Document:

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                                                                     Exhibit 4.3

                                                                  EXECUTION COPY
                                                                  --------------

                         Registration Rights Agreement

                           Dated as of June 19, 2001

                                     among

                     Applied Extrusion Technologies, Inc.

                                      and

                             Merrill Lynch & Co.,
                     Merrill Lynch, Pierce, Fenner & Smith
                                 Incorporated

                             Chase Securities Inc.

                    Credit Suisse First Boston Corporation

                                      and

                        Deutsche Banc Alex. Brown Inc.

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                         REGISTRATION RIGHTS AGREEMENT

          THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into June 19, 2001, among APPLIED EXTRUSION TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), and MERRILL LYNCH & CO., MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED, CHASE SECURITIES INC., CREDIT SUISSE FIRST
BOSTON CORPORATION and DEUTSCHE BANC ALEX. BROWN INC. (the "Purchasers").

          This Agreement is made pursuant to the Purchase Agreement dated June
12, 2001 between the Company and the Purchasers (the "Purchase Agreement"),
which provides for the sale by the Company to the Purchasers of an aggregate of
$275,000,000 principal amount of the Company's 10 3/4% Senior Notes due 2011
(the "Securities"). In order to induce the Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide to the Purchasers and their direct
and indirect transferees the registration rights set forth in this Agreement.
The execution of this Agreement is a condition to the closing under the Purchase
Agreement.

          In consideration of the foregoing, the parties hereto agree as
follows:

          1.   Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:

          "1933 Act" shall mean the Securities Act of 1933, as amended from time
           --------
to time.

          "1934 Act" shall mean the Securities Exchange Act of 1934, as amended
           --------
     from time to time.

          "Closing Date" shall mean the Closing Time as defined in the Purchase
           ------------
     Agreement.

          "Company" shall have the meaning set forth in the preamble and also
           -------
     includes the Company's successors.

          "Depositary" shall mean the Depositary Trust Company, or any other
           ----------
     depositary appointed by the Company; provided, however, that such
                                          --------  -------
     depositary must have an address in the Borough of Manhattan, in the City of
     New York.

          "Exchange Offer" shall mean the exchange offer by the Company of
           --------------
     Exchange Securities for Registrable Securities pursuant to Section 2(a)
     hereof.

          "Exchange Offer Registration" shall mean a registration under the 1933
           ---------------------------
     Act effected pursuant to Section 2(a) hereof.

          "Exchange Offer Registration Statement" shall mean an exchange offer
           -------------------------------------
     registration statement on Form S-4 (or, if applicable, on another
     appropriate

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     form), and all amendments and supplements to such registration statement,
     in each case including the Prospectus contained therein, all exhibits
     thereto and all material incorporated by reference therein.

          "Exchange Securities" shall mean 10 3/4% Series B Senior Notes due
           -------------------
     2011 issued by the Company under the Indenture containing terms identical
     to the Securities (except that (i) interest thereon shall accrue from the
     last date on which interest was paid on the Securities or, if no such
     interest has been paid, from the date of their original issue (ii) the
     transfer restrictions thereon shall be eliminated and (iii) certain
     provisions relating to an increase in the stated rate of interest thereon
     shall be eliminated), to be offered to Holders of Securities in exchange
     for Securities pursuant to the Exchange Offer.

          "Holders" shall mean the Purchasers, for so long as they own any
           -------
     Registrable Securities, and each of their successors, assigns and direct
     and indirect transferees who become registered owners of Registrable
     Securities under the Indenture.

          "Indenture" shall mean the Indenture relating to the Securities dated
           ---------
     as of June , 2001 between the Company and Wells Fargo Bank Minnesota,
     National Association, as trustee, as the same may be amended from time to
     time in accordance with the terms thereof.

          "Majority Holders" shall mean the Holders of a majority of the
           ----------------
     aggregate principal amount of outstanding Registrable Securities; provided
                                                                       --------
     that whenever the consent or approval of Holders of a specified percentage
     of Registrable Securities is required hereunder, Registrable Securities
     held by the Company shall be disregarded in determining whether such
     consent or approval was given by the Holders of such required percentage or
     amount.

          "Person" shall mean an individual, partnership, limited liability
           ------
     company, corporation, trust or unincorporated organization, or a government
     or agency or political subdivision thereof.

          "Prospectus" shall mean the prospectus included in a Registration
           ----------
     Statement, including any preliminary prospectus, and any such prospectus as
     amended or supplemented by any prospectus supplement, including a
     prospectus supplement with respect to the terms of the offering of any
     portion of the Registrable Securities covered by a Shelf Registration
     Statement, and by all other amendments and supplements to a prospectus,
     including post-effective amendments, and in each case including all
     material incorporated by reference therein.

          "Purchase Agreement" shall have the meaning set forth in the preamble.
           ------------------

          "Purchaser" shall have the meaning set forth in the preamble.
           ---------

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          "Registrable Securities" shall mean the Securities; provided, however,
           ----------------------                             --------  -------
     that the Securities shall cease to be Registrable Securities when (i) a
     Registration Statement with respect to such Securities shall have been
     declared effective under the 1933 Act and such Securities shall have been
     disposed of pursuant to such Registration Statement, (ii) such Securities
     shall have been sold to the public pursuant to Rule 144(k) (or any similar
     provision then in force, but not Rule 144A) under the 1933 Act, (iii) such
     Securities shall have ceased to be outstanding or (iv) such Securities have
     been exchanged for Exchange Securities upon consummation of the Exchange
     Offer.

          "Registration Expenses" shall mean any and all expenses incident to
           ---------------------
     performance of or compliance by the Company with this Agreement, including
     without limitation: (i) all SEC, stock exchange or National Association of
     Securities Dealers, Inc. ("NASD") registration and filing fees, (ii) all
     fees and expenses incurred in connection with compliance with state
     securities or blue sky laws and compliance with the rules of the NASD
     (including reasonable fees and disbursements of counsel for any
     underwriters or Holders in connection with blue sky qualification of any of
     the Exchange Securities or Registrable Securities), (iii) all expenses of
     any Persons in preparing or assisting in preparing, word processing,
     printing and distributing any Registration Statement, any Prospectus, any
     amendments or supplements thereto, any underwriting agreements, securities
     sales agreements and other documents relating to the performance of and
     compliance with this Agreement, (iv) all rating agency fees, (v) all fees
     and expenses incurred in connection with the listing, if any, of any of the
     Registrable Securities on any securities exchange or exchanges, (vi) the
     fees and disbursements of counsel for the Company and of the independent
     public accountants of the Company, including the expenses of any special
     audits or "cold comfort" letters required by or incident to such
     performance and compliance, (vii) the fees and expenses of the Trustee, and
     any escrow agent or custodian, and (viii) any fees and disbursements of the
     underwriters customarily required to be paid by issuers or sellers of
     securities and the reasonable fees and expenses of any special experts
     retained by the Company in connection with any Registration Statement, but
     excluding fees of counsel to the underwriters or the Holders and
     underwriting discounts and commissions and transfer taxes, if any, relating
     to the sale or disposition of Registrable Securities by a Holder.

          "Registration Statement" shall mean any registration statement of the
           ----------------------
     Company which covers any of the Exchange Securities or Registrable
     Securities pursuant to the provisions of this Agreement, and all amendments
     and supplements to any such Registration Statement, including post-
     effective amendments, in each case including the Prospectus contained
     therein, all exhibits thereto and all material incorporated by reference
     therein.

          "SEC" shall mean the Securities and Exchange Commission.
           ---

          "Shelf Registration" shall mean a registration effected pursuant to
           ------------------
     Section 2(b) hereof.

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          "Shelf Registration Statement" shall mean a "shelf" registration
         statement of the Company pursuant to the provisions of Section 2(b) of
         this Agreement which covers  all of the Registrable

         Securities on an appropriate form under Rule 415 under the 1933 Act, or
         any similar rule that may be adopted by the SEC, and all amendments and
         supplements to such registration statement, including post-effective
         amendments, in each case including the Prospectus contained therein,
         all exhibits thereto and all material incorporated by reference
         therein.

          "Trustee" shall mean the trustee with respect to the
           -------
Securities under the Indenture.

          2.   Registration Under the 1933 Act. (a) Exchange Offer Registration.
               -------------------------------      ---------------------------
To the extent not prohibited by any applicable law or applicable interpretation
of the Staff of the SEC, the Company shall use its best efforts (A) to file
within 30 days after the Closing Date an Exchange Offer Registration Statement
covering the offer by the Company to the Holders to exchange all of the
Registrable Securities for Exchange Securities, (B) to cause such Exchange Offer
Registration Statement to be declared effective by the SEC within 120 days after
the Closing Date, (C) to cause such Registration Statement to remain effective
until the closing of the Exchange Offer and (D) to consummate the Exchange Offer
within 150 days following the Closing Date. The Exchange Securities will be
issued under the Indenture. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder (other than
Participating Broker-Dealers (as defined in Section 3(f)) eligible and electing
to exchange Registrable Securities for Exchange Securities (assuming that such
Holder is not an affiliate of the Company within the meaning of Rule 405 under
the 1933 Act, acquires the Exchange Securities in the ordinary course of such
Holder's business and has no arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Securities) to trade such Exchange Securities from and after their receipt
without any limitations or restrictions under the 1933 Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States.

          In connection with the Exchange Offer, the Company shall:

          (i)   mail to each Holder a copy of the Prospectus forming part of the
     Exchange Offer Registration Statement, together with an appropriate letter
     of transmittal and related documents;

          (ii)  keep the Exchange Offer open for not less than 30 days after the
     date notice thereof is mailed to the Holders (or longer if required by
     applicable law);

          (iii) use the services of the Depositary for the Exchange Offer;

          (iv)  permit Holders to withdraw tendered Registrable Securities at
     any time prior to the close of business, New York City time, on the last
     business day

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     on which the Exchange Offer shall remain open, by sending to the
     institution specified in the notice, a telegram, telex, facsimile
     transmission or letter setting forth the name of such Holder, the principal
     amount of Registrable Securities delivered for exchange, and a statement
     that such Holder is withdrawing his election to have such Securities
     exchanged; and

          (v)  otherwise comply in all respects with all applicable laws
     relating to the Exchange Offer.

          As soon as practicable after the close of the Exchange Offer,
the Company shall:

          (i)   accept for exchange Registrable Securities duly tendered and not
     validly withdrawn pursuant to the Exchange Offer in accordance with the
     terms of the Exchange Offer Registration Statement and the letter of
     transmittal which is an exhibit thereto;

          (ii)  deliver, or cause to be delivered, to the Trustee for
     cancellation all Registrable Securities so accepted for exchange by the
     Company; and

          (iii) cause the Trustee promptly to authenticate and deliver Exchange
     Securities to each Holder of Registrable Securities equal in principal
     amount to the Registrable Securities of such Holder so accepted for
     exchange.

          Interest on each Exchange Security will accrue from the last date on
which interest was paid on the Registrable Securities surrendered in exchange
therefor or, if no interest has been paid on the Registrable Securities, from
the date of its original issue. The Exchange Offer shall not be subject to any
conditions, other than that the Exchange Offer, or the making of any exchange by
a Holder, does not violate applicable law or any applicable interpretation of
the Staff of the SEC. Each Holder of Registrable Securities (other than
Participating Broker-Dealers) who wishes to exchange such Registrable Securities
for Exchange Securities in the Exchange Offer will be required to represent that
(i) it is not an affiliate of the Company, (ii) any Exchange Securities to be
received by it were acquired in the ordinary course of business and (iii) at the
time of the commencement of the Exchange Offer it has no arrangement with any
person to participate in the distribution (within the meaning of the Securities
Act) of the Exchange Securities. The Company shall inform the Purchasers of the
names and addresses of the Holders to whom the Exchange Offer is made, and the
Purchasers shall have the right to contact such Holders and otherwise facilitate
the tender of Registrable Securities in the Exchange Offer.

          (b)  Shelf Registration. (i) If, because of any change in law or
               ------------------
applicable interpretations thereof by the Staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason the Exchange Offer is not consummated within 150
days after the Closing Date, or (iii) if any Holder (other than a Purchaser) is
not eligible to participate in the Exchange Offer or (iv) upon the request of
any Purchaser (with respect to any Registrable

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<PAGE>

Securities which it acquired directly from the Company) following the
consummation of the Exchange Offer if such Purchaser shall hold Registrable
Securities which it acquired directly from the Company and if such Purchaser is
not permitted, in the opinion of counsel to such Purchaser, pursuant to
applicable law or applicable interpretation of the Staff of the SEC to
participate in the Exchange Offer, the Company shall, at its cost,

          (A)  as promptly as practicable, file with the SEC a Shelf
     Registration Statement relating to the offer and sale of the Registrable
     Securities by the Holders from time to time in accordance with the methods
     of distribution elected by the Majority Holders of such Registrable
     Securities and set forth in such Shelf Registration Statement, and use its
     best efforts to cause such Shelf Registration Statement to be declared
     effective by the SEC by 150 days after the Closing Date. In the event that
     the Company is required to file a Shelf Registration Statement upon the
     request of any Holder (other than a Purchaser) not eligible to participate
     in the Exchange Offer pursuant to clause (iii) above or upon the request of
     any Purchaser pursuant to clause (iv) above, the Company shall file and
     have declared effective by the SEC both an Exchange Offer Registration
     Statement pursuant to Section 2(a) with respect to all Registrable
     Securities and a Shelf Registration Statement (which may be a combined
     Registration Statement with the Exchange Offer Registration Statement) with
     respect to offers and sales of Registrable Securities held by such Holder
     or such Purchaser after completion of the Exchange Offer.

          (B)  use its best efforts to keep the Shelf Registration Statement
     continuously effective in order to permit the Prospectus forming part
     thereof to be usable by Holders for a period of two years from the date the
     Shelf Registration Statement is declared effective by the SEC (or one year
     from the date the Shelf Registration Statement is declared effective if
     such Shelf Registration Statement is filed upon the request of any
     Purchaser pursuant to clause (iv) above) or such shorter period which will
     terminate when all of the Registrable Securities covered by the Shelf
     Registration Statement have been sold pursuant to the Shelf Registration
     Statement.

          (C)  nothwithstanding any other provisions hereof, use its best
     efforts to ensure that (i) any Shelf Registration Statement and any
     amendment thereto and any Prospectus forming part thereof and any
     supplement thereto complies in all material respects with the 1933 Act and
     the rules and regulations thereunder, (ii) any Shelf Registration Statement
     and any amendment thereto does not, when it becomes effective, contain an
     untrue statement of a material fact or omit to state a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading and (iii) any Prospectus forming part of any Shelf
     Registration Statement, and any supplement to such Prospectus (as amended
     or supplemented from time to time), does not include an untrue statement of
     a material fact or omit to state a material fact necessary in order to make
     the statements, in light of the circumstances under which they were made,
     not misleading.

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<PAGE>

          The Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement if reasonably requested by the Majority Holders
with respect to information relating to the Holders and otherwise as required by
Section 3(b) below, to use all reasonable efforts to cause any such amendment to
become effective and such Shelf Registration to become usable as soon as
thereafter practicable and to furnish to the Holders of Registrable Securities
copies of any such supplement or amendment promptly after its being used or
filed with the SEC.

          (c)  Expenses. The Company shall pay all Registration Expenses in
               --------
connection with the registration pursuant to Section 2(a) or 2(b) and, in the
case of any Shelf Registration Statement, will reimburse the Holders or
Purchasers for the reasonable fees and disbursements of one firm or counsel
designated in writing by the Majority Holders to act as counsel for the Holders
of the Registrable Securities in connection therewith, and, in the case of an
Exchange Offer Registration Statement, will reimburse the Purchasers, as
applicable, for the reasonable fees and disbursements of one counsel in
connection therewith. Each Holder shall pay all expenses of its counsel other
than as set forth in the preceding sentence, underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Registrable Securities pursuant to the Shelf Registration
Statement.

          (d)  Effective Registration Statement. (i) The Company will be deemed
               --------------------------------
not to have used its best efforts to cause the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, to become, or
to remain, effective during the requisite period if it voluntarily takes any
action that would result in any such Registration Statement not being declared
effective or in the Holders of Registrable Securities covered thereby not being
able to exchange or offer and sell such Registrable Securities during that
period unless (A) such action is required by applicable law or (B) such action
is taken by the Company in good faith and for valid business reasons (not
including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of assets, so long as the Company promptly complies
with the requirements of Section 3(j) hereof, if applicable.

          (ii) An Exchange Offer Registration Statement pursuant to Section 2(a)
     hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof
     will not be deemed to have become effective unless it has been declared
     effective by the SEC; provided, however, that if, after it has been
                           --------  -------
     declared effective, the offering of Registrable Securities pursuant to a
     Registration Statement is interfered with by any stop order, injunction or
     other order or requirement of the SEC or any other governmental agency or
     court, such Registration Statement will be deemed not to have been
     effective during the period of such interference, until the offering of
     Registrable Securities pursuant to such Registration Statement may legally
     resume.

          (e)  Increase in Interest Rate. In the event that (i) the Exchange
               -------------------------
Offer Registration Statement is not filed with the Commission on or prior to the
30th calendar day after the Closing Date, (ii) the Exchange Offer Registration
Statement is not declared effective on or prior to the 120th calendar day after
the Closing Date or (iii) the Exchange

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Offer is not consummated or a Shelf Registration Statement with respect to the
Registrable Securities is not declared effective on or prior to the 150th
calendar day after the Closing Date, the interest rate borne by the Securities
shall be increased by one-half of one percent per annum following such 30-day
period in the case of clause (i) above, such 120-day period in the case of
clause (ii) above, or such 150-day period in the case of clause (iii) above;
provided that the aggregate increase in such interest rate will in no event
--------
exceed one-half of one percent per annum. Upon (x) the filing of the Exchange
Offer Registration Statement after the 30-day period described in clause (i)
above, (y) the effectiveness of the Exchange Offer Registration Statement after
the 120-day period described in clause (ii) above or (z) the consummation of the
Exchange Offer or the effectiveness of a Shelf Registration Statement, as the
case may be, after the 150-day period described in clause (iii) above, the
interest rate borne by the Securities from the date of such filing,
effectiveness or consummation, as the case may be, will be reduced to the
original interest rate.

          (f)  Specific Enforcement. Without limiting the remedies available to
               --------------------
the Purchasers and the Holders, the Company acknowledges that any failure by the
Company to comply with its obligations under Section 2(a) and Section 2(b)
hereof may result in material irreparable injury to the Purchasers or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Purchasers or any Holder may obtain such relief as may
be required to specifically enforce the Company's obligations under Section 2(a)
and Section 2(b) hereof.

          3.   Registration Procedures. In connection with the obligations of
               -----------------------
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:

          (a)  prepare and file with the SEC a Registration Statement, within
the time period specified in Section 2, on the appropriate form under the 1933
Act, which form (i) shall be selected by the Company, (ii) shall, in the case of
a Shelf Registration, be available for the sale of the Registrable Securities by
the selling Holders thereof and (iii) shall comply as to form in all material
respects with the requirements of the applicable form and include or incorporate
by reference all financial statements required by the SEC to be filed therewith,
and use its best efforts to cause such Registration Statement to become
effective and remain effective in accordance with Section 2 hereof;

          (b)  prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period;
cause each Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act; and
comply with the provisions of the 1933 Act with respect to the disposition of
all securities covered by each Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
selling Holders thereof;

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<PAGE>

          (c)  in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is being filed
and advising such Holders that the distribution of Registrable Securities will
be made in accordance with the method elected by the Majority Holders; and (ii)
furnish to each Holder of Registrable Securities, to counsel for the Purchasers,
to counsel for the Holders and to each underwriter of an underwritten offering
of Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if the
Holder so requests, all exhibits to be filed (including those incorporated by
reference) in order to facilitate the public sale or other disposition of the
Registrable Securities; and (iii) subject to the last paragraph of Section 3,
hereby consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable Securities in connection
with the offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto provided that such use
complies with all applicable laws and regulations;

          (d)  use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, to cooperate with the Holders in
connection with any filings required to be made with the NASD, and do any and
all other acts and things which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in each such jurisdiction of
such Registrable Securities owned by such Holder; provided, however, that the
                                                  --------  -------
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) take any action which would
subject it to general service of process or (iii) subject itself to taxation in
any such jurisdiction if it is not then so subject;

          (e)  in the case of a Shelf Registration, notify each Holder of
Registrable Securities and one counsel for the Purchasers promptly and, if
requested by such Holder or counsel, confirm such advice in writing promptly (i)
when a Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to such offering cease to be true and correct in all
material respects, (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable

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<PAGE>

Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (vi) of the happening of any event or the discovery
of any facts during the period a Shelf Registration Statement is effective which
makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which requires the making of any
changes in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vii) of any determination by the Company
that a post-effective amendment to a Registration Statement would be
appropriate;

          (f)  (A) in the case of the Exchange Offer, (i) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section covering
the use of the Prospectus included in the Exchange Offer Registration Statement
by broker-dealers who have exchanged their Registrable Securities for Exchange
Securities for the resale of such Exchange Securities, (ii) furnish to each
broker-dealer who desires to participate in the Exchange Offer, without charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or supplement
thereto, as such broker-dealer may reasonably request, (iii) include in the
Exchange Offer Registration Statement a statement that any broker-dealer who
holds Registrable Securities acquired for its own account as a result of market-
making activities or other trading activities (a "Participating Broker-Dealer"),
and who receives Exchange Securities for Registrable Securities pursuant to the
Exchange Offer, may be a statutory underwriter and must deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Securities, (iv) subject to the last paragraph of Section 3, hereby
consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any broker-
dealer in connection with the sale or transfer of the Exchange Securities
covered by the Prospectus or any amendment or supplement thereto, and (v)
include in the transmittal letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange Offer (x) the following
provision:

          "If the undersigned is not a broker-dealer, the undersigned
          represents that it is not engaged in, and does not intend to
          engage in, a distribution of Exchange Securities. If the
          undersigned is a broker-dealer that will receive Exchange
          Securities for its own account in exchange for Registrable
          Securities, it represents that the Registrable Securities to
          be exchanged for Exchange Securities were acquired by it as
          a result of market-making activities or other trading
          activities and acknowledges that it will deliver a
          prospectus meeting the requirements of the 1933 Act in
          connection with any resale of such Exchange Securities
          pursuant to the Exchange Offer; however, by so acknowledging
          and by delivering a prospectus, the undersigned will not be
          deemed to admit that it is an "underwriter" within the
          meaning of the 1933 Act"; and

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<PAGE>

          (y)  a statement to the effect that by a broker-dealer
          making the acknowledgment described in subclause (x) and by
          delivering a Prospectus in connection with the exchange of
          registrable Securities, the broker-dealer will not be deemed
          to admit that it is an underwriter within the meaning of the
          1933 Act"; and

          (B)  to the extent any Participating Broker-Dealer participates in the
     Exchange Offer, the Company shall use its best efforts to cause to be
     delivered at the request of an entity representing the Participating
     Broker-Dealers (which entity shall be one of the Purchasers, unless they
     elect not to act as such representative) only one, if any, "cold comfort"
     letter with respect to the Prospectus in the form existing on the last date
     for which exchanges are accepted pursuant to the Exchange Offer and with
     respect to each subsequent amendment or supplement, if any, effected during
     the period specified in clause (C) below; and

          (C)  to the extent any Participating Broker-Dealer participates in the
     Exchange Offer, the Company shall use its best efforts to maintain the
     effectiveness of the Exchange Offer Registration Statement for a period of
     180 days following the closing of the Exchange Offer; and

          (D)  the Company shall not be required to amend or supplement the
     Prospectus contained in the Exchange Offer Registration Statement as would
     otherwise be contemplated by Section 3(b), or take any other action as a
     result of this Section 3(f), for a period exceeding 180 days after the last
     date for which exchanges are accepted pursuant to the Exchange Offer (as
     such period may be extended by the Company) and Participating Broker-
     Dealers shall not be authorized by the Company to, and shall not, deliver
     such Prospectus after such period in connection with resales contemplated
     by this Section 3(f) (D) in the case of an Exchange Offer, furnish one
     counsel for the Purchasers and (B) in the case of a Shelf Registration,
     furnish one counsel for the Holders of Registrable Securities copies of any
     request by the SEC or any state securities authority for amendments or
     supplements to a Registration Statement and Prospectus or for additional
     information;

          (g)  make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable and provide immediate notice to each Holder of the withdrawal of any
such order;

          (h)  in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);

          (i)  in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of

                                       11
<PAGE>

certificates representing Registrable Securities to be sold and not bearing any
restrictive legends; and cause such Registrable Securities to be in such
denominations (consistent with the provisions of the Indenture) and registered
in such names as the selling Holders or the underwriters, if any, may reasonably
request at least two business days prior to the closing of any sale of
Registrable Securities;

          (j)  in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Section 3(e)(vi)
hereof, use its best efforts to prepare a supplement or post-effective amendment
to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain at the time of such delivery any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company agrees to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an event, and
each Holder hereby agrees to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or omission.
At such time as such public disclosure is otherwise made or the Company
determines that such disclosure is not necessary, in each case to correct any
misstatement of a material fact or to include any omitted material fact, the
Company agrees promptly to notify each Holder of such determination and to
furnish each Holder such numbers of copies of the Prospectus, as amended or
supplemented, as such Holder may reasonably request;

          (k)  obtain a CUSIP number for all Exchange Securities, or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with printed certificates for
the Exchange Securities or the Registrable Securities, as the case may be, in a
form eligible for deposit with the Depositary;

          (l)  (i) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration of the
Exchange Securities, or Registrable Securities, as the case may be, (ii)
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in accordance
with the terms of the TIA and (iii) execute, and use its best efforts to cause
the Trustee to execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the SEC to enable
the Indenture to be so qualified in a timely manner;

          (m)  in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and appropriate
actions (including those reasonably requested by the Majority Holders) in order
to expedite or facilitate the disposition of such Registrable Securities and in
such connection whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration:

                                       12
<PAGE>

          (i)    make such representations and warranties to the Holders of such
     Registrable Securities and the underwriters, if any, in form, substance and
     scope as are customarily made by issuers to underwriters in similar
     underwritten offerings as may be reasonably requested by them;

          (ii)   obtain opinions of counsel to the Company and updates thereof
     (which counsel and opinions (in form, scope and substance) shall be
     reasonably satisfactory to the managing underwriters, if any, and the
     holders of a majority in principal amount of the Registrable Securities
     being sold) addressed to each selling Holder and the underwriters, if any,
     covering the matters customarily covered in opinions requested in sales of
     securities or underwritten offerings and such other matters as may be
     reasonably requested by such Holders and underwriters;

          (iii)  obtain "cold comfort" letters and updates thereof from the
     Company's independent certified public accountants addressed to the
     underwriters, if any, and will use reasonable best efforts to have such
     letter addressed to the selling Holders of Registrable Securities, such
     letters to be in customary form and covering matters of the type
     customarily covered in "cold comfort" letters to underwriters in connection
     with similar underwritten offerings;

          (iv)   enter into a securities sales agreement with the Holders and an
     agent of the Holders providing for, among other things, the appointment of
     such agent for the selling Holders for the purpose of soliciting purchases
     of Registrable Securities, which agreement shall be in form, substance and
     scope customary for similar offerings;

          (v)    if an underwriting agreement is entered into, cause the same to
     set forth indemnification provisions and procedures substantially
     equivalent to the indemnification provisions and procedures set forth in
     Section 5 hereof with respect to the underwriters and all other parties to
     be indemnified pursuant to said Section; and

          (vi)   deliver such documents and certificates as may be reasonably
     requested and as are customarily delivered in similar offerings.

     The above shall be done at (i) the effectiveness of such Registration
     Statement (and, if appropriate, each post-effective amendment thereto) and
     (ii) each closing under any underwriting or similar agreement as and to the
     extent required thereunder. In the case of any underwritten offering, the
     Company shall provide written notice to the Holders of all Registrable
     Securities of such underwritten offering at least 30 days prior to the
     filing of a prospectus supplement for such underwritten offering. Such
     notice shall (x) offer each such Holder the right to participate in such
     underwritten offering, (y) specify a date, which shall be no earlier than
     10 days following the date of such notice, by which such Holder must inform
     the Company of its intent to participate in such underwritten offering and

                                       13
<PAGE>

     (z) include the instructions such Holder must follow in order to
     participate in such underwritten offering;

          (n)  in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable Securities and
any underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any one counsel or accountant retained by such
Holders or underwriters, all financial and other records, pertinent corporate
documents and properties of the Company reasonably requested by any such
persons, and cause the respective officers, directors, employees, and any other
agents of the Company to supply all information reasonably requested by any such
representative, underwriter, one special counsel or accountant in connection
with a Registration Statement;

          (o)  (i) a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a part thereof, any amendment to
an Exchange Offer Registration Statement or amendment or supplement to a
Prospectus, provide copies of such document to the Purchasers, and make such
changes in any such document prior to the filing thereof as any of the
Purchasers or their counsel may reasonably request; (ii) in the case of a Shelf
Registration, a reasonable time prior to filing any Shelf Registration
Statement, any Prospectus forming a part thereof, any amendment to such Shelf
Registration Statement or amendment or supplement to such Prospectus, provide
copies of such document to the Holders of Registrable Securities, to the
Purchasers, to one counsel on behalf of the Holders and to the underwriter or
underwriters of an underwritten offering of Registrable Securities, if any, and
make such changes in any such document prior to the filing thereof as the
Holders of Registrable Securities, the Purchasers on behalf of such Holders,
their counsel and any underwriter may reasonably request; and (iii) cause the
representatives of the Company to be available for discussion of such document
as shall be reasonably requested by the Holders of Registrable Securities, the
Purchasers on behalf of such Holders or any underwriter and shall not at any
time make any filing of any such document of which such Holders, the Purchasers
on behalf of such Holders, their counsel or any underwriter shall not have
previously been advised and furnished a copy or to which such Holders, the
Purchasers on behalf of such Holders, their counsel or any underwriter shall
reasonably object;

          (p)  in the case of a Shelf Registration, use its best efforts to
cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the  Company are then listed if
requested by the Majority Holders or by the underwriter or underwriters of an
underwritten offering of Registrable Securities, if any;

          (q)  in the case of a Shelf Registration, use its best efforts to
cause the Registrable Securities to be rated with the appropriate rating
agencies, if so requested by the Majority Holders or by the underwriter or
underwriters of an underwritten offering of Registrable Securities, if any,
unless the Registrable Securities are already so rated;

                                       14
<PAGE>

          (r)  otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering at least 12
months which shall satisfy the provisions of Section 11(a) of the 1933 Act and
Rule 158 thereunder; and

          (s)  provide reasonable cooperation and assistance in any filings
required to be made with the NASD and in the performance of any due diligence
investigation by any underwriter and its counsel.

          In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Securities to promptly furnish to the Company such
information regarding such Holder and the proposed distribution by such Holder
of such Registrable Securities as the Company may from time to time reasonably
request in writing.

          In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
or the discovery of any facts, each of the kind described in Section 3(e)(ii)-
(vi) hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
3(j) hereof, and, if so directed by the Company, such Holder will deliver to the
Company (at its expense) all copies in its possession, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice. If the
Company shall give any such notice to suspend the disposition of Registrable
Securities pursuant to a Shelf Registration Statement as a result of the
happening of any event or the discovery of any facts, each of the kind described
in Section 3(e)(vi) hereof, the Company shall be deemed to have used its best
efforts to keep the Shelf Registration Statement effective during such period of
suspension provided that the Company shall use its best efforts to file and have
declared effective (if an amendment) as soon as practicable an amendment or
supplement to the Shelf Registration Statement and shall extend the period
during which the Registration Statement shall be maintained effective pursuant
to this Agreement by the number of days during the period from and including the
date of the giving of such notice to and including the date when the Holders
shall have received copies of the supplemented or amended Prospectus necessary
to resume such dispositions.

          4.   Underwritten Registrations. If any of the Registrable Securities
               --------------------------
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Majority Holders of such Registrable
Securities included in such offering and shall be reasonably acceptable to the
Company.

          No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes

                                       15
<PAGE>

all questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such
underwriting arrangements.

          5.    Indemnification and Contribution. (a) The Company shall
                --------------------------------
indemnify and hold harmless each Purchaser, each Holder, including Participating
Broker-Dealers, each underwriter who participates in an offering of Registrable
Securities, their respective affiliates, and the respective directors, officers,
employees, agents and each Person, if any, who controls any of such parties
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:

          (i)   against any and all losses, liabilities, claims, damages and
     expenses whatsoever, as incurred, arising out of any untrue statement or
     alleged untrue statement of a material fact contained in any Registration
     Statement (or any amendment thereto) pursuant to which Exchange Securities
     or Registrable Securities were registered under the 1933 Act, including all
     documents incorporated therein by reference, or the omission or alleged
     omission therefrom of a material fact required to be stated therein or
     necessary to make the statements therein not misleading or arising out of
     any untrue statement or alleged untrue statement of a material fact
     contained in any Prospectus (or any amendment or supplement thereto) or the
     omission or alleged omission therefrom of a material fact necessary in
     order to make the statements therein, in the light of the circumstances
     under which they were made, not misleading;

          (ii)  against any and all losses, liabilities, claims, damages and
     expenses whatsoever, as incurred, to the extent of the aggregate amount
     paid in settlement of any litigation, or investigation or proceeding by any
     governmental agency or body, commenced or threatened, or of any claim
     whatsoever based upon any such untrue statement or omission, or any such
     alleged untrue statement or omission, if such settlement is effected with
     the written consent of the Company; and

          (iii) against any and all expenses whatsoever, as incurred (including
     fees and disbursements of counsel chosen by any indemnified party),
     reasonably incurred in investigating, preparing or defending against any
     litigation, or investigation or proceeding by any court or governmental
     agency or body, commenced or threatened, or any claim whatsoever based upon
     any such untrue statement or omission, or any such alleged untrue statement
     or omission, to the extent that any such expense is not paid under
     subparagraph (i) or (ii) of this Section 5(a);

provided, however, that this indemnity does not apply to any loss, liability,
--------  -------
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the Purchasers,
any Holder, including Participating Broker-Dealers or any underwriter expressly
for use in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto).

                                       16
<PAGE>

          (b)  In the case of a Shelf Registration, each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, the
Purchasers, each underwriter who participates in an offering of Registrable
Securities and the other selling Holders and each of their respective directors
and officers (including each officer of the Company who signed the Registration
Statement) and each Person, if any, who controls the Company, the Purchasers,
any underwriter or any other selling Holder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all losses,
liabilities, claims, damages and expenses described in the indemnity contained
in Section 5(a) hereof, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Holder, as the case may be,
expressly for use in the Registration Statement (or any amendment thereto), or
the Prospectus (or any amendment or supplement thereto); provided, however, that
                                                         --------  -------
no such Holder shall be liable for any claims hereunder in excess of the amount
of net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.

          (c)  Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have other than on account of this indemnity agreement. An indemnifying party
may participate at its own expense in the defense of such action. In no event
shall the indemnifying party or parties be liable for the fees and expenses of
more than one counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.

          (d)  In order to provide for just and equitable contribution in
circumstances in which any of the indemnity provisions set forth in this Section
5 are for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Purchasers
and the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Purchasers and the Holders, as incurred; provided,
                                                                      --------
however, that no person guilty of fraudulent misrepresentation (within the
-------
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any Person that was not guilty of such fraudulent misrepresentation. As between
the Company, the Purchasers and the Holders, such parties shall contribute to
such aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect (i) the relative benefits received by the Company on the
one hand, the Purchasers on another hand, and the Holders on another hand, from
the offering of the Exchange Securities or Registrable Securities included in
such offering, and (ii) the relative fault of the Company on the one hand, the
Purchasers on another hand, and the Holders on another hand, with respect to the
statements or omissions which resulted in such loss, liability, claim, damage or
expense, or action in respect thereof, as well as any other relevant equitable
considerations. The Company, the Purchasers and the Holders of the

                                       17
<PAGE>

Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 5 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 5, each
affiliate of a Purchaser or Holder, and each director, officer, employee, agent
and Person, if any, who controls a Purchaser or Holder or such affiliate within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as such Purchaser or Holder, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each Person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The parties hereto agree that any
underwriting discount or commission or reimbursement of fees paid to any
Purchaser pursuant to the Purchase Agreement shall not be deemed to be a benefit
received by any Purchaser in connection with the offering of the Exchange
Securities or Registrable Securities included in such offering.

          6.   Miscellaneous. (a)  Rule 144 and Rule 144A. For so long as the
               -------------       ----------------------
Company is subject to the reporting requirements of Section 13 or 15 of the 1934
Act, the Company covenants that it will file the reports required to be filed by
it under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules
and regulations adopted by the SEC thereunder, that if it ceases to be so
required to file such reports, it will upon the request of any Holder of
Registrable Securities (i) make publicly available such information as is
necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver
such information to a prospective purchaser as is necessary to permit sales
pursuant to Rule 144A under the 1933 Act and it will take such further action as
any Holder of Registrable Securities may reasonably request, and (iii) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Securities without registration under the 1933 Act within the limitation of the
exemptions provided by (x) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, (y) Rule 144A under the 1993 Act, as such Rule may be
amended from time to time, or (z) any similar rules or regulations hereafter
adopted by the SEC. Upon the request of any Holder of Registrable Securities,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.

          (b)  No Inconsistent Agreements. The Company has not entered into nor
               --------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements.

          (c)  Amendments and Waivers. The provisions of this Agreement,
               ----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Majority
Holders affected by such amendment, modification, supplement, waiver or
departure; provided,
           --------

                                       18
<PAGE>

however, that no amendment, modification, supplement or waiver or consent to any
-------
departure from the provisions of Section 5 hereof shall be effective as against
any Holder of Registrable Securities unless consented to in writing by such
Holder.

          (d)  Notices. All notices and other communications provided for or
               -------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 6(d), which address initially is, with respect to a Purchaser, the
address set forth in the Purchase Agreement; and (ii) if to the Company,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 6(d).

          All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.

          Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee, at the
address specified in the Indenture.

          (e)  Successors and Assigns. This Agreement shall inure to the benefit
               ----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
                                --------
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms hereof or of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities, such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.

          (f)  Third Party Beneficiary. The Purchasers shall be third party
               -----------------------
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Holders, on the other hand, and shall have the right to enforce
such agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.

          (g)  Counterparts. This Agreement may be executed in any number of
               ------------
counterparts and by the parties hereto in separate counterparts, each of which
when so

                                       19
<PAGE>

executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

          (h)  Headings.  The headings in this Agreement are for convenience of
               --------
reference only and shall not limit or otherwise affect the meaning hereof.

          (i)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
               -------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          (j)  Severability. In the event that any one or more of the provisions
               ------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

                                       20
<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                             APPLIED EXTRUSION
                                             TECHNOLOGIES, INC.

                                             By: /s/ Anthony J. Allott
                                                 ----------------------------
                                             Name: Anthony J. Allott
                                             Title: Senior Vice President and
                                                    Chief Financial Officer

Confirmed and accepted as of
 the date first above
 written:

MERRILL LYNCH & CO.
   Merrill Lynch, Pierce, Fenner & Smith Incorporated
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANC ALEX. BROWN INC.

By:  MERRILL LYNCH & CO.
          Merrill Lynch, Pierce, Fenner & Smith Incorporated

By: /s/ Keith Alexander
    ------------------------
    Name: Keith Alexander
    Title: Managing Director

                                       21<PAGE>

                                                                     Exhibit 4.1

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

                             MYRIAD GENETICS, INC.

                                      and

                         MELLON INVESTOR SERVICES LLC

                                as Rights Agent

                                   ---------

                               RIGHTS AGREEMENT

                           Dated as of July 17, 2001

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

                               Table of Contents
                               -----------------

<TABLE>
<CAPTION>
Section                                                                                                         Page
<S>                                                                                                             <C>
Section 1. Certain Definitions...................................................................................1
           -------------------
Section 2. Appointment of Rights Agent...........................................................................5
           ---------------------------
Section 3. Issue of Rights Certificates..........................................................................5
           ----------------------------
Section 4. Form of Rights Certificates...........................................................................7
           ---------------------------
Section 5. Countersignature and Registration.....................................................................8
           ---------------------------------
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed,
           -------------------------------------------------------------------------------------------
              Lost or Stolen Rights Certificates.................................................................9
              ----------------------------------
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........................................9
           -------------------------------------------------------------
Section 8. Cancellation and Destruction of Rights Certificates..................................................11
           ---------------------------------------------------
Section 9. Reservation and Availability of Capital Stock........................................................12
           ---------------------------------------------
Section 10. Preferred Stock Record Date.........................................................................13
            ---------------------------
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.........................13
            ---------------------------------------------------------------------------
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..........................................22
            ----------------------------------------------------------
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power................................22
            --------------------------------------------------------------------
Section 14. Fractional Rights and Fractional Shares.............................................................24
            ---------------------------------------
Section 15. Rights of Action....................................................................................26
            ----------------
Section 16. Agreement of Rights Holders.........................................................................26
            ---------------------------
Section 17. Rights Certificate Holder Not Deemed a Stockholder..................................................27
            --------------------------------------------------
Section 18. Concerning the Rights Agent.........................................................................27
            ---------------------------
Section 19. Merger or Consolidation or Change of Name of Rights Agent...........................................27
            ---------------------------------------------------------
Section 20. Duties of Rights Agent..............................................................................28
            ----------------------
Section 21. Change of Rights Agent..............................................................................30
            ----------------------
Section 22. Issuance of New Rights Certificates.................................................................31
            -----------------------------------
Section 23. Redemption and Termination..........................................................................31
            --------------------------
Section 24. Exchange............................................................................................32
            --------
Section 25. Notice of Certain Events............................................................................33
            ------------------------
Section 26. Notices.............................................................................................34
            -------
Section 27. Supplements and Amendments..........................................................................35
            --------------------------
Section 28. Successors..........................................................................................36
            ----------
Section 29. Determinations and Actions by the Board of Directors, etc...........................................36
            ---------------------------------------------------------
Section 30. Benefits of this Agreement..........................................................................36
            --------------------------
Section 31. Severability........................................................................................36
            ------------
Section 32. Governing Law.......................................................................................37
            -------------
Section 33. Counterparts........................................................................................37
            ------------
Section 34. Descriptive Headings................................................................................37
            --------------------
</TABLE>

Exhibit A -- Form of Certificate of Designation of Preferred Stock
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
<PAGE>

                               RIGHTS AGREEMENT
                               ----------------

         RIGHTS AGREEMENT, dated as of July 17, 2001 (the "Agreement"), between
                                                           ---------
MYRIAD GENETICS, INC., a Delaware corporation (the "Company"), and MELLON
                                                    -------
INVESTOR SERVICES LLC, a New Jersey limited liability company, as Rights Agent
(the "Rights Agent").
      ------------

                                  WITNESSETH

         WHEREAS, on July 16, 2001 (the "Rights Dividend Declaration Date"), the
                                         --------------------------------
Board of Directors of the Company (the "Board") authorized and declared a
                                        -----
dividend distribution of one Right (a "Right") for each share of Common Stock
                                       -----
(as hereinafter defined) of the Company outstanding at the close of business on
July 17, 2001 (the "Record Date"), and has authorized the issuance of one Right
                    -----------
(as such number may hereinafter be adjusted pursuant to the provisions of
Section 11(a)(i) hereof) for each share of Common Stock of the Company issued
(whether originally issued or delivered from the Company's treasury) between the
Record Date and the Distribution Date, each Right initially representing the
right to purchase one one-hundredth of a share of Series A Junior Participating
Preferred Stock upon the terms and 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 15% or more of the shares of Common Stock then outstanding,
but shall not include the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, 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 such Person to 15% or more
of the Common Stock of the Company then outstanding; provided, however, that if
                                                     --------  -------
a Person shall become the Beneficial Owner of 15% or more of the Common Stock of
the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Common Stock of the Company, then such Person shall be deemed to
be an "Acquiring Person." Notwithstanding the foregoing, 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 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.
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                  (b) "Act" shall mean the Securities Act of 1933, as amended.
                       ---

                  (c) "Adjustment Shares" shall have the meaning set forth in
                       -----------------
Section 11(a)(ii)(C) hereof.

                  (d) "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 and in effect
on the date of this Agreement (the "Exchange Act").
                                    ------------

                  (e) "Agreement" shall mean this Rights Agreement as originally
                       ---------
executed or as it may from time to time be supplemented or amended pursuant to
the applicable provisions hereof.

                  (f) A Person shall be deemed the "Beneficial Owner" 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, 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, whether or not in writing, or upon
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 offer or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (B) 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(a)(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, 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 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 also 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, whether or not in

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writing, for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of this
paragraph (h)) or disposing of any voting securities of the Company (a joint
filing of a Schedule 13D under the Exchange Act or any comparable or successor
report being deemed to be conclusive evidence of such an agreement, arrangement
or understanding); provided, however, that nothing in this paragraph (h) shall
                   --------  -------
cause a Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own", any securities acquired through
such Person's participation in good faith in a firm commitment underwriting
until the expiration of forty (40) days after the date of such acquisition.

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

                  (g) "Board" means the Board of Directors of the Company.
                       -----

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

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

                  (j) "Common Stock" shall mean the common stock, $0.01 par
                       ------------
value per share, 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.

                  (k) "Common Stock Equivalents" shall have the meaning set
                       ------------------------
forth in Section 11(a)(iii) hereof.

                  (l) "Company" shall mean the Person named as the "Company" in
                       -------
the first paragraph of this Agreement until a successor corporation shall have
become such or until a Principal Party shall assume, and thereafter be liable
for, all obligations and duties of the Company hereunder, pursuant to the
applicable provisions of this Agreement, and thereafter "Company" shall mean
such successor corporation or Principal Party.

                  (m) "Current Market Price" shall have the meaning set forth in
                       --------------------
Section 11(d)(i) hereof.

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

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

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

                  (q) "Exchange Act" shall have the meaning set forth in Section
                       ------------
1(d) hereof.

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

                  (s) "Final Expiration Date" shall mean the close of business
                       ---------------------
on July 17, 2011.

                  (t) "Initial Exercise Price" shall be $300.00.
                       ----------------------

                  (u) "Nasdaq" shall mean the National Association of Securities
                       ------
Dealers, Inc. Automated Quotation System.

                  (v) "Original Rights" shall have the meaning set forth in
                       ---------------
Section 1(f)(i) hereof.

                  (w) "Person" shall mean any natural person, firm, association,
                       ------
corporation, limited liability company, partnership, trust or other entity or
organization.

                  (x) "Preferred Stock" shall mean the Series A Junior
                       ---------------
Participating Preferred Stock, $0.01 par value per share, of the Company having
the terms set forth in the form of certificate of designation attached hereto as
Exhibit A.
---------

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

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

                  (aa) "Record Date" shall have the meaning set forth in the
                        -----------
preamble of the Agreement.

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

                  (cc) "Rights" shall have the meaning set forth in the preamble
                        ------
of the Agreement.

                  (dd) "Rights Agent" shall mean the Person named as the "Rights
                        ------------
Agent" in the first paragraph of this Agreement until a successor Rights Agent
shall have become such pursuant to the applicable provisions hereof, and
thereafter "Rights Agent" shall mean such successor Rights Agent. If at any time
there is more than one Person appointed by the Company as Rights Agent pursuant
to the applicable provisions of this Agreement, "Rights Agent" shall mean and
include each such Person.

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

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                  (ff) "Rights Dividend Declaration Date" shall have the meaning
                        --------------------------------
set forth in the preamble of this Agreement.

                  (gg) "Section 11(a)(ii) Event" shall mean any event described
                        -----------------------
in Section 11(a)(ii)(A), (B) or (C) hereof.

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

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

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

                  (kk) "Stock Acquisition Date" shall mean the first date of a
                        ----------------------
public announcement or disclosure (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.

                  (ll) "Subsidiary" shall mean, with reference to any Person,
                        ----------
including the Company, 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 which is
otherwise controlled by such Person.

                  (mm) "Substitute Consideration" shall have the meaning set
                        ------------------------
forth in Section 11(a)(iii) hereof.

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

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

                  (pp) "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 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. Notwithstanding the foregoing, the Rights Agent shall
have no duty to supervise, and in no event shall be liable for, the acts or
omissions of any such Co-Rights Agent.

         Section 3. Issue of Rights Certificates.
                    ----------------------------

                  (a) Until the earlier of (i) the Close of Business on the
tenth day after the Stock Acquisition Date (or, if the tenth 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, if
such tenth Business Day occurs before the Record Date, the Close of

                                       5
<PAGE>

Business on the Record Date), or such specified or unspecified later date on or
after the Record Date as may be determined by action of the Board, after the
date that a tender offer or exchange offer, or an intention to make a tender
offer 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 or entity 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(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof for the maximum
number of shares that may be purchased thereunder, such Person would be the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
(the earlier of (i) or (ii) being herein referred to as the "Distribution
                                                             ------------
Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph
----
(b) of this Section 3) 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 underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the Distribution Date and upon
receipt of all necessary information, 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 the
form specified in Section 4 hereof (the "Rights Certificates"), evidencing one
                                         -------------------
Right for each share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(a)(i) hereof, at the time of
distribution of the Rights 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, 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 Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates
for the Common Stock and the registered holders of the Common Stock shall also
be the registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in Section 7
hereof), 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.

                  (c) Rights shall be issued in respect of all shares of Common
Stock that are issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date. Rights shall also be issued to the extent provided in Section
22 in respect of all shares of Common Stock which are issued (whether originally
issued or from the Company's treasury) after the Distribution Date and prior to
the Expiration Date. Certificates representing such shares of Common Stock in
respect of which Rights are issued pursuant to the first sentence of this
Section 3(c) shall also be deemed to

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<PAGE>

be certificates for Rights, and commencing as soon as reasonably practicable
following the date hereof 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
                  Myriad Genetics, Inc. (the "Company") and Mellon Investor
                  Services LLC (the "Rights Agent") dated as of July 17, 2001
                  (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 Associate of
                  an Acquiring Person (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.
                  The Rights shall not be exercisable, and shall be void so long
                  as held, by a holder in any jurisdiction where the requisite
                  qualification to the issuance to such holder, or the exercise
                  by such holder, of the Rights in such jurisdiction shall not
                  have been obtained or obtainable.

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 also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.

         Section 4. Form of Rights Certificates.
                    ---------------------------

                  (a) The Rights Certificates (and the forms of election to
purchase and of 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 (but which do not affect the
rights, duties or responsibilities of the Rights Agent) 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 trading market
on which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such number of one
one-hundredths of a share of Preferred Stock as shall be set forth therein at
the price per share set forth therein (such exercise price per one one-hundredth
of a share hereinafter referred to as 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.

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<PAGE>

                  (b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate of an Acquiring
Person) 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
of an Acquiring Person) 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
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of an agreement, arrangement or understanding that has as a
primary purpose or effect avoidance of Section 7(e) hereof, and provided that
the Company shall have notified the Rights Agent that this Section 4(b) applies,
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.

         Section 5. Countersignature and Registration.
                    ---------------------------------

                  (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman, the President and Chief Executive Officer, Chief
Financial 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 or an Assistant 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
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 and receipt by the Rights
Agent of all necessary information, the Rights Agent will 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

                                       8
<PAGE>

evidenced on its face by each of the Rights Certificates, the Rights 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 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-hundredths 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 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 or Certificates until the registered holder shall have properly
completed and signed the certificate contained in the form of assignment set
forth on the reverse side of each 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 or
the Rights Agent 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 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. The Rights Agent shall have no duty or obligation to take any
action under any Section of this Agreement which requires the payment by a
Rights holder of applicable taxes and governmental charges unless and until the
Rights Agent is satisfied that all such taxes and/or charges have been paid.

                  (b) Upon receipt by the Company and the Rights Agent of
evidence 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 satisfactory to them, and, at the Company's or the Right Agent's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the 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 set
forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or
in part at any time after the Distribution Date upon surrender

                                       9
<PAGE>

of the Rights Certificate, with the form of election to purchase set forth on
the reverse side thereof and the certificate contained therein completed and
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-hundredths of a share of Preferred Stock
(or other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of (i) the
Final Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date", (iii) the time at which
                                    ---------------
the Rights expire pursuant to Section 13(d) hereof or (iv) the time at which
such Rights are exchanged as provided in Section 24 hereof (the earliest of (i),
(ii), (iii) or (iv) being herein referred to as the "Expiration Date").
                                                     ---------------

                  (b) The Purchase Price for each one one-hundredth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be the
Initial Exercise Price, and shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof and shall be payable in accordance with
paragraph (c) below.

                  (c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase set forth on the
reverse side thereof and the certificate contained therein completed and duly
executed, accompanied by payment, with respect to each Right so exercised, of
the Purchase Price per one one-hundredth of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable tax or charge, the Rights
Agent shall, subject to Section 20(k) hereof, promptly (i) 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-hundredths of a share of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
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, 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) shall be made in
cash or by certified check, cashier's check or bank draft payable to the order
of the Company. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash or other property are
available for distribution by the Rights Agent, if and when necessary to comply
with this Agreement. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, such number
of Rights be exercised so that only whole shares of Preferred Stock would be
issued.

                  (d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the 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.

                                       10
<PAGE>

                  (e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of an event described in Section
11(a)(ii)(A) or (C) and from and after the Close of Business on the tenth day
after the occurrence of an event described in Section 11(a)(ii)(B), any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, which the Board, in its sole discretion, determines is or was
involved in or caused or facilitated, directly or indirectly (including through
any change in the Board), such Section 11(a)(ii) Event, (ii) a transferee of any
such Acquiring Person (or of any such Associate or Affiliate of an Acquiring
Person) who becomes a transferee after such Acquiring Person becomes such or
(iii) a transferee of any such Acquiring Person (or of any such Associate or
Affiliate of an Acquiring Person) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from such
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 regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the 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 notify the
Rights Agent when this Section 7(e) and/or Section 4(b) hereof applies and shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but neither the Company nor the
Rights Agent shall have any liability to any holder of Rights Certificates or
other Person as a result of the Company's failure to make any determinations
with respect to an Acquiring Person or any of its Affiliates, Associates or
transferees hereunder.

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

                                       11
<PAGE>

         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 Triggering Event, out of its
authorized and unissued shares of Common Stock 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 Triggering Event, Common
Stock or other securities) that, as provided in this Agreement including Section
11(a)(iii) hereof, 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 Triggering Event, Common Stock or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause all shares
reserved for such issuance to be listed on such exchange 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
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, a
registration statement under the Act, with respect to the Common Stock or other
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the 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. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Upon any suspension of the
exercisability of the Rights referred to in this Section 9(c), 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. The Company shall promptly provide the Rights
Agent with copies of such announcements. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable and shall be void
so long as held by a holder in any jurisdiction where the requisite
qualification to the issuance to such holder, or the exercise by such holder, of
the Rights in such jurisdiction shall not have been obtained or be obtainable,
the exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.

                  (d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one-hundredths of a share
of Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock or other securities) delivered upon exercise

                                       12
<PAGE>

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 taxes and governmental 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 -hundredths of a share of Preferred
Stock (or Common Stock or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any tax
or charge 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 -hundredths of a share of Preferred Stock (or Common Stock or other
securities, as the case may be) in respect of a name other than that of, the
registered holder of the Rights Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates for a number of one
-hundredths of a share of Preferred Stock (or Common Stock 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 or charge shall have been
paid (any such tax or charge being payable by the holder of such Rights
Certificates at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax or charge is due.

         Section 10.  Preferred Stock Record Date. Each Person in whose name any
                      ---------------------------
certificate for a number of one -hundredths of a share of Preferred Stock (or
Common Stock 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 Preferred Stock (or Common Stock 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
and payment of the Purchase Price (and all applicable taxes or charges) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the Preferred Stock (or Common Stock 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 on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Stock
(or Common Stock 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 shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the 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

                                       13
<PAGE>

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 if a holder
of Rights after such time were to exercise that number of Rights (or fraction
thereof) which would result in the aggregate amount of the Purchase Price
payable upon such exercise (at the Purchase Price then in effect) being equal to
the amount of the Purchase Price payable prior to such time upon exercise of a
Right, he would be entitled to receive the aggregate number and kind of shares
of Preferred Stock or other capital stock, as the case may be, which, if a Right
had been exercised immediately prior to such time and at a time when the
Preferred Stock transfer books (or other capital stock transfer books, as the
case may be) 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.

                           (ii)     In the event:

                                    (A)     any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, at any time after the date of
this Agreement, directly or indirectly, (1) shall merge into the Company or
otherwise combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and the Common Stock of the
Company shall remain outstanding and unchanged, (2) shall merge or otherwise
combine with any Subsidiary of the Company, (3) shall, in one transaction or a
series of transactions, transfer any assets to the Company or to any of its
Subsidiaries in exchange (in whole or in part) for shares of Common Stock, for
shares of other equity securities of the Company or any Subsidiary of the
Company, or for securities exercisable for or convertible into shares of equity
securities of the Company or any Subsidiary of the Company (Common Stock or
otherwise) or otherwise obtain from the Company, with or without consideration,
any additional shares of equity securities of the Company or securities
exercisable for or convertible into shares of such equity securities of the
Company (other than pursuant to a pro rata distribution to all holders of Common
Stock or upon the exercise of a convertible security of the Company or any
Subsidiary of the Company in accordance with its terms), (4) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of, in one transaction or a series of transactions, to, from or with (as
the case may be) the Company or any of its Subsidiaries, assets on terms and
conditions less favorable to the Company than the Company would be able to
obtain in arm's length negotiations with an unaffiliated third party, other than
pursuant to a transaction set forth in Section 13(a) hereof, (5) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of in one transaction or a series of transactions, to, from or with (as
the case may be) the Company or any of its Subsidiaries assets having an
aggregate fair market value of more than $1,000,000, other than pursuant to a
transaction set forth in Section 13(a) hereof and other than pursuant to a
transaction or series of transactions that have been approved by the Board, (6)
shall receive any compensation from the Company or any of the Company's
Subsidiaries other than compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or its Subsidiaries') past
practices, or (7)

                                       14
<PAGE>

shall receive the benefit, directly or indirectly (except proportionately as a
stockholder and except if resulting from a requirement of law or governmental
regulation), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by the Company or
any of its Subsidiaries, or

                                    (B)     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 or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan), alone
or together with any Affiliates and Associates of such Person, shall, at any
time after the Rights Dividend Declaration Date, become the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding, unless the event
causing the 15% threshold to be met or surpassed is a transaction set forth in
Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to
a tender offer or an exchange offer for all outstanding shares of Common Stock
at a price and on terms determined by the Board, after receiving advice from one
or more investment banking firms, to be (a) at a price that is fair to
stockholders (taking into account all factors which such members of the Board
deem relevant including, without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the best interest of the Company and
its stockholders, or

                                    (C)     during such time as there is an
Acquiring Person, there shall be any reclassification of securities (including
any reverse stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of its
Subsidiaries (whether or not with or into or otherwise involving an Acquiring
Person), other than a transaction or transactions to which the provisions of
Section 13(a) hereof apply (whether or not with or into or otherwise involving
an Acquiring Person), which has the effect, directly or indirectly, of
increasing by more than 1% the proportionate share of the outstanding shares of
any class of equity securities of the Company or any of its Subsidiaries which
is directly or indirectly beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person,

                  then, immediately upon the occurrence of any event described
in Section 11(a)(ii)(A) or (C) hereof, and upon the Close of Business ten (10)
days after the occurrence of any event described in Section 11(a)(ii)(B) hereof,
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, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one -hundredths of a
share of Preferred Stock, such number of shares of Common Stock of the Company
as shall equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of one -hundredths of a share of Preferred Stock for
which a Right was or would have been exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, whether or not such Right was then
exercisable, 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
per share of Common Stock (determined pursuant to Section 11(d) hereof) on the
date of such first occurrence (such number of shares being referred to herein as
the "Adjustment Shares").
     -----------------

                                       15
<PAGE>

               (iii)    In the event that the number of shares of Common Stock
which are authorized by the Company's Certificate of Incorporation, as amended,
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 value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value"), and (B) with respect to each
                              -------------
Right (subject to Section 7(e) hereof), make adequate provision to substitute,
upon the exercise of a Right and 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 being referred to herein
as "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, as adjusted (less the amount of any reduction in the
Purchase Price), 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 within thirty
(30) days following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the first 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 or cash have an aggregate value equal
to the Spread. For purposes of the preceding sentence, the term "Spread" shall
                                                                 ------
mean the excess of (i) the Current Value over (ii) the Purchase Price. If the
number of shares of Common Stock that are authorized by the Company's Restated
Certificate of Incorporation, as amended, 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 any Rights and the Board determines 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 stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended, shall be
referred to as the "Substitution Period"). To the extent that the Company
                    -------------------
determines that some action need be taken pursuant to the preceding provisions
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 or
to decide the appropriate form of distribution to be made pursuant to such
provisions and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect and the
Company shall promptly provide the Rights Agent copies of such announcements.
For purposes of this Section 11(a)(iii), the value of each Adjustment Share
shall be the Current Market Price per share of the Common Stock (as determined
pursuant to Section 11(d) hereof) on the Section 11(a)(ii) Trigger Date and the
per share or per unit value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Common Stock on such date.

                                       16
<PAGE>

                  (b) In case the Company shall fix a record date for the
issuance of rights (other than the 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, 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 conversion price
per share, if a security convertible into Preferred Stock or Equivalent
Preferred Stock) less than the Current Market Price per share of Preferred Stock
(as determined pursuant to Section 11(d) hereof) 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 or Equivalent Preferred Stock (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 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 noncash 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 binding on the Rights Agent and the holders
of the Rights. 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 or surviving corporation) of evidences of indebtedness, cash (other
than a regular quarterly or other periodic 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 per share of Preferred Stock (as determined pursuant to
Section 11(d) hereof) 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 binding on the Rights Agent
and the holders of the Rights) 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 per share of Preferred Stock (as determined pursuant
to Section 11(d) hereof). 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.

                                       17
<PAGE>

                  (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 immediately prior to but not including such date, and
for the 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 but not including 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) any 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 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, then, and in each such case, the Current Market Price shall
be properly adjusted to take into account ex-dividend 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 on, the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to 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 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 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 making a market in the Common Stock selected by the
Board. 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 the
                                   -----------
principal 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 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 100 (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

                                       18
<PAGE>

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 -hundredth of a share of
Preferred Stock shall be equal to the Current Market Price of one share of
Preferred Stock divided by 100.

                           (iii)    For the purpose of any computation
hereunder, the value of any securities or assets other than Common Stock or
Preferred Stock shall be the fair value as determined in good faith by the Board
or by a nationally recognized investment banking firm selected by the Board,
which determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

                     (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-thousandth of a share of
Common Stock or other share or one-millionth of a share of Preferred Stock, 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 (3) 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 shares of capital stock other
than Preferred Stock, thereafter the number of such other shares 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) hereof, 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 shares.

                     (g)   All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of one -
hundredths 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) hereof, upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c) hereof, 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 -hundredths of a share of Preferred Stock obtained by (i)
multiplying (x) the number of one -hundredths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the

                                       19
<PAGE>

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 shares 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-hundredths 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-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made, and shall promptly give the Rights Agent a
copy of such announcement. The 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 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-hundredths 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 share and
the number of shares 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 par value of the shares of
Common 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, fully paid and nonassessable,
such number of one one-hundredths of a share of 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 (and shall give prompt
written notice of such election to the Rights Agent) until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date

                                       20
<PAGE>

the number of one one-hundredths 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 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 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 any 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 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 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 stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
                                       ---------------
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.

          (o)  The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 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
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 Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a 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

                                       21
<PAGE>

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 total
number of shares of Common Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total 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 (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the computations and facts accounting for
such adjustment, (b) promptly 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 have no duty with respect to and shall
not be deemed to have knowledge of any such adjustment unless and until it shall
have received such certificate.

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

          (a)  In the event that, following the Stock Acquisition Date, directly
or indirectly, (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) 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 and except as contemplated in Section
13(d) hereof, 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, nonassessable and freely tradable 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-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a

                                       22
<PAGE>

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-
hundredths 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 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
     --------------
(2) 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 that 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) hereof, 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) hereof, 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;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the common stock 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.

          (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

                                       23
<PAGE>

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 Section 13 Event, the Principal Party will:

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

               (ii)  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 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) hereof.

          (d)  Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock pursuant to a tender offer
or exchange offer for all outstanding shares of Common Stock which complies with
the provisions of Section 11(a)(ii)(B) hereof (or a wholly owned subsidiary of
any such Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant to
such tender offer or exchange offer, and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.

     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(p) hereof, or to
distribute Rights Certificates that evidence fractional Rights. If the Company
determines not to issue fractional Rights, there shall be paid in lieu thereof
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 on the principal
national securities exchange on which the

                                       24
<PAGE>

Rights are listed or admitted to trading, or if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board. 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-
hundredth 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-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates, with
regard to which such fractional shares of Preferred Stock would otherwise be
issuable, 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-hundredth
of a share of Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price per share of Common Stock (determined
pursuant to Section 11(d)(ii) hereof) on 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 may 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 share of Common Stock. For purposes of this Section
14(c), the current market value of one share of Common Stock shall be the
closing price of one 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 Right 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.

          (e)  Whenever a payment for fractional Rights or fractional shares is
to be made by the Rights Agent, the Company shall (i) promptly prepare and
deliver to the Rights Agent a certificate setting forth in reasonable detail the
facts related to such payment and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agent in the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate and shall have
no duty with respect to, and shall not be deemed to have knowledge of, any
payment for fractional Rights or fractional shares under any Section of this
Agreement relating to the payment of fractional Rights or fractional shares
unless and until the Rights Agent shall have received such a certificate and
sufficient monies.

                                       25
<PAGE>

     Section 15. Rights of Action. All rights of action in respect of this
                 ----------------
Agreement, other than rights of action vested in 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
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 principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms of assignment 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 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
                                --------  -------
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.

                                       26

<PAGE>

     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-hundredths 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 preparation, execution,
delivery, amendment and administration 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, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (each as determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction) for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including, without limitation, the costs and
expenses of defending against any claim of liability in the premises. The costs
and expenses incurred in enforcing this right of indemnification shall be paid
by the Company. The provisions of this Section 18 and Section 20 below shall
survive the termination of this Agreement, the exercise or expiration of the
Rights and the resignation or removal of the Rights Agent.

               (b)  The Rights Agent shall be authorized and protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in connection with its acceptance and 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, 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. The Rights Agent shall not be deemed to have
knowledge of any event of which it was supposed to receive notice thereof
hereunder, and the Rights Agent shall be fully protected and shall incur no
liability for failing to take any action in connection therewith unless and
until it has received such notice in writing.

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

               (a)  Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger

                                       27
<PAGE>

or consolidation to which the Rights Agent or any successor Rights Agent shall
be a party, or any Person succeeding to the 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 Person 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 counter-signature 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
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 only the
                 ----------------------
duties and obligations imposed by this Agreement (and no implied duties and
obligations) 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 advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent, and the
Rights Agent shall incur no liability for or in respect of, any action taken,
suffered or omitted by it in accordance with such advice or opinion.

          (b)  Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(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, suffering or omitting to take 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 President and Chief Executive Officer, the Chief
Financial Officer, any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization and protection to
the Rights Agent and the Rights Agent shall incur no liability for or in respect
of, any action taken, suffered or omitted to be taken by it under the provisions
of this Agreement in reliance upon such certificate.

                                       28
<PAGE>

          (c)  The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (each as determined by a final, non-
appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage. Any liability of the Rights Agent under this Rights
Agreement will be limited to the amount of fees paid by the Company to the
Rights Agent.

          (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 or have
any liability 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 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt of a
certificate describing any such adjustment furnished in accordance with 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 to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common 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, the President and Chief Executive Officer, the Chief Financial
Officer, any Vice President, the Secretary, any Assistant 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 such
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it in accordance with instructions of any
such officer.

          (h)  The Rights Agent and any stockholder, affiliate, 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

                                       29
<PAGE>

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

          (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 absent gross negligence, bad faith or willful misconduct
(each as determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction) 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
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not assured to it.

          (k)  If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.

     Section 21. Change of Rights Agent. The Rights Agent or any successor
                 ----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
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 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 any registered
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 Person organized and doing
business under the laws of the United States or any state thereof in good
standing, which is authorized under such laws to exercise stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of a Person 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

                                       30
<PAGE>

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 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. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date (other than upon exercise
of a Right) and prior to the redemption or expiration of the Rights, the Company
(a) 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, notes, warrants or
debentures issued by the Company, and (b) 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 (i) 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 (ii)
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.

     Section 23. Redemption and Termination.
                 --------------------------

               (a)  The Board may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth 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 day following the Record
Date), or (ii) the Final Expiration Date, redeem all but not less than all of
the then outstanding Rights at a redemption price of $0.01 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" ). If, following the
                                      ----------------
occurrence of a Stock Acquisition Date and following the expiration of the right
of redemption set forth in the preceding sentence but prior to any Triggering
Event, (i) a Person who was an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one or more
transactions, not directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of a Triggering Event such
that such Person is thereafter a Beneficial Owner of less than 15% of the
outstanding shares of Common Stock, and (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons, and (iii) the Board shall so approve, then the Company's
right of redemption set forth in the preceding sentence shall be reinstated and
thereafter be subject to the provisions of this Section 23. If

                                       31
<PAGE>

following the occurrence of a Stock Acquisition Date and following the
expiration of the right of redemption set forth in the first sentence hereof,
but prior to any Triggering Event, the Board may, at its option, redeem all but
not less than all of the then outstanding Rights at the Redemption Price,
provided, that such redemption is effected in connection with the approval by
--------
the Board of Directors of the Company of, and the execution and delivery by the
Company of an agreement providing for, a merger, consolidation, sale or transfer
of all or substantially all of the assets of the Company or other business
combination, in each case which involves the Company but does not involve an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or any
other Person acting directly or indirectly on behalf of or in association with
any such Acquiring Person, Affiliate or Associate. 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 set forth in the first sentence of this Section
23(a) has expired.

               (b)  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) hereof, of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board.

               (c)  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 will 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 in writing
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 the redemption will state the method by which
the payment of the Redemption Price will be made.

     Section 24. Exchange. (a) At any time after any Person becomes an Acquiring
                 --------
Person the Board may, at its option, exchange all or part of the then
outstanding and exercisable Rights (which (i) shall not include Rights that have
become null and void pursuant to Section 7(e) and (ii) shall include, without
limitation, any Rights issued after the Distribution Date in connection with the
exercise of options pursuant to any employee benefit plan of the Company or any
Subsidiary of the Company) 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 of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
of its Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries or any Person organized, appointed or established by the Company or
any of its Subsidiaries 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.

                                       32
<PAGE>

               (b)  Immediately upon the action of the Board electing to
exchange any Rights pursuant to Section 24(a) and without any further action and
without any notice, the right to exercise such Rights will terminate and
thereafter the only right of the holders 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 thereafter
give written notice of such exchange to the Rights Agent and the holders of the
Rights to be exchanged in the manner set forth in Section 26; provided, however,
                                                              --------  -------
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
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 Section 7(e)) held by each holder of
Rights.

               (c)  In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Common Stock Equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the initial
rate of one Common Stock Equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of Common Stock Equivalents pursuant to the terms thereof, so that
each Common Stock Equivalent delivered in lieu of each share of Common Stock
shall have essentially the same dividend, liquidation and voting rights as one
share of Common Stock.

               (d)  In the event that the number of shares of Common Stock which
are authorized by the Company's certificate of incorporation but not outstanding
or reserved for issuance are not sufficient to permit an exchange of Rights as
contemplated by this Section 24, the Company shall take all such action as may
be necessary to authorize additional shares of Common 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 that evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights 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 purposes of this Section 24(e), the current market
value of a whole share of Common Stock shall be the closing price per share of
Common Stock (determined pursuant to Section 11(d)(ii) hereof) on the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.

     Section 25. Notice of Certain Events.
                 ------------------------

               (a)  In case the Company shall propose, 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

                                       33
<PAGE>

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 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, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the 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 any 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 and to the Rights Agent, 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
Common Stock shall, to the extent appropriate, also be deemed thereafter to
refer to 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) or by facsimile transmission as follows:

             Myriad Genetics, Inc.
             320 Wakara Way
             Salt Lake City, Utah 84108
             Attention: President and Chief Executive Officer
             Facsimile No.: (801) 584-3640

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) or by facsimile transmission as follows:

                                       34
<PAGE>

             Mellon Investor Services LLC
             111 Founders Plaza
             Suite 1100
             East Hartford, Connecticut 06108
             Attention: Relationship Manager
             Facsimile No.: (860) 528-6472

             With a copy to:

             Mellon Investor Services LLC
             85 Challenger Road
             Ridgefield Park, NJ  07660
             Attention: General Counsel
             Facsimile No.: (201) 296-4004

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.

     Section 27. Supplements and Amendments. At any time prior to the
                 --------------------------
Distribution Date, and subject to the other provisions of this Section 27, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the other provisions of this Section 27, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of such Person); provided, however, that this
                                              --------  -------
Agreement may not be supplemented or amended, (A) whether before or after the
Distribution Date, to lengthen a time period relating to when the Rights may be
redeemed or to modify the ability (or inability) of the Board to redeem the
Rights, in either case at such time as the Rights are not then redeemable or (B)
after the Distribution Date, to lengthen, pursuant to clause (iii) of this
sentence, any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of or the benefits to the holders
of Rights (other than any Acquiring Person or an Associate or Affiliate of such
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, and provided such supplement or amendment
does not change or increase the Rights Agent's rights, duties, liabilities or
obligations, 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, the
Final Expiration Date, the Purchase Price or the number of one one-hundredths of
a share of Preferred Stock for which a Right is exercisable.

                                       35
<PAGE>

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. Determinations and Actions by the Board of Directors, etc. 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 provisions of the last sentence of Rule 13d-3(d)(l)(i) of the General Rules
and Regulations under the Exchange Act. 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 the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other Persons, and (y) not
subject any member of the Board of Directors of the Company to any liability to
the holders of the Rights. The Rights Agent shall always be entitled to assume
that the Company's Board of Directors acted in good faith and shall be fully
protected and incur no liability in reliance thereon.

     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 language from this
Agreement would materially and 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. Without limiting the
foregoing, if any provision requiring that a determination made by less than the
entire Board is held by a court of competent jurisdiction or

                                       36
<PAGE>

other authority to be invalid, void or unenforceable, such determination shall
then be made by the entire 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
internal laws of the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State; provided, however, that all
                                                     --------  -------
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.

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

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

             [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       37
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Rights 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:                                 MYRIAD GENETICS, INC.

By: /s/   Christopher L. Wight         By: /s/   Peter D. Meldrum
   ------------------------------          ------------------------------
   Name:  Christopher L. Wight             Name:  Peter D. Meldrum
   Title: Vice President,                  Title: President and
          General Counsel                         Chief Executive Officer

Attest:                                 MELLON INVESTOR SERVICES LLC

By: /s/   Jackie Wadsworth              By: /s/   John J. Boryczki
   ------------------------------          -------------------------------
   Name:  Jackie Wadsworth                 Name:  John J. Boryczki
   Title: Vice President                   Title: Assistant Vice President

                                       38
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                          CERTIFICATE OF DESIGNATIONS

                 SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

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

                               ($0.01 Par Value)
                                      of
                             MYRIAD GENETICS, INC.

                        Pursuant to Section 151 of the
               General Corporation Law of the State of Delaware

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

     MYRIAD GENETICS, INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

     FIRST: That pursuant to the authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation, as amended, of the Corporation,
the Board of Directors of the Corporation adopted the following resolutions
creating a series of 600,000 shares of Preferred Stock, $0.01 par value per
share, designated as Series A Junior Participating Preferred Stock:

     RESOLVED: That pursuant to the authority vested in the Board of Directors
               of this Corporation in accordance with the provisions of Article
               FOURTH, Section B of its Restated Certificate of Incorporation,
               as amended, a series of Preferred Stock of the Corporation (the
               "Series A Junior Participating Preferred Stock") be, and it
               hereby is, created, and that the designation and amount thereof
               and the voting powers, preferences and relative, participating,
               optional and other special rights of the shares of the Series A
               Junior Participating Preferred Stock, and the qualifications,
               limitations or restrictions thereof (in addition to the
               provisions set forth in the Restated Certificate of Incorporation
               of the Corporation, as amended, which are applicable to the
               Preferred Stock of all classes and series), shall be as set forth
               in Appendix A attached hereto.
                  ----------

     RESOLVED: That the Chairman, the President and Chief Executive Officer, the
               Chief Financial Officer, or any Senior Vice President and the
               Secretary or any Assistant Secretary of the Corporation be, and
               they hereby are, authorized and directed, in the name and on
               behalf of the Corporation, to file the Certificate of
               Designations in accordance with the provisions of Delaware
               General Corporation Law and to take such actions as they may deem
               necessary or appropriate to carry out the intent of the foregoing
               resolution.
<PAGE>

     SECOND: That the aforesaid resolutions were duly and validly adopted in
accordance with the applicable provisions of Section 151 of the General
Corporation Law of the State of Delaware, and the Restated Certificate of
Incorporation, as amended, and By-Laws of the Corporation.

     THIRD: That the aforesaid designation shall become effective on July 17,
2001.

     IN WITNESS WHEREOF, said Myriad Genetics, Inc. has caused its corporate
seal to be hereunto affixed and this Certificate to be executed and attested,
this 17th day of July, 2001.

                                          MYRIAD GENETICS, INC.

                                          By: /s/ Peter D. Meldrum
                                              -----------------------------
                                          Name: Peter D. Meldrum
                                          Its:  President, and
                                                Chief Executive Officer
[Corporate Seal]

Attest:

 /s/   Christopher L. Wight
------------------------------
Name:  Christopher L. Wight
Its:   Vice President,
       General Counsel

                                       2
<PAGE>

                                                                      Appendix A
                                                                      ----------

     Section 1. Designation and Amount. The shares of such series shall be
                ----------------------
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 600,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided,
                                                                --------
however, that no decrease shall reduce the number of shares of Series A Junior
-------
Participating 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
Junior Participating Preferred Stock.

     Section 2. Dividends and Distributions.
                ---------------------------

               (A)  Subject to the rights of the holders of any shares of any
series of Preferred Stock ranking prior and superior to the shares of Series A
Junior Participating Preferred Stock with respect to dividends, the holders of
shares of Series A Junior Participating Preferred Stock, in preference to the
holders of Common Stock, $0.01 par value per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors, out of funds of the Corporation
legally available for the payment of dividends, quarterly dividends payable in
cash on March 31, June 30, September 30 and December 31 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 Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock or effect a subdivision, combination or
consolidation of the outstanding 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 Junior Participating 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.

               (B)  The Corporation shall declare a dividend or distribution on
the Series A Junior Participating Preferred Stock as provided in paragraph (A)
above 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 Junior
Participating Preferred Stock before the dividend or distribution declared on
the

                                      A-1
<PAGE>

Common Stock is paid or set apart; provided, however, that, in the event no
                                   --------  -------
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A
Junior Participating 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 Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, 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 Junior Participating 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 Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.

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

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

               (B)  Except as otherwise provided herein, by law, or in any other
Certificate of Designation creating a series of Preferred Stock or any similar
stock, the holders of shares of Series A Junior Participating Preferred Stock,
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.

                                      A-2
<PAGE>

               (C)  (i)    If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series A Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A Junior
Participating Preferred Stock) with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.

                    (ii)   During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior
Participating Preferred Stock.

                    (iii)  Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, the calling of special meeting of
the holders of Preferred Stock, which meeting shall thereupon be called by the
Chairman of the Board or the President of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this paragraph (C)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice to him at
his last address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 10 days and not later than
60 days after such order on request. Notwithstanding the provisions of this
paragraph (C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next annual meeting
of the stockholders.

                    (iv)   In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall continue to
be entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect

                                      A-3
<PAGE>

two (2) Directors voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of Preferred Stock shall continue in office
until their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of Directors
may (except as provided in paragraph (C)(ii) of this Section 3) be filled by
vote of a majority of the remaining Directors theretofore elected by the holders
of the class of stock which elected the Director whose office shall have become
vacant. References in this paragraph (C) to Directors elected by the holders of
a particular class of stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.

                    (v)    Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the Corporation's Restated Certificate of
Incorporation, as amended, or By-Laws irrespective of any increase made pursuant
to the provisions of paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or in the
Corporation's Restated Certificate of Incorporation, as amended, or By-Laws).
Any vacancies in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the
remaining Directors.

               (D)  Except as set forth herein, or as otherwise provided by law,
holders of Series A Junior Participating 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 Junior Participating 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 Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:

                    (i)    declare or pay dividends on 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 Junior
Participating Preferred Stock;

                    (ii)   declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid ratably on the Series A
Junior Participating 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 and then entitled;

                    (iii)  redeem, purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to

                                      A-4
<PAGE>

the Series A Junior Participating 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 Junior Participating Preferred Stock;

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

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

     Section 5. Reacquired Shares. Any shares of Series A Junior Participating
                -----------------
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 to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.

     Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation
                --------------------------------------
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series A Junior Participating Preferred Stock shall have received
$100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference"). Following the payment of the full amount of
the Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have received
an amount per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in subparagraph C below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock)
(such number in clause (ii), the "Adjustment Number"). Following the payment of
the full amount of the Series A Liquidation Preference and the Common Adjustment
in respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.

                                      A-5
<PAGE>

               (B)  In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.

               (C)  In the event the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding 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 Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment 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.

               (D)  Neither the consolidation, merger or other business
combination of the Corporation with or into any other corporation 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.

     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
                --------------------------
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding 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 Junior Participating 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.

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

                                      A-6
<PAGE>

     Section 9. Ranking. The Series A Junior Participating Preferred Stock shall
                -------
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.

     Section 10. Amendment. The Restated Certificate of Incorporation of the
                 ---------
Corporation, as amended, shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least seventy-five percent
(75%) of the outstanding shares of Series A Junior Participating Preferred
Stock, voting together as a single class.

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

                                      A-7
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                         [Form of Rights Certificate]

Certificate No. R-                                              _________ Rights

     NOT EXERCISABLE AFTER JULY 17, 2011 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE MAY BE OR MAY HAVE BEEN
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 BE OR BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.

                              Rights Certificate

                             MYRIAD GENETICS, INC.

     This Rights Certificate certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the holder thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of July 17, 2001 (the "Rights
Agreement"), between Myriad Genetics, Inc., a Delaware corporation (the
"Company"), and Mellon Investor Services LLC, a New Jersey limited liability
company (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 the Expiration Date (as such term is defined in the Rights
Agreement) at the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-hundredth of a fully paid,
non-assessable share of Series A Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $300.00 per one one-
hundredth of a share (the "Purchase Price"), upon presentation and surrender of
this Rights 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 shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of _____, 2001, based on the Preferred Stock as
constituted at such date. The Company reserves the right to require prior to the
occurrence of a Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only whole shares of
Preferred Stock will be issued.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Rights Agreement.

                                      B-1
<PAGE>

     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 an Acquiring Person (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate of an Acquiring Person),
or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person (or
an Associate or Affiliate 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
Triggering 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 office of the Company and are
also available upon written request to the Company.

     This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, 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-hundredths 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 the option of the Board at a
redemption price of $0.01 per Right at any time prior to the earlier of (i) the
close of business on the tenth 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 day following the Record Date), and (ii) the
Final Expiration Date. After the expiration of the redemption period, the
Company's right of redemption may be reinstated if an Acquiring Person reduces
his beneficial ownership to less than 15% of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the Company.

     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-hundredth of a share of Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.

                                      B-2
<PAGE>

     No holder of this Rights Certificate 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 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.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers.

Dated:

ATTEST:                                 MYRIAD GENETICS, INC.

_______________________________         By:____________________________________
                                        Name: Peter D. Meldrum
Its:                                    Its:  President and
                                              Chief Executive Officer

Countersigned:

MELLON INVESTOR SERVICES LLC

By:____________________________
   Authorized Signature

                                      B-3
<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:

                                      B-4
<PAGE>

                                  Certificate
                                  -----------

     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:

                                               _________________________________
                                               Signature

Signature Guaranteed:

                                    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.

                                      B-5
<PAGE>

                         FORM OF ELECTION TO PURCHASE
                         ----------------------------

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

To:  MYRIAD GENETICS, INC.:

     The undersigned hereby irrevocably elects to exercise ______ Rights
represented by this Rights Certificate to purchase the shares or portion thereof
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 Guaranteed:

                                      B-6
<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 of an Acquiring Person (as such terms are defined in
the Rights Agreement); and

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

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.

                                      B-7
<PAGE>

                                                                       EXHIBIT C
                                                                       ---------

                 SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK

                             MYRIAD GENETICS, INC.
                                (the "Company")

                            STOCKHOLDER RIGHTS PLAN
                              (the "Rights Plan")

                               Summary of Terms
                               ----------------

Distribution:            The Board of Directors of the Company (the "Board")
------------             declared a dividend distribution of one Right for each
                         share of Common Stock (the "Common Stock") of the
                         Company then outstanding. No stockholder approval is
                         required. Concurrently, the Board authorized the
                         establishment of a class of Preferred Stock, $0.01 par
                         value per share, designated "Series A Junior
                         Participating Preferred Stock" (the "Series A Junior
                         Participating Preferred Stock"). Each Right has no real
                         economic value unless and until a person or entity that
                         seeks to acquire or obtain control of the Company
                         without first dealing with the Board and obtaining its
                         approval (a "Bidder") acquires at least 15% of the
                         Company's voting stock without Board approval.

Rights:                  Each Right entitles the holder, at any time following
------                   the Distribution Date (described below), to purchase
                         one one-hundredth of a share of Series A Junior
                         Participating Preferred Stock of the Company at a
                         purchase price of $300.00 per share, subject to
                         adjustment in certain circumstances (the "Purchase
                         Price"). The Purchase Price was determined by the Board
                         upon adoption of the Rights Plan and reflects the value
                         that the Board believes the Common Stock will reach ten
                         years after the Rights Plan is put into effect. If each
                         Right has a high Purchase Price, each stockholder will
                         be able to buy a relatively large amount of discounted
                         Common Stock per Right; in other words, the higher the
                         Purchase Price relative to the then-current market
                         price, the greater the dilution that will result to a
                         potential Bidder in the event the Rights are triggered.

Exercisability:          Rights become exercisable after the Distribution Date.
--------------           The Rights, in all likelihood, would still not be
                         exercised by the holders after the Distribution Date
                         (since the Purchase Price would still exceed the then
                         current market price of the Common Stock) unless and
                         until a Flip-In Event or a Flip-Over Event has occurred
                         or does occur.

                                      C-1
<PAGE>

Transferability:         Until the Distribution Date, the Rights are attached to
---------------          the certificates representing outstanding shares of
                         Common Stock and can only be transferred in connection
                         with the underlying shares of Common Stock. After the
                         Distribution Date, the Rights separate from the Common
                         Stock, Rights Certificates are issued and the Rights
                         are separately tradable.

Distribution Date:       The Distribution Date will be the earliest to occur of
-----------------        the following:

                         (1)  the tenth day following a public announcement or
                         disclosure that a person or entity, or group of
                         affiliated or associated persons and/or entities (an
                         "Acquiring Person"), has acquired beneficial ownership
                         of 15% or more of the Common Stock then outstanding
                         (the "Stock Acquisition Date"); or

                         (2)  the tenth business day, or such specified later
                         date as determined by the Board, following the
                         commencement of, or the announcement of an intention to
                         make, a tender offer or exchange offer for the Common
                         Stock that would result in a person or group becoming
                         an Acquiring Person.

Flip-In Events:          In the event, following any Distribution Date, (1) any
--------------           person or entity becomes an Acquiring Person, except
                         pursuant to an offer for all outstanding shares that
                         the Board determines to be fair to, and otherwise in
                         the best interests of, the Company and its
                         stockholders, (2) the Company is the surviving
                         corporation in a merger or consolidation with an
                         Acquiring Person and the Common Stock is not changed or
                         exchanged, (3) an Acquiring Person engages in one or
                         more self-dealing transactions specified in the Rights
                         Agreement, or (4) during such time as there is an
                         Acquiring Person, an event occurs which results in such
                         Acquiring Person's proportionate ownership interest
                         being increased by more than 1% (e.g., a reverse stock
                         split) (collectively, "Flip-In Events"), then ten days
                         after the occurrence of a Flip-In Event specified in
                         (1) above, and immediately upon the occurrence of a
                         Flip-In Event specified in (2), (3) or (4) above, each
                         of the Rights (other than Rights held by the Acquiring
                         Person, or its affiliates, associates and certain
                         transferees) becomes a Right to acquire that number of
                         shares of Common Stock having an aggregate value (based
                         on the average market price over a 30 trading-day
                         period prior to the Flip-In Event) equal to twice the
                         Right's Purchase Price upon payment of the Purchase
                         Price (but such Right is not exercisable while the
                         Rights are redeemable). In sum, then, the Bidder's
                         attainment of the status of a non-board-approved owner
                         of that level of stock, irrespective of the Bidder's
                         intentions regarding

                                      C-2
<PAGE>

                         the possible use of the stock, triggers the poison pill
                         so that all stockholders other than the Bidder
                         automatically acquire the right to purchase additional
                         voting stock of the Company at a 50% discount to market
                         price.

                         In lieu of issuing Common Stock, if the Board
                         determines that it is necessary or appropriate and not
                         contrary to the interests of the holders of Rights
                         (other than any Acquiring Person or its affiliates or
                         associates), the Company may substitute value in the
                         form of cash, or other assets, or debt or equity
                         securities, or a reduction in the Purchase Price, or
                         any combination of the foregoing, in an aggregate
                         amount equal to the value of the Common Stock that
                         would otherwise be issuable.

Flip-Over Events:        If, following the Stock Acquisition Date, the Company
----------------         is acquired in a merger or other business combination
                         (i.e., the Company does not survive or the Common Stock
                          ----
                         is changed or exchanged), or more than 50% of its
                         assets or earning power (on a consolidated basis) is
                         sold or transferred in one transaction or a series of
                         related transactions (together, "Flip-Over Events"),
                         each Right becomes a Right to acquire that number of
                         shares of common stock (or other equity securities) of
                         the other entity to the transaction having an aggregate
                         value equal to twice the Purchase Price. The Rights
                         Agreement prohibits the Company from entering into any
                         such transaction unless the other party agrees to
                         comply with the provisions of the Rights Agreement.

Example of Effect        An example of the dilutive effect of a rights plan is
-----------------        as follows. Assume a company with 75 million shares
Of Rights Plan:          outstanding has a rights plan with a purchase price of
--------------           $250 per right, and a market price per share of common
                         stock of $60 at the time of a Flip-In Event, giving the
                         company a market capitalization at that time of $4.5
                         billion. If a Bidder were to trigger the rights issued
                         under the rights plan by purchasing 65 million shares
                         in a hostile tender offer and all the rights associated
                         with such shares for, let's say, a premium price of $80
                         per share, or $5.2 billion in the aggregate,
                         representing approximately 86% of the company's
                         outstanding common stock, the remaining stockholders
                         would still hold 10 million shares and 10 million
                         rights (one for each share of common stock not
                         purchased by the Bidder). Each right would entitle them
                         to buy $250 worth of common stock at half the market
                         price, or $30 per share. This means that the remaining
                         stockholders would have the right to purchase $2.5
                         billion of common stock ($250 purchase price times 10
                         million rights) at $30 per share, or approximately 83
                         million shares of common stock. If all the rights were
                         exercised, the economic dilution to the Bidder would be
                         $2.5 billion, and its percentage ownership in the
                         Company would drop

                                      C-3
<PAGE>

                         from approximately 86% to 41%, notwithstanding the very
                         substantial aggregate purchase price of $5.2 billion
                         paid by the Bidder for the Bidder's shares, which do
                         not then represent even a majority interest in the
                         company. The existence of such a rights plan, with an
                         appropriately high purchase price associated with each
                         right relative to the then-current market price per
                         share would have such a draconian dilutive effect on
                         even a "successful" Bidder, therefore makes it
                         uneconomic and very unwise to complete a takeover bid
                         that would trigger the rights.

Exclusion of Acquiror:   Rights held by an Acquiring Person and certain related
---------------------    persons are voided after a Flip-In Event but (if no
                         Flip-In Event has occurred) not after a Flip-Over
                         Event.

Redemption:              At any time prior to ten days following the Stock
----------               Acquisition Date, the Board may redeem the Rights in
                         whole, but not in part, at a price of $.01 per Right
                         (the "Redemption Price"). After such redemption period
                         has expired, the Company's right of redemption may be
                         reinstated by the Board if either (i) an Acquiring
                         Person reduces its beneficial ownership to less than
                         15% of the outstanding shares of Common Stock in a
                         transaction or series of transactions not involving the
                         Company, or (ii) the Board approves the merger of the
                         Company with, or acquisition of the Company by, a
                         person or entity unrelated to the Acquiring Person. The
                         redemption price is payable in cash, stock or other
                         consideration deemed appropriate by the Board.

Amendment:               In general, the provisions of the Rights Agreement may
---------                be amended by the Board (1) prior to the Distribution
                         Date in any manner (including to shorten or lengthen
                         any time period such as the redemption period), and (2)
                         from or after the Distribution Date in certain
                         respects, including to cure any ambiguity, defect or
                         inconsistency, to make changes which do not adversely
                         affect the interests of holders of Rights (excluding
                         the interests of any Acquiring Person), or to shorten
                         or lengthen any time period under the Rights Agreement.
                         Certain basic economic terms may not be amended at any
                         time (e.g., Purchase Price, Redemption Price), and
                         amendments extending the redemption period must be made
                         while Rights are still redeemable (i.e., initially
                         within ten days after the Stock Acquisition Date).

Voting Rights:           Rights holders have no rights as stockholders of the
-------------            Company, including the right to vote and to receive
                         dividends.

Expiration:              The Rights will expire in ten years unless earlier
----------               redeemed by the Company.

                                      C-4

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