SELECT THERAPEUTICS INC.

                                       AND

                      FLORIDA ATLANTIC STOCK TRANSFER, INC.

                                 AS RIGHTS AGENT



                                RIGHTS AGREEMENT

                            DATED: FEBRUARY 16, 2001




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<PAGE>

                                RIGHTS AGREEMENT

     RIGHTS AGREEMENT, dated February 16, 2001 (the "Agreement"), between Select
Therapeutics Inc., a Delaware corporation (the "Company"),  and Florida Atlantic
Stock Transfer, Inc., as Rights Agent (the "Rights Agent").

                               W I T N E S S E T H

     WHEREAS,  effective February 16, 2001 the Board of Directors of the Company
(the "Board")  authorized and declared a dividend  distribution of one Right for
each share of Common Stock (as hereinafter  defined) of the Company  outstanding
at the  close of  business  on  February  28,  2001  (the  "Record  Date"),  and
authorized the issuance of one Right (as such number may hereinafter be adjusted
pursuant to the  provisions  of Section  11(i) or Section 11(p) hereof) for each
share of Common  Stock of the Company  issued  between the Record Date  (whether
originally  issued or delivered from the Company's  treasury) and the earlier of
the Distribution Date or the Expiration Date, each Right initially  representing
the  right  to  purchase  one  one-thousandth  of a share  of  Series  A  Junior
Participating  Preferred  Stock of the  Company  having the  rights,  powers and
preferences set forth in the form of Certificate of Designations attached hereto
as EXHIBIT A, upon the terms and subject to the conditions hereinafter set forth
(the "Rights");

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

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

     (a)  "Acquiring  Person" shall mean any Person who or which,  together with
all Affiliates and Associates of such Person,  shall be the Beneficial  Owner of
20% or more of the  shares  of  Common  Stock  then  outstanding,  but shall not
include (i) the Company, (ii) any Subsidiary of the Company,  (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company, (iv) any Person
organized,  appointed or established by the Company for or pursuant to the terms
of any such plan, or (v) an Exempted Person.  Notwithstanding the foregoing, (x)
no Person shall become an "Acquiring  Person" as the result of an acquisition of
Common Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by


                                       10
<PAGE>

such  Person to 20% or more of the shares of Common  Stock of the  Company  then
outstanding;  provided,  however that if a Person  shall  become the  Beneficial
Owner  of 20% or  more  of the  shares  of  Common  Stock  of the  Company  then
outstanding  as the result of an  acquisition of Common Stock by the Company and
shall,  following  written notice from, or public  disclosure by, the Company of
such  share  purchases  by  the  Company  become  the  Beneficial  Owner  of any
additional  Common Stock of the Company and shall then  beneficially  own 20% or
more of the shares of Common Stock then  outstanding,  then such Person shall be
deemed to be an "Acquiring Person" and (y) if the Board determines in good faith
that a Person who would otherwise be an "Acquiring  Person," as defined pursuant
to  the   foregoing   provisions  of  this   paragraph   (a),  has  become  such
inadvertently, and such Person divests as promptly as practicable (as determined
in good faith by the Board of  Directors),  but in any event  within 15 Business
Days,  following  receipt of written  notice from the Company of such event,  of
Beneficial  Ownership of a  sufficient  number of shares of Common Stock so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring  Person" for any purposes of this Agreement unless and until
such Person shall again become an "Acquiring Person."

     (b) "Act" shall mean the Securities Act of 1933, as amended.

     (c) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such  terms in Rule  12b-2 of the  General  Rules and  Regulations  under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") as in effect on
the date of this Agreement.

     (d)  "Adjustment  Shares"  shall  have the  meaning  set  forth in  Section
11(a)(ii).

     (e) 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,  directly or indirectly,  owns or has 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),  whether or not in writing,  or
upon


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<PAGE>

the exercise of conversion rights,  exchange rights,  other rights,  warrants or
options, or otherwise;  PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial  Owner"  of,  or to  "beneficially  own,"  (A)  securities  tendered
pursuant  to a tender or  exchange  offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange,  or (B) securities  issuable upon exercise of
Rights  at any time  prior  to the  occurrence  of a  Triggering  Event,  or (C)
securities  issuable upon exercise of Rights from and after the  occurrence of a
Triggering  Event  which  Rights  were  acquired  by such  Person or any of such
Person's  Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof (the "Original Rights") or pursuant to Section
11(i) hereof in connection  with an adjustment made with respect to any Original
Rights;

          (ii)  which  such  Person  or  any  of  such  Person's  Affiliates  or
Associates,  directly or indirectly,  has the right to vote or dispose of or has
"beneficial  ownership" of (as determined  pursuant to Rule 13d-3 of the General
Rules and  Regulations  under the Exchange  Act, or any  comparable or successor
rule), including 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),  whether or
not in  writing;  PROVIDED,  HOWEVER,  that a Person  shall  not be  deemed  the
"Beneficial  Owner"  of, or to  "beneficially  own,"  any  security  under  this
subparagraph  (ii) as a result of an agreement,  arrangement or understanding to
vote such security if such agreement,  arrangement or understanding:  (A) arises
solely from a revocable  proxy or consent given in response to a public proxy or
consent  solicitation  made pursuant to, and in accordance  with, the applicable
provisions of the General Rules and Regulations  under the Exchange Act, and (B)
is not then reportable by such Person 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 (or any Affiliate or Associate  thereof) 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)
whether or not in writing, for the purpose of acquiring, holding, voting (except
pursuant  to a  revocable  proxy or  consent  as  described  in the  proviso  to
subparagraph (ii) of this


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<PAGE>

paragraph (e)) or disposing of any voting securities of the Company.

     For all purposes of this Agreement, any calculation of the number of shares
of Common Stock  outstanding at any particular  time,  including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial  Owner,  shall be made in accordance  with
the last sentence of Rule  13d-3(d)(l)(i)  of the General Rules and  Regulations
under the Exchange Act.

     (f) "Board"  shall have the meaning set forth in the WHEREAS  clause at the
beginning of this Agreement.

     (g)  "Business  Day" shall mean any day other than a Saturday,  Sunday or a
day on which banking  institutions  in the  Commonwealth  of  Massachusetts  are
authorized or obligated by law or executive order to close.

     (h) "Close of  business"  on any given  date  shall mean 5:00 p.m.,  Boston
time, on such date; PROVIDED,  HOWEVER,  that if such date is not a Business Day
it shall mean 5:00 p.m., Boston time, on the next succeeding Business Day.

     (i) "Common Stock" shall mean the common stock,  $0.0001 par value,  of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company  shall mean the capital  stock of such Person with the greatest
voting power, or the equity  securities or other equity interest having power to
control or direct the management, of such Person.

     (j) "Common stock  equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.

     (k)  "Company"  shall  have  the  meaning  set  forth  in the  introductory
paragraph hereof.

     (l)  "Current  market  price"  shall have the  meaning set forth in Section
11(d)(i) hereof.

     (m) "Current Value" shall have the meaning set forth in Section  11(a)(iii)
hereof.

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


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<PAGE>

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

     (p) "Exchange Act" shall have the meaning set forth in Section 1(c) hereof.

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

     (r) "Exempted  Person"  shall mean the  shareholders  of Cytomatrix  LLC, a
California  limited  liability  company,  to the extent  that such  shareholders
receive  shares of Common Stock  pursuant to any  acquisition  by the Company of
Cytomatrix  LLC which the Company  may effect as  contemplated  by that  certain
Joint  Venture and  Shareholder  Agreement  dated  December 13, 2000 between the
Company and Cytomatrix LLC.

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

     (t) "Final  Expiration  Date"  shall mean the close of business on February
28, 2011.

     (u) "Person" shall mean any  individual,  firm,  corporation,  partnership,
trust, association, limited liability company or other entity.

     (v)  "Preferred  Stock" shall mean shares of Series A Junior  Participating
Preferred  Stock,  $0.0001  par  value,  of the  Company  having  the rights and
preferences  set forth in the form of  Certificate of  Designations  attached to
this  Agreement  as EXHIBIT A and, to the extent that there is not a  sufficient
number of shares of Series A Junior Participating  Preferred Stock authorized to
permit the full  exercise of the Rights,  any other series of  Preferred  Stock,
$0.0001 par value, of the Company  designated for such purpose  containing terms
substantially  similar  to  the  terms  of the  Series  A  Junior  Participating
Preferred Stock.

     (w)  "Principal  Party"  shall have the meaning set forth in Section  13(b)
hereof.

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


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<PAGE>

     (y) "Record Date" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.

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

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

     (bb) "Rights" shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.

     (cc) "Rights  Agent"  shall have the meaning set forth in the  introductory
paragraph hereof.

     (dd) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.

     (ee) "Section  11(a)(ii)  Event" shall mean an  acquisition of Common Stock
described in the first sentence of Section 11(a)(ii) hereof.

     (ff) "Section  11(a)(ii)  Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.

     (gg) "Section 13 Event" shall mean any event  described in clauses (x), (y)
or (z) of Section 13(a) hereof.

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

     (ii)  "Stock  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) under the Exchange Act) by
the Company or an  Acquiring  Person that an  Acquiring  Person has become such;
PROVIDED, HOWEVER that, if such Person is deemed not to be an "Acquiring Person"
pursuant to clause (y) of Section 1(a) hereof,  no Stock  Acquisition Date shall
be deemed to have occurred.

     (jj) "Subsidiary" shall mean, with reference to any Person, any corporation
of which an amount of voting securities  sufficient to elect at least a majority
of the  directors  of  such  corporation  is  beneficially  owned,  directly  or
indirectly, by such Person, or otherwise controlled by such Person.


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<PAGE>

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

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

     (mm)  "Triggering  Event"  shall mean any  Section  11(a)(ii)  Event or any
Section 13 Event.

     Section 2.  APPOINTMENT OF RIGHTS AGENT.  The Company  hereby  appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof,  shall prior to the Distribution  Date also
be the holders of the Common Stock) 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. ISSUANCE OF RIGHTS.

     (a) Until the earlier of (i) the close of  business  on the tenth  Business
Day (or such  later  date as may be  determined  by the  Board)  after the Stock
Acquisition Date (or, if the tenth Business Day after the Stock Acquisition Date
occurs  before the Record Date,  the close of business on the Record  Date),  or
(ii) the close of business on the tenth  Business Day (or such later date as may
be  determined  by action of the Board) after the date that a tender or exchange
offer by any Person (other than the Company,  any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or any
Person organized, appointed or established by the Company for or pursuant to the
terms of any such plan) is first  published  or sent or given within the meaning
of Rule 14d-2 of the General  Rules and  Regulations  under the Exchange Act, if
upon  consummation  thereof such Person would be the Beneficial  Owner of 20% or
more of the shares of Common  Stock then  outstanding,  (the  earlier of (i) and
(ii) being herein referred to as the "Distribution  Date"),  (x) the Rights will
be evidenced by the certificates for the Common Stock registered in the names of
the holders of the Common  Stock (which  certificates  for Common Stock shall be
deemed also to be certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the transfer of the


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<PAGE>

underlying shares of Common Stock (including a transfer to the Company). As soon
as  practicable  after the  Distribution  Date,  the  Rights  Agent will send by
first-class,  insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the  Distribution  Date,  at the address of
such  holder  shown  on  the  records  of  the  Company,   one  or  more  rights
certificates,  in  substantially  the  form of  EXHIBIT  B hereto  (the  "Rights
Certificates"),  evidencing  one Right for each  share of Common  Stock so held,
subject to adjustment as provided  herein.  In addition,  in connection with the
issuance or sale of shares of Common Stock following the  Distribution  Date and
prior to the redemption or expiration of the Rights, the Company (i) shall, with
respect to shares of Common Stock so issued or sold  pursuant to the exercise of
stock options or under any employee plan or  arrangement,  or upon the exercise,
conversion  or  exchange  of  securities  issued  by the  Company  prior  to the
Distribution  Date and (ii) may,  in any other  case,  if  deemed  necessary  or
appropriate by the Board, issue Rights Certificates representing the appropriate
number of Rights in connection  with such issuance or sale;  provided,  however,
that (x) no such Rights  Certificate shall be issued if, and to the extent that,
the  Company  shall be advised  by counsel  that such  issuance  would  create a
significant  risk of  material  adverse tax  consequences  to the Company or the
Person to whom such Rights  Certificate would be issued,  and (y) no such Rights
Certificate shall be issued if, and to the extent that,  appropriate  adjustment
shall  otherwise  have been made in lieu of the issuance  thereof.  In the event
that an  adjustment  in the number of Rights per share of Common  Stock has been
made pursuant to Sections 11(i) or 11(p) hereof,  at the time of distribution of
the Right  Certificates,  the Company shall make the  necessary and  appropriate
rounding  adjustments  (in accordance  with Section 14(a) hereof) so that Rights
Certificates  representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.

     (b) As promptly as practicable  following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Preferred Stock, in substantially
the form attached hereto as EXHIBIT C, by first-class,  postage prepaid mail, to
each record holder of the Common Stock 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 the Common  Stock  outstanding  as of the close of
business  on the Record  Date,  until the  Distribution  Date the Rights will be
evidenced by such


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<PAGE>

certificates for the Common Stock and the registered holders of the Common Stock
shall also be the registered holders of the associated Rights.

     (c) Rights  shall be issued  (i) in  respect of all shares of Common  Stock
that are issued (either as an original issuance or from the Company's  treasury)
after the Record Date but prior to the earlier of the  Distribution  Date or the
Expiration Date and (ii) in connection with the issuance or sale of Common Stock
following  the  Distribution  Date and  prior to the  Expiration  Date  upon the
exercise of stock options or under any employee benefit plan or arrangement,  or
upon the exercise,  conversion or exchange of  securities,  granted or issued by
the Company  prior to the  Distribution  Date.  Certificates  representing  such
shares of Common Stock (including, without limitation,  certificates issued upon
transfer or exchange of Common  Stock)  shall also be deemed to be  certificates
for Rights, and shall bear the following legend:

     This  certificate  also evidences and entitles the holder hereof to certain
     Rights as set forth in the Rights  Agreement  between  Select  Therapeutics
     Inc. ( the "Company") and Florida  Atlantic  Stock Transfer  Company,  Inc.
     (the "Rights  Agent")  dated as of February  16,  2001,  as the same may be
     amended,  restated or renewed from time to time (the  "Rights  Agreement"),
     the terms of which are hereby  incorporated  herein by reference and a copy
     of which is on file at the principal offices of the Company.  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. The Company will mail to the holder of this certificate a copy
     of the  Rights  Agreement,  as in  effect on the date of  mailing,  without
     charge promptly after receipt of a written request therefor.  Under certain
     circumstances set forth in the Rights Agreement,  Rights issued to, or held
     by, any Person who is, was or becomes an Acquiring  Person or any Affiliate
     or Associates  thereof (as such terms are defined in the Rights Agreement),
     whether  currently held by or on behalf of such Person or by any subsequent
     holder, may become null and void.

     With respect to such certificates  containing the foregoing  legend,  until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated  with the Common  Stock  represented  by such  certificates  shall be
evidenced  by such  certificates  alone and  registered  holders of Common Stock
shall


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<PAGE>

also be the registered  holders of the associated Rights.  Notwithstanding  this
Section 3(c),  the omission of a legend shall not affect the  enforceability  of
any part of this Rights Agreement or the rights of any holder of the Rights.

     (d) Until the earlier of the Distribution  Date or the Expiration Date, the
transfer of any certificates  representing  shares of Common Stock in respect of
which Rights have been issued shall also  constitute  the transfer of the Rights
associated  with such  shares of Common  Stock.  In the event  that the  Company
purchases or acquires any shares of Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such shares of Common Stock
shall be deemed  cancelled and retired so that the Company shall not be entitled
to exercise any Rights  associated  with the shares of Common Stock which are no
longer outstanding.

     Section 4. FORM OF RIGHTS CERTIFICATES.

     (a) The  Rights  Certificates  (and the  forms  of  election  to  purchase,
certification and assignment to be printed on the reverse thereof) shall each be
substantially  in the form set forth in EXHIBIT B hereto and may have such marks
of  identification  or designation  and such legends,  summaries or endorsements
printed thereon as 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 over-the-counter market on which the
Rights may from time to time be listed,  or to conform to usage.  Subject to the
provisions of Sections 7, 11 and 22 hereof,  the Rights  Certificates,  whenever
distributed,  shall  entitle the holders  thereof to purchase such number of one
one-thousandths  of a share of Preferred  Stock as shall be set forth therein at
the price set forth therein (such  exercise  price per one  one-thousandth  of a
share, the "Purchase Price"), but the amount and type of securities  purchasable
upon the exercise of each Right and the Purchase  Price thereof shall be subject
to adjustment as provided herein.

     (b) Any Rights  Certificate  issued pursuant to Section 3, Section 11(i) or
Section 22 hereof that represents Rights  beneficially owned by persons known to
be: (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person


                                       19
<PAGE>

becomes  such,  or (iii) a  transferee  of an  Acquiring  Person (or of any such
Associate or Affiliate) who becomes a transferee  prior to or concurrently  with
the Acquiring  Person  becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for  consideration)  from the Acquiring Person to
holders of equity  interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing)  regarding the transferred  Rights or (B) a transfer
which the Board has determined is part of a plan,  arrangement or  understanding
(whether or not in writing) that has as a primary purpose or effect avoidance of
Section 7(e) hereof,  and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon  transfer,  exchange,  replacement  or  adjustment of any
other Rights  Certificate  referred to in this  sentence,  shall contain (to the
extent feasible) the following legend:

     The Rights  represented by this Rights Certificate are or were beneficially
     owned by a Person who was or became an Acquiring  Person or an Affiliate or
     Associate of an  Acquiring  Person (as such terms are defined in the Rights
     Agreement). Accordingly, this Rights Certificate and the Rights represented
     hereby may become null and void in the  circumstances  specified in Section
     7(e) of such  Agreement.  The  provisions  of Section  7(e) hereof shall be
     operative  whether or not the  foregoing  legend is  contained  on any such
     Rights Certificate.

     Section 5. COUNTERSIGNATURE AND REGISTRATION.

     (a) The Rights  Certificates  shall be executed on behalf of the Company by
its Chairman of the Board,  President  and Chief  Executive  Officer or any Vice
President,  either  manually or by facsimile  signature,  and shall have affixed
thereto the Company's  seal or a facsimile  thereof,  which shall be attested by
the Secretary of the Company,  either  manually or by facsimile  signature.  The
Rights  Certificates  shall be manually  countersigned  by the Rights  Agent and
shall not be valid for any purpose unless so countersigned.  In case any officer
of the Company who shall have signed any of the Rights  Certificates shall cease
to be such officer of the Company  before  countersignature  by the Rights Agent
and  issuance  and   delivery  by  the   Company,   such  Rights   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 Rights  Certificates had not ceased to be such officer of the Company;  and
any Rights


                                       20
<PAGE>

Certificates  may be signed on behalf of the  Company by any person  who, at the
actual  date of the  execution  of such  Rights  Certificate,  shall be a proper
officer of the Company to sign such Rights Certificate,  although at the date of
the execution of this Rights Agreement any such person was not such an officer.

     (b) Following the  Distribution  Date, the Rights Agent shall keep or cause
to be kept, at its office  designated as the appropriate  place for surrender of
Rights  Certificates  upon  exercise or  transfer,  books for  registration  and
transfer of the Rights Certificates issued hereunder.  Such books shall show the
names and addresses of the respective  holders of the Rights  Certificates,  the
number of Rights evidenced on its face by each of the Rights  Certificates,  the
Certificate number and the date of each of the Rights Certificates.

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

     (a) Subject to the provisions of Section 4(b),  Section 7(e) and 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 Expiration Date, any Rights Certificate
or Certificates  (other than Rights  Certificates  representing Rights that have
become void pursuant to Section 7(e) hereof or that have been exchanged pursuant
to Section 24 hereof) may be  transferred,  split up,  combined or exchanged for
another Rights  Certificate or Certificates,  entitling the registered holder to
purchase a like number of one one-thousandths of a share of Preferred Stock (or,
following a Triggering  Event,  Common Stock,  other  securities,  cash or other
assets,  as  the  case  may  be)  as  the  Rights  Certificate  or  Certificates
surrendered  then  entitled  such  holder  (or  former  holder  in the case of a
transfer) to purchase.  Any registered  holder  desiring to transfer,  split up,
combine or  exchange  any Rights  Certificate  or  Certificates  shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred,  split up, combined or exchanged,
with the form of  assignment  and  certificate  appropriately  executed,  at the
office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such  surrendered  Rights  Certificate  until the registered
holder shall have completed and signed the certificate  contained in the form of
assignment on the reverse side


                                       21
<PAGE>

of such Rights  Certificate and shall have provided such additional  evidence of
the identity of the Beneficial Owner (or former  Beneficial Owner) or Affiliates
or Associates  thereof as the Company shall  reasonably  request.  Thereupon the
Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled  thereto a Rights  Certificate or
Rights  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 Rights Certificates.

     (b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss,  theft,  destruction or mutilation of a Rights
Certificate,  and,  in case of  loss,  theft or  destruction,  of  indemnity  or
security  reasonably  satisfactory to them, and 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 Rights  Certificate  if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for  countersignature  and delivery to the  registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.

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

     (a) Subject to Section 7(e)  hereof,  the  registered  holder of any Rights
Certificate  may  exercise  the Rights  evidenced  thereby  (except as otherwise
provided   herein   including,   without   limitation,   the   restrictions   on
exercisability  set forth in Section  9(c),  Section  11(a)(iii)  and Section 23
hereof)  in  whole or in part at any  time  after  the  Distribution  Date  upon
surrender of the Rights  Certificate,  with the form of election to purchase and
the  certificate 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 aggregate  Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or other shares, securities, cash
or other  assets,  as the case may be) as to which such  surrendered  Rights are
then exercisable,  at or prior to the earliest of (i) the Final Expiration Date,
(ii) the time at which the Rights are  redeemed as provided in Section 23 hereof
(the "Redemption  Date") or (iii) the time at which such Rights are exchanged as
provided in Section 24


                                       22
<PAGE>

hereof (the  earliest of (i),  (ii) and (iii)  being  herein  referred to as the
"Expiration Date").

     (b) The Purchase Price for each one  one-thousandth of a share of Preferred
Stock  pursuant to the exercise of a Right shall  initially be $100.00 and shall
be subject to adjustment  from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in lawful  money of the United  States of America in
accordance with paragraph (c) below.

     (c) Upon receipt of a Rights Certificate  representing  exercisable Rights,
with the  form of  election  to  purchase  and the  certificate  duly  executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one  one-thousandth  of a share of Preferred  Stock (or other  shares,
securities,  cash or other  assets,  as the case may be) to be purchased  and an
amount equal to any applicable transfer tax, the Rights Agent shall,  subject to
Section 20(k) hereof,  thereupon  promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make  available,  if the Rights Agent
is the transfer agent for such shares)  certificates for the total number of one
one-thousandths  of a share of Preferred  Stock to be purchased  and the Company
hereby authorizes its transfer agent to comply with such requests, or (B) if the
Company  shall have  elected to deposit the total  number of shares of Preferred
Stock issuable upon exercise of the Rights  hereunder  with a depositary  agent,
requisition  from the depositary  agent depositary  receipts  representing  such
number  of one  one-thousandths  of a  share  of  Preferred  Stock  as are to be
purchased  (in  which  case  certificates  for the  shares  of  Preferred  Stock
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  requests,  (ii)  requisition  from the Company the amount of cash, if
any,  to be paid in lieu 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
Rights  Certificate,  registered  in such name or names as may be  designated by
such holder,  and (iv) after receipt  thereof,  deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate.  The payment
of the  Purchase  Price (as such  amount  may be  reduced  pursuant  to  Section
11(a)(iii) hereof) may be made in cash or by certified bank check or money order
payable to the order of the Company.  In the event that the Company is obligated
to issue other securities (including Common Stock) of the


                                       23
<PAGE>

Company,  pay cash and/or  distribute  other property  pursuant to Section 11(a)
hereof,  the Company  shall make all  arrangements  necessary so that such other
securities,  cash and/or other  property are available for  distribution  by the
Rights Agent, if and when appropriate.

     (d) In case the registered holder of any Rights  Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate  evidencing
Rights  equivalent to the Rights  remaining  unexercised  shall be issued by the
Rights Agent and  delivered to, or upon the order of, the  registered  holder of
such Rights  Certificate,  registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.

     (e)  Notwithstanding  anything in this Agreement to the contrary,  from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an  Acquiring  Person or an  Associate or Affiliate of an Acquiring
Person,  (ii) a transferee of an Acquiring  Person (or of any such  Associate or
Affiliate) who becomes a transferee  after the Acquiring Person becomes such, or
(iii)  a  transferee  of an  Acquiring  Person  (or of  any  such  Associate  or
Affiliate) who becomes a transferee prior to or concurrently  with the Acquiring
Person  becoming such and receives such Rights pursuant to either (A) a transfer
(whether  or not for  consideration)  from the  Acquiring  Person to  holders of
equity  interests  in such  Acquiring  Person  or to any  Person  with  whom the
Acquiring  Person has any continuing  agreement,  arrangement  or  understanding
(whether or not in writing)  regarding the transferred  Rights or (B) a transfer
which the Board has determined is part of a plan,  arrangement or  understanding
(whether or not in writing) that has as a primary purpose or effect avoidance of
this Section 7(e),  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.  The Company
shall use all  reasonable  efforts to insure that the provisions of this Section
7(e) and Section 4(b) hereof are complied  with,  but it shall have no liability
to any holder of Rights  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. No Rights 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,


                                       24
<PAGE>

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.

     (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  transfer or
exercise as set forth in this Section 7 unless such registered holder shall have
(i)  completed  and signed the  certificate  following the form of assignment or
election to purchase  set forth on the  reverse  side of the Rights  Certificate
surrendered for such  assignment or 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 RIGHTS CERTIFICATES.  All Rights
Certificates  surrendered  for the  purpose  of  exercise,  transfer,  split up,
combination  or  exchange  shall,  if  surrendered  to the Company or 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 Rights
Certificates  shall be issued in lieu thereof  except as expressly  permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement,  and the Rights Agent shall so cancel and
retire,  any other  Rights  Certificate  purchased  or  acquired  by the Company
otherwise  than upon the exercise  thereof.  The Rights Agent shall  deliver all
cancelled Rights Certificates to the Company or shall, at the written request of
the Company, destroy such cancelled Rights Certificates,  and in such case shall
deliver a certificate of destruction thereof to the Company.

     Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

     (a) The Company  covenants and agrees that it will cause to be reserved and
kept  available out of its  authorized  and unissued  shares of Preferred  Stock
(and,  following  the  occurrence  of a  Section  11(a)(ii)  Event,  out  of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury),  the number of shares of
Preferred  Stock (and,  following the occurrence of a Section  11(a)(ii)  Event,
Common  Stock  and/or  other  securities)  that,  as provided in this  Agreement
including Section 11(a)(iii) hereof,


                                       25
<PAGE>

will be sufficient to permit the exercise in full of all outstanding Rights.

     (b) So long as the shares of Preferred Stock (and, following the occurrence
of a Section 11(a)(ii) Event, Common Stock and/or other securities) issuable and
deliverable  upon the  exercise  of the  Rights  may be listed  on any  national
securities  exchange or automated  quotation  system,  the Company shall use its
best  efforts  to  cause,  from  and  after  such  time  as  the  Rights  become
exercisable, all shares reserved for such issuance to be so listed upon official
notice of issuance upon such exercise.

     (c) The  Company  shall  use  its  best  efforts  to (i)  file,  as soon as
practicable  following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the  consideration  to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration  statement  under the Act, on an  appropriate  form,
with respect to the  securities  purchasable  upon exercise of the Rights,  (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 Act)
until  the  earlier  of (A) the  date  as of  which  the  Rights  are no  longer
exercisable for such  securities,  and (B) the Expiration Date. 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. The Company may temporarily  suspend, for a period
of time 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 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.  Notwithstanding  any  provision  of this  Agreement  to the
contrary,  the Rights shall not be  exercisable in any  jurisdiction  unless the
requisite  registration or  qualification in such  jurisdiction  shall have been
effected or obtained.

     (d) The Company  covenants  and agrees that it will take all such action as
may be necessary to ensure that all one  one-thousandths of a share of Preferred
Stock (and, following the


                                       26
<PAGE>

occurrence of a Section  11(a)(ii) Event,  Common Stock and/or other securities)
delivered  upon  exercise  of  Rights  shall,  at the  time of  delivery  of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable.

     (e) The Company further covenants and agrees that it will pay, when due and
payable,  any and all federal and state  transfer  taxes and charges that may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any  certificates  for a number of one  one-thousandths  of a share of Preferred
Stock (or Common  Stock and/or  other  securities,  as the case may be) upon the
exercise of Rights.  The Company shall not, however,  be required (i) to pay any
transfer  tax that may be  payable in respect of any  transfer  or  delivery  of
Rights  Certificates  to a Person  other than,  or the issuance or delivery of a
number of one  one-thousandths  of a share of  Preferred  Stock (or Common Stock
and/or  other  securities,  as the case may be) in  respect of a name other than
that of, the  registered  holder of the  Rights  Certificate  evidencing  Rights
surrendered  for  exercise  or (ii) to issue or deliver any  certificates  for a
number of one  one-thousandths  of a share of  Preferred  Stock (or Common Stock
and/or  other  securities,  as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time  of  surrender)  or  until  it  has  been   established  to  the  Company's
satisfaction that no such tax is due.

     Section 10.  PREFERRED  STOCK  RECORD  DATE.  Each Person in whose name any
certificate  for a number of one  one-thousandths  of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such  fractional  shares of  Preferred  Stock (or Common  Stock and/or
other  securities,  as the  case  may  be)  represented  thereby  on,  and  such
certificate  shall  be  dated,  the  date  upon  which  the  Rights  Certificate
evidencing  such  Rights was duly  surrendered  with the forms of  election  and
certification  duly  executed  and  payment  of  the  Purchase  Price  (and  all
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Preferred  Stock (or Common Stock
and/or other  securities,  as the case may be) transfer books of the Company are
closed,  such Person  shall be deemed to have  become the record  holder of such
shares  (fractional or otherwise) on, and such  certificate  shall be dated, the
next


                                       27
<PAGE>

succeeding  Business  Day on which the  Preferred  Stock (or Common Stock and/or
other  securities,  as the case may be) transfer  books of the Company are open.
Prior to the exercise of the Rights  evidenced  thereby,  the holder of a Rights
Certificate,  as such,  shall not be entitled to any rights of a stockholder  of
the  Company  with  respect  to  securities   for  which  the  Rights  shall  be
exercisable,  including,  without  limitation,  the  right to vote,  to  receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company,  except
as provided herein.

     Section  11.  ADJUSTMENT  OF PURCHASE  PRICE,  NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.  The Purchase Price,  the number and kind of 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  Stock  payable in shares of
Preferred Stock, (B) subdivide the outstanding  Preferred Stock, (C) combine the
outstanding  Preferred  Stock into a smaller number of shares,  or (D) issue any
shares  of its  capital  stock  in a  reclassification  of the  Preferred  Stock
(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) and  Section  7(e)  hereof,  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 Preferred  Stock or capital stock,  as the case may
be, issuable on such date, shall be proportionately  adjusted so that the holder
of any Right  exercised  after  such time shall be  entitled  to  receive,  upon
payment of the Purchase Price then in effect,  the aggregate  number and kind of
shares of Preferred  Stock or capital stock,  as the case may be, which, if such
Right had been exercised  immediately  prior to such date and at a time when the
Preferred  Stock  transfer  books of the Company were open,  he would have owned
upon such  exercise  and been  entitled  to receive by virtue of such  dividend,
subdivision,  combination  or  reclassification.  If an event  occurs that would
require an  adjustment  under both this Section  11(a)(i) and Section  11(a)(ii)
hereof,  the  adjustment  provided  for in this  Section  11(a)(i)  shall  be in
addition  to, and shall be made prior to, any  adjustment  required  pursuant to
Section 11(a)(ii) hereof.


                                       28
<PAGE>

          (ii)  Subject to Section 24 of this  Agreement,  in the event that any
Person,  alone or  together  with  its  Affiliates  or  Associates,  becomes  an
Acquiring Person,  then,  promptly following the first occurrence of such event,
proper  provision  shall  be made so that  each  holder  of a Right  (except  as
provided  below and in Section 7(e) hereof) shall  thereafter  have the right to
receive  (subject to the last sentence of Section 23(a)),  upon exercise thereof
at the  then  current  Purchase  Price  in  accordance  with  the  terms of this
Agreement,  in lieu of a number of one  one-thousandths  of a share of Preferred
Stock,  such  number of shares of Common  Stock of the  Company  that equals the
result obtained by (x)  multiplying the then current  Purchase Price by the then
number of one  one-thousandths  of a share of Preferred  Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event,  and (y) dividing that product (which,  following such first  occurrence,
shall  thereafter be referred to as the "Purchase  Price" for each Right and for
all purposes of this  Agreement) by 50% of the current market price  (determined
pursuant to Section  11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment Shares").

          (iii) In the event that the number of shares of Common  Stock that 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 in accordance  with
the foregoing  subparagraph  (ii) of this Section 11(a),  the Company shall: (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the  "Current  Value")  over (2) the  Purchase  Price (such
excess,  the  "Spread"),  and (B) with  respect  to each  Right,  make  adequate
provision  to  substitute  for  the  Adjustment  Shares,  upon  payment  of  the
applicable  Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common  Stock or other  equity  securities  of the Company  (including,  without
limitation,  shares,  or units of shares, of preferred stock which the Board has
deemed  to have the same  value as  shares  of  Common  Stock  (such  shares  of
preferred  stock,  "common  stock  equivalents")),  (4) debt  securities  of the
Company,  (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  based  upon the  advice  of a  nationally  recognized
investment banking firm selected by the Board; PROVIDED, HOWEVER, if the Company
shall not have made adequate  provision to deliver value  pursuant to clause (B)
above


                                       29
<PAGE>

within  thirty (30) days  following  the later of (x) the first  occurrence of a
Section  11(a)(ii)  Event  and (y) the  date on  which  the  Company's  right of
redemption  pursuant to Section  23(a)  expires  (the later of (x) and (y) being
referred to herein as the "Section  11(a)(ii)  Trigger Date"),  then the Company
shall be obligated to deliver,  upon the  surrender  for exercise of a Right and
without requiring payment of the Purchase Price,  shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread.  If the Board shall determine in good faith
that it is likely that  sufficient  additional  shares of Common  Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth  above may be extended  to the extent  necessary,  but not more
than ninety (90) days after the Section  11(a)(ii)  Trigger  Date, in order that
the  Company  may  seek  shareholder  approval  for  the  authorization  of such
additional  shares  (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)(iii),
the Company (x) shall provide,  subject to Section 7(e) hereof, that such action
shall  apply  uniformly  to all  outstanding  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  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. For purposes of this Section  11(a)(iii),
the value of the Common Stock shall be the current  market price (as  determined
pursuant to Section  11(d)  hereof) per share of the Common Stock on the Section
11(a)(ii)  Trigger Date and the value of any "common stock  equivalent" shall be
deemed to have the same value as the Common Stock on such date.

     (b) In case the Company shall fix a record date for the issuance of rights,
options  or  warrants  to all  holders  of  Preferred  Stock  entitling  them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date)  Preferred Stock (or shares having the same rights,
privileges  and  preferences  as the  shares  of  Preferred  Stock  ("equivalent
preferred stock")) or securities  convertible into Preferred Stock or equivalent
preferred  stock  at a price  per  share  of  Preferred  Stock  or per  share of
equivalent preferred stock (or having a


                                       30
<PAGE>

conversion  price per share, if a security  convertible  into Preferred Stock or
equivalent  preferred  stock) less than the current  market price (as determined
pursuant to Section  11(d)  hereof) per share of Preferred  Stock 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 shares
of Preferred Stock  outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred  Stock and/or  equivalent  preferred stock so to be offered (and/or
the aggregate  initial  conversion price of the convertible  securities so to be
offered)  would purchase at such current  market price,  and the  denominator of
which  shall be the  number of shares of  Preferred  Stock  outstanding  on such
record  date plus the number of  additional  shares of  Preferred  Stock  and/or
equivalent  preferred stock to be offered for  subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such  subscription  price may be paid by delivery of consideration  part or
all of which may be in a form other than cash,  the value of such  consideration
shall be as determined in good faith by the Board, whose  determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.  Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed,
and in the event that such  rights,  options or  warrants  are not so issued the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

     (c) In case the Company shall fix a record date for a  distribution  to all
holders of Preferred Stock (including any such  distribution  made in connection
with  a  consolidation  or  merger  in  which  the  Company  is  the  continuing
corporation) of evidences of indebtedness,  cash (other than a regular quarterly
cash dividend out of the earnings or retained  earnings of the Company),  assets
(other than a dividend  payable in Preferred  Stock,  but including any dividend
payable in stock other than Preferred Stock) 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 current market price (as determined  pursuant to
Section 11(d) hereof) per share of


                                       31
<PAGE>

Preferred Stock on such record date less the fair market value (as determined in
good faith by the Board, whose  determination  shall be described in a statement
filed with the Rights  Agent and shall be  conclusive  for all  purposes) of the
portion of the cash, assets or evidences of indebtedness so to be distributed or
of such  subscription  rights or  warrants  applicable  to a share of  Preferred
Stock,  and the  denominator  of which shall be such  current  market  price (as
determined  pursuant to Section  11(d)  hereof) per share of Preferred  Stock on
such record date. 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 be adjusted to be the Purchase Price which would have been
in effect if such record date had not been fixed.

     (d)  (i)  For  the  purpose  of  any  computation  hereunder,   other  than
computations  made pursuant to Section  11(a)(iii)  hereof,  the "current market
price" per share of Common  Stock on any date shall be deemed to be the  average
of the daily  closing  prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such  date,  and for  purposes  of  computations  made  pursuant  to  Section
11(a)(iii)  hereof the "current  market  price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing  prices per share of
such  Common  Stock  for the  ten  (10)  consecutive  Trading  Days  immediately
following  such date;  PROVIDED,  HOWEVER,  that in the event  that the  current
market  price  per  share  of the  Common  Stock is  determined  during a period
following the  announcement by the issuer of such Common Stock of (A) a dividend
or  distribution  on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights),
or (B) any subdivision,  combination or  reclassification  of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period,  as set forth  above,  after the  ex-dividend  date for such
dividend or distribution,  or the record date for such subdivision,  combination
or  reclassification  occurs,  then, and in each such case, the "current  market
price"  shall be properly  adjusted  to take into  account  ex-dividend  or post
record  date  trading.  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 principal national securities
exchange on which the shares of Common Stock are listed or admitted to


                                       32
<PAGE>

trading or, if the shares of Common  Stock 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 the low asked  prices in the  over-the-counter
market,  as reported by The Nasdaq Stock Market,  Inc.  ("Nasdaq") or such other
system then in use,  or, if on any such date the shares of Common  Stock are not
quoted by any such organization, the average of the closing bid and asked prices
as  furnished  by a  professional  market  maker  selected by the Board making a
market in the  Common  Stock.  If on any such  date no market  maker is making a
market  in the  Common  Stock,  the fair  value of such  shares  on such date as
determined  in good faith by the Board  shall be used.  The term  "Trading  Day"
shall mean a day on which  NASDAQ or any national  securities  exchange on which
the  shares of Common  Stock are listed or  admitted  to trading is open for the
transaction  of  business  or, if the  shares of Common  Stock are not listed or
admitted to trading on NASDAQ or any national  securities  exchange,  a Business
Day.  If the  Common  Stock is not  publicly  held or not so listed  or  traded,
"current  market  price"  per  share  shall  mean the fair  value  per  share as
determined in good faith by the Board, whose determination shall be described in
a  statement  filed  with the  Rights  Agent  and  shall be  conclusive  for all
purposes.

          (ii) For the purpose of any computation hereunder, the "current market
price" per share of Preferred  Stock shall be  determined  in the same manner as
set forth above for the Common Stock in clause (i) of this Section  11(d) (other
than the last  sentence  thereof).  If the  current  market  price  per share of
Preferred  Stock cannot be  determined  in the manner  provided  above or if the
Preferred  Stock is not publicly held or listed or traded in a manner  described
in clause (i) of this Section  11(d),  the "current  market  price" per share of
Preferred Stock shall be conclusively  deemed to be an amount equal to 1,000 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock occurring after
the date of this Agreement)  multiplied by the current market price per share of
the  Common  Stock.  If  neither  the Common  Stock nor the  Preferred  Stock is
publicly  held or so listed or traded,  "current  market price" per share of the
Preferred  Stock shall mean the fair value per share as determined in good faith
by the Board, whose  determination  shall be described in a statement filed with
the Rights Agent and shall be conclusive  for all purposes.  For all purposes of
this Agreement,  the "current market price" of one  one-thousandth of a share of
Preferred Stock shall be


                                       33
<PAGE>

equal to the "current  market price" of one share of Preferred  Stock divided by
1000.

     (e) Anything herein to the contrary  notwithstanding,  no adjustment in the
Purchase  Price  shall be  required  unless  such  adjustment  would  require an
increase  or  decrease  of at least  one  percent  (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  ten-millionth  of a share of  Preferred
Stock, or  hundred-thousandth  of a share of Common Stock or other 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  mandates  such
adjustment, or (ii) the Expiration Date.

     (f) If as a result of an adjustment  made pursuant to Section  11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter  exercised shall become
entitled to receive any securities  other than Preferred  Stock,  thereafter the
number of such other securities so receivable upon exercise of any Right and the
Purchase  Price thereof  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 Stock contained in Sections 11(a),  (b), (c), (e), (g),
(h), (i),  (j), (k) and (m), and the  provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any such
other securities;  PROVIDED,  HOWEVER,  that the Company shall not be liable for
its  inability to reserve and keep  available  for issuance upon exercise of the
Rights pursuant to Section  11(a)(ii) a number of shares of Common Stock greater
than the number then  authorized by the Company's  Certificate of  Incorporation
but not outstanding or reserved for other purposes.

     (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-thousandths of a
share of Preferred Stock  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


                                       34
<PAGE>

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-thousandths  of a share of Preferred  Stock  (calculated to the nearest
ten-millionth) obtained by (i) multiplying (x) the number of one one-thousandths
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 lieu of any  adjustment in the
number of one one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights  outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable  immediately prior to
such  adjustment.  Each Right  held of record  prior to such  adjustment  of the
number of Rights shall become that number of Rights  (calculated  to the nearest
one-hundred-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  Rights
Certificates  have been  issued,  shall be at least ten (10) days later than the
date of the public  announcement.  If Rights 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  Rights   Certificates  on  such  record  date  Rights   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 Rights  Certificates  held by such holders
prior to the date of adjustment,  and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall  be  entitled  after  such  adjustment.   Rights  Certificates  so  to  be
distributed shall be


                                       35
<PAGE>

issued,  executed and  countersigned  in the manner provided for herein (and may
bear, at the option of the Company,  the adjusted  Purchase  Price) and shall be
registered in the names of the holders of record of Rights  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-thousandths  of a share of Preferred  Stock issuable upon the
exercise of the  Rights,  the Rights  Certificates  theretofore  and  thereafter
issued may continue to express the Purchase  Price per one  one-thousandth  of a
share and the number of one  one-thousandths  of a share which were expressed in
the initial Rights Certificates issued hereunder.

     (k) Before  taking any action that would cause an  adjustment  reducing the
Purchase  Price  below  the then  stated  value,  if any,  of the  number of one
one-thousandths  of a share of Preferred  Stock  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  such  number  of  one  one-thousandths  of a  share  of  fully  paid  and
nonassessable Preferred Stock 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
issuance to the holder of any Right  exercised after such record date the number
of one  one-thousandths of a share of Preferred Stock and other capital stock or
securities  of the Company,  if any,  issuable upon such exercise over and above
the  number  of one  one-thousandths  of a share of  Preferred  Stock  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  (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.

     (m)  Anything  in this  Section  11 to the  contrary  notwithstanding,  the
Company  shall be entitled to make such  reductions  in the Purchase  Price,  in
addition to those adjustments  expressly  required by this Section 11, as and to
the extent that in their good faith  judgment  the Board shall  determine  to be
advisable


                                       36
<PAGE>

in order that any (i)  consolidation or subdivision of the Preferred Stock, (ii)
issuance  wholly  for cash of any  shares  of  Preferred  Stock at less than the
current  market  price,  (iii)  issuance  wholly for cash of shares of Preferred
Stock or securities  which by their terms are  convertible  into or exchangeable
for shares of Preferred  Stock,  (iv) stock dividends or (v) issuance of rights,
options or  warrants  referred  to in this  Section  11,  hereafter  made by the
Company  to  holders  of its  Preferred  Stock  shall  not be  taxable  to  such
stockholders.

     (n) The Company  covenants  and agrees that it shall not, at any time after
the  Distribution  Date,  (i)  consolidate  with any other Person  (other than a
Subsidiary  of the Company in a  transaction  that  complies  with Section 11(o)
hereof),  (ii) merge with or into any other Person  (other than a Subsidiary  of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or  transfer  (or  permit  any  Subsidiary  to sell  or  transfer),  in one
transaction,  or a series  of  related  transactions,  assets or  earning  power
aggregating  more than 50% of the assets or earning power of the Company and its
Subsidiaries  (taken as a whole) to any other Person or Persons  (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof),  if (x) at the time of or immediately after
such consolidation,  merger or sale there are any charter or bylaw provisions or
any  rights,   warrants  or  other  instruments  or  securities  outstanding  or
agreements in effect that would  substantially  diminish or otherwise  eliminate
the  benefits   intended  to  be  afforded  by  the  Rights  or  (y)  prior  to,
simultaneously with or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes,  or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have  received a  distribution
of  Rights  previously  owned  by  such  Person  or any of  its  Affiliates  and
Associates. The Company shall not consummate any consolidation,  merger, sale or
transfer  described in clause (i),  (ii) or (iii) of the prior  sentence  unless
prior  thereto  the  Company  and such  other  Person  shall have  executed  and
delivered to the Rights Agent a  supplemental  agreement  evidencing  compliance
with this Section 11(n).

     (o) The Company covenants and agrees that, after the Distribution  Date, it
will not,  except as permitted  by Section 23,  Section 24 or Section 27 hereof,
take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially


                                       37
<PAGE>

or otherwise eliminate the benefits intended to be afforded by the Rights.

     (p)  Anything in this  Agreement to the  contrary  notwithstanding,  in the
event that the Company  shall at any time after the Record Date and prior to the
Distribution  Date (i) declare or pay any dividend on the outstanding  shares of
Common Stock payable in shares of Common Stock,  (ii) subdivide the  outstanding
shares of Common Stock, or (iii) combine the outstanding  shares of Common Stock
into a smaller number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be  proportionately  adjusted so that the number of
Rights thereafter  associated with each share of Common Stock following any such
event  shall  equal the  result  obtained  by  multiplying  the number of Rights
associated with each share of Common Stock  immediately prior to such event by a
fraction,  the  numerator of which shall be the number of shares of Common Stock
outstanding  immediately  prior  to  the  occurrence  of  such  event,  and  the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately following the occurrence of such event.

     Section 12.  CERTIFICATE  OF ADJUSTED  PURCHASE  PRICE OR NUMBER OF SHARES.
Whenever an  adjustment  is made as provided in Section 11 or Section 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 Preferred
Stock and the Common  Stock,  a copy of such  certificate,  and (c) mail a brief
summary  thereof to each  holder of a Rights  Certificate  (or,  if prior to the
Distribution Date, to each holder of a certificate representing shares of Common
Stock) in  accordance  with  Section 26 hereof.  The Rights Agent shall be fully
protected  in  relying on any such  certificate  and on any  adjustment  therein
contained and shall not be deemed to have knowledge of any adjustment unless and
until it shall have received such certificate.

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

     (a) In the event that,  at any time after a Person has become an  Acquiring
Person,  (x) the Company shall  consolidate  with,  or merge with and into,  any
other  Person  (other than a  Subsidiary  of the Company in a  transaction  that
complies with Section 11(o)


                                       38
<PAGE>

hereof), and the Company shall not be the continuing or surviving corporation of
such  consolidation  or merger,  (y) any Person  (other than a Subsidiary of the
Company  in a  transaction  that  complies  with  Section  11(o)  hereof)  shall
consolidate  with, or merge with or 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 outstanding
shares of Common  Stock shall be changed  into or  exchanged  for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise  transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer),  in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries  (taken as a whole) to any Person or Persons
(other  than  the  Company  or any  Subsidiary  of the  Company  in one or  more
transactions  each of which  complies with Section 11(o)  hereof),  then, and in
each such case,  proper  provision  shall be made so that:  (i) each holder of a
Right,  except as provided in Section 7(e)  hereof,  shall  thereafter  have the
right to receive,  upon the exercise  thereof at the then current Purchase Price
in  accordance  with  the  terms  of this  Agreement,  such  number  of  validly
authorized and issued, fully paid, non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter  defined),  not
subject to any liens,  encumbrances,  rights of first  refusal or other  adverse
claims,  as shall be equal to the result  obtained by (1)  multiplying  the then
current  Purchase  Price  by the  number  of one  one-thousandths  of a share of
Preferred Stock for which a Right is exercisable  immediately prior to the first
occurrence of a Section 13 Event (or, if a Section  11(a)(ii) Event has occurred
prior to the first  occurrence of a Section 13 Event,  multiplying the number of
such  one  one-thousandths  of  a  share  for  which  a  Right  was  exercisable
immediately  prior to the first  occurrence of a Section  11(a)(ii) Event by the
Purchase Price in effect  immediately prior to such first  occurrence),  and (2)
dividing that product  (which,  following  the first  occurrence of a Section 13
Event,  shall be referred to as the "Purchase  Price" for each Right and for all
purposes of this  Agreement)  by 50% of the  current  market  price  (determined
pursuant  to Section  11(d)(i)  hereof)  per share of the  Common  Stock of such
Principal Party on the date of consummation of such Section 13 Event;  (ii) such
Principal Party shall  thereafter be liable for, and shall assume,  by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement;  (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended


                                       39
<PAGE>

that,  subject to clause (v) below,  the  provisions  of Section 11 hereof shall
apply only to such Principal Party  following the first  occurrence of a Section
13 Event;  (iv) such Principal Party shall take such steps  (including,  but not
limited  to,  the  reservation  of a  sufficient  number of shares of its Common
Stock) in connection  with the  consummation  of any such  transaction as may be
necessary to assure that the provisions  hereof shall  thereafter be applicable,
as nearly  as  reasonably  may be, in  relation  to its  shares of Common  Stock
thereafter  deliverable upon the exercise of the Rights;  and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.

     (b) "Principal Party" shall mean

          (i) in the case of any  transaction  described in clause (x) or (y) of
     the first sentence of Section  13(a),  the Person that is the issuer of any
     securities  into which shares of Common Stock of the Company are  converted
     in such merger or  consolidation,  and if no securities are so issued,  the
     Person that is the other party to such merger or consolidation; and

          (ii) in the case of any  transaction  described  in clause  (z) of the
     first sentence of Section 13(a), the Person that is the party receiving the
     greatest  portion of the assets or earning  power  transferred  pursuant to
     such transaction or transactions;

     PROVIDED,  HOWEVER,  that in any such case, (1) if the Common Stock of such
Person  is not at such  time and has not been  continuously  over the  preceding
twelve (12) month period  registered  under  Section 12 of the Exchange Act, and
such  Person is a direct or  indirect  Subsidiary  of another  Person the Common
Stock of which is and has been so registered,  "Principal  Party" shall refer to
such  other  Person;  (2) in case  such  Person  is a  Subsidiary,  directly  or
indirectly,  of more than one Person,  the Common Stocks of two or more of which
are and have been so registered,  "Principal  Party" shall refer to whichever of
such Persons is the issuer of the Common  Stock  having the  greatest  aggregate
market value; and (3) in case such Person is owned, directly or indirectly, by a
joint  venture  formed by two or more  Persons  that are not owned,  directly or
indirectly,  by the same Person,  the rules set forth in (1) and (2) above shall
apply to each of the  chains of  ownership  having  an  interest  in such  joint
venture  as if such  party  were a  "Subsidiary"  of  both or all of such  joint
ventures and the


                                       40
<PAGE>

Principal  Parties in each such chain  shall bear the  obligations  set forth in
this Section 13 in the same ratio as their direct or indirect  interests in such
Person bear to the total of such interests.

     (c) The Company shall not consummate any such  consolidation,  merger, sale
or  transfer  unless  the  Principal  Party  shall have a  sufficient  number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the  exercise in full of the Rights in  accordance  with this
Section 13 and unless prior thereto the Company and such  Principal  Party shall
have  executed  and  delivered  to the  Rights  Agent a  supplemental  agreement
providing for the terms set forth in  paragraphs  (a) and (b) of this Section 13
and  further  providing  that,  as soon as  practicable  after  the  date of any
consolidation,  merger  or sale of assets  mentioned  in  paragraph  (a) of this
Section 13, the Principal Party will

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

          (ii) use its best  efforts to qualify or  register  the Rights and the
     securities  purchasable upon exercise of the Rights under the blue sky laws
     of such jurisdictions as may be necessary or appropriate; and

          (iii) deliver to holders of the Rights historical financial statements
     for the  Principal  Party  and each of its  Affiliates  that  comply in all
     respects  with the  requirements  for  registration  on Form 10  under  the
     Exchange Act.

     The  provisions  of this  Section 13 shall  similarly  apply to  successive
mergers  or  consolidations  or sales or other  transfers.  In the event  that a
Section  13 Event  shall  occur at the same time as, or at any time  after,  the
occurrence of a Section  11(a)(ii)  Event, the Rights which have not theretofore
been exercised shall  thereafter  become  exercisable in the manner described in
Section 13(a).


                                       41
<PAGE>

     Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

     (a) The Company shall not be required to issue fractions of Rights,  except
prior to the Distribution Date as provided in Section 11(i) or (p) hereof, or to
distribute Rights  Certificates that evidence fractional Rights. In lieu of such
fractional  Rights,  there shall be paid to the registered holders of the Rights
Certificates  with regard to which such  fractional  Rights  would  otherwise be
issuable  an amount in cash equal to the same  fraction  of the  current  market
value of a whole Right.  For purposes of this Section 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 of the Rights 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  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 the 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 maker selected by the Board making
a market in the  Rights.  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 shall be used.

     (b) The  Company  shall not be  required  to issue  fractions  of shares of
Preferred  Stock  (other than  fractions  which are  integral  multiples  of one
one-thousandth  of a share of Preferred Stock) upon exercise of the Rights or to
distribute  certificates  that  evidence  fractional  shares of Preferred  Stock
(other than fractions which are integral  multiples of one  one-thousandth  of a
share of Preferred  Stock).  Fractional  shares of  Preferred  Stock in integral
multiples  of one  one-thousandth  of a share of  Preferred  Stock  may,  at the
election of the Company, be evidenced by depositary receipts; provided, however,
that holders of such depositary  receipts shall have all of the designations and
the powers,  preferences  and rights,  and the  qualifications,  limitations and
restrictions, to which they are entitled as beneficial owners of


                                       42
<PAGE>

the shares of Preferred Stock represented by such depositary  receipts.  In lieu
of fractional shares of Preferred Stock (other than fractions which are integral
multiples  of one  one-thousandth  of a share of Preferred  Stock),  the Company
shall pay to the  registered  holders  of Rights  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  one-thousandth  of a share  of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one  one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the  closing  price of a share of  Preferred  Stock (as  determined  pursuant to
Section  11(d)(ii)  hereof) for the Trading Day immediately prior to the date of
such exercise.

     (c) Following the occurrence of a Triggering  Event,  the Company shall not
be required to issue  fractions of shares of Common  Stock upon  exercise of the
Rights or to distribute  certificates which evidence fractional shares of Common
Stock.  In lieu of fractional  shares of Common Stock,  the Company shall pay to
the  registered  holders  of Rights  Certificates  at the time such  Rights  are
exercised as herein provided an amount in cash equal to the same fraction of the
current market price of one (1) share of Common Stock (as determined pursuant to
Section  11(d)(i)  hereof) for the Trading Day immediately  prior to the date of
such exercise.

     (d) The  holder of a Right,  by the  acceptance  of the  Rights,  expressly
waives his right to receive any fractional  Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.

     Section  15.  RIGHTS OF  ACTION.  All  rights of action in  respect of this
Agreement,  except the rights of action  expressly  given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution  Date, of the Common Stock),  without the consent of the Rights
Agent  or of the  holder  of any  other  Rights  Certificate  (or,  prior to the
Distribution Date, of the Common Stock),  may, in his own behalf and for his own
benefit,  enforce, and may institute and maintain any suit, action or proceeding
against  the Company to enforce,  or  otherwise  act in respect of, his right to
exercise the Rights evidenced by such Rights  Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing


                                       43
<PAGE>

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 shall be entitled to specific  performance
of the obligations  hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.

     Section  16.  AGREEMENT  OF  RIGHTS  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 Common Stock;

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

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

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


                                       44
<PAGE>

efforts to prevent the issuance of any such order,  decree or ruling and to have
any such  order,  decree or ruling  lifted or  otherwise  overturned  as soon as
possible.

     Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.  No holder,
as such, of any Rights  Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of one  one-thousandths of
a share of Preferred  Stock 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 Rights  Certificate be construed to
confer upon the holder of any Rights 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  Rights  Certificate  shall  have been  exercised  in
accordance with the provisions hereof.

     Section 18. CONCERNING THE RIGHTS AGENT.

     (a) The Company agrees to pay to the Rights Agent  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 disbursements and
other  disbursements  incurred  in the  administration  and  execution  of  this
Agreement and the exercise and performance of its duties hereunder.  The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless  against,
any loss, liability or expense, incurred without gross negligence,  bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement,  including  the costs and expenses of defending  against any claim of
liability in the premises.

     (b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration  of this  Agreement in reliance  upon any Rights  Certificate  or
certificate for Common Stock or for other securities of the Company,  instrument
of assignment or transfer, power of attorney,  endorsement,  affidavit,  letter,
notice, direction, consent, certificate,


                                       45
<PAGE>

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.

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

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

     Section 20. DUTIES OF RIGHTS AGENT.  The Rights Agent undertakes the duties
and obligations imposed by this Agreement


                                       46
<PAGE>

upon the  following  terms and  conditions,  by all of which the Company and the
holders of Rights Certificates, by their acceptance thereof, shall be bound:

     (a) The  Rights  Agent may  consult  with legal  counsel  (who may be legal
counsel  for the  Company),  and the opinion of such  counsel  shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

     (b)  Whenever in the  performance  of its duties under this  Agreement  the
Rights  Agent  shall  deem it  necessary  or  desirable  that any fact or matter
(including,  without  limitation,  the identity of any Acquiring  Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action  hereunder,  such fact or matter (unless
other  evidence in respect  thereof be herein  specifically  prescribed)  may be
deemed to be conclusively  proved and established by a certificate signed by the
Chairman  of  the  Board,  President  and  Chief  Executive  Officer,  any  Vice
President,  the  Treasurer,  any  Assistant  Treasurer,  or the Secretary of the
Company and delivered to the Rights Agent;  and such  certificate  shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.

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

     (e) The Rights  Agent shall not be under any  responsibility  in respect of
the validity of this Agreement or the execution and delivery  hereof (except the
due  execution  hereof by the Rights  Agent) or in respect  of the  validity  or
execution of any Rights Certificate (except its countersignature  thereof);  nor
shall it be  responsible  for any  breach  by the  Company  of any  covenant  or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be  responsible  for any  adjustment  required  under the  provisions of Section
11, Section 13 or Section 24 hereof or


                                       47
<PAGE>

responsible  for the  manner,  method or amount  of any such  adjustment  or the
ascertaining  of the existence of facts that would  require any such  adjustment
(except with respect to the exercise of Rights evidenced by Rights  Certificates
after  receipt  of a  certificate  describing  any  such  adjustment,  delivered
pursuant to Section 12); nor shall it by any act hereunder be deemed to make any
representation  or warranty as to the authorization or reservation of any shares
of Common Stock or Preferred  Stock to be issued  pursuant to this  Agreement or
any Rights  Certificate or as to whether any shares of Common Stock or Preferred
Stock will,  when so issued,  be validly  authorized and issued,  fully paid and
nonassessable.

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

     (g)  The  Rights  Agent  is  hereby   authorized  and  directed  to  accept
instructions  with respect to the  performance of its duties  hereunder from the
Chairman  of  the  Board,  President  and  Chief  Executive  Officer,  any  Vice
President,  the  Secretary,  the  Treasurer  or any  Assistant  Treasurer of the
Company and to apply to such officers for advice or  instructions  in connection
with its duties,  and it shall not be liable for any action taken or suffered to
be  taken  by it in good  faith  in  accordance  with  instructions  of any such
officer.  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 with  respect to its duties
or  obligations  under this Rights  Agreement and the date on and/or after which
such action  shall be taken or omitted and the Rights  Agent shall not be liable
for any action taken or omitted in  accordance  with a proposal  included in any
such application on or after the date specified therein (which date shall not be
less than five Business Days after the date any such officer  actually  receives
such application,  unless any such officer shall have consented in writing to an
earlier  date) unless,  prior to taking or omitting any such action,  the Rights
Agent  has  received  written  instructions  in  response  to  such  application
specifying the action to be taken or omitted.


                                       48
<PAGE>

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

     (i) The Rights  Agent may execute and  exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its  attorneys  or  agents,  and the Rights  Agent  shall not be  answerable  or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the  Company  resulting  from any such  act,  default,
neglect or misconduct;  PROVIDED,  HOWEVER, 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
there shall be reasonable  grounds for believing 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 Rights  Certificate  surrendered  to the Rights
Agent  for  exercise  or  transfer,  the  certificate  attached  to the  form of
assignment  or form of  election to  purchase,  as the case may be, has not been
completed,  the Company and the Rights Agent will deem the  beneficial  owner of
the rights evidenced by such Rights  Certificate to be an Acquiring Person or an
Affiliate or Associate  thereof and such assignment or election to purchase will
not be honored.

     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
transfer  agent of the  Common  Stock and  Preferred  Stock,  by  registered  or
certified  mail,  and to the holders of the Rights  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


                                       49
<PAGE>

transfer  agent of the  Common  Stock and  Preferred  Stock,  by  registered  or
certified  mail,  and to the holders of the Rights  Certificates  by first-class
mail. If the Rights Agent shall resign or be removed or shall  otherwise  become
incapable of acting,  the 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 Rights  Certificate  (who  shall,  with such
notice,  submit his Rights Certificate for inspection by the Company),  then any
registered holder of any Rights  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) a
corporation organized and doing business under the laws of the United States (or
of any state of the United States) in good standing,  which is authorized  under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state  authority or (b) an affiliate of
a corporation described in clause (a) of this sentence.  After appointment,  the
successor Rights Agent shall be vested with the same powers,  rights, duties and
responsibilities  as if it had been  originally  named as Rights  Agent  without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose.  Not later than the  effective  date of any such  appointment,  the
Company shall file notice thereof in writing with the  predecessor  Rights Agent
and each transfer  agent of the Common Stock and the Preferred  Stock and mail a
notice thereof in writing to the registered holders of the Rights  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 RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary,  the Company may,
at its option,  issue new Rights Certificates  evidencing Rights in such form as
may be approved by the Board 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 Rights Certificates made in accordance with the provisions
of this Agreement.


                                       50
<PAGE>

     Section 23. REDEMPTION.

     (a) The Board may, at its  option,  at any time prior to the earlier of (i)
the close of  business on the tenth  Business  Day (or such later date as may be
determined by the Board  pursuant to clause (i) of the first sentence of Section
3(a) with respect to the Distribution Date) following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth  Business Day  following  the Record Date) or
(ii) the  Final  Expiration  Date,  redeem  all but not  less  than all the then
outstanding Rights at a redemption price of $0.001 per Right, as such amount may
be appropriately  adjusted to reflect any stock split, stock dividend or similar
transaction  occurring  after  the date  hereof  (such  redemption  price  being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
by the Board may be made  effective  at such  time,  on such basis and with such
conditions as the Board in its sole  discretion may establish.  The Company may,
at its option,  pay the Redemption Price in cash,  shares of Common Stock (based
on the "current  market price," as defined in Section  11(d)(i)  hereof,  of the
Common Stock at the time of redemption) or any other form of  consideration,  or
any  combination  of any of the  foregoing,  deemed  appropriate  by the  Board.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.

     (b) Immediately upon the action of the Board ordering the redemption of the
Rights,  evidence  of which  shall have been filed  with the Rights  Agent,  and
without any further  action and  without any notice,  the right to exercise  the
Rights shall  terminate;  and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held.  Promptly after
the action of the Board ordering the redemption of the Rights, the Company shall
give notice of such  redemption  to the Rights Agent and the holders of the then
outstanding  Rights by mailing such notice to all such holders at each  holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the  Distribution  Date, on the registry  books of the Transfer Agent for the
Common Stock.  Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption  will state the method by which the payment of the  Redemption  Price
will be made.


                                       51
<PAGE>

     (c) In the event of a  redemption  of the  Rights in  accordance  with this
Agreement, the Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press  release  announcing  the manner of
redemption  of the Rights in  accordance  with this  Agreement  and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
last  addresses  as they appear on the  registry  books of the Rights  Agent or,
prior to the  Distribution  Date, on the registry books of the Transfer Agent of
the  Common  Shares;  and upon such  action  all  outstanding  Rights  and Right
Certificates shall be null and void without any further action by the Company.

     Section 24. EXCHANGE.

     (a) The Board may,  at its  option,  at any time after a Section  11(a)(ii)
Event,  exchange  all or part of the then  outstanding  and  exercisable  Rights
(which (i) shall not  include  Rights  that have  become  void  pursuant  to the
provisions of Section 7(e) hereof, and (ii) shall include,  without  limitation,
any Rights issued after the Distribution  Date) for shares of Common Stock at an
exchange ratio of one share of Common Stock 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  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 Stock 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  shares of Common
Stock then outstanding.

     (b)  Immediately  upon the action of the Board ordering the exchange of any
Rights  pursuant to subsection  (a) of this Section 24,  evidence of which shall
have been  filed with the Rights  Agent,  and  without  any  further  action and
without any notice,  the right to exercise such Rights shall terminate;  and the
only right thereafter of a holder of such Rights shall be to receive that number
of shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio.  The 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


                                       52
<PAGE>

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

     (c) In any  exchange  pursuant  to this  Section  24, the  Company,  at its
option, may substitute  Preferred Stock (or equivalent  preferred stock, as such
term is defined in Section 11(b) hereof) for shares of Common Stock exchangeable
for Rights,  at the initial rate of one  one-thousandth  of a share of Preferred
Stock  (or  equivalent  preferred  stock)  for each  share of Common  Stock,  as
appropriately  adjusted  to  reflect  adjustments  in the  voting  rights of the
Preferred  Stock  pursuant to Section 3(A) of the  Certificate  of  Designations
attached hereto as EXHIBIT A, so that the fraction of a share of Preferred Stock
(or equivalent  preferred stock) delivered in lieu of each share of Common Stock
shall have the same voting rights as one share of Common Stock.

     (d) In the event that there shall not be sufficient  shares of Common Stock
or Preferred  Stock issued but not  outstanding  or  authorized  but unissued to
permit any exchange of Rights as  contemplated  in accordance  with this Section
24, the Company  shall take all such  action as may be  necessary  to  authorize
additional  shares of Common Stock or Preferred Stock for issuance upon exchange
of the Rights.

     (e) The  Company  shall not be  required  to issue  fractions  of shares of
Common Stock or to distribute  certificates which evidence  fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock,  there shall be
paid to the registered  holders of the Right  Certificates  with regard to which
such fractional  shares of Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the current  market value of a whole share of
Common Stock.  For the purposes of this subsection (e), the current market value
of a whole share of Common Stock shall be the closing  price per share of Common
Stock (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.


                                       53
<PAGE>

     Section 25. NOTICE OF CERTAIN EVENTS.

     (a) In case the Company shall propose,  at any time after the  Distribution
Date,  (i) to pay any  dividend  payable in stock of any class to the holders of
Preferred  Stock or to make any other  distribution  to the holders of Preferred
Stock (other than a regular  quarterly cash dividend out of earnings or retained
earnings of the  Company),  or (ii) to offer to the holders of  Preferred  Stock
rights or warrants to  subscribe  for or to purchase  any  additional  shares of
Preferred Stock or shares of stock of any class or any other securities,  rights
or  options,  or (iii) to effect any  reclassification  of its  Preferred  Stock
(other than a  reclassification  involving  only the  subdivision of outstanding
shares of Preferred  Stock),  or (iv) to effect any consolidation or merger into
or  with  any  other  Person  (other  than  a  Subsidiary  of the  Company  in a
transaction which complies with Section 11(o) hereof),  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 transaction or a series of related transactions,  of
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more  transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation,  dissolution or winding
up of the  Company,  then,  in each such case,  the  Company  shall give to each
holder of a Rights  Certificate,  to the extent  feasible and 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,  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 shares of Preferred Stock,
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  twenty  (20) days
prior to the record  date for  determining  holders  of the shares of  Preferred
Stock for purposes of such action,  and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such  proposed  action
or the date of  participation  therein by the holders of the shares of Preferred
Stock, whichever shall be the earlier.

     (b) In case a Section 11(a)(ii) Event shall occur,  then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the


                                       54
<PAGE>

extent  feasible  and in  accordance  with  Section 26  hereof,  a notice of the
occurrence of such event,  which shall specify the event and the consequences of
the event to holders of Rights  under  Section  11(a)(ii)  hereof,  and (ii) all
references  in the  preceding  paragraph  to  Preferred  Stock  shall be  deemed
thereafter  to  refer  also  to  Common  Stock  and/or,  if  appropriate,  other
securities.

     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 Rights  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:

                  Select Therapeutics Inc.
                  50 Cummings Park
                  Woburn, MA 01801
                  Attention: Chief Executive Officer

                  with a copy to:

                  Hofheimer Gartlir & Gross, LLP
                  530 Fifth Avenue
                  New York, NY 10036
                  Attention: Richard G. Klein, Esq.

     Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Rights
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:

                  Florida Atlantic Stock Transfer, Inc.
                  7130 Nob Hill Road
                  Tamarac, FL 33321
                  Attention: Rene Garcia, President

     Notices or demands  authorized by this Agreement to be given or made by the
Company or the Rights  Agent to the holder of any  Rights  Certificate  (or,  if
prior to the  Distribution  Date,  to the  holder of  certificates  representing
shares  of  Common  Stock)  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.


                                       55
<PAGE>

     Section  27.  SUPPLEMENTS  AND  AMENDMENTS.   Except  as  provided  in  the
penultimate  sentence  of this  Section  27,  for so long as the Rights are then
redeemable the Company may in its sole and absolute  discretion,  and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement in any respect  without the approval of any holders of the Rights.  At
any time when the Rights are no longer  redeemable,  except as  provided  in the
penultimate  sentence of this  Section  27, the  Company  may, by approval of at
least 75% of the members of the Board, and the Rights Agent shall if the Company
so directs,  supplement  or amend this  Agreement  without  the  approval of any
holders  of Rights  in order (i) to cure any  ambiguity  or (ii) to  correct  or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein,  PROVIDED that no such supplement or amendment
shall  adversely  affect the  interests  of the holders of Rights as such (other
than an Acquiring  Person or an Affiliate or Associate of an Acquiring  Person).
Upon the delivery of a certificate  from an  appropriate  officer of the Company
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights  Agent shall  execute  such  supplement  or
amendment. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment  shall be made which  changes the  Redemption  Price.
Prior to the Distribution  Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.

     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.  ACTIONS BY THE BOARD,  ETC. The Board shall have the exclusive
power and authority to administer  this Agreement and to exercise all rights and
powers  specifically  granted  to  the  Board  or to the  Company,  or as may be
necessary or  advisable  in the  administration  of this  Agreement,  including,
without limitation,  the right and power to (i) interpret the provisions of this
Agreement,  and (ii) make all  determinations  deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend this 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
in good faith, shall (x) be final, conclusive and binding


                                       56
<PAGE>

on the  Company,  the  Rights  Agent,  the  holders  of the Rights and all other
parties,  and (y) not subject the Board 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 other than the Company, the Rights Agent and the
registered  holders of the Rights  Certificates  (and, prior to the Distribution
Date,  registered  holders of the Common  Stock) 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  Rights  Certificates  (and,  prior  to the  Distribution  Date,
registered holders of the Common Stock).

     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 determines
in its good faith  judgment  that  severing the invalid,  void or  unenforceable
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 close of  business  on the tenth day
following the date of such determination by the Board.

     Section  32.  GOVERNING  LAW.  This  Agreement,  each Right and each Rights
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 Delaware  applicable to contracts made
and to be performed entirely within Delaware.

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

     Section  34.  DESCRIPTIVE  HEADINGS.  Descriptive  headings  of the several
Sections of this Agreement are inserted for convenience


                                       57
<PAGE>

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 their  respective  corporate seals to be hereunto  affixed and
attested, all as of the day and year first above written.

Attest:                                     SELECT THERAPEUTICS INC.


By: /s/ Michelle A. Guertin                 By: /s/ Steve M. Peltzman
    -----------------------                     -----------------------
Name:   Michelle A. Guertin                 Name:   Steve M. Peltzman
                                            Title:  President and Chief
                                                    Executive Officer


Attest:                                     Florida Atlantic Stock
                                              Transfer, Inc.


By: /s/                                     By: /s/ Rene Garcia
    -----------------------                     -----------------------
Name:                                       Name:   Rene Garcia
Title:                                      Title:  President



                                       58
<PAGE>

                                     FORM OF

                           CERTIFICATE OF DESIGNATIONS

                                       OF

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       OF

                            SELECT THERAPEUTICS INC.


     Select  Therapeutics  Inc., a corporation  organized and existing under the
laws of the State of Delaware  (hereinafter  called the  "Corporation"),  hereby
certifies that the following resolution was adopted by the Board of Directors of
the Corporation effective February 16, 2001:

     RESOLVED: That pursuant to the authority granted to and vested in the Board
of Directors of the Corporation  (hereinafter  called the "Board") in accordance
with the provisions of the Certificate of Incorporation,  as amended,  the Board
hereby  creates a series of  Preferred  Stock,  $0.0001 par value per share (the
"Preferred  Stock"),  of the  Corporation  and hereby states the designation and
number of shares,  and fixes the relative  rights,  preferences  and limitations
thereof as follows:

     SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:

     Section 1.  DESIGNATION  AND  AMOUNT.  The shares of such  series  shall be
designated  as "Series A Junior  Participating  Preferred  Stock" (the "Series A
Preferred  Stock") and the number of shares  constituting the Series A Preferred
Stock  shall be one  hundred  thousand  (100,000).  Such number of shares may be
increased or decreased by resolution  of the Board prior to issuance;  PROVIDED,
that no decrease  shall reduce the number of shares of Series A Preferred  Stock
to a number less than the number of shares then  outstanding  plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the  conversion  of any  outstanding  securities  issued by the
Corporation convertible into Series A Preferred Stock.

     Section 2. DIVIDENDS AND DISTRIBUTIONS.


                                       59
<PAGE>

     (A)  Subject  to the  rights of the  holders of any shares of any series of
Preferred  Stock (or any similar stock) ranking prior and superior to the Series
A Preferred  Stock with respect to dividends,  the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.0001
per share (the  "Common  Stock"),  of the  Corporation,  and of any other junior
stock,  shall be entitled to receive,  when, as and if declared by the Board out
of funds of the  Corporation  legally  available  for the payment of  dividends,
quarterly  dividends  payable in cash on the last day of each fiscal  quarter of
the  Corporation  in each year  (each  such  date  being  referred  to herein as
a"Quarterly Dividend Payment Date"),  commencing on the first Quarterly Dividend
Payment  Date  after the first  issuance  of a share or  fraction  of a share of
Series A Preferred  Stock,  in an amount per share (rounded to the nearest cent)
equal  to the  greater  of  (a)  $10.00  or (b)  subject  to the  provision  for
adjustment  hereinafter set forth, 1,000 times the aggregate per share amount of
all cash  dividends,  and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash  dividends or other  distributions,  other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding  shares of
Common Stock (by  reclassification  or otherwise),  declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly  Dividend  Payment Date,  since the first issuance of any
share or  fraction  of a share of  Series A  Preferred  Stock.  In the event the
Corporation  shall at any time  declare or pay any  dividend on the Common Stock
payable  in shares of Common  Stock,  or effect a  subdivision,  combination  or
consolidation of the outstanding shares of Common Stock (by  reclassification or
otherwise  than by  payment  of a  dividend  in shares of Common  Stock)  into a
greater or lesser number of shares of Common  Stock,  then in each such case the
amount to which  holders of shares of Series A  Preferred  Stock  were  entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction,  the numerator of which is
the number of shares of Common Stock  outstanding  immediately  after such event
and the  denominator  of which is the number of shares of Common Stock that were
outstanding  immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series A Preferred  Stock payable
in shares of Series A Preferred  Stock, or effect a subdivision,  combination or
consolidation  of the  outstanding  shares  of  Series  A  Preferred  Stock  (by
reclassification  or otherwise than by payment of a dividend in shares of Series
A  Preferred  Stock)  into a  greater  or  lesser  number  of shares of Series A
Preferred Stock, then in each such case the amount to


                                       60
<PAGE>

which holders of shares of Series A Preferred  Stock were  entitled  immediately
prior to such event under clause (b) of the first  sentence of this Section 2(A)
shall be adjusted by  multiplying  such amount by a fraction,  the  numerator of
which is the number of shares of Series A Preferred Stock that were  outstanding
immediately  prior to such event and the  denominator  of which is the number of
shares of Series A Preferred Stock outstanding immediately after such event.

     (B) The Corporation  shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section immediately after
it  declares a  dividend  or  distribution  on the Common  Stock  (other  than a
dividend  payable in shares of Common Stock) and the Corporation  shall pay such
dividend or  distribution on the Series A Preferred Stock before the dividend or
distribution  declared on the Common Stock is paid or set apart;  provided that,
in the event no dividend or distribution  shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent  Quarterly  Dividend  Payment Date, a dividend of $10.00 per share on
the Series A Preferred  Stock shall  nevertheless  be payable on such subsequent
Quarterly Dividend Payment Date.

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


                                       61
<PAGE>

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

     (A) Subject to the provision for  adjustment  hereinafter  set forth,  each
share of Series A  Preferred  Stock shall  entitle  the holder  thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the  Corporation  shall at any time  declare or pay any dividend on
the Common Stock  payable in shares of Common  Stock,  or effect a  subdivision,
combination  or  consolidation  of the  outstanding  shares of Common  Stock (by
reclassification  or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common  Stock,  then in each
such case the  number of votes per share to which  holders of shares of Series A
Preferred Stock were entitled  immediately prior to such event shall be adjusted
by multiplying  such number by a fraction,  the numerator of which is the number
of shares of Common  Stock  outstanding  immediately  after  such  event and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding  immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series A Preferred  Stock payable
in shares of Series A Preferred  Stock, or effect a subdivision,  combination or
consolidation  of the  outstanding  shares  of  Series  A  Preferred  Stock  (by
reclassification  or otherwise than by payment of a dividend in shares of Series
A  Preferred  Stock)  into a  greater  or  lesser  number  of shares of Series A
Preferred  Stock,  then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event  shall be  adjusted by  multiplying  such  amount by a fraction,  the
numerator of which is the number of shares of Series A Preferred Stock that were
outstanding  immediately prior to such event and the denominator of which is the
number of shares of Series A Preferred Stock outstanding  immediately after such
event.

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

     (C) (i) If at any time  dividends on any Series A Preferred  Stock shall be
in arrears in an amount equal to six quarterly dividends thereon, the holders of
the Series A Preferred Stock,  voting as a separate series from all other series
of Preferred


                                       62
<PAGE>

Stock and  classes of capital  stock,  shall be entitled to elect two members of
the Board in addition to any  Directors  elected by any other  series,  class or
classes of securities and the authorized number of Directors will  automatically
be increased by two. Promptly thereafter, the Board of the Corporation shall, as
soon as may be  practicable,  call a  special  meeting  of  holders  of Series A
Preferred  Stock for the purpose of  electing  such  members of the Board.  Such
special  meeting shall in any event be held within 45 days of the  occurrence of
such arrearage.

          (ii) During any period  when the holders of Series A Preferred  Stock,
voting as a separate  series,  shall be entitled and shall have exercised  their
right  to  elect  two  Directors,  then,  and  during  such  time as such  right
continues,  (a) the then  authorized  number of Directors  shall be increased by
two, and the holders of Series A Preferred  Stock,  voting as a separate series,
shall be entitled to elect the  additional  Directors  so provided  for, and (b)
each such additional Director shall not be a member of any existing class of the
Board,  but shall serve until the next annual  meeting of  stockholders  for the
election  of  Directors,  or until  his  successor  shall be  elected  and shall
qualify,  or until his  right to hold such  office  terminates  pursuant  to the
provisions of this Section 3(C).

          (iii) A Director  elected  pursuant to the terms hereof may be removed
with or without  cause by the  holders of Series A Preferred  Stock  entitled to
vote in an election of such Director.

          (iv) If, during any interval  between annual  meetings of stockholders
for the election of Directors and while the holders of Series A Preferred  Stock
shall be entitled to elect two Directors, there is no such Director in office by
reason of resignation,  death or removal,  then, promptly thereafter,  the Board
shall call a special  meeting of the holders of Series A Preferred Stock for the
purpose of filling such vacancy and such vacancy shall be filled at such special
meeting.  Such special  meeting shall in any event be held within 45 days of the
occurrence of such vacancy.

          (v) At such time as the  arrearage is fully cured,  and all  dividends
accumulated and unpaid on any shares of Series A Preferred Stock outstanding are
paid,  and, in addition  thereto,  at least one regular  dividend  has been paid
subsequent to curing such arrearage,  the term of office of any Director elected
pursuant to this Section 3(C), or his successor,  shall automatically terminate,
and the authorized number of Directors shall automatically decrease


                                       63
<PAGE>

by two, the rights of the holders of the shares of the Series A Preferred  Stock
to vote as provided in this Section  3(C) shall  cease,  subject to renewal from
time to time upon the same terms and  conditions,  and the  holders of shares of
the Series A Preferred Stock shall have only the limited voting rights elsewhere
herein set forth.

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

     Section 4. CERTAIN RESTRICTIONS.

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

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

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

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


                                       64
<PAGE>

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

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

     Section  5.  REACQUIRED  SHARES.  Any  shares of Series A  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and cancelled promptly after the acquisition  thereof. All such
shares shall upon their  cancellation  become  authorized but unissued shares of
Preferred  Stock and may be reissued as part of a new series of Preferred  Stock
subject to the conditions and restrictions on issuance set forth herein,  in the
Certificate  of  Incorporation,  or in any  other  Certificate  of  Designations
creating  a series  of  Preferred  Stock or any  similar  stock or as  otherwise
required by law.

     Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.

     (A) Upon any liquidation,  dissolution or winding up of the Corporation, no
distribution  shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon  liquidation,  dissolution or winding up) to the
Series A Preferred Stock unless,  prior thereto, the holders of shares of Series
A Preferred Stock shall have received  $1000.00 per share,  plus an amount equal
to accrued  and  unpaid  dividends  and  distributions  thereon,  whether or not
declared,  to the date of such  payment,  provided that the holders of shares of
Series A Preferred  Stock shall be entitled to receive an  aggregate  amount per
share,  subject to the provision for adjustment  hereinafter set forth, equal to
1,000  times the  aggregate  amount to be  distributed  per share to  holders of
shares of Common  Stock,  or (2) to the holders of shares of stock  ranking on a
parity (either as to dividends or upon  liquidation,  dissolution or winding up)
with the Series A Preferred


                                       65
<PAGE>

Stock, except distributions made ratably on the Series A Preferred Stock and all
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up.

     (B) Neither the consolidation,  merger or other business combination of the
Corporation with or into any other corporation nor the sale, lease,  exchange or
conveyance  of all or any  part  of the  property,  assets  or  business  of the
Corporation  shall be deemed to be a  liquidation,  dissolution or winding up of
the Corporation for purposes of this Section 6.

     (C) In the  event  the  Corporation  shall at any time  declare  or pay any
dividend  on the Common  Stock  payable in shares of Common  Stock,  or effect a
subdivision,  combination or consolidation  of the outstanding  shares of Common
Stock (by  reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the  aggregate  amount to which  holders of shares of Series A
Preferred Stock were entitled  immediately prior to such event under the proviso
in  clause  (1) of  paragraph  (A) of  this  Section  6  shall  be  adjusted  by
multiplying  such amount by a fraction,  the numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding  immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series A Preferred  Stock payable
in shares of Series A Preferred  Stock, or effect a subdivision,  combination or
consolidation  of the  outstanding  shares  of  Series  A  Preferred  Stock  (by
reclassification  or otherwise than by payment of a dividend in shares of Series
A  Preferred  Stock)  into a  greater  or  lesser  number  of shares of Series A
Preferred Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under the  proviso in clause  (1) of  paragraph  (A) of this  Section 6 shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Series A Preferred Stock that were  outstanding  immediately
prior to such  event  and the  denominator  of which is the  number of shares of
Series A Preferred Stock outstanding immediately after such event.

     Section 7.  CONSOLIDATION,  MERGER,  ETC.  Notwithstanding  anything to the
contrary  contained  herein,  in case  the  Corporation  shall  enter  into  any
consolidation, merger, combination or other


                                       66
<PAGE>

transaction  in which the shares of Common  Stock are  exchanged  for or changed
into other stock or securities, cash and/or any other property, then in any such
case each share of Series A Preferred  Stock shall at the same time be similarly
exchanged  or changed  into an amount per share,  subject to the  provision  for
adjustment  hereinafter set forth,  equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be,  into  which or for which  each  share of  Common  Stock is  changed  or
exchanged.  In the event the  Corporation  shall at any time  declare or pay any
dividend  on the Common  Stock  payable in shares of Common  Stock,  or effect a
subdivision,  combination or consolidation  of the outstanding  shares of Common
Stock (by  reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the  exchange or change of shares of Series A Preferred  Stock shall be adjusted
by multiplying  such amount by a fraction,  the numerator of which is the number
of shares of Common  Stock  outstanding  immediately  after  such  event and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding  immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series A Preferred  Stock payable
in shares of Series A Preferred  Stock, or effect a subdivision,  combination or
consolidation  of the  outstanding  shares  of  Series  A  Preferred  Stock  (by
reclassification  or otherwise than by payment of a dividend in shares of Series
A  Preferred  Stock)  into a  greater  or  lesser  number  of shares of Series A
Preferred  Stock,  then in each  such  case the  amount  set  forth in the first
sentence of this  Section 7 with  respect to the exchange or change of shares of
Series A  Preferred  Stock shall be  adjusted  by  multiplying  such amount by a
fraction,  the  numerator of which is the number of shares of Series A Preferred
Stock that were outstanding  immediately prior to such event and the denominator
of which is the  number  of  shares  of  Series A  Preferred  Stock  outstanding
immediately after such event.

     Section 8. NO REDEMPTION.  The shares of Series A Preferred Stock shall not
be redeemable.

     Section 9. RANK. The Series A Preferred  Stock shall rank,  with respect to
the payment of dividends and the distribution of assets, junior to all series of
any  other  class of the  Preferred  Stock  issued  either  before  or after the
issuance  of the Series A  Preferred  Stock  unless the terms of any such series
shall provide otherwise.


                                       67
<PAGE>

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

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

     IN WITNESS WHEREOF,  this Certificate of Designations is executed on behalf
of the Corporation by its President and Chief Executive Officer this 16th day of
February, 2001.

                                              SELECT THERAPEUTICS INC.



                                              By: __________________________
                                              Name:  Steve M. Peltzman
                                              Title: President and Chief
                                                       Executive Officer


                                       68
<PAGE>

                          [Form of Rights Certificate]

Certificate No. R-                                                   ____ Rights

     NOT EXERCISABLE AFTER FEBRUARY 28, 2011 OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO
EXCHANGE  ON  THE  TERMS  SET  FORTH  IN THE  RIGHTS  AGREEMENT.  UNDER  CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS  AGREEMENT) AND ANY  SUBSEQUENT  HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS  REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY  OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING  PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS  AGREEMENT).   ACCORDINGLY,   THIS  RIGHTS  CERTIFICATE  AND  THE  RIGHTS
REPRESENTED  HEREBY MAY BECOME NULL AND VOID IN THE  CIRCUMSTANCES  SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.](1)

-----------

     (1) The  portion  of the  legend  in  brackets  shall be  inserted  only if
applicable and shall replace the preceding sentence.

-----------

                            SELECT THERAPEUTICS INC.

                               Rights Certificate

     This certifies that ____________,  or registered assigns, is the registered
owner of the number of Rights set forth above,  each of which entitles the owner
thereof,  subject  to  the  terms,  provisions  and  conditions  of  the  Rights
Agreement,  dated as of February  16,  2001 (the  "Rights  Agreement"),  between
Select  Therapeutics Inc., a Delaware  corporation (the "Company"),  and Florida
Atlantic Stock Transfer, Inc. (the "Rights Agent"), to purchase from the Company
after the  Distribution  Date (as such term is defined in the Rights  Agreement)
and at any time prior to 5:00 p.m.  (Boston  time) on  February  28, 2011 at the
office of the Rights Agent  designated  for such purpose,  or its  successors as
Rights Agent, one one-thousandth of a fully paid, non-assessable share of Series
A Junior  Participating  Preferred Stock (the "Preferred Stock") of the Company,
$0.0001  par value per  share,  at a  purchase  price of $100.00 in cash per one
one-thousandth  of  a  share  (the  "Purchase  Price"),  upon  presentation  and
surrender of this Rights


                                       69
<PAGE>

Certificate  with the Form of Election to Purchase and related  Certificate duly
executed.  The number of Rights  evidenced by this Rights  Certificate  (and the
number  of one  one-thousandth  of a  share  of  Preferred  Stock  which  may be
purchased  upon  exercise  hereof) set forth above,  and the Purchase  Price set
forth above,  are the number and  Purchase  Price as of the close of business on
February 28, 2001,  based on the Preferred  Stock as  constituted  at such date.
Capitalized  terms used herein and not otherwise  defined  herein shall have the
meanings ascribed to such terms in the Rights Agreement.

     Upon the occurrence of a Section  11(a)(ii)  Event, if the Rights evidenced
by this Rights  Certificate are beneficially owned by (i) an Acquiring Person or
an  Affiliate  or  Associate  of any such  Acquiring  Person  (as such terms are
defined  in the  Rights  Agreement),  (ii) a  transferee  of any such  Acquiring
Person,  Associate or Affiliate  who becomes a  transferee  after the  Acquiring
Person  becomes  an  Acquiring  Person,  or (iii)  under  certain  circumstances
specified in the Rights  Agreement,  a transferee of a person who,  concurrently
with or after such  transfer,  became an  Acquiring  Person,  or an Affiliate or
Associate of an Acquiring Person,  such Rights shall become null and void and no
holder  hereof  shall have any right with  respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.

     As provided in the Rights Agreement,  the Purchase Price and the number and
kind of shares of  Preferred  Stock or other  securities  which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification  and adjustment upon the happening of certain events,  including
Section 11(a)(ii) Events.

     This  Rights  Certificate  is subject to all of the terms,  provisions  and
conditions of the Rights Agreement,  which terms,  provisions and conditions are
hereby  incorporated  herein by  reference  and made a part  hereof and to which
Rights Agreement  reference is hereby made for a full description of the rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights  Agent,  the Company and the  holders of the Rights  Certificates,  which
limitations of rights include the temporary  suspension of the exercisability of
such Rights under the specific  circumstances set forth in the Rights Agreement.
Copies of the  Rights  Agreement  are on file at the  principal  offices  of the
Company and are available upon written request to the Company.


                                       70
<PAGE>

     This Rights Certificate,  with or without other Rights  Certificates,  upon
surrender at the office of the Rights Agent  designated  for such purpose,  with
the Form of  Election  and  Certificate  set  forth  on the  reverse  side  duly
executed, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate  number of one  one-thousandths  of a share of Preferred  Stock as the
Rights evidenced by the Rights  Certificate or Rights  Certificates  surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this  Certificate  may be redeemed by the Company at its option at a  redemption
price of $0.001 per Right at any time  prior to the  earlier of (i) the close of
business on the tenth Business Day following the Stock  Acquisition Date (or, if
the Stock  Acquisition  Date shall have occurred  prior to the Record Date,  the
close of business on the tenth  Business Day following the Record Date) and (ii)
the Final Expiration Date.

     Subject to the provisions of the Rights Agreement,  the Company may, at its
option, at any time after a Section 11(a)(ii) Event, exchange all or part of the
Rights evidenced by this Certificate for shares of the Company's Common Stock or
for Preferred  Stock (or shares of a class or series of the Company's  preferred
stock  having the same  rights,  privileges  and  preferences  as the  Preferred
Stock).

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

     No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock  or of any  other  securities  of the  Company  which  may at any  time be
issuable on the  exercise  hereof,  nor shall  anything  contained in the Rights
Agreement or herein be construed to confer upon the holder hereof,  as such, any
of the rights of a stockholder of the Company or any right to vote


                                       71
<PAGE>

for the election of directors or upon any matter  submitted to  stockholders  at
any meeting thereof,  or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided  in the Rights  Agreement),  or to receive  dividends  or  subscription
rights,  or  otherwise,  until  the  Right or Rights  evidenced  by this  Rights
Certificate shall have been exercised as provided in the Rights Agreement.

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

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

                                            DATED AS OF _________________


ATTEST:                                     SELECT THERAPEUTICS INC.


___________________________                 By:___________________________
Secretary
                                            Title:________________________


                                               COUNTERSIGNED:

                                            FLORIDA ATLANTIC STOCK
                                               TRANSFER, INC.



                                            By: __________________________
                                                Authorized Signature



                                       72
<PAGE>

                  [Form of Reverse Side of Rights Certificate]

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such

               holder desires to transfer the Rights Certificate.)


FOR VALUE RECEIVED _____________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
____________________________________________  (Please  print name and address of
transferee)   ____________________________________________________________  this
Rights  Certificate,  together with all right,  title and interest therein,  and
does hereby irrevocably constitute and appoint ______________________  Attorney,
to  transfer  the within  Rights  Certificate  on the books of the  within-named
Company, with full power of substitution.

                                            DATED:_______________________
                                                  SIGNATURE

Signature Guaranteed:

                                   Certificate

The  undersigned  hereby  certifies  that the Rights  evidenced  by this  Rights
Certificate  are not  beneficially  owned by, or being assigned to, an Acquiring
Person or an Affiliate or Associate  thereof (as such terms are defined pursuant
to the Rights Agreement).

                                            DATED:_______________________
                                                  SIGNATURE

Signature Guaranteed:

     (b) NOTICE

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


                                       73
<PAGE>

                          FORM OF ELECTION TO PURCHASE

                  (To be executed if holder desires to exercise

                 Rights represented by the Rights Certificate.)

To:  Florida Atlantic Stock Transfer, Inc.

     The undersigned hereby  irrevocably  elects to exercise  ___________ Rights
     represented by this Rights  Certificate to purchase the shares of Preferred
     Stock issuable upon the exercise of the Rights (or such other securities of
     the Company or of any other person which may be issuable  upon the exercise
     of the Rights) and requests that  certificates for such shares be issued in
     the name of and delivered to:

           Please insert social security
           or other identifying number _________________________________

________________________________________________________________________________
                         (Please print name and address)

________________________________________________________________________________

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

Please insert social security
or other identifying number ____________________________________________

________________________________________________________________________________
                         (Please print name and address)

________________________________________________________________________________


                                                _____________________________

                                                _____________________________

                                                DATED:_______________________
                                                      SIGNATURE

Signature Guaranteed:


                                       74
<PAGE>

                                   Certificate

     The undersigned hereby certifies by checking the appropriate boxes that:

     (1) the Rights  evidenced  by this  Rights  Certificate  [ ] are [] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an  Affiliate or  Associate  thereof (as such terms are defined  pursuant to the
Rights Agreement);

     (2) after due inquiry and to the best  knowledge  of the  undersigned,  the
undersigned  [ ] did [ ] did not  acquire  the Rights  evidenced  by this Rights
Certificate  from any  Person who is,  was or became an  Acquiring  Person or an
Affiliate or Associate thereof.

                                                DATED:_______________________
                                                      SIGNATURE


Signature Guaranteed:

                                     NOTICE

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



                                       75
<PAGE>

                              SUMMARY OF RIGHTS TO

                            PURCHASE PREFERRED STOCK

     Effective February 16, 2001, the Board of Directors of Select  Therapeutics
Inc.  (the  "Company"),  declared a dividend  of one Right for each  outstanding
share of the Company's  Common Stock to  stockholders  of record at the close of
business on February  28, 2001 (the  "Record  Date").  Each Right  entitles  the
registered holder to purchase from the Company one  one-thousandth of a share of
Series A Junior Participating  Preferred Stock, $0.0001 par value per share (the
"Preferred  Stock"),  at a  Purchase  Price  of  $100.00  in  cash,  subject  to
adjustment.  The  description  and terms of the Rights are set forth in a Rights
Agreement  dated as of February  16, 2001 (the "Rights  Agreement")  between the
Company and Florida Atlantic Stock Transfer, Inc., as Rights Agent.

     The Rights are intended to protect the  stockholders  of the Company in the
event of an unfair or  coercive  offer to acquire the Company and to provide the
Board with adequate  time to evaluate  unsolicited  offers.  The Rights may have
anti-takeover effects. The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company without  conditioning  the offer on a
substantial  number of Rights being acquired.  The Rights,  however,  should not
affect  any  prospective  offeror  willing  to make an offer at a fair price and
otherwise  in the  best  interests  of the  Company  and  its  stockholders,  as
determined by a majority of the Board.  The Rights should not interfere with any
merger or other business combination approved by the Board.

     Initially,  the  Rights are not  exercisable  and will be  attached  to all
Common Stock certificates representing shares then outstanding,  and no separate
Rights  Certificates  will be  distributed.  The Rights will  separate  from the
Common  Stock and a  Distribution  Date will  occur  upon the  earlier of (i) 10
Business  Days  following  the first date (the  "Stock  Acquisition  Date") of a
public  announcement that a person or group of affiliated or associated  persons
(an  "Acquiring  Person")  has  acquired,  or  obtained  the  right to  acquire,
beneficial  ownership  of 20%  or  more  of the  outstanding  shares  of  Common
Stock(other  than the  shareholders  of  Cytomatrix  LLC, a  California  limited
liability company, to the extent that such shareholders receive shares of Common
Stock  pursuant to any  acquisition  by the Company of Cytomatrix  LLC which the
Company may effect as contemplated by that certain Joint Venture and Shareholder
Agreement dated December 13,


                                       76
<PAGE>

2000, between the Company and Cytomatrix LLC) or (ii) 10 Business Days following
the  commencement  of a tender  offer or exchange  offer that would  result in a
person or group  beneficially  owning 20% or more of such outstanding  shares of
Common Stock. The  Distribution  Date may be deferred by the Board of Directors.
In addition, certain inadvertent acquisitions will not trigger the occurrence of
the Distribution  Date. Until the  Distribution  Date (or earlier  redemption or
expiration of the Rights),  (i) the Rights will be evidenced by the Common Stock
certificates  outstanding on the Record Date,  together with a Summary of Rights
to be mailed to stockholders,  or by new Common Stock certificates  issued after
the Record Date which contain a notation  incorporating  the Rights Agreement by
reference,  (ii) the Rights will be  transferred  with and only with such Common
Stock certificates; and (iii) the surrender for transfer of any certificates for
Common  Stock  outstanding  (with or without a copy of the  Summary of Rights or
such notation) will also  constitute the transfer of the Rights  associated with
the Common Stock represented by such certificate.

     The Rights are not exercisable  until the Distribution Date and will expire
upon the close of business on February  28, 2011 (the "Final  Expiration  Date")
unless earlier  redeemed or exchanged as described below. As soon as practicable
after the  Distribution  Date,  separate Rights  Certificates  will be mailed to
holders  of  record  of the  Common  Stock as of the  close of  business  on the
Distribution Date and,  thereafter,  the separate Rights Certificates alone will
represent the Rights.  Except as otherwise determined by the Board of Directors,
and  except for shares of Common  Stock  issued  upon  exercise,  conversion  or
exchange of then outstanding options,  convertible or exchangeable securities or
other contingent obligations to issue shares or pursuant to any employee benefit
plan  or  arrangement,   only  shares  of  Common  Stock  issued  prior  to  the
Distribution Date will be issued with Rights.

     In the event that any Person becomes an Acquiring  Person,  then,  promptly
following the first occurrence of such event,  each holder of a Right (except as
provided  below and in Section 7(e) of the Rights  Agreement)  shall  thereafter
have the right to receive, upon exercise,  that number of shares of Common Stock
of the Company (or, in certain circumstances, cash, property or other securities
of the Company)  which equals the exercise  price of the Right divided by 50% of
the  current  market  price (as  defined in the Rights  Agreement)  per share of
Common Stock at the date of the  occurrence of such event.  However,  Rights are
not exercisable following such event until such time as the Rights are no longer


                                       77
<PAGE>

redeemable  by  the  Company  as  described  below.  Notwithstanding  any of the
foregoing,  following  the  occurrence  of such  event,  all Rights that are, or
(under  certain   circumstances   specified  in  the  Rights   Agreement)  were,
beneficially  owned by any  Acquiring  Person  will be null and void.  The event
summarized in this paragraph is referred to as a "Section 11(a)(ii) Event."

     For  example,  at an exercise  price of $100.00  per Right,  each Right not
owned by an Acquiring Person (or by certain related parties) following a Section
11(a)(ii)  Event would entitle its holder to purchase for $100.00 such number of
shares  of  Common  Stock (or  other  consideration,  as noted  above) as equals
$100.00  divided by  one-half  of the  current  market  price (as defined in the
Rights  Agreement)  of the Common  Stock.  Assuming  that the Common Stock had a
market  price of $5.00 per share at such time,  the  holder of each valid  Right
would be entitled  to purchase  forty  shares of Common  Stock,  having a market
value of $200.00 (40 x $5.00), for $100.00.

     In the event  that,  at any time  after any  Person  becomes  an  Acquiring
Person,  (i) the Company is consolidated  with, or merged with and into, another
entity and the  Company is not the  surviving  entity of such  consolidation  or
merger or if the Company is the surviving entity,  but shares of its outstanding
Common  Stock are changed or  exchanged  for stock or  securities  (of any other
person) or cash or any other  property,  or (ii) more than 50% of the  Company's
assets or earning power is sold or  transferred,  each holder of a Right (except
Rights which  previously  have been voided as set forth above) shall  thereafter
have the right to receive, upon exercise,  that number of shares of common stock
of the acquiring company which equals the exercise price of the Right divided by
50% of the current  market  price (as defined in the Rights  Agreement)  of such
common stock at the date of the occurrence of the event.  The events  summarized
in this  paragraph  are referred to as "Section 13 Events." A Section  11(a)(ii)
Event and Section 13 Events are collectively referred to as "Triggering Events."

     For example,  at an exercise  price of $100.00 per Right,  each valid Right
following  a Section 13 Event would  entitle its holder to purchase  for $100.00
such number of shares of common stock of the acquiring company as equals $100.00
divided  by  one-half  of the  current  market  price (as  defined in the Rights
Agreement)  of such common  stock.  Assuming that such common stock had a market
price of $5.00 per share at such time, the holder of each valid Right


                                       78
<PAGE>

would be entitled  to purchase  forty  shares of common  stock of the  acquiring
company, having a market value of $200.00 (40 x $5.00), for $100.00.

     At any time after the  occurrence  of a Section  11(a)(ii)  Event,  when no
person  owns a  majority  of the Common  Stock,  the Board of  Directors  of the
Company may  exchange  the Rights  (other than  Rights  owned by such  Acquiring
Person which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one  one-thousandth  of a share of Preferred Stock (or
of a share  of a  class  or  series  of the  Company's  preferred  stock  having
equivalent   rights,   preferences  and  privileges),   per  Right  (subject  to
adjustment).

     The Purchase Price payable,  and the number of units of Preferred  Stock or
other securities or property  issuable,  upon exercise of the Rights are subject
to adjustment from time to time to prevent  dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock,  (ii) if holders of the  Preferred  Stock are granted  certain  rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the  then-current  market  price (as  defined  in the Rights  Agreement)  of the
Preferred  Stock,  or (iii) upon the  distribution  to holders of the  Preferred
Stock of evidences of indebtedness or assets  (excluding  regular  periodic cash
dividends paid out of earnings or retained  earnings) or of subscription  rights
or  warrants  (other  than  those  referred  to  above).  The  number  of Rights
associated  with each share of Common Stock is also subject to adjustment in the
event of a stock  split of the Common  Stock or a stock  dividend  on the Common
Stock payable in Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the Distribution Date.

     With  certain  exceptions,  no  adjustment  in the  Purchase  Price will be
required  until  cumulative  adjustments  amount to at least 1% of the  Purchase
Price.  No fractional  shares of Preferred Stock (other than fractions which are
integral  multiples of one one-thousandth of a share of Preferred Stock) will be
issued and, in lieu  thereof,  an  adjustment  in cash will be made based on the
market price of the  Preferred  Stock on the last trading date prior to the date
of exercise.

     Preferred  Stock  purchasable  upon  exercise  of the  Rights  will  not be
redeemable.  Each share of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors, a


                                       79
<PAGE>

minimum  preferential  quarterly  dividend  payment  of $10.00  per share or, if
greater, an aggregate dividend of 1,000 times the dividend declared per share of
Common Stock.  In the event of  liquidation,  the holders of the Preferred Stock
will be entitled to a minimum preferential  liquidation payment of $1,000.00 per
share,  plus an  amount  equal to  accrued  and  unpaid  dividends,  and will be
entitled to an  aggregate  payment of 1,000 times the payment  made per share of
Common  Stock.  Each share of  Preferred  Stock will have  1,000  votes,  voting
together with the Common  Stock.  In the event of any merger,  consolidation  or
other  transaction in which Common Stock is changed or exchanged,  each share of
Preferred  Stock will be entitled to receive 1,000 times the amount received per
share of Common  Stock.  These rights are  protected  by customary  antidilution
provisions. Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of one one-thousandth of a share of Preferred Stock
purchasable  upon  exercise of each Right  should  approximate  the value of one
share of Common Stock.

     At any time  prior to the  earlier of (i) the tenth  Business  Day (or such
later date as may be determined by the Board of Directors of the Company)  after
the Stock  Acquisition  Date, or (ii) the Final Expiration Date, the Company may
redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the
"Redemption Price"),  payable in cash or stock.  Immediately upon the redemption
of the Rights or such earlier time as established by the Board in the resolution
ordering the  redemption of the Rights,  the Rights will  terminate and the only
right of the  holders of Rights  will be to receive the  Redemption  Price.  The
Rights may also be redeemable following certain other circumstances specified in
the Rights Agreement.

     Until a Right is  exercised,  the  holder  thereof,  as such,  will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive  dividends.  While the distribution of the Rights will not
be taxable to stockholders or to the Company,  stockholders may,  depending upon
the circumstances,  recognize taxable income in the event that the Rights become
exercisable  for Common  Stock (or other  consideration)  of the  Company or for
common stock of the acquiring company as set forth above.

     Any provision of the Rights Agreement, other than the redemption price, may
be  amended  by the  Board  prior  to such  time  as the  Rights  are no  longer
redeemable. Once the Rights are no longer


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redeemable,  the Board's  authority to amend the Rights is limited to correcting
ambiguities  or defective or  inconsistent  provisions in a manner that does not
adversely affect the interest of holders of Rights.

     A copy of the  Rights  Agreement  has been filed  with the  Securities  and
Exchange  Commission as an Exhibit to the Company's  Current  Report on Form 8-K
dated  February 20, 2001.  A copy of the Rights  Agreement is available  free of
charge from the Company. This summary description of the Rights does not purport
to be complete  and is  qualified  in its  entirety by  reference  to the Rights
Agreement, which is incorporated herein by reference.



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