SyntheMed,
      Inc.

     

    and

     

    American
      Stock Transfer & Trust Company

     

    as
      Rights
      Agent

     

    Rights
      Agreement

     

    Dated
      as
      of May 20, 2008

     

    


    
      
        

      



    


    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    RIGHTS
      AGREEMENT

     

    Rights
      Agreement, dated as of May 20, 2008, between SyntheMed, Inc., a Delaware
      corporation (the “Company”),
      and
      American Stock Transfer & Trust Company, a New York corporation, as Rights
      Agent (the “Rights
      Agent”).

     

    RECITALS

     

    WHEREAS,
      on April 25, 2008, the Board of Directors of the Company approved the adoption
      of this Agreement, and has authorized and declared a dividend of one preferred
      share purchase right (a “Right”)
      for
      each Common Share (as defined in Section 1.6) of the Company outstanding at
      the
      close of business on June 2, 2008 (the “Record
      Date”)
      and
      has authorized and directed the issuance of one Right (subject to adjustment
      as
      provided herein) with respect to each Common Share that shall become outstanding
      between the Record Date and the earliest of the Distribution Date and the
      Expiration Date (as such terms are defined in Sections 3.1 and 7.1), each Right
      initially representing the right to purchase one one-thousandth (subject to
      adjustment) of a share of Series D Junior Participating Preferred Stock, par
      value $0.01 per share (the “Preferred
      Shares”),
      of
      the Company having the rights, powers and preferences set forth in the form
      of
      Certificate of Designation attached hereto as Exhibit A, upon the terms and
      subject to the conditions hereinafter set forth;
      provided, however,
      that
      Rights may be issued with respect to Common Shares that shall become outstanding
      after the Distribution Date and prior to the Expiration Date in accordance
      with
      Section 22.

     

    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:

     

    1.1.
      “Acquiring
      Person”
shall
      mean any Person (as such term is hereinafter defined) who or which, together
      with all Affiliates and Associates (as such terms are hereinafter defined)
      of
      such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
      of 15% or more of the Common Shares of the Company then outstanding but shall
      not include (i) an Exempt Person (as such term is hereinafter defined) or (ii)
      if, as of the date hereof, any Person is the Beneficial Owner of 15% or more
      of
      the Common Shares outstanding (an “Existing
      Holder”),
      such
      Existing Holder shall not be or become an “Acquiring Person” unless and until
      such time as such Existing Holder shall become the Beneficial Owner of one
      or
      more additional Common Shares of the Company (other than pursuant to a dividend
      or distribution paid or made by the Company on the outstanding Common Shares
      in
      Common Shares or pursuant to a split or subdivision of the outstanding Common
      Shares), unless, upon becoming the Beneficial Owner of such additional Common
      Shares, such Existing Holder is not then the Beneficial Owner of 15% or more
      of
      the Common Shares then outstanding. Notwithstanding the foregoing, no Person
      shall become an “Acquiring Person” as the result of an acquisition of Common
      Shares by the Company which, by reducing the number of shares outstanding,
      increases the proportionate number of shares beneficially owned by such Person
      to 15% or more of the Common Shares of the Company then outstanding;
      provided, however
      , that
      if a Person shall become the Beneficial Owner of 15% or more of the Common
      Shares of the Company then outstanding solely by reason of share purchases
      by
      the Company and shall, after such share purchases by the Company, become the
      Beneficial Owner of one or more additional Common Shares of the Company (other
      than pursuant to a dividend or distribution paid or made by the Company on
      the
      outstanding Common Shares in Common Shares or pursuant to a split or subdivision
      of the outstanding Common Shares), then such Person shall be deemed to be an
      “Acquiring Person” unless upon becoming the Beneficial Owner of such additional
      shares of Common Stock such Person does not beneficially own 15% or more of
      the
      shares of Common Stock then outstanding. Notwithstanding the foregoing, if
      the
      Board of Directors of the Company determines in good faith that a Person who
      would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing
      provisions of this Section 1.1, has become such inadvertently (including,
      without limitation, because (A) such Person was unaware that it beneficially
      owned a percentage of Common Stock that would otherwise cause such Person to
      be
      an “Acquiring Person” or (B) such Person was aware of the extent of its
      Beneficial Ownership of Common Stock but had no actual knowledge of the
      consequences of such Beneficial Ownership under this Agreement), and without
      any
      intention of changing or influencing control of the Company, and such Person
      divests as promptly as practicable a sufficient number of Common Shares so
      that
      such Person would no longer be an Acquiring Person, as defined pursuant to
      the
      foregoing provisions of this Section 1.1, then such Person shall not be deemed
      to be or have become an “Acquiring Person” at any time for any purposes of this
      Agreement. For all purposes of this Agreement, any calculation of the number
      of
      Common Shares outstanding at any particular time, including for purposes of
      determining the particular percentage of such outstanding Common Shares of
      which
      any Person is the Beneficial Owner, shall be made in accordance with the last
      sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
      the
      Securities Exchange Act of 1934, as amended (the “Exchange
      Act”),
      as in
      effect on the date of this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2.
      “Affiliate”
and
      “Associate”
shall
      have the respective meanings ascribed to such terms in Rule 12b-2 of the General
      Rules and Regulations under the Exchange Act, as in effect on the date of this
      Agreement.

     

    1.3.
      A
      Person shall be deemed the “Beneficial
      Owner”
of
      and
      shall be deemed to “beneficially
      own”
any
      securities:

     

    (i)
      which
      such Person or any of such Person’s Affiliates or Associates beneficially owns,
      directly or indirectly (as determined pursuant to Rule 13d-3 of the General
      Rules and Regulations under the Exchange Act as in effect on the date of this
      Agreement);

     

    (ii)
      which such Person or any of such Person’s Affiliates or Associates, directly or
      indirectly, has (A) the right to acquire (whether such right is exercisable
      immediately, or only after the passage of time, compliance with regulatory
      requirements, fulfillment of a condition or otherwise) pursuant to any
      agreement, arrangement or understanding, whether or not in writing (other than
      customary agreements with and between underwriters and selling group members
      with respect to a bona fide public offering of securities), or upon the exercise
      of conversion rights, exchange rights, rights, warrants or options, or
      otherwise;
      provided, however
      , that a
      Person shall not be deemed the Beneficial Owner of, or to beneficially own,
      (w)
      securities tendered pursuant to a tender or exchange offer made by or on behalf
      of such Person or any of such Person’s Affiliates or Associates until such
      tendered securities are accepted for purchase or exchange, (x) securities which
      such Person has a right to acquire upon the exercise of Rights at any time
      prior
      to the time that any Person becomes an Acquiring Person, (y) securities issuable
      upon the exercise of Rights from and after the time that any Person becomes
      an
      Acquiring Person if such Rights were acquired by such Person or any of such
      Person’s Affiliates or Associates prior to the Distribution Date or pursuant to
      Section 3.1 or Section 22 (“Original
      Rights”)
      or
      pursuant to Section 11.9 or Section 11.15 with respect to an adjustment to
      Original Rights or (z) securities which such Person or any of such Person’s
      Affiliates or Associates may acquire, does or do acquire or may be deemed to
      acquire or may be deemed to have the right to acquire, pursuant to any merger
      or
      other acquisition agreement between the Company and such Person (or one or
      more
      of such Person’s Affiliates or Associates) if prior to such Person becoming an
      Acquiring Person the Board of Directors of the Company has approved such
      agreement and determined that such Person shall not be or be deemed to be the
      beneficial owner of such securities within the meaning of this Section 1.3;
      or
      (B) the right to vote 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 clause (B) if the agreement, arrangement or understanding
      to
      vote such security (1) arises solely from a revocable proxy or consent given
      to
      such Person in response to a public proxy or consent solicitation made pursuant
      to, and in accordance with, the applicable rules and regulations of the Exchange
      Act and (2) is not also then reportable on Schedule 13D under the Exchange
      Act
      (or any comparable or successor report); or

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (iii)
      which are beneficially owned, directly or indirectly, by any other Person (or
      any Affiliate or Associate thereof) and with respect to which such Person or
      any
      of such Person’s Affiliates or Associates has any agreement, arrangement or
      understanding (other than customary agreements with and between underwriters
      and
      selling group members with respect to a bona fide public offering of
      securities), whether or not in writing, for the purpose of acquiring, holding,
      voting (except pursuant to a revocable proxy or consent as described in the
      proviso to Section 1.3(ii)(B)) or disposing of any securities of the
      Company;

     

    provided,
      however,
      that no
      Person who is an officer, director or employee of an Exempt Person shall be
      deemed, solely by reason of such Person’s status or authority as such, to be the
“Beneficial Owner” of, to have “Beneficial Ownership” of or to “beneficially
      own” any securities that are “beneficially owned” (as defined in this Section
      1.3), including, without limitation, in a fiduciary capacity, by an Exempt
      Person or by any other such officer, director or employee of an Exempt
      Person.

     

    1.4.
      “Business
      Day”
shall
      mean any day other than a Saturday, Sunday, or a day on which banking
      institutions in the States of New Jersey or New York are authorized or obligated
      by law or executive order to close.

     

    1.5.
      “close
      of business”
on
      any
      given date shall mean 5:00 p.m., New York, New York time, on such
      date;
      provided, however,
      that if
      such date is not a Business Day it shall mean 5:00 p.m., New York, New York
      time, on the next succeeding Business Day.

     

    1.6.
      “Common
      Shares”
when
      used with reference to the Company shall mean the shares of common stock, par
      value $0.001 per share, of the Company. “Common Shares” when used with reference
      to any Person other than the Company shall mean the capital stock with the
      greatest voting power, or the equity securities or other equity interest having
      power to control or direct the management, of such other Person or, if such
      Person is a Subsidiary (as such term is hereinafter defined) of another Person,
      the Person or Persons which ultimately control such first-mentioned Person,
      and
      which has issued and outstanding such capital stock, equity securities or equity
      interest.

     

    1.7.
      “Exempt
      Person”
shall
      mean the Company, any Subsidiary of the Company, in each case including, without
      limitation, its fiduciary capacity, or any employee benefit plan of the Company
      or of any Subsidiary of the Company or any entity or trustee holding shares
      of
      capital stock of the Company for or pursuant to the terms of any such plan,
      or
      for the purpose of funding other employee benefits for employees of the Company
      or any Subsidiary of the Company.

     

    1.8.
      “Person”
      shall
      mean any individual, partnership, joint venture, limited liability company,
      firm, corporation, unincorporated association, trust or other entity, and shall
      include any successor (by merger or otherwise) of such entity.

     

    1.9.
      “Shares
      Acquisition Date”
shall
      mean the first date of public announcement (which, for purposes of this
      definition, shall include, without limitation, the filing of a report pursuant
      to Section 13(d) of the Exchange Act or pursuant to a comparable successor
      statute) by the Company or an Acquiring Person that an Acquiring Person has
      become such or that discloses information which reveals the existence of an
      Acquiring Person, or such earlier date as a majority of the Board of Directors
      shall become aware of the existence of an Acquiring Person.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    1.10.
      “Subsidiary”
of
      any
      Person shall mean any corporation or other entity of which a majority of the
      voting power of the voting equity securities or equity interests is owned,
      of
      record or beneficially, directly or indirectly, by such Person.

     

    1.11.
      A
“Trigger
      Event”
shall
      be deemed to have occurred upon any Person becoming an Acquiring
      Person.

     

    1.12.
      The
      following terms shall have the meanings defined for such terms in the Sections
      set forth below:

     

    
      	
               

            	
               

            	
               

            
	
              Term

            	
                

            	
              Section

            
	 	 	 
	
              Adjustment
                Shares

            	
                

            	
              11.1.2

            
	
              common
                stock equivalent

            	
                

            	
              11.1.3

            
	
              Company

            	
                

            	
              Preamble

            
	
              current
                per share market price

            	
                

            	
              11.4

            
	
              Current
                Value

            	
                

            	
              11.1.3

            
	
              Distribution
                Date

            	
                

            	
              3.1

            
	
              equivalent
                preferred stock

            	
                

            	
              11.2

            
	
              Exchange
                Act

            	
                

            	
              1.1

            
	
              Exchange
                Consideration

            	
                

            	
              27.1

            
	
              Existing
                Holder

            	
                

            	
              1.1

            
	
              Expiration
                Date

            	
                

            	
              7.1

            
	
              Final
                Expiration Date

            	
                

            	
              7.1

            
	
              Nasdaq

            	
                

            	
              9

            
	
              Original
                Rights

            	
                

            	
              1.3

            
	
              Preferred
                Shares

            	
                

            	
              Recitals

            
	
              Principal
                Party

            	
                

            	
              13.2

            
	
              Purchase
                Price

            	
                

            	
              4

            
	
              Record
                Date

            	
                

            	
              Recitals

            
	
              Redemption
                Date

            	
                

            	
              7.1

            
	
              Redemption
                Price

            	
                

            	
              23.1

            
	
              Reduced
                Threshold

            	 	
              26

            
	
              Right

            	
                

            	
              Recitals

            
	
              Right
                Certificate

            	
                

            	
              3.1

            
	
              Rights
                Agent

            	
                

            	
              Preamble

            
	
              Security

            	
                

            	
              11.4

            
	
              Spread

            	
                

            	
              11.1.3

            
	
              Substitution
                Period

            	
                

            	
              11.1.3

            
	
              Summary
                of Rights

            	
                

            	
              3.2

            
	
              Trading
                Day

            	
                

            	
              11.4

            


    

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    


    Section
      2.
      Appointment of Rights Agent.
      The
      Company hereby appoints the Rights Agent to act as agent for the Company and
      the
      holders of the Rights (who, in accordance with Section 3, shall prior to the
      Distribution Date also be the holders of the Common Shares) in accordance with
      the terms and conditions hereof, and the Rights Agent hereby accepts such
      appointment. The Company may from time to time appoint such co-Rights Agents
      as
      it may deem necessary or desirable. In the event the Company appoints one or
      more co-Rights Agents, the respective duties of the Rights Agent and any
      co-Rights Agent shall be as the Company shall determine. Contemporaneously
      with
      such appointment, if any, the Company shall notify the Rights Agent
      thereof.

     

    Section
      3.
      Issuance of Right Certificates.

     

    3.1.
      Rights Evidenced by Share Certificates.
      Until
      the earlier of the close of business on (i) the tenth calendar day after the
      Shares Acquisition Date or (ii) the tenth Business Day after the date of the
      commencement of, or first public announcement of the intent of any Person (other
      than an Exempt Person) to commence, a tender or exchange offer, the consummation
      of which would result in any Person (other than an Exempt Person) becoming
      the
      Beneficial Owner of Common Shares aggregating 15% or more of the then
      outstanding Common Shares of the Company (the earlier of (i) and (ii) being
      herein referred to as the “Distribution
      Date”),
      (x)
      the Rights (unless earlier expired, redeemed or terminated) will be evidenced
      (subject to the provisions of Section 3.2) by the certificates for Common Shares
      registered in the names of the holders thereof (which certificates for Common
      Shares shall also be deemed to be Right Certificates) and not by separate
      certificates, and (y) the Rights (and the right to receive certificates
      therefor) will be transferable only in connection with the transfer of the
      underlying Common Shares. The preceding sentence notwithstanding, prior to
      the
      occurrence of a Distribution Date specified as a result of an event described
      in
      clause (ii) above (or such later Distribution Date as the Board of Directors
      of
      the Company may select pursuant to this sentence), the Board of Directors may
      postpone, one or more times, the Distribution Date which would occur as a result
      of an event described in clause (ii) beyond the date set forth in such clause
      (ii). Nothing herein shall permit such a postponement of a Distribution Date
      after a Person becomes an Acquiring Person. As soon as practicable after the
      Distribution Date, the Company will prepare and execute, the Rights Agent will
      countersign and the Company (or, if requested, the Rights Agent) will send,
      by
      first-class, postage-prepaid mail, to each record holder of Common Shares as
      of
      the close of business on the Distribution Date (other than any Acquiring Person
      or any Associate or Affiliate of an Acquiring Person), at the address of such
      holder shown on the records of the Company, one or more certificates for Rights,
      in substantially the form of Exhibit B hereto (a “Right
      Certificate”),
      evidencing one Right (subject to adjustment as provided herein) for each Common
      Share so held. As of the Distribution Date, the Rights will be evidenced solely
      by such Right Certificates.

     

    3.2.
      Summary of Rights.
      On the
      Record Date or as soon as practicable thereafter, the Company will send or
      cause
      to be sent a copy of a Summary of Rights to Purchase Preferred Shares, in
      substantially the form attached hereto as Exhibit C (the “Summary
      of Rights”),
      by
      first-class, postage-prepaid mail, to each record holder of Common Shares as
      of
      the close of business on the Record Date at the address of such holder shown
      on
      the records of the Company. With respect to certificates for Common Shares
      outstanding as of the close of business on the Record Date, until the
      Distribution Date (or the earlier Expiration Date), the Rights will be evidenced
      by such certificates for Common Shares registered in the names of the holders
      thereof together with a copy of the Summary of Rights and the registered holders
      of the Common Shares shall also be registered holders of the associated Rights.
      Until the Distribution Date (or the earlier Expiration Date), the surrender
      for
      transfer of any certificate for Common Shares outstanding at the close of
      business on the Record Date, with or without a copy of the Summary of Rights,
      shall also constitute the transfer of the Rights associated with the Common
      Shares represented thereby.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    3.3.
      New
      Certificates After Record Date.
      Certificates for Common Shares which become outstanding (whether upon issuance
      out of authorized but unissued Common Shares, disposition out of treasury or
      transfer or exchange of outstanding Common Shares) after the Record Date but
      prior to the earliest of the Distribution Date or the Expiration Date, shall
      have impressed, printed, stamped, written or otherwise affixed onto them the
      following legend:

     

    This
      certificate also evidences and entitles the holder hereof to certain rights
      as
      set forth in an Agreement between SyntheMed, Inc. (the “Corporation”) and
      American Stock Transfer & Trust Company, as Rights Agent, dated as of May
      20, 2008, as the same may be amended from time to time (the “Agreement”), the
      terms of which are hereby incorporated herein by reference and a copy of which
      is on file at the principal executive offices of the Corporation. Under certain
      circumstances, as set forth in the Agreement, such Rights will be evidenced
      by
      separate certificates and will no longer be evidenced by this certificate.
      The
      Corporation will mail to the holder of this certificate a copy of the Agreement
      without charge after receipt of a written request therefor.
      As described in the Agreement, Rights which are owned by, transferred to or
      have
      been owned by Acquiring Persons or Associates or Affiliates thereof (as defined
      in the Agreement) shall become null and void and will no longer be
      transferable.
      

    


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

     

    Notwithstanding
      this Section 3.3, the omission of a legend shall not affect the enforceability
      of any part of this Agreement or the rights of any holder of the
      Rights.

     

    Section
      4.
      Form
      of Right Certificates.
      The
      Right Certificates (and the forms of election to purchase shares, certification
      and assignment to be printed on the reverse thereof) shall be substantially
      the
      same as Exhibit B hereto and may have such marks of identification or
      designation and such legends, summaries or endorsements printed thereon as
      the
      Company may deem appropriate and as are not inconsistent with the provisions
      of
      this Agreement, or as may be required to comply with any applicable law or
      with
      any rule or regulation made pursuant thereto or with any rule or regulation
      of
      any stock exchange or trading system on which the Rights may from time to time
      be listed or quoted, or to conform to usage. Subject to the terms and conditions
      hereof, the Right Certificates, whenever issued, shall be dated as of the Record
      Date, and shall show the date of countersignature by the Rights Agent, and
      on
      their face shall entitle the holders thereof to purchase such number of one
      one-thousandths of a Preferred Share as shall be set forth therein at the price
      per one one-thousandths of a Preferred Share set forth therein (the
“Purchase
      Price”),
      but
      the number of such one one-thousandths of a Preferred Share and the Purchase
      Price shall be subject to adjustment as provided herein.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Section
      5.
      Countersignature and Registration.
      The
      Right Certificates shall be executed on behalf of the Company by its Chairman
      of
      the Board of Directors, the Chief Executive Officer, President or any Vice
      President, either manually or by facsimile signature, and may (but need not)
      have affixed thereto the Company’s seal or a facsimile thereof which may (but
      need not) be attested by the Secretary or any Assistant Secretary of the
      Company, either manually or by facsimile signature. The Right Certificates
      shall
      be countersigned, either manually or by facsimile signature, by an authorized
      signatory of the Rights Agent, but it shall not be necessary for the same
      signatory to countersign all of the Right Certificates hereunder. No Right
      Certificate shall be valid for any purpose unless so countersigned. In case
      any
      officer of the Company who shall have signed any of the Right Certificates
      shall
      cease to be such officer of the Company before countersignature by the Rights
      Agent and issuance and delivery by the Company, such Right Certificates,
      nevertheless, may be countersigned by the Rights Agent, and issued and delivered
      by the Company with the same force and effect as though the person who signed
      such Right Certificates had not ceased to be such officer of the Company; and
      any Right Certificate may be signed on behalf of the Company by any person
      who,
      at the actual date of the execution of such Right Certificate, shall be a proper
      officer of the Company to sign such Right Certificate, although at the date
      of
      the execution of this Agreement any such person was not such an
      officer.

     

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

     

    Section
      6.
      Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
      Destroyed, Lost or Stolen Right Certificates.
      Subject
      to the provisions of Section 11.1.2 and Section 14, 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 Right Certificate or Right Certificates (other
      than
      Right Certificates representing Rights that have become null and void pursuant
      to Section 11.1.2 or that have been exchanged pursuant to Section 27) may be
      transferred, split up or combined or exchanged for another Right Certificate
      or
      Right Certificates, entitling the registered holder to purchase a like number
      of
      one one-thousandths of a Preferred Share as the Right Certificate or Right
      Certificates surrendered then entitled such holder to purchase. Any registered
      holder desiring to transfer, split up or combine or exchange any Right
      Certificate shall make such request in writing delivered to the Rights Agent,
      and shall surrender, together with any required form of assignment and
      certificate duly completed, the Right Certificate or Right Certificates to
      be
      transferred, split up or 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 Right Certificate or Right Certificates until the registered holder
      shall have properly completed and signed the certificate contained in the form
      of assignment on the reverse side of such Right Certificate or Right
      Certificates 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 countersign and deliver to the person entitled thereto
      a
      Right Certificate or Right Certificates, as the case may be, as so requested.
      The Company may require payment from the holders of Right Certificates of a
      sum
      sufficient to cover any tax or governmental charge that may be imposed in
      connection with any transfer, split up or combination or exchange of such Right
      Certificates.

     

    Subject
      to the provisions of Section 11.1.2, at any time after the Distribution Date
      and
      prior to the Expiration Date, upon receipt by the Company and the Rights Agent
      of evidence reasonably satisfactory to them of the loss, theft, destruction
      or
      mutilation of a Right Certificate, and, in case of loss, theft or destruction,
      of indemnity or security reasonably satisfactory to them, and, at the Company’s
      or the Rights 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 Right Certificate if mutilated, the Company will
      make and deliver a new Right Certificate of like tenor to the Rights Agent
      for
      countersignature and delivery to the registered owner in lieu of the Right
      Certificate so lost, stolen, destroyed or mutilated.

     

    
      
        
        

      

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

     

    7.1.
      Exercise of Rights.
      Subject
      to Section 11.1.2 and except as otherwise provided herein, the registered holder
      of any Right Certificate may exercise the Rights evidenced thereby in whole
      or
      in part at any time after the Distribution Date upon surrender of the Right
      Certificate, with the form of election to purchase and certification on the
      reverse side thereof duly executed, to the Rights Agent at the office of the
      Rights Agent designated for such purpose, together with payment of the aggregate
      Purchase Price for the total number of one one-thousandths of a Preferred Share
      (or other securities, cash or other assets) as to which the Rights are
      exercised, at or prior to the time (the “Expiration
      Date”)
      that
      is the earliest of (i) the close of business on June 2, 2018 (the “Final
      Expiration Date”),
      (ii)
      the time at which the Rights are redeemed as provided in Section 23 (the
“Redemption
      Date”),
      (iii)
      the closing of any merger or other acquisition transaction involving the Company
      pursuant to an agreement of the type described in Section 13.3 at which time
      the
      Rights are deemed terminated, or (iv) the time at which the Rights are exchanged
      as provided in Section 27.

     

    7.2.
      Purchase.
      The
      Purchase Price for each one one-thousandth of a Preferred Share pursuant to
      the
      exercise of a Right shall be initially $10.00, shall be subject to adjustment
      from time to time as provided in Sections 11, 13 and 26 and shall be payable
      in
      lawful money of the United States of America in accordance with Section
      7.3.

     

    7.3.
      Payment Procedures.
      Upon
      receipt of a Right Certificate representing exercisable Rights, with the form
      of
      election to purchase and certification duly executed, accompanied by payment
      of
      the aggregate Purchase Price for the total number of one one-thousandths of
      a
      Preferred Share to be purchased and an amount equal to any applicable transfer
      tax or governmental charge required to be paid by the holder of such Right
      Certificate in accordance with Section 9, in cash or by certified or cashier’s
      check or money order payable to the order of the Company, the Rights Agent
      shall
      thereupon promptly (i)(A) requisition from any transfer agent of the Preferred
      Shares (or make available, if the Rights Agent is the transfer agent)
      certificates for the number of Preferred Shares to be purchased and the Company
      hereby irrevocably authorizes its transfer agent to comply with all such
      requests, or (B) if the Company shall have elected to deposit the total number
      of Preferred Shares issuable upon exercise of the Rights hereunder with a
      depository agent, requisition from the depository agent depository receipts
      representing interests in such number of one one-thousandths of a Preferred
      Share as are to be purchased (in which case certificates for the Preferred
      Shares represented by such receipts shall be deposited by the transfer agent
      with the depository agent) and the Company hereby directs the depository agent
      to comply with all such requests, (ii) when appropriate, requisition from the
      Company the amount of cash to be paid in lieu of the issuance of fractional
      shares in accordance with Section 14 or otherwise in accordance with Section
      11.1.3, (iii) promptly after receipt of such certificates or depository
      receipts, cause the same to be delivered to or upon the order of the registered
      holder of such Right Certificate, registered in such name or names as may be
      designated by such holder and (iv) when appropriate, after receipt, promptly
      deliver such cash to or upon the order of the registered holder of such Right
      Certificate. In the event that the Company is obligated to issue other
      securities of the Company, pay cash and/or distribute other property pursuant
      to
      Section 11.1.3, the Company will make all arrangements necessary so that such
      other securities, cash and/or other property are available for distribution
      by
      the Rights Agent, if and when necessary to comply with this
      Agreement.

     

    7.4.
      Partial Exercise.
      In case
      the registered holder of any Right Certificate shall exercise less than all
      the
      Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
      to the Rights remaining unexercised shall be issued by the Rights Agent and
      delivered to the registered holder of such Right Certificate or to his duly
      authorized assigns, subject to the provisions of Section 14.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    7.5.
      Full
      Information Concerning Ownership.
      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 of Rights upon the occurrence of any purported exercise
      as
      set forth in this Section 7 unless the certificate contained in the form of
      election to purchase set forth on the reverse side of the Right Certificate
      surrendered for such exercise shall have been duly and properly completed and
      signed by the registered holder thereof and the Company shall have been provided
      with 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 Right Certificates.
      All
      Right Certificates surrendered for the purpose of exercise, transfer, split
      up,
      combination or exchange shall, if surrendered to the Company or to any of its
      agents, be delivered to the Rights Agent for cancellation or in canceled form,
      or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
      Certificates shall be issued in lieu thereof except as expressly permitted
      by
      any of the provisions of this Agreement. The Company shall deliver to the Rights
      Agent for cancellation and retirement, and the Rights Agent shall so cancel
      and
      retire, any other Right Certificate purchased or acquired by the Company
      otherwise than upon the exercise thereof. The Rights Agent shall deliver all
      canceled Right Certificates to the Company, or shall, at the written request
      of
      the Company, destroy such canceled Right Certificates (after any retention
      period required by the Securities and Exchange Commission), and in such case
      shall deliver a certificate of destruction thereof to the Company.

     

    Section
      9.
      Reservation and Availability of Capital Stock.
      The
      Company covenants and agrees that from and after the Distribution Date it will
      cause to be reserved and kept available out of its authorized and unissued
      Preferred Shares (and, following the occurrence of a Trigger Event, out of
      its
      authorized and unissued Common Shares or other securities or out of its shares
      held in its treasury) the number of Preferred Shares (and, following the
      occurrence of a Trigger Event, Common Shares and/or other securities) that
      will
      be sufficient to permit the exercise in full of all outstanding
      Rights.

     

    So
      long
      as the Preferred Shares (and, following the occurrence of a Trigger Event,
      Common Shares and/or other securities) issuable upon the exercise of Rights
      may
      be listed on any national securities exchange, the Company shall use its best
      efforts to cause, from and after such time as the Rights become exercisable,
      all
      shares reserved for such issuance to be listed or admitted to trading on such
      exchange.

     

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

     

    From
      and
      after such time as the Rights become exercisable, the Company shall use its
      best
      efforts, if then necessary to permit the issuance of Preferred Shares upon
      the
      exercise of Rights, to register and qualify such Preferred Shares under the
      Securities Act of 1933, as amended (the “Securities
      Act”)
      and
      any applicable state securities or “Blue Sky” laws (to the extent exemptions
      therefrom are not available), cause such registration statement and
      qualifications to become effective as soon as possible after such filing and
      keep such registration and qualifications effective until the earlier of the
      date as of which the Rights are no longer exercisable for such securities and
      the Expiration Date. The Company may temporarily suspend, for a period of time
      not to exceed 90 days, the exercisability of the Rights in order to prepare
      and
      file a registration statement under the Securities Act and permit it to become
      effective. Upon any such suspension, the Company shall issue a public
      announcement stating that the exercisability of the Rights has been temporarily
      suspended, as well as a public announcement at such time as the suspension
      is no
      longer in effect. Notwithstanding any provision of this Agreement to the
      contrary, the Rights shall not be exercisable in any jurisdiction unless the
      requisite qualification in such jurisdiction shall have been obtained and until
      a registration statement under the Securities Act (if required) shall have
      been
      declared effective.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

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

     

    Section
      10.
      Preferred Shares Record Date.
      Each
      Person in whose name any certificate for Preferred Shares (or Common Shares
      and/or other securities, as the case may be) is issued upon the exercise of
      Rights shall for all purposes be deemed to have become the holder of record
      of
      the Preferred Shares (or Common Shares and/or other securities, as the case
      may
      be) represented thereby on, and such certificate shall be dated, the date upon
      which the Right Certificate evidencing such Rights was duly surrendered and
      payment of the Purchase Price (and any applicable transfer taxes and
      governmental charges) was made;
      provided, however,
      that if
      the date of such surrender and payment is a date upon which the Preferred Shares
      (or Common Shares and/or other securities, as the case may be) transfer books
      of
      the Company are closed, such Person shall be deemed to have become the record
      holder of such shares (fractional or otherwise) on, and such certificate shall
      be dated, the next succeeding Business Day on which the Preferred Shares (or
      Common Shares and/or other securities, as the case may be) transfer books of
      the
      Company are open; and
      further provided, however,
      that if
      delivery of shares of Preferred Stock (or Common Shares and/or other securities,
      as the case may be) is delayed pursuant to Section 9(c), such Person shall
      be
      deemed to have become the record holder of such securities only when such
      securities first become deliverable. Prior to the exercise of the Rights
      evidenced thereby, the holder of a Right Certificate shall not be entitled
      to
      any rights of a holder of Preferred Shares (or Common Shares and/or other
      securities, as the case may be) for which the Rights shall be exercisable,
      including, without limitation, the right to vote or to receive dividends or
      other distributions, and shall not be entitled to receive any notice of any
      proceedings of the Company, except as provided herein.

     

    Section
      11.
      Adjustment of Purchase Price, Number of Shares or Number of
      Rights.
      The
      Purchase Price, the number of Preferred Shares or other securities or property
      purchasable upon exercise of each Right and the number of Rights outstanding
      are
      subject to adjustment from time to time as provided in this Section
      11.

     

    11.1.
      Post-Execution Events.

     

    11.1.1.
      Corporate Dividends, Reclassifications, Etc.
      In the
      event the Company shall at any time after the date of this Agreement (A) declare
      and pay a dividend on the Preferred Shares payable in Preferred Shares, (B)
      subdivide the outstanding Preferred Shares, (C) combine the outstanding
      Preferred Shares into a smaller number of Preferred Shares or (D) issue any
      shares of its capital stock in a reclassification of the Preferred Shares
      (including any such reclassification in connection with a consolidation or
      merger in which the Company is the continuing or surviving corporation), except
      as otherwise provided in this Section 11.1, the Purchase Price in effect at
      the
      time of the record date for such dividend or of the effective date of such
      subdivision, combination or reclassification, and the number and kind of shares
      of capital stock issuable on such date, shall be proportionately adjusted so
      that the holder of any Right exercised after such time shall be entitled to
      receive the aggregate number and kind of shares of capital stock which, if
      such
      Right had been exercised immediately prior to such date and at a time when
      the
      Preferred Shares transfer books of the Company were open, he would have owned
      upon such exercise and been entitled to receive by virtue of such dividend,
      subdivision, combination or reclassification;
      provided, however
      , that
      in no event shall the consideration to be paid upon the exercise of one Right
      be
      less than the aggregate par value of the shares of capital stock of the Company
      issuable upon exercise of one Right. If an event occurs which would require
      an
      adjustment under both Section 11.1.1 and Section 11.1.2, the adjustment provided
      for in this Section 11.1.1 shall be in addition to, and shall be made prior
      to,
      the adjustment required pursuant to, Section 11.1.2.

    
      
        
        

      

      
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    11.1.2.
      Acquiring Person Events; Triggering Events.
      Subject
      to Sections 23.1 and 27, in the event that a Trigger Event occurs, then, from
      and after the first occurrence of such event, each holder of a Right, except
      as
      provided below, shall thereafter have a right to receive, upon exercise thereof
      at a price per Right equal to the then current Purchase Price multiplied by
      the
      number of one one-thousandths of a Preferred Share for which a Right is then
      exercisable (without giving effect to this Section 11.1.2), in accordance with
      the terms of this Agreement and in lieu of Preferred Shares, such number of
      Common Shares as shall equal the result obtained by (x) multiplying the then
      current Purchase Price by the then number of one one-thousandths of a Preferred
      Share for which a Right is then exercisable (without giving effect to this
      Section 11.1.2) and (y) dividing that product by 50% of the current per share
      market price of the Common Shares (determined pursuant to Section 11.4) on
      the
      first of the date of the occurrence of, or the date of the first public
      announcement of, a Trigger Event (the “Adjustment
      Shares”);
      provided
      that the
      Purchase Price and the number of Adjustment Shares shall thereafter be subject
      to further adjustment as appropriate in accordance with Section 11.6.
      Notwithstanding the foregoing, upon the occurrence of a Trigger Event, any
      Rights that are or were acquired or beneficially owned by (1) any Acquiring
      Person or any Associate or Affiliate thereof, (2) a transferee of any Acquiring
      Person (or of any such Associate or Affiliate) who becomes a transferee after
      the Acquiring Person becomes such, or (3) a transferee of any Acquiring Person
      (or of any such Associate or Affiliate) who becomes a transferee prior to or
      concurrently with the Acquiring Person becoming such and receives such Rights
      pursuant to either (A) a transfer (whether or not for consideration) from the
      Acquiring Person to holders of equity interests in such Acquiring Person or
      to
      any Person with whom the Acquiring Person has any continuing agreement,
      arrangement or understanding regarding the transferred Rights or (B) a transfer
      which the Board of Directors of the Company has determined is part of a plan,
      arrangement or understanding which has as a primary purpose or effect avoidance
      of this Section 11.1.2, and subsequent transferees, shall become null and void
      without any further action, and any holder (whether or not such holder is an
      Acquiring Person or an Associate or Affiliate of an Acquiring Person) of such
      Rights shall thereafter have no right to exercise such Rights under any
      provision of this Agreement or otherwise. From and after the Trigger Event,
      no
      Right Certificate shall be issued pursuant to Section 3 or Section 6 that
      represents Rights that are or have become null and void pursuant to the
      provisions of this paragraph, and any Right Certificate delivered to the Rights
      Agent that represents Rights that are or have become null and void pursuant
      to
      the provisions of this paragraph shall be canceled.

     

    The
      Company shall use all reasonable efforts to ensure that the provisions of this
      Section 11.1.2 are complied with, but shall have no liability to any holder
      of
      Right Certificates or other Person as a result of the Company’s failure to make
      any determinations with respect to any Acquiring Person or its Affiliates,
      Associates or transferees hereunder.

     

    
      
        
        

      

      
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    From
      and
      after the occurrence of an event specified in Section 13.1, any Rights that
      theretofore have not been exercised pursuant to this Section 11.1.2 shall
      thereafter be exercisable only in accordance with Section 13 and not pursuant
      to
      this Section 11.1.2.

     

    11.1.3.
      Insufficient Shares.
      The
      Company may at its option substitute for a Common Share issuable upon the
      exercise of Rights in accordance with the foregoing Section 11.1.2 a number
      of
      Preferred Shares or fraction thereof such that the current per share market
      price of one Preferred Share multiplied by such number or fraction is equal
      to
      the current per share market price of one Common Share. In the event that upon
      the occurrence of a Trigger Event there shall not be sufficient Common Shares
      authorized but unissued, or held by the Company as treasury shares, to permit
      the exercise in full of the Rights in accordance with the foregoing Section
      11.1.2, the Company shall take all such action as may be necessary to authorize
      additional Common Shares for issuance upon exercise of the Rights;
      provided, however
      , that
      if the Company determines that it is unable to cause the authorization of a
      sufficient number of additional Common Shares, then, in the event the Rights
      become exercisable, the Company, with respect to each Right and to the extent
      necessary and permitted by applicable law and any agreements or instruments
      in
      effect on the date hereof to which it is a party, shall: (A) determine the
      excess of (1) the value of the Adjustment Shares issuable upon the exercise
      of a
      Right (the “Current
      Value”),
      over
      (2) the Purchase Price (such excess, the “Spread”)
      and
      (B) with respect to each Right (other than Rights which have become null and
      void pursuant to Section 11.1.2), make adequate provision to substitute for
      the
      Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash,
      (2)
      a reduction in the Purchase Price, (3) Preferred Shares or other equity
      securities of the Company (including, without limitation, shares, or fractions
      of shares, of preferred stock which, by virtue of having dividend and
      liquidation rights substantially comparable to those of the Common Shares,
      the
      Board of Directors of the Company has deemed in good faith to have substantially
      the same value as Common Shares) (each such share of preferred stock or
      fractions of shares of preferred stock constituting a “common
      stock equivalent”),
      (4)
      debt securities of the Company, (5) other assets or (6) any combination of
      the
      foregoing having an aggregate value equal to the Current Value, where such
      aggregate value has been determined by the Board of Directors of the Company
      based upon the advice of a nationally recognized investment banking firm
      selected in good faith by the Board of Directors of the Company;
      provided, however
      , that
      if the Company shall not have made adequate provision to deliver value pursuant
      to clause (B) above within thirty (30) days following the occurrence of a
      Trigger Event, then the Company shall be obligated to deliver, to the extent
      necessary and permitted by applicable law and any agreements or instruments
      in
      effect on the date hereof to which it is a party, upon the surrender for
      exercise of a Right and without requiring payment of the Purchase Price, Common
      Shares (to the extent available) and then, if necessary, such number or
      fractions of Preferred Shares (to the extent available) and then, if necessary,
      cash, which shares and/or cash have an aggregate value equal to the Spread.
      If
      the Board of Directors of the Company shall determine in good faith that it
      is
      unlikely that sufficient additional Common Shares could be authorized for
      issuance upon exercise in full of the Rights, the thirty (30) day period set
      forth above may be extended and re-extended to the extent necessary, but not
      more than ninety (90) days following the occurrence of a Trigger Event, in
      order
      that the Company may seek stockholder approval for the authorization of such
      additional shares (such period as may be extended, the “Substitution
      Period”).
      To
      the extent that the Company determines that some action need be taken pursuant
      to the second and/or third sentences of this Section 11.1.3, the Company (x)
      shall provide that such action shall apply uniformly to all outstanding Rights,
      and (y) may suspend the exercisability of the Rights until the expiration of
      the
      Substitution Period in order to seek any authorization of additional shares
      and/or to decide the appropriate form of distribution to be made pursuant to
      such first sentence and to determine the value thereof. In the event of any
      such
      suspension, the Company shall issue a public announcement stating that the
      exercisability of the Rights has been temporarily suspended as well as a public
      announcement at such time as the suspension is no longer in effect. For purposes
      of this Section 11.1.3, the value of a Common Share shall be the current per
      share market price (as determined pursuant to Section 11.4) on the date of
      the
      occurrence of a Trigger Event and the value of any “common stock equivalent”
shall be deemed to have the same value as the Common Shares on such date. The
      Board of Directors of the Company may, but shall not be required to, establish
      procedures to allocate the right to receive Common Shares upon the exercise
      of
      the Rights among holders of Rights pursuant to this Section 11.1.3.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    11.2.
      Dilutive Rights Offering.
      In case
      the Company shall fix a record date for the issuance of rights, options or
      warrants to all holders of Preferred Shares entitling them (for a period
      expiring within 45 calendar days after such record date) to subscribe for or
      purchase Preferred Shares (or securities having the same rights, privileges
      and
      preferences as the Preferred Shares (“equivalent
      preferred stock”))
      or
      securities convertible into Preferred Shares or equivalent preferred stock
      at a
      price per Preferred Share or per share of equivalent preferred stock (or having
      a conversion or exercise price per share, if a security convertible into or
      exercisable for Preferred Shares or equivalent preferred stock) less than the
      current per share market price of the Preferred Shares (as determined pursuant
      to Section 11.4) on such record date, the Purchase Price to be in effect after
      such record date shall be determined by multiplying the Purchase Price in effect
      immediately prior to such record date by a fraction, the numerator of which
      shall be the number of Preferred Shares and shares of equivalent preferred
      stock
      outstanding on such record date plus the number of Preferred Shares and shares
      of equivalent preferred stock which the aggregate offering price of the total
      number of Preferred Shares and/or shares of equivalent preferred stock to be
      offered (and/or the aggregate initial conversion price of the convertible
      securities so to be offered) would purchase at such current per share market
      price and the denominator of which shall be the number of Preferred Shares
      and
      shares of equivalent preferred stock outstanding on such record date plus the
      number of additional Preferred Shares and/or shares of equivalent preferred
      stock to be offered for subscription or purchase (or into which the convertible
      securities so to be offered are initially convertible);
      provided, however
      , that
      in no event shall the consideration to be paid upon the exercise of one Right
      be
      less than the aggregate par value of the shares of capital stock of the Company
      issuable upon exercise of one Right. In case such subscription price may be
      paid
      in a consideration part or all of which shall be in a form other than cash,
      the
      value of such consideration shall be as determined in good faith by the Board
      of
      Directors of the Company, whose determination shall be described in a statement
      filed with the Rights Agent and shall be binding on the Rights Agent and the
      holders of the Rights. Preferred Shares and shares of equivalent preferred
      stock
      owned by or held for the account of the Company or any Subsidiary of the Company
      shall not be deemed outstanding for the purpose of any such computation. Such
      adjustments shall be made successively whenever such a record date is fixed;
      and
      in the event that such rights 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.

     

    11.3.
      Distributions.
      In case
      the Company shall fix a record date for the making of a distribution to all
      holders of the Preferred Shares (including any such distribution made in
      connection with a consolidation or merger in which the Company is the continuing
      or surviving corporation) of evidences of indebtedness, cash, securities or
      assets (other than a dividend payable in Preferred Shares (which dividend,
      for
      purposes of this Agreement, shall be subject to the provisions of Section
      11.1.1(A)) or convertible securities, or subscription rights or warrants
      (excluding those referred to in Section 11.2), 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 per share market price of the Preferred
      Shares (as determined pursuant to Section 11.4) on such record date, less the
      fair market value (as determined in good faith by the Board of Directors of
      the
      Company, whose determination shall be described in a statement filed with the
      Rights Agent) of the portion of the cash, assets, securities or evidences of
      indebtedness so to be distributed or of such subscription rights or warrants
      applicable to one Preferred Share and the denominator of which shall be such
      current per share market price of the Preferred Shares (as determined pursuant
      to Section 11.4);
      provided,
      however
      , that
      in no event shall the consideration to be paid upon the exercise of one Right
      be
      less than the aggregate par value of the shares of capital stock of the Company
      to be issued upon exercise of one Right. Such adjustments shall be made
      successively whenever such a record date is fixed; and in the event that such
      distribution is not so made, the Purchase Price shall again be adjusted to
      be
      the Purchase Price which would then be in effect if such record date had not
      been fixed.

     

    
      
        
        

      

      
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    11.4.
      Current Per Share Market Value.

     

    11.4.1.
      General.
      For the
      purpose of any computation hereunder, the “current
      per share market price”
of
      any
      security (a “Security”
for
      the
      purpose of this Section 11.4.1) on any date shall be deemed to be the average
      of
      the daily closing prices per share of such Security for the thirty (30)
      consecutive Trading Days (as such term is hereinafter defined) immediately
      prior
      to but not including such date;
      provided, however
      , that
      in the event that the current per share market price of the Security is
      determined during any period following the announcement by the issuer of such
      Security of (i) a dividend or distribution on such Security payable in shares
      of
      such Security or securities convertible into such shares or (ii) any
      subdivision, combination or reclassification of such Security, and prior to
      the
      expiration of thirty (30) Trading Days after but not including the ex-dividend
      date for such dividend or distribution, or the record date for such subdivision,
      combination or reclassification, then, and in each such case, the “current per
      share market price” shall be appropriately adjusted to reflect the current
      market price per share equivalent of such Security. The closing price for each
      day shall be the last sale price, regular way, or, in case no such sale takes
      place on such day, the average of the closing bid and asked prices, regular
      way,
      in either case as reported in the principal consolidated transaction reporting
      system with respect to securities listed or admitted to trading on the New
      York
      Stock Exchange or, if the Security is not listed or admitted to trading on
      the
      New York Stock Exchange, as reported in the principal consolidated transaction
      reporting system with respect to securities listed on the principal national
      securities exchange on which the Security is listed or admitted to trading
      or,
      if the Security is not listed or admitted to trading on any national securities
      exchange, the last quoted price or, if not so quoted, the average of the high
      bid and low asked prices in the over-the-counter market, as reported by the
      OTC
      Bulletin Board or such other system then in use, or, if on any such date the
      Security is not quoted by any such organization, the average of the closing
      bid
      and asked prices as furnished by a professional market maker making a market
      in
      the Security selected by the Board of Directors of the Company. If on any such
      date no such market maker is making a market in the Security, the fair value
      of
      the Security on such date as determined in good faith by the Board of Directors
      of the Company shall be used. The term “Trading
      Day”
shall
      mean a day on which the principal national securities exchange on which the
      Security is listed or admitted to trading is open for the transaction of
      business or, if the Security is not listed or admitted to trading on any
      national securities exchange, a Business Day. If the Security is not publicly
      held or not so listed or traded, or if on any such date the Security is not
      so
      quoted and no such market maker is making a market in the Security, “current per
      share market price” shall mean the fair value per share as determined in good
      faith by the Board of Directors of the Company or, if at the time of such
      determination there is an Acquiring Person, by a nationally recognized
      investment banking firm selected by the Board of Directors, which shall have
      the
      duty to make such determination in a reasonable and objective manner, whose
      determination shall be described in a statement filed with the Rights Agent
      and
      shall be conclusive for all purposes.

     

    11.4.2.
      Preferred Shares.
      Notwithstanding Section 11.4.1, for the purpose of any computation hereunder,
      the “current per share market price” of the Preferred Shares shall be determined
      in the same manner as set forth above in Section 11.4.1 (other than the last
      sentence thereof). If the current per share market price of the Preferred Shares
      cannot be determined in the manner described in Section 11.4.1, the “current per
      share market price” of the Preferred Shares shall be conclusively deemed to be
      an amount equal to one thousand (1,000) (as such number may be appropriately
      adjusted for such events as stock splits, stock dividends and recapitalizations
      with respect to the Common Shares occurring after the date of this Agreement)
      multiplied by the current per share market price of the Common Shares (as
      determined pursuant to Section 11.4.1). If neither the Common Shares nor the
      Preferred Shares are publicly held or so listed or traded, or if on any such
      date neither the Common Shares nor the Preferred Shares are so quoted and no
      such market maker is making a market in either the Common Shares or the
      Preferred Shares, “current per share market price” of the Preferred Shares shall
      mean the fair value per share as determined in good faith by the Board of
      Directors of the Company, or, if at the time of such determination there is
      an
      Acquiring Person, by a nationally recognized investment banking firm selected
      by
      the Board of Directors of the Company, which shall have the duty to make such
      determination in a reasonable and objective manner, which determination shall
      be
      described in a statement filed with the Rights Agent and shall be conclusive
      for
      all purposes. For purposes of this Agreement, the “current per share market
      price” of one one-thousandth of a Preferred Share shall be equal to the “current
      per share market price” of one Preferred Share divided by one thousand
      (1,000).

    
      
        
        

      

      
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    11.5.
      Insignificant Changes.
      No
      adjustment in the Purchase Price shall be required unless such adjustment would
      require an increase or decrease of at least 1% in the Purchase Price. Any
      adjustments which by reason of this Section 11.5 are not required to be made
      shall be carried forward and taken into account in any subsequent adjustment.
      All calculations under this Section 11 shall be made to the nearest cent or
      to
      the nearest one-thousandth of a Preferred Share or the nearest one-thousandth
      of
      a Common Share or other share or security, as the case may be.

     

    11.6.
      Shares Other Than Preferred Shares.
      If as a
      result of an adjustment made pursuant to Section 11.1, the holder of any Right
      thereafter exercised shall become entitled to receive any shares of capital
      stock of the Company other than Preferred Shares, thereafter the number of
      such
      other shares so receivable upon exercise of any Right shall be subject to
      adjustment from time to time in a manner and on terms as nearly equivalent
      as
      practicable to the provisions with respect to the Preferred Shares contained
      in
      Sections 11.1, 11.2, 11.3, 11.5, 11.8, 11.9 and 11.13, and the provisions of
      Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply
      on
      like terms to any such other shares.

     

    11.7.
      Rights Issued Prior to Adjustment.
      All
      Rights originally issued by the Company subsequent to any adjustment made to
      the
      Purchase Price hereunder shall evidence the right to purchase, at the adjusted
      Purchase Price, the number of one one-thousandths of a Preferred Share
      purchasable from time to time hereunder upon exercise of the Rights, all subject
      to further adjustment as provided herein.

     

    11.8.
      Effect of Adjustments.
      Unless
      the Company shall have exercised its election as provided in Section 11.9,
      upon
      each adjustment of the Purchase Price as a result of the calculations made
      in
      Sections 11.2 and 11.3, each Right outstanding immediately prior to the making
      of such adjustment shall thereafter evidence the right to purchase, at the
      adjusted Purchase Price, that number of one one-thousandths of a Preferred
      Share
      (calculated to the nearest one-hundred thousandth of a Preferred Share) obtained
      by (i) multiplying (x) the number of one one-thousandths of a Preferred Share
      covered by a Right immediately prior to this adjustment by (y) the Purchase
      Price in effect immediately prior to such adjustment of the Purchase Price
      and
      (ii) dividing the product so obtained by the Purchase Price in effect
      immediately after such adjustment of the Purchase Price.

     

    11.9.
      Adjustment in Number of Rights.
      The
      Company may elect on or after the date of any adjustment of the Purchase Price
      to adjust the number of Rights, in substitution for any adjustment in the number
      of one one-thousandths of a Preferred Share issuable upon the exercise of a
      Right. Each of the Rights outstanding after such adjustment of the number of
      Rights shall be exercisable for the number of one one-thousandths of a Preferred
      Share for which a Right was exercisable immediately prior to such adjustment.
      Each Right held of record prior to such adjustment of the number of Rights
      shall
      become that number of Rights (calculated to the nearest one-thousandth) obtained
      by dividing the Purchase Price in effect immediately prior to adjustment of
      the
      Purchase Price by the Purchase Price in effect immediately after adjustment
      of
      the Purchase Price. The Company shall make a public announcement of its election
      to adjust the number of Rights, indicating the record date for the adjustment,
      and, if known at the time, the amount of the adjustment to be made. This record
      date may be the date on which the Purchase Price is adjusted or any day
      thereafter, but, if the Right Certificates have been issued, shall be at least
      ten (10) days later than the date of the public announcement. If Right
      Certificates have been issued, upon each adjustment of the number of Rights
      pursuant to this Section 11.9, the Company may, as promptly as practicable,
      cause to be distributed to holders of record of Right Certificates on such
      record date Right Certificates evidencing, subject to Section 14, the additional
      Rights to which such holders shall be entitled as a result of such adjustment,
      or, at the option of the Company, shall cause to be distributed to such holders
      of record in substitution and replacement for the Right Certificates held by
      such holders prior to the date of adjustment, and upon surrender thereof, if
      required by the Company, new Right Certificates evidencing all the Rights to
      which such holders shall be entitled after such adjustment. Right Certificates
      so to be distributed shall be issued, executed and countersigned in the manner
      provided for herein (and 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
      Right Certificates on the record date specified in the public
      announcement.

    
      
        
        

      

      
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    11.10.
      Right
      Certificates Unchanged.
      Irrespective of any adjustment or change in the Purchase Price or the number
      of
      one one-thousandths of a Preferred Share issuable upon the exercise of the
      Rights, the Right Certificates theretofore and thereafter issued may continue
      to
      express the Purchase Price per share and the number of one one-thousandths
      of a
      Preferred Share which were expressed in the initial Right Certificates issued
      hereunder.

     

    11.11.
      Par
      Value Limitations.
      Before
      taking any action that would cause an adjustment reducing the Purchase Price
      below one one-thousandth of the then par value, if any, of the Preferred Shares
      or other shares of capital 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 Preferred Shares or other such shares at such
      adjusted Purchase Price.

    


    11.12.
      Deferred Issuance.
      In any
      case in which this Section 11 shall require that an adjustment in the Purchase
      Price be made effective as of a record date for a specified event, the Company
      may elect to defer until the occurrence of such event the issuance to the holder
      of any Right exercised after such record date of that number of Preferred Shares
      and shares of other capital stock or securities of the Company, if any, issuable
      upon such exercise over and above the Preferred Shares and shares of other
      capital stock or other securities, assets or cash of the Company, if any,
      issuable upon such exercise on the basis of the Purchase Price in effect prior
      to such adjustment;
      provided, however
      , that
      the Company shall deliver to such holder a due bill or other appropriate
      instrument evidencing such holder’s right to receive such additional shares upon
      the occurrence of the event requiring such adjustment.

     

    11.13.
      Reduction in Purchase Price.
      Anything in this Section 11 to the contrary notwithstanding, the Company shall
      be entitled to make such reductions in the Purchase Price, in addition to those
      adjustments expressly required by this Section 11, as and to the extent that
      it
      in its sole discretion shall determine to be advisable in order that any
      consolidation or subdivision of the Preferred Shares, issuance wholly for cash
      of any of the Preferred Shares at less than the current market price, issuance
      wholly for cash of Preferred Shares or securities which by their terms are
      convertible into or exchangeable for Preferred Shares, dividends on Preferred
      Shares payable in Preferred Shares or issuance of rights, options or warrants
      referred to hereinabove in this Section 11, hereafter made by the Company to
      holders of its Preferred Shares shall not be taxable to such
      stockholders.

     

    11.14.
      Company Not to Diminish Benefits of Rights.
      The
      Company covenants and agrees that after the earlier of the Shares Acquisition
      Date or Distribution Date it will not, except as permitted by Section 23,
      Section 26 or Section 27, 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 substantially diminish or otherwise eliminate the benefits intended to
      be
      afforded by the Rights.

     

    
      
        
        

      

      
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    11.15.
      Adjustment of Rights Associated with Common Shares.
      Notwithstanding anything contained in this Agreement to the contrary, in the
      event that the Company shall at any time after the date hereof and prior to
      the
      Distribution Date (i) declare or pay any dividend on its outstanding Common
      Shares payable in Common Shares, (ii) effect a subdivision or consolidation
      of
      its outstanding Common Shares (by reclassification or otherwise than by the
      payment of dividends payable in Common Shares), or (iii) combine its outstanding
      Common Shares into a greater or lesser number of Common Shares, then in any
      such
      case, the number of Rights associated with each Common Share then outstanding,
      or issued or delivered thereafter but prior to the Distribution Date or in
      accordance with Section 22, shall be proportionately adjusted so that the number
      of Rights thereafter associated with each Common Share following any such event
      shall equal the result obtained by multiplying the number of Rights associated
      with each Common Share immediately prior to such event by a fraction, the
      numerator of which shall be the total number of Common Shares outstanding
      immediately prior to the occurrence of the event and the denominator of which
      shall be the total number of Common Shares outstanding immediately following
      the
      occurrence of such event. Alternatively, in lieu of adjusting the number of
      Rights associated with each Common Share, upon the occurrence of any of the
      events referred to in clauses (i), (ii) or (iii) above, the Company may provide
      that (a)
      the
      number of one one-thousandths of a share of Preferred Stock purchasable after
      such event upon proper exercise of each Right shall be determined by multiplying
      the number of one one-thousandths of a share of Preferred Stock so purchasable
      immediately prior to such event by a fraction, the numerator of which is the
      number of Common Shares of the Company outstanding immediately prior to such
      event and the denominator of which is the number of Common Shares of the Company
      outstanding immediately after such event, and (b) each Common Share of the
      Company outstanding immediately after such event shall have issued with respect
      to it that number of Rights which each Common Share of the Company outstanding
      immediately prior to such event had issued with respect to it. 

     

    The
      adjustments provided for in this Section 11.15 shall be made successively
      whenever such a dividend is declared or paid or such a subdivision, combination
      or consolidation is effected.

    


    Section
      12.
      Certificate of Adjusted Purchase Price or Number of Shares.
      Whenever an adjustment is made as provided in Sections 11 or 13, 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
      Common Shares or the Preferred Shares a copy of such certificate and (c) mail
      a
      brief summary thereof to each holder of a Right Certificate in accordance with
      Section 25. The Rights Agent shall be fully protected in relying on any such
      certificate and on any adjustment therein contained and shall not be deemed
      to
      have knowledge of any such adjustment unless and until it shall have received
      such certificate.

     

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

     

    13.1.
      Certain Transactions.
      In the
      event that, from and after the first occurrence of a Trigger Event, directly
      or
      indirectly, (A) the Company shall consolidate with, or merge with and into,
      any
      other Person and the Company shall not be the continuing or surviving
      corporation, (B) any Person shall consolidate with the Company, or merge with
      and into the Company and the Company shall be the continuing or surviving
      corporation of such merger and, in connection with such merger, all or part
      of
      the Common Shares shall be changed into or exchanged for stock or other
      securities of the Company or any other Person or cash or any other property,
      or
      (C) the Company shall sell, exchange, mortgage or otherwise transfer (or one
      or
      more of its Subsidiaries shall sell, exchange, mortgage or otherwise transfer),
      in one or more transactions, assets or earning power aggregating 50% or more
      of
      the assets or earning power of the Company and its Subsidiaries (taken as a
      whole) to any other Person or Persons (other than the Company or one or more
      wholly-owned Subsidiaries of the Company in one or more transactions each of
      which complies with Section 11.14), then, and in each such case, proper
      provision shall be made so that (i) each holder of a Right (other than Rights
      which have become null and void pursuant to Section 11.1.2) shall thereafter
      have the right to receive, upon the exercise thereof at a price per Right equal
      to the then current Purchase Price multiplied by the number of one
      one-thousandths of a Preferred Share for which a Right was exercisable
      immediately prior to the first occurrence of a Trigger Event (as subsequently
      adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in
      accordance with the terms of this Agreement and in lieu of Preferred Shares
      or
      Common Shares, such number of validly authorized and issued, fully paid,
      non-assessable and freely tradable Common Shares of the Principal Party (as
      such
      term is hereinafter defined) not subject to any liens, encumbrances,


     

    
      
        
        

      

      
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    rights
      of
      first refusal or other adverse claims, as shall be equal to the result obtained
      by (x) multiplying the then current Purchase Price by the number of one
      one-thousandths of a Preferred Share for which a Right was exercisable
      immediately prior to the first occurrence of a Trigger Event (as subsequently
      adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12) and
      (y)
      dividing that product by 50% of the then current per share market price of
      the
      Common Shares of such Principal Party (determined pursuant to Section 11.4)
      on
      the date of consummation of such consolidation, merger, sale or
      transfer;
      provided,
      that
      the price per Right so payable and the number of Common Shares of such Principal
      Party so receivable upon exercise of a Right shall thereafter be subject to
      further adjustment as appropriate in accordance with Section 11.6 to reflect
      any
      events covered thereby occurring in respect of the Common Shares of such
      Principal Party after the occurrence of such consolidation, merger, sale or
      transfer; (ii) such Principal Party shall thereafter be liable for, and shall
      assume, by virtue of such consolidation, merger, sale or transfer, all the
      obligations and duties of the Company pursuant to this Agreement; (iii) the
      term
“Company” shall thereafter be deemed to refer to such Principal Party; and (iv)
      such Principal Party shall take such steps (including, but not limited to,
      the
      reservation of a sufficient number of its Common Shares in accordance with
      Section 9) in connection with such consummation as may be necessary to assure
      that the provisions hereof shall thereafter be applicable, as nearly as
      reasonably may be, in relation to its Common Shares thereafter deliverable
      upon
      the exercise of the Rights;
      provided
      that,
      upon the subsequent occurrence of any consolidation, merger, sale or transfer
      of
      assets or other extraordinary transaction in respect of such Principal Party,
      each holder of a Right shall thereupon be entitled to receive, upon exercise
      of
      a Right and payment of the Purchase Price as provided in this Section 13.1,
      such
      cash, shares, rights, warrants and other property which such holder would have
      been entitled to receive had such holder, at the time of such transaction,
      owned
      the Common Shares of the Principal Party receivable upon the exercise of a
      Right
      pursuant to this Section 13.1, and such Principal Party shall take such steps
      (including, but not limited to, reservation of shares of stock) as may be
      necessary to permit the subsequent exercise of the Rights in accordance with
      the
      terms hereof for such cash, shares, rights, warrants and other property. The
      Company shall not consummate any such consolidation, merger, sale or transfer
      unless prior thereto the Company and such Principal Party shall have executed
      and delivered to the Rights Agent a supplemental agreement confirming that
      the
      requirements of this Section 13.1 and Section 13.2 shall promptly be performed
      in accordance with their terms and that such consolidation, merger, sale or
      transfer of assets shall not result in a default by the Principal Party under
      this Agreement as the same shall have been assumed by the Principal Party
      pursuant to this Section 13.1 and Section 13.2 and providing that, as soon
      as
      practicable after executing such agreement pursuant to this Section 13, the
      Principal Party, at its own expense, shall

     

    (1)
      prepare and file a registration statement under the Securities Act, if
      necessary, with respect to the Rights and the securities purchasable upon
      exercise of the Rights on an appropriate form, use its best efforts to cause
      such registration statement to become effective as soon as practicable after
      such filing and use its best efforts to cause such registration statement to
      remain effective (with a prospectus at all times meeting the requirements of
      the
      Securities Act) until the Expiration Date and similarly comply with applicable
      state securities laws;

     

    
      
        
        

      

      
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    (2)
      use
      its best efforts to cause the Rights and the securities receivable upon exercise
      of the Rights to be listed or admitted for trading on a national securities
      exchange or such other system then in use;

     

    (3)
      deliver to holders of the Rights historical financial statements for the
      Principal Party which comply in all respects with the requirements for
      registration on Form 10 (or any successor form) under the Exchange Act;
      and

     

    (4)
      obtain waivers of any rights of first refusal or preemptive rights in respect
      of
      the Common Shares of the Principal Party subject to purchase upon exercise
      of
      outstanding Rights.

     

    In
      case
      the Principal Party has provision in any of its authorized securities or in
      its
      certificate of incorporation or by-laws or other instrument governing its
      corporate affairs, which provision would have the effect of (i) causing such
      Principal Party to issue (other than to holders of Rights pursuant to this
      Section 13), in connection with, or as a consequence of, the consummation of
      a
      transaction referred to in this Section 13, Common Shares or common stock
      equivalents of such Principal Party at less than the then current market price
      per share thereof (determined pursuant to Section 11.4) or securities
      exercisable for, or convertible into, Common Shares or common stock equivalents
      of such Principal Party at less than such then current market price (other
      than
      to holders of Rights pursuant to this Section 13), or (ii) providing for any
      special payment, taxes or similar provision in connection with the issuance
      of
      the Common Shares of such Principal Party pursuant to the provision of Section
      13, then, in such event, the Company hereby agrees with each holder of Rights
      that it shall not consummate any such transaction unless prior thereto the
      Company and such Principal Party shall have executed and delivered to the Rights
      Agent a supplemental agreement providing that the provision in question of
      such
      Principal Party shall have been canceled, waived or amended, or that the
      authorized securities shall be redeemed, so that the applicable provision will
      have no effect in connection with, or as a consequence of, the consummation
      of
      the proposed transaction.

     

    The
      Company covenants and agrees that it shall not, at any time after the Trigger
      Event, enter into any transaction of the type described in clauses (A) through
      (C) of this Section 13.1 if (i) at the time of or immediately after such
      consolidation, merger, sale, transfer or other transaction there are any rights,
      warrants or other instruments or securities outstanding or agreements in effect
      which would substantially diminish or otherwise eliminate the benefits intended
      to be afforded by the Rights, (ii) prior to, simultaneously with or immediately
      after such consolidation, merger, sale, transfer or other transaction, the
      stockholders of the Person who constitutes, or would constitute, the Principal
      Party for purposes of Section 13.2 shall have received a distribution of Rights
      previously owned by such Person or any of its Affiliates or Associates or (iii)
      the form or nature of organization of the Principal Party would preclude or
      limit the exercisability of the Rights. The provisions of this Section 13 shall
      similarly apply to successive transactions of the type described in clauses
      (A)
      through (C) of this Section 13.1.

     

    13.2.
      Principal Party.
      “Principal
      Party”
shall
      mean:

     

    (i)
      in
      the case of any transaction described in (A) or (B) of the first sentence of
      Section 13.1: (i) the Person that is the issuer of the securities into which
      the
      Common Shares are converted in such merger or consolidation, or, if there is
      more than one such issuer, the issuer the Common Shares of which have the
      greatest aggregate market value of shares outstanding, or (ii) if no securities
      are so issued, (x) the Person that is the other party to the merger, if such
      Person survives said merger, or, if there is more than one such Person, the
      Person the Common Shares of which have the greatest aggregate market value
      of
      shares outstanding or (y) if the Person that is the other party to the merger
      does not survive the merger, the Person that does survive the merger (including
      the Company if it survives) or (z) the Person resulting from the consolidation;
      and

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (ii)
      in
      the case of any transaction described in (C) of the first sentence in Section
      13.1, the Person that is the party receiving the greatest portion of the assets
      or earning power transferred pursuant to such transaction or transactions,
      or,
      if each Person that is a party to such transaction or transactions receives
      the
      same portion of the assets or earning power so transferred or if the Person
      receiving the greatest portion of the assets or earning power cannot be
      determined, whichever of such Persons is the issuer of Common Shares having
      the
      greatest aggregate market value of shares outstanding;
      provided, however
      , that
      in any such case described in the foregoing clause (i) or (ii) of this Section
      13.2, if the Common Shares of such Person are not at such time or have not
      been
      continuously over the preceding 12-month period registered under Section 12
      of
      the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary
      of
      another Person the Common Shares of which are and have been so registered,
      the
      term “Principal Party” shall refer to such other Person, or (2) if such Person
      is a Subsidiary, directly or indirectly, of more than one Person, the Common
      Shares of all of which are and have been so registered, the term “Principal
      Party” shall refer to whichever of such Persons is the issuer of Common Shares
      having the greatest aggregate market value of shares outstanding, or (3) if
      such
      Person is owned, directly or indirectly, by a joint venture formed by two or
      more Persons that are not owned, directly or indirectly, by the same Person,
      the
      rules set forth in clauses (1) and (2) above shall apply to each of the owners
      having an interest in the venture as if the Person owned by the joint venture
      was a Subsidiary of both or all of such joint venturers, and the Principal
      Party
      in each such case shall bear the obligations set forth in this Section 13 in
      the
      same ratio as its interest in such Person bears to the total of such
      interests.

     

    13.3.
      Approved Acquisitions.
      Notwithstanding anything contained herein to the contrary, upon the consummation
      of any merger or other acquisition transaction of the type described in clause
      (A), (B) or (C) of Section 13.1 involving the Company pursuant to a merger
      or
      other acquisition agreement between the Company and any Person (or one or more
      of such Person’s Affiliates or Associates) which agreement has been approved by
      the Board of Directors of the Company prior to any Person becoming an Acquiring
      Person, this Agreement and the rights of holders of Rights hereunder shall
      be
      terminated in accordance with Section 7.1.

     

    Section
      14.
      Fractional Rights and Fractional Shares.

     

    14.1.
      Cash
      in Lieu of Fractional Rights.
      The
      Company shall not be required to issue fractions of Rights or to distribute
      Right Certificates which evidence fractional Rights (except prior to the
      Distribution Date in accordance with Section 11.15). In lieu of such fractional
      Rights, there shall be paid to the registered holders of the Right Certificates
      with regard to which such fractional Rights would otherwise be issuable an
      amount in cash equal to the same fraction of the current market value of a
      whole
      Right. For the purposes of this Section 14.1, the current market value of a
      whole Right shall be the closing price of the Rights for the Trading Day
      immediately prior to the date on which such fractional Rights would have been
      otherwise issuable. The closing price for any day shall be the last sale price,
      regular way, or, in case no such sale takes place on such day, the average
      of
      the closing bid and asked prices, regular way, in either case as reported in
      the
      principal consolidated transaction reporting system with respect to securities
      listed or admitted to trading on the New York Stock Exchange or, if the Rights
      are not listed or admitted to trading on the New York Stock Exchange, as
      reported in the principal consolidated transaction reporting system with respect
      to securities listed on the principal national securities exchange on which
      the
      Rights are listed or admitted to trading or, if the Rights are not listed or
      admitted to trading on any national securities exchange, the last quoted price
      or, if not so quoted, the average of the high bid and low asked prices in the
      over-the-counter market, as reported by the OTC Bulletin Board or such other
      system then in use or, if on any such date the Rights are not quoted by any
      such
      organization, the average of the closing bid and asked prices as furnished
      by a
      professional market maker making a market in the Rights selected by the Board
      of
      Directors of the Company. If on any such date no such market maker is making
      a
      market in the Rights, the current market value of the Rights on such date shall
      be the fair value of the Rights as determined in good faith by the Board of
      Directors of the Company, or, if at the time of such determination there is
      an
      Acquiring Person, by a nationally recognized investment banking firm selected
      by
      the Board of Directors of the Company, which shall have the duty to make such
      determination in a reasonable and objective manner, which determination shall
      be
      described in a statement filed with the Rights Agent and shall be conclusive
      for
      all purposes.

     

    
      
        
        

      

      
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    14.2.
      Cash
      in Lieu of Fractional Preferred Shares.
      The
      Company shall not be required to issue fractions of Preferred Shares (other
      than
      fractions which are integral multiples of one one-thousandth of a Preferred
      Share) upon exercise or exchange of the Rights or to distribute certificates
      which evidence fractional Preferred Shares (other than fractions which are
      integral multiples of one one-thousandth of a Preferred Share). Interests in
      fractions of Preferred Shares in integral multiples of one one-thousandth of
      a
      Preferred Share may, at the election of the Company, be evidenced by depository
      receipts, pursuant to an appropriate agreement between the Company and a
      depository selected by it;
      provided,
      that
      such agreement shall provide that the holders of such depository receipts shall
      have all the rights, privileges and preferences to which they are entitled
      as
      beneficial owners of the Preferred Shares represented by such depository
      receipts. In lieu of fractional Preferred Shares that are not integral multiples
      of one one-thousandth of a Preferred Share, the Company shall pay to the
      registered holders of Right Certificates at the time such Rights are exercised
      or exchanged as herein provided an amount in cash equal to the same fraction
      of
      the current per share market price of one Preferred Share (as determined in
      accordance with Section 14.1) for the Trading Day immediately prior to the
      date
      of such exercise or exchange.

     

    14.3.
      Cash
      in Lieu of Fractional Common Shares.
      The
      Company shall not be required to issue fractions of Common Shares or to
      distribute certificates which evidence fractional Common Shares upon the
      exercise or exchange of Rights. In lieu of such fractional Common Shares, the
      Company shall pay to the registered holders of the Right Certificates with
      regard to which such fractional Common Shares would otherwise be issuable an
      amount in cash equal to the same fraction of the current market value of a
      whole
      Common Share (as determined in accordance with Section 14.1) for the Trading
      Day
      immediately prior to the date of such exercise or exchange.

     

    14.4.
      Waiver of Right to Receive Fractional Rights or Shares.
      The
      holder of a Right by the acceptance of the Rights expressly waives his right
      to
      receive any fractional Rights or any fractional shares upon exercise or exchange
      of a Right, except as permitted by this Section 14.

     

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

     

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

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

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

     

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


     

    (c)
      the
      Company and the Rights Agent may deem and treat the Person in whose name the
      Right Certificate (or, prior to the Distribution Date, the associated Common
      Shares certificate) is registered as the absolute owner thereof and of the
      Rights evidenced thereby (notwithstanding any notations of ownership or writing
      on the Right Certificates or the associated Common Shares certificate made
      by
      anyone other than the Company or the Rights Agent) for all purposes whatsoever,
      and neither the Company nor the Rights Agent shall be affected by any notice
      to
      the contrary; 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 the 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
      obligations;
      provided that
      the
      Company must use its best efforts to have any such order, decree or ruling
      lifted or otherwise overturned as soon as possible.

     

    Section
      17.
      Right
      Certificate Holder Not Deemed a Stockholder.
      No
      holder, as such, of any Right Certificate shall be entitled to vote, receive
      dividends or be deemed for any purpose the holder of the Preferred Shares or
      any
      other securities of the Company which may at any time be issuable on the
      exercise of the Rights represented thereby, nor shall anything contained herein
      or in any Right Certificate be construed to confer upon the holder of any Right
      Certificate, as such, any of the rights of a stockholder of the Company or
      any
      right to vote for the election of directors or upon any matter submitted to
      stockholders at any meeting thereof, or to give or withhold consent to any
      corporate action, or to receive notice of meetings or other actions affecting
      stockholders (except as provided in Section 24), or to receive dividends or
      subscription rights, or otherwise, until the Right or Rights evidenced by such
      Right Certificate shall have been exercised in accordance with the provisions
      hereof.

     

    Section
      18.
      Concerning the Rights Agent.
      The
      Company agrees to pay to the Rights Agent as full compensation for the services
      rendered by it hereunder such amount as
      shall
      be agreed to in writing between the Company and the Rights Agent and,
      from
      time to time and on demand of the Rights Agent, its reasonable expenses and
      counsel fees 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 or
      expense, incurred without negligence, bad faith or willful misconduct on the
      part of the Rights Agent, for any action taken, suffered or omitted by the
      Rights Agent in connection with the acceptance and administration of this
      Agreement, including, without limitation, the costs and expenses of defending
      against any claim of liability arising therefrom, directly or
      indirectly.

     

    The
      Rights Agent shall be protected and shall incur no liability for or in respect
      of any action taken, suffered or omitted by it in connection with its acceptance
      and administration of this Agreement in reliance upon any Right Certificate
      or
      certificate for the Preferred Shares or the Common Shares or for other
      securities of the Company, instrument of assignment or transfer, power of
      attorney, endorsement, affidavit, letter, notice, instruction, 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.

     

    
      
        
        

      

      
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    Section
      19.
      Merger or Consolidation or Change of Name of Rights Agent.
      Any
      Person into which the Rights Agent or any successor Rights Agent may be merged
      or with which it may be consolidated, or Person resulting from any merger 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
      that
      such Person would be eligible for appointment as a successor Rights Agent under
      the provisions of Section 21. In case at the time such successor Rights Agent
      shall succeed to the agency created by this Agreement, any of the Right
      Certificates shall have been countersigned but not delivered, any such successor
      Rights Agent may adopt the countersignature of the predecessor Rights Agent
      and
      deliver such Right Certificates so countersigned; and in case at that time
      any
      of the Right Certificates shall not have been countersigned, any successor
      Rights Agent may countersign such Right Certificates either in the name of
      the
      predecessor Rights Agent or in the name of the successor Rights Agent; and
      in
      all such cases such Right Certificates shall have the full force provided in
      the
      Right Certificates and in this Agreement.

     

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

    


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

     

    20.1.
      Legal
      Counsel.
      The
      Rights Agent may consult with legal counsel selected by it (who may be legal
      counsel for the Company), and the opinion of such counsel shall be full and
      complete authorization and protection to the Rights Agent as to any action
      taken, suffered or omitted by it in good faith and in accordance with such
      opinion.

     

    20.2.
      Certificates as to Facts or Matters.
      Whenever in the performance of its duties under this Agreement the Rights Agent
      shall deem it necessary or desirable that any fact or matter be proved or
      established by the Company prior to taking, 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 any one of the Chairman of the Board
      of
      Directors, the Chief Executive Officer, the President, the Chief Financial
      Officer, any Vice President, the Treasurer, the Secretary or any Assistant
      Treasurer or Assistant Secretary of the Company and delivered to the Rights
      Agent; and such certificate shall be full authorization and protection to the
      Rights Agent for any action taken, suffered or omitted to be taken by it under
      the provisions of this Agreement in reliance upon such certificate.

     

    20.3.
      Standard of Care.
      The
      Rights Agent shall be liable hereunder only for its own negligence, bad faith
      or
      willful misconduct.

     

    20.4.
      Reliance on Agreement and Right Certificates.
      The
      Rights Agent shall not be liable for or by reason of any of the statements
      of
      fact or recitals contained in this Agreement or in the Right Certificates
      (except as to its countersignature thereof) or be required to verify the same,
      but all such statements and recitals are and shall be deemed to have been made
      by the Company only.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    20.5.
      No
      Responsibility as to Certain Matters.
      The
      Rights Agent shall not be under any responsibility in respect of the validity
      of
      this Agreement or the execution and delivery hereof (except the due execution
      hereof by the Rights Agent) or in respect of the validity or execution of any
      Right Certificate (except its countersignature thereof); nor shall it be
      responsible for any breach by the Company of any covenant or condition contained
      in this Agreement or in any Right Certificate; nor shall it be responsible
      for
      any change in the exercisability of the Rights (including the Rights becoming
      null and void pursuant to Section 11.1.2) or any adjustment required under
      the
      provisions of Sections 3, 11, 13, 23 or 27 or responsible for the manner, method
      or amount of any such adjustment or the ascertaining of the existence of facts
      that would require any such adjustment (except with respect to the exercise
      of
      Rights evidenced by Right Certificates after actual notice of any such change
      or
      adjustment); nor shall it by any act hereunder be deemed to make any
      representation or warranty as to the authorization or reservation of any
      Preferred Shares or other securities to be issued pursuant to this Agreement
      or
      any Right Certificate or as to whether any Preferred Shares will, when so
      issued, be validly authorized and issued, fully paid and
      nonassessable.

    


    20.6.
      Further Assurance by Company.
      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.

     

    20.7.
      Authorized Company Officers.
      The
      Rights Agent is hereby authorized and directed to accept instructions with
      respect to the performance of its duties hereunder from any one of the Chairman
      of the Board of Directors, the Chief Executive Officer, the President, the
      Chief
      Financial Officer, any Vice President, the Treasurer, the Secretary or any
      Assistant Treasurer or Assistant Secretary of the Company, and to apply to
      such
      officers for advice or instructions in connection with its duties under this
      Agreement, and such instructions shall be full authorization and protection
      to
      the Rights Agent for any action taken, suffered or omitted to be taken by it
      in
      good faith in accordance with instructions of any such officer or for any delay
      in acting while waiting for these instructions. Any application by the Rights
      Agent for written instructions from the Company may, at the option of the Rights
      Agent, set forth in writing any action proposed to be taken or omitted by the
      Rights Agent with respect to its duties or obligations under this Agreement
      and
      the date on and/or after which such action shall be taken or such omission
      shall
      be effective. The Rights Agent shall not be liable to the Company for any action
      taken by, or omission of, the Rights Agent in accordance with a proposal
      included in any such application on or after the date specified therein (which
      date shall not be less than three business days after the date any such officer
      actually receives such application, unless any such officer shall have consented
      in writing to an earlier date) unless, prior to taking of any such action (or
      the effective date in the case of omission), the Rights Agent shall have
      received written instructions in response to such application specifying the
      action to be taken or omitted.

     

    20.8.
      Freedom to Trade in Company Securities.
      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 though it were not Rights Agent under
      this
      Agreement. Nothing herein shall preclude the Rights Agent from acting in any
      other capacity for the Company or for any other Person.

     

    20.9.
      Reliance on Attorneys and Agents.
      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, omission, default, neglect or misconduct of any such attorneys or agents
      or
      for any loss to the Company resulting from any such act, omission, default,
      neglect or misconduct,
      provided
      that
      reasonable care was exercised in the selection and continued employment
      thereof.

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    20.10.
      Incomplete Certificate.
      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 not been completed to certify the holder is not an Acquiring Person
      (or
      an Affiliate or Associate thereof), the Rights Agent shall not take any further
      action with respect to such requested exercise or transfer without first
      consulting with the Company.

    


    20.11.
      Rights Holders List.
      At any
      time and from time to time after the Distribution Date, upon the request of
      the
      Company, the Rights Agent shall promptly deliver to the Company a list, as
      of
      the most recent practicable date (or as of such earlier date as may be specified
      by the Company), of the holders of record of Rights.

     

    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 Shares and/or Preferred
      Shares, as applicable, by registered or certified mail. Following the
      Distribution Date, the Company shall promptly notify the holders of the Right
      Certificates by first-class mail of any such resignation. 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 Shares and/or Preferred Shares,
      as
      applicable, by registered or certified mail, and to the holders of the Right
      Certificates by first-class mail. If the Rights Agent shall resign or be removed
      or shall otherwise become incapable of acting, the resigning, removed, or
      incapacitated Rights Agent shall remit to the Company, or to any successor
      Rights Agent designated by the Company, all books, records, funds, certificates
      or other documents or instruments of any kind then in its possession which
      were
      acquired by such resigning, removed or incapacitated Rights Agent in connection
      with its services as Rights Agent hereunder, and shall thereafter be discharged
      from all duties and obligations hereunder. Following notice of such removal,
      resignation or incapacity, the Company shall appoint a successor to such Rights
      Agent. If the Company shall fail to make such appointment within a period of
      thirty (30) days after giving notice of such removal or after it has been
      notified in writing of such resignation or incapacity by the resigning or
      incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
      with such notice, submit his Right Certificate for inspection by the Company),
      then the registered holder of any Right Certificate may apply to any court
      of
      competent jurisdiction for the appointment of a new Rights Agent. Any successor
      Rights Agent, whether appointed by the Company or by such a court, shall be
      an
      entity organized and doing business under the laws of the United States, in
      good
      standing, which is authorized under such laws to exercise stock transfer or
      corporate trust powers and is subject to supervision or examination by Federal
      or state authority and which has individually or combined with an affiliate
      at
      the time of its appointment as Rights Agent a combined capital and surplus
      of at
      least $50 million. After appointment, the successor Rights Agent shall be vested
      with the same powers, rights, duties and responsibilities as if it had been
      originally named as Rights Agent without further act or deed; but the
      predecessor Rights Agent shall deliver and transfer to the successor Rights
      Agent any property at the time held by it hereunder, and execute and deliver
      any
      further assurance, conveyance, act or deed necessary for the purpose. Not later
      than the effective date of any such appointment the Company shall file notice
      thereof in writing with the predecessor Rights Agent and each transfer agent
      of
      the Common Shares and/or Preferred Shares, as applicable, and, following the
      Distribution Date, mail a notice thereof in writing to the registered holders
      of
      the Right Certificates. Failure to give any notice provided for in this Section
      21, however, or any defect therein, shall not affect the legality or validity
      of
      the resignation or removal of the Rights Agent or the appointment of the
      successor Rights Agent, as the case may be.

     

    
      
        
        

      

      
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    Section
      22.
      Issuance of New Right Certificates.
      Notwithstanding any of the provisions of this Agreement or of the Rights to
      the
      contrary, the Company may, at its option, issue new Right Certificates
      evidencing Rights in such form as may be approved by its Board of Directors
      to
      reflect any adjustment or change in the Purchase Price and the number or kind
      or
      class of shares or other securities or property purchasable under the Right
      Certificates made in accordance with the provisions of this Agreement. In
      addition, in connection with the issuance or sale of Common Shares following
      the
      Distribution Date and prior to the Expiration Date, the Company shall, with
      respect to Common Shares so issued or sold pursuant to the exercise of stock
      options or under any employee plan or arrangement, granted or awarded, or upon
      exercise, conversion or exchange of securities hereinafter issued by the
      Company, in each case existing prior to the Distribution Date, issue Right
      Certificates representing the appropriate number of Rights in connection with
      such issuance or sale;
      provided, however
      , that
      (i) no such Right Certificate shall be issued if, and to the extent that, the
      Company shall be advised by counsel that such issuance would create a
      significant risk of material adverse tax consequences to the Company or the
      Person to whom such Right Certificate would be issued and (ii) no such Right
      Certificate shall be issued if, and to the extent that, appropriate adjustment
      shall otherwise have been made in lieu of the issuance thereof.

     

    Section
      23.
      Redemption.

     

    23.1.
      Right
      to Redeem.
      The
      Board of Directors of the Company may, at its option, at any time prior to
      a
      Trigger Event, redeem all but not less than all of the then outstanding Rights
      at a redemption price of $0.0005 per Right, appropriately adjusted to reflect
      any stock split, stock dividend, recapitalization or similar transaction
      occurring after the date hereof (such redemption price being hereinafter
      referred to as the “Redemption
      Price”),
      and
      the Company may, at its option, pay the Redemption Price in Common Shares (based
      on the “current per share market price,” determined pursuant to Section 11.4, of
      the Common Shares at the time of redemption), cash or any other form of
      consideration deemed appropriate by the Board of Directors. The redemption
      of
      the Rights by the Board of Directors may be made effective at such time, on
      such
      basis and subject to such conditions as the Board of Directors in its sole
      discretion may establish. 

     

    23.2.
      Redemption Procedures.
      Immediately upon the action of the Board of Directors of the Company ordering
      the redemption of the Rights (or at such later time as the Board of Directors
      may establish for the effectiveness of such redemption), 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. The Company shall promptly give public
      notice of such redemption;
      provided, however,
      that
      the failure to give, or any defect in, any such notice shall not affect the
      validity of such redemption. The Company shall promptly give, or cause the
      Rights Agent to give, notice of such redemption to the holders of the then
      outstanding Rights by mailing such notice to all such holders at their last
      addresses as they appear upon the registry books of the Rights Agent or, prior
      to the Distribution Date, on the registry books of the transfer agent for the
      Common Shares. Any notice which is mailed in the manner herein provided shall
      be
      deemed given, whether or not the holder receives the notice. Each such notice
      of
      redemption shall state the method by which the payment of the Redemption Price
      will be made. Neither the Company nor any of its Affiliates or Associates may
      redeem, acquire or purchase for value any Rights at any time in any manner
      other
      than that specifically set forth in this Section 23 or in Section 27, and other
      than in connection with the purchase, acquisition or redemption of Common Shares
      prior to the Distribution Date. 

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    Section
      24.
      Notice of Certain Events.
      In case
      the Company shall propose at any time after the earlier of the Shares
      Acquisition Date and the Distribution Date (a) to pay any dividend payable
      in
      stock of any class to the holders of Preferred Shares or to make any other
      distribution to the holders of Preferred Shares (other than a stock dividend
      on,
      or a subdivision, combination or reclassification of the Common Shares), or
      (b)
      to offer to the holders of Preferred Shares rights, options or warrants to
      subscribe for or to purchase any additional Preferred Shares or shares of stock
      of any class or any other securities, rights, options or warrants, or (c) to
      effect any reclassification of its Preferred Shares (other than a
      reclassification involving only the subdivision of outstanding Preferred
      Shares), or (d) to effect any consolidation or merger into or with, or to effect
      any sale or other transfer (or to permit one or more of its Subsidiaries to
      effect any sale or other transfer), in one or more transactions, of 50% or
      more
      of the assets or earning power of the Company and its Subsidiaries (taken as
      a
      whole) to, any other Person (other than pursuant to a merger or other
      acquisition agreement of the type described in Section 1.3(ii)(A)(z)), or (e)
      to
      effect the liquidation, dissolution or winding up of the Company, or (f) to
      declare or pay any dividend on the Common Shares payable in Common Shares or
      to
      effect a subdivision, combination or consolidation of the Common Shares (by
      reclassification or otherwise than by payment of dividends in Common Shares),
      then, in each such case, the Company shall give to the Rights Agent and to
      each
      holder of a Right Certificate, in accordance with Section 25, a notice of such
      proposed action, which shall specify the record date for the purposes of such
      stock dividend, distribution of rights or warrants, or the date on which such
      reclassification, consolidation, merger, sale, transfer, liquidation,
      dissolution, or winding up is to take place and the date of participation
      therein by the holders of the Preferred Shares and/or Common Shares, if any
      such
      date is to be fixed, and such notice shall be so given in the case of any action
      covered by clause (a) or (b) above at least ten (10) days prior to the record
      date for determining holders of the Preferred Shares for purposes of such
      action, and in the case of any such other action, at least ten (10) days prior
      to the date of the taking of such proposed action or the date of participation
      therein by the holders of the Preferred Shares and/or Common Shares, whichever
      shall be the earlier.

     

    In
      case
      any event set forth in Section 11.1.2 or Section 13 shall occur, then, in any
      such case, (i) the Company shall as soon as practicable thereafter give to
      the
      Rights Agent and to each holder of a Right Certificate, in accordance with
      Section 25, a notice of the occurrence of such event, which notice shall
      describe the event and the consequences of the event to holders of Rights under
      Section 11.1.2 and Section 13, and (ii) all references in this Section 24 to
      Preferred Shares shall be deemed thereafter to refer to Common Shares and/or,
      if
      appropriate, other securities.

     

    Notwithstanding
      anything in this Agreement to the contrary, prior to the Distribution Date
      a
      filing by the Company with the Securities and Exchange Commission shall
      constitute sufficient notice to the holders of securities of the Company,
      including the Rights, for purposes of this Agreement and no other notice need
      be
      given.

     

    Section
      25.
      Notices.
      Notices
      or demands authorized by this Agreement to be given or made by the Rights Agent
      or by the holder of any Right Certificate to or on the Company shall be
      sufficiently given or made if sent by first-class mail, postage prepaid,
      addressed (until another address is filed in writing with the Rights Agent)
      or
      by facsimile transmission as follows:

     

    SyntheMed,
      Inc.

    200
      Middlesex Essex Turnpike, Suite 210

    Iselin,
      New Jersey 08830

    Attention:
      Chief Financial Officer

    Facsimile
      No.: (732) 404-1118

     

    Subject
      to the provisions of Section 21 and Section 24, any notice or demand authorized
      by this Agreement to be given or made by the Company or by the holder of any
      Right Certificate to or on the Rights Agent shall be sufficiently given or
      made
      if sent by first-class mail, postage prepaid, addressed (until another address
      is filed in writing with the Company) or by facsimile transmission as
      follows:

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    American
      Stock Transfer & Trust Company

    59
      Maiden
      Lane 

    New
      York,
      NY 10038 

    Facsimile
      No. (718) 236-4588 

    Attention:
      Executive Vice President

     

    Notices
      or demands authorized by this Agreement to be given or made by the Company
      or
      the Rights Agent to the holder of any Right Certificate (or, prior to the
      Distribution Date, to the holder of any certificate representing Common Shares)
      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
      26.
      Supplements and Amendments.
      For so
      long as the Rights are then redeemable, the Company may in its sole and absolute
      discretion, and the Rights Agent shall, if the Company so directs, supplement
      or
      amend any provision of this Agreement in any respect without the approval of
      any
      holders of Rights or Common Shares. From and after the time that the Rights
      are
      no longer redeemable, the Company may, and the Rights Agent shall, if the
      Company so directs, from time to time supplement or amend this Agreement without
      the approval of any holders of Rights (i) to cure any ambiguity or to correct
      or
      supplement any provision contained herein which may be defective or inconsistent
      with any other provisions herein or (ii) to make any other changes or provisions
      in regard to matters or questions arising hereunder which the Company may deem
      necessary or desirable, including but not limited to extending the Final
      Expiration Date;
      provided, however,
      that no
      such supplement or amendment shall adversely affect the interests of the holders
      of Rights as such (other than an Acquiring Person or an Affiliate or Associate
      of an Acquiring Person), and no such supplement or amendment may cause the
      Rights again to become redeemable or cause this Agreement again to become
      amendable other than in accordance with this sentence;
      provided further,
      that
      the right of the Board of Directors to extend the Distribution Date shall not
      require any amendment or supplement hereunder. 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
      26, the Rights Agent shall execute such supplement or amendment. Without
      limiting the foregoing, at any time prior to such time as any Person becomes
      an
      Acquiring Person, the Company and the Rights Agent may amend this Agreement
      to
      lower the thresholds set forth in Sections 1.1 and 3.1 to not less than 10%
      (the
“Reduced Threshold”); provided,
      that no
      Person who beneficially owns a number of Common Shares equal to or greater
      than
      the Reduced Threshold shall become an Acquiring Person unless such Person (other
      than an Exempt Person) shall, after the public announcement of the Reduced
      Threshold, increase its beneficial ownership of the then outstanding Common
      Shares (other than as a result of an acquisition of Common Shares by the
      Company) to an amount equal to or greater than the greater of (i) the Reduced
      Threshold or (ii) the sum of (x) the lowest beneficial ownership of such Person
      as a percentage of the outstanding Common Shares as of any date on or after
      the
      date of the public announcement of such Reduced Threshold plus (y) .001%.


    


    Section
      27.
      Exchange.

     

    27.1.
      Exchange of Common Shares for Rights.
      The
      Board of Directors of the Company may, at its option, at any time after the
      occurrence of a Trigger Event, exchange Common Shares for all or part of the
      then outstanding and exercisable Rights (which shall not include Rights that
      have become null and void pursuant to the provisions of Section 11.1.2) by
      exchanging at an exchange ratio of one Common Share per Right, appropriately
      adjusted to reflect any stock split, stock dividend or similar transaction
      occurring after the date hereof (such amount per Right being hereinafter
      referred to as the “Exchange
      Consideration”).
      Notwithstanding the foregoing, the Board of Directors shall not be empowered
      to
      effect such exchange at any time after any Acquiring Person shall have become
      the Beneficial Owner of 50% or more of the Common Shares then outstanding.
      From
      and after the occurrence of an event specified in Section 13.1, any Rights
      that
      theretofore have not been exchanged pursuant to this Section 27.1 shall
      thereafter be exercisable only in accordance with Section 13 and may not be
      exchanged pursuant to this Section 27.1. The exchange of the Rights by the
      Board
      of Directors may be made effective at such time, on such basis and with such
      conditions as the Board of Directors in its sole discretion may
      establish.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    27.2.
      Exchange Procedures.
      Immediately upon the action of the Board of Directors of the Company ordering
      the exchange for any Rights pursuant to Section 27.1 and without any further
      action and without any notice, the right to exercise such Rights shall terminate
      and the only right thereafter of the holders of such Rights shall be to receive
      the Exchange Consideration. The Company shall promptly give public notice of
      any
      such exchange;
      provided, however
      , that
      the failure to give, or any defect in, such notice shall not affect the validity
      of such exchange. The Company promptly shall mail a notice of any such exchange
      to all of the holders of such Rights at their last addresses as they appear
      upon
      the registry books of the Rights Agent. Any notice which is mailed in the manner
      herein provided shall be deemed given, whether or not the holder receives the
      notice. Each such notice of exchange shall state the method by which the
      exchange of the Common Shares for Rights will be effected and, in the event
      of
      any partial exchange, the number of Rights which will be exchanged. Any partial
      exchange shall be effected pro rata based on the number of Rights (other than
      the Rights that have become null and void pursuant to the provisions of Section
      11.1.2) held by each holder of Rights.

     

    27.3.
      Insufficient Shares.
      If
      there are not sufficient Common Shares issued but not outstanding or authorized
      but unissued to permit any exchange of Rights as contemplated in accordance
      with
      this Section 27, the Company will take all such action as may be necessary
      to authorize additional Common Shares for issuance upon exchange of the Rights.
      If the Company shall, after good faith effort, be unable to take all such action
      as may be necessary to authorize such additional Common Shares, the Company
      shall substitute, for each Common Share that would otherwise be issuable upon
      exchange of a Right, a number of Preferred Shares or fraction thereof (or
      equivalent preferred stock, as such term is defined in Section 11.2) such that
      the current per share market price of one Preferred Share (or equivalent
      preferred share) multiplied by such number or fraction is equal to the current
      per share market price of one Common Share (determined pursuant to Section
      11.4)
      as of the date of such exchange.

     

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

     

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

     

    Section
      30.
      Determination and Actions by the Board of Directors.
      The
      Board of Directors of the Company shall have the exclusive power and authority
      to administer this Agreement and to exercise the rights and powers specifically
      granted to the Board of Directors of the Company 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, without limitation, a determination
      to redeem or not redeem the Rights or amend this Agreement). All such actions,
      calculations, interpretations and determinations (including, for purposes of
      clause (y) below, all omissions with respect to the foregoing) that are done
      or
      made by the Board of Directors of the Company in good faith shall (x) be final,
      conclusive and binding on the Company, the Rights Agent, the holders of the
      Rights, as such, and all other Persons, and (y) not subject the Board of
      Directors to any liability to the holders of the Rights.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    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.

     

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

     

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

     

    Section
      34.
      Descriptive Heading.
      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.

    


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

     

    
      	
               

            	
               

            	
               

            
	
              SYNTHEMED,
                INC.

            
	
               

            	
               

            
	
              By:

            	
                

            	
              /s/
                Robert P.
                Hickey                             

            
	
              Name:

            	
                

            	
              Robert
                P. Hickey

            
	
              Title:

            	
                

            	
              President
                and Chief Executive Officer

            
	
               

            
	
              AMERICAN
                STOCK TRANSFER & TRUST COMPANY

            
	
               

            	
               

            
	
              By:

            	
                

            	
              /s/
                Herbert J.
                Lemmer                           
                

            
	
              Name:

            	
                

            	
              Herbert
                J. Lemmer 

            
	
              Title:

            	
                

            	
              Vice
                President

            


    

    


    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    


     

      
        

      

    

     

    EXHIBIT
      A

     

    FORM
      OF

     

    CERTIFICATE
      OF DESIGNATIONS

     

    of

     

    SERIES
      D
      JUNIOR PARTICIPATING PREFERRED STOCK

     

    of

     

    SYNTHEMED,
      INC.

     

    (Pursuant
      to Section 151 of the

    Delaware
      General Corporation Law)

     

    
      
        

      

    

     

    


     

    SyntheMed,
      Inc., a corporation organized and existing under the General Corporation Law
      of
      the State of Delaware (hereinafter called the “Corporation”),
      hereby certifies that the following resolution was adopted by the Board of
      Directors of the Corporation as required by Section 151 of the General
      Corporation Law at a meeting duly called and held on April 25,
      2008.

     

    RESOLVED,
      that pursuant to the authority granted to and vested in the Board of Directors
      of this Corporation (hereinafter called the “Board
      of Directors”
or
      the
“Board”)
      in
      accordance with the provisions of the Amended and Restated Certificate of
      Incorporation of this Corporation, the Board of Directors hereby creates a
      series of Preferred Stock, par value $0.01 per share (the “Preferred
      Stock”),
      of
      the Corporation and hereby states the designation and number of shares, and
      fixes the relative rights, powers and preferences, and qualifications,
      limitations and restrictions thereof as follows:

     

    Section
      1.
      Designation and Amount.
      The
      shares of such series shall be designated as “Series D Junior Participating
      Preferred Stock” (the “Series
      D Preferred Stock”)
      and
      the number of shares constituting the Series D Preferred Stock shall be 200,000.
      Such number of shares may be increased or decreased by resolution of the Board
      of Directors;
      provided
      , that
      no decrease shall reduce the number of shares of Series D 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 D Preferred Stock.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    Section
      2.
      Dividends and Distributions.

     

    (A)
      Subject to the prior and superior rights of the holders of any shares of any
      class or series of stock of this Corporation ranking prior and superior to
      the
      Series D Preferred Stock with respect to dividends, the holders of shares of
      Series D Preferred Stock, in preference to the holders of Common Stock, par
      value $0.001 per share (the “Common
      Stock”),
      of
      the Corporation, and of any other stock ranking junior to the Series D Preferred
      Stock, shall be entitled to receive, when, as and if declared by the Board
      of
      Directors out of funds legally available for the purpose, quarterly dividends
      payable in cash on the first day of March, June, September and December in
      each
      year (each such date being referred to herein as a “
      Quarterly Dividend Payment Date”),
      commencing on the first Quarterly Dividend Payment Date after the first issuance
      of a share or fraction of a share of Series D 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, 1,000 times
      the
      aggregate per share amount of all cash dividends, and 1,000 times the aggregate
      per share amount (payable in kind) of all non-cash dividends or other
      distributions, other than a dividend payable in shares of Common Stock or a
      subdivision of the outstanding shares of Common Stock (by reclassification
      or
      otherwise), declared on the Common Stock since the immediately preceding
      Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
      Payment Date, since the first issuance of any share or fraction of a share
      of
      Series D Preferred Stock. In the event the Corporation shall at any time declare
      or pay any dividend on the Common Stock payable in shares of Common Stock,
      or
      effect a subdivision, combination or consolidation of the outstanding shares
      of
      Common Stock (by reclassification or otherwise than by payment of a dividend
      in
      shares of Common Stock) into a greater or lesser number of shares of Common
      Stock, then in each such case the amount to which holders of shares of Series
      D
      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 D Preferred
      Stock as provided in paragraph (A) of this Section 2 immediately after it
      declares a dividend or distribution on the Common Stock (other than a dividend
      payable in shares of Common Stock);
      provided
      that, in
      the event no dividend or distribution shall have been declared on the Common
      Stock during the period between any Quarterly Dividend Payment Date and the
      next
      subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on
      the
      Series D 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 D Preferred Stock from the Quarterly Dividend Payment Date next preceding
      the date of issue of such shares, unless the date of issue of such shares is
      prior to the record date for the first Quarterly Dividend Payment Date, in
      which
      case dividends on such shares shall begin to accrue from the date of issue
      of
      such shares, or unless the date of issue is a Quarterly Dividend Payment Date
      or
      is a date after the record date for the determination of holders of shares
      of
      Series D 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 D 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 D Preferred Stock entitled to receive payment
      of
      a dividend or distribution declared thereon, which record date shall be not
      more
      than 60 days prior to the date fixed for the payment thereof.

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

    


    


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

     

    (iii)
      redeem or purchase or otherwise acquire for consideration shares of any stock
      ranking junior (either as to dividends or upon liquidation, dissolution or
      winding up) to the Series D 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
      (both as to dividends and upon dissolution, liquidation or winding up) to the
      Series D Preferred Stock; or

     

    (iv)
      redeem or purchase or otherwise acquire for consideration any shares of Series
      D
      Preferred Stock, or any shares of stock ranking on a parity with the Series
      D
      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.

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

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

     

    Section
      6.
      Liquidation, Dissolution or Winding Up.

     

    (A)
      Upon
      any liquidation, dissolution or winding up of the Corporation, voluntary or
      otherwise no distribution shall be made (1) to the holders of shares of stock
      ranking junior (either as to dividends or upon liquidation, dissolution or
      winding up) to the Series D Preferred Stock unless, prior thereto, the holders
      of shares of Series D Preferred Stock shall have received an amount per share
      (the “
      Series D Liquidation Preference”)
      equal
      to $1,000 per share, plus an amount equal to accrued and unpaid dividends and
      distributions thereon, whether or not declared, to the date of such payment,
      provided that the holders of shares of Series D Preferred Stock shall be
      entitled to receive an aggregate amount per share, subject to the provision
      for
      adjustment hereinafter set forth, equal to 1,000 times the aggregate amount
      to
      be distributed per share to holders of shares of Common Stock, or (2) to the
      holders of shares of stock ranking on a parity (either as to dividends or upon
      liquidation, dissolution or winding up) with the Series D Preferred Stock,
      except distributions made ratably on the Series D Preferred Stock and all such
      parity stock in proportion to the total amounts to which the holders of all
      such
      shares are entitled upon such liquidation, dissolution or winding up. In the
      event the Corporation shall at any time declare or pay any dividend on the
      Common Stock payable in shares of Common Stock, or effect a subdivision,
      combination or consolidation of the outstanding shares of Common Stock (by
      reclassification or otherwise than by payment of a dividend in shares of Common
      Stock) into a greater or lesser number of shares of Common Stock, then in each
      such case the aggregate amount to which holders of shares of Series D Preferred
      Stock were entitled immediately prior to such event under the proviso in clause
      (1) of the preceding sentence shall be adjusted by multiplying such amount
      by a
      fraction, the numerator of which is the number of shares of Common Stock
      outstanding immediately after such event and the denominator of which is the
      number of shares of Common Stock that are outstanding immediately prior to
      such
      event.

     

    (B)
      In
      the event, however, that there are not sufficient assets available to permit
      payment in full of the Series D Liquidation Preference and the liquidation
      preferences of all other classes and series of stock of the Corporation, if
      any,
      that rank on a parity with the Series D Preferred Stock in respect thereof,
      then
      the assets available for such distribution shall be distributed ratably to
      the
      holders of the Series D Preferred Stock and the holders of such parity shares
      in
      proportion to their respective liquidation preferences.

     

    (C)
      Neither the merger or consolidation of the Corporation into or with another
      corporation nor the merger or consolidation of any other corporation into or
      with the Corporation shall be deemed to be a liquidation, dissolution or winding
      up of the Corporation within the meaning of this Section 6.

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

    Section
      7.
      Consolidation, Merger, etc.
      In case
      the Corporation shall enter into any consolidation, merger, combination or
      other
      transaction in which the shares of Common Stock are exchanged for or changed
      into other stock or securities, cash and/or any other property, then in any
      such
      case each share of Series D Preferred Stock shall at the same time be similarly
      exchanged or changed into an amount per share, subject to the provision for
      adjustment hereinafter set forth, equal to 1,000 times the aggregate amount
      of
      stock, securities, cash and/or any other property (payable in kind), as the
      case
      may be, into which or for which each share of Common Stock is changed or
      exchanged. In the event the Corporation shall at any time declare or pay any
      dividend on the Common Stock payable in shares of Common Stock, or effect a
      subdivision, combination or consolidation of the outstanding shares of Common
      Stock (by reclassification or otherwise than by payment of a dividend in shares
      of Common Stock) into a greater or lesser number of shares of Common Stock,
      then
      in each such case the amount set forth in the preceding sentence with respect
      to
      the exchange or change of shares of Series D 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 D Preferred Stock shall not be redeemable by the
      Corporation.

     

    Section
      9.
      Rank.
      The
      Series D Preferred Stock shall rank, with respect to the payment of dividends
      and the distribution of assets upon liquidation, dissolution or winding up,
      junior to all series of any other class of the Corporation’s Preferred Stock,
      except to the extent that any such other series specifically provides that
      it
      shall rank on a parity with or junior to the Series D Preferred
      Stock.

     

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

     

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

     

    IN
      WITNESS WHEREOF, this Certificate of Designations is executed on behalf of
      the
      Corporation by its President and Chief Executive Officer this ___ day of ______,
      2008.

     

    


    
      	 	
              SYNTHEMED,
                INC.

            
	 	 
	 	
              By:_______________________________

            
	 	
              Robert
                P. Hickey

            
	
               

            	
              President
                and CEO

            
	 	 


    

    


    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      B

     

    [Form
      of
      Right Certificate]

     

         

    Certificate
      No. R-                                               &
#160;                        
      Rights

     

     

    NOT
      EXERCISABLE AFTER JUNE 2, 2018 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE
      IS
      GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED PURSUANT TO AN AGREEMENT OF THE
      TYPE DESCRIBED IN SECTION 1.3(ii)(A)(z) OF THE AGREEMENT. THE RIGHTS ARE SUBJECT
      TO REDEMPTION AT $0.0005 PER RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH
      IN
      THE AGREEMENT.
      UNDER
      CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE AGREEMENT), RIGHTS
      BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED IN
      THE
      AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL BECOME NULL AND VOID
      AND WILL NO LONGER BE TRANSFERABLE
      .

     

    Right
      Certificate

     

    SYNTHEMED,
      INC.

     

    This
      certifies
      that                    ,
      or registered assigns, is the registered owner of the number of Rights set
      forth
      above, each of which entitles the owner thereof, subject to the terms,
      provisions and conditions of the Rights Agreement, dated as of May 20, 2008,
      as
      the same may be amended from time to time (the “Agreement”), between SyntheMed,
      Inc., a Delaware corporation (the “Company”), and American Stock Transfer &
Trust Company, a New York corporation, as Rights Agent (the “Rights Agent”), to
      purchase from the Company at any time after the Distribution Date and prior
      to
      5:00 P.M. New York time on June 2, 2018, at the offices of the Rights Agent,
      or
      its successors as Rights Agent, designated for such purpose, one one-thousandth
      of a fully paid, nonassessable share of Series D Junior Participating Preferred
      Stock, par value $0.01 per share (the “Preferred Shares”) of the Company, at a
      purchase price of $10.00 per one one-thousandth of a Preferred Share, subject
      to
      adjustment (the “Purchase Price”), upon presentation and surrender of this Right
      Certificate with the Form of Election to Purchase and certification duly
      executed. The number of Rights evidenced by this Right Certificate (and the
      number of one one-thousandths of a Preferred Share which may be purchased upon
      exercise thereof) set forth above, and the Purchase Price set forth above,
      are
      the number and Purchase Price as of June 2, 2008, based on the Preferred Shares
      as constituted at such date. Capitalized terms used in this Right Certificate
      without definition shall have the meanings ascribed to them in the Agreement.
      As
      provided in the Agreement, the Purchase Price and the number of Preferred Shares
      which may be purchased upon the exercise of the Rights evidenced by this Right
      Certificate are subject to modification and adjustment upon the happening of
      certain events.

     

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

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

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

     

    Subject
      to the provisions of the Agreement, the Board of Directors may, at its option,
      (i) redeem the Rights evidenced by this Right Certificate at a redemption price
      of $0.0005 per Right or (ii) exchange Common Shares for the Rights evidenced
      by
      this Certificate, in whole or in part.

     

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

     

    No
      holder
      of this Right Certificate, as such, shall be entitled to vote or receive
      dividends or be deemed for any purpose the holder of the Preferred Shares or
      of
      any other securities of the Company which may at any time be issuable on the
      exercise hereof, nor shall anything contained in the 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 Agreement),
      or
      to receive dividends or subscription rights, or otherwise, until the Right
      or
      Rights evidenced by this Right Certificate shall have been exercised as provided
      in the Agreement.

     

    If
      any
      term, provision, covenant or restriction of the 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 the
      Agreement shall remain in full force and effect and shall in no way be affected,
      impaired or invalidated.

     

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

     

    


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

     

    
      	
              SYNTHEMED,
                INC.

            
	 
	
              By:
                ______________________

            
	
              Title:

            


    

    


    Countersigned:

    AMERICAN
      STOCK TRANSFER & TRUST COMPANY, as Rights Agent

    


    By:
      _________________________

    Authorized
      Signature

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

    
       

       

        
          

        

      

    

    


    


    [Form
      of
      Reverse Side of Right Certificate]

     

    FORM
      OF
      ASSIGNMENT

     

    (To
      be
      executed by the registered holder if such holder

    desires
      to transfer the Right Certificate.)

     

     

    FOR
      VALUE
      RECEIVED                                        
                                              
                                        


    hereby
      sells, assigns and transfers unto                                        
                                                                     

    


    (Please
      print name and address

    of
      transferee)

     

    Rights
      evidenced by this Right Certificate, together with all right, title and interest
      therein, and does hereby irrevocably constitute and appoint            
      Attorney, to transfer the within Right Certificate on the books of the
      within-named Company, with full power of substitution.

     

    Dated:                    

     

     

     

    
      
        

      

    

    


    


    


    Signature

     

     

    Signature
      Medallion Guaranteed:

     

     

    
      
        

      



     

     

    Signatures
      must be medallion guaranteed by an “eligible guarantor institution” as defined
      in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
      amended.

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

     

    The
      undersigned hereby certifies that:

     

    (1)
      the
      Rights evidenced by this Right Certificate are not beneficially owned by and
      are
      not being assigned to an Acquiring Person or an Affiliate or an Associate
      thereof; and

     

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

     

    Dated:                     

     

     

    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

     

    FORM
      OF ELECTION TO PURCHASE

     

    (To
      be
      executed if holder desires to

    exercise
      the Right Certificate.)

     

    To:
      SyntheMed, Inc.

     

    The
      undersigned hereby irrevocably elects to exercise            
      Rights
      represented by this Right Certificate to purchase the Preferred Shares issuable
      upon the exercise of such Rights (or such other securities or property 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:

     

     

                                          
                                              
                                        
                                        


    (Please
      print name and address)

                                          
                                              
                                        
                                        


     

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

     

    Please
      insert social security

    or
      other
      identifying number

     

     

                                          
                                              
                                        
                                                                    


    (Please
      print name and address)

                                          
                                              
                                        
                                                                  


     

    Dated:                    

     

     

    
      
        

      

    

    


    


    


    Signature

     

     

     

    Signature
      Medallion Guaranteed:

     

     

    
      
        

      

      
        
          
          

        

        
          B-5

          
            

          

        

        
          
          

        

      

    

     

    Signatures
      must be medallion guaranteed by an “eligible guarantor institution” as defined
      in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
      amended.

    


     

    The
      undersigned hereby certifies that:

     

    (1)
      the
      Rights evidenced by this Right Certificate are not beneficially owned by and
      are
      not being assigned to an Acquiring Person or an Affiliate or an Associate
      thereof; and

     

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

     

    Dated:                    

     

     

    
      	
               

            
	
               

            


    

     

     

    
      
        
        

      

      
        B-6

        
          

        

      

      
        
        

      

    

    


    


     

    NOTICE

     

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

     

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

     

    


    
      
        
        

      

      
        B-7

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    As
      described in the Rights Agreement, Rights which are

    held
      by or have been held by an Acquiring Person or Associates

    or
      Affiliates thereof (as defined in the Rights Agreement) and
      certain

    transferees
      thereof shall become null and void and will no longer be
      transferable.

     

    SUMMARY
      OF RIGHTS TO PURCHASE

    PREFERRED
      SHARES

     

    On
      April
      25, 2008 the Board of Directors of SyntheMed, Inc. (the“Company”)
      declared a dividend of one preferred share purchase right (a “Right”)
      for
      each share of common stock, $0.001 par value (the “Common
      Shares”),
      of
      the Company outstanding at the close of business on June 2, 2008 (the
“
      Record Date”).
      As
      long as the Rights are attached to the Common Shares, the Company will issue
      one
      Right (subject to adjustment) with each new Common Share so that all such shares
      will have attached Rights. When exercisable, each Right will entitle the
      registered holder to purchase from the Company one one-thousandth of a share
      of
      Series D Junior Participating Preferred Stock (the “Preferred
      Shares”)
      at a
      price of $10.00 per one one-thousandth of a Preferred Share, subject to
      adjustment (the “Purchase
      Price”).
      The
      description and terms of the Rights are set forth in a Rights Agreement, dated
      as of May 20, 2008, as the same may be amended from time to time (the
“Agreement”),
      between the Company and American Stock Transfer & Trust Company, as Rights
      Agent (the “Rights
      Agent”).

     

    Until
      the
      earlier to occur of (i) ten (10) days following a public announcement that
      a
      person or group of affiliated or associated persons has acquired, or obtained
      the right to acquire, beneficial ownership of 15% or more of the Common Shares
      (an “Acquiring
      Person”)
      or
      (ii) ten (10) business days (or such later date as may be determined by action
      of the Board of Directors prior to such time as any person or group of
      affiliated persons becomes an Acquiring Person) following the commencement
      or
      announcement of an intention to make a tender offer or exchange offer, the
      consummation of which would result in the beneficial ownership by a person
      or
      group of 15% or more of the Common Shares (the earlier of (i) and (ii) being
      called the “Distribution
      Date”),
      the
      Rights will be evidenced, with respect to any of the Common Share certificates
      outstanding as of the Record Date, by such Common Share certificate together
      with a copy of this Summary of Rights.

     

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

     

    The
      Rights are not exercisable until the Distribution Date. The Rights will expire
      on June 2, 2018, subject to the Company’s right to extend such date (the
“Final
      Expiration Date”),
      unless earlier redeemed or exchanged by the Company or terminated.

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    Each
      Preferred Share purchasable upon exercise of the Rights will be entitled, when,
      as and if declared, to a minimum preferential quarterly dividend payment of
      $1.00 per share but will be entitled to an aggregate dividend of 1,000 times
      the
      dividend, if any, declared per Common Share. In the event of liquidation,
      dissolution or winding up of the Company, the holders of the Preferred Shares
      will be entitled to a minimum preferential liquidation payment of $1,000 per
      share (plus any accrued but unpaid dividends) but will be entitled to an
      aggregate payment of 1,000 times the payment made per Common Share. Each
      Preferred Share will have 1,000 votes and will vote together with the Common
      Shares. Finally, in the event of any merger, consolidation or other transaction
      in which Common Shares are exchanged, each Preferred Share will be entitled
      to
      receive 1,000 times the amount received per Common Share. Preferred Shares
      will
      not be redeemable. These rights are protected by customary antidilution
      provisions. Because of the nature of the Preferred Share’s dividend, liquidation
      and voting rights, the value of one one-thousandth of a Preferred Share
      purchasable upon exercise of each Right should approximate the value of one
      Common Share.

     

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

     

    In
      the
      event that a Person becomes an Acquiring Person or if the Company were the
      surviving corporation in a merger with an Acquiring Person or any affiliate
      or
      associate of an Acquiring Person and the Common Shares were not changed or
      exchanged, each holder of a Right, other than Rights that are or were acquired
      or beneficially owned by the Acquiring Person (which Rights will thereafter
      be
      void), will thereafter have the right to receive upon exercise that number
      of
      Common Shares having a market value of two times the then current Purchase
      Price
      of the Right. In the event that, after a person has become an Acquiring Person,
      (i) the Company were acquired in a merger or other business combination
      transaction in which the Company is not the surviving corporation or, if the
      surviving corporation, in which
      the
      Common Shares shall be changed or exchanged
      or (ii)
      more than 50% of the Company’s assets or earning power were sold, proper
      provision shall be made so that each holder of a Right (other than Rights that
      have become void by virtue of a person becoming an Acquiring Person) shall
      thereafter have the right to receive, upon the exercise thereof at the then
      current Purchase Price of the Right, that number of shares of common stock
      of
      the acquiring company which at the time of such transaction would have a market
      value of two times the then current Purchase Price of the Right.

     

    At
      any
      time after a Person becomes an Acquiring Person and prior to the earlier of
      one
      of the events described in the last sentence of the previous paragraph or the
      acquisition by such Acquiring Person of 50% or more of the outstanding Common
      Shares, the Board of Directors may cause the Company to exchange the Rights
      (other than Rights owned by an Acquiring Person which will have become void),
      in
      whole or in part, for Common Shares at an exchange rate of one Common Share
      per
      Right (subject to adjustment).

     

    No
      adjustment in the Purchase Price will be required until cumulative adjustments
      require an adjustment of at least 1% in such Purchase Price. No fractional
      Preferred Shares or Common Shares will be issued (other than fractions of
      Preferred Shares which are integral multiples of one one-thousandth of a
      Preferred Share, which may, at the election of the Company, be evidenced by
      depository receipts), and in lieu thereof, a payment in cash will be made based
      on the market price of the Preferred Shares or Common Shares on the last trading
      date prior to the date of exercise.

     

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

    The
      Rights may be redeemed in whole, but not in part, at a price of $0.0005 per
      Right (the “Redemption
      Price”)
      by the
      Board of Directors at any time prior to the time that an Acquiring Person has
      become such. The redemption of the Rights may be made effective at such time,
      on
      such basis and with such conditions as the Board of Directors in its sole
      discretion may establish. Immediately upon any redemption of the Rights, the
      right to exercise the Rights will terminate and the only right of the holders
      of
      Rights will be to receive the Redemption Price.

     

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

     

    Any
      of
      the provisions of the Agreement may be amended by the Board of Directors of
      the
      Company for so long as the Rights are then redeemable, and after the Rights
      are
      no longer redeemable, the Company may amend or supplement the Agreement in
      any
      manner that does not adversely affect the interests of the holders of the Rights
      (other than an Acquiring Person or an affiliate or associate of an Acquiring
      Person). The Company may at any time prior to such time as any person becomes
      an
      Acquiring Person amend the Agreement to lower the thresholds described above
      to
      no less than 10% (the “Reduced
      Threshold”);
      provided,
      that no
      Person who beneficially owns a number of Common Shares equal to or greater
      than
      the Reduced Threshold shall become an Acquiring Person unless such Person (other
      than an Exempt Person) shall, after the public announcement of the Reduced
      Threshold, increase its beneficial ownership of the then outstanding Common
      Shares (other than as a result of an acquisition of Common Shares by the
      Company) to an amount equal to or greater than the greater of (i) the Reduced
      Threshold or (ii) the sum of (x) the lowest beneficial ownership of such Person
      as a percentage of the outstanding Common Shares as of any date on or after
      the
      date of the public announcement of such Reduced Threshold plus (y) .001%.


     

    A
      copy of
      the Agreement has been filed with the Securities and Exchange Commission as
      an
      Exhibit to the Company’s Current Report on Form 8-K filed May___, 2008. A copy
      of the Agreement is available free of charge from the Company. This summary
      description of the Rights does not purport to be complete and is qualified
      in
      its entirety by reference to the Agreement, which is incorporated herein by
      reference.

     

    
      
        
        

      

      
        C-3