ex410.htm


    Exhibit
4.10

     

    RIGHTS
AGREEMENT

     

    This Rights
Agreement (“Agreement”)
is dated as of July 10, 2008 and is made between Chordiant
Software, Inc., a Delaware corporation (the “Company”),
and American
Stock Transfer & Trust Company, LLC  (“Rights
Agent”).

     

    Recitals

     

    The
Board of Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Right”)
for each Common Share (as such term is hereinafter defined) outstanding at the
close of business on July 21, 2008 (the “Record
Date”), each Right representing the right to purchase one one-hundredth
of a Preferred Share (as such term is hereinafter defined), upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest to occur of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined); provided, however, that
Rights may be issued with respect to Common Shares that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date in accordance with the provisions of Section 22
hereof.

     

    Agreement

     

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

     

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

     

    (a) “Acquiring Person” shall mean
any Person (as such term is hereinafter defined) who or that, together with all
Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares then outstanding.  Notwithstanding
the foregoing, (A) the term Acquiring Person shall not include (i) the Company,
(ii) any Subsidiary (as such term is hereinafter defined) of the Company, (iii)
any employee benefit or compensation plan of the Company or any Subsidiary of
the Company, (iv) any entity holding Common Shares for or pursuant to the terms
of any such employee benefit or compensation plan of the Company or any
Subsidiary of the Company, or (v) any Person, together with all Affiliates and
Associates of such Person, who is the Beneficial Owner of 20% or more of the
Common Shares outstanding as of the date of this Agreement until such time after
the date of this Agreement that such Person, together with all Affiliates and
Associates of such Person, shall become the Beneficial Owner of any additional
Common Shares (other than by means of a dividend made by the Company on the
Common Shares outstanding or pursuant to a split, subdivision or other
reclassification of the Common Shares undertaken by the Company) and shall then
beneficially own more than 20% of the Common Shares outstanding, and (B) no
Person shall become an “Acquiring Person” either (x)

    
      
        
        

      

      
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as
the result of an acquisition of Common Shares by the Company that, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the Common Shares then
outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 20% or
more of the Common Shares then outstanding by reason of share purchases by the
Company and shall, following written notice from, or public disclosure by the
Company of such share purchases by the Company, become the Beneficial Owner of
any additional Common Shares without the prior consent of the Company and shall
then be the Beneficial Owner more than 20% of the Common Shares then
outstanding, then such Person shall be deemed to be an “Acquiring Person,” (y)
as the result of the acquisition of Common Shares directly from the Company,
provided, however, that
if a Person shall become the Beneficial Owner of 20% or more of the Common
Shares then outstanding by reason of share purchases directly from the Company
and shall, after that date, become Beneficial Owner of any additional Common
Shares without the prior written consent of the Company and shall then
Beneficially Own more than 20% of the Common Shares then outstanding, then such
Person shall be deemed to be an “Acquiring Person” or (z) if the Board of
Directors determines in good faith that a Person who would otherwise be an
“Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests, as
promptly as practicable (as determined in good faith by the Board of Directors),
following receipt of written notice from the Company of such event, of
Beneficial Ownership of a sufficient number of Common Shares so that such Person
would no longer be an Acquiring Person, as defined pursuant to the foregoing
provisions of this paragraph (a), or, in the case of any Derivative Securities
underlying a transaction entered into by such Person or otherwise acquired by
such Person, such Person terminates such transaction or otherwise disposes of
such Derivative Securities so that such Person would no longer be an Acquiring
Person, then such Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement; provided, however, that if
such Person shall again become the Beneficial Owner of 20% or more of the Common
Shares then outstanding, such Person shall be deemed an “Acquiring Person,”
subject to the exceptions set forth in this
Section 1(a).

    

     

    (b) “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), as in effect on the date of this Agreement; provided, however, that the
limited partners of a limited partnership shall not be deemed to be Associates
of such limited partnership solely by virtue of their limited partnership
interests.

     

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

     

    (i) that
such Person or any of such Person’s Affiliates or Associates is deemed to
beneficially own, within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement;

     

    (ii) that
such Person or any of such Person’s Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities and other than
agreements between the Company and any 

    
      
        
        

      

      
        2.

        
          

        

      

      
        
        
corporate
partner pursuant to which the right to purchase shares is conditioned upon the
achievement of research or development milestones), or upon the exercise of
conversion rights, exchange rights, rights (other than these Rights), warrants
or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);

    

     

    (iii) that
are beneficially owned, directly or indirectly, by any other Person with which
such Person or any of such Person’s Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section 1(c)(ii)(B) hereof) or
disposing of any securities of the Company; provided, however, an
agreement, arrangement or understanding for purposes of this
Section 1(c)(iii) shall not be deemed to include actions, including any
agreement, arrangement or understanding, or statements by any member of the
Company’s Board of Directors as of the date of this Agreement, any subsequent
directors of the Company (the “Successor
Directors”) who have been nominated by a majority of directors who are
directors as of the date of this Agreement or who are Successor Directors, or by
any Person of whom such a director is an Affiliate or Associate, provided, however that this
exception shall not apply to a particular Person or Persons if and to the extent
that such Person or Persons, after the date of this Agreement, acquires
Beneficial Ownership of more than an additional 5% of the then outstanding
Common Shares of the Company unless (A) the shares are acquired directly from
the Company or as part of an employee benefit or compensation plan of the
Company or a subsidiary of the Company or (B) the Person establishes to the
satisfaction of the directors of the Company that it is acting on its own behalf
and not in concert with any other Person and will not, upon completion of any
purchases, be the Beneficial Owner of 20% or more of the outstanding Common
Shares; or

     

    (iv) that
are Derivative Securities provided that the number of Common Shares deemed
Beneficially Owned as a result of such Derivative Securities shall equal the
number of Common Shares that are synthetically owned pursuant to the derivative
transactions underlying such Derivative Securities.

     

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

    
      
        
        

      

      
        3.

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (f) “Common Shares” shall mean the
shares of common stock, par value $0.001 per share, of the Company; provided, however, that,
“Common Shares,” when used in this Agreement in connection with a specific
reference to any Person other than the Company, shall mean the capital stock (or
equity interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons that
ultimately control such first-mentioned Person.

     

    (g) “Derivative Securities” shall
mean securities underlying a derivative transaction entered into by a Person, or
derivative securities acquired by a Person, which give such Person the economic
equivalent of ownership of an amount of securities in the Company due to the
fact that the value of the derivative transaction is explicitly determined by
reference to the price or value of securities in the Company, without regard to
whether (i) such derivative securities convey any voting rights in securities in
the Company to such Person, (ii) such derivative securities are required to be,
or capable of being, settled through delivery of securities in the Company, or
(iii) such Person may have entered into other transactions that hedge the
economic effect of such derivative securities.

     

    (h) “Distribution Date” shall have
the meaning set forth in Section 3 hereof.

     

    (i)  “Final Expiration Date”
shall have the meaning set forth in Section 7 hereof.

     

    (j) “Interested Stockholder” shall
mean any Acquiring Person or any Affiliate or Associate of an Acquiring Person
or any other Person in which any such Acquiring Person, Affiliate or Associate
has an interest, or any other Person acting directly or indirectly on behalf of
or in concert with any such Acquiring Person, Affiliate or
Associate.

     

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

     

    (l) “Preferred Shares” shall mean
shares of Series A Junior Participating Preferred Stock, par value $0.001 per
share, of the Company having the designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions set forth in the
Form of Certificate of Designation attached to this Agreement as
Exhibit A.

     

    (m) “Purchase Price” shall have
the meaning set forth in Section 7(b) hereof.

     

    (n) “Redemption Date” shall have
the meaning set forth in Section 7 hereof.

     

    (o) “Shares Acquisition Date”
shall mean the first date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such; provided,

    
      
        
        

      

      
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 however, that, if such
Person is determined not to have become an Acquiring Person pursuant to clause
(z) of Subsection 1(a)(B) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.

    

     

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

     

    (q) “Transaction” shall mean any
merger, consolidation or sale of assets described in Section 13(a) hereof
or any acquisition of Common Shares that would result in a Person becoming an
Acquiring Person or a Principal Party (as such term is hereinafter
defined).

     

    (r) “Transaction Person” with
respect to a Transaction shall mean (i) any Person who (x) is or will become an
Acquiring Person or a Principal Party (as such term is hereinafter defined) if
the Transaction were to be consummated and (y) directly or indirectly proposed
or nominated a director of the Company, which director is in office at the time
of consideration of the Transaction, or (ii) an Affiliate or Associate of such a
Person.

     

    SECTION
2. Appointment
of Rights Agent.  The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.  The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.

     

    SECTION
3. Issue of
Right Certificates.

     

    (a) Until
the earlier of the Close of Business on (i) the Shares Acquisition Date or (ii)
the tenth Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement (determined in accordance with Rule 14d-2
under the Exchange Act) by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) of, or of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer (which intention to commence remains in
effect for five Business Days after such announcement), the consummation of
which would result in any Person becoming an Acquiring Person (including any
such date that is after the date of this Agreement and prior to the issuance of
the Rights, the earlier of such dates being herein referred to as the “Distribution
Date”), (x) the Rights will be evidenced by the certificates for Common
Shares registered in the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) the Rights (and the right to receive Right Certificates therefor) will
be transferable only in connection with the transfer of Common
Shares.  As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of 

    
      
        
        

      

      
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the
Company, a Right Certificate, in substantially the form of Exhibit B hereto
(a “Right
Certificate”), evidencing one Right for each Common Share so held,
subject to the adjustment provisions of Section 11 of this Rights
Agreement.  As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.

    

     

    (b) On
the Record Date, or as soon as practicable thereafter, the Company will send
(directly or through the Rights Agent or its transfer agent) a copy of a Summary
of Rights to Purchase Preferred Shares, in substantially the form of
Exhibit C hereto (the “Summary of
Rights”), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company.  With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof.  Until the Distribution Date (or
the earlier of the Redemption Date and the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding on the Record Date
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.

     

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

     

    THIS
CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS
SET FORTH IN A RIGHTS AGREEMENT BETWEEN CHORDIANT SOFTWARE, INC. (THE “COMPANY”)
AND AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC AS RIGHTS AGENT (THE
“RIGHTS AGENT”), DATED AS OF JULY 10, 2008, AS AMENDED FROM TIME TO TIME (THE
“RIGHTS AGREEMENT”), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
THE COMPANY.  UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO
LONGER BE EVIDENCED BY THIS CERTIFICATE.  THE COMPANY WILL MAIL TO THE
HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR.  AS DESCRIBED IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.

    


    With
respect to such certificates containing the foregoing legend, until the
Distribution Date (or, if earlier, the earlier of the Redemption Date or the
Final Expiration Date), the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute
the

    
      
        
        

      

      
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transfer
of the Rights associated with the Common Shares represented
thereby.  In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares that are no longer outstanding.  Notwithstanding
this Section 3(c), the omission of a legend shall not affect the
enforceability of any part of this Rights Agreement or the rights of any holder
of the Rights.

    

     

    SECTION
4. Form of
Right Certificates.

     

    (a) The
Right Certificates (and the form of election to purchase Preferred Shares, the
form of assignment and the form of certification to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or quotation system
on which the Rights may from time to time be listed, or to conform to
usage.  Subject to the provisions of Sections 7, 11 and 22 hereof, the
Right Certificates shall entitle the holders thereof to purchase such number of
one one-hundredths of a Preferred Share as shall be set forth therein at the
Purchase Price (as defined in Section 7(b)), but the number of such one
one-hundredths of a Preferred Share and the Purchase Price shall be subject to
adjustment as provided herein.

     

    (b) Any
Right Certificate issued pursuant to Section 3(a) or Section 22 hereof
that represents Rights that are null and void pursuant to the second paragraph
of Section 11(a)(ii) hereof and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:

     

    THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT).  ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY ARE NULL AND VOID.

     

    The
provisions of Section 11(a)(ii) hereof shall be operative whether or not
the foregoing legend is contained on any such Right Certificate.

     

    SECTION
5. Countersignature
and Registration.  The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its Chief Executive Officer,
its President, its Vice Chairman of the Board, its Chief Financial Officer, or
any of its Vice Presidents, either manually or by facsimile signature, shall
have affixed thereto the Company’s seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature.  The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned.  In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and

    
      
        
        

      

      
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    issued
and delivered by the Company with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Right Certificate, shall
be a proper officer of the Company to sign such Right Certificate, although at
the date of the execution of this Agreement any such person was not such an
officer.

     

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

     

    SECTION
6. Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.  Subject to the provisions
of Section 11(a)(ii), Section 14 and Section 24 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase.  Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent designated for such purpose.  Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 11(a)(ii), Section 14 and Section 24 hereof, countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested.  The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.

     

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

    
      
        
        

      

      
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    Notwithstanding
any other provisions hereof, the Company and the Rights Agent may amend this
Rights Agreement to provide for uncertificated Rights in addition to or in place
of Rights evidenced by Rights Certificates.

     

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

     

    (a) The
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each one one-hundredth of a
Preferred Share (or such other number of shares or other securities) as to which
the Rights are exercised, at or prior to the earliest of (i) the Close of
Business on July 21, 2011 (the “Final Expiration
Date”), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the “Redemption
Date”), or (iii) the time at which such Rights are exchanged as provided
in Section 24 hereof.

     

    (b) The
purchase price for each one one-hundredth of a Preferred Share pursuant to the
exercise of a Right shall initially be $20.00 (the “Purchase
Price”) and shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.

     

    (c) Upon
receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Section 9 hereof by certified check, cashier’s check, bank draft or
money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent for the Preferred
Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company, in its sole discretion, shall have elected to
deposit the Preferred Shares issuable upon exercise of the Rights hereunder into
a depository, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, deliver such
cash to or upon the order of the registered holder of such Right
Certificate.  In the event that the Company is obligated to issue
securities of the Company other than Preferred Shares (including Common Shares)
of the Company pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when appropriate.

    
      
        
        

      

      
        9.

        
          

        

      

      
        
        

      

    

     

    In
addition, in the case of an exercise of the Rights by a holder pursuant to
Section 11(a)(ii) hereof, the Rights Agent shall return such Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by such Right
Certificate no longer include the rights provided by Section 11(a)(ii)
hereof, and, if fewer than all the Rights represented by such Right Certificate
were so exercised, the Rights Agent shall indicate on the Right Certificate the
number of Rights represented thereby that continue to include the rights
provided by Section 11(a)(ii) hereof.

     

    (d) In
case the registered holder of any Right Certificate shall exercise fewer than
all the Rights evidenced thereby (other than a partial exercise of rights
pursuant to Section 11(a)(ii) as described in Section 7(c) hereof), a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.

     

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

     

    (f) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed
the certification following the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise, (ii)
tendered the Purchase Price (and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance with
Section 9) to the Company in the manner set forth in Section 7(c), and (iii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.

     

    SECTION
8. Cancellation
and Destruction of Right Certificates.  All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
delivered or surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement.  The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof.  The Rights Agent
shall deliver all canceled Right Certificates to the Company approximately one
and one-half years after the cancellation date, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

     

    SECTION
9. Availability
of Preferred Shares.  The Company covenants and agrees that so
long as the Preferred Shares (and, after the time a person becomes an Acquiring
Person, Common Shares or any other securities) issuable upon the exercise of the
Rights may be listed on any national securities exchange or quotation system,
the Company shall use its best efforts to 

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

    

    cause,
from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed on such exchange or quotation system upon
official notice of issuance upon such exercise.

     

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

     

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

     

    As
soon as practicable after the Distribution Date, the Company shall use its best
efforts to:

     

    (i) prepare
and file a registration statement under the Securities Act of 1933, as amended
(the “Act”),
with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, will use its best efforts to cause such registration statement
to become effective as soon as practicable after such filing and will use its
best efforts to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the Final
Expiration Date; and

     

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

     

    SECTION
10. Preferred
Shares Record Date.  Each person in whose name any certificate
for Preferred Shares or other securities is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares or other securities represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered with the forms of election and certification
duly executed and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon
which the Preferred Shares or other securities transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares or other securities transfer books of the Company
are open.  Prior to the exercise of the Rights evidenced 

    
      
        
        

      

      
        11.

        
          

        

      

      
        
        

      

    

    thereby,
the holder of a Right Certificate, as such, shall not be entitled to any rights
of a holder of Preferred Shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided
herein.

     

    SECTION
11. Adjustment
of Purchase Price, Number of Shares or Number of Rights.  The
Purchase Price, the number of Preferred Shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

     

    (a) 

     

    (i) In
the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock that, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.  If an event occurs that would
require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to any
adjustment required pursuant to Section 11(a)(ii) hereof.

     

    (ii) Subject
to Section 24 hereof and the provisions of the next paragraph of this
Section 11(a)(ii), in the event any Person shall become an Acquiring
Person, each holder of a Right shall, for a period of 60 days after the later of
such time any Person becomes an Acquiring Person or the effective date of an
appropriate registration statement filed under the Act pursuant to
Section 9 hereof (provided, however that, if at any time prior to the
expiration or termination of the Rights there shall be a temporary restraining
order, a preliminary injunction, an injunction, or temporary suspension by the
Board of Directors, or similar obstacle to exercise of the Rights (the
“Injunction”) that prevents exercise of the Rights, a new 60-day period shall
commence on the date the Injunction is removed), have a right to receive, upon
exercise thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a 

    
      
        
        

      

      
        12.

        
          

        

      

      
        
        
Preferred
Share for which a Right is then exercisable and dividing that product by (B) 50%
of the then current per share market price of the Common Shares (determined
pursuant to Section 11(d) hereof) on the date such Person became an
Acquiring Person; provided,
however, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii).  In
the event that any Person shall become an Acquiring Person and the Rights shall
then be outstanding, the Company shall not take any action that would eliminate
or diminish the benefits intended to be afforded by the
Rights.

    

     

    Notwithstanding
anything in this Agreement to the contrary, from and after the time any Person
becomes an Acquiring Person, any Rights beneficially owned by (i) such Acquiring
Person or an Associate or Affiliate of such Acquiring Person, (ii) a transferee
of such Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person became such, or (iii) a transferee of such
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person’s becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors has determined is part of a
plan, arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 11(a)(ii), shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise.  The Company shall use all reasonable efforts to insure
that the provisions of this Section 11(a)(ii) and Section 4(b) hereof
are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.  No Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or Affiliate; and any
Right Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence shall be
canceled.

     

    (iii) In
lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof,
the Company may, if a majority of the Board of Directors then in office
determines that such action is necessary or appropriate and not contrary to the
interests of holders of Rights, elect to (and, in the event that the Board of
Directors has not exercised the exchange right contained in Section 24(c)
hereof and there are not sufficient treasury shares and authorized but unissued
Common Shares to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Company shall) take all such action as may
be necessary to authorize, issue or pay, upon the exercise of the Rights, cash
(including by way of a reduction of the Purchase Price), property, Common
Shares, other securities or any combination thereof having an aggregate value
equal to the value of the Common Shares that otherwise would have been issuable
pursuant to Section 11(a)(ii) hereof, which aggregate value shall be
determined by a nationally recognized investment banking firm selected by a
majority of the Board of Directors then in office.  For purposes of
the preceding sentence, the value of the Common Shares shall be

    
      
        
        

      

      
        13.

        
          

        

      

      
        
        
determined
pursuant to Section 11(d) hereof.  Any such election by the Board
of Directors must be made within 60 days following the date on which the event
described in Section 11(a)(ii) hereof shall have
occurred.  Following the occurrence of the event described in
Section 11(a)(ii) hereof, a majority of the Board of Directors then in
office may suspend the exercisability of the Rights for a period of up to 60
days following the date on which the event described in Section 11(a)(ii)
hereof shall have occurred to the extent that such directors have not determined
whether to exercise their rights of election under this
Section 11(a)(iii).  In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended.

    

     

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

     

    (c) In
case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by 

    
      
        
        

      

      
        14.

        
          

        

      

      
        
        
a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares (as such term is hereinafter defined) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to
one Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right.  Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price that would then be in effect if such record date had not been
fixed.

    

     

    (d) 

     

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

     

    
      
        
        

      

      
        15.

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        16.

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        17.

        
          

        

      

      
        
        

      

    

    (m) The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 or Section 27 hereof, take (or
permit any Subsidiary to take) any action the purpose of which is to, or if at
the time such action is taken it is reasonably foreseeable that the effect of
such action is to, materially diminish or eliminate the benefits intended to be
afforded by the Rights.  Any such action taken by the Company during
any period after any Person becomes an Acquiring Person but prior to the
Distribution Date shall be null and void unless such action could be taken under
this Section 11(m) from and after the Distribution Date.

     

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

     

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

     

    (p) The
exercise of Rights under Section 11(a)(ii) hereof shall only result in the
loss of rights under Section 11(a)(ii) hereof to the extent so exercised
and shall not otherwise affect the rights represented by the Rights under this
Agreement, including the rights represented by Section 13
hereof.

     

    SECTION
12. Certificate
of Adjusted Purchase Price or Number of Shares.  Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Shares or the Preferred Shares
a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25 hereof.  The


    
      
        
        

      

      
        18.

        
          

        

      

      
        
        

      

    

    Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such
certificate.

     

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

     

    (a) In
the event that, following the Distribution Date, directly or indirectly (x) the
Company shall consolidate with, or merge with and into, any Interested
Stockholder, or if in such merger or consolidation all holders of Common Stock
are not treated alike, any other Person, (y) any Interested Stockholder, or if
in such merger or consolidation all holders of Common Stock are not treated
alike, any other Person shall consolidate with the Company, or merge with and
into the Company, and the Company shall be the continuing or surviving
corporation of such merger (other than, in the case of either transaction
described in (x) or (y), a merger or consolidation that would result in all of
the voting power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all
of the voting power represented by the securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation and
the holders of such securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell, mortgage or otherwise transfer
(or one or more of its subsidiaries shall sell, mortgage or otherwise transfer),
in one or more transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its subsidiaries (taken as a
whole) to any Interested Stockholder or Stockholders, or if in such transaction
all holders of Common Stock are not treated alike, any other Person, (other than
the Company or any Subsidiary of the Company in one or more transactions each of
which individually and the aggregate does not violate Section 13(d) hereof)
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right, subject to Section 11(a)(ii) hereof, shall have the
right to receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of freely tradeable
Common Shares of the Principal Party (as such term is hereinafter defined), free
and clear of liens, rights of call or first refusal, encumbrances or other
adverse claims, as shall be equal to the result obtained by (A) multiplying the
then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable (without taking into account any
adjustment previously made pursuant to Section 11(a)(ii) hereof) and
dividing that product by (B) 50% of the then current per share market price of
the Common Shares of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; and (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Shares in accordance
with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as

    
      
        
        

      

      
        19.

        
          

        

      

      
        
        
reasonably
may be, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights.

    

     

    (b) “Principal
Party” shall mean:

     

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

     

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

     

    provided, however, that in
any case, (1) if the Common Shares of such Person are not at such time and have
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary or Affiliate of another Person the Common Shares of which are and
have been so registered, “Principal Party” shall refer to such other Person; (2)
if such Person is a Subsidiary, directly or indirectly, or Affiliate of more
than one Person, the Common Shares of two or more of which are and have been so
registered, “Principal Party” shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value; and (3)
if such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a “Subsidiary” of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.

     

    (c) The
Company shall not consummate any such consolidation, merger, sale or transfer
unless the Principal Party shall have a sufficient number of authorized Common
Shares that have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and each Principal Party and each other Person who may
become a Principal Party as a result of such consolidation, merger, sale or
transfer shall have (i) executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and (ii) prepared, filed and had declared and remain
effective a registration statement under the Act on the appropriate form with
respect to the Rights and the securities exercisable upon exercise of the Rights
and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in paragraph (a) of
this Section 13, the Principal Party at its own expense will:

     

    (i) cause
the registration statement under the Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the Final Expiration Date;

     

    
      
        
        

      

      
        20.

        
          

        

      

      
        
        

      

    

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

     

    (iii) list
the Rights and the securities purchasable upon exercise of the Rights on each
national securities exchange on which the Common Shares were listed prior to the
consummation of such consolidation, merger, sale or transfer of assets or on the
NASDAQ Global Market if the Common Shares were listed on the NASDAQ Global
Market or, if the Common Shares were not listed on a national securities
exchange or the NASDAQ Global Market prior to the consummation of such
consolidation, merger, sale or transfer of assets, on a national securities
exchange or the NASDAQ Global Market; and

     

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

     

    The
provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers.

     

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

     

    SECTION
14. Fractional
Rights and Fractional Shares.

     

    (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates that evidence fractional Rights.  In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right.  For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.  The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to

    
      
        
        

      

      
        21.

        
          

        

      

      
        
        
trading
on the New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or as reported on the NASDAQ Global Market or, if the Rights
are not listed or admitted to trading on any national securities exchange or
reported on the NASDAQ Global Market, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Rights selected by the Board of Directors.  If on any
such date no such market maker is making a market in the Rights, the fair value
of the Rights on such date as determined in good faith by the Board of Directors
shall be used.

    

     

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

     

    (c) Following
the occurrence of one of the transactions or events specified in Section 11
hereof giving rise to the right to receive Common Shares, capital stock
equivalents (other than Preferred Shares) or other securities upon the exercise
of a Right, the Company shall not be required to issue fractions of Common
Shares or units of such Common Shares, capital stock equivalents or other
securities upon exercise of the Rights or to distribute certificates that
evidence fractional Common Shares, capital stock equivalents or other
securities.  In lieu of fractional Common Shares, capital stock
equivalents or other securities, the Company shall pay to the registered holders
of Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one
Common Share or unit of such Common Shares, capital stock equivalents or other
securities.  For purposes of this Section 14(c), the current
market value shall be the current per share market price (as determined pursuant
to Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of such exercise and, if such capital stock equivalent is not traded, each
such capital stock equivalent shall have the value of one one-hundredth of a
Preferred Share.

     

    
      
        
        

      

      
        22.

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    (b) after
the Distribution Date, the Right Certificates are transferable (subject to the
provisions of this Agreement) only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and

     

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

     

    SECTION
17. Right
Certificate Holder Not Deemed a Stockholder.  No holder, as
such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company that may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the

    
      
        
        

      

      
        23.

        
          

        

      

      
        
        

      

    

    election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.

     

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

     

    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 Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.  In no case will the Rights Agent be liable
for special, indirect, incidental or consequential or consequential loss or
damage at any kind whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of such loss or damage.

     

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

     

    
      
        
        

      

      
        24.

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    (b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter 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 any one of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

     

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

     

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

     

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

    
      
        
        

      

      
        25.

        
          

        

      

      
        
        
reservation
of any Preferred Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.

    

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        26.

        
          

        

      

      
        
        

      

    

    (k) If,
with respect to any Right Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has not been executed, the Rights
Agent shall not take any further action with respect to such requested exercise
of transfer without first consulting with the Company.

     

    SECTION
21. Change of
Rights Agent.  The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon 30 days’
notice in writing mailed to the Company and to each transfer agent for the
Common Shares or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail.  The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent for the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail.  If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent.  If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights
Agent.  Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be either (a) a corporation, business trust or limited
liability company organized and doing business under the laws of the United
States or of any other state of the United States that is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (b) a direct or indirect wholly owned Subsidiary of such an
entity or its wholly-owning parent.  After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose.  Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent for the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates.  Failure to give any notice provided for in
this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.

     

    SECTION
22. Issuance of
New Right Certificates.  Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.  In addition, in connection with the
issuance or sale of Common Shares following the Distribution Date and prior to
the earlier of the Redemption Date and the Final Expiration Date, the Company
(a) shall with respect to Common 

    
      
        
        

      

      
        27.

        
          

        

      

      
        
        

      

    

    Shares
so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement in existence prior to the Distribution Date, or
upon the exercise, conversion or exchange of securities, notes or debentures
issued by the Company and in existence prior to the Distribution Date, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i)
the Company shall not be obligated to issue any such Right Certificates if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued, and (ii)
no Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance
thereof.

     

    SECTION
23. Redemption.

     

    (a) The
Rights may be redeemed by action of the Board of Directors pursuant to
Section 23(b) hereof and shall not be redeemed in any other
manner.

     

    (b) 

     

    (i) The
Board of Directors may, at its option, at any time prior to the earlier of (A)
such time as any Person becomes an Acquiring Person, or (B) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.001 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the “Redemption
Price”), and the Company may, at its option, pay the Redemption Price in
Common Shares (based on the “current per-share market price,” as such term is
defined in Section 11(d) hereof, of the Common Shares at the time of
redemption), cash or any other form of consideration deemed appropriate by the
Board of Directors.  The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and subject to such
conditions as the Board of Directors in its sole discretion may
establish.  Notwithstanding anything contained in this Agreement to
the contrary, the Rights shall not be exercisable pursuant to
Section 11(a)(ii) hereof prior to the expiration or termination of the
Company’s right of redemption under this Section 23(b)(i).

     

    (ii) In
addition, the Board of Directors may, at its option, at any time after the time
a Person becomes an Acquiring Person and after the expiration of any period
during which the holder of Rights may exercise the rights under
Section 11(a)(ii) hereof but prior to any event described in clause (x),
(y) or (z) of the first sentence of Section 13 hereof, redeem all but not
less than all of the then outstanding Rights at the Redemption Price (x) in
connection with any merger, consolidation or sale or other transfer (in one
transaction or in a series of related transactions) of assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
subsidiaries (taken as a whole) in which all holders of Common Shares are
treated alike and not involving (other than as a holder of Common Shares being
treated like all other such holders) an Interested Stockholder or a Transaction
Person or (y)(A) if and for so long as the Acquiring Person is not thereafter
the Beneficial Owner of 20% or more of the then outstanding Common Shares, and
(B) at the time of redemption no other Persons are Acquiring
Persons.

     

    
      
        
        

      

      
        28.

        
          

        

      

      
        
        

      

    

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

     

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

     

    SECTION
24. Exchange.

     

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

     

    (b) Immediately
upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to Section 24(a) hereof and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio.  The Company shall promptly give

    
      
        
        

      

      
        29.

        
          

        

      

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

    

     

    (c) In
lieu of issuing Common Shares in accordance with Section 24(a) hereof, the
Company may, if a majority of the Board of Directors then in office determines
that such action is necessary or appropriate and not contrary to the interests
of the holders of Rights, elect to (and, in the event that there are not
sufficient treasury shares and authorized but unissued Common Shares to permit
any exchange of the Rights in accordance with Section 24(a) hereof, the
Company shall) take all such action as may be necessary to authorize, issue or
pay, upon the exchange of the Rights, cash, property, Common Shares, other
securities or any combination thereof having an aggregate value equal to the
value of the Common Shares that otherwise would have been issuable pursuant to
Section 24(a) hereof, which aggregate value shall be determined by a
nationally recognized investment banking firm selected by a majority of the
Board of Directors then in office.  For purposes of the preceding
sentence, the value of the Common Shares shall be determined pursuant to
Section 11(d) hereof.  Any election pursuant to this
Section 24(c) by the Board of Directors must be made by resolution within
60 days following the date on which the event described in
Section 11(a)(ii) hereof shall have occurred.  Following the
occurrence of the event described in Section 11(a)(ii) hereof, a majority
of the Board of Directors then in office may suspend the exercisability of the
Rights for a period of up to 60 days following the date on which the event
described in Section 11(a)(ii) hereof shall have occurred to the extent
that such directors have not determined whether to exercise their rights of
exchange under this Section 24(c).  In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.

     

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

     

    SECTION
25. Notice of
Certain Events.

     

    (a) In
case the Company shall propose (i) to pay any dividend payable in stock of any
class to the holders of its Preferred Shares or to make any other distribution
to the holders of its

    
      
        
        

      

      
        30.

        
          

        

      

      
        
        
Preferred
Shares (other than a regular quarterly cash dividend), (ii) to offer to the
holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole), to any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purpose of such
stock dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or the Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the record
date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Shares and/or the Preferred Shares, whichever shall
be the earlier.

    

     

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

     

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

     

    American
Stock Transfer & Trust Company, LLC

    10150
Mallard Creek Road, Suite 307

    Charlotte,
NC 28262

    Attn:  Holly
Drummond

    


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

     

    Chordiant
Software, Inc.

    20400
Stevens Creek Boulevard, Suite 400

    Cupertino,
CA 95014

    Attention:  Chief
Financial Officer

     

    
      
        
        

      

      
        31.

        
          

        

      

      
        
        

      

    

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

     

    SECTION
27. Supplements
and Amendments.  Prior to the Distribution Date, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of the
Rights.  From and after the Distribution Date, the Company and the
Rights Agent shall, if the Company so directs, from time to time supplement or
amend any provision of this Agreement without the approval of any holders of
Right Certificates in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provisions herein, or (iii) change any other provisions with
respect to the Rights that the Company may deem necessary or desirable; provided, however, that no
such supplement or amendment shall be made that would adversely affect the
interests of the holders of Rights (other than the interests of an Acquiring
Person or its Affiliates or Associates).  Any supplement or amendment
adopted during any period after any Person has become an Acquiring Person but
prior to the Distribution Date shall become null and void unless such supplement
or amendment could have been adopted by the Company from and after the
Distribution Date.  Any such supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights
Agent.  Upon delivery of a certificate from an appropriate officer of
the Company that states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment unless the Rights Agent shall have
determined in good faith that such supplement or amendment would adversely
affect its interest under this Agreement.  Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.

     

    SECTION
28. Determination
and Actions by the Board of Directors, Etc.  For all purposes
of this Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares or any other securities of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement.  The Board of
Directors shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board, or the Company, or as may be necessary or advisable in the administration
of this Agreement, including without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement).  All such actions, calculations, interpretations
and determinations that are done or made by the Board in good faith, shall be
final, conclusive and binding on the Rights Agent and the holders of the
Rights.

     

    
      
        
        

      

      
        32.

        
          

        

      

      
        
        

      

    

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

     

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

     

    SECTION
31. Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

     

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

     

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

     

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

     


    
      
        
          


          . 

        

         


      

      
        33.

        
          

        

      

      
         


      

    


    The
parties whereto have caused this Agreement to be duly executed as of the day and
year first above written.

    
 

    
      
        	
                Chordiant
      Software, Inc.

              	 
      	
                American
      Stock Transfer & Trust

              	 
      
	 
      	 
      	 
      	
                Company,
      LLC, as Rights Agent

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/
      Steven R. Springsteel

              	 
      	
                By:

              	
                /s/
      Herbert J. Lemmer

              	 
      
	
                Name:

              	
                Steven
      R. Springsteel

              	 
      	
                Name:

              	
                Herbert
      J. Lemmer

              	 
      
	
                Title:

              	
                Chairman,
      President and CEO

              	 
      	
                Title:

              	
                Vice
      President

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                By:

              	 
      	 
      
	 
      	 
      	 
      	
                Name:

              	 
      	 
      
	 
      	 
      	 
      	
                Title:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      


      

       

       

    

    
      
        
          


          . 

        

         
34.

      

      
         


        
          

        

      

      
         


      

    


    Exhibit
A

     

    FORM
OF

    CERTIFICATE
OF DESIGNATION

     

    OF

     

    SERIES
A JUNIOR PARTICIPATING PREFERRED STOCK

     

    (Pursuant
to Section 151 of the

    Delaware
General Corporation Law)

     

    Chordiant
Software, Inc., a corporation organized
and existing under the General Corporation Law of the State of Delaware
(hereinafter called the “Company”),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the General
Corporation Law at a meeting duly called and held on July 7, 2008:

     

    Resolved,
that pursuant to the authority granted to and vested in the Board of the Company
in accordance with the provisions of the Company’s Amended and Restated
Certificate of Incorporation, as amended (the “Charter”),
the Board hereby creates a series of Preferred Stock, par value $0.001 per
share, of the Company and hereby states the designation and number of shares,
and fixes the designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof (in addition to the
provisions set forth in the Charter, which are applicable to the Preferred Stock
of all classes and series), as follows:

     

    Series A
Junior Participating Preferred Stock:

     

    Section
1. Designation and Amount. Five
Hundred Thousand (500,000) shares of Preferred Stock, $0.001 par value per
share, are designated “Series A Junior Participating Preferred Stock” with the
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions specified herein (the “Junior Preferred
Stock”).  Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Junior Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Company
convertible into Junior Preferred Stock.

     

    Section
2. Dividends
and Distributions.

     

    (A) Subject
to the rights of the holders of any shares of any series of Preferred Stock (or
any similar stock) ranking prior and superior to the Junior Preferred Stock with
respect to dividends, the holders of shares of Junior Preferred Stock, in
preference to the holders of 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
Common
Stock, par value $0.001 per share (the “Common
Stock”), of the Company, and of any other junior stock, shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on the
first day of April, July, October and January in each year (each such date being
referred to herein as a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Junior Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $l.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Junior Preferred Stock.  In the event the
Company shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

    

     

    (B) The
Company shall declare a dividend or distribution on the Junior Preferred Stock
as provided in paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided, that in the event
no dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Junior
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.

     

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

    
      
        
        

      

      
        2.

        
          

        

      

      
        
        
Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than sixty (60) days prior to the date fixed
for the payment thereof.

    

     

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

     

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

     

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

     

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

     

    Section
4. Certain
Restrictions.

     

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

     

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

     

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

     

    
      
        
        

      

      
        3.

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    Section
6. Liquidation, Dissolution or Winding
Up.  Upon any liquidation, dissolution or winding up of the
Company, no distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Junior Preferred Stock unless, prior thereto, the holders of
shares of Junior Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, provided that the holders of
shares of Junior Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.  In the event the Company shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Junior

    
      
        
        

      

      
        4.

        
          

        

      

      
        
        
Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

    

     

    Section
7. Consolidation, Merger,
Etc.  In case the Company shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Junior Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged.  In the event the Company shall
at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Junior
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.

     

    Section
8. No Redemption. The shares of
Junior Preferred Stock shall not be redeemable.

     

    Section
9. Rank.  The Junior
Preferred Stock shall rank, with respect to the payment of dividends and the
distribution of assets, junior to all series of any other class of the Company’s
Preferred Stock.

     

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

     


    
      
         


      

      
        5.

        
          

        

      

      
         


      

    


    The
undersigned has executed this certificate as of July 10, 2008.

    

      
        	 
      	 
      	 
      	 
      
	 
      	 
      	
                /s/ STEVEN
      R. SPRINGSTEEL

              	 
      
	 
      	 
      	
                Steven
      R. Springsteel

                Chairman,
      President, and Chief Executive Officer

              	 
      




    

     


    
      
        
          


          . 

        

         
6.

      

      
         


        
          

        

      

      
         


      

    


    Exhibit
B

     

    Certificate
No.
R-[___]                                                                                                                                                                      
[_____] Rights

     

    NOT
EXERCISABLE AFTER JULY 21, 2011 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

     

    RIGHT
CERTIFICATE

     

    CHORDIANT
SOFTWARE, INC.

     

    This
certifies that [___________________] or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of July 10, 2008 (the “Rights
Agreement”), between Chordiant Software, Inc., a Delaware corporation
(the “Company”),
and American Stock Transfer & Trust Company, LLC (the “Rights
Agent”), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 p.m.,
California time, on July 21, 2011 at the office of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $0.001 per share (the “Preferred
Shares”), of the Company, at a purchase price of $20.00 per one
one-hundredth of a Preferred Share (the “Purchase
Price”), upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed.  The number of Rights
evidenced by this Right Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
July 21, 2008, based on the Preferred Shares as constituted at such
date.

     

    From
and after the time any Person becomes an Acquiring Person, (as such terms are
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate who becomes a transferee after the Acquiring Person
becomes such, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of any such Acquiring Person, Associate or Affiliate who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such, such Rights shall become null and void without any further action and no
holder hereof shall have any right with respect to such Rights from and after
the time any Person becomes an Acquiring Person.

     

    As
provided in the Rights Agreement, the Purchase Price and the number of one
one-hundredths of a Preferred Share which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

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

     

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

     

    Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $0.001
per Right or (ii) may be exchanged in whole or in part for shares of the
Company’s Common Stock, par value $0.001 per share, or, upon circumstances set
forth in the Rights Agreement, cash, property or other securities of the
Company, including fractions of a share of Preferred Stock.

     

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

     

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

     

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

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

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

      


      Dated
as of __________, 2008.

       

      
        	 
      	 
      	
                Chordiant
      Software, Inc.

              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                By:

              	 
      	 
      
	 
      	 
      	 
      	
                Name:

              	 
      	 
      
	 
      	 
      	 
      	
                Title:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      


      

      Countersigned:

      


      
        	
                American
      Stock Transfer & Trust Company, LLC

              	 
      
	
                as
      rights agent

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                By:

              	 
      	 
      	 
      	 
      	 
      
	
                Name:

              	 
      	 
      	 
      	 
      	 
      
	
                Title:

              	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                By:

              	 
      	 
      	 
      	 
      	 
      
	
                Name:

              	 
      	 
      	 
      	 
      	 
      
	
                Title:

              	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      


      

                                    

    

    



    
      
        
          


           

        

        B-3 


      

      
         


        
          

        

      

      
         


        
          Form
of Reverse Side of Right Certificate

        

      

    


    


      FORM
OF ASSIGNMENT

       

      (To
be executed by the registered holder if such

       

      holder
desires to transfer the Right Certificate.)

       

      For Value
Received ______________________________________ hereby sells, assigns and
transfers unto

       

      
        	 
      
	
                (Please
      print name and address of
transferee)

              


      

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

       

      Dated:  ____________________

       

      
        	 
      	 
      	 
      	 
      
	 
      	 
      	
                Signature

              	 
      


      

      


      

        
          
            
              


               

            

             
B-4

          

          
             


            
              

            

          

          
             


          

        



    

    Signature
Guaranteed:

     

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

     

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

     

    The
undersigned hereby certifies that (1) the Rights evidenced by this Right
Certificate are not being sold, assigned or transferred by or on behalf of a
Person who is or was an Acquiring Person, an Interested Stockholder or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement); and (2) after due inquiry and to the best of the knowledge of
the undersigned, the undersigned did not acquire the Rights evidenced by this
Right Certificate from any Person who is or was an Acquiring Person, an
Interested Stockholder, or an Affiliate or Associate thereof.

     

     

    
      
        	 
      	 
      	 
      	 
      
	 
      	 
      	
                Signature

              	 
      


      

    

    



    
      
         


      

      
         


        
          

        

      

      
         


        
          Form
of Reverse Side of Right Certificate

        

      

    


    


      FORM
OF ELECTION TO PURCHASE

       

      (To
be executed if holder desires to exercise

       

      Rights
represented by the Right Certificate.)

       

      To
American Stock Transfer & Trust Company, LLC:

       

      The
undersigned hereby irrevocably elects to exercise ___________________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:

       

      Please
insert social security

      or
other identifying number:  ______________

       

      
        	 
      
	
                (Please
      print name and address of transferee)

              
	 
      
	 
      


      

      


       

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

       

      Please
insert social security

      or
other identifying number:  ______________

       

      
        	 
      
	
                (Please
      print name and address of transferee)

              
	 
      
	 
      


      

      


       

      Dated:  _________________

       

      
        	 
      	 
      	 
      	 
      
	 
      	 
      	
                Signature

              	 
      


      



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Signature
Guaranteed:

     

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

     

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

     

    The
undersigned hereby certifies that (1) the Rights evidenced by this Right
Certificate are not beneficially owned by nor are they being exercised on behalf
of an Acquiring Person, an Interested Stockholder or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement); and (2) after
due inquiry and to the best of the knowledge of the undersigned, the undersigned
did not acquire the Rights evidenced by this Right Certificate from any Person
who is or was an Acquiring Person, an Interested Stockholder, or an Affiliate or
Associate thereof.

    

      
        	 
      	 
      	 
      	 
      
	 
      	 
      	
                Signature

              	 
      


      



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

     

    NOTICE

     

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

     

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

    


    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
C

     

    CHORDIANT
SOFTWARE, INC.

     

    SUMMARY
OF RIGHTS TO PURCHASE

     

    PREFERRED
SHARES

     

    On
July 7, 2008, the Board of Directors of Chordiant
Software, Inc., a Delaware corporation (the “Company”),
declared a dividend of one preferred share purchase right (a “Right”)
for each outstanding share of common stock, par value $0.001 per share (the
“Common
Shares”), of the Company.  The dividend is effective as of July
21, 2008 (the “Record
Date”) with respect to the stockholders of record on that
date.  The Rights will also attach to new Common Shares issued after
the Record Date.  Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $0.001 per share (the “Preferred
Shares”), of the Company at a price of $20.00 per one one-hundredth of a
Preferred Share (the “Purchase
Price”), subject to adjustment.  Each Preferred Share is
designed to be the economic equivalent of one hundred (100) Common
Shares.  The description and terms of the Rights are set forth in a
Rights Agreement dated as of July 10, 2008 (the “Rights
Agreement”), between the Company and American Stock Transfer & Trust
Company, LLC  (the “Rights
Agent”).

     

    Detachment
and Transfer of Rights

     

    Initially,
the Rights will be evidenced by the stock certificates representing Common
Shares then outstanding, and no separate Right Certificates will be
distributed.  Until the earlier to occur of (i) a public announcement
that a person or group of affiliated or associated persons, has become an
“Acquiring Person” (as such term is defined in the Rights Agreement) or (ii) 10
business days (or such later date as the Board may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer which would result in the beneficial ownership by an Acquiring
Person of 20% or more of the outstanding Common Shares (the earlier of such
dates being called the “Distribution
Date”), the Rights will be evidenced, with respect to any of the Common
Share certificates outstanding as of the Record Date, by such Common Share
certificate.

     

    In
general, an “Acquiring Person” is a person, the affiliates or associates of such
person, or a group, which has acquired beneficial ownership of 20% or more of
the outstanding Common Shares; provided, however, that
generally, under the Rights Agreement, an “Acquiring Person” does not include
(i) the Company, (ii) a subsidiary of the Company, (iii) any employee benefit or
compensation plan of the Company, (iv) any entity holding Common Shares for or
pursuant to the terms of any such employee benefit or compensation plan or (v)
any person or entity that, together with its affiliates and associates,
beneficially owned 20% or more of the outstanding Common Shares as of July 21,
2008, until such person or entity or its affiliates or associates becomes the
beneficial owner of any additional Common Shares.  In addition, except
under limited circumstances, no person or entity will become an Acquiring Person
as the result of the acquisition of Common Shares by the Company that, by
reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such person or

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        
entity
to 20% or more of the Common Shares then outstanding.  Further, except
under certain circumstances, no person will become an Acquiring Person due to
the acquisition of Common Shares directly from the Company.

    

     

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

     

    Exercisability
of Rights

     

    The
Rights are not exercisable until the Distribution Date.  The Rights
will expire on July 21, 2011 (the “Final Expiration
Date”), unless the Final Expiration Date is extended or unless the Rights
are earlier redeemed or exchanged by the Company in each case as described
below.  Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.

     

    The
Purchase Price payable, and the number of Preferred Shares or other securities
or property issuable or payable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution.  The number of
outstanding Rights and the number of one one-hundredths of a Preferred Share
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares, or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution
Date.  With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price.  No fractional Preferred Shares will be
issued (other than fractions which are integral multiples of one one-hundredth
(1/100) of a Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.

     

    Terms
of Preferred Shares

     

    Preferred
Shares purchasable upon exercise of the Rights will not be
redeemable.  Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of one dollar ($l.00) per share but will
be entitled to an aggregate dividend of one hundred times (100x) the dividend
declared per Common Share.  In the event of liquidation, the holders
of the Preferred Shares will be entitled to a minimum preferential liquidation
payment of one hundred 

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        
dollars
($100) per share but will be entitled to an aggregate payment of one hundred
(100x) times the payment made per Common Share.  Each Preferred Share
will have one hundred (100) votes, voting together with the Common
Shares.  Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive one hundred times (100x) the amount received per Common
Share.  These rights are protected by customary anti-dilution
provisions.  Because of the nature of the Preferred Shares’ dividend,
liquidation and voting rights, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of each Right should approximate the
value of one Common Share.  The Preferred Shares would rank junior to
any other series of the Company’s preferred stock.

    

     

    Trigger
of Flip-In and Flip-Over Rights

     

    In
the event that any person or group of affiliated or associated persons becomes
an Acquiring Person, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring Person or any
affiliate or associate thereof (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times (2x) the exercise price of the Right.  This
right will commence on the date of public announcement that a person has become
an Acquiring Person (or the effective date of a registration statement relating
to distribution of the rights, if later) and terminate sixty (60) days later
(subject to adjustment in the event exercise of the rights is
enjoined).

     

    In
the event that the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold
to an Acquiring Person, its affiliates or associates or certain other persons in
which such persons have an interest, proper provision will be made so that each
such holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times (2x) the exercise price of the
Right.

     

    Redemption
and Exchange of Rights

     

    At
any time prior to the earliest of (i) the close of business on the day of
the first public announcement that a person has become an Acquiring Person, or
(ii) the Final Expiration Date, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the
“Redemption
Price”).  In general, the redemption of the Rights may be made
effective at such time on such basis with such conditions as the Board of
Directors in its sole discretion may establish.  Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.

     

    At
any time after any Person becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which will have become void), in whole
or in part, at an exchange ratio of one Common Share, or, under circumstances
set forth in the Rights Agreement, cash, property or other securities
of

    
      
        
        

      

      
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the
Company, including fractions of a Preferred Share (or of a share of a class or
series of the Company’s preferred stock having equivalent designations and the
powers, preferences and rights, and the qualifications, limitations and
restrictions), per Right (with value equal to such Common
Shares).

    

     

    Amendment
of Rights

     

    The
terms of the Rights generally may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as the Rights are distributed no such amendment may adversely
affect the interests of the holders of the Rights (excluding the interest of any
Acquiring Person).

     

    Additional
Information

     

    A
copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Current Report on Form 8-K filed on July 11,
2008. A copy of the Rights Agreement is available from the Company by writing
to:  Chordiant Software, Inc., 20400 Stevens Creek Boulevard,
Cupertino, California 95014, Attention: Investor Relations.  This
summary description of the Rights is not intended to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.

     

    



    
      
        
          


           

        

        C-4