:

            (a) that such Person or any of such Person's Affiliates or
     Associates is deemed to "beneficially own" within the meaning of Rule 13d-3
     of the General Rules and Regulations under the Exchange Act, as in effect
     on the date of this Rights Agreement;

            (b) that such Person or any of such Person's Affiliates or
     Associates has (i) the right to acquire (whether such right is exercisable
     immediately or only after the passage of time) pursuant to any agreement,
     arrangement or understanding (written or oral), or upon the exercise of
     conversion rights, exchange rights, rights (other than the Rights),
     warrants or options, or otherwise; provided, however, that a Person shall
                                        --------  -------                     
     not be deemed the Beneficial Owner of, or to beneficially own, or to have
     Beneficial Ownership of, 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 thereunder or (ii) the right to vote pursuant to any
     agreement, arrangement or understanding (written

                                                                           PAGE2
<PAGE>
 
     or oral); provided, however, that a Person shall not be deemed the
               --------  -------                                       
     Beneficial Owner of, or to beneficially own, any security if (A) the
     agreement, arrangement or understanding (written or oral) to vote such
     security 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 under the
     Exchange Act and (B) the beneficial ownership of such security is not also
     then reportable on Schedule 13D under the Exchange Act (or any comparable
     or successor report); or

            (c) that 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 (written or
     oral) for the purpose of acquiring, holding, voting (except pursuant to a
     revocable proxy as described in clause (b) (ii) of this definition) or
     disposing of any securities of the Company.

Notwithstanding the foregoing, nothing contained in this definition shall cause
a Person ordinarily engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own," any securities acquired in
a bona fide firm commitment underwriting pursuant to an underwriting agreement
with the Company.

     "Book Value," when used with reference to Common Shares issued by any
      ----------                                                          
Person, shall mean the amount of such Person's equity applicable to each Common
Share, determined (a) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value is to be
determined, (b) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (c) after giving effect
to (i) the exercise of all rights, options and warrants to purchase such Common
Shares (other than the Rights), and the conversion of all securities convertible
into such Common Shares, at an exercise or conversion price, per Common Share,
that is less than such Book Value before giving effect to such exercise or
conversion (whether or not exercisability or convertibility is conditioned upon
occurrence of a future event), (ii) all dividends and other distributions on the
capital stock of such Person declared prior to the date as of which such Book
Value is to be determined and to be paid or made after such date, and (iii) any
other agreement, arrangement or understanding (written or oral), or transaction
or other action prior to the date as of which such Book Value is to be
determined that would have the effect of thereafter reducing such Book Value.

     "Business Combination" shall have the meaning set forth in Section
      --------------------                                             
11(c)(i).

                                                                           PAGE3
<PAGE>
 
     "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
      ------------                                                          
Friday that is not a day on which banking institutions in New York, New York, or
Seattle, Washington, are authorized or obligated by law or executive order to
close.

     "Statement of Designation of Rights and Preferences" shall mean the
      --------------------------------------------------                
Statement of Designation of Rights and Preferences Series A Participating
Cumulative Preferred Stock setting forth the powers, preferences, rights,
qualifications, limitations and restrictions of such series of Preferred Stock
of the Company, a copy of which is attached to this Rights Agreement as Exhibit
A.

     "Close of Business" on any given date shall mean 5 p.m., New York City
      -----------------                                                    
time, on such date; provided, however, that if such date is not a Business Day,
                    --------  -------                                          
"Close of Business" shall mean 5 p.m., New York City time, on the next
succeeding Business Day.

     "Common Shares," when used with reference to the Company prior to a
      -------------                                                     
Business Combination, shall mean the shares of Common Stock of the Company or
any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed.  "Common Shares," when used with reference to
any Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such class or series is subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed; provided, however, that, if at any
                                            --------  -------                 
time there shall be more than one such class or series of capital stock or
equity interests of such Person, "Common Shares" of such Person shall include
all such classes and series substantially in the proportion of the total number
of shares or other units of each such class or series outstanding at such time.

     "Common Stock" shall have the meaning set forth in the introductory
      ------------                                                      
paragraph of this Rights Agreement.

     "Company" shall have the meaning set forth in the introductory paragraph of
      -------                                                                   
this Rights Agreement; provided, however, that if there is a Business
                       --------  -------                             
Combination, "Company" shall have the meaning set forth in Section 11(c)(iii).

     The term "control" with respect to any Person shall mean the power to
               -------                                                    
direct the management and policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an

                                                                           PAGE4
<PAGE>
 
agreement, arrangement or understanding (written or oral) with one or more other
Persons by or through stock ownership, agency or otherwise; and the terms
"controlling" and "controlled" shall have meanings correlative to the foregoing.

     "Distribution Date" shall have the meaning set forth in Section 3(b).
      -----------------                                                   

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as in effect
      ------------                                                              
on the date in question, unless otherwise specifically provided in this Rights
Agreement.

     "Exchange Consideration" shall have the meaning set forth in Section
      ----------------------                                             
11(b)(i).

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

     "Formula Number" shall have the meaning set forth in the Statement of
      --------------                                                      
Designation of Rights and Preferences.

     "Major Part," when used with reference to the assets of the Company and its
      ----------                                                                
Subsidiaries as of any date, shall mean assets (a) having a fair market value
aggregating 50% or more of the total fair market value of all the assets of the
Company and its Subsidiaries (taken as a whole) as of the date in question, (b)
accounting for 50% or more of the total value (net of depreciation and
amortization) of all the assets of the Company and its Subsidiaries (taken as a
whole) as would be shown on a consolidated or combined balance sheet of the
Company and its Subsidiaries as of the date in question, prepared in accordance
with generally accepted accounting principles then in effect, or (c) accounting
for 50% or more of the total amount of net income or revenues of the Company and
its Subsidiaries (taken as a whole) as would be shown on a consolidated or
combined statement of income of the Company and its Subsidiaries for the period
of 12 months ending on the last day of the Company's monthly accounting period
next preceding the date in question, prepared in accordance with generally
accepted accounting principles then in effect.

     "Market Value," when used with reference to Common Shares on any date,
      ------------                                                         
shall mean the average of the daily closing prices, per share, of such Common
Shares for the period that is the shorter of (a) 30 consecutive Trading Days
immediately prior to the date in question and (b) the number of consecutive
Trading Days beginning on the Trading Day immediately after the date of the
first public announcement of the event requiring a determination of the Market
Value and ending on the Trading Day immediately prior to the record date of such
event; provided, however, that, in the event that the Market Value of such
       --------  -------                                                  
Common Shares is to be determined in whole or in part during a period following
the announcement by the issuer of such Common Shares of any action of the type
described in Section 12(a) that would require an adjustment thereunder, then,
and in each such case, the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on 

                                                                           PAGE5
<PAGE>
 
the market price of such Common Shares. The closing price for each Trading Day
shall be the closing price quoted on the composite tape for securities listed on
the New York Stock Exchange, or, if such securities are not quoted on such
composite tape or if such securities are not listed on such exchange, on the
principal United States securities exchange registered under the Exchange Act
(or any recognized foreign stock exchange) on which such securities are listed
or, if such securities are not listed on any such exchange, the average of the
closing bid and asked quotations with respect to a share of such securities on
the National Association of Securities Dealers, Inc. Automated Quotations System
or such other system then in use or, if no such quotations are available, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in such securities selected by the Company's Board
of Directors. If on any such Trading Day no market maker is making a market in
such securities, the closing price of such securities on such Trading Day shall
be deemed to be the fair value of such securities as determined in good faith by
the Company's Board of Directors (whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent,
the holders of Rights and all other Persons); provided, however, that for the
                                              --------  ------- 
purpose of determining the closing price of the Preferred Shares for any Trading
Day on which there is no such market maker for the Preferred Shares, the closing
price on such Trading Day shall be deemed to be the Formula Number times the
closing price of the Common Shares of the Company on such Trading Day.

     "Person" shall mean an individual, corporation, partnership, joint venture,
      ------                                                                    
association, trust, unincorporated organization or other entity.

     "Preferred Shares" shall have the meaning set forth in the introductory
      ----------------                                                      
paragraph of this Rights Agreement.  Any reference in this Rights Agreement to
Preferred Shares shall be deemed to include any authorized fraction of a
Preferred Share, unless the context otherwise requires.

     "Preferred Stock" shall mean the Series A Participating Cumulative
      ---------------                                                  
Preferred Stock of the Company, par value $.01 per share.

     "Principal Party" shall mean the Surviving Person in a Business
      ---------------                                               
Combination; provided, however, that, if such Surviving Person is a direct or
             --------  -------                                               
indirect Subsidiary of any other Person, "Principal Party" shall mean the Person
which is the ultimate parent of such Surviving Person and which is not itself a
Subsidiary of another Person.  In the event ultimate control of such Surviving
Person is shared by two or more Persons, "Principal Party" shall mean that
Person which is immediately controlled by such two or more Persons.

     "Purchase Price" with respect to each Right shall mean $14.00, subject to
      --------------                                                          
adjustment as provided herein, and shall be payable in lawful money of the
United 

                                                                           PAGE6
<PAGE>
 
States of America. All references herein to the Purchase Price shall mean the
Purchase Price as in effect at the time in question.

     "Record Date" shall have the meaning set forth in the introductory
      -----------                                                      
paragraph of this Rights Agreement.

     "Redemption Date" shall have the meaning set forth in Section 24(a).
      ---------------                                                    

     "Redemption Price" with respect to each Right shall mean $.01, as such
      ----------------                                                     
amount may from time to time be adjusted in accordance with Section 12.  All
references in this Rights Agreement to the Redemption Price shall mean the
Redemption Price as in effect at the time in question.

     "Registered Common Shares" shall mean Common Shares that are, as of the
      ------------------------                                              
date of consummation of a Business Combination, and have continuously been for
the 12 months immediately preceding such date, registered under Section 12 of
the Exchange Act.

     "Right Certificate" shall mean a certificate evidencing a Right in
      -----------------                                                
substantially the form attached to this Rights Agreement as Exhibit B.

     "Right" shall mean the right to purchase Preferred Shares (or other
      -----                                                             
securities) as provided in this Rights Agreement.

     "Securities Act" shall mean the Securities Act of 1933, as in effect on the
      --------------                                                            
date in question, unless otherwise specifically provided in this Rights
Agreement.

     "Subsidiary" shall mean a Person, at least a majority of the total
      ----------                                                       
outstanding voting power (being the power under ordinary circumstances (and not
merely upon the happening of a contingency) to vote in the election of directors
of such Person (if such Person is a corporation) or to participate in the
management and control of such Person (if such Person is not a corporation)) of
which is owned, directly or indirectly, by another Person or by one or more
other subsidiaries of such other Person or by such other Person or by one or
more other Subsidiaries of such other Person.

     "Surviving Person" shall mean (a) the Person which is the continuing or
      ----------------                                                      
surviving Person in a consolidation or merger specified in Section 11(c)(i)(A)
or 11(c)(i)(B) or (b) the Person to which the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred
or disposed of in a transaction specified in Section 11(c)(i)(C); provided,
                                                                  -------- 
however, that if the Major Part of the assets of the Company and its
-------                                                             
subsidiaries is sold, leased, exchanged or otherwise transferred or disposed of
in one or more related transactions specified in Section 11(c)(i)(C) to more
than one Person, the "Surviving Person" in such case shall 

                                                                           PAGE7
<PAGE>
 
mean the Person that acquired assets of the Company and/or its Subsidiaries with
the greatest fair market value in such transaction or transactions.

     "Trading Day" shall mean a day on which the principal national securities
      -----------                                                             
exchange (or principal recognized foreign stock exchange, as the case may be) on
which any securities or Rights, as the case may be, are listed or admitted to
trading is open for the transaction of business or, if the securities or Rights
in question are not listed or admitted to trading on any national securities
exchange (or recognized foreign stock exchange, as the case may be), a Business
Day.

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 prior to the Distribution Date shall
also be the holders of the Common Stock) in accordance with the terms and
conditions of this Rights Agreement , and the Rights Agent hereby accepts such
appointment.  The Company may from time to time appoint one or more co-Rights
Agents as it may deem necessary or desirable (the term "Rights Agent" being used
in this Rights Agreement to refer, collectively, to the Rights Agent together
with any such co-Rights Agents).  In the event the Company appoints one or more
co-Rights Agents, the respective duties of the Rights Agent and any co-Rights
Agents shall be as the Company shall determine.

SECTION 3.  ISSUE OF RIGHTS AND RIGHT CERTIFICATES

     (a) One Right shall be associated with each Common Share outstanding on the
Record Date, each additional Common Share that shall become outstanding between
the Record Date and the earliest of the Distribution Date, the Redemption Date
and the Expiration Date and each additional Common Share with which Rights are
issued after the Distribution Date but prior to the earlier of the Redemption
Date and the Expiration Date as provided in Section 23; provided, however, that
                                                        --------  -------      
if the number of outstanding Rights are combined into a smaller number of
outstanding Rights pursuant to Section 12(a), the appropriate fractional Right
determined pursuant to such Section shall thereafter be associated with each
such Common Share.

     (b) Until the earlier of (i) the Close of Business on the tenth Business
Day after the Date that the Company learns that a Person has become an Acquiring
Person and (ii) the Close of Business on such date, if any, as may be designated
by the Company's Board of Directors following the commencement of, or first
public disclosure of an intent to commence, a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any of its Subsidiaries, or any Person holding
Common Shares for or pursuant to the terms of any such employee benefit plan)
for outstanding Common Shares, if upon consummation of such tender or exchange
offer such Person could be

                                                                           PAGE8
<PAGE>
 
the Beneficial Owner of 15% or more of the outstanding Common Shares (the
Close of Business on the earlier of such dates being the "Distribution Date"),
(y) the Rights will be evidenced by the certificates for Common Shares
registered in the names of the holders thereof and not by separate Right
Certificates and (z) the Rights, including the right to receive Right
Certificates, will be transferable only in connection with the transfer of
Common Shares.  As soon as practicable after the Distribution Date, the Rights
Agent will send, by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Distribution Date, at the address of such holder shown
on the records of the Company, a Right Certificate evidencing one whole Right
for each Common Share (or for the number of Common Shares with which one whole
Right is then associated if the number of Rights per Common Share held by such
record holder has been adjusted in accordance with the proviso in Section 3(a)).
If the number of Rights associated with each Common Share has been adjusted in
accordance with the proviso in Section 3(a), at the time of distributing the
Right Certificates the Company may make any necessary and appropriate rounding
adjustments so that Right Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Right in accordance
with Section 15(a).  As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.

     (c) With respect to any certificate for Common Shares, until the earliest
of the Distribution Date, the Redemption Date and the Expiration Date, the
Rights associated with the Common Shares represented by any such certificate
shall be evidenced by such certificate alone, the registered holders of the
Common Shares shall also be the registered holders of the associated Rights and
the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.

     (d) Certificates issued for Common Shares after the Record Date (including,
without limitation, upon transfer or exchange of outstanding Common Shares), but
prior to the earliest of the Distribution Date, the Redemption Date and the
Expiration Date, shall have 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 the Rights Agreement dated as of December 7,
     1994, as it may be amended from time to time (the "Rights Agreement"),
     between ProCyte Corporation ("ProCyte") and American Securities Transfer,
     Inc., as Rights Agent (or between ProCyte and any successor Rights Agent
     under the Rights Agreement), the terms of which are hereby incorporated
     herein by reference and a copy of which is on file at the principal
     executive offices of ProCyte. 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 

                                                                           PAGE9
<PAGE>
 
     this certificate. ProCyte will mail to the holder of this certificate a
     copy of the Rights Agreement without charge after receipt of a written
     request therefor. Rights beneficially owned by Acquiring Persons or their
     Affiliates or Associates (as such terms are defined in the Rights
     Agreement) and by any subsequent holder of such Rights are null and void
     and nontransferable.

Notwithstanding the requirements of this paragraph (d), the omission of a legend
shall not affect the enforceability of any part of this Rights Agreement or the
rights of any holder of Rights.

SECTION 4.  FORM OF RIGHT CERTIFICATES

     The Right Certificates (and the form of election to purchase and form of
assignment to be printed on the reverse side thereof) shall be in substantially
the form set forth as Exhibit B and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Rights Agreement, or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage.  Subject to the provisions of Sections 7, 11 and
23, the Right Certificates, whenever issued, shall be dated as of the
Distribution Date, and on their face shall entitle the holders thereof to
purchase such number of Preferred Shares as shall be set forth therein for the
Purchase Price set forth therein.

SECTION 5.  EXECUTION, COUNTERSIGNATURE AND REGISTRATION

     (a) The Right Certificates shall be executed on behalf of the Company by
the Chairman of the Board of Directors, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer or a Vice
President (whether preceded by any additional title) of the Company, either
manually or by facsimile signature, and have affixed thereon the Company's seal
or a facsimile thereof, which shall be attested by the Secretary, an Assistant
Secretary or a Vice President (whether preceded by any additional title,
provided that such Vice President shall not have also executed the Right
Certificates) 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 or obligatory for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such an officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates may
nevertheless be countersigned by the Rights Agent and issued and delivered by
the 

                                                                          PAGE10
<PAGE>
 
Company with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such an officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who, at
the actual date of execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
execution of this Rights Agreement any such person was not such an officer of
the Company.

     (b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office in New York, New York, books for registration
and transfer of the Right Certificates issued under this Rights Agreement.  Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced by each Right Certificate, the
certificate number of each Right Certificate and the date of each Right
Certificate.

SECTION 6.  TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
            LOST, STOLEN, DESTROYED OR MUTILATED RIGHT CERTIFICATES;
            UNCERTIFICATED RIGHTS

     (a) Subject to the provisions of Sections 7(e) and 15, at any time after
the Distribution Date, and at or prior to the Close of Business on the earlier
of the Redemption Date and the Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates representing, in the aggregate, the same
number of Rights as the Right Certificate or Right Certificates surrendered then
represented.  Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in writing delivered to
the Rights Agent and shall surrender the Right Certificate or Right Certificates
to be transferred, split up, combined or exchanged at the principal office of
the Rights Agent; provided, however, that neither the Rights Agent nor the
                  --------  -------                                       
Company shall be obligated to take any action whatsoever with respect to the
transfer of any Right Certificate surrendered for transfer until the registered
holder shall have completed and signed the certification contained in the form
of assignment on the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.  Thereupon the Rights Agent shall, subject to the
provisions of Sections 7(e) and 15, 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.

                                                                          PAGE11
<PAGE>
 
     (b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a valid
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 a new Right
Certificate of like tenor and deliver such new Right Certificate to the Rights
Agent for delivery to the registered owner in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.

     (c) Notwithstanding any other provision of this Rights Agreement, the
Company and the Rights Agent may amend this Rights Agreement to provide for
uncertificated Rights in addition to or in place of Rights evidenced by Right
Certificates.

SECTION 7.  EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS

     (a) Subject to Section 7(e) and except as otherwise provided in this Rights
Agreement (including Section 11), each Right shall entitle the registered holder
thereof, upon exercise thereof as provided in this Rights Agreement, to purchase
for the Purchase Price, at any time after the Distribution Date and at or prior
to the earlier of (i) the Close of Business on December 7, 2004 (the Close of
Business on such date being the "Expiration Date"), and (ii) the Redemption
Date, one one-hundredth (1/100th) of a Preferred Share, subject to adjustment
from time to time as provided in Sections 11 and l2.

     (b) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided in this Rights Agreement) in
whole or in part at any time after the Distribution Date, upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal office of the Rights
Agent in New York, New York, together with payment of the Purchase Price for
each one one-hundredth (1/100th) of a Preferred Share as to which the Rights are
exercised, at or prior to the earlier of (i) the Expiration Date and (ii) the
Redemption Date.

     (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 Preferred Shares to be purchased together with an
amount equal to any applicable transfer tax, in lawful money of the United
States of America, in cash or by certified check or money order payable to the
order of the Company, the Rights Agent shall thereupon (i) either (A) promptly
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent) certificates for the number of
Preferred Shares to be purchased and the 

                                                                          PAGE12
<PAGE>
 
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests or (B) if the Company shall have elected to deposit the Preferred
Shares with a depositary agent under a depositary arrangement, promptly
requisition from the depositary agent depositary receipts representing the
number of one one-hundredths (l/100ths) of a Preferred Share to be purchased (in
which case certificates for the Preferred Shares to be represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company will direct the depositary agent to comply with all such requests,
(ii) when appropriate, promptly requisition from the Company the amount of cash
to be paid in lieu of the issuance of fractional shares in accordance with
Section 15, (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
fewer 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 and delivered to the registered holder of such Right Certificate or
to his or her duly authorized assigns, subject to the provisions of Section 15.

     (e) Notwithstanding anything in this Rights Agreement to the contrary, any
Rights that are at any time beneficially owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.

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

     (g) The Company may temporarily suspend, for a period of time not to exceed
90 calendar days after the Distribution Date, the exercisability of the Rights
in order to prepare and file a registration statement under the Securities Act,
on an appropriate form, with respect to the Preferred Shares purchasable upon
exercise of the Rights and permit such registration statement to become
effective; provided, 
           -------- 

                                                                         PAGE 13
<PAGE>
 
however, that no such suspension shall remain effective after, and the Rights 
-------                                                               
shall without any further action by the Company or any other Person become
exercisable immediately upon, the effectiveness of such registration statement.
Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended and shall
issue a further public announcement at such time as the suspension is no longer
in effect. Notwithstanding any provision in this Rights Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification under the blue sky or securities laws of such
jurisdiction shall not have been obtained or the exercise of the Rights shall
not be permitted under applicable law.

SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES

     All Right Certificates surrendered or presented for the purpose of
exercise, transfer, split-up, combination or exchange shall, and any Right
Certificate surrendered or presented for any purpose that represents Rights that
have become null and void and nontransferable pursuant to Section 7(e) shall, if
surrendered or presented to the Company or to any of its agents, be delivered to
the Rights Agent for cancellation or in canceled form, or, if surrendered or
presented to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Rights Agreement.  The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any Right Certificate purchased or acquired by the Company.  The Rights Agent
shall deliver all canceled Right Certificates to the Company, or shall, at the
Company's written request, destroy such canceled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.

SECTION 9.  RESERVATION AND AVAILABILITY OF PREFERRED SHARES

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

     (b) In the event that there shall not be sufficient Preferred Shares issued
but not outstanding, or authorized but unissued, to permit the exercise or
exchange of Rights in accordance with Section 11, the Company covenants and
agrees that it will take all such action as may be necessary to authorize
additional Preferred Shares for issuance upon the exercise or exchange of Rights
pursuant to Section 11.

                                                                          PAGE14
<PAGE>
 
     (c) 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 or
exchange 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.

     (d) So long as the Preferred Shares issuable upon the exercise or exchange
of Rights are to be listed on any national securities exchange, the Company
covenants and agrees to use its best efforts to cause, from and after such time
as the Rights become exercisable or exchangeable, all Preferred Shares reserved
for such issuance to be listed on such securities exchange upon official notice
of issuance upon such exercise or exchange.

     (e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of Right Certificates or of any
Preferred Shares upon the exercise or exchange of Rights.  The Company shall
not, however, be required to pay any transfer tax that may be payable in respect
of any transfer or delivery of Right Certificates to a Person other than, or in
respect of the issuance or delivery of certificates for the Preferred Shares in
a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or exchange or to issue or deliver
any certificates for Preferred Shares upon the exercise or exchange 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 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 or exchange 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 on which the Right Certificate
evidencing such Rights was duly surrendered and payment of any Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
                                              --------  -------             
date of such surrender and payment is a date on 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.

                                                                          PAGE15
<PAGE>
 
SECTION 11.  ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING PERSON; EXCHANGE
             OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS

     (a) Upon a Person becoming an Acquiring Person, proper provision shall be
made so that each holder of a Right, except as provided in Section 7(e), shall
thereafter have a right to receive, upon exercise thereof for the Purchase Price
in accordance with the terms of this Rights Agreement, such number of one one-
hundredths (1/100ths) of a Preferred Share as shall equal the result obtained by
multiplying the Purchase Price by a fraction, the numerator of which is the
number of one one-hundredths (1/100ths) of a Preferred Share for which a Right
is then exercisable and the denominator of which is 50% of the Market Value of
the Common Shares on the date on which a Person becomes an Acquiring Person.  As
soon as practicable after a Person becomes an Acquiring Person (provided the
Company shall not have elected to make the exchange permitted by Section
11(b)(i) for all outstanding Rights), the Company covenants and agrees to use
its best efforts to:

            (i)   prepare and file a registration statement under the Securities
     Act, on an appropriate form, with respect to the Preferred Shares
     purchasable upon exercise of the Rights;

            (ii)  cause such registration statement to become effective as soon
     as practicable after such filing;

            (iii) cause such registration statement to remain effective (with a
     prospectus at all times meeting the requirements of the Securities Act)
     until the Expiration Date; and

            (iv)  qualify or register the Preferred Shares purchasable upon
     exercise of the Rights under the blue sky or securities laws of such
     jurisdictions as may be necessary or appropriate.

     (b)   (i)    The Company's Board of Directors may, at its option, at any
     time after a Person becomes an Acquiring Person, mandatorily exchange all
     or part of the then-outstanding and exercisable Rights (which shall not
     include Rights that shall have become null and void and nontransferable
     pursuant to the provisions of Section 7(e)) for consideration per Right
     consisting of one-half of the securities that would be issuable at such
     time upon the exercise of one Right in accordance with Section 11(a) (the
     consideration issuable per Right pursuant to this Section 11(b)(i) being
     the "Exchange Consideration"). The Company's Board of Directors may, at its
     option, issue, in substitution for Preferred Shares, Common Shares in an
     amount per Preferred Share equal to the Formula Number if there are
     sufficient Common Shares issued but not outstanding or authorized but
     unissued. If the Company's Board of Directors

                                                                         PAGE 16
<PAGE>
 
     elects to exchange all the Rights for the Exchange Consideration pursuant
     to this Section 11(b)(i) prior to the physical distribution of the Right
     Certificates, the Corporation may distribute the Exchange Consideration in
     lieu of distributing Right Certificates, in which case for purposes of this
     Rights Agreement holders of Rights shall be deemed to have simultaneously
     received and surrendered for exchange Right Certificates on the date of
     such distribution.

            (ii) Any action of the Company's Board of Directors ordering the
     exchange of any Rights pursuant to Section 11(b)(i) shall be irrevocable
     and, immediately upon the taking of such action and without any further
     action and without any notice, the right to exercise any such Right
     pursuant to Section 11(a) shall terminate and the only right thereafter of
     a holder of such Right shall be to receive the Exchange Consideration in
     exchange for each such Right held by such holder or, if the Exchange
     Consideration shall not have been paid, to exercise any such Right pursuant
     to Section 11(c)(i).  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 holders of
     such Rights at their last addresses as they appear on the registry books of
     the Rights Agent.  Any notice that is mailed in the manner provided in this
     Rights Agreement 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 Rights for the Exchange Consideration will be effected
     and, in the event of any partial exchange, the number of Rights that will
     be exchanged.  Any partial exchange shall be effected pro rata based on the
     number of Rights (other than Rights that shall have become null and void
     and nontransferable pursuant to the provisions of Section 7(e)) held by
     each holder of Rights.

     (c)   (i)   In the event that, following a Distribution Date, directly or
     indirectly, any transactions specified in the following clause (A), (B) or
     (C) of this Section 11(c)(i) (each such transaction being a "Business
     Combination") shall be consummated:

            (A)  the Company shall consolidate with, or merge with and into, any
     other Person;

            (B)  any Person shall merge with and into the Company and, in
     connection with such merger, all or part of the Common Shares shall be
     changed into or exchanged for capital stock or other securities of the
     Company or of any other Person or cash or any other property; or

                                                                          PAGE17
<PAGE>
 
            (C) the Company shall sell, lease, exchange or otherwise transfer or
     dispose of (or one or more of its Subsidiaries shall sell, lease, exchange
     or otherwise transfer or dispose of), in one or more transactions, the
     Major Part of the assets of the Company and its Subsidiaries (taken as a
     whole) to any other Person or Persons,

then, in each such case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, the securities specified below (or, at such
holder's option, if any Business Combination is consummated at any time after a
Person becomes an Acquiring Person, the securities specified in Section 11(a)):

            (1)  If the Principal Party in such Business Combination has
     Registered Common Shares outstanding, each Right shall thereafter represent
     the right to receive, upon the exercise thereof for the Purchase Price in
     accordance with the terms of this Rights Agreement, such number of
     Registered Common Shares of such Principal Party, free and clear of all
     liens, encumbrances or other adverse claims, as shall have an aggregate
     Market Value equal to the result obtained by multiplying the Purchase Price
     by two; or

            (2)  If the Principal Party in such Business Combination does not
     have Registered Common Shares outstanding, each Right shall thereafter
     represent the right to receive, upon the exercise thereof for the Purchase
     Price in accordance with the terms of this Rights Agreement, at the
     election of the holder of such Right at the time of the exercise thereof,
     any of:

                 (x) such number of Common Shares of the Surviving Person in
          such Business Combination as shall have an aggregate Book Value
          immediately after giving effect to such Business Combination equal to
          the result obtained by multiplying the Purchase Price by two;

                 (y) such number of Common Shares of the Principal Party in such
          Business Combination (if the Principal Party is not also the Surviving
          Person in such Business Combination) as shall have an aggregate Book
          Value immediately after giving effect to such Business Combination
          equal to the result obtained by multiplying the Purchase Price by two;
          or

                                                                          PAGE18
<PAGE>
 
                 (z) if the Principal Party in such Business Combination is an
          Affiliate of one or more Persons which has Registered Common Shares
          outstanding, such number of Registered Common Shares of whichever of
          such Affiliates of the Principal Party has Registered Common Shares
          with the greatest aggregate Market Value on the date of consummation
          of such Business Combination as shall have an aggregate Market Value
          on the date of such Business Combination equal to the result obtained
          by multiplying the Purchase Price by two.

            (ii) The Company shall not consummate any Business Combination
     unless each issuer of Common Shares for which Rights may be exercised, as
     set forth in this Section 11(c), shall have sufficient authorized Common
     Shares that have not been issued or reserved for issuance (and that shall,
     when issued upon exercise thereof in accordance with this Rights Agreement,
     be validly issued, fully paid and nonassessable and free of preemptive
     rights, rights of first refusal or any other restrictions or limitations on
     the transfer or ownership thereof) to permit the exercise in full of the
     Rights in accordance with this Section 11(c) and unless prior thereto:

            (A)  a registration statement under the Securities Act, on an
     appropriate form, with respect to the Rights and the Common Shares of such
     issuer purchasable upon exercise of the Rights shall be effective under the
     Securities Act; and

            (B)  the Company and each such issuer shall have:

            (1)  executed and delivered to the Rights Agent a supplemental
     agreement providing for the assumption by such issuer of the obligations
     set forth in this Section 11(c) (including the obligation of such issuer to
     issue Common Shares upon the exercise of Rights in accordance with the
     terms set forth in Sections 11(c)(i) and 11(c)(iii)) and further providing
     that such issuer, at its own expense, will use its best efforts to:

            (x)  cause a registration statement under the Securities Act, on an
          appropriate form, with respect to the Rights and the Common Shares of
          such issuer purchasable upon exercise of the Rights to remain
          effective (with a prospectus at all times meeting the requirements of
          the Securities Act) until the Expiration Date;

            (y)  qualify or register the Rights and the Common Shares of such
          issuer purchasable upon exercise of the Rights

                                                                          PAGE19
<PAGE>
 
          under the blue sky or securities laws of such jurisdictions as may be
          necessary or appropriate; and

                 (z) list the Rights and the Common Shares of such issuer
          purchasable upon exercise of the Rights on each national securities
          exchange on which the Common Shares were listed prior to the
          consummation of the Business Combination or, if the Common Shares were
          not listed on a national securities exchange prior to the consummation
          of the Business Combination, on a national securities exchange;

          (2) furnished to the Rights Agent a written opinion of independent
     counsel stating that such supplemental agreement is a valid, binding and
     enforceable agreement of such issuer; and

          (3) filed with the Rights Agent a certificate of a nationally
     recognized firm of independent accountants setting forth the number of
     Common Shares of such issuer that may be purchased upon the exercise of
     each Right after the consummation of such Business Combination.

     (iii)   After consummation of any Business Combination and subject to the
provisions of Section 11(c)(ii), (A) each issuer of Common Shares for which
Rights may be exercised as set forth in this Section 11(c) shall be liable for,
and shall assume, by virtue of such Business Combination, all the obligations
and duties of the Company pursuant to this Rights Agreement, (B) the term
"Company" shall thereafter be deemed to refer to such issuer, (C) each such
issuer shall take such steps in connection with such consummation as may be
necessary to ensure that the provisions of this Rights Agreement (including the
provisions of Sections 11(a) and 11(b)) shall thereafter be applicable, as
nearly as reasonably may be, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights, and (D) the number of Common Shares
of each such issuer thereafter 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 of Sections 11(a) and 12(a), and the
provisions of Sections 7, 9 and 10 with respect to the Preferred Shares shall
apply, as nearly as reasonably may be, on like terms to any such Common Shares.

SECTION 12.  CERTAIN ADJUSTMENTS

     (a) To preserve the actual or potential economic value of the Rights, if at
any time after the date of this Rights Agreement there shall be any change in
the Common Shares or the Preferred Shares, whether by reason of stock dividends,
stock splits, recapitalizations, mergers, consolidations, combinations or
exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other
similar changes in

                                                                          PAGE20
<PAGE>
 
capitalization, any distribution or issuance of cash, assets, evidences of
indebtedness or subscription rights, options or warrants to holders of Common
Shares or Preferred Shares, as the case may be (other than the Rights or regular
quarterly cash dividends), or otherwise, then, in each such event the Company's
Board of Directors shall make such appropriate adjustments in the number of
Preferred Shares (or the number and kind of other securities) issuable upon
exercise of each Right, the Purchase Price and Redemption Price in effect at
such time and the number of Rights outstanding at such time (including the
number of Rights or fractional Rights associated with each Common Share) such
that following such adjustment such event shall not have had the effect of
reducing or limiting the benefits the holders of the Rights would have had
absent such event.

     (b) If, as a result of an adjustment made pursuant to Section 12(a), the
holder of any Right thereafter exercised shall become entitled to receive any
securities other than Preferred Shares, then the number of such securities so
receivable upon exercise of any Right thereafter shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions of Sections 11(a) and 12(a), and the provisions of Sections 7,
9 and 10 with respect to the Preferred Shares shall apply, as nearly as
reasonably may be, on like terms to any such other securities.

     (c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities relating
to a Right shall evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time to time under this
Rights Agreement upon exercise of the Rights, all subject to further adjustment
as provided in this Rights Agreement.

     (d) Irrespective of any adjustment or change in the Purchase Price or the
number of Preferred Shares or number or kind of other securities issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the terms that were expressed in the initial
Right Certificates issued under this Rights Agreement.

     (e) In any case in which action taken pursuant to Section 12(a) requires
that an adjustment 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 the Preferred Shares
and/or other securities, if any, issuable upon such exercise over and above the
Preferred Shares and/or other securities, if any, issuable before giving effect
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 securities upon the occurrence of the event requiring
such adjustment.

                                                                          PAGE21
<PAGE>
 
SECTION 13.  CERTIFICATE OF ADJUSTMENT

     Whenever an adjustment is made as provided in Section 11 or 12, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Preferred Shares a
copy of such certificate, and (c) mail a brief summary thereof to each holder of
a Right Certificate (or, prior to the Distribution Date, of the Common Shares)
in accordance with Section 25.  The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.

SECTION 14.  ADDITIONAL COVENANTS

     (a) Notwithstanding any other provision of this Rights Agreement, no
adjustment to the number of Preferred Shares (or fractions of a share) or other
securities for which a Right is exercisable or the number of Rights outstanding
or associated with each Common Share or any similar or other adjustment shall be
made or be effective if such adjustment would have the effect of reducing or
limiting the benefits the holders of the Rights would have had absent such
adjustment, including, without limitation, the benefits under Sections 11 and
12, unless the terms of this Rights Agreement are amended so as to preserve such
benefits.

     (b) The Company covenants and agrees that, after the Distribution Date,
except as permitted by Section 26, it will not take (or permit any Subsidiary of
the Company to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will reduce or otherwise limit the
benefits the holders of the Rights would have had absent such action, including,
without limitation, the benefits under Sections 11 and 12.  Any action taken by
the Company during any period after any Person becomes an Acquiring Person but
prior to the Distribution Date shall be null and void unless such action could
be taken under this Section 14(b) from and after the Distribution Date.

SECTION 15.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES

     (a) The Company may, but shall not be required to, issue fractions of
Rights or distribute Right Certificates that evidence fractional Rights.  In
lieu of such fractional Rights, the Company may pay 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 purposes of this Section 15(a), the
current market value of a whole Right shall be the closing price of the Rights
(as determined pursuant to the second and third sentences of the definition of
Market Value contained in Section 1) for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise issuable.

                                                                         Page 22
<PAGE>
 
     (b) The Company may, but shall not be required to, issue fractions of
Preferred Shares upon exercise of the Rights or distribute certificates that
evidence fractional Preferred Shares.  In lieu of fractional Preferred Shares,
the Company may elect to (i) utilize a depository arrangement as provided by the
terms of the Preferred Shares or (ii) in the case of a fraction of a Preferred
Share (other than one one-hundredth (1/100th) of a Preferred Share or any
integral multiple thereof), pay to the registered holders of Right Certificates
at the time such Rights are exercised as provided in this Rights Agreement an
amount in cash equal to the same fraction of the current market value of one
Preferred Share, if any are outstanding and publicly traded (or the Formula
Number times the current market value of one Common Share if the Preferred
Shares are not outstanding and publicly traded).  For purposes of this Section
15(b), the current Market Value of a Preferred Share (or Common Share) shall be
the closing price of a Preferred Share (or Common Share) (as determined pursuant
to the second and third sentences of the definition of Market Value contained in
Section 1) for the Trading Day immediately prior to the date of such exercise.
If, as a result of an adjustment made pursuant to Section 12(a), the holder of
any Right thereafter exercised shall become entitled to receive any securities
other than Preferred Shares, the provisions of this Section 15(b) shall apply,
as nearly as reasonably may be, on like terms to such other securities.

     (c) The Company may, but shall not be required to, issue fractions of
Common Shares upon exchange of Rights pursuant to Section 11(b), or to
distribute certificates that evidence fractional Common Shares.  In lieu of such
fractional Common Shares, the Company may pay to the registered holders of 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 one Common Share as of the date on which a Person became an Acquiring
Person.

     (d) The holder of Rights by the acceptance of the Rights expressly waives
his or her right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as provided in this Section 15.

SECTION 16.  RIGHTS OF ACTION

     (a) All rights of action in respect of this Rights Agreement are vested in
the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares), and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
Common Shares) may, in his or her own behalf and for his or her own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his or her right to
exercise the Rights evidenced by such Right Certificate in the manner

                                                                         Page 23
<PAGE>
 
provided in such Right Certificate and in the Rights 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 Rights Agreement and shall be entitled to
specific performance of the obligations of any Person under, and injunctive
relief against actual or threatened violations of the obligations of any Person
subject to, this Rights Agreement.

     (b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred in such action.

SECTION 17.  TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT CERTIFICATES

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

     (b) After the Distribution Date, the Right Certificates will be
transferable, subject to Section 7(e), 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.

     (c) The Company and the Rights Agent may deem and treat the Person in whose
name a Right Certificate (or, prior to the Distribution Date, the associated
Common Shares certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated certificate for Common
Shares 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 18.  RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER

     No holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company that may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained in this Rights Agreement or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company, including, without limitation, any right to vote for
the election of directors or on any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting 

                                                                         Page 24
<PAGE>
 
shareholders, or to receive dividends or other distributions or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions of this
Rights Agreement .

SECTION 19.  CONCERNING THE RIGHTS AGENT

     (a) The Company agrees to pay to the Rights Agent reasonable and customary
compensation for all services rendered by it under this Rights Agreement and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in administering and executing
this Rights Agreement and exercising and performing its duties under this Rights
Agreement.

     (b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Rights Agreement in reliance on any Right Certificate or
certificate for the 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.

SECTION 20.  MERGER OR CONSOLIDATION OR CHANGE OF RIGHTS AGENT

     (a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Rights
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Rights Agreement; provided, however, that
                                                     --------  -------      
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 22.  In case, at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and, in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and, in all such cases, such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.

                                                                         Page 25
<PAGE>
 
     (b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and, in case at that time any
of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its
changed name; and, in all such cases, such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.

SECTION 21.  DUTIES OF RIGHTS AGENT

     The Rights Agent undertakes the duties and obligations imposed by this
Rights Agreement upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates (or, prior to the Distribution
Date, of the Common Shares), 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, suffered or omitted by it in good faith and in accordance with such
opinion.

     (b) Whenever in the performance of its duties under this Rights Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by the Company prior to taking, refraining from taking or
suffering any action under this Rights Agreement, such fact or matter (unless
other evidence in respect thereof be specifically prescribed in this Rights
Agreement) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board of Directors, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, a Vice President (whether preceded by any additional title),
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 Rights
Agreement in reliance upon such certificate.

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

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

                                                                         Page 26
<PAGE>
 
     (e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution of this Rights Agreement  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 Rights Agreement or in
any Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or 12 or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act under this Rights Agreement be deemed to
make any representation or warranty as to the authorization or reservation of
any Preferred Shares or Common Shares to be issued pursuant to this Rights
Agreement or any Right Certificate or as to whether any Preferred Shares or
Common Shares will, when so 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 performance by the Rights Agent of
the provisions of this Rights Agreement.

     (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties under this Rights
Agreement from any one of the Chairman of the Board of Directors, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, a Vice President (whether preceded by any additional title),
the Secretary or the Treasurer of the Company in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with the instructions of any such officer.

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

                                                                         Page 27
<PAGE>
 
or for any loss to the Company resulting from any such act, default, neglect or
misconduct provided reasonable care was exercised in the selection and continued
employment thereof.

SECTION 22.  CHANGE OF RIGHTS AGENT

     The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Rights Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Shares and the
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates (or, prior to the Distribution Date, of the Common Shares) 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 and the Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates (or, prior to the Distribution Date, of
the Common Shares) 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
(or, prior to the Distribution Date, of the Common Shares) (who shall, with such
notice, submit his or her Right Certificate or, prior to the Distribution Date,
the certificate representing his or her Common Shares, for inspection by the
Company), then the registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares) may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent.  Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation in good standing organized and doing business under the laws of the
United States or of the state of New York (or of any other state of the United
States so long as such corporation is authorized to conduct a stock transfer or
corporate trust business in the state of New York) and having a principal office
in the state of New York, which is authorized under such laws to exercise stock
transfer or corporate trust powers and is subject to supervision or examination
by federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000.
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; provided, however, that the
                                             -----------------          
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it under this Rights Agreement, 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 and the 

                                                                         Page 28
<PAGE>
 
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates (or, prior to the Distribution Date, of the Common
Shares). Failure to give any notice provided for in this Section 22, 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 23.  ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT CERTIFICATES

     Notwithstanding any of the provisions of this Rights Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change made in accordance with the
provisions of this Rights Agreement.  In addition, in connection with the
issuance or sale of Common Shares following the Distribution Date and prior to
the earlier of the Redemption Date and the Expiration Date, the Company (a)
shall issue, with respect to Common Shares so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities, notes or debentures issued by
the Company, and (b) may issue, in any other case, if deemed necessary or
appropriate by the Company's Board of Directors, Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be issued if, and to
--------  -------                                                               
the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued and (ii) no
such Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.

SECTION 24.  REDEMPTION AND TERMINATION

     (a) The Company's Board of Directors may, at its option, at any time prior
to the earlier of (i) the Close of Business on the tenth Business Day following
the date that the Company learns that a Person has become an Acquiring Person
and (ii) the Expiration Date, order the redemption of all, but not fewer than
all, the then-outstanding Rights at the Redemption Price (the date of such
redemption being the "Redemption Date"), and the Company, at its option, may pay
the Redemption Price either in cash or Common Shares or other securities of the
Company deemed by the Company's Board of Directors, in the exercise of its sole
discretion, to be at least equivalent in value to the Redemption Price;
provided, however, that in addition to any other limitations contained in this
--------  -------
Rights Agreement on the right to redeem outstanding Rights (including the
occurrence of any event or the expiration of any period after which the Rights
may no longer be redeemed), for the 120-day period after any date of a change
(resulting from a proxy or consent solicitation) in a majority 

                                                                         Page 29
<PAGE>
 
of the Company's Board of Directors in office at the commencement of such
solicitation, the Rights may only be redeemed if (A) there are directors then in
office who were in office at the commencement of such solicitation and (B) the
Company's Board of Directors, with the concurrence of a majority of such
directors then in office, determines that such redemption is, in its judgment,
in the best interests of the Company and its shareholders.

     (b) Immediately upon the action of the Company's Board of Directors
ordering the redemption of the Rights, 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.  Within 10 Business Days after the action of the Company's Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then-outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares.  Each such notice of
redemption will state the method by which payment of the Redemption Price will
be made.  The notice, if mailed in the manner provided in this Rights Agreement,
shall be conclusively presumed to have been duly given, whether or not the
holder of Rights receives such notice.  In any case, failure to give such notice
by mail, or any defect in the notice, to any particular holder of Rights shall
not affect the sufficiency of the notice to other holders of Rights.

SECTION 25.  NOTICES

     Notices or demands authorized by this Rights Agreement to be given or made
by the Rights Agent or by the holder of a Right Certificate (or, prior to the
Distribution Date, of the Common Shares) 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:

          ProCyte Corporation
          12040 115th Avenue N.E.
          Kirkland, WA  98034-6900
          Attention:  President

Subject to the provisions of Section 22, notices or demands authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage

                                                                         Page 30
<PAGE>
 
prepaid, addressed (until another address is filed in writing with the Company)
as follows:

          American Securities Transfer, Inc.
          938 Quail Street, Suite 101
          Lakewood, CO  80215

Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate (or, prior
to the Distribution Date, of the Common Shares) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at
such holder's address as shown on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares.

SECTION 26.  SUPPLEMENTS AND AMENDMENTS

     At any time prior to the Distribution Date and subject to the last sentence
of this Section 26, the Company may, and the Rights Agent shall if the Company
so directs, supplement or amend any provision of this Rights Agreement
(including, without limitation, the date on which the Distribution Date shall
occur, the time during which the Rights may be redeemed pursuant to Section 24
or any provision of the Statement of Designation of Rights and Preferences)
without the approval of any holder of the Rights.  From and after the
Distribution Date and subject to applicable law, the Company may, and the Rights
Agent shall if the Company so directs, amend this Rights Agreement without the
approval of any holder of Right Certificates to (a) cure any ambiguity or
correct or supplement any provision contained in this Rights Agreement that may
be defective or inconsistent with any other provision of this Rights Agreement
or (b) make any other provisions in regard to matters or questions arising under
this Rights Agreement  that the Company may deem necessary or desirable and that
shall not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person).  Any supplement or amendment adopted during any period after any Person
has become an Acquiring Person but prior to the Distribution Date shall be null
and void unless such supplement or amendment could have been adopted under the
prior sentence from and after the Distribution Date.  Any supplement or
amendment to this Rights Agreement duly approved by the Company shall become
effective immediately upon execution by the Company, whether or not also
executed by the Rights Agent.  Notwithstanding anything contained in this Rights
Agreement to the contrary, during the 120-day period after any date of a change
(resulting from a proxy or consent solicitation) in a majority of the Company's
Board of Directors in office at the commencement of such solicitation, this
Rights Agreement may be supplemented or amended only if (i) there are directors
then in office who were in office at the commencement of such solicitation and
(ii) the Company's Board of 

                                                                         Page 31
<PAGE>
 
Directors, with the concurrence of a majority of such directors then in office,
determines that such supplement or amendment is, in its judgment, in the best
interests of the Company and its shareholders and, after the Distribution Date,
the holders of the Rights. In addition, notwithstanding anything to the contrary
contained in this Rights Agreement, no supplement or amendment to this Rights
Agreement shall be made that (x) reduces the Redemption Price (except as
required by Section 12(a)), (y) provides for an earlier Expiration Date, or (z)
changes the last two sentences in the definition of Acquiring Person contained
in Section 1.

SECTION 27.  SUCCESSORS

     All the covenants and provisions of this Rights 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 under this Rights Agreement.

SECTION 28.  BENEFITS OF THIS RIGHTS AGREEMENT; DETERMINATIONS AND ACTIONS BY
             THE COMPANY'S BOARD OF DIRECTORS

     (a) Nothing in this Rights 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 Distribution Date, of the Common
Shares) any legal or equitable right, remedy or claim under this Rights
Agreement; provided, however, that this Rights Agreement shall be for the sole
           --------  -------                                                  
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, of the
Common Shares).

     (b) Except as explicitly otherwise provided in this Rights Agreement, the
Company's Board of Directors shall have the exclusive power and authority to
administer this Rights Agreement and to exercise all rights and powers
specifically granted to the Company's Board of Directors or to the Company, or
as may be necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Rights Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Rights Agreement and a determination of whether there is
an Acquiring Person).

SECTION 29.  SEVERABILITY

     If any term, provision, covenant or restriction of this Rights 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

                                                                         Page 32
<PAGE>
 
this Rights Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated.

SECTION 30.  GOVERNING LAW

     This Rights Agreement and each Right Certificate issued under this Rights
Agreement shall be deemed to be a contract made under the laws of the state of
Washington and for all purposes shall be governed by and construed in accordance
with the law of Washington applicable to contracts to be made and performed
entirely within Washington.

SECTION 31.  COUNTERPARTS; EFFECTIVENESS

     This Rights Agreement may be executed in any number of counterparts, each
of which shall for all purposes be deemed to be an original, and all of which
shall together constitute but one and the same instrument.  This Rights
Agreement shall be effective as of the Close of Business on the date of this
Rights Agreement first set forth above.

SECTION 32.  DESCRIPTIVE HEADINGS

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

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

                           PROCYTE CORPORATION


                           By:  /s/ Joseph Ashley
                               --------------------------------------
                               Joseph Ashley
                               Its:  President and Chief Executive Officer

                           AMERICAN SECURITIES TRANSFER, INC., as Rights Agent


                           By:  [signature illegible]
                               --------------------------------------
                               Its:  V.P. Operations
                                     --------------------------------

                                                                         Page 33
<PAGE>
 
                                                                       EXHIBIT A
                                                                       TO RIGHTS
                                                                       AGREEMENT



                              PROCYTE CORPORATION

                            STATEMENT OF DESIGNATION
                     OF RIGHTS AND PREFERENCES OF SERIES A
                    PARTICIPATING CUMULATIVE PREFERRED STOCK

                     (Pursuant to Section 23B.06.020 of the
                      Washington Business Corporation Act)

                   __________________________________________

     PROCYTE CORPORATION, a Washington corporation (the "Corporation"), hereby
states that at a meeting of the Board of Directors of the Corporation duly
convened and held on December 7, 1994, the following resolution was duly
adopted:

     RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board of Directors of the Corporation (the "Board of Directors") in
accordance with the provisions of the Articles of Incorporation of the
Corporation, the Board of Directors hereby creates a series of Series A
Participating Cumulative Preferred Stock, par value $.01 per share, of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences and limitations thereof (in addition to the
rights and preferences set forth in the Articles of Incorporation of the
Corporation that are applicable to the Preferred stock of all series) as
follows:

SECTION 1.  DESIGNATION AND NUMBER OF SHARES

     The shares of such series shall be designated as "Series A Participating
Cumulative Preferred Stock" (the "Series A Preferred Stock"), par value $.01 per
share.  The number of shares initially constituting the Series A Preferred Stock
shall be 300,000.

SECTION 2.  DIVIDENDS OR DISTRIBUTIONS

     (a) Subject to the prior and superior rights of the holders of shares of
any other series of Preferred Stock or other class of capital stock of the
Corporation ranking prior and superior to the shares of Series A Preferred Stock
with respect to dividends, the holders of shares of the Series A Preferred Stock
shall be entitled to receive, when, as, and if declared by the Board of
Directors, out of the assets of the Corporation legally available therefor, (1)
quarterly dividends payable in cash on the last day of each fiscal quarter in
each year, or such other dates as the Corporation's Board of Directors shall
approve (each such date being referred to in this Statement of 

                                                                          Page 1
<PAGE>
 
Designation of Rights and Preferences as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or a fraction of a share of Series A Preferred Stock, in the amount
of $.01 per whole share (rounded to the nearest cent) less the amount of all
cash dividends declared on the Series A Preferred Stock pursuant to the
following clause (2) 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
(the total of which shall not, in any event, be less than zero) and (2)
dividends payable in cash on the payment date for each cash dividend declared on
the Common Stock in an amount per whole share (rounded to the nearest cent)
equal to the Formula Number (as hereinafter defined) then in effect times the
cash dividends then to be paid on each share of Common Stock. In addition, if
the Corporation shall pay any dividend or make any distribution on the Common
Stock payable in assets, securities or other forms of noncash consideration
(other than dividends or distributions solely in shares of Common Stock), then,
in each such case, the Corporation shall simultaneously pay or make on each
outstanding whole share of Series A Preferred Stock a dividend or distribution
in like kind equal to the Formula Number then in effect times such dividend or
distribution on each share of the Common Stock. As used in this Statement of
Designation of Rights and Preferences and in the Rights Agreement, the "Formula
Number" shall be 100; provided, however, that if at any time after December 8,
                      --------  ------- 
1994, the Corporation shall (i) declare or pay any dividend on the Common Stock
payable in shares of Common Stock or make any distribution on the Common Stock
in shares of Common Stock, (ii) subdivide (by a stock split or otherwise) the
outstanding shares of Common Stock into a larger number of shares of Common
Stock, or (iii) combine (by a reverse stock split or otherwise) the outstanding
shares of Common Stock into a smaller number of shares of Common Stock, then in
each such event the Formula Number shall be adjusted to a number determined by
multiplying the Formula Number in effect immediately prior to such event by a
fraction, the numerator of which is the number of shares of Common Stock that
are outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that are outstanding immediately prior to such
event (and rounding the result to the nearest whole number); and provided
                                                                 -------- 
further, that if at any time after December 8, 1994, the Corporation shall issue
-------
any shares of its capital stock in a merger, reclassification or change of the
outstanding shares of Common Stock, then in each such event the Formula Number
shall be appropriately adjusted to reflect such merger, reclassification or
change so that each share of Preferred Stock continues to be the economic
equivalent of a Formula Number of shares of Common Stock prior to such merger,
reclassification or change.

     (b) The Corporation shall declare a dividend or distribution on the Series
A Preferred Stock as provided in Section 2(a) immediately prior to or at the
same time it declares a dividend or distribution on the Common Stock (other than
a dividend or distribution solely in shares of Common Stock); provided, however,
                                                              --------  ------- 
that in the event 

                                                                          Page 2
<PAGE>
 
no dividend or distribution (other than a dividend or distribution in shares of
Common Stock) 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 $.01 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date. The Corporation's Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a dividend or distribution declared thereon, which record date shall be
the same as the record date for any corresponding dividend or distribution on
the Common Stock.

     (c) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Preferred Stock from and after the Quarterly Dividend Payment Date
next preceding the date of original issue of such shares of Series A Preferred
Stock; provided, however, that dividends on such shares that are originally
       --------  -------                                                   
issued after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and on or
prior to the next succeeding Quarterly Dividend Payment Date shall begin to
accrue and be cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the foregoing, dividends on shares of Series A Preferred Stock
that are originally issued prior to the record date for the first Quarterly
Dividend Payment shall be calculated as if cumulative from and after the last
day of the fiscal quarter (or such other Quarterly Dividend Payment Date as the
Corporation's Board of Directors shall approve) next preceding the date of
original issuance of such shares.  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.

     (d) So long as any shares of Series A Preferred Stock are outstanding, no
dividends or other distributions shall be declared, paid or distributed, or set
aside for payment or distribution, on the Common Stock unless, in each case, the
dividend required by this Section 2 to be declared on the Series A Preferred
Stock shall have been declared.

     (e) The holders of shares of Series A Preferred Stock shall not be entitled
to receive any dividends or other distributions except as provided in this
Statement of Designation of Rights and Preferences.

SECTION 3.  VOTING RIGHTS

     The holders of shares of Series A Preferred Stock shall have the following
voting rights:

                                                                          Page 3
<PAGE>
 
     (a) Each holder of Series A Preferred Stock shall be entitled to a number
of votes equal to the Formula Number then in effect for each share of Series A
Preferred Stock held of record on each matter on which holders of the Common
Stock or shareholders generally are entitled to vote, multiplied by the maximum
number of votes per share that any holders of the Common Stock or shareholders
generally then have with respect to such matter (assuming any holding period or
other requirement to vote a greater number of shares is satisfied).

     (b) Except as otherwise provided in this Statement of Designation of Rights
and Preferences or by applicable law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock shall vote together as
one class for the election of directors of the Corporation and on all other
matters submitted to a vote of shareholders of the Corporation.

     (c) If, at the time of any annual meeting of shareholders for the election
of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Preferred Stock are in
default, the number of directors constituting the Corporation's Board of
Directors shall be increased by two.  In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series A Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at said
meeting of shareholders (and at each subsequent annual meeting of shareholders),
unless all dividends in arrears have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of Series A Preferred Stock being entitled to cast a
number of votes per share of Series A Preferred Stock equal to the Formula
Number.  Until the default in payment of all dividends that permitted the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote of the holders
of shares of Series A Preferred Stock at the time entitled to cast a majority of
the votes entitled to be cast for the election of any such director at a special
meeting of such holders called for that purpose, and any vacancy thereby created
shall be filled by the vote of such holders.  If and when such default shall
cease to exist, the holders of Series A Preferred Stock shall be divested of the
foregoing special voting rights, subject to revesting in the event of each and
every subsequent like default in payment of dividends.  Upon the termination of
the foregoing special voting rights, the terms of office of all persons who may
have been elected directors pursuant to said special voting rights shall
forthwith terminate, and the number of directors constituting the Corporation's
Board of Directors shall be reduced by two.  The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights granted to the
holders of the Series A Preferred Stock in this Section 3.

                                                                          Page 4
<PAGE>
 
     (d) Except as provided in this Statement of Designation of Rights and
Preferences or by applicable 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 in
this Statement of Designation of Rights and Preferences) for authorizing or
taking any corporate action.

SECTION 4.  CERTAIN RESTRICTIONS

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

            (i)   declare or pay dividends on, make any other distributions on,
     or redeem or purchase or otherwise acquire for consideration 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 on 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 on a parity (either as to dividends or upon
     liquidation, dissolution or winding up) with the Series A Preferred Stock;
     provided, however, that the Corporation may at any time redeem, purchase or
     ------------------                                                         
     otherwise acquire shares of any such parity 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)  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 Corporation's Board
     of Directors) to all holders of such shares upon such terms as the
     Corporation's 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.

                                                                          Page 5
<PAGE>
 
     (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.  LIQUIDATION RIGHTS

     Upon the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, no distribution shall be made (a) to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
an amount equal to the accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, plus an amount equal to
the greater of (i) $.01 per whole share and (ii) an aggregate amount per share
equal to the Formula Number then in effect times the aggregate amount to be
distributed per share to holders of Common Stock or (b) to the holders 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 other 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.

SECTION 6.  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 or any other
property, then in any such case the then-outstanding shares of Series A
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share equal to the Formula Number then in effect times the aggregate
amount of stock, securities, cash or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is exchanged
or changed.  In the event both this Section 6 and Section 2 appear to apply to a
transaction, this Section 6 will control.

SECTION 7.  NO REDEMPTION; NO SINKING FUND

     (a) The shares of Series A Preferred Stock shall not be subject to
redemption by the Corporation or at the option of any holder of Series A
Preferred Stock; provided, however, that the Corporation may purchase or
                 --------  -------                                      
otherwise acquire outstanding shares of Series A Preferred Stock in the open
market or by offer to any holder or holders of shares of Series A Preferred
Stock.

     (b) The shares of Series A Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.

                                                                          Page 6
<PAGE>
 
SECTION 8.  RANKING

     The Series A Preferred Stock shall rank junior to all other series of
Preferred Stock of the Corporation, unless the Corporation's Board of Directors
shall specifically determine otherwise in fixing the powers, preferences and
relative, participating, optional and other special rights of the shares of such
series and the qualifications, limitations and restrictions thereof.

SECTION 9.  FRACTIONAL SHARES

     The Series A Preferred Stock shall be issuable upon exercise of the Rights
issued pursuant to the Rights Agreement in whole shares or in any fraction of a
share that is one one-hundredth (1/100th) of a share or any integral multiple of
such fraction, and shall entitle the holder, in proportion to such holder's
fractional shares, to receive dividends, exercise voting rights, participate in
distributions and have the benefit of all other rights of holders of Series A
Preferred Stock.  In lieu of fractional shares, the Corporation, prior to the
first issuance of a share or a fraction of a share of Series A Preferred Stock,
may elect to (a) make a cash payment as provided in the Rights Agreement for
fractions of a share other than one one-hundredth (1/100th) of a share or any
integral multiple thereof or (b) issue depository receipts evidencing such
authorized fraction of a share of Series A Preferred Stock pursuant to an
appropriate agreement between the Corporation and a depository selected by the
Corporation; provided, however, that such agreement shall provide that the
             ------------------                                           
holders of such depository receipts shall have all the rights, privileges and
preferences to which they are entitled as holders of the Series A Preferred
Stock.

SECTION 10.  REACQUIRED SHARES

     Any shares of Series A Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof.  All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock, without designation as
to series until such shares are once more designated as part of a particular
series by the Corporation's Board of Directors pursuant to the provisions of
Article V of the Corporation's Articles of Incorporation.

SECTION 11.  AMENDMENT

     None of the powers, preferences and relative, participating, optional and
other special rights of the Series A Preferred Stock as provided in this
Statement of Designation of Rights and Preferences or in the Articles of
Incorporation shall be amended in any manner that would alter or change the
powers, preferences, rights or privileges of the holders of Series A Preferred
Stock so as to affect them adversely 

                                                                          Page 7
<PAGE>
 
without the affirmative vote of the holders of at least 66-2/3% of the
outstanding shares of Series A Preferred Stock, voting as a separate class.

     IN WITNESS WHEREOF, this Statement has been signed by the President of
ProCyte Corporation on this 7th day of December, 1994.


                           PROCYTE CORPORATION


                           _________________________________
                           By: Joseph Ashley
                           Its:  President and Chief Executive Officer

                                                                          Page 8
<PAGE>
 
                                                                       EXHIBIT B
                                                                       TO RIGHTS
                                                                       AGREEMENT


                          [FORM OF RIGHT CERTIFICATE]


Certificate No. [R] -
___________ Rights

     NOT EXERCISABLE AFTER DECEMBER 7, 2004, OR EARLIER IF REDEEMED BY THE
     COMPANY.  THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
     COMPANY, AT $.01 PER RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
     RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
     -------------------------------------------------------------------
     ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
     -------------------------------------------------------------------------
     AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID
     ------------------------------------------------------------------------
     AND NONTRANSFERABLE.
     ------------------- 



                               RIGHT CERTIFICATE

                              PROCYTE CORPORATION


     This certifies that___________________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of December 7, 1994 (the "Rights Agreement"),
between ProCyte Corporation , a Washington corporation (the "Company"), and
American Securities Transfer, Inc., as Rights Agent (the "Rights Agent"), unless
the Rights evidenced hereby shall have been previously redeemed by the Company,
to purchase from the Company at any time after the Distribution Date (as defined
in the Rights Agreement) and prior to 5 p.m., New York City time, on December 7,
2004 (the "Expiration Date"), at the principal office of the Rights Agent, or
its successors as Rights Agent (in New York, New York), one one-hundredth

                                                                          Page 1
<PAGE>
 
(1/100th) of a fully paid, nonassessable share of Series A Participating
Cumulative Preferred Stock, par value $.01 per share, of the Company (the
"Preferred Shares"), at a purchase price per one one-hundredth (1/100th) of a
share equal to $14.00 (the "Purchase Price") payable in cash, upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed.

     The Purchase Price and the number and kind of shares that may be purchased
upon exercise of each Right evidenced by this Right Certificate, as set forth
above, are the Purchase Price and the number and kind of shares that may be so
purchased as of December 8, 1994.  As provided in the Rights Agreement, the
Purchase Price and the number and kind of shares that may be purchased upon the
exercise of each Right evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.

     If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.

     This Right Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated in this Right Certificate by reference and made a part
hereof and to which reference to the Rights Agreement is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities under this Right Certificate of the Rights Agent, the Company and the
holders of the Right Certificates.  Copies of the Rights Agreement are on file
at the above-mentioned office of the Rights Agent and are also available from
the Company upon written request.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the principal stock transfer or corporate trust 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 and kind of 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 may be redeemed by the Company at its option at a
redemption price (in cash or shares of Common Stock or other securities of the
Company deemed by the Company's Board of Directors to be at least equivalent in
value) of $.01 per Right (which amount shall be subject to adjustment as
provided in the Rights Agreement) at 

                                                                          Page 2
<PAGE>
 
any time prior to the earlier of (i) such time as a (as defined in the Rights
Agreement) Person becomes an Acquiring Person and (ii) the Expiration Date;
provided, however, that for the 120-day period after any date of a change 
--------  -------                      
(resulting from a proxy or consent solicitation) in a majority of the Company's
Board of Directors in office at the commencement of such solicitation, the
Rights may only be redeemed if (A) there are directors then in office who were
in office at the commencement of such solicitation and (B) the Company's Board
of Directors, with the concurrence of a majority of such directors then in
office, determines that such redemption is, in its judgment, in the best
interests of the Company and its shareholders.

     The Company may, but shall not be required to, issue fractions of Preferred
Shares or distribute certificates that evidence fractions of Preferred Shares
upon the exercise of any Right or Rights evidenced hereby.  In lieu of issuing
fractional shares, the Company may elect to make a cash payment as provided in
the Rights Agreement for fractions of a share other than one one-hundredth
(1/100th) of a share or any integral multiple thereof or to issue certificates
or utilize a depository arrangement as provided in the terms of the Rights
Agreement and the Preferred Shares.

     No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company that may at any time be issuable on the
exercise of the Right or Rights evidenced by this Right Certificate, nor shall
anything contained in the Rights Agreement or in this Right Certificate be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company, including, without limitation, any right to vote for
the election of directors or on any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders except as
provided in the Rights Agreement, or to receive dividends or other distributions
or subscription rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided in accordance with
the provisions of 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.

                                                                          Page 3
<PAGE>
 
     WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.


     Dated as of:_______________

                                   PROCYTE CORPORATION                    
                                                                          
                                                                          
                                                                          
                                   By: ___________________________________
                                   Its: __________________________________ 

Attest:



 ______________________________
     [NAME]

Countersigned:


AMERICAN SECURITIES TRANSFER, INC.,

 as Rights Agent


By: _______________________________
Its: ______________________________

                                                                          Page 4
<PAGE>
 
                   FORM OF REVERSE SIDE OF RIGHT CERTIFICATE

                               FORM OF ASSIGNMENT

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

     FOR VALUE RECEIVED, _________________________ hereby 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: __________, 19___

 
                                     ___________________________________________
                                                       Signature

Signature Guaranteed:

     Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program), pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended.

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

     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 such terms are defined in the Rights Agreement).

 
                                     ___________________________________________
                                                       Signature    
                                        
--------------------------------------------------------------------------------

                                                                          Page 5
<PAGE>
 
                FORM OF REVERSE SIDE OF RIGHT CERTIFICATE, CONT.

                          FORM OF ELECTION TO PURCHASE

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

To:  PROCYTE CORPORATION

     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 print name and address and insert social security or other identifying
 number.)

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

________________________________________________________________________________
________________________________________________________________________________
 (Please print name and address and insert social security or other identifying
 number.)

Dated: _________, 19___

                                     ___________________________________________
                                                      Signature

Signature Guaranteed:

     Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program), pursuant to Rule 17Ad-15 of
the Securities Exchange Act of 1934, as amended.

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

     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 such terms are defined in the Rights Agreement).


                                     ___________________________________________
                                                      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

                                                                          Page 6
<PAGE>
 
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 such terms are defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.

                                                                          Page 7