Prepared and filed by St Ives Burrups




Exhibit 4.1

SHAREHOLDER PROTECTION RIGHTS
  PLAN

dated as of

April 10, 2003

between

ITXC CORP.

and

AMERICAN STOCK TRANSFER &
  TRUST COMPANY,

as Rights Agent

 







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Table
  of Contents

	 	 	Page
	Article I

      DEFINITIONS
	 	 	 
	Section
        1.1
	Definitions	1
	Article II

      THE RIGHTS
	 	 	 
	 Section
        2.1
	Summary of
      Rights	6
	 Section
        2.2
	Legend on Common
      Stock Certificates	6
	 Section
        2.3
	Exercise of
      Rights; Separation of Rights	7
	 Section
        2.4
	Adjustments
      to Exercise Price; Number of Rights	9
	 Section
        2.5
	Effective
      Date of Exercise	10
	 Section
        2.6
	Execution,
      Authentication, Delivery and Dating of Rights Certificates	10
	 Section
        2.7
	Registration,
      Registration of Transfer and Exchange	10
	 Section
        2.8
	Mutilated,
      Destroyed, Lost and Stolen Rights Certificates	11
	 Section
        2.9
	Persons Deemed
      Owners	12
	 Section
        2.10
	Delivery and
      Cancellation of Certificates	12
	 Section
        2.11
	Agreement
      of Rights Holders	12
	Article III

      ADJUSTMENTS TO THE RIGHTS IN

      CERTAIN TRANSACTIONS
	 	 	 
	 Section
        3.1
	Flip-in	13
	 Section
        3.2
	Flip-over	15
	Article IV

      THE RIGHTS AGENT
	 	 	 
	 Section
        4.1
	General	15
	 Section
        4.2
	Merger or Consolidation
      or Change of Name of Rights Agent	16
	 Section
        4.3
	Duties of Rights
      Agent	17
	 Section
        4.4
	Change of Rights
      Agent	18
	Article V

      MISCELLANEOUS
	 	 	 
	 Section
        5.1
	Redemption	19
	 Section
        5.2
	Expiration	19
	 Section
        5.3
	Issuance of
      New Rights Certificates	19


 

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	 Section
        5.4
	Supplements
      and Amendments	20
	 Section
        5.5
	Fractional
      Shares	20
	 Section
        5.6
	Rights of
      Action	20
	 Section
        5.7
	Holder of
      Rights Not Deemed a Shareholder	21
	 Section
        5.8
	Notice of
      Proposed Actions	21
	 Section
        5.9
	Notices	21
	 Section
        5.10
	Suspension
      of Exercisability	22
	 Section
        5.11
	Costs of Enforcement	22
	 Section
        5.12
	Successors	22
	 Section
        5.13
	Benefits of
      this Agreement	22
	 Section
        5.14
	Determination
      and Actions by the Board of Directors, etc.	22
	 Section
        5.15
	Descriptive
      Headings	23
	 Section
        5.16
	Governing
      Law	23
	 Section
        5.17
	Counterparts	23
	 Section
        5.18
	Severability	23


EXHIBITS

	Exhibit A –
      Description of Terms of the
      Participating Preferred Stock


	 	 
	Exhibit B –
      Form of Rights Certificate (Together with Form
      of Election to Exercise)


 

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	SHAREHOLDER PROTECTION
      RIGHTS PLAN



This SHAREHOLDER PROTECTION RIGHTS
    PLAN (as amended from time to time, this “Agreement”), dated as
    of April 10, 2003, between ITXC CORP., a Delaware corporation (the “Company”),
    and American Stock Transfer & Trust Company, a New York  corporation,
    as Rights Agent (the “Rights Agent”, which term shall include any
    successor Rights Agent hereunder),



	WITNESSETH:



WHEREAS, the Board has (a) authorized
    and declared a dividend of one right (“Right”) in respect of each
    share of Common Stock (as hereinafter defined) held of record as of the close
    of business on April 21, 2003 (the “Record Time”) and (b) as provided
    in Section 2.4, authorized the issuance of one Right in respect of each share
    of Common Stock issued after the Record Time and prior to the Separation
    Time and, to the extent provided in Section 5.3, each share of Common Stock
    issued after the Separation Time;




WHEREAS, subject to the terms and
    conditions hereof, each Right entitles the holder thereof, after the Separation
    Time, to purchase securities or assets of the Company (or, in certain cases,
    securities of certain other entities) pursuant to the terms and subject to
    the conditions set forth herein; and




WHEREAS, the Company desires to appoint
    the Rights Agent to act on behalf of the Company, and the Rights Agent is
    willing so to act, in connection with the issuance, transfer, exchange and
    replacement of Rights Certificates, the exercise of Rights and other matters
    referred to herein;




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



	ARTICLE I


	 
	DEFINITIONS



1.1      Definitions.
     For purposes of this Agreement, the following terms have the meanings indicated:




“Acquiring Person” shall
    mean any Person  who is a Beneficial Owner of 15% or more of the outstanding
    shares of Common
  Stock; provided, however, that the term “Acquiring Person”
  shall not include any Person (i) who is the Beneficial Owner of 15% or more
   of the outstanding shares of Common Stock on the date of this Agreement or
  who
  shall become the Beneficial Owner of 15% or more of the outstanding shares
  of  Common Stock solely as a result of an acquisition by the Company of shares
  of
  Common Stock, until such time hereafter as any of such Persons shall become
   the Beneficial Owner (other than by means of a stock dividend or



 







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stock split) of additional shares
  of Common Stock (other than shares of Common Stock acquired upon the exercise
  of stock options granted to such Persons as employees, officers or directors
  of the Company or any of its Subsidiaries) constituting two percent (2%) or
  more of the then outstanding shares of Common Stock, (ii) who becomes the Beneficial
  Owner of 15% or more of the outstanding shares of Common Stock but who acquired
  Beneficial Ownership of shares of Common Stock without any plan or intention
  to seek or affect control of the Company, if, upon notice by the Company, such
  Person promptly enters into an irrevocable commitment with the Company to divest,
  and thereafter promptly divests (without exercising or retaining any power,
  including voting, with respect to such shares), sufficient shares of Common
  Stock (or securities convertible into, exchangeable into or exercisable for
  Common Stock) so that such Person ceases to be the Beneficial Owner of the greater
  of (x) 15% or more of the outstanding shares of Common Stock or (y) the percentage
  of the outstanding Common Stock Beneficially Owned by such Person on the date
  hereof or (iii) who Beneficially Owns shares of Common Stock consisting solely
  of one or more of (A) shares of Common Stock Beneficially Owned pursuant to
  the grant or exercise of an option granted to such Person (an “Option Holder”)
  by the Company in connection with an agreement to merge with, or acquire, the
  Company approved by the Board and entered into prior to a Flip-in Date, (B)
  shares of Common Stock (or securities convertible into, exchangeable into or
  exercisable for Common Stock) Beneficially Owned by such Option Holder or its
  Affiliates or Associates at the time of grant of such option and (C) shares
  of Common Stock (or securities convertible into, exchangeable into or exercisable
  for Common Stock) acquired by Affiliates or Associates of such Option Holder
  after the time of such grant which, in the aggregate, amount to less than 1%
  of the outstanding shares of Common Stock. In addition, the Company, any wholly-owned
  Subsidiary of the Company and any employee stock ownership or other employee
  benefit plan of the Company or a wholly-owned Subsidiary of the Company shall
  not be an Acquiring Person.


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




“Agreement” shall have the meaning set forth in the Preamble.




A Person shall be deemed the “Beneficial Owner”,
  and to have “Beneficial Ownership” of, and to “Beneficially Own”,
  any securities as to which such Person or any of such Person’s Affiliates
  or Associates is or may be deemed to be the beneficial owner of pursuant to
  Rule 13d-3 and 13d-5 under the Exchange Act, as such Rules are in effect on
  the date of this Agreement, as well as any securities as to which such Person
  or any of such Person’s Affiliates or Associates has the right to become
  Beneficial Owner (whether such right is exercisable immediately or only after
  the passage of time or the occurrence of conditions) pursuant to any agreement,
  arrangement or understanding, or upon the exercise of conversion rights, exchange
  rights, other rights (other than the Rights), warrants or options, or otherwise;
  provided, however, that a Person shall not be deemed the “Beneficial
  Owner”, or to have “Beneficial Ownership” of, or to “Beneficially
  Own”, any security (i) solely because such security has been tendered pursuant
  to a tender or exchange offer made by such Person or any of such Person’s
  Affiliates or Associates until such tendered security is accepted for payment
  or exchange or (ii) solely because such



 

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Person or any of such Person’s
    Affiliates or Associates has or shares the power to vote or direct the voting
    of such security pursuant to a revocable proxy given in response to a public
    proxy or consent solicitation made to more than ten holders of shares of
    a class of stock of the Company registered under Section 12 of the Exchange
    Act and pursuant to, and in accordance with, the applicable rules and regulations
    under the Exchange Act, except if such power (or the arrangements relating
    thereto) is then reportable under Item 6 of Schedule 13D under the Exchange
    Act (or any similar provision of a comparable or successor report). For purposes
    of this Agreement, in determining the percentage of the outstanding shares
    of Common Stock with respect to which a Person is the Beneficial Owner, all
    shares as to which such Person is deemed the Beneficial Owner shall be deemed
    outstanding.


“Board” means the Board of Directors of the Company.




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




“Close of business” on
    any given date shall mean 5:00 p.m. eastern standard time on such date or,
    if such date is not a Business Day, 5:00 p.m. eastern standard time on the
    next succeeding Business Day.




“Common Stock” shall mean
    the shares of Common Stock, par value $.001 per share, of the Company.




“Company” shall have the meaning set forth in the Preamble.




“Election to Exercise” shall
    have the meaning set forth in Section 2.3(d) hereof.




“Exchange Act” shall mean
    the Securities Exchange Act of 1934, as amended.




“Exchange Ratio” shall have the meaning set forth in Section 3.1(c) hereof.




“Exchange Time” shall mean
    the time at which the right to exercise the Rights shall terminate pursuant
    to Section 3.1(c) hereof.




“Exercise Price” shall
    mean, as of any date, the price at which a holder may purchase the securities
    issuable upon exercise of one whole Right. Until adjustment thereof in accordance
    with the terms hereof, the Exercise Price shall equal $7.00.




“Expansion Factor” shall have the meaning set forth in Section 2.4(a) hereof.




“Expiration Time” shall
    mean the earliest of (i) the Exchange Time, (ii) the Redemption Time, (iii)
    the close of business on the tenth anniversary of the Record Time and (iv)
    immediately prior to the effective time of a consolidation, merger or share
    exchange of the Company (A) into another corporation or (B) with another
    corporation in which the Company is



 

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the surviving corporation but Common Stock is converted into cash and/or securities of another corporation, in either case pursuant to an agreement entered into by the Company with the approval of the Board prior to a Stock Acquisition Date.


“Flip-in Date” shall mean any Stock Acquisition Date.




“Flip-over Entity,” for purposes of Section 3.2, shall mean (i) in the case of a Flip-over Transaction or Event described in clause (i) of the definition thereof, the Person issuing any securities into which shares of Common Stock are being converted or exchanged and, if  no such securities are being issued, the other party to such Flip-over Transaction or Event and (ii) in the case of a Flip-over Transaction or Event referred to in clause (ii) of the definition thereof, the Person receiving the greatest portion of the (A) assets or (B) operating  income or cash flow being transferred in such Flip-over Transaction or Event, provided that in all cases if such Person is a subsidiary of a corporation, the parent corporation shall be the Flip-over Entity.




“Flip-over Stock” shall mean the capital stock (or similar equity interest) with the greatest voting power in respect of the election of directors (or other persons similarly responsible for direction of the business and affairs) of the Flip-over Entity.




“Flip-over Transaction or Event” shall
    mean a transaction or series of transactions after a Flip-in Date in which,
    directly or indirectly, (i) the Company shall consolidate or merge or participate
    in a share exchange with any other Person if, at the time of the consolidation,
    merger or share exchange or at the time the Company enters into any agreement
    with respect to any such consolidation, merger or share exchange, the Acquiring
    Person controls the Board and either (A) any term of or arrangement concerning
    the treatment of shares of capital stock in such consolidation, merger or
    share exchange relating to the Acquiring Person is not identical to the terms
    and arrangements relating to other holders of the Common Stock or (B) the
    Person with whom the transaction or series of transactions occurs is the
    Acquiring Person or an Affiliate or Associate of the Acquiring Person or
    (ii) the Company shall sell or otherwise transfer (or one or more of its
    Subsidiaries shall sell or otherwise transfer) assets (A) aggregating more
    than 50% of the assets (measured by either book value or fair market value)
    or (B) generating more than 50% of the operating income of the Company and
    its Subsidiaries (taken as a whole) to any Person (other than the Company
    or one or more of its wholly owned Subsidiaries) or to two or more Persons
    which are Affiliates or Associates or otherwise acting in concert, if, at
    the time of the entry by the Company (or any such Subsidiary) into an agreement
    with respect to such sale or transfer of assets, the Acquiring Person controls
    the Board.




“Market Price” per share of any securities
  on any date shall mean the average of the daily closing prices per share of
  such securities (determined as described below) on each of the twenty (20) consecutive
  Trading Days through and including the Trading Day immediately preceding such
  date; provided, however, that if an event of a type analogous
  to any of the events described in Section 2.4 hereof shall have caused the closing
  prices used to determine the Market Price on any Trading Days during such period
  of twenty (20) Trading Days not to be fully comparable with the closing price
  on such date, each such closing price so used shall be appropriately adjusted
  in order to make it fully comparable with the closing price on such date.



 

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The closing price per share of any
  securities on any date shall be the last reported sale price, regular way, or,
  in case no such sale takes place or is quoted on such date, the average of the
  closing bid and asked prices, regular way, for each share of such securities,
  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, Inc. or, if the securities are not listed or admitted to trading
  on the New York Stock Exchange, Inc., as reported in the principal consolidated
  transaction reporting system with respect to securities listed on the principal
  national securities exchange on which the securities are listed or admitted
  to trading or, if the securities are not listed or admitted to trading on any
  national securities exchange, as reported by the National Association of Securities
  Dealers, Inc. Automated Quotation System or such other comparable system then
  in use, or, if on any such date the securities are not listed or admitted to
  trading on any national securities exchange or 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 securities selected by the Board; provided,
  however, that if on any such date the securities are not listed or admitted
  to trading on a national securities exchange or traded in the over-the-counter
  market, the closing price per share of such securities on such date shall mean
  the fair value per share of securities on such date as determined in good faith
  by the Board, after consultation with a nationally recognized investment banking
  firm, and set forth in a certificate delivered to the Rights Agent.


“Option Holder” shall have the meaning set forth in the definition of Acquiring Person.




“Person” shall mean any individual, firm, partnership, association, group (as such term is used in Rule 13d-5 under the Securities Exchange Act of 1934, as such Rule is in effect on the date of this Agreement), corporation, limited liability company or other entity.




“Preferred Stock” shall mean the series of Participating Preferred Stock, par value $.001 per share, of the Company created by resolution of the Board containing substantially the same terms as set forth in Exhibit A annexed hereto (appropriately completed).




“Record Time” shall have the meaning set forth in the Recitals.




“Redemption Price” shall mean an amount equal to one mill ($0.001).




“Redemption Time” shall mean the time at which the right to exercise the Rights shall terminate pursuant to Section 5.1 hereof.




“Right” shall have the meaning set forth in the Recitals.




“Rights Agent” shall have the meaning set forth in the Preamble.




“Rights Certificate” shall have the meaning set forth in Section 2.3(c) hereof.




“Rights Register” shall have the meaning set forth in Section 2.7(a) hereof.



 

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“Separation Time” shall
    mean the close of business on the earlier of (i) the tenth Business Day after
    the date on which any Person commences a tender or exchange offer which,
    if consummated, would result in such Person’s becoming an Acquiring
    Person and (ii) the Flip-in Date; provided, that if the foregoing results in
    the Separation Time being prior to the Record Time, the Separation Time shall
    be the Record Time and provided further, that if any tender or exchange offer
    referred to in clause (i) of this paragraph is canceled, terminated or otherwise
    withdrawn prior to the Separation Time without the purchase of any shares
    of Common Stock pursuant thereto, such offer shall be deemed, for purposes
    of this paragraph, never to have been made.




  “Stock Acquisition Date”
    shall mean the date of the first public announcement by the Company (by any
    means) or by an Acquiring Person (including by means of filing a Schedule
    13D or Schedule 13G under the Securities Exchange Act of 1934 (or any comparable
    or successor report or schedule) or an amendment thereto that a Person has
    become an Acquiring Person.




“Subsidiary” of any specified
    Person shall mean any corporation or other entity of which a majority of
    the voting power of the equity securities or a majority of the equity interest
    is Beneficially Owned, directly or indirectly, by such Person.




“Trading Day,” when used
    with respect to any securities, shall mean a day on which the New York Stock
    Exchange, Inc. is open for the transaction of business or, if such securities
    are not listed or admitted to trading on the New York Stock Exchange, Inc.,
    a day on which the principal national securities exchange on which such securities
    are listed or admitted to trading is open for the transaction of business
    or, if such securities are not listed or admitted to trading on any national
    securities exchange, a Business Day.



ARTICLE II

THE RIGHTS


2.1      Summary
  of Rights. As soon as practicable after the Record Time, the Company will
  mail a letter summarizing the terms of the Rights to each holder of record of
  Common Stock as of the Record Time, at such holder’s address as shown by
  the records of the Company.




2.2      Legend
  on Common Stock Certificates. Certificates for the Common Stock issued after
  the Record Time but prior to the Separation Time shall evidence one Right for
  each share of Common Stock represented thereby and shall have impressed on,
  printed on, written on or otherwise affixed to them the following legend:



	 	Until the Separation Time (as defined in the Rights Plan referred to below), this certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Plan, dated as of April 10, 2003 (as



 

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	 	such may be amended from
          time to time, the “Rights Plan”), between ITXC Corp. (the “Company”)
          and American Stock Transfer & Trust Company, as Rights Agent, 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 Company.
          Under certain circumstances, as set forth in the Rights Plan, such
          Rights may be redeemed, may become exercisable for securities or assets
          of the Company or securities of another entity, may be exchanged for
          shares of Common Stock or other securities or assets of the Company,
          may expire, may become void (if they are “Beneficially Owned” by
          an “Acquiring Person” or an Affiliate or Associate thereof,
          as such terms are defined in the Rights Plan, or by any transferee
          of any of the foregoing) or may be evidenced by separate certificates
          and may no longer be evidenced by this certificate. The Company will
          mail or arrange  for the mailing of a copy of the Rights Plan to the
          holder of this certificate without charge after the receipt of a written
          request therefor.



Certificates representing shares of Common Stock that are issued and outstanding at the Record Time shall evidence one Right for each share of Common Stock evidenced thereby notwithstanding the absence of the foregoing legend.


2.3      Exercise
  of Rights; Separation of Rights.




(a)      Subject to Sections 3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each Right will entitle the holder thereof, after the Separation Time and prior to the Expiration Time, to purchase, for the Exercise Price, one one hundredth of a share of Preferred  Stock.




(b)      Until
    the Separation Time, (i) no Right may be exercised and (ii) each Right will
    be evidenced by the certificate for the associated share of Common Stock
    (together, in the case of certificates issued prior to the Record Time, with
    the letter mailed to the record holder thereof pursuant to Section 2.1) and
    will be transferable only together with, and will be transferred by a transfer
    (whether with or without such letter) of, such associated share.




(c)      Subject
    to the terms and conditions hereof, after the Separation Time and prior to
    the Expiration Time, the Rights (i) may be exercised and (ii) may be transferred
    independent of shares of Common Stock. Promptly following the Separation
    Time, the Rights Agent will mail to each holder of record of Common Stock
    as of the Separation Time (other than any Person whose Rights have become
    void pursuant to Section 3.1(b)), at such holder’s address as shown
    by the records of the Company (the Company hereby agreeing to furnish copies
    of such records to the Rights Agent for this purpose), (x) a certificate
    (a “Rights Certificate”) in substantially the form of Exhibit B
    annexed hereto appropriately completed, representing the number of Rights
    held by such holder at the Separation Time and having 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 law
    or with any rule or regulation made



 

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pursuant thereto or with any rule or regulation of any national securities exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage, and (y) a disclosure statement describing the Rights.


(d)      Subject
    to the terms and conditions hereof, Rights may be exercised on any Business
    Day after the Separation Time and prior to the Expiration Time by submitting
    to the Rights Agent the Rights Certificate evidencing such Rights with an
    election to exercise (an  “Election to Exercise”), substantially
    in the form attached to the Rights Certificate, duly completed, accompanied
    by payment in cash, or by certified or official bank check or money order
    payable to the order of the Company, of a sum equal to the Exercise Price
    multiplied by the number of Rights being exercised and a sum sufficient to
    cover any transfer tax or charge which may be payable in respect of any transfer
    involved in the transfer or delivery of Rights Certificates or the issuance
    or delivery of certificates for shares or depositary receipts (or both) in
    a name other than that of the holder of the Rights being exercised.




(e)      Upon
    receipt of a Rights Certificate, with an Election to Exercise accompanied
    by payment as set forth in Section 2.3(d), and subject to the terms and conditions
    hereof, the Rights Agent will thereupon promptly (i)(A) requisition from
    a transfer agent (which may, but need not, be the Rights Agent) stock certificates
    evidencing such number of shares or other securities to be purchased (the
    Company hereby irrevocably authorizing its transfer agents to comply with
    all such requisitions) and (B) if the Company elects pursuant to Section
    5.5 not to issue certificates representing fractional shares, requisition
    from the depositary selected by the Company depositary receipts representing
    the fractional shares to be purchased or requisition from the Company the
    amount of cash to be paid in lieu of fractional shares in accordance with
    Section 5.5 and (ii) after receipt of such certificates, depositary receipts
    and/or cash, deliver the same to or upon the order of the registered holder
    of such Rights Certificate, registered (in the case of certificates or depositary
    receipts) in such name or names as may be designated by such holder.




(f)      In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such holder’s duly  authorized assigns.




(g)      The Company
  covenants and agrees that it will (i) take all such action as may be necessary
  to ensure that all shares delivered upon exercise of Rights shall, at the time
  of delivery of the certificates for such shares (subject to payment of the Exercise
  Price), be duly and validly authorized, executed, issued and delivered and fully
  paid and nonassessable; (ii) take all such action as may be necessary to comply
  with any applicable requirements of the Securities Act of 1933 or the Exchange
  Act, and the rules and regulations promulgated thereunder, and any other applicable
  law, rule or regulation, in connection with the issuance of any shares upon
  exercise of Rights; and (iii) pay when due and payable any and all federal and
  state transfer taxes and charges which may be payable in respect of the original
  issuance or delivery of the Rights Certificates or of any shares issued upon
  the exercise of Rights, provided, that the Company shall not be required
  to pay any transfer tax or charge which may be payable in respect of any transfer



 

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involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for shares in a name other than that of the holder of the Rights being transferred or exercised.


2.4      Adjustments
  to Exercise Price; Number of Rights.




(a)      In
    the event the Company shall at any time after the Record Time and prior to
    the Separation Time (i) declare or pay a dividend on Common Stock payable
    in Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine
    the outstanding Common Stock into a smaller number of shares of Common Stock,
    (x) the Exercise Price in effect after such adjustment will be equal to the
    Exercise Price in effect immediately prior to such adjustment divided by
    the number of shares of Common Stock (the “Expansion Factor”) that
    a holder of one share of Common Stock immediately prior to such dividend,
    subdivision or combination would hold thereafter as a result thereof and
    (y) each Right held prior to such adjustment will become that number of Rights
    equal to the Expansion Factor, and the adjusted number of Rights will be
    deemed to be distributed among the shares of Common Stock with respect to
    which the original Rights were  associated (if they remain outstanding) and
    the shares issued in respect of such dividend, subdivision or combination,
    so that each such share of Common Stock will have exactly one Right associated
    with it. Each adjustment made pursuant to this paragraph shall be made as
    of the payment or effective date for the applicable dividend, subdivision
    or combination.




In the event the Company shall at any time after the Record Time and prior to the Separation Time issue any shares of Common Stock otherwise than in a transaction referred to in the preceding paragraph, each such share of Common Stock so issued shall automatically  have one new Right associated with it, which Right shall be evidenced by the certificate representing such share. To the extent provided in Section 5.3, Rights shall be issued by the Company in respect of shares of Common Stock that are issued or sold by the Company after  the Separation Time.




(b)      In
    the event the Company shall at any time after the Record Time and prior to
    the Separation Time issue or distribute any securities or assets in respect
    of, in lieu of or in exchange for Common Stock (other than pursuant to a
    dividend intended by the Board to represent a regular periodic cash dividend
    or a dividend paid solely in Common Stock), whether by dividend, in a reclassification
    or recapitalization (including any such transaction involving a merger, consolidation
    or share exchange), or otherwise, the Company shall make such adjustments,
    if any, in the Exercise Price, number of Rights and/or securities or other
    property purchasable upon exercise of Rights as the Board, in its sole discretion,
    may deem to be appropriate under the circumstances in order to adequately
    protect the interests of the holders of Rights generally, and the Company
    and the Rights Agent shall amend this Agreement as necessary to provide for
    such adjustments.




(c)      Each adjustment to the Exercise Price made pursuant to this Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to the Exercise Price is made pursuant to this Section 2.4, the Company shall (i) promptly prepare a certificate setting forth such  adjustment and a brief statement of the facts accounting for such adjustment and (ii)



 

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promptly file with the Rights Agent and with each transfer agent for the Common Stock a copy of such certificate.


(d)      Rights
    Certificates shall represent the securities purchasable under the terms of
    this Agreement, including any adjustment or change in the securities purchasable
    upon exercise of the Rights, even though such certificates may continue to
    express the securities purchasable at the time of issuance of the initial
    Rights Certificates.




2.5      Effective
  Date of Exercise. Each person in whose name any certificate for shares is
  issued upon the exercise of Rights shall for all purposes be deemed to have
  become the holder of record of the shares represented thereby on the date upon
  which the Rights Certificate evidencing such Rights was duly surrendered and
  payment of the Exercise Price for such Rights (and any applicable taxes and
  other governmental charges payable by the exercising holder hereunder) was made;
  provided, however, that if the date of such surrender and payment
  is a date upon which the stock transfer books of the Company are closed, such
  person shall be deemed to have become the record holder of such shares on, and
  such certificate shall be dated, the next succeeding Business Day on which the
  stock transfer books of the Company are open.




2.6      Execution,
  Authentication, Delivery and Dating of Rights Certificates.




(a)      The
    Rights Certificates shall be executed on behalf of the Company by its Chairman
    of the Board, the President or one of its Vice Presidents, under its corporate
    seal reproduced thereon attested by its Secretary or one of its Assistant
    Secretaries. The signature of any of these officers on the Rights Certificates
    may be manual or facsimile.




Rights Certificates bearing the manual
    or facsimile signatures of individuals who were at any time the proper officers
    of the Company shall bind the Company, notwithstanding that such individuals
    or any of them have ceased to hold such offices prior to the countersignature
    and delivery of such Rights Certificates.




Promptly after the Company learns
    of the Separation Time, the Company will notify the Rights Agent of such
    Separation Time and will deliver Rights Certificates executed by the Company
    to the Rights Agent for counter-signature, and, subject to Section 3.1(b),
    the Rights Agent shall manually countersign and deliver such Rights Certificates
    to the holders of the Rights pursuant to Section 2.3(c) hereof. No Rights
    Certificate shall be valid for any purpose unless manually countersigned
    by the Rights Agent.




(b)      Each Rights Certificate shall be dated the date of countersignature thereof.




2.7      Registration,
  Registration of Transfer and Exchange.




(a)      After
    the Separation Time, the Company will cause to be kept a register (the “Rights
    Register”) in which, subject to such reasonable regulations as it may
    prescribe, the Company will provide for the registration and transfer of
    Rights. The Rights Agent is hereby appointed “Rights Registrar” for
    the purpose of maintaining the Rights Register for the Company



 

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and registering Rights and transfers
    of Rights after the Separation Time as herein provided. In the event that
    the Rights Agent shall cease to be the Rights Registrar, the Rights Agent
    will have the right to examine the Rights Register at all reasonable times
    after the Separation Time.


After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate, and subject to the provisions of Section 2.7(c) and (d), the Company will execute, and the Rights Agent will countersign and  deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificate so surrendered.




(b)      Except
    as otherwise provided in Section 3.1(b), all Rights issued upon any registration
    of transfer or exchange of Rights Certificates shall be the valid obligations
    of the Company, and such Rights shall be entitled to the same benefits under
    this Agreement as the Rights surrendered upon such registration of transfer
    or exchange.




(c)      Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in a form satisfactory to the Company or the Rights Agent, as the case may be, duly executed by the holder  thereof or such holder’s attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate under this Section 2.7, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in  relation thereto.




(d)      The Company shall not be required to register the transfer or exchange of any Rights after such Rights have become void under Section 3.1(b), been exchanged under Section 3.1(c) or been redeemed under Section 5.1.




2.8      Mutilated,
  Destroyed, Lost and Stolen Rights Certificates.




(a)      If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company shall execute and the Rights Agent shall countersign and deliver in exchange therefor a new Rights  Certificate evidencing the same number of Rights as did the Rights Certificate so surrendered.




(b)      If there shall
  be delivered to the Company and the Rights Agent prior to the Expiration Time
  (i) evidence to their satisfaction of the destruction, loss or theft of any
  Rights Certificate and (ii) such security or indemnity as may be required by
  them to save each of them and any of their agents harmless, then, subject to
  Sections 3.1(b), 3.1(c) and 5.1 and in the absence of notice to the Company
  or the Rights Agent that such Rights Certificate has been acquired by a bona
  fide purchaser, the Company shall execute and upon its request the Rights
  Agent shall countersign and deliver, in lieu of any such destroyed, lost or
  stolen Rights Certificate, a new Rights Certificate evidencing the same number
  of Rights as did the Rights Certificate so destroyed, lost or stolen.



 

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(c)      As
    a condition to the issuance of any new Rights Certificate under this Section
    2.8, the Company may require the payment of a sum sufficient to cover any
    tax or other governmental charge that may be imposed in relation thereto
    and any other expenses (including the fees and expenses of the Rights Agent)
    connected therewith.




(d)      Every
    new Rights Certificate issued pursuant to this Section 2.8 in lieu of any
    destroyed, lost or stolen Rights Certificate shall evidence an original additional
    contractual obligation of the Company, whether or not the destroyed, lost
    or stolen Rights Certificate shall be at any time enforceable by anyone,
    and, subject to Section 3.1(b), shall be entitled to all the benefits of
    this Agreement equally and proportionately with any and all other Rights
    duly issued hereunder.




2.9      Persons
       Deemed Owners. Prior to due presentment of a Rights Certificate (or,
       prior  to the Separation Time, the associated Common Stock certificate)
       for registration
  of transfer, the Company, the Rights Agent and any agent of the Company or
       the  Rights Agent may deem and treat the person in whose name such Rights
       Certificate
  (or, prior to the Separation Time, such Common Stock certificate) is registered
        as the absolute owner thereof and of the Rights evidenced thereby for
       all purposes
  whatsoever, including the payment of the Redemption Price and neither the Company
        nor the Rights Agent shall be affected by any notice to the contrary.
       As used
  in this Agreement, unless the context otherwise requires, the term “holder”
  of any Rights shall mean the registered holder of such Rights (or, prior to
   the Separation Time, the associated shares of Common Stock).




2.10      Delivery
  and Cancellation of Certificates. All Rights Certificates surrendered upon
  exercise or for registration of transfer or exchange shall, if surrendered to
  any person other than the Rights Agent, be delivered to the Rights Agent and,
  in any case, shall be promptly canceled by the Rights Agent. The Company may
  at any time deliver to the Rights Agent for cancellation any Rights Certificates
  previously countersigned and delivered hereunder which the Company may have
  acquired in any manner whatsoever, and all Rights Certificates so delivered
  shall be promptly canceled by the Rights Agent. No Rights Certificates shall
  be countersigned in lieu of or in exchange for any Rights Certificates canceled
  as provided in this Section 2.10, except as expressly permitted by this Agreement.
  The Rights Agent shall destroy all canceled Rights Certificates and deliver
  a certificate of destruction to the Company.




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




(a)      prior
    to the Separation Time, each Right will be transferable only together with,
    and will be transferred by a transfer of, the associated share of Common
    Stock;




(b)      after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as provided herein;




(c)      prior to due presentment of a Rights Certificate (or, prior to the



 

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Separation Time, the associated Common
    Stock certificate) for registration of transfer, the Company, the Rights
    Agent and any agent of the Company or the Rights Agent may deem and treat
    the person in whose name the Rights Certificate (or, prior to the Separation
    Time, the associated Common Stock certificate) is registered as the absolute
    owner thereof and of the Rights evidenced thereby for all purposes whatsoever,
    and neither the Company nor the Rights Agent nor any agent of the Company
    or the Rights Agent shall be affected by any notice to the contrary;


(d)      Rights Beneficially Owned by certain Persons will, under the circumstances set forth in Section 3.1(b), become void; and




(e)      this Agreement may be supplemented or amended from time to time pursuant to Section 2.4(b) or 5.4 hereof.



ARTICLE III

ADJUSTMENTS TO THE RIGHTS IN
CERTAIN TRANSACTIONS


3.1      Flip-in.




(a)      In
    the event that prior to the Expiration Time a Flip-in Date shall occur, except
    as provided in this Section 3.1, each Right shall constitute the right to
    purchase from the Company, upon exercise thereof in accordance with the terms
    hereof (but subject to Section 5.10), that number of shares of Common Stock
    having an aggregate Market Price on the Stock Acquisition Date equal to twice
    the Exercise Price for an amount in cash equal to the Exercise Price (such
    right to be appropriately adjusted in order to protect the interests of the
    holders of Rights generally in the event that on or after such Stock Acquisition
    Date an event of a type analogous to any of the events described in Section
    2.4(a) or (b) shall have occurred with respect to the Common Stock).




(b)      Notwithstanding
    the foregoing, any Rights that are or were Beneficially Owned on or after
    the Stock Acquisition Date by an Acquiring Person or an Affiliate or Associate
    thereof or by any transferee, direct or indirect, of any of the foregoing
    shall become void and any holder of such Rights (including transferees) shall
    thereafter have no right to exercise or transfer such Rights under any provision
    of this Agreement. If any Rights Certificate is presented for assignment
    or exercise and the Person presenting the same will not complete the certification
    set forth at the end of the form of assignment or notice of election to exercise
    and provide such additional evidence of the identity of the Beneficial Owner
    and its Affiliates and Associates (or former Beneficial Owners and their
    Affiliates and Associates) as the Company shall reasonably request, then
    the Company shall be entitled conclusively to deem the Beneficial Owner thereof
    to be an Acquiring Person or an Affiliate or Associate thereof or a transferee
    of any of the foregoing and accordingly will deem the Rights evidenced thereby
    to be void and not transferable or exercisable.



 

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(c)      The
    Board may, at its option, at any time after a Flip-in Date and prior to the
    time that an Acquiring Person becomes the Beneficial Owner of more than 50%
    of the outstanding shares of Common Stock elect to exchange all (but not
    less than all) of the then outstanding Rights (which shall not include Rights
    that have become void pursuant to the provisions of Section 3.1(b)) for shares
    of Common Stock at an exchange ratio of one share of Common Stock per Right,
    appropriately adjusted in order to protect the interests of holders of Rights
    generally in the event that after the Separation Time an event of a type
    analogous to any of the events described in Section 2.4(a) or (b) shall have
    occurred with respect to the Common Stock (such exchange ratio, as adjusted
    from time to time, being hereinafter referred to as the “Exchange Ratio”).




Immediately upon the action of the Board electing to exchange the Rights, without any further action and without any notice, the right to exercise the Rights will terminate and each Right (other than Rights that have become void pursuant to Section 3.1(b)) will  thereafter represent only the right to receive a number of shares of Common Stock equal to the Exchange Ratio. Promptly after the action of the Board electing to exchange the Rights, the Company shall give notice thereof (specifying the steps to be taken to receive shares of  Common Stock in exchange for Rights) to the Rights Agent and the holders of the Rights (other than Rights that have become void pursuant to Section 3.1(b)) outstanding immediately prior thereto by mailing such notice in accordance with Section 5.9.




Each Person in whose name any certificate for shares
  is issued upon the exchange of Rights pursuant to this Section 3.1(c) or Section
  3.1(d) shall for all purposes be deemed to have become the holder of record
  of the shares represented thereby on, and such certificate shall be dated, the
  date upon which the Rights Certificate evidencing such Rights was duly surrendered
  and payment of any applicable taxes and other governmental charges payable by
  the holder was made; provided, however, that if the date of such
  surrender and payment is a date upon which the stock transfer books of the Company
  are closed, such Person shall be deemed to have become the record holder of
  such shares on, and such certificate shall be dated, the next succeeding Business
  Day on which the stock transfer books of the Company are open.




(d)      Whenever the Company shall become obligated under Section 3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange for Rights, the Company, at its option, may substitute therefor shares of Preferred Stock, at a ratio of one one hundredth of a  share of Preferred Stock for each share of Common Stock so issuable.




(e)      In the event that there shall not be sufficient treasury shares or authorized but unissued shares of Common Stock or Preferred Stock of the Company to permit the exercise or exchange in full of the Rights in accordance with Section 3.1(a) or (c), and the Company  elects not to, or is otherwise unable to, make the exchange referred to in Section 3.1(c), the Company shall either (i) call a meeting of shareholders seeking approval to cause sufficient additional shares to be authorized (provided that if such approval is not obtained the  Company will take the action specified in clause (ii) of this sentence) or (ii) take such action as shall be necessary to ensure and provide, to the extent permitted by applicable law and any agreements or instruments in effect on the Stock Acquisition Date to which it is a party,  that each Right shall



 

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thereafter constitute the right to
    receive, (x) at the Company’s option, either (A) in return for the Exercise
    Price, debt or equity securities or other assets (or a combination thereof)
    having a fair value equal to twice the Exercise Price, or (B) without payment
    of consideration (except as otherwise required by applicable law), debt or
    equity securities or other assets (or a combination thereof) having a fair
    value equal to the Exercise Price, or (y) if the Board elects to exchange
    the Rights in accordance with Section 3.1(c), debt or equity securities or
    other assets (or a combination thereof) having a fair value equal to the
    product of the Market Price of a share of Common Stock on the Flip-in Date
    times the Exchange Ratio in effect on the Flip-in Date, where in any case
    set forth in (x) or (y) above the fair value of such debt or equity securities
    or other assets shall be as determined in good faith by the Board, after
    consultation with a nationally recognized investment banking firm.


3.2      Flip-over.




(a)      Prior
    to the Expiration Time, the Company shall not enter into any agreement with
    respect to, consummate or permit to occur any Flip-over Transaction or Event
    unless and until it shall have entered into a supplemental agreement with
    the Flip-over Entity, for the benefit of the holders of the Rights, providing
    that, upon consummation or occurrence of the Flip-over Transaction or Event
    (i) each Right shall thereafter constitute the right to purchase from the
    Flip-over Entity, upon exercise thereof in accordance with the terms hereof,
    that number of shares of Flip-over Stock of the Flip-over Entity having an
    aggregate Market Price on the date of consummation or occurrence of such
    Flip-over Transaction or Event equal to twice the Exercise Price for an amount
    in cash equal to the Exercise Price (such right to be appropriately adjusted
    in order to protect the interests of the holders of Rights generally in the
    event that after such date of consummation or occurrence an event of a type
    analogous to any of the events described in Section 2.4(a) or (b) shall have
    occurred with respect to the Flip-over Stock) and (ii) the Flip-over Entity
    shall thereafter be liable for, and shall assume, by virtue of such Flip-over
    Transaction or Event and such supplemental agreement, all the obligations
    and duties of the Company pursuant to this Agreement. The provisions of this
    Section 3.2 shall apply to successive Flip-over Transactions or Events.




(b)      Prior to the Expiration Time, unless the Rights will be redeemed pursuant to Section 5.1 hereof in connection therewith, the Company shall not enter into any agreement with respect to, consummate or permit to occur any Flip-over Transaction or Event if at the time  thereof there are any rights, warrants or securities outstanding or any other arrangements, agreements or instruments that would eliminate or otherwise diminish in any material respect the benefits intended to be afforded by this Rights Plan to the holders of Rights upon  consummation of such transaction.



 

 

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ARTICLE IV

THE RIGHTS AGENT


4.1      General.




(a)      The
    Company hereby appoints the Rights Agent to act as agent for the Company
    in accordance with the terms and conditions hereof, and the Rights Agent
    hereby accepts such appointment. The Company agrees to pay to the Rights
    Agent reasonable compensation for all services rendered by it hereunder and,
    from time to time, on demand of the Rights Agent, its reasonable expenses
    and counsel fees and other disbursements incurred in the administration and
    execution of this Agreement and the exercise and performance of its duties
    hereunder. The Company also agrees to indemnify the Rights Agent for, and
    to hold it harmless against, any loss, liability, or expense, incurred without
    negligence, bad faith or willful misconduct on the part of the Rights Agent,
    for anything done or omitted to be done by the Rights Agent in connection
    with the acceptance and administration of this Agreement, including the costs
    and expenses of defending against any claim of liability.




(b)      The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any certificate for securities purchasable upon exercise of Rights,  Rights Certificate, certificate for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed,  executed and, where necessary, verified or acknowledged, by the proper person or persons.




4.2      Merger or
  Consolidation or Change of Name of Rights Agent.




(a)      Any
    corporation or other entity into which the Rights Agent or any successor
    Rights Agent may be merged or with which it may be consolidated, or any corporation
    or other entity resulting from any merger or consolidation to which the Rights
    Agent or any successor Rights Agent is a party, or any corporation or other
    entity succeeding to the shareholder services business of the Rights Agent
    or any successor Rights Agent, will be the successor to the Rights Agent
    under this Agreement without the execution or filing of any paper or any
    further act on the part of any of the parties hereto, provided that such
    corporation or other entity would be eligible for appointment as a successor
    Rights Agent under the provisions of Section 4.4 hereof. In case at the time
    such successor Rights Agent succeeds to the agency created by this Agreement
    any of the Rights Certificates have been countersigned but not delivered,
    any such successor Rights Agent may adopt the countersignature of the predecessor
    Rights Agent and deliver such Rights Certificates so countersigned; and in
    case at that time any of the Rights Certificates have not been countersigned,
    any successor Rights Agent may countersign such Rights 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 Rights Certificates will have the
    full force provided in the Rights Certificates and in this Agreement.




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



 

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provided in the Rights Certificates and in this Agreement.


4.3      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 Rights Certificates, by their acceptance thereof,
  shall be bound:




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




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




(c)      The Rights Agent will be liable hereunder only for its own negligence, bad faith or willful misconduct.




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




(e)      The
    Rights Agent will not be under any responsibility in respect of the validity
    of this Agreement or the execution and delivery hereof (except the due authorization,
    execution and delivery hereof by the Rights Agent) or in respect of the validity
    or execution of any certificate for securities purchasable upon exercise
    of Rights or Rights Certificate (except its countersignature thereof); nor
    will it be responsible for any breach by the Company of any covenant or condition
    contained in this Agreement or in any Rights Certificate; nor will it be
    responsible for any change in the exercisability of the Rights (including
    the Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment
    required under the provisions of Section 2.4, 3.1 or 3.2 hereof or be 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 after receipt of the certificate
    contemplated by Section 2.4 describing any such adjustment); nor will it
    by any act hereunder be deemed to make any representation or warranty as
    to the authorization or reservation of any securities purchasable upon exercise
    of



 

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Rights or any Rights or as to whether any securities purchasable upon exercise of Rights will, when issued, be duly and validly authorized, executed, issued and delivered and fully paid and nonassessable.


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




(g)      The
    Rights Agent is hereby authorized and directed to accept instructions with
    respect to the performance of its duties hereunder from any person believed
    by the Rights Agent to be the Chairman of the Board, the President or any
    Vice President or the Secretary or any Assistant Secretary or the Treasurer
    or any Assistant Treasurer of the Company, and to apply to such persons for
    advice or instructions in connection with its duties, and it shall not be
    liable for any action taken or suffered by it in good faith in accordance
    with instructions of any such person.




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




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




4.4      Change
      of  Rights Agent. The Rights Agent may resign and be discharged from
      its duties  under this Agreement upon 90 days’ notice (or such lesser
      notice as is  acceptable to the Company) in writing mailed to the Company
      and to each transfer
  agent of Common Stock by registered or certified mail, and to the holders of
       the Rights in accordance with Section 5.9. The Company may remove the
      Rights
  Agent upon 30 days’ notice in writing, mailed to the Rights Agent and
  to  each transfer agent of the Common Stock by registered or certified mail,
  and
  to the holders of the Rights in accordance with Section 5.9. If the Rights
  Agent  should resign or be removed or otherwise become incapable of acting,
  the Company
  will appoint a successor to the Rights Agent. If the Company fails to make
  such  appointment within a period of 30 days after 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 any Rights (which holder shall, with such
  notice,
  submit such holder’s Rights Certificate for inspection by the Company),
   then the holder of any Rights may apply to any court of competent jurisdiction

  for the appointment of a new Rights Agent. Any successor Rights Agent, whether
   appointed by the Company or by such a court, shall be a limited partnership,

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under the laws of the United States
    or any state of the United States, in good standing, which is authorized
    under such laws to exercise the powers of the Rights Agent contemplated by
    this Agreement and is subject to supervision or examination by federal or
    state authority and which has at the time of its appointment as Rights Agent
    a combined capital and surplus of at least $50,000,000. After appointment,
    the successor Rights Agent will 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 will file notice thereof in writing with the predecessor Rights
    Agent and each t ransfer agent of the Common Stock, and mail a notice thereof
    in writing to the holders of the Rights. Failure to give any notice provided
    for in this Section 4.4, 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.

	ARTICLE V


	 
	MISCELLANEOUS



5.1      Redemption.




(a)      The Board may, at its option, at any time prior to the time that a Person becomes an Acquiring Person, elect to redeem all (but not less than all) of the then outstanding Rights at the Redemption Price, and the Company, at its option, may pay the Redemption Price  either in cash or shares of Common Stock or other securities of the Company deemed by the Board, in the exercise of its sole discretion, to be at least equivalent in value to the Redemption Price.




(b)      Immediately
    upon the action of the Board electing to redeem the Rights (or, if the resolution
    of the Board electing to redeem the Rights states that the redemption will
    not be effective until the occurrence of a specified future time or event,
    upon the occurrence of such future time or event), without any further action
    and without any notice, the right to exercise the Rights will terminate and
    each Right will thereafter represent only the right to receive the Redemption
    Price in cash or securities, as determined by the Board. Promptly after the
    Rights are redeemed, the Company shall give notice of such redemption to
    the Rights Agent and the holders of the then outstanding Rights by mailing
    such notice in accordance with Section 5.9.




5.2      Expiration.
  The Rights and this Agreement shall expire at the Expiration Time and no Person
  shall have any rights pursuant to this Agreement or any Right after the Expiration
  Time, except, if the Rights are exchanged or redeemed, as provided in Section
  3.1 or 5.1 hereof, respectively.




5.3      Issuance
  of New Rights Certificates. Notwithstanding any of the



 

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provisions of this Agreement or of
     the Rights to the contrary, the Company may, at its option, issue new Rights

  Certificates evidencing Rights in such form as may be approved by the Board
     to reflect any adjustment or change in the number or kind or class of shares

  of stock purchasable upon exercise of Rights made in accordance with the provisions
     of this Agreement. In addition, in connection with the issuance or sale
    of shares
  of Common Stock by the Company following the Separation Time and prior to the
     Expiration Time pursuant to the terms of securities convertible or redeemable

  into shares of Common Stock or to options, in each case issued or granted prior
     to, and outstanding at, the Separation Time, the Company shall issue to
    the
  holders of such shares of Common Stock, Rights Certificates representing the
     appropriate number of Rights in connection with the issuance or sale of
    such
  shares of Common Stock; provided, however, in each case, (i)
  no  such Rights Certificate shall be issued, if, and to the extent that, the
  Company
  shall be advised by counsel that such issuance would create a significant risk
   of material adverse tax consequences to the Company or to the Person to whom

  such Rights Certificates would be issued, (ii) no such Rights Certificates
  shall  be issued if, and to the extent that, appropriate adjustment shall have
  otherwise
  been made in lieu of the issuance thereof, and (iii) the Company shall have
   no obligation to distribute Rights Certificates to any Acquiring Person or
  Affiliate
  or Associate of an Acquiring Person or any transferee of any of the foregoing.


5.4      Supplements
       and Amendments. The Company and the Rights Agent may from time to
       time supplement or amend this Agreement without the approval of any holders
       of Rights
  (i) prior
  to the time a person becomes an Acquiring Person, to cure any ambiguity or
  in any other respect and (ii) on or after the time a person becomes an Acquiring
  Person, to cure any ambiguity or (A) to correct or supplement any provision
  contained herein which may be inconsistent with any other provisions herein
  or otherwise defective or (B) to change or supplement the provisions hereunder
  in any manner which the Company may deem necessary or desirable and which,
  in
  the case of (A) or (B), shall not materially adversely affect the interests
       of the holders of Rights (other than an Acquiring Person or an Affiliate
       or Associate
       of an
  Acquiring Person). The Rights Agent will duly execute and deliver any supplement
  or amendment hereto requested by the Company which satisfies the terms of the
  preceding sentence, provided that the Rights Agent receives 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 5.7 and provided
  that such supplement or amendment does not materially change or increase the
  Rights Agent’s rights, duties, liabilities or obligations hereunder.




5.5      Fractional
  Shares. If the Company elects not to issue certificates representing fractional
  shares upon exercise or redemption of Rights, the Company shall, in lieu thereof,
  in the sole discretion of the Board, either (a) evidence such fractional shares
  by depositary receipts issued pursuant to an appropriate agreement between the
  Company and a depositary selected by it, providing that each holder of a depositary
  receipt shall have all of the rights, privileges and preferences to which such
  holder would be entitled as a beneficial owner of such fractional share, or
  (b) pay to the registered holder of such Rights the appropriate fraction of
  the Market Price per share in cash.




5.6      Rights
  of Action. Subject to the terms of this Agreement (including Sections 3.1(b)
  and 5.14), rights of action in respect of this Agreement, other than rights
  of



 

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action vested solely in the Rights
    Agent, are vested in the respective holders of the Rights; and any holder
    of any Rights, without the consent of the Rights Agent or of the holder of
    any other Rights, may, on such holder’s own behalf and for such holder’s
    own benefit and the benefit of other holders of Rights, enforce, and may
    institute and maintain any suit, action or proceeding against the Company
    to enforce, or otherwise act in respect of, such holder’s right to exercise
    such holder’s Rights in the manner provided in such holder’s Rights
    Certificate and in this Agreement. Without limiting the foregoing or any
    remedies available to the holders of Rights, it is specifically acknowledged
    that the holders of Rights would not have an adequate remedy at law for any
    breach of this Agreement and will be entitled to specific performance of
    the obligations under, and injunctive relief against actual or threatened
    violations of, the obligations of any Person subject to this Agreement.


5.7      Holder
  of Rights Not Deemed a Shareholder. No holder, as such, of any Rights shall
  be entitled to vote, receive dividends or be deemed for any purpose the holder
  of shares or any other securities which may at any time be issuable on the exercise
  of such Rights, nor shall anything contained herein or in any Rights Certificate
  be construed to confer upon the holder of any Rights, as such, any of the rights
  of a shareholder of the Company or any right to vote for the election of directors
  or upon any matter submitted to shareholders at any meeting thereof, or to give
  or withhold consent to any corporate action, or to receive notice of meetings
  or other actions affecting shareholders (except as provided in Section 5.8 hereof),
  or to receive dividends or subscription rights, or otherwise, until such Rights
  shall have been exercised or exchanged in accordance with the provisions hereof.




5.8      Notice
  of Proposed Actions. In case the Company shall, at any time after a Flip-in
  Date, propose after the Separation Time and prior to the Expiration Time (i)
  to effect or permit a Flip-over Transaction or Event or (ii) to effect the liquidation,
  dissolution or winding up of the Company, then, in each such case, the Company
  shall give to each holder of a Right, in accordance with Section 5.9 hereof,
  a notice of such proposed action, which shall specify the date on which such
  Flip-over Transaction or Event, liquidation, dissolution, or winding up is to
  take place, and such notice shall be so given at least twenty (20) Business
  Days prior to the date of the taking of such proposed action.




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




ITXC Corp.

750 College Road East

  Princeton, New Jersey 08540

  Attention: Secretary



Any notice or demand authorized or required by this Agreement to be given or made by the Company or by the holder of any Rights to or on the Rights Agent shall be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed (until another  address is

 

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filed in writing with the Company) as follows:


American Stock Transfer & Trust Company

  59 Maiden Lane

  New York, New York 10038

  Attn: Corporate Trust Department



Notices or demands authorized or
    required by this Agreement to be given or made by the Company or the Rights
    Agent to or on the holder of any Rights shall be sufficiently given or made
    if delivered or sent by first-class mail, postage prepaid, addressed to such
    holder at the address of such holder as it appears upon the registry books
    of the Rights Agent or, prior to the Separation Time, on the registry books
    of the transfer agent for the Common Stock. Any notice which is mailed in
    the manner herein provided shall be deemed given, whether or not the holder
    receives the notice.


5.10      Suspension
  of Exercisability. To the extent that the Company determines in good faith
  that some action will or need be taken pursuant to Section 3.1 or to comply
  with federal or state securities laws, the Company may suspend the exercisability
  of the Rights for a reasonable period in order to take such action or comply
  with such laws. In the event of any such suspension, the Company shall issue
  as promptly as practicable a public announcement stating that the exercisability
  or exchangeability of the Rights has been temporarily suspended. Notice thereof
  pursuant to Section 5.9 shall not be required. Failure to give a notice pursuant
  to the provisions of this Agreement shall not affect the validity of any action
  taken hereunder.




5.11      Costs
  of Enforcement. The Company agrees that if the Company or any other Person
  the securities of which are purchasable upon exercise of Rights fails to fulfill
  any of its obligations pursuant to this Agreement, then the Company or such
  Person will reimburse the holder of any Rights for the costs and expenses (including
  legal fees) incurred by such holder in actions to enforce such holder’s
  rights pursuant to any Rights or this Agreement.




5.12      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.




5.13      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 holders of the
  Rights any legal or equitable right, remedy or claim under this Agreement and
  this Agreement shall be for the sole and exclusive benefit of the Company, the
  Rights Agent and the holders of the Rights.




5.14      Determination
  and Actions by the Board of Directors, etc. The Board shall have the exclusive
  power and authority to administer this Agreement and to exercise all rights
  and powers specifically granted to the Board or to the Company, or as may be
  necessary or advisable in the administration of this Agreement, including, without
  limitation, the right and power to (i) interpret the provisions of this Agreement
  and (ii) make all determinations deemed necessary or advisable for the administration
  of this Agreement. All such actions, calculations, interpretations and determinations
  which are done or made by the Board in good faith, shall be final, conclusive
  and binding on the Company, the Rights Agent, the holders of the Rights and
  all other parties.



 

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5.15      Descriptive
  Headings. Descriptive headings appear herein for convenience only and shall
  not control or affect the meaning or construction of any of the provisions hereof.



  
5.16      Governing
    Law. THIS AGREEMENT AND EACH RIGHT 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.




5.17      Counterparts;
  Facsimile. 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.
  Execution and delivery of this Agreement and such other agreements by facsimile
  transmission shall constitute execution and delivery of this Agreement and such
  other agreements for all purposes, with the same force and effect as execution
  and delivery of an original manually signed copy hereof.




5.18      Severability.
  If any term or provision hereof or the application thereof to any circumstance
  shall, in any jurisdiction and to any extent, be invalid or unenforceable, such
  term or provision shall be ineffective as to such jurisdiction to the extent
  of such invalidity or unenforceability without invalidating or rendering unenforceable
  the remaining terms and provisions hereof or the application of such term or
  provision to circumstances other than those as to which it is held invalid or
  unenforceable.



[This space intentionally left blank.]

 

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



	 	ITXC CORP.

	 	 	 
	 	 	 
	 	By:	/s/
        Tom Evslin                     

	 	Name:	Tom Evslin
	 	Title:	President and Chief Executive Officer
	 	 	 


	 	

	 	AMERICAN STOCK
      TRANSFER & TRUST
	 	 	COMPANY 
	 	 	 
	 	By:	/s/
        Herbert Lemmer              

	 	Name:	Herbert Lemmer
	 	Title:	Vice President





 

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	Description of Terms of
      Participating Preferred Stock



RESOLVED, that there is hereby established
    a series of Preferred Stock, par value $.001 per share, of the Corporation,
    and the designation and certain terms, powers, preferences and other rights
    of the shares of such series, and certain qualifications, limitations and
    restrictions thereon, are hereby fixed as follows:




(i)      The distinctive serial designation of this series shall be “Participating Preferred Stock” (hereinafter called “this Series”). Each share of this Series shall be identical in all respects with the other shares of this Series except as to the dates from and after which dividends  thereon shall be cumulative.




(ii)      The number of shares in this Series shall initially be _______,* which number may from time to time be increased or decreased (but not below the number then outstanding) by the Board of Directors. Shares of this Series purchased by the Corporation shall be  canceled and shall revert to authorized but unissued shares of Preferred Stock undesignated as to series. Shares of this Series may be issued in fractional shares, which fractional shares shall entitle the holder, in proportion to such holder’s fractional share, to all rights of a  holder of a whole share of this Series.




(iii)      The
    holders of full or fractional shares of this Series shall be entitled to
    receive, when and as declared by the Board of Directors, but only out of
    funds legally available therefor, dividends, on each date that dividends
    or other distributions (other than dividends or distributions payable in
    Common Stock of the Corporation) are payable on or in respect of Common Stock
    comprising part of the Reference Package (as defined below), in an amount
    per whole share of this Series equal to the aggregate amount of dividends
    or other distributions (other than dividends or distributions payable in
    Common Stock of the Corporation) that would be payable on such date to a
    holder of the Reference Package. Each such dividend shall be paid to the
    holders of record of shares of this Series on the date, not exceeding sixty
    days preceding such dividend or distribution payment date, fixed for the
    purpose by the Board of Directors in advance  of payment of each particular
    dividend or distribution. Dividends on each full and each fractional share
    of this Series shall be cumulative from the date such full or fractional
    share is originally issued; provided that any such full or fractional share
    originally issued after a dividend record date and on or prior to the dividend
    payment date to which such record date relates shall not be entitled to receive
    the dividend payable on such dividend payment date or any amount in respect
    of the period from such original issuance to such dividend payment date.




The term “Reference Package” shall
    initially mean 100 shares of Common Stock, $.001 par value per share (“Common
    Stock”), of the Corporation. In the event the Corporation shall at any
    time after the close of business on ________, ____* (A) declare or pay a
    dividend on



	
	 


	*	Insert a number of equivalent to 1/100 of the sum of the number of outstanding shares of Common Stock, reserved conversion shares (if any), and stock options, rounded up to a whole number.



	*	For a resolution relating
          to shares to be issued pursuant to Section 2.3 of the Rights Agreement,
          insert the Separation Time. For a resolution relating to shares to
          be issued pursuant to Section 3.1(d) of the Rights Agreement, insert
          the Flip-in Date.



 







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any Common Stock payable in Common Stock, (B) subdivide any Common Stock or (C) combine any Common Stock into a smaller number of shares, then and in each such case the Reference Package after such event shall be the Common Stock that a holder of the  Reference Package immediately prior to such event would hold thereafter as a result thereof.


Holders of shares of this Series shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of full cumulative dividends, as herein provided on this Series.




So long as any shares of this Series are outstanding, no dividend (other than a dividend in Common Stock or in any other stock ranking junior to this Series as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other distribution  declared or made upon the Common Stock or upon any other stock ranking junior to this Series as to dividends or upon liquidation, nor shall any Common Stock nor any other stock of the Corporation ranking junior to or on a parity with this Series as to dividends or upon  liquidation be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by the Corporation (except by conversion into or exchange for stock of the  Corporation ranking junior to this Series as to dividends and upon liquidation), unless, in each case, the full cumulative dividends (including the dividend to be due up

on payment of such dividend, distribution, redemption, purchase or other acquisition) on all outstanding shares  of this Series shall have been, or shall contemporaneously be, paid.




(iv)      In the event of any merger, consolidation, reclassification or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of this Series shall at the  same time be similarly exchanged or changed into an amount per whole share equal to the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, that a holder of the Reference Package would be entitled to receive as a  result of such transaction.




(v)      In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the holders of full and fractional shares of this Series shall be entitled, before any distribution or payment is made on any date to the holders  of the Common Stock or any other stock of the Corporation ranking junior to this Series upon liquidation, to be paid in full an amount per whole share of this Series equal to the greater of (A) $__________* or (B) the aggregate amount distributed or to be distributed prior to  such date in connection with such liquidation, dissolution or winding up to a holder of the Reference Package (such greater amount being hereinafter referred to as the “Liquidation Preference”), together with accrued dividends to such distribution or payment date, whether or



	
	 


	*	Insert an amount equal to 100 times the Exercise Price in effect as of the Separation Time.



 

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not earned or declared. If such payment shall have been made in full to all holders of shares of this Series, the holders of shares of this Series as such shall have no right or claim to any of the remaining assets of the Corporation.


In the event the assets of the Corporation available for distribution to the holders of shares of this Series upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such  holders are entitled pursuant to the first paragraph of this Section (v), no such distribution shall be made on account of any shares of any other class or series of Preferred Stock ranking on a parity with the shares of this Series upon such liquidation, dissolution or winding up  unless proportionate distributive amounts shall be paid on account of the shares of this Series, ratably in proportion to the full distributable amounts for which holders of all such parity shares are respectively entitled upon such liquidation, dissolution or winding up.




Upon the liquidation, dissolution or winding up of the Corporation, the holders of shares of this Series then outstanding shall be entitled to be paid out of assets of the Corporation available for distribution to its shareholders all amounts to which such holders are entitled  pursuant to the first paragraph of this Section (v) before any payment shall be made to the holders of Common Stock or any other stock of the Corporation ranking junior upon liquidation to this Series.




For the purposes of this Section (v), the consolidation or merger of, or binding share exchange by, the Corporation with any other corporation shall not be deemed to constitute a liquidation, dissolution or winding up of the Corporation.




(vi)      The shares of this Series shall not be redeemable.




(vii)      In addition to any other vote or consent of shareholders required by law or by the Certificate of Incorporation, as amended, of the Corporation, each whole share of this Series shall, on any matter, vote as a class with any other capital stock comprising part of the  Reference Package and voting on such matter and shall have the number of votes thereon that a holder of the Reference Package would have.



 

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EXHIBIT B

[Form of Rights Certificate]

	Certificate No. W-	_______ Rights





    THE RIGHTS ARE SUBJECT TO REDEMPTION
      OR MANDATORY EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH
      IN THE RIGHTS PLAN. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES
      OR ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS PLAN) OR
      TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.



Rights Certificate

ITXC Corp.


This certifies that ____________________, or registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Shareholder Protection Rights  Plan, dated as of April 10, 2003 (as amended from time to time, the “Rights Plan”), between ITXC Corp., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, a New York corporation, as Rights Agent (the “Rights Agent”,
    which term shall include any successor Rights Agent under the Rights Plan),
    to purchase from the Company at any time after the Separation Time (as such
    term is defined in the Rights Plan) and prior to the close of business on
    April 10, 2013, one one-hundredth of a fully-paid share of Participating
    Preferred Stock (the “Preferred Stock”), of the Company (subject to adjustment as provided in the Rights Plan) at
 the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate with the Form of Election to Exercise duly executed  at the principal office of the Rights Agent in New York, New York. The Exercise Price shall initially be $7.00 per Right and shall be subject to adjustment in certain events as provided in the Rights Plan.




In certain circumstances described
    in the Rights Plan, the Rights evidenced hereby may entitle the registered
    holder thereof to purchase securities of an entity other than the Company
    or securities of the Company other than Preferred Stock or assets of the
    Company, all as provided in the Rights Plan.




This Rights Certificate is subject to all of the terms, provisions and conditions of



 

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the Rights Plan, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Plan reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder  of the Rights Agent, the Company and the holders of the Rights Certificates. Copies of the Rights Plan are on file at the principal office of the Company and are available without cost upon written request.


This Rights Certificate, with or without other Rights Certificates, upon surrender at the office of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor evidencing an aggregate number of Rights  equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be entitled to receive, upon surrender hereof, another Rights Certificate or Rights  Certificates for the number of whole Rights not exercised.




Subject to the provisions of the Rights Plan, each Right evidenced by this Certificate may be (a) redeemed by the Company under certain circumstances, at its option, at a redemption price of $0.001 per Right or (b) exchanged by the Company under certain  circumstances, at its option, for one share of Common Stock or one one hundredth of a share of Preferred Stock per Right (or, in certain cases, other securities or assets of the Company), subject in each case to adjustment in certain events as provided in the Rights Plan.




No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of any securities which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Plan or herein be  construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action,  or to receive notice of meetings or other actions affecting shareholders (except as provided in the Rights Plan), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by this Rights Certificate shall have been exercised or exchanged as provided  in the Rights Plan.




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



 

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



	Date:
                                                            
        
	 	 
	 	 	 
	ATTEST:
	 	ITXC CORP.
	 	 	 
	                                                                                     	 	By                                                                                      
	Secretary	 	 
	 	 	 
	Countersigned:
	 	 
	                                                                                     	 	 
	 	 	 
	By                                                                                 
      	 	 
	Authorized
        Signature
	 	 


 

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[Form of Reverse Side of Rights Certificate]

	FORM OF ASSIGNMENT


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


  FOR VALUE RECEIVED_____________________________________________________________________________________________ hereby



sells, assigns and transfers unto_________________________________________________________________________________________________

 (Please print name

 ____________________________________________________________________________________________________________________________________

and address of transferee)


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

	Dated:
        _______________, ____
	 
	 	 
	Signature
        Guaranteed:
	                                                                                   
	 	Signature

      (Signature must correspond to name as written upon the face of this Rights
      Certificate in every particular, without alteration or enlargement or any
      change whatsoever)



Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee Medallion program), pursuant to SEC Rule 17Ad-15.



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  (To be completed if true)

 







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The undersigned hereby represents, for the benefit of all holders of Rights and shares of Common Stock, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an  Affiliate or Associate thereof (as defined in the Rights Plan).

	 	 
	 	

	 	Signature


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

	 
	NOTICE



In the event the certification set forth above is not completed in connection with a purported assignment, the Company will deem the Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or an Affiliate or Associate  thereof (as defined in the Rights Plan) or a transferee of any of the foregoing and accordingly will deem the Rights evidenced by such Rights Certificate to be void and not transferable or exercisable.



 

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[To be attached to each Rights Certificate]

FORM OF ELECTION TO EXERCISE

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

TO: ITXC Corp.


The undersigned hereby irrevocably elects to exercise _____ whole Rights represented by the attached Rights Certificate to purchase the shares of Participating Preferred Stock issuable upon the exercise of such Rights and requests that certificates for such shares be  issued in the name of and delivered to:



	 	
	 
	 	Name

      Address:	 
	 	 	 
	 	 
      
	 
	 	Social Security or Other Taxpayer

      Identification Number:	 


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

	 	
	 
	 	Name

      Address:	 
	 	 	 
	 	  
	 
	 	Social Security or Other Taxpayer

      Identification Number:	 


 

	Dated:
        _______________, ____
	 
	 	 
	Signature
        Guaranteed:
	                                                                                   
	 	Signature

      (Signature must correspond to name as written upon the face of the attached
      Rights Certificate in every particular, without alteration or enlargement
      or any change whatsoever)


 







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Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee Medallion program), pursuant to SEC Rule 17Ad-15.



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  (To be completed if true)


The undersigned hereby represents, for the benefit of all holders of Rights and shares of Common Stock, that the Rights evidenced by the attached Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring  Person or an Affiliate or Associate thereof (as defined in the Rights Plan).



	
	                                                                                   
	 	Signature


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  - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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NOTICE


In the event the certification set forth above is not completed in connection with a purported exercise, the Company will deem the Beneficial Owner of the Rights evidenced by the attached Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof  (as defined in the Rights Plan) or a transferee of any of the foregoing and accordingly will deem the Rights evidenced by such Rights Certificate to be void and not transferable or exercisable.



 

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