Document:

Exhibit
4.6

 

 

FORM OF OMNIBUS INSTRUMENT

 

 

WHEREAS, parties
named herein desire to enter into certain Program Documents, each such document
dated as of the date specified in this Omnibus Instrument, relating to the
issuance by Protective Life Secured Trust 20[  ]-[  ] (the
“Trust”) of Notes to investors under Protective Life Insurance Company’s
(“Protective Life”) secured notes program;

 

WHEREAS, if the
Pricing Supplement filed with the Securities and Exchange Commission pursuant
to Rule 424(b) under the Securities Act of 1933, as amended, with respect
to the Notes to be issued by the Trust (as such Pricing Supplement may be
amended, modified, supplemented or replaced from time to time, the “Pricing
Supplement”), indicates that the Trust is a Delaware statutory trust, the
Trust will be organized under and its activities will be governed by (i)
the provisions of the Statutory Trust Agreement (set forth in Section A of this
Omnibus Instrument), dated as of the date of the Pricing Supplement (the “Execution
Date”), by and between the parties thereto indicated in Section I herein,
and (ii) the certificate of trust of the Trust;

 

WHEREAS, if the
Pricing Supplement indicates that the Trust is a common law trust, the Trust
will be organized under and its activities will be governed by the provisions
of the Common Law Trust Agreement (set forth in Section A of this Omnibus
Instrument), dated as of the Execution Date, by and between the parties thereto
indicated in Section I herein;

 

WHEREAS, the Trust
will be administered pursuant to the provisions of the Administrative Services
Agreement (set forth in Section B of this Omnibus Instrument), dated as of the
Execution Date, by and between the parties thereto indicated in Section I
herein;

 

WHEREAS, certain
costs and expenses of the Trust and the service providers to the Trust will be
paid pursuant to the Expense and Indemnity Agreement (set forth in Section C of
this Omnibus Instrument), dated as of the Execution Date, by and between the
parties thereto indicated in Section I herein;

 

WHEREAS, certain
licensing arrangements between the Trust and Protective Life will be governed
pursuant to the provisions of the License Agreement (set forth in Section D of
this Omnibus Instrument), dated as of the Execution Date, by and between the
parties thereto indicated in Section I herein;

 

WHEREAS, the Notes
will be issued pursuant to the Indenture (set forth in Section E of this
Omnibus Instrument), dated as of the Original Issue Date, by and between the
parties thereto indicated in Section I herein;

 

1

 

WHEREAS, if the
Trust is issuing InterNotes® to retail investors, then the sale of the Notes
will be governed by the Selling Agent Agreement (set forth in Section F of this
Omnibus Instrument), dated as of the Execution Date, by and between the parties
thereto indicated in Section I herein;

 

WHEREAS, if the
Trust is issuing secured medium-term notes to institutional investors, then the
sale of the Notes will be governed by the Distribution Agreement (set forth in
Section G of this Omnibus Instrument), dated as of the Execution Date, by and
between the parties thereto indicated in Section I herein; and

 

WHEREAS, certain
agreements relating to the Notes and the Funding Agreement are set forth in the
Coordination Agreement (set forth in Section H of this Omnibus Instrument),
dated as of the Original Issue Date, by and among the parties thereto indicated
in Section I herein.

 

All capitalized
terms used herein and not otherwise defined will have the meanings set forth in
the Indenture.

 

2

 

SECTION
A

 

Trust Agreement

 

 

Section A-1.          Delaware Statutory Trust

 

If
the Pricing Supplement indicates that the Trust is a Delaware Statutory Trust,
the following shall constitute the Trust Agreement.

 

STATUTORY
TRUST AGREEMENT 

by and among

AMACAR Pacific Corp., as Trust Beneficial Owner and Administrator

and

Wilmington Trust Company, as Delaware Trustee 

 

THIS STATUTORY
TRUST AGREEMENT, dated as of the Execution Date, by and among AMACAR Pacific
Corp., a Delaware corporation (the “Trust Beneficial Owner” and “Administrator”)
and Wilmington Trust Company, a Delaware banking corporation, as Delaware
Trustee (the “Delaware Trustee”).

 

W
I T N E S S E T H:

 

WHEREAS, the Trust
Beneficial Owner and the Delaware Trustee desire to authorize the issuance of a
Trust Beneficial Interest and a Series of Notes in connection with the entry
into this Statutory Trust Agreement;

 

WHEREAS, all
things necessary to make this Statutory Trust Agreement a valid and legally
binding agreement of the Delaware Trustee, the Trust Beneficial Owner and the
Administrator, enforceable in accordance with its terms, have been done;

 

WHEREAS, the
parties intend to provide for, among other things, (i) the issuance
and sale of the Notes (pursuant to the Indenture and the applicable Program
Distribution Agreement) and the Trust Beneficial Interest, (ii) the
use of the proceeds of the sale of the Notes and Trust Beneficial Interest to
acquire the Funding Agreements, and (iii) all other actions deemed
necessary or desirable in connection with the transactions contemplated by this
Statutory Trust Agreement; and

 

WHEREAS, the
parties hereto desire to incorporate by reference those certain Standard Statutory
Trust Terms, dated November 7, 2003 (the “Standard Statutory Trust Terms”),
filed as Exhibit 4.7 to Protective Life Insurance Company’s Registration

 

3

 

Statement
on Form S-3 (Registration No. 333-100944) and all capitalized terms not
otherwise defined herein (including the recitals hereof) shall have the meaning
set forth in the Standard Statutory Trust Terms (the Standard Statutory Trust
Terms and this Statutory Trust Agreement, collectively, the “Trust Agreement”).

 

NOW, THEREFORE, in
consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, each party hereby agrees as follows:

 

ARTICLE
1

 

Section 1.01  Incorporation
by Reference.  All terms, provisions
and agreements of the Standard Statutory Trust Terms (except to the extent
expressly modified herein) are hereby incorporated herein by reference with the
same force and effect as though fully set forth herein.  To the extent that the terms set forth in
Article 2 of this Agreement are inconsistent with the terms of the Standard
Statutory Trust Terms, the terms set forth in Article 2 herein shall apply.

 

Section 1.02  Definitions.  “Omnibus Instrument” means the Omnibus
Instrument in which this Statutory Trust Agreement is included as Section A-1.

 

ARTICLE
2

 

Section 2.01  Name.  The Trust created and governed by this Trust
Agreement shall be the trust specified in the Omnibus Instrument, as such name
may be modified from time to time by the Delaware Trustee following written
notice to the Trust Beneficial Owner.

 

Section 2.02  Initial
Capital Contribution and Ownership. 
The Trust Beneficial Owner has paid to, or to an account at the
direction of, the Delaware Trustee, on the date hereof, the sum of $15 (or, if
the Trust issues Notes at a discount, the product of $15 and the issue price
(expressed as a percentage of the original principal amount of the
Notes)).  The Delaware Trustee hereby
acknowledges receipt in trust from the Trust Beneficial Owner, as of the date
hereof, of the foregoing contribution, which shall be used along with the
proceeds from the sale of the Series of Notes to purchase one or more Funding
Agreements.  Upon the creation of the
Trust and the registration of the Trust Beneficial Interest in the Securities
Register by the Registrar in the name of the Trust Beneficial Owner, the Trust
Beneficial Owner shall be the sole beneficial owner of the Trust.

 

Section 2.03  Acknowledgment.  The Delaware Trustee, on behalf of the
Trust, expressly acknowledges its duties and obligations set forth in Section
2.07 of the Standard Statutory Trust Terms incorporated herein.

 

4

 

Section 2.04  Additional
Terms.  Notwithstanding any
provision of the Standard Statutory Trust Terms to the contrary, “Pricing
Supplement” means the Pricing Supplement as defined in the recitals of the
Omnibus Instrument.

 

Section 2.05  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this Trust Agreement will enter into this Trust
Agreement by executing the Omnibus Instrument.

 

By executing the
Omnibus Instrument, the Delaware Trustee, the Trust Beneficial Owner and the
Administrator hereby agree that this Trust Agreement will constitute a legal,
valid and binding agreement between the Delaware Trustee, the Trust Beneficial
Owner and the Administrator as of the Execution Date.

 

All terms relating
to the Trust or the Notes not otherwise included in this Trust Agreement will
be as specified in the Omnibus Instrument or Pricing Supplement as indicated
herein.

 

Section 2.06  Counterparts.  This Trust Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

 

5

 

Section A-2.          Delaware Common Law Trust

 

If
the Pricing Supplement indicates that the Trust is a Delaware Common Law Trust,
the following shall constitute the Trust Agreement.

 

COMMON
LAW TRUST AGREEMENT 

by and among

AMACAR Pacific Corp., as Trust Beneficial Owner and Administrator

and

Wilmington Trust Company, as Trustee

 

 

THIS COMMON LAW TRUST
AGREEMENT, dated as of the Execution Date, by and among AMACAR Pacific Corp., a
Delaware corporation (the “Trust Beneficial Owner” and “Administrator”)
and Wilmington Trust Company, a Delaware banking corporation, as Trustee (the “Trustee”).

 

W
I T N E S S E T H:

 

WHEREAS, the Trust
Beneficial Owner and the Trustee desire to authorize the issuance of a Trust
Beneficial Interest and a Series of Notes in connection with the entry into
this Common Law Trust Agreement;

 

WHEREAS, all
things necessary to make this Common Law Trust Agreement a valid and legally
binding agreement of the Trustee, the Trust Beneficial Owner and the
Administrator, enforceable in accordance with its terms, have been done;

 

WHEREAS, the
parties intend to provide for, among other things, (i) the issuance
and sale of the Notes (pursuant to the Indenture and the applicable Program
Distribution Agreement) and the Trust Beneficial Interest, (ii) the
use of the proceeds of the sale of the Notes and Trust Beneficial Interest to
acquire the Funding Agreements, and (iii) all other actions deemed
necessary or desirable in connection with the transactions contemplated by this
Common Law Trust Agreement; and

 

WHEREAS, the
parties hereto desire to incorporate by reference those certain Standard Common
Law Trust Terms, dated November 7, 2003 (the “Standard Common Law Trust
Terms”), filed as Exhibit 4.9 to Protective Life Insurance Company’s
Registration Statement on Form S-3 (Registration No. 333-100944) and all
capitalized terms not otherwise defined herein (including the recitals hereof)
shall have the meaning set forth in the Standard Common Law Trust Terms (the
Standard Common Law Trust Terms and this Common Law Trust Agreement,
collectively, the “Trust Agreement”).

 

6

 

NOW, THEREFORE, in
consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, each party hereby agrees as follows:

 

ARTICLE
1

 

Section 1.01  Incorporation
by Reference.  All terms, provisions
and agreements of the Standard Common Law Trust Terms (except to the extent
expressly modified herein) are hereby incorporated herein by reference with the
same force and effect as though fully set forth herein.  To the extent that the terms set forth in
Article 2 of this Agreement are inconsistent with the terms of the Standard
Common Law Trust Terms Trust Agreement, the terms set forth in Article 2 herein
shall apply.

 

Section 1.02  Definitions.
 “Omnibus Instrument” means the Omnibus
Instrument in which this Statutory Trust Agreement is included as Section A-2.

 

ARTICLE
2

 

Section 2.01  Name.  The Trust created and governed by this Trust
Agreement shall be the trust specified in the Omnibus Instrument, as such name
may be modified from time to time by the Trustee following written notice to
the Trust Beneficial Owner.

 

Section 2.02  Initial
Capital Contribution and Ownership. 
The Trust Beneficial Owner has paid to, or to an account at the direction
of, the Trustee, on the date hereof, the sum of $15 (or, if the Trust issues
Notes at a discount, the product of $15 and the issue price (expressed as a
percentage of the original principal amount of the Notes)).  The Trustee hereby acknowledges receipt in
trust from the Trust Beneficial Owner, as of the date hereof, of the foregoing
contribution, which shall be used along with the proceeds from the sale of the
Series of Notes to purchase one or more Funding Agreements.  Upon the creation of the Trust and the
registration of the Trust Beneficial Interest in the Securities Register by the
Registrar in the name of the Trust Beneficial Owner, the Trust Beneficial Owner
shall be the sole beneficial owner of the Trust.

 

Section 2.03  Acknowledgment.  The Trustee, on behalf of the Trust,
expressly acknowledges its duties and obligations set forth in Section 2.07 of
the Standard Common Law Trust Terms incorporated herein.

 

Section 2.04  Additional
Terms.  Notwithstanding any
provision of the Standard Common Law Trust Terms to the contrary, “Pricing
Supplement” means the Pricing Supplement as defined in the recitals of the
Omnibus Instrument.

 

Section 2.05  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this Trust Agreement will enter into this Trust
Agreement by executing the Omnibus Instrument.

 

7

 

By executing the
Omnibus Instrument, the Trustee, the Trust Beneficial Owner and the
Administrator hereby agree that this Trust Agreement will constitute a legal,
valid and binding agreement between the Trustee, the Trust Beneficial Owner and
the Administrator as of the Execution Date.

 

All terms relating
to the Trust or the Series of Notes  not
otherwise included in this Trust Agreement will be as specified in the Omnibus
Instrument or Pricing Supplement as indicated herein.

 

Section 2.06  Counterparts.  This Trust Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

 

8

 

SECTION B

 

Administrative Services Agreement

 

 

ADMINISTRATIVE
SERVICES AGREEMENT 

by and among

The Protective Life Secured Trust 

specified in the Omnibus Instrument

and

AMACAR Pacific Corp.,
 as Administrator 

 

THIS
ADMINISTRATIVE SERVICES AGREEMENT, dated as of the Execution Date, by and among
the Protective Life Secured Trust specified in the Omnibus Instrument (the “Trust”)
and AMACAR Pacific Corp., a Delaware corporation (the “Administrator”).

 

W
I T N E S S E T H:

 

 

WHEREAS, the Trust
has requested that the Administrator provide advice and assistance to the Trust
and perform various services for the Trust;

 

WHEREAS, the Trust
desires to avail itself of the experience, advice and assistance of the
Administrator and to have the Administrator perform various financial,
statistical, accounting and other services for the Trust, and the Administrator
is willing to furnish such services on the terms and conditions herein set
forth; and

 

WHEREAS, the
parties hereto desire to incorporate by reference those certain Standard
Administrative Services Terms, dated November 7, 2003 (the “Standard
Administrative Services Terms”), filed as Exhibit 4.12 to Protective Life
Insurance Company’s Registration Statement on Form S-3 (Registration No.
333-100944) and all capitalized terms not otherwise defined herein (including
the recitals hereof) shall have the meaning set forth in the Standard
Administrative Services Terms (the Standard Administrative Services Terms and
this Administrative Services Agreement, collectively, the “Administrative
Services Agreement”).

 

NOW, THEREFORE, in
consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, each party hereby agrees as follows:

 

9

 

ARTICLE
1

 

Section 1.01  Incorporation
by Reference.  All terms, provisions
and agreements of the Standard Administrative Services Terms (except to the
extent expressly modified herein) are hereby incorporated herein by reference
with the same force and effect as though fully set forth herein.  To the extent that the terms set forth in
Article 2 of this Agreement are inconsistent with the terms of the Standard
Administrative Services Terms, the terms set forth in Article 2 herein shall
apply.

 

Section 1.02  Definitions.  “Omnibus Instrument” means the Omnibus
Instrument in which this Administrative Services Agreement is included as
Section B.

 

ARTICLE
2

 

Section 2.01  Additional Terms.  Notwithstanding any provision of the
Standard Administrative Services Terms to the contrary, “Pricing Supplement”
means the Pricing Supplement as defined in the recitals of the Omnibus
Instrument.

 

Section 2.02  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this Administrative Services Agreement will enter
into this Administrative Services Agreement by executing the Omnibus
Instrument.

 

By executing the
Omnibus Instrument, Wilmington on behalf of the Trust and the Administrator
hereby agree that this Administrative Services Agreement will constitute a
legal, valid and binding agreement between the Trust and the Administrator as
of the Execution Date.

 

All terms relating
to the Trust or the Notes not otherwise included in this Administrative
Services Agreement will be as specified in the Omnibus Instrument or Pricing
Supplement as indicated herein.

 

Section 2.03  Counterparts.  This Administrative Services Agreement,
through the Omnibus Instrument, may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

 

Section 2.04  Third
Party Beneficiary.  The parties
hereto acknowledge that Wilmington shall be an express third party beneficiary
to this Administrative Services Agreement, entitled in its own name and on its
own behalf to enforce the provisions hereof against the Trust and the
Administrator with respect to obligations owed to Wilmington by either the
Trust or the Administrator; provided, however, that such right shall be valid
only for so long as Wilmington has any outstanding obligations or potential
obligations under the Trust Agreement.

 

10

 

SECTION C

 

Expense and Indemnity Agreement

 

 

EXPENSE
AND INDEMNITY AGREEMENT

 

 

This Expense and
Indemnity Agreement, dated as of the Execution Date, is entered into by and
among Protective Life, the Trust, Wilmington Trust Company, The Bank of New
York, as indenture trustee, and AMACAR Pacific Corp., as Administrator.

 

WHEREAS, in
consideration of the Service Providers (as defined in the Standard Expense and
Indemnity Agreement Terms, dated November 7, 2003 (the “Standard Expense and
Indemnity Agreement Terms”), filed as Exhibit 10.1 to Protective Life
Insurance Company’s Registration Statement on Form S-3 (Registration No.
333-100944)) providing services to the Trust in connection with the Program and
pursuant to the Program Documents under which the Service Providers will have
certain duties and obligations, Protective Life hereby agrees to the following
compensation arrangements and terms of indemnity; and

 

WHEREAS, the
parties hereto desire to incorporate by reference the Standard Expense and
Indemnity Agreement Terms and all capitalized terms not otherwise defined
herein (including the recitals hereof) shall have the meaning set forth in the
Standard Expense and Indemnity Agreement Terms (the Standard Expense and
Indemnity Agreement Terms and this Expense and Indemnity Agreement,
collectively, the “Expense and Indemnity Agreement”).

 

NOW, THEREFORE, in
consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, each party hereby agrees as follows:

 

ARTICLE
1

 

Section 1.01  Incorporation
by Reference.  All terms, provisions
and agreements of the Standard Expense and Indemnity Terms (except to the
extent expressly modified herein) are hereby incorporated herein by reference
with the same force and effect as though fully set forth herein.  To the extent that the terms set forth in
Article 2 of this Agreement are inconsistent with the terms of the Standard
Expense and Indemnity Terms, the terms set forth in Article 2 herein shall
apply.

 

Section 1.02  Definitions.  “Omnibus Instrument” means the Omnibus
Instrument in which this Expense and Indemnity Agreement is included as Section
C.

 

11

 

ARTICLE
2

 

Section 2.01  Additional Terms.  Notwithstanding any provision of the
Standard Expense and Indemnity Agreement Terms to the contrary, “Pricing Supplement”
means the Pricing Supplement as defined in the recitals of the Omnibus
Instrument.

 

Section 2.02  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this Expense and Indemnity Agreement will enter
into this Expense and Indemnity Agreement by executing the Omnibus Instrument.

 

By executing the
Omnibus Instrument, each party hereto agrees that this Expense and Indemnity
Agreement will constitute a legal, valid and binding agreement by and among
such parties as of the Execution Date.

 

All terms relating
to the Trust or the Notes not otherwise included in this Expense and Indemnity
Agreement will be as specified in the Omnibus Instrument or Pricing Supplement
as indicated herein.

 

Section 2.03  Counterparts.  This Expense and Indemnity Agreement,
through the Omnibus Instrument, may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

 

12

 

SECTION D

 

License Agreement

 

 

LICENSE
AGREEMENT

 

 

This LICENSE
AGREEMENT, dated as of the Execution Date, is entered into between Protective
Life Corporation (the “Licensor”), a Delaware corporation with its
principal place of business at 2801 Highway 280 South, Birmingham, Alabama
35223, and the Protective Life Secured Trust specified in the Omnibus
Instrument (the “Licensee”).

 

W
I T N E S S E T H:

 

WHEREAS, Licensor
is the owner of certain trademarks and service marks and registrations and
pending applications therefore, and may acquire additional trademarks and
service marks in the future, all as defined below;

 

WHEREAS, Licensee
desires to use certain of Licensor’s trademarks and service marks in connection
with Licensee’s activities, as described more fully below;

 

WHEREAS, Licensor
and Licensee wish to formalize the agreement between them regarding Licensee’s
use of Licensor’s marks; and

 

WHEREAS, the
parties hereto desire to incorporate by reference those certain Standard
License Agreement Terms, dated November 7, 2003 (the “Standard License
Agreement Terms”), filed as Exhibit 99.1 to Protective Life Insurance
Company’s Current Report on Form 8-K, filed with the Securities and Exchange
Commission on March 3, 2004 and all capitalized terms not otherwise defined
herein (including the recitals hereof) shall have the meaning set forth in the
Standard License Agreement Terms (the Standard License Agreement Terms and this
License Agreement, collectively, the “License Agreement”).

 

NOW THEREFORE, in
consideration of the mutual promises set forth in this License Agreement and
other good and valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, the parties agree as follows:

 

ARTICLE
1

 

Section 1.01  Incorporation
by Reference.  All terms, provisions
and agreements set forth in the Standard License Agreement Terms (except to the
extent expressly

 

13

 

modified
herein) are hereby incorporated herein by reference with the same force and
effect as though fully set forth herein. 
To the extent that the terms set forth in Article 2 of this Agreement
are inconsistent with the terms of the Standard License Agreement Terms, the
terms set forth in Article 2 herein shall apply.

 

Section 1.02  Definitions.  “Omnibus Instrument” means the Omnibus
Instrument in which this License Agreement is included as Section D.

 

ARTICLE
2

 

Section 2.01  Additional
Terms.  None

 

Section 2.02  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this License Agreement will enter into this
License Agreement by executing the Omnibus Instrument.

 

By executing the
Omnibus Instrument, Licensor and the Licensee hereby agree that this License
Agreement will constitute a legal, valid and binding agreement between Licensor
and the Licensee as of the Execution Date.

 

All terms relating
to the Trust or the Notes not otherwise included in this License Agreement will
be as specified in the Omnibus Instrument or Pricing Supplement as indicated
herein.

 

Section 2.03  Counterparts.  This License Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

 

14

 

SECTION E

 

Indenture

 

 

INDENTURE

 

This INDENTURE
(the “Indenture”) is entered into as of the Original Issue Date
specified in the Pricing Supplement, by and between the Protective Life Secured
Trust specified in the Omnibus Instrument (the “Trust”), and The Bank of
New York, as indenture trustee (the “Indenture Trustee”).

 

The Bank of New
York in its capacity as Indenture Trustee, hereby accepts its role as Registrar,
Paying Agent, Transfer Agent and Calculation Agent hereunder.

 

References herein
to “Indenture Trustee,” “Registrar,” “Transfer Agent,” “Paying Agent” or
“Calculation Agent” shall include the permitted successors and assigns of any
such entity from time to time.

 

W
I T N E S S E T H:

 

WHEREAS, the Trust
has duly authorized the execution and delivery of this Indenture to provide for
the issuance of secured Notes; and

 

WHEREAS, all
things necessary to make this Indenture a valid and legally binding agreement
of the Trust and the other parties to this Indenture, enforceable in accordance
with its terms, have been done, and the Trust proposes to do all things
necessary to make the Notes, when executed by the Trust and authenticated and
delivered pursuant hereto, valid and legally binding obligations of the Trust
as hereinafter provided; and

 

WHEREAS, the
parties hereto desire to incorporate by reference those certain Amended and
Restated Standard Indenture Terms dated as of June 10, 2004 (the “Amended and
Restated Standard  Indenture Terms”), filed as Exhibit 4.1 to
Protective Life Insurance Company’s Current Report on Form 8-K, filed with the
Securities and Exchange Commission on June 10, 2004 and all capitalized terms
not otherwise defined herein (including the recitals hereof) shall have the
meaning set forth in the Amended and Restated Standard Indenture Terms (the
Amended and Restated Standard Indenture Terms and this Indenture, collectively,
the “Indenture”);

 

NOW, THEREFORE,
for and in consideration of the premises and the purchase of the Notes by the
Holders thereof, it is mutually covenanted and agreed by the parties hereto as
follows:

 

15

 

ARTICLE
1

 

Section 1.01  Incorporation
by Reference.  All terms, provisions
and agreements set forth in the Amended and Restated Standard Indenture Terms
(except to the extent expressly modified hereby) are hereby incorporated herein
by reference (as if fully set forth herein). 
Should any portion of the Amended and Restated Standard Indenture Terms
conflict with the terms of this Indenture, the terms of this Indenture shall
prevail.  References herein to Articles,
Sections or Exhibits shall refer respectively to the articles, sections or
exhibits of the Amended and Restated Standard Indenture Terms, unless otherwise
expressly provided.

 

Section 1.02  Definitions.  “Omnibus Instrument” means the Omnibus
Instrument in which this Indenture is included as Section E.

 

ARTICLE
2

 

Section 2.01  Agreement
to be Bound.  Each of the Trust, the
Indenture Trustee, the Registrar, the Transfer Agent, the Paying Agent and the
Calculation Agent hereby agrees to be bound by all of the terms, provisions and
agreements set forth herein, with respect to all matters contemplated herein, including,
without limitation, those relating to the issuance of the below referenced
Notes.

 

Section 2.02  Designation
of the Trust and the Notes.  The
Trust created by the Trust Agreement and, if such Trust is a statutory trust,
the certificate of trust of the Trust, and referred to in this Indenture is the
Protective Life Secured Trust specified in the Omnibus Instrument.  The Notes issued by the Trust and governed
by this Indenture shall be the Notes specified in the Pricing Supplement.

 

Section 2.03  Additional
Terms.  None.

 

Section 2.04  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this Indenture will enter into this Indenture by
executing the Omnibus Instrument and the date of this Indenture will be the day
and year specified therein.

 

By executing the
signature page thereto, the Indenture Trustee and the Trust hereby agree that
this Indenture will constitute a legal, valid and binding agreement between the
Indenture Trustee and the Trust as of the Original Issue Date.

 

All terms relating
to the Trust or the Notes not otherwise included in this Indenture will be as
specified in the Omnibus Instrument or the Pricing Supplement, as indicated
herein.

 

Section 2.05  Counterparts.  This Indenture, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be

 

16

 

deemed
to be an original, and all of which counterparts shall constitute one and the
same instrument.

 

17

 

SECTION F

 

Selling Agent Agreement

 

 

SELLING
AGENT AGREEMENT

by and among

The Protective Life Secured Trust

specified in the Omnibus Instrument

and

Protective Life Insurance Company

and

The Agents specified in the Pricing Supplement

 

This Selling
Agent Agreement, dated as of the Execution Date, is entered into by and among
each Agent specified in the Pricing Supplement,  Protective Life Insurance Company, a Tennessee stock life
insurance company (the “Company”) and the Protective Life Secured Trust
specified in the Omnibus Instrument.

 

WHEREAS, the
Protective Life Secured Trust specified in the Omnibus Instrument desires to
issue and sell the Notes specified in the Pricing Supplement to the Purchasing
Agent.

 

ARTICLE
1

 

Section 1.01  Incorporation
by Reference.  All terms, provisions
and agreements set forth in the Standard Selling Agent Agreement Terms, dated
as of November 7, 2003 (the “Standard Selling Agent Agreement Terms”),
filed as Exhibit 1.1 to Protective Life Insurance Company’s Registration
Statement on Form S-3 (Registration No. 333-100944) (except to the extent
expressly modified herein) are hereby incorporated herein by reference with the
same force and effect as though fully set forth herein and all capitalized
terms not otherwise defined herein (including recitals hereof) shall have the
meanings set forth in the Standard Selling Agent Agreement Terms (the Standard
Selling Agent Agreement Terms and this Selling Agent Agreement, collectively,
the “Selling Agent Agreement”). 
To the extent that the terms set forth in Article 2 of this Agreement
are inconsistent with the terms of the Standard Selling Agent Agreement Terms,
the terms set forth in Article 2 herein shall apply.

 

Section 1.02  Definitions.  “Omnibus Instrument” means the Omnibus
Instrument in which this Selling Agent Agreement is included as Section F.

 

18

 

ARTICLE
2

 

Section 2.01   Purchase of Notes.  The Purchasing Agent agrees to purchase the
Notes having the terms and in the amounts specified in the Pricing Supplement.

 

ARTICLE
3

 

Section 3.01  Additional
Terms.  (a)  Notwithstanding Section III(a)(i) of the
Standard Selling Agent Agreement Terms, the parties to this Selling Agent
Agreement agree that the Company and the Trust shall file the Pricing
Supplement pursuant to the appropriate subsection under Rule 424(b) under the
1933 Act.

 

(b)  The
parties to this Selling Agent Agreement agree that if, at any time after the
Settlement Date when the Prospectus is required by the 1933 Act to be delivered
in connection with offers or sales of the Notes, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Agents, counsel for the Company or counsel for the Trust, to
amend or supplement the Registration Statement in order that the Registration
Statement will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading or to amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, or if it shall be necessary, in the opinion of any
such counsel, to amend or supplement the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, as applicable, the Company shall give prompt
notice, confirmed in writing, to the Agents to cease the solicitation of offers
for the purchase of Notes and to cease sales of any Notes by the Purchasing
Agent, and the Company will promptly prepare and file with the Commission such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement and Prospectus comply with such requirements,
and the Company will furnish to the Agents, without charge, such number of
copies of such amendment or supplement as the Agents may reasonably request.

 

(c) 
Notwithstanding Section II(c) of the Standard Selling Agent Agreement
Terms, the parties to this Selling Agent Agreement agree that the officer’s
certificate to be delivered pursuant to such Section II(c) need only be
executed by one officer of the Company who is at least a Senior Vice President
of the Company.

 

Section 3.02  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this Selling Agent Agreement will enter into this
Selling Agent Agreement by executing the Omnibus Instrument.

 

19

 

By executing the
Omnibus Instrument, each party hereto agrees that this Selling Agent Agreement
will constitute a legal, valid and binding agreement by and among the Trust,
Protective Life Insurance Company and the Agents specified in the Pricing
Supplement as of the Execution Date.

 

All terms relating
to the Trust or the Notes not otherwise included in this Selling Agent
Agreement will be as specified in the Omnibus Instrument or Pricing Supplement
as indicated herein.

 

Section 3.03  Counterparts.  This Selling Agent Agreement, through the
Omnibus Instrument, may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

 

20

 

SECTION G

 

Distribution Agreement

 

 

DISTRIBUTION
AGREEMENT

by and among

The Protective Life Secured Trust

specified in the Omnibus Instrument

and

Protective Life Insurance Company

and

The Dealers specified in the Pricing Supplement

 

 

This Distribution
Agreement, dated as of the Execution Date, is entered into by and among each
dealer specified in the Pricing Supplement (each, a “Dealer”), Protective Life Insurance Company, a Tennessee stock
life insurance company (the “Company”)
and the Protective Life Secured Trust specified in the Omnibus Instrument.

 

WHEREAS, the Trust
has entered into the Indenture (the “Indenture”),
dated as of the date specified in the Omnibus Instrument, by and between the
Trust and The Bank of New York, as indenture trustee (the “Indenture Trustee”) to provide for
the issuance by the Trust of the secured medium-term notes specified in the
Pricing Supplement (the “Notes”);
and

 

WHEREAS, all
things necessary to make this Distribution Agreement a valid and legally
binding agreement of the Trust and the other parties to this Distribution
Agreement, enforceable in accordance with its terms, have been done, and the
Trust proposes to do all things necessary to make the Notes, when executed by
the Trust and authenticated and delivered pursuant hereto and the Indenture,
valid and legally binding obligations of the Trust as hereinafter provided; and

 

WHEREAS, the
parties hereto desire to incorporate by reference those certain Standard
Distribution Agreement Terms, dated as of November 7, 2003 (the “Standard Distribution Agreement Terms”),
filed as Exhibit 1.3 to Protective Life Insurance Company’s Registration
Statement on Form S-3 (Registration No. 333-100944) and all capitalized terms
not otherwise defined herein (including the recitals hereof) shall have the
meaning set forth in the Standard Distribution Agreement Terms (the Standard
Distribution Agreement Terms and this Distribution Agreement, collectively, the
“Distribution Agreement”).

 

21

 

NOW, THEREFORE,
for and in consideration of the premises and the issuance of the Notes by the
Trust, it is mutually agreed by the parties hereto as follows:

 

ARTICLE 1

 

Section 1.01  Agreement
to be Bound.  The Trust and each
Dealer hereby agrees to be bound by all of the terms, provisions and agreements
set forth herein, with respect to all matters contemplated herein, including,
without limitation, those relating to the issuance of the below-referenced
Notes.

 

Section 1.02  Incorporation
by Reference.  All terms, provisions
and agreements set forth in the Standard Distribution Agreement Terms (except
to the extent expressly modified hereby) are hereby incorporated herein by
reference (as if fully set forth herein). 
Should any portion of the Standard Distribution Agreement Terms conflict
with the terms of this Distribution Agreement, the terms of this Distribution
Agreement shall prevail.  References
herein to Sections or Exhibits shall refer respectively to the sections or
exhibits of the Standard Distribution Agreement Terms, unless otherwise
expressly provided.

 

Section 1.03  Designation
of the Trust and the Notes.  The
Trust created by the Trust Agreement and, if such Trust is a Delaware statutory
trust, the certificate of trust of the Trust, and referred to in this
Distribution Agreement is the Protective Life Secured Trust specified in the
Omnibus Instrument.  The term Trust
refers to the Protective Life Secured Trust specified in this Omnibus
Instrument.  The Series of Notes issued
by the Trust pursuant to the Distribution Agreement shall be the Series of
notes specified in the Pricing Supplement. 
The term Notes refers to the notes of this Series of Notes.

 

Section 1.04  Additional
Terms.  Notwithstanding Section
3(a)(i) of the Standard Distribution Agreement Terms, the parties to this
Distribution Agreement agree that the Company and the Trust shall file the
Pricing Supplement pursuant to the appropriate subsection under Rule 424(b)
under the 1933 Act.

 

The parties to this Distribution Agreement agree that
if, at any time after the Settlement Date when the Prospectus is required by
the 1933 Act to be delivered in connection with offers or sales of the Notes,
any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Dealer(s), counsel for the Company
or counsel for the Trust, to amend or supplement the Registration Statement in
order that the Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
or if it

 

22

 

shall be necessary, in the opinion of any such counsel, to amend or
supplement the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, as applicable, the Company shall give prompt notice, confirmed in
writing, to the Dealer(s) to cease the solicitation of offers for the purchase
of Notes in their capacity as agent, if applicable, and to cease sales of any
Notes they may then own as principal, and the Company will promptly prepare and
file with the Commission such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement and
Prospectus comply with such requirements, and the Company will furnish to the
Dealer(s), without charge, such number of copies of such amendment or
supplement as the Dealer(s) may reasonably request.

 

Section 1.05  Definitions.  “Omnibus Instrument” means the Omnibus
Instrument in which this Distribution Agreement is included as Section G.

 

ARTICLE
2

 

Section 2.01  Purchase/Solicitation
of Purchases of Notes.

 

(a)           If specified in the Pricing
Supplement, the Notes are being purchased by the Dealer(s) as principal.

 

If the Notes are
to be purchased by the Dealer(s) as principal, the Dealer(s) specified in the
Pricing Supplement [severally] agree to purchase the Notes having the terms and
in the amounts specified in the Pricing Supplement.

 

(b)           If
specified in the Pricing Supplement, the Dealer(s) will be acting as agent.

 

If the Dealer(s)
are to solicit the purchase of the Notes acting as agents, the Dealer(s) will
solicit the purchase of Notes pursuant to Section 1(d) of the Distribution
Agreement.

 

Section 2.02  Funding
Agreement.  On the Original Issue
Date set forth above, the Company will issue to the Trust the Funding
Agreement(s) identified by number in the Pricing Supplement.

 

Section 2.03  Dealer
Notice Information.  As specified in
Schedule 1 to the Omnibus Instrument.

 

23

 

ARTICLE
3

 

Section 3.01  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this Distribution Agreement will enter into this
Distribution Agreement by executing the Omnibus Instrument.

 

By executing the
Omnibus Instrument, each party hereto agrees that this Distribution Agreement
will constitute a legal, valid and binding agreement by and among the Trust,
Protective Life Insurance Company and the Dealers specified in the Pricing
Supplement as of the Execution Date.

 

All terms relating
to the Trust or the Notes not otherwise included in this Distribution Agreement
will be as specified in the Omnibus Instrument or Pricing Supplement as
indicated herein.

 

Section 3.02  Counterparts.  This Distribution Agreement, through the
Omnibus Instrument, may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

 

24

 

SECTION H

 

COORDINATION AGREEMENT

 

This Coordination
Agreement, dated as of the Original Issue Date, is entered into by and among
Protective Life, the Trust and the Indenture Trustee.

 

W
I T N E S S E T H:

 

WHEREAS, the Trust
will enter into the Funding Agreement with Protective Life dated as of the
Original Issue Date;

 

WHEREAS, the
Dealer(s) have agreed to sell the Notes in accordance with the Registration
Statement; and

 

WHEREAS, the Trust
intends to issue the Notes in accordance with the Indenture and to transfer the
Funding Agreement to the Indenture Trustee in accordance with the Indenture to
secure payment of the Notes;

 

NOW, THEREFORE, to
give effect to the agreements and arrangements established under the
Distribution Agreement or Selling Agent Agreement, as applicable, the Trust
Agreement, the Indenture, and the Notes, and in consideration of the agreements
and obligations set forth herein and for other good and valuable consideration,
the sufficiency of which is hereby acknowledged, each party hereby agrees as
follows:

 

ARTICLE
1

 

Section 1.01           Delivery of the Funding Agreement.  The Trust hereby authorizes the Indenture
Trustee to receive the Funding Agreement from Protective Life pursuant to the
Assignment of the Funding Agreement, to be entered into on the Original Issue
Date, as specified in the Pricing Supplement and included in the closing
instrument dated as of the Original Issue Date set forth in the Pricing
Supplement (the “Closing Instrument”).

 

Section 1.02           Issuance and Purchase of the Notes.

 

(a)           Delivery of the Funding Agreement to
the Indenture Trustee pursuant to the Assignment of the Funding Agreement shall
be confirmation of payment by the Trust for the Funding Agreement.

 

(b)           The Trust hereby directs the
Indenture Trustee, upon receipt of the Funding Agreement pursuant to the
Assignment of the Funding Agreement, (i) to authenticate the
certificates representing the Notes (the “Notes Certificates”) in
accordance with the Indenture and (ii) to (A) deliver each
relevant Notes Certificate to

 

25

 

the
clearing system or systems identified in each such Notes Certificate, or to the
nominee of such clearing system, for credit to such accounts as the Dealer(s)
may direct, or (B) deliver each relevant Notes Certificate to the
purchasers thereof as identified by the Dealer(s).

 

Section 1.03  Definitions.  “Omnibus Instrument” means the Omnibus
Instrument in which this Coordination Agreement is included as Section H.

 

ARTICLE
2

 

Section 2.01           Directions
Regarding Periodic Payments.  As registered
owner of the Funding Agreement as collateral securing payments on the Notes,
the Indenture Trustee will receive payments on the Funding Agreement on behalf
of the Trust.  The Trust hereby directs
the Indenture Trustee to use such funds to make payments on behalf of the Trust
pursuant to the Trust Agreement and the Indenture.

 

Section 2.02           Maturity
of the Funding Agreement.  Upon the
maturity of the Funding Agreement and the return of funds thereunder, the Trust
hereby directs the Indenture Trustee to set aside from such funds an amount
sufficient for the repayment of the outstanding principal on the Notes when
due.

 

ARTICLE
3

 

Section 3.01           No
Additional Liability.  Nothing in
this agreement shall impose any liability or obligation on the part of any
party to this agreement to make any payment or disbursement in addition to any
liability or obligation such party has under the Program Documents, except to
the extent that a party has actually received funds which it is obligated to
disburse pursuant to this agreement.

 

Section 3.02           No
Conflict.  This agreement is
intended to be in furtherance of the agreements reflected in the documents
related to the Program Documents, and not in conflict.  To the extent that a provision of this
agreement conflicts with the provisions of one or more Program Documents, the
provisions of such documents shall govern.

 

Section 3.03           Governing
Law.  This agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to the principles of conflicts of laws thereof.

 

Section 3.04           Severability.  If any provision in this agreement shall be
invalid, illegal or unenforceable, such provisions shall be deemed severable
from the remaining provisions of this agreement and shall in no way affect the
validity or enforceability of such other provisions of this agreement.

 

26

 

Section 3.05           Counterparts.  This agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which shall constitute but one and the same instrument.

 

Section 3.06           Notices.  All demands, notices and communications
under this agreement shall be in writing and shall be deemed to have been duly
given upon receipt at the addresses set forth below:

 

if to the Trust,
Indenture Trustee or Protective Life, as specified in the Expense and Indemnity
Agreement or at such other address as shall be designated by any such party in
a written notice to the other parties.

 

ARTICLE
4

 

Section 4.01  Omnibus
Instrument; Execution and Incorporation of Terms.  The parties to this Coordination Agreement will enter into this
Coordination Agreement by executing the Omnibus Instrument.

 

By executing the
Omnibus Instrument, each party hereto agrees that this Coordination Agreement
will constitute a legal, valid and binding agreement by and among the Trust,
Protective Life Insurance Company and the Indenture Trustee as of the Original
Issue Date.

 

All terms relating
to the Trust or the Notes not otherwise included in this Coordination Agreement
will be as specified in the Omnibus Instrument or Pricing Supplement as
indicated herein.

 

27

 

SECTION I

 

Miscellaneous and Execution Pages

 

 

Notwithstanding
any other provisions of this Omnibus Instrument, no amendment to this Omnibus
Instrument may be made if such amendment would cause the Trust not to be
treated as a grantor trust for U.S. federal income tax purposes.

 

This Omnibus
Instrument may be executed by each of the parties hereto in any number of
counterparts, and by each of the parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.  Facsimile signatures
shall be deemed original signatures.

 

It is expressly
understood and agreed by the parties hereto that (a) this Omnibus Instrument is
executed and delivered by Wilmington Trust Company, not individually or
personally but solely as trustee of the Trust, in the exercise of the powers
and authority conferred and vested in it pursuant to the Trust Agreement, (b)
each of the representations, undertakings and agreements herein made on the
part of the Trust is made and intended not as a personal representation,
undertaking or agreement by Wilmington Trust Company but is made and intended
for the purpose of binding only the Trust, (c) nothing herein contained shall
be construed as creating any liability on Wilmington Trust Company,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Omnibus
Instrument or any other related documents.

 

Each signatory, by
its execution hereof, does hereby become a party to each of the agreements
identified for such party as of the date specified in such agreements.

 

28

 

IN WITNESS WHEREOF, the undersigned have executed this Omnibus
Instrument, dated as of the Execution Date.

 

 

	
   

  	
  PROTECTIVE LIFE
  CORPORATION (in

  executing below agrees and becomes a party

  to the License Agreement set forth in

  Section D herein).

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Protective Life Secured Trust
20[   ]-[   ]

Omnibus Instrument

Execution Page 1
of 7

 

	
   

  	
  PROTECTIVE LIFE
  INSURANCE

  COMPANY (in executing below agrees and

  becomes a party to (i) the Expense and

  Indemnity Agreement set forth in Section C

  herein, (ii) if the Trust is issuing InterNotes®

  to retail investors, the Selling Agent

  Agreement set forth in Section F herein, (iii) if

  the Trust is issuing secured medium-term

  notes to institutional investors, the

  Distribution Agreement set forth in Section G

  herein and (iv) the Coordination Agreement

  set forth in Section H herein).

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Protective Life Secured Trust 20[   ]-[   ]

Omnibus Instrument

Execution Page 2
of 7

 

	
   

  	
  PROTECTIVE LIFE
  SECURED TRUST

  specified in the Omnibus Instrument (in

  executing below agreement and becomes a

  party to (i) the Administrative Services

  Agreement set forth in Section B herein,

  (ii) the Expense and Indemnity Agreement set

  forth in Section C herein, (iii) the License

  Agreement set forth in Section D herein,

  (iv) the Indenture set forth in Section E herein

  (v) if the Trust is issuing InterNotes® to retail

  investors, the Selling Agent Agreement set

  forth in Section F herein, (vi) if the Trust is

  issuing secured medium-term notes to

  institutional investors, the Distribution

  Agreement set forth in Section G herein and

  (vii) the Coordination Agreement set forth in

  Section H herein).

  
	
   

  	
   

  
	
   

  	
  By: Wilmington
  Trust Company, solely in its

  capacity as trustee of the Trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Protective Life Secured Trust
20[   ]-[   ]

Omnibus Instrument

Execution Page 3
of 7

 

	
   

  	
  WILMINGTON TRUST
  COMPANY (in

  executing below agrees and becomes a party

  to (i) (a) if the Trust is a Delaware statutory

  trust, the Statutory Trust Agreement set forth

  in Section A-1 herein as Delaware Trustee or

  (b) if the Trust is a Delaware common law

  trust, the Common Law Trust Agreement set

  forth in Section A-2 herein as trustee and

  (ii) the Expense and Indemnity Agreement set

  forth in Section C herein).

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Protective Life Secured Trust 20[   ]-[   ]

Omnibus Instrument

Execution Page 4
of 7

 

	
   

  	
  AMACAR PACIFIC
  CORP. (in executing

  below agrees and becomes a party to (i) the

  Statutory Trust Agreement or Common Law

  Trust Agreement set forth in Sections A-1 and

  A-2, respectively, as the case may be, as Trust

  Beneficial Owner and Administrator, (ii) the

  Administrative Services Agreement, set forth

  in Section B herein as Administrator and (iii)

  the Expense and Indemnity Agreement as set

  forth in Section C herein).

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Protective Life Secured Trust
20[   ]-[   ]

Omnibus Instrument

Execution Page 5
of 7

 

	
   

  	
  THE BANK OF NEW
  YORK (in executing

  below agrees and becomes a party to (i) the

  Indenture set forth in Section E herein, not in

  its individual capacity but solely in its

  capacity as Indenture Trustee, Registrar,

  Transfer Agent, Paying Agent and Calculation

  Agent, (ii)  the Expense and Indemnity

  Agreement set forth in Section C herein, not in

  its individual capacity but solely in its

  capacity as Indenture Trustee and (iii) the

  Coordination Agreement set forth in Section

  H herein, not in its individual capacity but

  solely in its capacity as Indenture Trustee).

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Protective Life Secured Trust
20[   ]-[   ]

Omnibus Instrument

Execution Page 6
of 7

 

	
   

  	
  LEHMAN BROTHERS
  INC.1 (in executing

  below agrees and becomes a party to the

  Distribution Agreement set forth in Section G

  herein).

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INCAPITAL LLC
  (in executing below agrees

  and becomes a party to the Selling Agent

  Agreement set forth in Section F herein on

  behalf of itself and each of the agents named

  in the Pricing Supplement).

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

1               Insert name of the relevant
Dealer(s) if other than, or in addition to, Lehman Brothers Inc.

 

Protective Life Secured Trust
20[   ]-[   ]

Omnibus Instrument

Execution Page 7 of 7

 

SCHEDULE
1

 

[Insert
the following text if the Trust is issuing InterNotes® to retail investors.

 

Selling Agent Agreement Specifications

 

In connection with
Section VI(a)(viii) of the Selling Agent Agreement, the Program under which the
Notes are issued, as well as the Notes, have been assigned the ratings issued
by Moody’s and S&P set forth in the Pricing Supplement.  In connection with Section VI(b)(xiv) of the
Selling Agent Agreement, the Company has been assigned the financial strength
rating by Moody’s and S&P as set forth in the Pricing Supplement.

 

In connection with
Section X of the Selling Agent Agreement, the notice information for the Agents
is as follows:

 

[c/o Incapital LLC

One North LaSalle Street, Suite 3500

Chicago, Illinois 60602]]

 

[Insert the following
text if the Trust is issuing secured medium-term notes to institutional
investors.

 

Distribution Agreement Specifications

 

 

In connection with
Section 2(a)(viii) of the Distribution Agreement, the Program under which the
Notes are issued, as well as the Notes, have been assigned the ratings issued
by Moody’s and by S&P set forth in the Pricing Supplement.  In connection with Section 2(b)(xiv) of the
Distribution Agreement, the Company has been assigned the financial strength
rating by Moody’s and S&P set forth in the Pricing Supplement.

 

In connection with
Article 2 of the Distribution Agreement, the notice information for the
Dealer(s) is as follows:

 

[Lehman Brothers Inc.

745 Seventh Avenue

New York, NY 10019

Attn: Medium Term Note Desk

Telecopy No.:  212 526 0943]]

 

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Exhibit 4.2    
    

        THERAVANCE, INC.

and

                        , as Rights Agent  

  
 

    RIGHTS AGREEMENT    
    

Dated as of                        , 2004  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	Section 1.	 	Certain Definitions	 	1
	

Section 2.	
 	

Appointment of Rights Agent	
 	

4
	

Section 3.	
 	

Issue of Right Certificates	
 	

4
	

Section 4.	
 	

Form of Right Certificates	
 	

5
	

Section 5.	
 	

Countersignature and Registration	
 	

6
	

Section 6.	
 	

Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	
 	

6
	

Section 7.	
 	

Exercise of Rights, Purchase Price; Expiration Date of Rights	
 	

7
	

Section 8.	
 	

Cancellation and Destruction of Right Certificates	
 	

8
	

Section 9.	
 	

Availability of Shares of Preferred Stock	
 	

8
	

Section 10.	
 	

Preferred Stock Record Date	
 	

9
	

Section 11.	
 	

Adjustment of Purchase Price, Number of Shares and Number of Rights	
 	

9
	

Section 12.	
 	

Certificate of Adjusted Purchase Price or Number of Shares	
 	

15
	

Section 13.	
 	

Consolidation, Merger or Sale or Transfer of Assets or Earning Power	
 	

16
	

Section 14.	
 	

Fractional Rights and Fractional Shares	
 	

18
	

Section 15.	
 	

Rights of Action	
 	

19
	

Section 16.	
 	

Agreement of Right Holders	
 	

19
	

Section 17.	
 	

Right Certificate Holder Not Deemed a Stockholder	
 	

20
	

Section 18.	
 	

Concerning the Rights Agent	
 	

20
	

Section 19.	
 	

Merger or Consolidation or Change of Name of Rights Agent	
 	

20
	

Section 20.	
 	

Duties of Rights Agent	
 	

21
	

Section 21.	
 	

Change of Rights Agent	
 	

22
	

Section 22.	
 	

Issuance of New Right Certificates	
 	

23
	

Section 23.	
 	

Redemption	
 	

23
	

Section 24.	
 	

Exchange	
 	

24
	

Section 25.	
 	

Notice of Certain Events	
 	

24
	

Section 26.	
 	

Notices	
 	

25
	

Section 27.	
 	

Supplements and Amendments	
 	

25
	

Section 28.	
 	

Successors	
 	

26
	

Section 29.	
 	

Benefits of this Agreement	
 	

26
	

Section 30.	
 	

Determinations and Actions by the Board of Directors	
 	

26
	

Section 31.	
 	

Severability	
 	

26
	

Section 32.	
 	

Governing Law	
 	

26
	 	 	 	 	 

	

Section 33.	
 	

Counterparts	
 	

26
	

Section 34.	
 	

Descriptive Headings	
 	

26

  

 
 

RIGHTS AGREEMENT    
    

        Rights Agreement, dated as of                        , 2004
("Agreement"), between Theravance, Inc., a Delaware corporation (the "Company"), and                        ,
as Rights Agent (the "Rights Agent"). 

        The
Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a "Right") for each share of Common Stock (as hereinafter defined) of
the Company outstanding as of the Close of Business (as defined below) on                        , 2004 (the "Record Date"), each
Right representing the right to purchase one one-thousandth
(subject to adjustment) of a share of Preferred Stock (as hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of
one Right (subject to adjustment as provided herein) with respect to each share of Common Stock that shall become outstanding between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined); provided, however, that Rights may be issued with respect to shares of Common Stock that shall
become outstanding after the Distribution Date and prior to the Expiration Date in accordance with Section 22. 

        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 meaning indicated: 

        (a)   "Acquiring
Person" shall mean any Person (as such term is hereinafter defined) who or which shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the shares of Common Stock then outstanding, but shall not include an Exempt Person (as such term is hereinafter defined); provided, however,
that (i) if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an "Acquiring Person" became the Beneficial Owner of a number of shares of Common
Stock such that the Person would otherwise qualify as an "Acquiring Person" inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such Person to be an "Acquiring Person" or (B) such Person was aware of the extent of its Beneficial Ownership of Common Stock but had no
actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention of changing or influencing control of the Company, then such Person shall not be
deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement unless and until such Person shall have failed to divest itself, as soon as practicable (as determined, in good
faith, by the Board of Directors of the Company), of Beneficial Ownership of a sufficient number of shares of Common Stock so that such Person would no longer otherwise qualify as an "Acquiring
Person"; (ii) if, as of the date hereof or prior to the first public announcement of the adoption of this Agreement, any Person is or becomes the Beneficial Owner of 15% or more of the shares
of Common Stock outstanding, such Person shall not be deemed to be or to become an "Acquiring Person" unless and until such time as such Person shall, after the first public announcement of the
adoption of this Agreement, become the Beneficial Owner of additional shares of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common
Stock or pursuant to a split or subdivision of the outstanding Common Stock), unless, upon becoming the Beneficial Owner of such additional shares of Common Stock, such Person is not then the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding; (iii) no Person shall become an "Acquiring Person" as the result of an acquisition of shares of Common Stock by
the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares of Common Stock beneficially owned by such Person to 15% or more of the shares of Common
Stock then outstanding, provided, however, that if a Person shall become the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding by reason of such share acquisitions by the Company and shall thereafter become the Beneficial Owner of any additional 

1

 

shares
of Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common
Stock), then such Person shall be deemed to be an "Acquiring Person" unless upon becoming the Beneficial Owner of such additional shares of Common Stock such Person does not beneficially own 15% or
more of the shares of Common Stock then outstanding; and (iv) GlaxoSmithKline plc, Glaxo Group Limited and SmithKlineBeecham Corporation (collectively "GSK") shall not be deemed an "Acquiring
Person" under this Agreement for so long as GSK is in compliance with the terms of that certain Governance Agreement dated May 11, 2004 by and among the Company and GSK. For all purposes of
this Agreement, any calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date hereof. 

        (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
Exchange Act, as in effect on the date hereof. 

        (c)   A
Person shall be deemed the "Beneficial Owner" of, shall be deemed to have "Beneficial Ownership" of and shall be deemed to "beneficially own" any securities: 

        (i)    which
such Person or any of such Person's Affiliates or Associates is deemed to beneficially own, directly or indirectly, within the meaning of Rule l3d-3 of
the General Rules and Regulations under the Exchange Act as in effect on the date hereof; 

        (ii)   which
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, warrants or options, or otherwise; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to beneficially own, (x) 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, (y) securities which such Person has a right to acquire upon the exercise of Rights at any time prior
to the time that any Person becomes an Acquiring Person or (z) securities issuable upon the exercise of Rights from and after the time that any Person becomes an Acquiring Person if such Rights
were acquired by such Person or any of such Person's Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof ("Original Rights") or
pursuant to Section 11(i) or Section 11(n) with respect to an adjustment to Original Rights; 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 by reason of such
agreement, arrangement or understanding 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)  which
are beneficially owned, directly or indirectly, by any other Person and with respect to which such Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the 

2

 

purpose
of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of such securities of the Company; 

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

        (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 or the city in which the principal
office of the Rights Agent is located 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 City time, on such date; provided,  however, that if such date is not a Business Day it
shall mean 5:00 P.M., New York City time, on the next succeeding Business Day. 

        (f)    "Common
Stock" when used with reference to the Company shall mean the Common Stock and Class A Common Stock, each presently par value $0.01 per share, of the
Company. "Common Stock" when used with reference to any Person other than the Company shall mean the common stock (or, in the case of an unincorporated entity, the equivalent 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 which ultimately control such first-mentioned Person. 

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

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

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

        (j)    "Equivalent
Preferred Shares" shall have the meaning set forth in Section 11(b) hereof. 

        (k)   "Exempt
Person" shall mean the Company or any Subsidiary (as such term is hereinafter defined) of the Company, in each case including, without limitation, in its
fiduciary capacity, or any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity or trustee holding Common Stock for or pursuant to the terms of any such plan or for
the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary of the Company. 

        (l)    "Exchange
Ratio" shall have the meaning set forth in Section 24 hereof. 

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

        (n)   "Final
Expiration Date" shall have the meaning set forth in Section 7 hereof. 

        (o)   "Flip-In
Event" shall have the meaning set forth in Section 11(a)(ii) hereof. 

        (p)   "NASDAQ"
shall mean The Nasdaq Stock Market. 

        (q)   "New
York Stock Exchange" shall mean the New York Stock Exchange, Inc. 

        (r)   "Person"
shall mean any individual, firm, corporation, partnership, limited liability company, trust or other entity, and shall include any successor (by merger or
otherwise) to such entity. 

        (s)   "Preferred
Stock" shall mean the Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company having the rights and preferences set
forth in the Amended and Restated Certificate of Incorporation attached to this Agreement as Exhibit A. 

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

3

 

        (u)   "Purchase
Price" shall have the meaning set forth in Section 7(b) hereof. 

        (v)   "Redemption
Date" shall have the meaning set forth in Section 7 hereof. 

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

        (x)   "Right
Certificate" shall have the meaning set forth in Section 3 hereof. 

        (y)   "Securities
Act" shall mean the Securities Act of 1933, as amended. 

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

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

        (bb) "Stock
Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such, or such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person. 

        (cc) "Subsidiary"
of any Person shall mean any corporation or other entity of which securities or other ownership interests having ordinary voting power sufficient to elect
a majority of the board of directors or other persons performing similar functions are beneficially owned, directly or indirectly, by such Person, and any corporation or other entity that is otherwise
controlled by such Person. 

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

        (ee) "Summary
of Rights" shall have the meaning set forth in Section 3 hereof. 

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

        Section
2.    Appointment of Rights Agent.    The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date be the holders of Common Stock) 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 Close of Business on the earlier of (i) the tenth day after the Stock 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 by any Person (other than an Exempt Person) of, or of
the first public announcement of the intention of such Person (other than an Exempt Person) to commence, a tender or exchange offer the consummation of which would result in any Person (other than an
Exempt Person) becoming the Beneficial Owner of shares of Common Stock aggregating 15% or more of the Common Stock then outstanding (the earlier of such dates being herein referred to as the
"Distribution Date", provided, however, that if either of such dates occurs after the date of this Agreement and on or prior to the Record Date, then
the Distribution Date shall be the Record Date), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Stock registered in
the names of the holders thereof and not by separate Right Certificates, and (y) the Rights will be transferable only in connection with the transfer of Common Stock. 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 Stock as of the close of business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of
an Acquiring Person), at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing
one Right (subject to 

4

 

adjustment
as provided herein) for each share of Common Stock so held. 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 a copy of a Summary of Rights to Purchase Shares of Preferred Stock, in substantially the
form of Exhibit C hereto (the "Summary of Rights"), by first-class, postage-prepaid mail, to each record holder of Common Stock as of the Close of Business on the Record Date (other than any
Acquiring Person or any Associate or Affiliate of any Acquiring Person), at the address of such holder shown on the records of the Company. With respect to certificates for Common Stock 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 together with the Summary of Rights. Until the
Distribution Date (or, if earlier, the Expiration Date), the surrender for transfer of any certificate for Common Stock outstanding on the Record Date, with or without a copy of the Summary of Rights,
shall also constitute the transfer of the Rights associated with the Common Stock represented thereby. 

        (c)   Rights
shall be issued in respect of all shares of Common Stock issued or disposed of (including, without limitation, upon disposition of Common Stock out of treasury
stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date, or in certain
circumstances provided in Section 22 hereof, after the Distribution Date. Certificates issued for Common Stock (including, without limitation, upon transfer of outstanding Common Stock,
disposition of Common Stock out of treasury stock or issuance or reissuance of Common Stock out of authorized but unissued shares) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend: 

This
certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement between Theravance, Inc. (the "Company")
and                        , as Rights
Agent, dated as of                        , 2004 and as amended from time to time (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by
this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, Rights owned by or transferred to any Person who is or becomes an Acquiring Person (as defined in the Rights Agreement) and certain
transferees thereof will become null and void and will no longer be transferable.  

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

        Notwithstanding
this paragraph (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.    The Right Certificates (and the forms of election to purchase shares and
of assignment to be printed on the reverse thereof) shall be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any 

5

 

applicable
law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or interdealer quotation system on which the Rights may from time to time be
listed or quoted, or to conform to usage. Subject to the provisions of this Agreement, the Right Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein at the Purchase Price, but the number of such one one-thousandths of a share of Preferred Stock and
the Purchase Price shall be subject to adjustment as provided herein. 

        Section
5.    Countersignature and Registration.    

        (a)   The
Right Certificates shall be executed on behalf of the Company by the Company's Chief Executive Officer either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof and shall be attested by the Secretary of the Company, either manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and
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. 

        (b)   Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at an office or agency 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.    

        (a)   Subject
to the provisions of this Agreement, at any time after the Distribution Date and prior to the 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
share of Preferred Stock 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 or agency of the Rights Agent designated for such purpose. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment 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. 

        (b)   Subject
to the provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date, upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights 

6

 

Agent
for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 

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

        (a)   Except
as otherwise provided herein, the Rights shall become exercisable on the Distribution Date, and thereafter the registered holder of any Right Certificate may,
subject to Section 11(a)(ii) hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part 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 or agency of the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of one one-thousandths of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as to which
the Rights are exercised, at any time which is both after the Distribution Date and prior to the time (the "Expiration Date") that is the earliest of (i) the Close of Business on
                        , 200  (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 shall be initially $[            ] for each one one-thousandth of a share of Preferred Stock purchasable upon
the exercise of a Right. The Purchase Price and the number of one one-thousandths of a share of Preferred Stock or other securities or property to be acquired upon exercise of a Right
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)
of this Section 7. 

        (c)   Except
as otherwise provided herein, upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the aggregate Purchase Price for the shares of Preferred Stock to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof, in cash or by certified check, cashier's check or money order payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Stock, or make available if the Rights Agent is the transfer agent for the Preferred Stock, certificates for the number of
shares of Preferred Stock to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition from a depositary agent
appointed by the Company depositary receipts representing interests in such number of one one-thousandths of a share of Preferred Stock as are to be purchased (in which case certificates
for the Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent), and the Company hereby directs any such 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) promptly 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, promptly deliver such cash to or upon the order of the registered holder of such Right
Certificate. 

        (d)   Except
as otherwise provided herein, in case the registered holder of any Right Certificate shall exercise less than all of the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the exercisable 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)   Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a
registered holder of Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6 hereof or this 

7

 

Section 7
unless such registered holder shall have (i) completed and signed the certificate contained in the form of assignment or form of election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such transfer or exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof
as the Company shall reasonably request. 

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

        Section
9.    Availability of Shares of Preferred Stock.    

        (a)   The
Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock or any shares of
Preferred Stock held in its treasury, the number of shares of Preferred Stock that will be sufficient to permit the exercise in full of all outstanding Rights. 

        (b)   So
long as the shares of Preferred Stock issuable upon the exercise of Rights may be listed or admitted to trading on any national securities exchange, or quoted on
NASDAQ, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to trading on such
exchange, or quoted on NASDAQ, upon official notice of issuance upon such exercise. 

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

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

        (e)   The
Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect
of the issuance or delivery 

8

 

of
the Right Certificates or of any shares of Preferred Stock upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Stock in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or deliver any certificates or depositary receipts for Preferred Stock upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by that holder of such Right Certificate at the time of surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due. 

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

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

        (a)(i) In
the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a), the number and kind of shares of capital stock issuable upon exercise of a Right as of the record date for such
dividend or the effective date of such subdivision, combination or reclassification 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 Stock transfer books of the
Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. 

        (ii)   Subject
to Section 24 of this Agreement, in the event any Person becomes an Acquiring Person (the first occurrence of such event being referred to hereinafter as
the "Flip-In Event"), then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect immediately prior to the Flip-In Event multiplied by the number of
one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such Flip-In Event, whether or not such Right was then exercisable, and
(B) each holder of a Right, except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon
exercise thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock
as shall equal the result obtained by dividing the Purchase Price (as so adjusted) 

9

 

by
50% of the current per share market price of the Common Stock (determined pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided,
however, that the Purchase Price (as so adjusted) and the number of shares of Common Stock so receivable upon exercise of a Right shall, following the Flip-In
Event, be subject to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding anything in this Agreement to the contrary, however, from and after the
Flip-In Event, any Rights that are beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z) a transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-In Event pursuant to either (I) a transfer from the Acquiring Person to holders of its equity securities or to any Person
with whom it has any continuing agreement, arrangement or understanding regarding the transferred Rights or (II) a transfer which the Board of Directors has determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding the provisions of this paragraph, and subsequent transferees of such Persons, shall be void without any further action and any
holder of such Rights shall thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. From and after the Flip-In Event, no Right Certificate shall be issued pursuant
to Section 3 or Section 6 hereof that represents Rights that are or have become void pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent
that represents Rights that are or have become void pursuant to the provisions of this paragraph shall be canceled. From and after the occurrence of an event specified in Section 13(a) hereof,
any Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in accordance with Section 13 and not pursuant to this
Section 11(a)(ii). 

        (iii)  The
Company may at its option substitute for a share of Common Stock issuable upon the exercise of Rights in accordance with the foregoing subparagraph (ii) a
number of shares of Preferred Stock or fraction thereof such that the current per share market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current per
share market price of one share of Common Stock. In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the Board of Directors shall, with respect to such deficiency, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine the excess (such excess, the "Spread") of (1) the value of the shares of Common Stock issuable upon the exercise
of a Right in accordance with the foregoing subparagraph (ii) (the "Current Value") over (2) the Purchase Price (as adjusted in accordance with the foregoing subparagraph (ii)), and
(B) with respect to each Right (other than Rights which have become void pursuant to the foregoing subparagraph (ii)), make adequate provision to substitute for the shares of Common Stock
issuable in accordance with the foregoing subparagraph (ii) upon exercise of the Right and payment of the Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a
reduction in such Purchase Price, (3) shares of Preferred Stock or other equity securities of the Company (including, without limitation, shares or fractions of shares of preferred stock which,
by virtue of having dividend, voting and liquidation rights substantially comparable to those of the shares of Common Stock, are deemed in good faith by the Board of Directors to have substantially
the same value as the shares of Common Stock (such shares of Preferred Stock and shares or fractions of shares of preferred stock are hereinafter referred to as "Common Stock Equivalents")),
(4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having a value which, when added to the value of the 

10

 

shares
of Common Stock issued upon exercise of such Right, shall have an aggregate value equal to the Current Value (less the amount of any reduction in such Purchase Price), where such aggregate
value has been determined by the Board of Directors upon the advice of a nationally recognized investment banking firm selected in good faith by the Board of Directors;  provided, however, that if the
Company shall not make adequate provision to deliver value pursuant to clause (B) above within thirty
(30) days following the Flip-In Event (the date of the Flip-In Event being the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, to the extent permitted by applicable law and any material agreements then in effect to which the Company is a party, upon the surrender for exercise of a Right and without requiring payment
of such Purchase Price, shares of Common Stock (to the extent available), and then, if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If, upon the occurrence of the Flip-In Event, the Board of Directors shall determine in good faith
that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then, if the Board of Directors so elects, the thirty
(30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"). To the
extent that the Company determines that some action need be taken pursuant to the second and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof, that such action shall apply uniformly to all outstanding Rights and (y) may
suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution
to be made pursuant to such second sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the
shares of Common Stock shall be the current per share market price (as determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or
fractional value of any "Common Stock Equivalent" shall be deemed to equal the current per share market price of the Common Stock. The Board of Directors of the Company may, but shall not be required
to, establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii). 

        (b)   In
case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the Preferred Stock ("Equivalent Preferred
Shares")) or securities convertible into Preferred Stock or Equivalent Preferred Shares at a price per share of Preferred Stock or Equivalent Preferred Shares (or having a conversion price per share,
if a security convertible into shares of Preferred Stock or Equivalent Preferred Shares) less than the then current per share market price of the Preferred Stock (determined pursuant to
Section 11(d) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock and Equivalent Preferred Shares outstanding on such record date plus the number of shares of
Preferred Stock and Equivalent Preferred Shares which the aggregate offering price of the total number of shares of Preferred Stock 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 shares of Preferred
Stock and Equivalent Preferred Shares outstanding on such record date plus the 

11

 

number
of additional shares of Preferred Stock and/or Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent.
Shares of Preferred Stock and Equivalent 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 which
would then be in effect if such record date had not been fixed. 

        (c)   In
case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred
Stock (determined pursuant to Section 11(d) hereof) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company whose determination
shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to
one share of Preferred Stock, and the denominator of which shall be such current per share market price (determined pursuant to Section 11(d) hereof) of the Preferred Stock;  provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares
of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 

        (d)(i) Except
as otherwise provided herein, 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, and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported by the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, 

12

 

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 Security is
not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of
the Company. 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, if the Preferred Stock is publicly traded, the "current per share market price" of the Preferred Stock shall be determined
in accordance with the method set forth in Section 11(d)(i). If the Preferred Stock is not publicly traded but the Common Stock is publicly traded, the "current per share market price" of the
Preferred Stock shall be conclusively deemed to be the current per share market price of the Common Stock as determined pursuant to Section 11(d)(i) multiplied by the then applicable
Adjustment Number (as defined in and determined in accordance with the terms of the Preferred Stock). If neither the Common Stock nor the Preferred Stock is publicly traded, "current per share market
price" shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, 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 which by
reason of this Section 11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one hundred-thousandth of a share of Preferred Stock or
one-hundredth of a share of Common Stock or 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 which requires such adjustment or (ii) the Expiration Date. 

        (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 the Preferred Stock, thereafter the Purchase Price and the number of such other shares so receivable upon exercise of a 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 Stock contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h),
11(i) and 11(m) hereof, as applicable, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares. 

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

        (h)   Unless
the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made
in Sections 11(b) and 11(c), 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 share of Preferred Stock (calculated to the nearest one hundred-thousandth of a share of Preferred Stock) obtained by (i) multiplying (x) the number
of one one-thousandths of a share purchasable upon the exercise of a Right immediately prior to such adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment. 

13

 

        (i)    The
Company may elect on or after the date of any adjustment of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust the number of Rights, in
substitution for any adjustment in the number of one one-thousandths of a share of Preferred Stock 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 share of Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-hundredth) 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. Such 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 may, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 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 so to be 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 share of Preferred Stock issuable upon the exercise
of a Right, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-thousandths of a share of Preferred Stock which
were expressed in the initial Right Certificates issued hereunder. 

        (k)   Before
taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the fraction of Preferred Stock or other shares
of capital stock issuable upon exercise of a Right, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock or other such 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 issuing to the holder of any Right exercised after such record date the Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment. 

        (m)  Anything
in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such adjustments in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any shares of Preferred Stock at less than the current market price, issuance wholly for cash of Preferred Stock or securities which by their terms are
convertible into or exchangeable for Preferred Stock, 

14

 

dividends
on Preferred Stock payable in shares of Preferred Stock or issuance of rights, options or warrants referred to hereinabove in Section 11(b), hereafter made by the Company to holders
of its Preferred Stock shall not be taxable to such stockholders. 

        (n)   Anything
in this Agreement to the contrary notwithstanding, in the event that at any time after the date of this Agreement and prior to the Distribution Date, the
Company shall (i) declare and pay any dividend on the Common Stock payable in Common Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of a dividend payable in Common Stock) into a greater or lesser number of shares of Common Stock, then, in each such case, the number of Rights associated
with each share of Common Stock then outstanding, or issued or delivered thereafter, shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common
Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event. 

        (o)   The
Company agrees that, after the earlier of the Distribution Date or the Stock Acquisition Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or eliminate the benefits intended to be
afforded by the Rights. 

        Section
12.    Certificate of Adjusted Purchase Price or Number of Shares.    Whenever an adjustment is made as
provided in Section 11 or 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 Stock and the Preferred Stock 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 (if so required under 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 such adjustment unless and until it shall have received such certificate. 

15

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

        (a)   In
the event, directly or indirectly, at any time after the Flip-In Event (i) the Company shall consolidate with or shall merge into any other Person,
(ii) any Person shall merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the
Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or of the Company) or cash or any other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person (other than the Company or one or more wholly-owned Subsidiaries of the Company), then upon the first occurrence of such event,
proper provision shall be made so that: (A) each holder of a Right (other than Rights which have become void pursuant to Section 11(a)(ii) hereof) shall thereafter have the right
to receive, upon the exercise thereof at the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof), in accordance with the terms of this Agreement and in
lieu of shares of Preferred Stock or Common Stock of the Company, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of
the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall equal the result obtained by dividing the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50% of the current per share market price of the Common Stock of such Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; provided, however, that the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the number of shares of Common Stock of such Principal Party so receivable upon exercise of a
Right shall be subject to further adjustment as appropriate in accordance with Section 11(f) hereof to reflect any events occurring in respect of the Common Stock of such Principal Party after
the occurrence of such consolidation, merger, sale or transfer; (B) 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; (C) the term "Company" shall thereafter be deemed to refer to such Principal Party; and (D) such
Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of its shares of Common Stock in accordance with Section 9 hereof) in connection
with such consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of its
Common Stock thereafter deliverable upon the exercise of the Rights; provided that, upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided in this
Section 13(a), such cash, shares, rights, warrants and other property which such holder would have been entitled to receive had such holder, at the time of such transaction, owned the Common
Stock of the Principal Party receivable upon the exercise of a Right pursuant to this Section 13(a), and such Principal Party shall take such steps (including, but not limited to, reservation
of shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property. 

        (b)   "Principal
Party" shall mean: 

                (i)    in
the case of any transaction described in (i) or (ii) of the first sentence of Section 13(a) hereof: (A) the Person that is
the issuer of the securities into which the shares of Common Stock are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer the shares of Common Stock of
which have the greatest aggregate market value of shares outstanding, or (B) if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives
said merger, or, if there is more than one such Person, the Person the shares of Common 

16

 

Stock
of which have the greatest aggregate market value of shares outstanding or (y) if the Person that is the other party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the Person resulting from the consolidation; and 

                (ii)    in
the case of any transaction described in (iii) of the first sentence of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person that is a party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding; 

provided,
however, that in any such case described in the foregoing clause (b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, the term "Principal Party" shall refer to such other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stock of all of which is and has been so registered, the term "Principal Party" shall refer to whichever of such Persons is the issuer of Common Stock having the greatest aggregate market value
of shares outstanding, or (3) if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture as if the Person owned by the joint venture was a Subsidiary of both
or all of such joint venturers, and the Principal Party in each such case shall bear the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests. 

        (c)   The
Company shall not consummate any consolidation, merger, sale or transfer referred to in Section 13(a) hereof unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights Agent an agreement confirming that the requirements of Sections 13(a) and (b) hereof shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale or transfer of assets shall not result in a default by the Principal Party under this Agreement as the same shall have been
assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and providing that, as soon as practicable after executing such agreement pursuant to this Section 13, the
Principal Party will: 

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

                (ii)    use
its best efforts, if the Common Stock of the Principal Party shall be listed or admitted to trading on the New York Stock Exchange or on another
national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights on the New York Stock Exchange or such
securities exchange, or, if the Common Stock of the Principal Party shall not be listed or admitted to trading on the New York Stock Exchange or a national securities exchange, to cause the Rights and
the securities receivable upon exercise of the Rights to be authorized for quotation on NASDAQ or on such other system then in use; 

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

17

 

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

        (d)   In
case the Principal Party has a provision in any of its authorized securities or in its certificate of incorporation or by-laws or other instrument
governing its affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant to this Section 13), in connection
with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Common Stock or Common Stock Equivalents of such Principal Party at less than the then
current market price per share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Stock or Common Stock Equivalents of such
Principal Party at less than such then current market price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not consummate any such transaction unless
prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party shall
have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction. 

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

        Section
14.    Fractional Rights and Fractional Shares.    

        (a)   The
Company shall not be required to issue fractions of Rights (except prior to the Distribution Date in accordance with Section 11(n) hereof) or to distribute
Right Certificates which 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, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any 

18

 

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 of the Company shall be used. 

        (b)   The
Company shall not be required to issue fractions of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share
of Preferred Stock) or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock) upon the exercise or exchange of Rights. Interests in fractions of Preferred Stock in integral multiples of one one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it;  provided, that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Stock represented by such depositary receipts. In lieu of fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised or exchanged as herein provided an
amount in cash equal to the same fraction of the current market value of a whole share of Preferred Stock (as determined in accordance with Section 14(a) hereof) for the Trading Day immediately
prior to the date of such exercise or exchange. 

        (c)   The
Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock upon the
exercise or exchange of Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional shares
of Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock (as determined in accordance with
Section 14(a) hereof) for the Trading Day immediately prior to the date of such exercise or exchange. 

        (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 or exchange 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 Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Stock), on his own behalf and for his own benefit, may 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 (or, prior to the Distribution Date, such Common Stock) in the manner provided
therein 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. 

        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 Stock; 

19

 

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

        (c)   the
Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to Section 7(e) hereof, 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 Stock or any other securities of the Company which may at any time be issuable on the exercise or
exchange 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 this Agreement), or to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised or exchanged in accordance with the provisions hereof. 

        Section
18.    Concerning the Rights Agent.    

        (a)   The
Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and 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 arising therefrom, directly or indirectly. 

        (b)   The
Rights Agent shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration
of this Agreement in reliance upon any Right Certificate or certificate for the Preferred Stock or Common Stock or for other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. 

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

        (a)   Any
corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the stock transfer or corporate trust powers of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto;  provided, that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights
Agent 

20

 

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. 

        (b)   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 (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 the Chief Executive Officer and the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. 

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

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

        (e)   The
Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof
by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights provided for in Sections 3, 11, 13, 23 and 24, 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 furnished pursuant to Section 12, 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 shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of Preferred Stock or other securities will, when issued, be validly authorized and issued,
fully paid and nonassessable. 

21

 

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

        (g)   The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any person reasonably believed by
the Rights Agent to be one of the Chief Executive Officer or the Secretary 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 under this Agreement
and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date specified in such application (which date shall not be less than five Business Days after the date any officer of the
Company actually receives such application unless any such officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response to such application specifying the action to be taken or omitted. 

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

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

        (j)    If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof) or a
transferee thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 

        Section
21.    Change of Rights Agent.    The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days' notice in writing mailed to the Company and to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail,
and, following the Distribution Date, 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 of the Common Stock or Preferred Stock by registered or certified mail, and, following the
Distribution Date, 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 

22

 

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 a corporation organized and doing business under the laws of the United
States or the laws of any state of the United States or the District of Columbia, in good standing, having an office in the State of
                         or the State of New
York, which 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 which has at the time of
its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock or Preferred Stock, and, following the Distribution Date, mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 

        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 forms 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 Stock following the Distribution Date and prior to the Expiration Date, the Company may with respect to shares of Common Stock
so issued or sold pursuant to (i) the exercise of stock options, (ii) under any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities, notes
or debentures issued by the Company or (iv) a contractual obligation of the Company, in each case existing prior to the Distribution Date, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale. 

        Section
23.    Redemption.    

        (a)   The
Board of Directors of the Company may, at any time prior to the Flip-In Event, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Common Stock after the date hereof (the
redemption price being hereinafter referred to as the "Redemption Price"). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. The Redemption Price shall be payable, at the option of the Company, in cash, shares of Common Stock, or such other form of consideration as the Board
of Directors shall determine. 

        (b)   Immediately
upon the action of the Board of Directors ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at such later
time as the Board of Directors may establish for the effectiveness of such redemption), and without any further action and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the Redemption Price. 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 (or such later time as the Board of Directors may establish for the effectiveness of such redemption), the Company shall mail a notice of redemption to
all the holders 

23

 

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 Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption shall state the method
by which the payment of the Redemption Price will be made. 

        Section
24.    Exchange.    

        (a)   The
Board of Directors of the Company may, at its option, at any time after the Flip-In Event, 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 Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring in respect of the Common Stock after the date hereof (such amount per Right 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 an Acquiring Person shall have
become the Beneficial Owner of shares of Common Stock aggregating 50% or more of the shares of Common Stock then outstanding. From and after the occurrence of an event specified in
Section 13(a) hereof, any Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in accordance with Section 13 and may
not be exchanged pursuant to this Section 24(a). The exchange of the Rights by the Board of Directors may be made effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. 

        (b)   Immediately
upon the effectiveness of the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 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 shares of Common Stock 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 shall promptly
mail a notice of any such exchange to all of the holders of the Rights so exchanged at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the shares of Common Stock
for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights. 

        (c)   The
Company may at its option substitute, and, in the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but
unissued to permit an exchange of Rights for Common Stock as contemplated in accordance with this Section 24, the Company shall substitute to the extent of such insufficiency, for each share of
Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof (or Equivalent Preferred Shares, as such term is defined in
Section 11(b)) such that the current per share market price (determined pursuant to Section 11(d) hereof) of one share of Preferred Stock (or Equivalent Preferred Share) multiplied by
such number or fraction is equal to the current per share market price of one share of Common Stock (determined pursuant to Section 11(d) hereof) as of the date of such exchange. 

        Section
25.    Notice of Certain Events.    

        (a)   In
case the Company shall at any time after the earlier of the Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend payable in stock of
any class to the holders of its 

24

 

Preferred
Stock or to make any other distribution to the holders of its Preferred Stock (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving only the subdivision or combination of outstanding Preferred Stock), (iv) to effect the liquidation, dissolution
or winding up of the Company, or (v) to pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock), 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 purposes of such dividend or distribution or offering of rights or warrants, or the date on which such
liquidation, dissolution, winding up, reclassification, subdivision, combination or consolidation is to take place and the date of participation therein by the holders of the Common Stock and/or
Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Stock 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 Stock and/or Preferred Stock, whichever shall be the earlier. 

        (b)   In
case any event described in Section 11(a)(ii) or Section 13 shall occur then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate (or if occurring prior to the Distribution Date, the holders of the Common Stock) in accordance with Section 26 hereof, a notice of the occurrence of such event,
which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) and Section 13 hereof. 

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

Theravance, Inc.

901 Gateway Boulevard

South San Francisco, California 94080

Attention: Chief Executive Officer 

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: 

	 	
	 	 
	 	
	 	 
	 	
	 	 
	 	Attention:	 	    
	 	 

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.    Except as provided in the penultimate sentence of this
Section 27, for so long as the Rights are then redeemable, the Company may in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders of the Rights. At any time when the Rights are no longer redeemable, except as provided in the penultimate sentence of
this Section 27, the Company may, and the Rights Agent shall, if the Company so directs, supplement or 

25

 

amend
this Agreement without the approval of any holders of Rights, provided that no such supplement or amendment may (a) adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), (b) cause this Agreement again to become amendable other than in
accordance with this sentence or (c) cause the Rights again to become redeemable. Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price. Upon the delivery of a certificate from an appropriate officer of the Company which states that the supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment, provided that any supplement or amendment that does not amend Sections
18, 19, 20 or 21 hereof in a manner adverse to the Rights Agent shall become effective immediately upon execution by the Company, whether or not also executed by the Rights Agent. 

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

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

        Section
30.    Determinations and Actions by the Board of Directors.    The Board of Directors of the Company shall
have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this Agreement (including, without limitation, a determination to redeem or not redeem the Rights or to amend or not amend this
Agreement). All such actions, calculations, interpretations and determinations that are done or made by the Board of Directors of the Company in good faith shall be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights, as such, and all other parties. 

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

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

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

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

26

 

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

	 	 	THERAVANCE, INC.
	

 	
 	

By:	
 	

    

	 	 	Name:	 	    

	 	 	Title:	 	    

	

 	
 	

,
	 	 	
 as Rights Agent
	

 	
 	

By:	
 	

    

	 	 	Name:	 	    

	 	 	Title:	 	    

27

  

 
 

Exhibit A  

 
 

Amended and Restated Certificate of Incorporation    
    

A-1

  

 
 

Exhibit B  

 
 

Form of Right Certificate    

Certificate
No. R-                         

	NOT EXERCISABLE AFTER                         ,
200             OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND
WILL NO LONGER BE TRANSFERABLE.

RIGHT CERTIFICATE

THERAVANCE, 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                         ,
2004, as the same may be amended from time to time (the
"Rights Agreement"), between Theravance, Inc., a Delaware corporation (the "Company"), and                         ,
as Rights
Agent (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 City time, on
                        , 200   at the office or agency of the Rights Agent designated for such purpose,
or 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 Stock"), of
the Company at a purchase price of $[            ] per one one-thousandth of a share of Preferred Stock (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 Rights Certificate (and the number of one
one-thousandths of a share of Preferred Stock 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
                        , 200  , based on the Preferred Stock as constituted at such date. As provided in
the Rights Agreement, the
Purchase Price, the number of one one-thousandths of a share of Preferred Stock (or other securities or property) which may be purchased upon the exercise of the Rights and the number of
Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. 

        This
Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned office or
agency of the Rights Agent. The Company will mail to the holder of this Right Certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. 

        This
Right Certificate, with or without other Right Certificates, upon surrender at the office or agency of the Rights Agent designated for such purpose, may be exchanged for another
Right 

B-1

 

Certificate
or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of Preferred Stock 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 $.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 shares of Preferred Stock. 

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

        No
holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Stock or of any other securities of
the Company which may at any time be issuable on the exercise or exchange 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 or exchanged 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. 

        WITNESS
the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of                         ,
200  . 

	 	 	 	 	THERAVANCE, INC.
	

 	

 	

 	
 	

By:	

    
 [Title]
	

ATTEST:	

 	

 	

 
	

 [Title]	
 	

 	

 
	

Countersigned:	
 	

 	

 
	

    
	

, as Rights Agent	
 	

 	

 
	

By	

    
 [Title]	
 	

 	

 

B-2

 
Form of Reverse Side of Right Certificate 

FORM
OF ASSIGNMENT 

(To
be executed by the registered holder if such

holder desires to transfer the Right Certificate) 

        FOR
VALUE RECEIVED                          hereby sells, assigns and transfers unto
                                         
                 
 

	

	

 (Please print name and address of transferee)

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

	Dated:	    
	 	 
	

 	

 	
 	

 Signature

Signature
Guaranteed: 

        Signatures
must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion program. 

	

 (To be completed)

        The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, were not acquired by the undersigned from, and are not being assigned
to an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). 

	

 	
 	

 Signature

B-3

 
Form of Reverse Side of Right Certificate—continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise

Rights represented by the Rights Certificate) 

To
THERAVANCE, INC.: 

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

	

 (Please print name and address)
	

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

Please
insert social security

or other identifying number 

	

 (Please print name and address)
	

	

Dated:	

    
	
 	

 
	

 	

 	
 	

 Signature
	(Signature must conform to holder specified on Right Certificate)

Signature
Guaranteed: 

        Signature
must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee medallion program. 

B-4

 
Form
of Reverse Side of Right Certificate—continued 

	
 (To be completed)

        The
undersigned certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, and were not acquired by the undersigned from, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement). 

	 	 	
 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, such Assignment or Election to
Purchase will not be honored. 

B-5

  

 
 

Exhibit C  

	UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

SUMMARY OF RIGHTS TO PURCHASE

SHARES OF PREFERRED STOCK OF

THERAVANCE, INC. 

        On
                        , 200  , the Board of Directors of Theravance, 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, of the Company (the "Common Stock"). The dividend is payable on
                        , 200   (the "Record Date") to the stockholders of record on that 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, of the Company (the "Preferred Stock") at a
price of $[            ] per one one-thousandth of a share of Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated as of                         , 2004, as the
same may be amended from time to time (the "Rights
Agreement"), between the Company and                         , as Rights Agent (the "Rights Agent"). 

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

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

        The
Rights are not exercisable until the Distribution Date. The Rights will expire on                         ,
200   (the
"Final Expiration Date"), unless the Final Expiration Date is advanced or extended or unless the Rights are earlier redeemed or exchanged by the Company, in each case as described below. 

C-1

 

        The
Purchase Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights is subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) upon the grant to holders of the Preferred
Stock of certain rights or warrants to subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the
then-current market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic
cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). 

        The
number of outstanding Rights is subject to adjustment in the event of a stock dividend on the Common Stock payable in shares of Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the Distribution Date. 

        Shares
of Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled, when, as and if declared, to a minimum
preferential quarterly
dividend payment of the greater of (a) $[            ] per share, and (b) an amount equal to 1,000 times the dividend declared per
share of Common Stock. In the event of liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum preferential payment of the greater of
(a) $[            ] per share (plus any accrued but unpaid dividends), and (b) an amount equal to 1,000 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 1,000 votes, voting together with the Common Stock. Finally, in the event of any merger, consolidation or other transaction in which
outstanding shares of Common Stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per share of Common Stock. These rights are
protected by customary antidilution provisions. 

        Because
of the nature of the Preferred Stock's dividend, liquidation and voting rights, the value of the one one-thousandth interest in a share of Preferred Stock purchasable
upon exercise of each Right should approximate the value of one share of Common Stock. 

        In
the event that any person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right that number of shares of Common Stock having a market value of two times the exercise
price of the Right. 

        In
the event that, after a person or group has become an Acquiring Person, 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, proper provisions will be made so that each holder of a Right (other than Rights beneficially owned by an Acquiring Person which will have become void)
will thereafter have the right to receive upon the exercise of a Right that number of shares of common stock of the person with whom the Company has engaged in the foregoing transaction (or its
parent) that at the time of such transaction have a market value of two times the exercise price of the Right. 

        At
any time after any person or group becomes an Acquiring Person and prior to the earlier of one of the events described in the previous paragraph or the acquisition by such Acquiring
Person of 50% or more of the outstanding shares of Common Stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such Acquiring Person which will have become
void), in whole or in part, for shares of Common Stock or Preferred Stock (or a series of the Company's preferred stock having equivalent rights, preferences and privileges), at an exchange ratio of
one share of Common Stock, or a fractional share of Preferred Stock (or other preferred stock) equivalent in value thereto, per Right. 

        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
shares of 

C-2

 

Preferred
Stock or Common Stock will be issued (other than fractions of Preferred Stock which are integral multiples of one one-thousandth of a share of Preferred Stock, 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 current market price of the Preferred Stock or the Common Stock. 

        At
any time prior to the time an Acquiring Person becomes such, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price") payable, at the option of the Company, in cash, shares of Common Stock or such other form of consideration as the Board of Directors of the Company shall determine. The redemption
of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. 

        For
so long as the Rights are then redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any manner. After the Rights are no longer
redeemable, the Company may, except with respect to the Redemption Price, amend the Rights Agreement in any manner that does not adversely affect the interests of holders of the Rights. 

        Until
a Right is exercised or exchanged, 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. 

        A
copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
                        , 200  . A copy of the Rights Agreement is available free of charge from the
Company. This summary description of
the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, as the same may be amended from time to time, which is hereby incorporated herein by
reference. 

C-3

QuickLinks

Exhibit 4.2

RIGHTS AGREEMENT

TABLE OF CONTENTS

RIGHTS AGREEMENT

Exhibit A

Amended and Restated Certificate of Incorporation

Exhibit B

Form of Right Certificate

NOTICE

Exhibit C

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