<PAGE>


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




                            ULTRATECH STEPPER, INC.




                                      and




                       THE FIRST NATIONAL BANK OF BOSTON




                                 Rights Agent




                           Amended Rights Agreement

                       Dated as of February 11, 1997, as
                            amended March 18, 1998




------------------------------------------------------------------------------
<PAGE>

                                  TABLE OF CONTENTS
                                                                          Page
                                                                          ----

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

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

Section 3.     Issue of Right Certificates . . . . . . . . . . . . . . . . . 6

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

Section 5.     Countersignature and Registration . . . . . . . . . . . . . . 8

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

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

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

Section 9.     Availability of Preferred Shares. . . . . . . . . . . . . . .11

Section 10.    Preferred Shares Record Date. . . . . . . . . . . . . . . . .12

Section 11.    Adjustment of Purchase Price, Number of Shares or 
               Number of Rights. . . . . . . . . . . . . . . . . . . . . . .13

Section 12.    Certificate of Adjusted Purchase Price or Number of Shares. .20

Section 13.    Consolidation, Merger or Sale or Transfer of 
               Assets or Earning Power . . . . . . . . . . . . . . . . . . .21

Section 14.    Fractional Rights and Fractional Shares . . . . . . . . . . .23

Section 15.    Rights of Action. . . . . . . . . . . . . . . . . . . . . . .24

Section 16.    Agreement of Right Holders. . . . . . . . . . . . . . . . . .24

Section 17.    Right Certificate Holder Not Deemed a Stockholder . . . . . .25

Section 18.    Concerning the Rights Agent . . . . . . . . . . . . . . . . .25

Section 19.    Merger or Consolidation or Change of Name of Rights Agent . .26

Section 20.    Duties of Rights Agent. . . . . . . . . . . . . . . . . . . .27

Section 21.    Change of Rights Agent. . . . . . . . . . . . . . . . . . . .29

Section 22.    Issuance of New Right Certificates. . . . . . . . . . . . . .30

Section 23.    Redemption. . . . . . . . . . . . . . . . . . . . . . . . . .30

                                       i
<PAGE>

Section 24.    Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . .31

Section 25.    Notice of Certain Events. . . . . . . . . . . . . . . . . . .33

Section 26.    Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .34

Section 27.    Supplements and Amendments. . . . . . . . . . . . . . . . . .35

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

Section 29.    Determinations and Actions by the Board of Directors. . . . .35

Section 30.    Benefits of this Agreement. . . . . . . . . . . . . . . . . .36

Section 31.    Severability. . . . . . . . . . . . . . . . . . . . . . . . .36

Section 32.    Governing Law . . . . . . . . . . . . . . . . . . . . . . . .36

Section 33.    Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .36

Section 34.    Descriptive Headings. . . . . . . . . . . . . . . . . . . . .37

Exhibit A -    Form of Certificate of Designations of Series A Junior
               Participating Preferred Stock of Ultratech Stepper, Inc.

Exhibit B -    Form of Right Certificate

Exhibit C -    Summary of Rights to Purchase Preferred Shares

                                       ii
<PAGE>

                               RIGHTS AGREEMENT


          Rights Agreement, dated as of February 11,  1997 (as amended March 
18, 1998), between Ultratech Stepper, Inc., a Delaware corporation (the 
"Company"), and The First National Bank of Boston, a national banking 
association (the "Rights Agent").

          The Board of Directors of the Company has authorized and declared a 
dividend of one preferred share purchase right (a "Right") for each Common 
Share (as hereinafter defined) of the Company outstanding as of the Close of 
Business (as hereinafter defined) on February 24, 1997 (the "Record Date"), 
each Right representing the right to purchase one one-hundredth (1/100th) of 
a Preferred Share (as hereinafter defined) upon the terms and subject to the 
conditions herein set forth, and has further authorized and directed the 
issuance of one Right with respect to each Common Share that shall become 
outstanding between the Record Date and the earliest of the Distribution 
Date, the Redemption Date or the Final Expiration Date (as such terms are 
hereinafter defined).

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

                                                                          1
<PAGE>

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

          (a) "Acquiring Person" shall mean any Person (as such term is 
hereinafter defined) who or which, together with all Affiliates and 
Associates (as such terms are hereinafter defined) of such Person, shall be 
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of 
the Common Shares of the Company then outstanding, but shall not include the 
Company, any Subsidiary (as such term is hereinafter defined) of the Company, 
any employee benefit plan of the Company or any Subsidiary of the Company, or 
any entity holding Common Shares for or pursuant to the terms of any such 
plan.   Notwithstanding the foregoing:

               (i) no Person shall become an "Acquiring Person" as the result
     of an acquisition of Common Shares by the Company which, by reducing the
     number of shares outstanding, increases the proportionate number of 
     shares beneficially owned by such Person to 15% or more of the Common
     Shares of the Company then outstanding; PROVIDED, HOWEVER, that if a
     Person shall become the Beneficial Owner of 15% or more of the Common
     Shares of the Company then outstanding by reason of share purchases by
     the Company and shall, after such share purchases by the Company, become
     the Beneficial Owner of any additional Common Shares of the Company,
     then such Person shall be deemed to be an "Acquiring Person";

              (ii) if the Board of Directors of the Company determines (upon
     approval by a majority of the Continuing Directors (as such term is
     hereinafter defined)) in good faith that a Person who would otherwise
     be an Acquiring Person, as defined pursuant to the foregoing provisions
     of this paragraph (a), is eligible to file and did file a Schedule 13G,
     and such Person divests as promptly as practicable a sufficient number
     of Common Shares so that such Person would no longer be an Acquiring
     Person, as defined pursuant to the foregoing provisions of this
     paragraph (a), then such Person shall not be deemed to be an "Acquiring
     Person" for any purpose of this Agreement; and

             (iii) no Person shall become an "Acquiring Person" if the 
     transaction or series of related transactions in which such Person
     (together with all Affiliates or Associates of such Person) became
     the Beneficial Owner of 15% or more of the Common Shares of the Company
     then outstanding had received prior approval of a majority of the
     Continuing Directors; PROVIDED, that in the event a Person is not an
     Acquiring Person by reason of this clause (iii) of this Section 1(a), such
     Person shall become an Acquiring Person, in the event such Person
     thereafter acquires Beneficial Ownership of any additional Common Shares
     unless such acquisition of such additional Common Shares would not result
     in such Person becoming an Acquiring Person by reason by any provision of
     this Agreement, including, without limitation, this clause (iii) of this
     Section 1(a).

          (b) "Affiliate" and "Associate" shall have the respective meanings 
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations 
under the Exchange Act (as such term is hereinafter defined).

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

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

              (ii) which such Person or any of such Person's Affiliates
     or Associates has (A) the right to acquire (whether such right is
     exercisable immediately or only after the passage of time) pursuant to
     any agreement, arrangement or understanding (other than customary 
     agreements with and between underwriters and selling group members
     with respect to a bona fide public offering of securities), or upon
     the exercise of conversion rights, exchange rights, rights (other than
     these Rights), warrants or options, or otherwise; PROVIDED, HOWEVER that a
     Person shall not be deemed the Beneficial Owner of, or to beneficially own,
     (1)  securities tendered pursuant to a tender or exchange offer made by or
     on behalf of such Person or any of such Person's Affiliates or Associates
     until such tendered securities are accepted for purchase or exchange or
     (2) securities which a Person or any Person's Affiliates or Associates may
     be deemed to have the right to acquire pursuant to any merger or other
     acquisition agreement between the Company and such Person (or one or more
     of such Person's Affiliates or Associates) if such agreement has been
     approved by the Board of Directors of the Company, upon the affirmative
     vote of a majority of the Continuing Directors, prior to there being an
     Acquiring Person; or (B) the right to vote pursuant to any agreement,
     arrangement or understanding; PROVIDED, HOWEVER, that a Person shall not be
     deemed the Beneficial Owner of, or to beneficially own, any security if the
     agreement, arrangement or understanding to vote such security (1) arises
     solely from a revocable proxy or consent

                                                                          2
<PAGE>

     given to such Person in response to a public proxy or consent solicitation
     made pursuant to, and in accordance with, the applicable rules and
     regulations promulgated under the Exchange Act and (2) is not also then
     reportable on Schedule 13D under the Exchange Act (or any comparable or
     successor report); or

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

          Notwithstanding anything in this definition of Beneficial Ownership 
to the contrary, the phrase "then outstanding," when used with reference to a 
Person's Beneficial Ownership of securities of the Company, shall mean the 
number of such securities then issued and outstanding together with the 
number of such securities not then actually issued and outstanding which such 
Person would be deemed to own beneficially hereunder.

          (d) "Business Day" shall mean any day other than a Saturday, a 
Sunday, or a day on which banking institutions in the State of California or 
the state in which the principal office of the Rights Agent is located are 
authorized or obligated by law or executive order to close.

          (e) "Company" shall have the meaning set forth in the first 
paragraph at the beginning of this Agreement.

          (f) "Close of Business" on any given date shall mean 5:00 P.M., 
Eastern time, on such date; PROVIDED, HOWEVER, that if such date is not a 
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding 
Business Day.

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

          (h) "common stock equivalents" shall have the meaning set forth in 
Section 11(a)(iv) hereof.

          (i) "Continuing Director" shall mean (i) any person who is a member 
of the Board of Directors of the Company, while such person is a member of 
the Board of Directors, who is not an Acquiring Person, or an Affiliate or 
Associate of an Acquiring Person, or a representative or agent of an 
Acquiring Person or of any such Affiliate or Associate, and who was a member 
of the Board of Directors prior to the date of this Agreement, or (ii) any 
person who subsequently becomes a member of the Board of Directors and who, 
while such person is a member of the Board of Directors, is not an Acquiring 
Person or an Affiliate or Associate of an Acquiring Person, or a 
representative or agent of an Acquiring Person or of any such Affiliate or 
Associate, if such Person's nomination for election or such Person's election 
to the Board of Directors is recommended or approved by a majority of the 
Continuing Directors then on the Board of Directors.

          (j) "current per share market price" shall have the meaning set 
forth in Section 11(d)(i) hereof.

          (k) "Current Value" shall have the respective meanings set forth in 
Section 11(a)(iv) hereof and Section 24 hereof.

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

          (m) "equivalent preferred shares" shall have the meaning set forth 
in Section 11(b) hereof.

          (n) "Exchange Act" shall mean the Securities Exchange Act of 1934, 
as amended, as in effect on the date of this Agreement.

          (o) "Exchange ratio" shall have the meaning set forth in Section 24 
hereof.

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

                                                                          3
<PAGE>


          (q) "issuer" shall have the meaning set forth in Section 13 hereof.

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

          (s) "Preferred Shares" shall mean shares of Series A Junior 
Participating Preferred Shares, par value .001, of the Company having the 
rights and preferences set forth in the Form of Certificate of Designations 
attached to this Agreement as Exhibit A.

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

          (u) "Record Date" shall have the meaning set forth in the second 
paragraph at the beginning of this Agreement.

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

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

          (x) "Right" shall have the meaning set forth in the second 
paragraph at the beginning of this Agreement.

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

          (z) "Rights Agent" shall have the meaning set forth in the first 
paragraph at the beginning of this Agreement.

         (aa) "Securities Act" shall have the meaning set forth in Section 9 
hereof.

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

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

         (dd) "Spread" shall have the meaning set forth in Section 11(a)(iv) 
hereof.

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

         (ff) "Substitution Period" shall have the meaning set forth in 
Section 11(a)(iv) hereof.

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

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

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

          Section 3. ISSUE OF RIGHT CERTIFICATES. Until the earlier of (i) 
the tenth day after the Shares Acquisition Date or (ii) the tenth business 
day (or such later date as may be determined by action of the Board of 
Directors (upon approval by a majority of the Continuing Directors) prior to 
such time as any Person becomes an Acquiring Person) after the date of the 
commencement by any Person (other than the Company, any Subsidiary of the 
Company, any employee benefit plan of the Company or of any Subsidiary of the 
Company or any entity

                                                                          4
<PAGE>


holding Common Shares for or pursuant to the terms of any such plan) of, or 
of the first public announcement of the intention of any Person (other than 
the Company, any Subsidiary of the Company, any employee benefit plan of the 
Company or of any Subsidiary of the Company or any entity holding Common 
Shares for or pursuant to the terms of any such plan) to commence, a tender 
or exchange offer the consummation of which would result in any Person 
becoming the Beneficial Owner of Common Shares aggregating 15% or more of the 
then outstanding Common Shares (including any such date which is after the 
date of this Agreement and prior to the issuance of the Rights; the earlier 
of such dates being herein referred to as the "Distribution Date"), (x) the 
Rights will be evidenced (subject to the provisions of Section 3(b) hereof) 
by the certificates for Common Shares registered in the names of the holders 
thereof (which certificates shall also be deemed to be Right Certificates) 
and not by separate Right Certificates, and (y) the right to receive Right 
Certificates will be transferable only in connection with the transfer of 
Common Shares.  As soon as practicable after the Distribution Date, the 
Company will notify the Rights Agent thereof and the Company will prepare and 
execute, the Rights Agent will countersign, and the Company will send or 
cause to be sent (and the Rights Agent will, if requested, send) by 
first-class, insured, postage-prepaid mail, to each record holder of Common 
Shares as of the Close of Business on the Distribution Date, at the address 
of such holder shown on the records of the Company, a Right Certificate, in 
substantially the form of Exhibit B hereto (a "Right Certificate"), 
evidencing one Right for each Common Share so held.  As of the Distribution 
Date, the Rights will be evidenced solely by such Right Certificates.

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

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

          This certificate also evidences and entitles the holder hereof to
     certain rights as set forth in a Rights Agreement between Ultratech
     Stepper, Inc. and The First National Bank of Boston, dated as of
     February 11, 1997 (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 Ultratech Stepper, Inc.  Under
     certain circumstances, as set forth in the Rights Agreement, such
     Rights will be evidenced by separate certificates and will no longer
     be evidenced by this certificate.  Ultratech Stepper, Inc. will mail
     to the holder of this certificate a copy of the Rights Agreement
     without charge after receipt of a written request therefor.  Under
     certain circumstances, as set forth in the Rights Agreement, Rights
     issued to any Person who becomes an Acquiring Person (as defined in
     the Rights Agreement) may become null and void.

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

          Section 4. FORM OF RIGHT CERTIFICATES.  The Right Certificates (and 
the forms of election to purchase Preferred Shares and of assignment to be 
printed on the reverse thereof) shall be substantially the same as Exhibit B 
hereto and may have such marks of identification or designation and such 
legends, summaries or endorsements printed thereon as the Company may deem 
appropriate and as are not inconsistent with the provisions of this 
Agreement, or as may be required to comply with any applicable law or with 
any rule or regulation made pursuant thereto or with any rule or regulation 
of any stock exchange or transaction reporting system on which the Rights may 
from time to time be listed, or to conform to usage.  Subject to the 
provisions of Section 22 hereof, the Right Certificates shall entitle the 
holders thereof to purchase such number of one one-hundredths of a Preferred 
Share 

                                                                          5
<PAGE>


as shall be set forth therein at the price per one one-hundredth of a 
Preferred Share set forth therein (the "Purchase Price"), but the number of 
such one one-hundredths of a Preferred Share and the Purchase Price shall be 
subject to adjustment as provided herein.

          Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right 
Certificates shall be executed on behalf of the Company by its Chairman of 
the Board, its President, any of its Vice Presidents, or its Treasurer or 
Chief Financial Officer, either manually or by facsimile signature, shall 
have affixed thereto the Company's seal or a facsimile thereof, and shall be 
attested by the Secretary or an Assistant Secretary of the Company, either 
manually or by facsimile signature.  The Right Certificates shall be manually 
countersigned by the Rights Agent and shall not be valid for any purpose 
unless countersigned.  In case any officer of the Company who shall have 
signed any of the Right Certificates shall cease to be such officer of the 
Company before countersignature by the Rights Agent and issuance and delivery 
by the Company, such Right Certificates, nevertheless, may be countersigned 
by the Rights Agent and issued and delivered by the Company with the same 
force and effect as though the person who signed such Right Certificates had 
not ceased to be such officer of the Company; and any Right Certificate may 
be signed on behalf of the Company by any person who, at the actual date of 
the execution of such Right Certificate, shall be a proper officer of the 
Company to sign such Right Certificate, although at the date of the execution 
of this Rights Agreement any such person was not such an officer.

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

          Section 6.  TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT 
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.  
Subject to the provisions of Section 14 hereof, at any time after the Close 
of Business on the Distribution Date, and at or prior to the Close of 
Business on the earlier of the Redemption Date or the Final Expiration Date, 
any Right Certificate or Right Certificates (other than Right Certificates 
representing Rights that have become void pursuant to Section 11(a)(ii) 
hereof or that have been exchanged pursuant to Section 24 hereof) may be 
transferred, split up, combined or exchanged for another Right Certificate or 
Right Certificates, entitling the registered holder to purchase a like number 
of one one-hundredths of a Preferred Share (or other securities or property) 
as the Right Certificate or Right Certificates surrendered then entitled such 
holder to purchase.  Any registered holder desiring to transfer, split up, 
combine or exchange any Right Certificate or Right Certificates shall make 
such request in writing delivered to the Rights Agent, and shall surrender 
the Right Certificate or Right Certificates to be transferred, split up, 
combined or exchanged at the office of the Rights Agent designated for such 
purpose.  Thereupon the Rights Agent shall countersign and deliver to the 
person entitled thereto a Right Certificate or Right Certificates, as the 
case may be, as so requested.  The Company may require payment of a sum 
sufficient to cover any tax or governmental charge that may be imposed in 
connection with any transfer, split up, combination or exchange of Right 
Certificates.

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

          Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF 
RIGHTS. (a) Except as provided in Section 23(c), the registered holder of any 
Right Certificate may exercise the Rights evidenced thereby (except as 
otherwise provided herein) in whole or in part at any time after the 
Distribution Date upon surrender of the Right Certificate, with the form of 
election to purchase and certification on the reverse side thereof duly 
executed, to the Rights Agent at the office of the Rights Agent designated 
for such purpose, together with payment of the Purchase Price for each one 
one-hundredth of a Preferred Share as to which the Rights are exercised, at 
or prior to the earliest of (i) the Close of Business on February 9, 2007, 
(the "Final Expiration Date"), (ii) the time at which the Rights are redeemed 
as provided in Section 23 hereof (the "Redemption Date"), (iii) the time at 
which such Rights are exchanged as provided in Section 24 hereof, or (iv) the 
consummation of any merger or other acquisition involving the Company 
pursuant to an agreement described in Section 1(c)(ii)(A)(2) hereof.

          (b) The Purchase Price for each one one-hundredth of a Preferred 
Share pursuant to the exercise of a Right shall initially be $145.00, shall 
be subject to adjustment from time to time as provided in Sections 11 and 13 
hereof and shall be payable in lawful money of the United States of America 
in accordance with paragraph (c) below.

                                                                          6
<PAGE>

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

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

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

          (f) Notwithstanding anything in this Agreement to the contrary, 
neither the Rights Agent nor the Company shall be obligated to undertake any 
action with respect to a registered holder upon the occurrence of any 
purported exercise 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.

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

          Section 9. AVAILABILITY OF PREFERRED SHARES. (a) The company 
covenants and agrees that it will use its best efforts to cause to be 
reserved and kept available out of and to the extent of its authorized and 
unissued shares of Preferred Stock not reserved for another purpose (and, 
following the occurrence of an event described in Section 11(a)(ii) or 
Section 13(a), out of its authorized and unissued shares of Common Stock 
and/or other securities), the number of Preferred Shares (and, following the 
occurrence of any such event, Common Stock and/or other securities) that will 
be sufficient to permit the exercise in full of all outstanding Rights.

          (b) If the Preferred Shares (or, following the occurrence of an 
event described in Section 11(a)(ii) or Section 13(a), the Common Shares 
and/or other securities) are at any time listed on a national securities 
exchange or included for quotation on any transaction reporting system, then 
so long as the Preferred Shares (and, following the occurrence of any such 
event, Common Shares and/or other securities) issuable and deliverable upon 
exercise of the Rights may be listed on such exchange or included for 
quotation on any such transaction reporting system, the Company shall use its 
best efforts to cause, from and after such time as the Rights become 
exercisable (but only to the extent that it is reasonably likely that the 
Rights will be exercised), all shares reserved for such issuance to be listed 
on such exchange or included for quotation on any such transaction reporting 
system upon official notice of issuance upon such exercise.

                                                                          7
<PAGE>

          (c) The Company shall use its best efforts to (i) file, as soon as 
practicable following the earliest date after the first occurrence of an 
event described in Section 11(a)(ii) in which the consideration to be 
delivered by the Company upon exercise of the Rights has been determined in 
accordance with Section 11(a)(iv) hereof, or as soon as is required by law 
following the Distribution Date, as the case may be, a registration statement 
under the Securities Act of 1933, as amended (the "Securities Act"), with 
respect to the securities purchasable upon exercise of the Rights on an 
appropriate form, (ii) cause such registration statement to become effective 
as soon as practicable after such filing and (iii) cause such registration 
statement to remain effective (with a prospectus at all times meeting the 
requirements of the Securities Act) until the earlier of (A) the date as of 
which the Rights are no longer exercisable for such securities or (B) the 
date of expiration of the Rights.  The Company may temporarily suspend, for a 
period not to exceed ninety (90) days after the date set forth in clause (i) 
of the first sentence of this Section 9(c), the exercisability of the Rights 
in order to prepare and file such registration statement and permit it to 
become effective.  Upon any such suspension, the Company shall issue a public 
announcement stating, and notify the Rights Agent, that the exercisability of 
the Rights has been temporarily suspended, as well as a public announcement 
and notification to the Rights Agent at such time as the suspension is no 
longer in effect.  The Company will also take such action as may be 
appropriate under, or to ensure compliance with, the securities or "blue sky" 
laws of the various states in connection with the exercisability of the 
Rights.  Notwithstanding any provision of this Agreement to the contrary, the 
Rights shall not be exercisable in any jurisdiction, unless the requisite 
qualification in such jurisdiction shall have been obtained, or an exemption 
therefrom shall be available and until a registration statement has been 
declared effective.

          (d) The Company covenants and agrees that it will take all such 
action as may be necessary to ensure that all Preferred Shares delivered upon 
exercise of Rights shall, at the time of delivery of the certificates for 
such Preferred Shares (subject to payment of the Purchase Price), be duly and 
validly authorized and issued and fully paid and nonassessable shares.

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

          Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name 
any certificate for Preferred Shares is issued upon the exercise of Rights 
shall for all purposes be deemed to have become the holder of record of the 
Preferred Shares represented thereby on, and such certificate shall be dated, 
the date upon which the Right Certificate evidencing such Rights was duly 
surrendered and payment of the Purchase Price (and any applicable transfer 
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and 
payment is a date upon which the Preferred Shares transfer books of the 
Company are closed, such person shall be deemed to have become the record 
holder of such shares on, and such certificate shall be dated, the next 
succeeding Business Day on which the Preferred Shares transfer books of the 
Company are open.  Prior to the exercise of the Rights evidenced thereby, the 
holder of a Right Certificate shall not be entitled to any rights of a holder 
of Preferred Shares for which the Rights shall be exercisable, including, 
without limitation, the right to vote, to receive dividends or other 
distributions or to exercise any preemptive rights, and shall not be entitled 
to receive any notice of any proceedings of the Company, except as provided 
herein.

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

          (a)  (i) In the event the Company shall at any time after the date 
of this Agreement (A) declare a dividend on the Preferred Shares payable in 
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine 
the outstanding Preferred Shares into a smaller number of Preferred Shares or 
(D) issue any shares of its capital stock in a reclassification of the 
Preferred Shares (including any such reclassification in connection with a 
consolidation or merger in which the Company is the continuing or surviving 
corporation), except as otherwise provided in this Section 11(a), the 
Purchase Price in effect at the time of the record date for such dividend or 
of the effective date of such subdivision, combination or reclassification, 
and the number and kind of shares of capital stock issuable on such date, 
shall be

                                                                          8
<PAGE>

proportionately adjusted so that the holder of any Right exercised after such 
time shall be entitled to receive the aggregate number and kind of shares of 
capital stock which, if such Right had been exercised immediately prior to 
such date and at a time when the Preferred Shares transfer books of the 
Company were open, such holder would have owned upon such exercise and been 
entitled to receive by virtue of such dividend, subdivision, combination or 
reclassification; PROVIDED, HOWEVER, that in no event shall the consideration 
to be paid upon the exercise of one Right be less than the aggregate par 
value of the shares of capital stock of the Company issuable upon exercise of 
one Right.  If an event occurs which would require an adjustment under both 
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this 
Section 11(a)(i) shall be in addition to, and shall be made prior to any 
adjustment required pursuant to Section 11(a)(ii).

              (ii) Subject to Section 24 of this Agreement, in the event that 
any Person becomes an Acquiring Person, each holder of a Right shall 
thereafter have a right to receive, upon exercise thereof at a price equal to 
the then current Purchase Price multiplied by the number of one 
one-hundredths of a Preferred Share for which a Right is then exercisable, in 
accordance with the terms of this Agreement and in lieu of Preferred Shares, 
such number of Common Shares of the Company as shall equal the result 
obtained by (x) multiplying the then current Purchase Price by the number of 
one one-hundredths of a Preferred Share for which a Right is then exercisable 
and dividing that product by (y) 50% of the then current per share market 
price of the Company's Common Shares (determined pursuant to Section 11(d) 
hereof) on the date of the occurrence of such event.  Except as provided in 
Section 23(C), in the event that any Person shall become an Acquiring Person 
and the Rights shall then be outstanding, the Company shall not take any 
action which would eliminate or diminish the benefits intended to be afforded 
by the Rights.

          Notwithstanding anything in this Agreement to the contrary, from 
and after the first occurrence of an event in which any Person shall become 
an Acquiring Person, any Rights beneficially owned by (A) an Acquiring Person 
or an Associate or Affiliate of an Acquiring Person, (B) a transferee of an 
Acquiring Person (or of any such Associate or Affiliate) who becomes a 
transferee after the Acquiring Person becomes such, or (C) a transferee of an 
Acquiring Person (or of any such Associate or Affiliate) who becomes a 
transferee prior to or concurrently with the Acquiring Person becoming such 
and receives such Rights pursuant to either (1) a transfer (whether or not 
for consideration) from the Acquiring Person to holders of equity interests 
in such Acquiring Person or to any Person with whom the Acquiring Person has 
any continuing agreement, arrangement or understanding regarding the 
transferred Rights or (2) a transfer which the Board of Directors, upon 
approval by a majority of the Continuing Directors, has determined is part of 
a plan, arrangement or understanding which has as a primary purpose or effect 
the avoidance of this Section 11(a)(ii), shall become null and void without 
any further action and no holder of such Rights shall have any rights 
whatsoever with respect to such Rights, whether under any provision of this 
Agreement or otherwise.  No Right Certificate shall be issued pursuant to 
Section 3 that represents Rights beneficially owned by an Acquiring Person 
whose Rights would be void pursuant to the preceding sentence or any 
Associate or Affiliate thereof; no Right Certificate shall be issued at any 
time upon the transfer of any Rights to an Acquiring Person whose Rights 
would be void pursuant to the preceding sentence or any Associate or 
Affiliate thereof or to any nominee of such Acquiring Person, Associate or 
Affiliate; and any Right Certificate delivered to the Rights Agent for 
transfer to an Acquiring Person whose Rights would be void pursuant to the 
preceding sentence shall be cancelled.  The Company shall use all reasonable 
efforts to ensure that the provisions of this Section 11(a)(ii) are complied 
with, but shall have no liability to any holder of Right Certificates or 
other Person as a result of its failure to make any determinations with 
respect to an Acquiring person or its Affiliates, Associates or transferees 
hereunder.

             (iii) The right to buy Common Shares of the Company pursuant to 
subparagraph (ii) of this paragraph (a) shall not arise if the event causing 
such Person to become an Acquiring Person (A) is a consolidation, merger, 
sale, transfer or similar transaction subject to Section 13 hereof, or (B) is 
an acquisition of shares of Common Stock pursuant to a tender offer or an 
exchange offer for all outstanding Common Shares at a price and on terms 
determined by at least a majority of the Continuing Directors, and after 
receiving advice from one or more investment banking firms, to be (1) at a 
price which is fair to stockholders (taking into account all factors which 
such members of the Board of Directors deem relevant including, without 
limitation, prices which could reasonably be achieved if the Company or its 
assets were sold in an orderly basis designed to realize maximum value) and 
(2) otherwise in the best interests of the Company and its stockholders.

              (iv) In lieu of issuing Common Shares in accordance with 
Section 11(a)(ii) hereof, the Company may, if the Board of Directors of the 
Company, upon approval by a majority of the Continuing Directors, determines 
that such action is necessary or appropriate and not contrary to the interest 
of holders of Rights (and, in the event that the number of Common Shares 
which are authorized by the Company's Certificate of Incorporation but not 
outstanding or reserved for issuance for purposes other than upon exercise of 
the Rights are not sufficient to permit the exercise in full of the Rights, 
or if any necessary regulatory approval for such issuance has not been 
obtained by the Company), the Company shall: (A) determine the excess of (1) 
the value of the Common Shares issuable upon the exercise of a Right (the 
"Current Value")

                                                                          9
<PAGE>

over (2) the Purchase Price (such excess being referred to as the "Spread") 
and (B) with respect to each Right, make adequate provision to substitute for 
such Common Shares, upon exercise of the Rights, (1) cash, (2) a reduction in 
the Purchase Price, (3) other equity securities of the Company (including, 
without limitation, shares or units of shares of any series of preferred 
stock which the Board of Directors of the Company, upon approval by a 
majority of the Continuing Directors, has deemed to have the same value as 
Common Shares (such shares or units of shares of preferred stock are herein 
called "common stock equivalents")), except to the extent that the Company 
has not obtained any necessary regulatory approval for such issuance, (4) 
debt securities of the Company, except to the extent that the Company has not 
obtained any necessary regulatory approval for such issuance, (5) other 
assets or (6) any combination of the foregoing, having an aggregate value 
equal to the Current Value, where such aggregate value has been determined by 
the Board of Directors of the Company, upon approval by a majority of the 
Continuing Directors, based upon the advice of a nationally recognized 
investment banking firm selected by the Board of Directors of the Company, 
upon approval by a majority of the Continuing Directors; PROVIDED, HOWEVER, 
if the Company shall not have made adequate provision to deliver value 
pursuant to clause (B) above within thirty (30) days following the occurrence 
of an event described in Section 11(a)(ii), then the Company shall be 
obligated to deliver, upon the surrender for exercise of a Right and without 
requiring payment of the Purchase Price, Common Shares (to the extent 
available), except to the extent that the Company has not obtained any 
necessary regulatory approval for such issuance, and then, if necessary, 
cash, which shares and/or cash have an aggregate value equal to the Spread.  
If the Board of Directors, upon approval by a majority of the Continuing 
Directors, shall determine in good faith that it is likely that sufficient 
additional Common Shares could be authorized for issuance upon exercise in 
full of the Rights or that any necessary regulatory approval for such 
issuance will be obtained, the thirty (30) day period set forth above may be 
extended to the extent necessary, but not more than ninety (90) days after 
the occurrence of an event described in Section 11(a)(ii), in order that the 
Company may seek stockholder approval for the authorization of such 
additional shares or take action to obtain such regulatory approval (such 
period, as it may be extended, the "Substitution Period").  To the extent 
that the Company determines that some action need be taken pursuant to the 
first and/or second sentences of this Section 11(a)(iv), the Company (x) 
shall provide that such action shall apply uniformly to all outstanding 
Rights held by holders entitled to receive Common Shares or other securities 
or property upon exercise of such Rights and (y) may suspend the 
exercisability of the Rights until the expiration of the Substitution Period 
in order to seek any authorization of additional shares, to take any action 
to obtain any required regulatory approval and/or to decide the appropriate 
form of distribution to be made pursuant to such first sentence and to 
determine the value thereof.  In the event of any such suspension, the 
Company shall issue a public announcement stating that the exercisability of 
the Rights has been temporarily suspended, as well as a public announcement 
at such time as the suspension is no longer in effect and shall promptly 
notify the Rights Agent of such suspension.  For purposes of this Section 
11(a)(iv), the value of the Common Shares shall be the current per share 
market price (as determined pursuant to Section 11(d) hereof) of the Common 
Shares at the Close of Business on the date of the occurrence of one of the 
events described in Section 11(a)(ii) and the value of any "common stock 
equivalent" shall be deemed to have the same value as the Common Shares on 
such date.

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

                                                                          10
<PAGE>

          (c) In case the Company shall fix a record date for the making of a 
distribution to all holders of the Preferred Shares (including any such 
distribution made in connection with a consolidation or merger in which the 
Company is the continuing or surviving corporation) of evidences of 
indebtedness or assets (other than a regular quarterly cash dividend or a 
dividend payable in Preferred Shares) or subscription rights or warrants 
(excluding those referred to in Section 11(b) hereof), the Purchase Price to 
be in effect after such record date shall be determined by multiplying the 
Purchase Price in effect immediately prior to such record date by a fraction, 
the numerator of which shall be the then current per share market price of 
the Preferred Shares on such record date, less the fair market value (as 
determined in good faith by the Board of Directors of the Company, upon 
approval by a majority of the Continuing Directors, whose determination shall 
be described in a statement filed with the Rights Agent) of the portion of 
the assets or evidences of indebtedness so to be distributed or of such 
subscription rights or warrants applicable to one Preferred Share and the 
denominator of which shall be such current per share market price of the 
Preferred Shares. Such adjustments shall be made successively whenever such a 
record date is fixed; and in the event that such distribution is not so made, 
the Purchase Price shall again be adjusted to be the Purchase Price which 
would then be in effect if such record date had not been fixed.

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

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

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

                                                                          11
<PAGE>

          (f) If as a result of an adjustment made pursuant to Section 11(a) 
hereof, the holder of any Right thereafter exercised shall become entitled to 
receive any shares of capital stock of the Company other than Preferred 
Shares, thereafter the number of such other shares so receivable upon 
exercise of any Right shall be subject to adjustment from time to time in a 
manner and on terms as nearly equivalent as practicable to the provisions 
with respect to the Preferred Shares contained in Section 11(a) through (c), 
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to 
the Preferred Shares shall apply on like terms to any such other shares.

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

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

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

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

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

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

                                                                          12
<PAGE>

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

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

          Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF 
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13 
hereof, the Company shall promptly (a) prepare a certificate setting forth 
such adjustment, and a brief statement of the facts accounting for such 
adjustment, (b) file with the Rights Agent and with each transfer agent for 
the Common Shares or the Preferred Shares (if such transfer agent is an 
entity other than the Rights Agent) a copy of such certificate and (c) mail a 
brief summary thereof to each holder of a Right Certificate in accordance 
with Section 25 hereof.  Notwithstanding the foregoing sentence, the failure 
by the Company to make such certification or give such notice shall not 
affect the validity of or the force or effect of the requirement for such 
adjustment.  The Rights Agent shall be fully protected in relying on any such 
certificate and on any adjustment contained therein and shall not be deemed 
to have knowledge of such adjustment unless and until it shall have received 
such certificate.

          Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR 
EARNING POWER. (a) After the Rights become exercisable, except as provided in 
Section 13(b) hereof, in the event, directly or indirectly, (1) the Company 
shall consolidate with, or merge with and into, any other Person, (2) any 
Person shall consolidate with the Company, or merge with and into the Company 
and the Company shall be the continuing or surviving corporation of such 
consolidation or merger and, in connection with such consolidation or merger, 
all or part of the Common Shares shall be changed into or exchanged for stock 
or other securities of any other Person (or the Company) or cash or any other 
property, or (3) the Company shall sell or otherwise transfer (or one or more 
of its Subsidiaries shall sell or otherwise transfer), in one or more 
transactions, directly or indirectly, assets or earning power aggregating 50% 
or more of the assets or earning power of the Company and its Subsidiaries 
(taken as a whole) to any other Person other than the Company or one or more 
of its wholly-owned Subsidiaries, then, and in each such case, proper 
provision shall be made so that (i) each holder of a Right (except as 
otherwise provided herein) shall thereafter have the right to receive, upon 
the exercise thereof at a price equal to the then current Purchase Price 
multiplied by the number of one one-hundredths of a Preferred Share for which 
a Right is then exercisable, in accordance with the terms of this Agreement 
and in lieu of Preferred Shares, such number of Common Shares of such other 
Person (including the Company as successor thereto or as the surviving 
corporation) as shall equal the result obtained by (A) multiplying the then 
current Purchase Price by the number of one one-hundredths of a Preferred 
Share for which a Right is then exercisable and dividing that product by (B) 
50% of the then current per share market price of the Common Shares of such 
other Person (determined pursuant to Section 11(d) hereof) on the date of 
consummation of such consolidation, merger, sale or transfer; (ii) the issuer 
of such Common Shares shall thereafter be liable for, and shall assume, by 
virtue of such consolidation, merger, sale or transfer, all the obligations 
and duties of the Company pursuant to this Agreement; (iii) the term 
"Company" shall thereafter be deemed to refer to such issuer; and (iv) such 
issuer shall take such steps (including, but not limited to, the reservation 
of a sufficient number of its Common Shares in accordance with Section 9 
hereof) in connection with such consummation as may be necessary to assure 
that the provisions hereof shall thereafter be applicable, as nearly as 
reasonably may be, in relation to the Common Shares thereafter deliverable 
upon the exercise of the Rights.  The Company shall not consummate any such 
consolidation, merger, sale or transfer unless prior thereto the Company and 
such issuer shall have executed and delivered to the Rights Agent a 
supplemental agreement so providing.  The 

                                                                          13
<PAGE>

Company shall not enter into any transaction of the kind referred to in this 
Section 13 if at the time of such transaction there are any rights, warrants, 
instruments or securities outstanding or any agreements or arrangements 
which, as a result of the consummation of such transaction, would eliminate 
or substantially diminish the benefits intended to be afforded by the Rights. 
 The provisions of this Section 13 shall similarly apply to successive 
mergers or consolidations or sales or other transfers. 

          The supplemental agreement referred to above in this Section 13(a) 
to be entered into by the Company and the Rights Agent shall also provide 
that, as soon as practicable after the date of any of the events described in 
this Section 13(a), such issuer shall:

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

              (ii) use its best efforts to list (or continue the listing of) 
the Rights and the securities purchasable upon exercise of the Rights on a 
national securities exchange or to meet the eligibility requirements for 
quotation on Nasdaq; and

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

          (b) In the event of any merger or other acquisition transaction 
involving the Company pursuant to an agreement described in Section 
1(c)(ii)(A)(2), the provisions of Section 13(a) hereof shall not be 
applicable to such transaction and this Rights Agreement and the rights of 
holders of Rights hereunder shall be terminated in accordance with Section 
7(a) hereof.

          (c) The term "issuer," for purposes of this Section 13, shall refer 
to the Person (or Affiliate or Associate) referred to in Section 13(a); 
PROVIDED, HOWEVER, that (i) if such Person (or Affiliate or Associate) is a 
direct or indirect Subsidiary of another Person, the term "issuer" shall 
refer to such other Person, and (ii) in case such Person is a Subsidiary, 
directly or indirectly, of more than one Person, the term "issuer" shall 
refer to whichever of such Persons is the issuer of such Common Shares having 
the greatest aggregate value.

          (d) If, for any reason, the Rights cannot be exercised for Common 
Shares of such issuer as provided in Section 13(a), then each holder of 
Rights shall have the right to exchange its Rights for cash from such issuer 
in an amount equal to the number of Common Shares that it would otherwise be 
entitled to purchase multiplied by 50% of the current per share market price, 
as determined pursuant to Section 11(d) hereof, of such Common Shares of such 
issuer.  If, for any reason, the foregoing provision cannot be applied to 
determine the cash amount into which the Rights are exchangeable, then the 
Board of Directors of the Company, upon approval by a majority of the 
Continuing Directors, based upon the advice of one or more nationally 
recognized investment banking firms, shall determine such amount reasonably 
and with good faith due to the holders of Rights.  Any such determination 
shall be final and binding on the Rights Agent and the holders of Rights.

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

                                                                          14
<PAGE>

maker making a market in the Rights selected by the Board of Directors of the 
Company, upon approval by a majority of the Continuing Directors.  If on any 
such date no such market maker is making a market in the Rights, the fair 
value of the Rights on such date as determined in good faith by the Board of 
Directors of the Company, upon approval by a majority of the Continuing 
Directors, shall be used.  If the Rights are not publicly traded, the current 
market value of a whole Right shall equal the difference between the closing 
price of a Common Share (as determined pursuant to the second sentence of 
Section 11(d)(i) hereof) less the current Purchase Price, multiplied by 100.

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

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

          Section 15. RIGHTS OF ACTION. All rights of action in respect of 
this Agreement, excepting the rights of action given to the Rights Agent 
under Section 18 hereof, are vested in the respective registered holders of 
the Right Certificates (and, prior to the Distribution Date, the registered 
holders of the Common Shares); and any registered holder of any Right 
Certificate (or, prior to the Distribution Date, of the Common Shares), 
without the consent of the Rights Agent or of the holder of any other Right 
Certificate (or, prior to the Distribution Date, of the Common Shares), may, 
in such holder's own behalf and for such holder's own benefit, enforce, and 
may institute and maintain any suit, action or proceeding against the Company 
to enforce, or otherwise act in respect of, such holder's right to exercise 
the Rights evidenced by such Right Certificate in the manner provided in such 
Right Certificate and in this Agreement.  Without limiting the foregoing or 
any remedies available to the holders of Rights, it is specifically 
acknowledged that the holders of Rights would not have an adequate remedy at 
law for any breach of this Agreement and will be entitled to specific 
PERFORMANCE OF THE OBLIGATIONS HEREUNDER, AND INJUNCTIVE RELIEF AGAINST 
ACTUAL OR THREATENED VIOLATIONS OF THE OBLIGATIONS OF ANY PERSON SUBJECT TO 
THIS AGREEMENT.

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

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

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

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

          (d) notwithstanding anything in this Agreement to the contrary, 
neither the Company nor the Rights Agent shall have any liability to any 
holder of a Right or other Person as a result of its inability to perform any 
of its 

                                                                          15
<PAGE>

obligations under this Agreement by reason of any preliminary or permanent 
injunction or other order, decree or ruling issued by a court of competent 
jurisdiction or by a governmental, regulatory or administrative agency or 
commission, or any statute, rule, regulation or executive order promulgated 
or enacted by any governmental authority, prohibiting or otherwise 
restraining performance of such obligation; PROVIDED, HOWEVER, the Company 
must use its best efforts to have any such order, decree or ruling lifted or 
otherwise overturned as soon as possible.

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

          Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay 
to the Rights Agent reasonable compensation for all services rendered by it 
hereunder and, from time to time, on demand of the Rights Agent, its 
reasonable expenses and counsel fees and other disbursements incurred in the 
administration and execution of this Agreement and the exercise and 
performance of its duties hereunder.  The Company also agrees to indemnify 
the Rights Agent for, and to hold it harmless against, any loss, liability, 
or expense, incurred without gross negligence, bad faith or willful 
misconduct on the part of the Rights Agent, for any action taken, suffered or 
omitted by the Rights Agent in connection with the execution, acceptance and 
administration of this Agreement and the exercise and performance hereunder 
of its duties, including the costs and expenses of defending against and 
appealing any claim of liability in the premises.  The indemnity provided 
herein shall survive the termination of this Agreement and the expiration of 
the Rights.

          The Rights Agent shall be protected and shall incur no liability 
for, or in respect of any action taken, suffered or omitted by it in 
connection with, its administration of this Agreement and the exercise and 
performance of its duties hereunder in reliance upon any Right Certificate or 
certificate for the Preferred Shares or Common Shares or for other securities 
of the Company, instrument of assignment or transfer, power of attorney, 
endorsement, affidavit, letter, notice, direction, consent, certificate, 
statement, or other paper or document believed by it to be genuine and to be 
signed, executed and, where necessary, verified or acknowledged, by the 
proper person or persons, or otherwise upon the advice of counsel as set 
forth in Section 20 hereof.

          Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS 
AGENT.  Any corporation into which the Rights Agent or any successor Rights 
Agent may be merged or with which it may be consolidated, or any corporation 
resulting from any merger or consolidation to which the Rights Agent or any 
successor Rights Agent shall be a party, or any corporation succeeding to the 
stock transfer or corporate trust business of the Rights Agent or any 
successor Rights Agent, shall be the successor to the Rights Agent under this 
Agreement without the execution or filing of any paper or any further act on 
the part of any of the parties hereto, provided that such corporation would 
be eligible for appointment as a successor Rights Agent under the provisions 
of Section 21 hereof.  In case at the time such successor Rights Agent shall 
succeed to the agency created by this Agreement any of the Right Certificates 
shall have been countersigned but not delivered, any such successor Rights 
Agent may adopt the countersignature of the predecessor Rights Agent and 
deliver such Right Certificates so countersigned; and in case at that time 
any of the Right Certificates shall not have been countersigned, any 
successor Rights Agent may countersign such Right Certificates either in the 
name of the predecessor Rights Agent or in the name of the successor Rights 
Agent; and in all such cases such Right Certificates shall have the full 
force provided in the Right Certificates and in this Agreement.

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

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

                                                                          16
<PAGE>

          (a) The Rights Agent may consult with legal counsel of its choice 
(who may be legal counsel for the Company), and the advice or 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 advice or opinion. 

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

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

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

          (e) The Rights Agent shall not be under any liability or 
responsibility in respect of the legality, validity or enforceability of this 
Agreement or the execution and delivery hereof (except the due execution 
hereof by the Rights Agent) or in respect of the legality, validity or 
enforceability or the execution of any Right Certificate (except its 
countersignature thereof); nor shall it be liable or responsible for any 
breach by the Company of any covenant or condition contained in this 
Agreement or in any Right Certificate; nor shall it be responsible for any 
change in the exercisability of the Rights (including the Rights becoming 
void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of 
the Rights (including the manner, method or amount thereof) provided for in 
Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts 
that would require any such change or adjustment (except with respect to the 
exercise of Rights evidenced by Right Certificates after receipt of the 
certificate described in Section 12 hereof); nor shall it by any act 
hereunder be deemed to make any representation or warranty as to the 
authorization or reservation of any Preferred Shares to be issued pursuant to 
this Agreement or any Right Certificate or as to whether any Preferred Shares 
will, when issued, be validly authorized and issued, fully paid and 
nonassessable.

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

          (g) The Rights Agent is hereby authorized and directed to accept 
instructions with respect to the administration, exercise and performance of 
its duties hereunder from any one of the Chairman of the Board, the Chief 
Executive Officer, the President, any Vice President, the Secretary or the 
Treasurer of the Company, and to apply to such officers for advice or 
instructions in connection with its duties, and it shall not be responsible 
or liable for any action taken, suffered or omitted by it in good faith in 
accordance with instructions of any such officer or for any delay in acting 
while waiting for those instructions.  Any application by the Rights Agent 
for written instructions from the Company may, at the option of the Rights 
Agent, set forth in writing any action proposed to be taken or omitted by the 
Rights Agent under this Rights Agreement and the date on and/or after which 
such action shall be taken or such omission shall be effective.  The Rights 
Agent shall not be liable for any action taken by, or omission of, the Rights 
Agent in accordance with a proposal included in any such application on or 
after the date specified in such application (which date shall not be less 
than five (5) Business Days after the date any officer of the Company 
actually received such application, unless any such officer shall have 
consented in writing to an earlier date) unless, prior to taking any such 
action (or the effective date in the case of an omission), the Rights Agent 
shall have received written instructions in response to such application 
specifying the action to be taken or omitted.

          (h) The Rights Agent and any stockholder, director, officer or 
employee of the Rights Agent may buy, sell or deal in any of the Rights or 
other securities of the Company or become pecuniarily interested in any 
transaction in which the Company may be interested, or contract with or lend 
money to the Company or otherwise act as fully and freely as 

                                                                          17
<PAGE>

though it were not Rights Agent under this Agreement.  Nothing herein shall 
preclude the Rights Agent from acting in any other capacity for the Company 
or for any other legal entity.

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

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

          (k) If, with respect to any Right Certificate surrendered to the 
Rights Agent for exercise, transfer, split up, combination or exchange, the 
certification on the form of assignment or form of election to purchase, as 
the case may be, that the Rights evidenced by the Right Certificate are not 
owned by an Acquiring Person, or an Affiliate or Associate thereof, has 
either not been completed or in any manner indicates any other response 
thereto, the Rights Agent shall not take any further action with respect to 
such requested exercise, transfer, split up, combination or exchange, without 
first consulting with the Company.

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

          Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any 
of the provisions of this Agreement or of the Rights to the contrary, the 
Company may, at its option, issue new Right Certificates evidencing Rights in 
such form as may be approved by its Board of Directors, upon approval by a 
majority of the Continuing Directors, to reflect any adjustment or change in 
the Purchase Price and the number or kind or class of shares or other 
securities or property purchasable under the Right Certificates made in 
accordance with the provisions of this Agreement.  In addition, in connection 
with the issuance or sale of Common Shares following the Distribution Date 
and prior to the redemption or expiration of the Rights, the Company (a) 
shall, with respect to Common Shares so issued or sold pursuant to the 
exercise of stock options or under any employee benefit plan or arrangement 
or upon the exercise, conversion or exchange of securities of the Company 
currently outstanding or issued at any time in the future by the Company and 
(b) may, in any other case, if deemed necessary 

                                                                          18
<PAGE>

or appropriate by the Board of Directors of the Company, upon approval by a 
majority of the Continuing Directors, issue 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 and 
this sentence shall be null and void AB INITIO if, and to the extent that, 
such issuance or this sentence would create a significant risk of or result 
in material adverse tax consequences to the Company or the Person to whom 
such Right Certificate would be issued or would create a significant risk of 
or result in such options' or employee plans' or arrangements' failing to 
qualify for otherwise available special tax treatment 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 23. REDEMPTION. (a) The Company may, at its option, upon 
approval by a majority of the Continuing Directors, at any time prior to the 
earlier of (i) the tenth business day following the Shares Acquisition Date, 
or (ii) such date or dates on or after the tenth business day following the 
Shares Acquisition Date to which such option may be extended by a majority of 
the Continuing Directors (for one or more successive 10 day periods) by 
vote(s) first taken or written consent(s) first given prior to the tenth 
business day following the Shares Acquisition Date and, thereafter, prior to 
the completion of any such 10 day extension or extensions (or, if the Shares 
Acquisition Date shall have occurred prior to the Record Date, prior to (A) 
the tenth business day following the Record Date or (B) such date or dates on 
or after the tenth business day after the Record Date to which such option 
may be extended by a majority of the Continuing Directors (for one or more 
successive 10 day periods) by vote(s) first taken or written consent(s) first 
given prior to the tenth business day following the Record Date and, 
thereafter, prior to the completion of any such 10 day extension or 
extensions), redeem all but not less than all the then outstanding Rights at 
a redemption price of $.01 per Right, appropriately adjusted to reflect any 
stock split, stock dividend or similar transaction occurring after the date 
hereof (such redemption price being hereinafter referred to as the 
"Redemption Price"), and the Company may, at its option, pay the Redemption 
Price either in cash, Common Shares (based on the current per share market 
price thereof (as determined pursuant to Section 11(d) hereof) at the time of 
redemption), or any other form of consideration deemed appropriate by the 
Board of Directors.  The redemption of the Rights by the Board of Directors 
may be made effective at such time on such basis and with such conditions as 
the Board of Directors in its sole discretion may establish, upon approval by 
a majority of the Continuing Directors.

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

          (c) Notwithstanding anything contained in this Agreement to the 
contrary, the Rights shall not be exercisable pursuant to Section 7(a) at any 
time when the Rights are redeemable hereunder.

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

          (b) Immediately upon the action of the Board of Directors of the 
Company ordering the exchange of any Rights pursuant to subsection (a) of 
this Section 24 and without any further action and without any notice, the 
right to exercise 

                                                                          19
<PAGE>

such Rights shall terminate and the only right thereafter of a holder of such 
Rights shall be to receive that number of Common Shares equal to the number 
of such Rights held by such holder multiplied by the Exchange Ratio.  The 
Company shall promptly give public notice of any such exchange; PROVIDED, 
HOWEVER that the failure to give, or any defect in, such notice shall not 
affect the validity of such exchange.  The Company promptly shall mail a 
notice of any such exchange to all of the holders of such Rights at their 
last addresses as they appear upon the registry books of the Rights Agent. 
Any notice which is mailed in the manner herein provided shall be deemed 
given, whether or not the holder receives the notice.  Each such notice of 
exchange will state the method by which the exchange of the Common Shares for 
Rights will be effected and, in the event of any partial exchange, the number 
of Rights which will be exchanged.  Any partial exchange shall be effected 
pro rata based on the number of Rights (other than Rights which have become 
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each 
holder of Rights.

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

          (d) In the event that there shall not be sufficient Common Shares 
or Preferred Shares issued but not outstanding or authorized but unissued to 
permit any exchange of Rights as contemplated in accordance with Section 
24(a), the Company shall either take such action as may be necessary to 
authorize additional Common Shares or Preferred Shares for issuance upon 
exchange of the Rights or alternatively, at the option of the Board of 
Directors, upon approval by a majority of the Continuing Directors, with 
respect to each Right (i) pay cash in an amount equal to the Purchase Price, 
in lieu of issuing Common Shares or Preferred Shares in exchange therefor, or 
(ii) issue debt or equity securities, or a combination thereof, having a 
value equal to the Current Value (as hereinafter defined) of the Common 
Shares or Preferred Shares exchangeable for each such Right, where the value 
of such securities shall be determined by a nationally recognized investment 
banking firm selected by the Board of Directors, upon approval by a majority 
of the Continuing Directors, or (iii) deliver any combination of cash, 
property, Common Shares, Preferred Shares and/or other securities having a 
value equal to the Current Value in exchange for each Right.  The term 
"Current Value," for the purposes of this Section 24, shall mean the product 
of the current per share market price of Common Shares (determined pursuant 
to Section 11(d) on the date of the occurrence of the event described above 
in subparagraph (a)) multiplied by the number of Common Shares for which the 
Right otherwise would be exchangeable if there were sufficient shares 
available.  To the extent that the Company determines that some action need 
be taken pursuant to clauses (i), (ii) or (iii) of this Section 24(d), the 
Board of Directors, upon approval by a majority of the Continuing Directors, 
may temporarily suspend the exercisability of the Rights for a period of up 
to sixty (60) days following the date on which the event described in Section 
24(a) shall have occurred, in order to seek any authorization of additional 
Common Shares or Preferred Shares and/or to decide the appropriate form of 
distribution to be made pursuant to the above provision and to determine the 
value thereof.  In the event of any such suspension, the Company shall issue 
a public announcement stating that the exercisability of the Rights has been 
temporarily suspended.

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

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

                                                                          20
<PAGE>

reclassification or otherwise than by payment of dividends in Common Shares), 
then, in each such case, the Company shall give to each holder of a Right 
Certificate, in accordance with Section 26 hereof, a notice of such proposed 
action, which shall specify the record date for the purposes of such stock 
dividend, or distribution of rights or warrants, or the date on which such 
reclassification, consolidation, merger, sale, transfer, liquidation, 
dissolution, or winding up is to take place and the date of participation 
therein by the holders of the Common Shares and/or Preferred Shares, if any 
such date is to be fixed, and such notice shall be so given in the case of 
any action covered by clause (i) or (ii) above at least ten (10) days prior 
to the record date for determining holders of the Preferred Shares for 
purposes of such action, and in the case of any such other action, at least 
ten (10) days prior to the date of the taking of such proposed action or the 
date of participation therein by the holders of the Common Shares and/or 
Preferred Shares, whichever shall be the earlier.

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

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

          Ultratech Stepper, Inc.
          3050 Zanker Road
          San Jose, CA  95134

          Attention:     Arthur W. Zafiropoulo
                         Chairman and Chief Executive Officer

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

          The First National Bank of Boston
          c/o Boston EquiServe Limited Partnership
          150 Royall Street, Mail Stop 45-02-62
          Canton, MA  02021

          Attention:  Shareholder Services Division

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

          Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution 
Date, the Company may supplement or amend this Agreement in any respect, 
without the approval of any holders of Rights, by action of its Board of 
Directors upon approval by a majority of the Continuing Directors, and the 
Rights Agent shall, if the Company so directs, execute such supplement or 
amendment. From and after the Distribution Date, the Company may from time to 
time supplement or amend this Agreement without the approval of any holders 
of Rights, by action of its Board of Directors, upon approval by a majority 
of the Continuing Directors, in order to cure any ambiguity, to correct or 
supplement any provision contained herein which may be defective or 
inconsistent with any other provisions herein, or to make any other 
provisions with respect to the Rights which the Company may deem necessary or 
desirable and which shall be consistent with, and for the purpose of 
fulfilling, the objectives of the Board of Directors in adopting this 
Agreement, including, without limitation, to change the Purchase Price, the 
Redemption Price, any time periods herein specified, and any other term 
hereof, any such supplement or amendment to be evidenced by a writing signed 
by the Company and the Rights Agent; PROVIDED, HOWEVER, that from and after 
such time as any Person becomes an Acquiring Person, this Agreement shall not 
be amended in any manner which would adversely affect the interests of the 
holders of Rights.  Upon receipt of a certificate from an appropriate officer 
of the Company that the proposed supplement or amendment is consistent with 
this Section 27 and, after such time as any Person has become an Acquiring 
Person, that the proposed supplement or amendment does not adversely affect 
the interests of the 

                                                                          21
<PAGE>

holders of Rights, the Rights Agent shall execute such supplement or 
amendment.  Without limiting the foregoing, the Company may at any time prior 
to such time as any Person becomes an Acquiring Person, by action of its 
Board of Directors, upon approval by a majority of the Continuing Directors, 
amend this Agreement to lower the thresholds set forth in Sections 1(a) and 
3(a) to not less than the greater of (i) any percentage greater than the 
largest percentage of the outstanding Common Shares then known by the Company 
to be beneficially owned by any Person (other than the Company, any 
Subsidiary of the Company, any employee benefit plan of the Company or any 
Subsidiary of the Company, or any entity holding Common Shares for or 
pursuant to the terms of any such plan) and (ii) 10%.

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

          Section 29.  DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. 
For all purposes of this Agreement, any calculation of the number of Common 
Shares outstanding at any particular time, including for purposes of 
determining the particular percentage of such outstanding Common Shares of 
which any Person is the Beneficial Owner, shall be made in accordance with 
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations 
under the Exchange Act.  The Board of Directors of the Company (and, where 
specifically provided for herein, only upon approval by a majority of the 
Continuing Directors) shall have the exclusive power and authority to 
administer this Agreement and to exercise all rights and powers specifically 
granted to the Board, or the Company, or as may be necessary or advisable in 
the administration of this Agreement, including, without limitation, the 
right and power to (i) interpret the provisions of this Agreement and (ii) 
make all determinations deemed necessary or advisable for the administration 
of this Agreement (including a determination to redeem or not redeem the 
Rights or to amend the Agreement).  All such actions, calculations, 
interpretations and determinations (including, for purposes of clause (y) 
below, all omissions with respect to the foregoing), which are done or made 
by the Board (or, where specifically provided for herein, upon approval by a 
majority of the Continuing Directors) in good faith, shall (x) be final, 
conclusive and binding on the Company, the Rights Agent, the holders of the 
Right Certificates and all other parties and (y) not subject the Board or the 
Continuing Directors to any liability to the holders of the Rights.

          Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement 
shall be construed to give to any person or corporation other than the 
Company, the Rights Agent and the registered holders of the Right 
Certificates (and, prior to the Distribution Date, the Common Shares) any 
legal or equitable right, remedy or claim under this Agreement; but this 
Agreement shall be for the sole and exclusive benefit of the Company, the 
Rights Agent and the registered holders of the Right Certificates (and, prior 
to the Distribution Date, the Common Shares).

          Section 31. SEVERABILITY. If any term, provision, covenant or 
restriction of this Agreement is held by a court of competent jurisdiction or 
other authority to be invalid, void or unenforceable, the remainder of the 
terms, provisions, covenants and restrictions of this Agreement shall remain 
in full force and effect and shall in no way be affected, impaired or 
invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this 
Agreement to the contrary, if any such term, provision, covenant or 
restriction is held by such court or authority to be invalid, void or 
unenforceable and the Board of Directors of the Company, upon approval by a 
majority of the Continuing Directors, determines in its good faith judgment 
that severing the invalid language from this Agreement would adversely affect 
the purpose or effect of this Agreement, the right of redemption set forth in 
Section 23 hereof shall be reinstated and shall not expire until the tenth 
business day following the date of such determination by the Board of 
Directors of the Company.

          Section 32. GOVERNING LAW. This Agreement and each Right 
Certificate issued hereunder shall be deemed to be a contract made under the 
laws of the State of Delaware and for all purposes shall be governed by and 
construed in accordance with the laws of such State applicable to contracts 
to be made and performed entirely within such State.

          Section 33. COUNTERPARTS. This Agreement may be executed in any 
number of counterparts and each of such counterparts shall for all purposes 
be deemed to be an original, and all such counterparts shall together 
constitute but one and the same instrument.

                                                                          22
<PAGE>

          Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the 
several Sections of this Agreement are inserted or convenience only and shall 
not control or affect the meaning or construction of any of the provisions 
hereof.

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

ATTEST:                                 ULTRATECH STEPPER, INC.



By  /s/ William G. Leunis, III          By  /s/ Arthur W. Zafiropoulo
  --------------------------------        --------------------------------
  Name: William G. Leunis, III            Name: Arthur W. Zafiropoulo
  Title: Chief Financial Officer          Title: Chairman and Chief
         and Secretary                           Executive Officer



ATTEST:                                 THE FIRST NATIONAL BANK OF 
                                        BOSTON, as Rights Agent



By  /s/ Angela R. Dray                  By  /s/ Katherine S. Anderson
  --------------------------------        --------------------------------
  Name: Angela R. Dray                    Name: Katherine S. Anderson
  Title: Account Manager                  Title: Administration Manager

                                                                          23