Document:

Exhibit 4.2

 

Bridgepoint
Education, Inc.

 

Limited
Waiver of Underwriting Agreement

 

August 19,
2009

 

Bridgepoint
Education, Inc.

13500
Evening Creek Drive North, Suite 600

San
Diego, California 92128

 

Re:          Limited Waiver of Bridgepoint
Education, Inc. Underwriting Agreement

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain
Underwriting Agreement (the “Agreement”) entered into on April 14, 2009,
by and among Credit Suisse Securities (USA) LLC and J.P. Morgan Securities
Inc., as representatives (together, the “Representatives”), William Blair &
Company, BMO Capital Markets, Piper Jaffray and Signal Hill, Bridgepoint
Education, Inc. (the “Company”) and, certain stockholders of the Company,
in connection with the initial public offering (the “IPO”) of the Common Stock
of the Company.  Capitalized terms used
but not defined herein have the meanings set forth in the Agreement.

 

Pursuant to Section 5(k) of the
Agreement, the Company has agreed, among other things, not to directly or
indirectly take any of the following actions with respect to its Securities or
any securities convertible into or exchangeable or exercisable for any of its
Securities (“Lock-Up Securities”): (i) offer, sell, issue, contract to
sell, pledge or otherwise dispose of Lock-Up Securities, (ii) offer, sell,
issue, contract to sell, contract to purchase or grant any option, right or
warrant to purchase Lock-Up Securities, (iii) enter into any swap, hedge
or any other agreement that transfers, in whole or in part, the economic consequences
of ownership of Lock-Up Securities, (iv) establish or increase a put
equivalent position or liquidate or decrease a call equivalent position in
Lock-Up Securities within the meaning of Section 16 of the Exchange Act,
or (v) file with the Commission a registration statement under the Act
relating to Lock-Up Securities, or publicly disclose the intention to take any
such action, in each case without the prior written consent of the
Representatives, during the Lock-up Period.

 

The Representatives hereby waive the Lock-up
Period of the Agreement solely as it relates to subsection (v) above, and
public disclosure related thereto.

 

Except to the extent, and only to the extent,
so modified by this Limited Waiver of Underwriting Agreement, all terms,
conditions and covenants contained in the Agreement and the documents related
thereto shall remain in full force and effect, enforceable in accordance with
their terms.  This Limited Waiver of
Underwriting Agreement is effective only as to the matters expressly waived.  This Limited Waiver of Underwriting Agreement
is intended for the benefit of, and may be relied upon by, the Company.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE REPRESENTATIVES

  
	
   

  	
   

  
	
   

  	
  Credit Suisse Securities (USA) LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hayes Smith

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Hayes Smith

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J.P. Morgan Securities Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alice Takhtajan

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Alice Takhtajan

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice PresidentExhibit 4.3

 

Bridgepoint
Education, Inc.

 

Limited
Waiver of Lock-Up Agreement

 

August 31,
2009

 

To
the Stockholder Signatories

 

Re:          Limited Waiver of Bridgepoint
Education, Inc. Lock-Up Agreement

 

Ladies and Gentlemen:

 

Reference is hereby made to those certain
Lock-Up Agreements (each an “IPO Agreement” and, collectively, the “IPO
Agreements”) entered into on or about December 16, 2008, by and among
Credit Suisse Securities (USA) LLC and J.P. Morgan Securities Inc., as
representatives (together, the “Representatives”), and certain Stockholders of
Bridgepoint Education, Inc. (the “Company”), in connection with the
initial public offering (the “IPO”) of the Common Stock of the Company.  Capitalized terms used but not defined herein
have the meanings set forth in the IPO Agreements.

 

Pursuant to the IPO Agreements, the
Stockholder Signatories (as defined below) have agreed, among other things,
that they will not (i) offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any Securities or securities convertible
into or exchangeable or exercisable for any Securities, or enter into a
transaction which would have the same effect; (ii) enter into any swap,
hedge or other arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of the Securities, whether any such
aforementioned transaction is to be settled by delivery of the Securities or
such other securities, in cash or otherwise; (iii) publicly disclose the
intention to make any such offer, sale, pledge or disposition, or to enter into
any such transaction, swap, hedge or other arrangement; or (iv) make any
demand for or exercise any right with respect to, the registration of any
Securities or any security convertible into or exercisable or exchangeable for
the Securities; in each case, without the prior written consent of the
Representatives during the Lock-up Period.

 

The Representatives hereby waive the Lock-up
Period of the IPO Agreements entered into by those individuals and entities
(each a “Stockholder Signatory” and, collectively, the “Stockholder Signatories”)
listed on the table under the heading “Principal and Selling Stockholders” in
the registration statement on Form S 1 (File No. 333-161549)
originally filed by the Company with the Securities and Exchange Commission on August 26,
2009, as it may be subsequently amended (the “Registration Statement”), solely
as it relates to subsections (i), (iii) and (iv) above, and solely
with respect to the offer and sale of securities pursuant to the Registration
Statement.  The Company hereby consents
to the waiver of subsections (i), (iii) and (iv) above.

 

With respect to any individual or entity that
is not a Stockholder Signatory, the IPO Agreements shall remain in full force
and effect, enforceable in accordance with their terms.  Except to the extent, and only to the extent,
so modified by this Limited Waiver of Lock-Up Agreement, all terms, conditions
and covenants contained in the IPO Agreements and the documents related thereto
shall remain in full force and effect, enforceable in accordance with their
terms.  This Limited Waiver of Lock-Up
Agreement is effective only as to the matters expressly waived.  This Limited Waiver of Lock-Up Agreement is
intended for the benefit of, and may be relied upon by, the Stockholder
Signatories and the Company.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE REPRESENTATIVES

  
	
   

  	
   

  
	
   

  	
  Credit Suisse Securities (USA) LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Hayes Smith

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Hayes Smith

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J.P. Morgan Securities Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Alice Takhtajan

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Alice Takhtajan

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Bridgepoint
  Education, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Daniel J. Devine

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. Devine

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial OfficerExhibit 4.2

 

RIGHTS AGREEMENT

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  CERTAIN
  DEFINITIONS

  	
  2

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  APPOINTMENT OF
  RIGHTS AGENT

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  ISSUE OF RIGHT
  CERTIFICATES

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  FORM OF
  RIGHT CERTIFICATES

  	
  7

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  COUNTERSIGNATURE
  AND REGISTRATION

  	
  8

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  TRANSFER, SPLIT
  UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED,
  LOST OR STOLEN RIGHT CERTIFICATES

  	
  8

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  EXERCISE OF
  RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  CANCELLATION AND
  DESTRUCTION OF RIGHT CERTIFICATES

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AVAILABILITY OF
  PREFERRED SHARES

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  PREFERRED SHARES
  RECORD DATE

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  ADJUSTMENT OF
  PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  CERTIFICATE OF
  ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES

  	
  19

  
	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  CONSOLIDATION,
  MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER

  	
  19

  
	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  FRACTIONAL
  RIGHTS AND FRACTIONAL SHARES

  	
  22

  
	
   

  	
   

  	
   

  
	
  SECTION 15.

  	
  RIGHTS OF ACTION

  	
  23

  
	
   

  	
   

  	
   

  
	
  SECTION 16.

  	
  AGREEMENT OF
  RIGHT HOLDERS

  	
  23

  
	
   

  	
   

  	
   

  
	
  SECTION 17.

  	
  RIGHT
  CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER

  	
  24

  
	
   

  	
   

  	
   

  
	
  SECTION 18.

  	
  CONCERNING THE
  RIGHTS AGENT

  	
  24

  
	
   

  	
   

  	
   

  
	
  SECTION 19.

  	
  MERGER OR
  CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT

  	
  24

  
	
   

  	
   

  	
   

  
	
  SECTION 20.

  	
  DUTIES OF RIGHTS
  AGENT

  	
  25

  
	
   

  	
   

  	
   

  
	
  SECTION 21.

  	
  CHANGE OF RIGHTS
  AGENT

  	
  27

  
	
   

  	
   

  	
   

  
	
  SECTION 22.

  	
  ISSUANCE OF NEW
  RIGHT CERTIFICATES

  	
  28

  
	
   

  	
   

  	
   

  
	
  SECTION 23.

  	
  REDEMPTION

  	
  28

  
	
   

  	
   

  	
   

  
	
  SECTION 24.

  	
  EXCHANGE

  	
  29

  
	
   

  	
   

  	
   

  
	
  SECTION 25.

  	
  NOTICE OF
  CERTAIN EVENTS

  	
  31

  
	
   

  	
   

  	
   

  
	
  SECTION 26.

  	
  NOTICES

  	
  31

  
	
   

  	
   

  	
   

  
	
  SECTION 27.

  	
  SUPPLEMENTS AND
  AMENDMENTS

  	
  32

  
	
   

  	
   

  	
   

  
	
  SECTION 28.

  	
  DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS,
  ETC.

  	
  33

  

 

i

 

TABLE OF CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  SECTION 29.

  	
  SUCCESSORS

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 30.

  	
  BENEFITS OF THIS
  AGREEMENT

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 31.

  	
  SEVERABILITY

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 32.

  	
  GOVERNING LAW

  	
  33

  
	
   

  	
   

  	
   

  
	
  SECTION 33.

  	
  COUNTERPARTS

  	
  34

  
	
   

  	
   

  	
   

  
	
  SECTION 34.

  	
  DESCRIPTIVE
  HEADINGS

  	
  34

  

 

ii

 

 

AMAG PHARMACEUTICALS, INC.

 

and

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY, LLC

as Rights Agent

 

 

RIGHTS AGREEMENT

 

 

Dated as of September 4,
2009

 

 

RIGHTS AGREEMENT

 

THIS RIGHTS AGREEMENT (“Agreement”),
is dated as of September 4, 2009, between AMAG
PHARMACEUTICALS, 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 September 17,
2009 (the “Record Date”), each Right
representing the right to purchase one one-thousandth 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.

 

1

 

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, and (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,  and (B) no
Person shall become an “Acquiring Person”
either (x) 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
beneficially own more than 20% of the Common Shares then outstanding, then such
Person shall be deemed to be an “Acquiring Person,”
or (y) 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.

 

2

 

(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), 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); or

 

(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 1% 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 

 

3

 

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.

 

(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 $.01 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, limited liability company,
partnership, joint venture, association, trust, unincorporated organization or
other entity, and shall include any successor (by merger or otherwise) of such
entity.

 

4

 

(l)            “Preferred Shares”
shall mean shares of Series A Junior Participating Preferred Stock, par
value $.01 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 date 10 days following the first date of public announcement by
the Company or an Acquiring Person that an Acquiring Person has become such;
provided, however that, if such Person is determined not to have become an
Acquiring Person pursuant to clause (y) 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 (for which intention to commence has not been abandoned pursuant
to a public announcement by the fifth Business Day after such initial
announcement), the consummation of which would result in any 

 

5

 

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 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 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
penultimate 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 substantially the following legend:

 

THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN AMAG PHARMACEUTICALS, INC.
(THE “COMPANY”) AND AMERICAN STOCK
TRANSFER & TRUST COMPANY, LLC AS RIGHTS AGENT (THE “RIGHTS AGENT”), DATED AS OF
SEPTEMBER 4, 2009, 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 

 

6

 

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 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 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-thousandths 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-thousandths 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

 

7

 

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 Chief Financial Officer, or any of its Senior Vice
Presidents, either manually or by facsimile signature, shall have affixed
thereto the Company’s seal or a facsimile thereof (to the extent the Company
has one at such time), 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 countersigned
by the Rights Agent either manually or by facsimile signature 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 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-thousandths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase.  Any registered holder desiring to transfer,
split up, 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 or
the Rights Agent shall reasonably request. 
Thereupon the Rights Agent shall, 

 

8

 

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.

 

Notwithstanding any other provisions hereof, the
Company and the Rights Agent may amend this 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 in
cash, or by certified check or cashier’s check payable to the order of the
Company for each one one-thousandth 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 September 17,
2019 (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-thousandth of a
Preferred Share pursuant to the exercise of a Right shall initially be $250
(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 tax or charge 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 (or make available, if the Rights Agent is the transfer
agent for such shares) for the Preferred Shares certificates for the number of
Preferred Shares to be purchased and, if the Rights Agent is the transfer agent
for such shares, the Company hereby irrevocably authorizes the Rights Agent, in
its capacity as transfer 

 

9

 

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-thousandths of a Preferred Share
as are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
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.

 

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 or the
Rights Agent shall reasonably request.

 

10

 

SECTION 8.             CANCELLATION
AND DESTRUCTION OF RIGHT CERTIFICATES.  All Right
Certificates surrendered for the purpose of exercise (other than an exercise
pursuant to Section 11(a)(ii) which shall be governed by the last
paragraph of Section 7(c)), 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 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 or the Rights Agent’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 

 

11

 

registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Final Expiration Date (or, if earlier, until such time as
the securities purchasable upon exercise of the Rights become freely
tradeable); 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 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 which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer books of the Company
were open, 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

 

12

 

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-thousandths 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-thousandths of a
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 ensure that the provisions of this Section 11(a)(ii) and
Section 4(b) hereof are complied with, but neither the Company nor
the Rights Agent shall have any 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 

 

13

 

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 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);

 

14

 

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 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 

 

15

 

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.

 

(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 thousand.  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-thousandth 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, 

 

16

 

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-thousandths
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-thousandths 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-thousandths of
a Preferred Share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.

 

(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-thousandths 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-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. 
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
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-thousandths of a Preferred Share
issuable upon the exercise of the Rights, the Right 

 

17

 

Certificates theretofore
and thereafter issued may continue to express the Purchase Price and the number
of one one-thousandths 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 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.

 

(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-thousandths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the
number of one one-thousandths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the 

 

18

 

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 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 Shares Acquisition
Date or, if a Transaction is proposed, 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) 

 

19

 

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-thousandths 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-thousandths 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 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.

 

20

 

(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;

 

(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”

 

21

 

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 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-thousandth 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-thousandth of a Preferred
Share).  Fractions of Preferred Shares in
integral multiples of one one-thousandth of a Preferred Share may, at the
election of the Company, be evidenced by 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-thousandth 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 closing price for the
Trading Day immediately prior the date of such exercise (or, if not publicly
traded, in accordance with Section 11(d)(ii) hereof).

 

22

 

(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 closing price 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-thousandth of a Preferred Share.

 

(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

 

23

 

(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 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 Person into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any Person resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the 

 

24

 

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 document or any further act on the part of any of the parties hereto,
provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 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.

 

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 Senior 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 

 

25

 

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
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 Senior 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 Person.

 

26

 

(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.

 

(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 Person 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 Person 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 

 

27

 

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 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 $0.01 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).

 

28

 

(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.

 

(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 

 

29

 

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 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.

 

30

 

(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, at any time after the
Distribution Date, 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 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 

 

31

 

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

6201
15th Avenue

Brooklyn
NY 11219

Attention:
Herb Lemmer

 

With a copy to:

 

American Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn NY 11219

Attention: Legal Department

 

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:

 

AMAG Pharmaceuticals, Inc.

100 Hayden Avenue

Lexington, Massachusetts 02421

Attention: General Counsel

 

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.  For so long as the Rights are then redeemable,
the Company may in its sole and absolute discretion, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights.  From and after the time that the Rights are
no longer redeemable, the Company may, and the Rights Agent shall, if the
Company so directs, from time to time supplement or amend 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 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 

 

32

 

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 (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are
done or made by the Board in good faith, shall (x) be final, conclusive
and binding on the Rights Agent and the holders of the Rights, and (y) not
subject the Board to any liability to the holders of the Rights.

 

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.

 

33

 

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.

 

[Remainder of page intentionally
left blank.]

 

34

 

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

 

	
   

  	
  AMAG PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Joseph L. Farmer 

  
	
   

  	
  Joseph L. Farmer 

  
	
   

  	
  Senior Vice President of Legal Affairs and General
  Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN STOCK TRANSFER & TRUST
  COMPANY, LLC, AS RIGHTS AGENT  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Herbert J. Lemmer

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  

 

35

 

EXHIBIT A

 

AMAG
PHARMACEUTICALS, INC.

 

FORM OF

CERTIFICATE
OF DESIGNATION

 

OF

 

SERIES A
JUNIOR PARTICIPATING PREFERRED STOCK

 

(Pursuant
to Section 151 of the

Delaware
General Corporation Law)

 

AMAG PHARMACEUTICALS, 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 September 3, 2009:

 

RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Company in accordance with the provisions of
its Certificate of Incorporation, as amended, the Board of Directors hereby
creates a series of Preferred Stock, par value $0.01 per share, of the Company
and hereby states the designation and number of shares, and fixes the relative
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions thereof (in addition to the provisions set forth
in the Certificate of Incorporation of the Company, 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.     Forty-Five
Thousand    (45,000) shares of Preferred Stock, par value $0.01
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.

 

A-1

 

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 $0.01 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, 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of 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 

 

A-2

 

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

 

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 1,000 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 

 

A-3

 

Preferred Stock and all
such parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then entitled;

 

(iii)                            redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the 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  Certificate
of Incorporation, as amended, 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 $250 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 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2) to
the holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the 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 

 

A-4

 

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 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 1,000 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. 
In the event the 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 Certificate of Incorporation of the Company, as
amended, 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.

 

A-5

 

IN WITNESS WHEREOF, the undersigned has executed this
certificate as of September 4, 2009.

 

	
   

  	
  /s/ Joseph L.
  Farmer

  
	
   

  	
  Joseph
  L. Farmer

  
	
   

  	
  Senior
  Vice President of Legal Affairs and General Counsel

  

 

A-6

 

EXHIBIT
B

 

FORM OF
RIGHT CERTIFICATE

 

(EXHIBIT B TO
RIGHTS AGREEMENT)

 

	
  Certificate
  No. R-             

  	
                Rights

  

 

NOT EXERCISABLE
AFTER SEPTEMBER 17, 2019 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

 

RIGHT CERTIFICATE

AMAG PHARMACEUTICALS, 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 September 4,
2009 (the “Rights Agreement”), between
AMAG Pharmaceuticals, 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, New York time,  on September 17, 2019 at the office of the Rights
Agent designated for such purpose, or at the office of its successor as Rights
Agent, one one-thousandth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Shares”), of the Company,
at a purchase price of $250 per one one-thousandth 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-thousandths 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
September 17, 2009, 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-thouandths of a Preferred Share which may be
purchased upon the exercise of the Rights

 

B-1

 

evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.

 

This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, as amended from time to
time, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof. Reference is made to the Rights Agreement 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 $0.01 per Right or (ii) may be exchanged in whole or
in part for shares of the Company’s Common Stock, par value $0.01 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-thousandth 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
                    .

 

 

	
  ATTEST:

  	
   

  	
  AMAG PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Joseph L. Farmer

  	
   

  	
  Brian J.G. Pereira

  
	
  Secretary

  	
   

  	
  Chief Executive Officer and President

  

 

 

COUNTERSIGNED:

 

 

AMERICAN STOCK TRANSFER & TRUST COMPANY,
LLC

as Rights Agent

 

 

	
  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

  

 

B-5

 

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, as Rights Agent

 

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

 

	
  Please insert
  social security

  
	
  or other
  identifying number:

  	
   

  	
   

  

 

 

	
   

  
	
  (Please print
  name and address)

  
	
   

  
	
   

  

 

 

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

 

	
  Please insert
  social security

  
	
  or other
  identifying number:

  	
   

  	
   

  

 

	
   

  
	
  (Please print
  name and address)

  
	
   

  
	
   

  

 

 

	
  Dated:

  	
   

  	
   

  

 

	
   

  	
  Signature

  

 

B-6

 

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.

 

B-7

 

EXHIBIT
C

 

SUMMARY OF RIGHTS TO
PURCHASE PREFERRED SHARES

 

AMAG PHARMACEUTICALS, INC.

 

SUMMARY OF RIGHTS TO
PURCHASE

PREFERRED SHARES

 

(EXHIBIT C TO
RIGHTS PLAN)

 

On September 3, 2009, the Board of Directors of AMAG PHARMACEUTICALS, INC. (the “Company”)
declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share
of common stock, par value $0.01 per share (the “Common
Shares”), of the Company. 
The dividend is effective as of September 17, 2009 (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-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the “Preferred Shares”), of the Company
at a price of $250 per one one-thousandth of a Preferred Share (the “Purchase Price”), subject to
adjustment.  Each Preferred Share is
designed to be the economic equivalent of 1,000 Common Shares.  The description and terms of the Rights are
set forth in a Rights Agreement dated as of September 4, 2009 (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) the tenth day after 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  of 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

 

 

C-1

 

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 September 17,
2019 (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-thousandths 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-thousandth 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 $l per share but will be entitled to an aggregate dividend of 1,000
times 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 $250 per share but
will be entitled to an aggregate payment of 1,000 times the payment made per
Common Share.  Each Preferred Share will
have 1,000 votes, 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 1,000 times 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-thousandth 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.

 

C-2

 

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 equal to two times the exercise price of
the Right.  This right will commence on
the date that a person has become an Acquiring Person (or the effective date of
a registration statement relating to the securities purchasable upon exercise
of the  Rights, if later) and terminate
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 the exercise price of the Right.

 

REDEMPTION AND
EXCHANGE OF RIGHTS

 

At any time prior to the earliest of (i) the day
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 $0.01 per Right (the “Redemption
Price”), which may be paid in cash, Common Shares or any other
consideration deemed appropriate by the Board of Directors of the Company.  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 affiliated or
associated persons 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 of affiliated or associated persons which will have become
void), in whole or in part, at an exchange ratio of one Common Share per
Right.  Under certain circumstances set
forth in the Rights Agreement, in lieu of Common Shares, the Company may
exchange cash, property or other securities of 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) 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 the time

 

C-3

 

that the Rights are no
longer redeemable, no such amendment may adversely affect the interests of the
holders of the Rights (excluding the interest of any Acquiring Person and any
group of affiliated or associated persons).

 

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
dated September 4, 2009.  A copy of
the Rights Agreement is available from the Company by writing to: AMAG
Pharmaceuticals, 100 Hayden Avenue, Lexington, Massachusetts 0242,
Attention: General Counsel.  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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]