Document:

ex411.htm

    
      

      

    

    

    

    

    

    

    

    

    

    OLD
      REPUBLIC INTERNATIONAL CORPORATION

    

    

    and

    

    

    COMPUTERSHARE
      TRUST COMPANY, N.A.

    

    

    Rights
      Agent

    

    

    
      
        

      

     

    

    Amended
      and Restated Rights Agreement

    

    

    

    Amended
      and Restated as of June 26, 2007

     

     

     

     

     

     

     

     

     

    

      
        

        

      

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

         

      

      
        TABLE
          OF CONTENTS

        

        
          	
                  Section
                    1.

                	
                  Certain
                    Definitions                                                                                                   

                	
                  2. 
                    

                
	 	 	 
	
                  Section
                    2.

                	
                  Appointment
                    of Rights
                    Agent                                                                                                   

                	
                  6. 
                    

                
	 	 	 
	
                  Section
                    3.

                	
                  Issuance
                    of Right
                    Certificates                                                                                                   

                	
                  6. 
                    

                
	 	 	 
	
                  Section
                    4.

                	
                  Form
                    of Right
                    Certificates                                                                                                   

                	
                  8. 
                    

                
	 	 	 
	
                  Section
                    5.

                	
                  Countersignature
                    and
                    Registration                                                                                                   

                	
                  9. 
                    

                
	 	 	 
	Section
                  6.	Transfer,
                  Split Up, Combination and Exchange of Right Certificates; Mutilated,
                  Destroyed, Lost or Stolen Rights Certificate                	
                  10. 

                
	 	 	 
	Section
                  7.      	Exercise
                  of Rights; Purchase Price; Expiration Date of Rights	
                  11. 

                
	 	 	
                   

                
	Section
                  8.	Cancellation
                  and Destruction of Right Certificates	
                  14. 

                
	 	 	
                   

                
	Section
                  9.	Reservation
                  and Availablity of Preferred Shares	
                  14. 

                
	 	 	
                   

                
	
                  Section
                    10.

                	
                  Preferred
                    Shares Record
                    Date                                                                                                   

                	
                  16. 
                    

                
	 	 	
                   

                
	
                  Section
                    11.

                	Adjustment
                  of Purchase Price, Number and Kind of Shares or Number of Rights    	
                  16. 

                
	 	 	
                   

                
	Section
                  12.	Certificate
                  of Adjusted Purchase Price or Number of Shares	26. 
	 	 	 
	Section
                  13.	Consolidation,
                  Merger or Transfer of Assets or Earning Power	27. 
	 	 	 
	
                  Section
                    14.

                	
                  Fractional
                    Rights and Fractional Shares

                	
                  30. 
                    

                
	 	 	 
	
                  Section
                    15.

                	
                  Rights
                    of
                    Action                                                                                                   

                	
                   32. 

                
	 	 	 
                  
	
                  Section
                    16.

                	
                  Agreement
                    of Right
                    Holders                                                                                                   

                	
                  33. 
                    

                
	 	 	 
	Section
                  17.	Right
                  Certificate Holder Not Deemed a Stockholder	34. 
	 	 	 
	
                  Section
                    18.

                	
                  Concerning
                    the Rights Agent

                	
                  34. 
                    

                
	
                   

                	 	 

        

         

        -i-

      

    

    
      
        
        

      

      
        
        

      

      
        
        

      

    

    
      	
              Section
                19.

            	
              Merger
                or Consolidation or Change of Name of Rights Agent

            	
               

              35. 
                

            
	 	 	 
	
              Section
                20.

            	
              Duties
                of Rights
                Agent                                                                                                   

            	
              36. 
                

            
	 	 	 
	
              Section
                21.

            	
              Change
                of Rights
                Agent                                                                                                   

            	
              39. 
                

            
	 	 	 
	
              Section
                22.

            	
              Issuance
                of New Right Certificates

            	
              40. 
                

            
	 	 	 
	
              Section
                23.

            	
              Redemption
                and
                Termination                                                                                                   

            	
              41. 
                

            
	 	 	 
	
              Section
                24.

            	
              Exchanges                                                                                                   

            	
              42. 
                

            
	 	 	 
	
              Section
                25.

            	
              Notice
                of Certain
                Events                                                                                                   

            	
              44. 
                

            
	 	 	 
	
              Section
                26.

            	
              Notices                                                                                                   

            	
              45. 
                

            
	 	 	 
	
              Section
                27.

            	
              Supplements
                and
                Amendments                                                                                                   

            	
              46. 
                

            
	 	 	 
	Section
              28.	Determination
              and Actions by the Board of Directors, etc. 	47. 
	 	 	 
	
              Section
                29.

            	
              Successors                                                                                                   

            	
              47. 
                

            
	 	 	 
	
              Section
                30.

            	
              Benefits
                of this
                Agreement                                                                                                   

            	
              47. 
                

            
	 	 	 
	
              Section
                31.

            	
              Severability                                                                                                   

            	
              48. 
                

            
	 	 	 
	
              Section
                32.

            	
              Governing
                Law                                                                                                   

            	
              48. 
                

            
	 	 	 
	
              Section
                33.

            	
              Counterparts                                                                                                   

            	
              48. 
                

            
	 	 	 
	
              Section
                34.

            	
              Descriptive
                Headings                                                                                                   

            	
              48. 
                

            
	 	 	 
	
              Section
                35.

            	
              Force
                Majeure                                                                                                   

            	
              48. 
                

            
	 	 	 
	
              Exhibit
                A

            	 	 
	 	 	 
	
              Exhibit
                B

            	 	 

    

     

    -ii-

    
      
         

        
          
          

        

        
          
          

        

      

    

    

    AMENDED
      AND RESTATED RIGHTS AGREEMENT

    

    

    This
      Agreement, as amended and restated
      as of May 24, 2007, between Old Republic International Corporation, a Delaware
      corporation (the "Company"), and Computershare Trust Company, N.A. (the "Rights
      Agent").

    

    

    W
      I T
      N E S S E T H:

    

    WHEREAS,
      on March 25, 1987, the Board
      of Directors of the Company authorized and declared a dividend (the "Dividend")
      of one Right for each outstanding share of Common Stock, par value $1.00 per
      share, of the Company ("Common Share") outstanding on the record date for the
      Dividend, and, subject to the approval of the shareholders of the Company,
      authorized the issuance of one Right with respect to each Common Share that
      was
      or shall become outstanding between the record date and the earlier of the
      Distribution Date, the Expiration Date and the Final Expiration Date (as such
      terms are defined in Sections 3 and 7);

    

    WHEREAS,
      on June 26, 1987, at their
      regular annual meeting, the shareholders of the Company approved the issuance
      of
      such Rights and authorized the Company to enter into a Rights Agreement with
      the
      Rights Agent;

    

    WHEREAS,
      the Company and the Rights
      Agent entered into a Rights Agreement effective as of June 26, 1987 (the
      "Original Rights Agreement") with respect to the Rights;

    

    WHEREAS,
      the Original Rights Agreement
      provided for its amendment from time to time as the Company and the Rights
      Agent
      deemed necessary or desirable;

    

    WHEREAS,
      on May 15, 1997, the Board of
      Directors of the Company authorized the officers of the Company to amend and
      restate the Original Rights Agreement; and

    

    WHEREAS,
      the Company and the Rights
      Agent now mutually desire to further amend and restate the 1997 Amended and
      Restated Rights Agreement as herein below set forth.

    

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

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

    (a)  "Acquiring
      Person" shall mean any Person who or which together with all Affiliates and
      Associates of such Person, shall be the Beneficial Owner of 20% or more of
      the
      then outstanding Common Shares (other than as a result of a Permitted Offer
      (as
      hereinafter defined)) or was such a Beneficial Owner at any time after the
      date
      hereof, whether or not such Person continues to be the Beneficial Owner of
      20%
      or more of the then outstanding Common Shares.  Notwithstanding the
      foregoing, (A) the term "Acquiring Person" shall not include (i) the Company,
      (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the
      Company or of any Subsidiary of the Company, (iv) any Person or entity
      organized, appointed or established by the Company for or pursuant to the terms
      of any such plan, or (v) any Person, who or which together with all Affiliates
      and Associates of such Person becomes the Beneficial Owner of 20% or more of
      the
      then outstanding Common Shares as a result of the acquisition of Common Shares
      directly from the Company, and (B) no Person shall be deemed to be an "Acquiring
      Person" either (X) as a result of the acquisition of Common Shares by the
      Company which, by reducing the number of Common Shares outstanding, increases
      the proportional number of shares beneficially owned by such Person together
      with all Affiliates and Associates of such Person: except that if (i) a Person
      would become an Acquiring Person (but for the operation of this subclause (X))
      as a result of the acquisition of Common Shares by the Company, and (ii) after
      such share acquisition by the Company, such Person, or an Affiliate or Associate
      of such Person, becomes the Beneficial Owner of any additional Common Shares,
      then such Person shall be deemed an Acquiring Person, or (Y) if (i) within
      8
      days after such Person would otherwise have become an Acquiring Person (but
      for
      the operation of this subclause Y), such Person notifies the Board of Directors
      that such Person did so inadvertently and (ii) within 2 days after such
      notification, such Person is the Beneficial Owner of less than 20% of the
      outstanding Common Shares.

     

    (b)  "Act"
      shall mean the Securities Act of 1933, as amended and as in effect on the date
      of this Agreement.

     

    
       

    

    -2-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (c)  "Affiliate"
      and "Associate" shall have the respective meanings ascribed to such terms in
      Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
      Act of 1934, as amended and in effect on the date of this Agreement (the
      "Exchange Act").

     

    (d)  A
      Person
      shall be deemed the "Beneficial Owner" of and shall be deemed to "beneficially
      own" any securities:

     

    (i)    which
      such Person or any of such Person's Affiliates or Associates beneficially owns,
      directly or indirectly;

     

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

     

    (iii)    which
      are beneficially owned, directly or indirectly, by any other Person (or any
      Affiliate or Associate thereof) with which such Person (or any of such Person's
      Affiliates or Associates) has any agreement, arrangement or understanding (other
      than customary agreements with and between underwriters and selling group
      members with respect to a bona fide public offering of securities) relating
      to
      the acquisition, holding, voting (except to the extent contemplated by the
      proviso to Section 1(d)(ii)(B)) or disposing of any securities of the
      Company.

     

    -3-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

    

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

     

    (f)  "Close
      of
      Business" on any given date shall mean 5:00 P.M., New York time, on such date;
      provided, however, that if such date is not a Business Day it shall mean
      5:00 P.M., New York time, on the next succeeding Business Day.

     

    (g)  "Common
      Shares" when used with reference to the Company shall mean the shares of Common
      Stock, par value $1 per share, of the Company or, in the event of a
      subdivision, combination or consolidation with respect to such shares of Common
      Stock, the shares of Common Stock resulting from such subdivision, combination
      or consolidation. "Common Shares" when used with reference to any Person other
      than the Company shall mean the capital stock (or equity interest) with the
      greatest voting power of such other Person or, if such other Person is a
      Subsidiary of another Person, the Person or Persons which ultimately control
      such first-mentioned Person.

     

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

     

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

     

    -4-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

    (k)  "Permitted
      Offer" shall mean a tender or exchange offer which is for all outstanding Common
      Shares at a price and on terms determined, prior to the purchase of shares
      under
      such tender or exchange offer, by at least a majority of the members of the
      Board of Directors who are not officers of the Company and who are not Acquiring
      Persons or Affiliates, Associates, nominees or representatives of an Acquiring
      Person, to be adequate (taking into account all factors that such Directors
      deem
      relevant including, without limitation, prices that could reasonably be achieved
      if the Company or its assets were sold on an orderly basis designed to realize
      maximum value) and otherwise in the best interests of the Company and its
      stockholders (other than the Person or any Affiliate or Associate thereof on
      whose behalf the offer is being made) taking into account all factors that
      such
      directors may deem relevant.

     

    (l)  "Person"
      shall mean any individual, firm, partnership, corporation, trust, association,
      joint venture or other entity, and shall include any successor (by merger or
      otherwise) of such entity.

     

    (m)  "Preferred
      Shares" shall mean shares of Series A Junior Participating Preferred Stock
      with
      a par value of $.01 per share of the Company having the relative rights,
      preferences and limitations set forth in the Form of Certificate of Designations
      attached to this Agreement as Exhibit A.

     

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

     

    (o)  "Section
      11(a)(ii)Event" shall mean any event described in Section 11(a)(ii)
      hereof.

     

    (p)  "Section
      13 Event" shall mean any event described in clause (x), (y) or (z) of Section
      13(a) hereof.

     

    -5-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (q)  "Shares
      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 the Exchange Act) by the Company or an Acquiring Person that an
      Acquiring Person has become such; provided, that, if such Person is determined
      not to have become an Acquiring Person pursuant to Section 1(a)(B)(Y) hereof,
      then no Shares Acquisition Date shall be deemed to have occurred.

     

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

     

    (s)  "Triggering
      Event" shall mean any Section 11(a)(ii) Event or any Section 13
      Event.

     

    Section
      2.    Appointment
      of Rights Agent.  The Company hereby appoints the Rights Agent to
      act as agent of the Company and the holders of the Rights (who, in accordance
      with Section 3 hereof, shall prior to the Distribution Date also be the holders
      of the Common Shares) in accordance with the terms and conditions hereof, and
      the Rights Agent hereby accepts such appointment. The Company may from time
      to
      time appoint such Co-Rights Agents as it may deem necessary or desirable, upon
      ten (10) days’ prior written notice to the Rights Agent.  The Rights
      Agent shall have no duty to supervise, and in no event be liable for, the acts
      or omissions of any such co-Rights Agent.

     

    Section
      3.    Issuance
      of Right Certificates.

     

    (a)  Until
      the
      earlier of (i) the Shares Acquisition Date or (ii) the Close of Business on
      the
      tenth day (or such later date as may be determined by action of the Company's
      Board of Directors) after the date of the commencement by any Person (other
      than
      the Company, any Subsidiary of the Company, any employee benefit plan of the
      Company or of any Subsidiary of the Company or any Person or entity organized,
      appointed or established by the Company for or pursuant to the terms of any
      such
      plan) of, or 

     

    
      -6-

      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    of
the
      first
      public announcement of the intention of any Person (other than the Company,
      any
      Subsidiary of the Company, any employee benefit plan of the Company or of any
      Subsidiary of the Company or any Person or entity organized, appointed or
      established by the Company for or pursuant to the terms of any such plan) to
      commence (which intention to commence remains in effect for five Business Days
      after such announcement), a tender or exchange offer the consummation of which
      would result in any Person becoming an Acquiring Person (including, in the
      case
      of both (i) and (ii), any such date which is after the date of this Agreement
      and prior to the issuance of the Rights), the earlier of such dates being herein
      referred to as the "Distribution Date," (x) the Rights will be evidenced
      (subject to the provisions of Section 3(b) hereof) by the certificates for
      Common Shares registered in the names of the holders thereof (which certificates
      shall also be deemed to be Right Certificates) and not by separate Right
      Certificates, and (y) the right to receive Right Certificates will be
      transferable only in connection with the transfer of the underlying Common
      Shares (including a transfer to the Company); provided, however, that if a
      tender offer is terminated prior to the occurrence of a Distribution Date,
      then
      no Distribution Date shall occur as a result of such tender offer. 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
      by first-class, postage-prepaid mail, to each record holder of Common Shares
      as
      of the close of business on the Distribution Date, at the address of such holder
      shown on the records of the Company, a Right Certificate, substantially in
      the
      form of Exhibit B hereto (a "Right Certificate"), evidencing one Right for
      each
      Common Share so held. As of and after the Distribution Date, the Rights will
      be
      evidenced solely by such Right Certificates.

     

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

     

    This
      certificate also evidences and entitles the holder hereof to certain Rights
      as
      set forth in an Amended and Restated Rights Agreement between Old Republic
      International Corporation and Computershare Trust Company, N.A., dated as of
      May
      24, 2007 (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 Old Republic International Corporation. 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. Old Republic
      International Corporation 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 issued
      to any Person who becomes an Acquiring Person (as defined in the Rights
      Agreement) may become null and void.

     

    -7-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

    

    Section
      4.    Form
      of Right Certificates.

     

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

     

     

    -8-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (b)  Any
      Right
      Certificate issued pursuant to Section 3(a) or Section 22 hereof that
      represents Rights which are null and void pursuant to Section 7(e) of this
      Agreement and any Right Certificate issued pursuant to Section 6 or Section
      11
      hereof upon transfer, exchange, replacement or adjustment of any other Right
      Certificate referred to in this sentence, shall contain (to the extent feasible)
      the following legend:

     

    The
      Rights represented by this Right Certificate are or were beneficially owned
      by a
      Person who was or became an Acquiring Person or an Affiliate or Associate of
      an
      Acquiring Person (as such terms are defined in the Rights Agreement).
      Accordingly, this Right Certificate and the Rights represented hereby are null
      and void.

    

    Provisions
      of Section 7(e) of this Rights Agreement shall be operative whether or not
      the
      foregoing legend is contained on any such Right Certificate.

    

    Section
      5.    Countersignature
      and Registration.  The Right Certificates shall be executed on
      behalf of the Company by its Chairman of the Board, its Chief Executive Officer,
      its President, any of its Vice Presidents, or its Treasurer, either manually
      or
      by facsimile signature, shall have affixed thereto the Company's seal or a
      facsimile thereof, and shall be attested by the Secretary or an Assistant
      Secretary of the Company, either manually or by facsimile signature. The Right
      Certificates shall be 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 Rights Agreement any such Person was not such an
      officer.

     

    -9-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Following
      the Distribution Date, the
      Rights Agent will keep or cause to be kept, at its principal office, 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  Certificate.  Subject
      to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time after the
      close of business on the Distribution Date, and at or prior to the close of
      business on the earlier of the Redemption Date or the Final Expiration Date,
      any
      Right Certificate or Right Certificates may be transferred, split up, combined
      or exchanged for another Right Certificate or Right Certificates, entitling
      the
      registered holder to purchase a like number of one one-hundredths of a Preferred
      Share (or, following a Triggering Event, other securities as the case may be)
      as
      the Right Certificate or Right Certificates surrendered then entitled such
      holder (or former holder in the case of a transfer) 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 principal office of the
      Rights Agent designated for such purpose. Neither the Rights Agent nor the
      Company shall be obligated to take any action whatsoever with respect to the
      transfer of any such surrendered Right Certificate until the registered holder
      shall have completed and signed the certificate contained in the form of
      assignment on the reverse side of such Right Certificate and shall have provided
      such additional evidence of the identity of the Beneficial Owner (or former
      Beneficial Owner) or Affiliates or Associates thereof as the Company shall
      reasonably request. Thereupon the Rights Agent shall, subject to Sections 4(b),
      7(e) and 14 hereof, countersign and deliver to the Person entitled thereto
      a
      Right Certificate or Right Certificates, as the case may be, as so requested.
      The Company may require payment of a sum sufficient to cover any tax or
      governmental charge that may be imposed in connection with any transfer, split
      up, combination or exchange of Right Certificates.

     

    -10-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    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 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)  Subject
      to Section 7(e) hereof, the registered holder of any Right Certificate may
      exercise the Rights evidenced thereby (except as otherwise provided herein)
      in
      whole or in part at any time after the Distribution Date upon surrender of
      the
      Right Certificate, with the form of election to purchase on the reverse side
      thereof duly executed, to the Rights Agent at the principal office or offices
      of
      the Rights Agent designated for such purpose, together with payment of the
      aggregate Purchase Price for each one one-hundredth of a Preferred Share (or
      such other securities, as the case may be) as to which the Rights are exercised,
      at or prior to the earliest of (i) the Close of Business on June 26, 2017 (the
      "Final Expiration Date"), (ii) the time at which the Rights are redeemed as
      provided in Section 23 hereof (the "Redemption Date"), or (iii) the time at
      which such Rights are exchanged as provided in Section 24 hereof.

     

    (b)  The
      Purchase Price for each one one-hundredth of a Preferred Share pursuant to
      the
      exercise of a Right shall initially be $100.00, shall be subject to adjustment
      from time to time as provided in the next sentence and in Sections 11 and 13(a)
      hereof and shall be payable in accordance with paragraph (c) below. 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 or pay any dividend on the Common Shares payable in Common
      Shares or (ii) effect a subdivision, combination or consolidation of the Common
      Shares (by reclassification or otherwise than by payment of dividends in Common
      Shares) into a greater or lesser number of Common Shares, then in any such
      case,
      each Common Share outstanding following such subdivision, combination or
      consolidation shall continue to have a Right associated therewith and the
      Purchase Price following any such event shall be proportionately adjusted to
      equal the result obtained by multiplying the Purchase Price immediately prior
      to
      such event by a fraction the numerator of which shall be the total number of
      Common Shares outstanding immediately prior to the occurrence of the event
      and
      the denominator of which shall be the total number of Common Shares outstanding
      immediately following the occurrence of such event. The adjustment provided
      for
      in the preceding sentence shall be made successively whenever such a dividend
      is
      declared or paid or such a subdivision, combination or consolidation is
      effected.

     

    -11-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (c)  Upon
      receipt of a Right Certificate representing exercisable Rights, with the form
      of
      election to purchase duly executed, accompanied by payment of the Purchase
      Price
      for the Preferred Shares (or other securities, as the case may be) 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 6 hereof
      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 Shares certificates for the number of Preferred
      Shares to be purchased and the Company hereby irrevocably authorizes its
      transfer agent to comply with all such requests, or (B) if the Company, in
      its
      sole discretion, shall have elected to deposit the Preferred Shares issuable
      upon exercise of the Rights hereunder into a depositary, requisition from the
      depositary agent depositary receipts representing such number of one
      one-hundredths of a Preferred Share as are to be purchased (in which case
      certificates for the Preferred Shares represented by such receipts shall be
      deposited by the transfer agent with the depositary agent) and the Company
      hereby directs the depositary agent to comply with such request, (ii) when
      appropriate, requisition from the Company the amount of cash to be paid in
      lieu
      of issuance of fractional shares in accordance with Section 14 hereof, (iii)
      after receipt of such certificates or depositary receipts, cause the same to
      be
      delivered to or upon the order of the registered holder of such Right
      Certificate, registered in such name or names as may be designated by such
      holder and (iv) when appropriate, after receipt, deliver such cash to or upon
      the order of the registered holder of such Right Certificate. In the event
      the
      Company is obligated to issue other securities (including Common Shares) of
      the
      Company pursuant to Section 11(a) hereof, the Company will make all arrangements
      necessary so that such other securities are available for distribution by the
      Rights Agent, if and when appropriate.

     

    -12-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (d)  In
      case
      the registered holder of any Right Certificate shall exercise less than all
      the
      Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
      to the Rights remaining unexercised shall be issued by the Rights Agent to
      the
      registered holder of such Right Certificate or to his duly authorized assigns,
      subject to the provisions of Section 14 hereof, or the Rights Agent shall place
      an appropriate notation on the Right Certificate with respect to those Rights
      exercised.

     

    (e)  Notwithstanding
      anything in this Agreement to the contrary, from and after the first occurrence
      of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
      Person or an Affiliate or Associate of an Acquiring Person, (ii) a transferee
      of
      an Acquiring Person (or of any Affiliate or Associate thereof) who becomes
      a
      transferee after the Acquiring Person becomes such, or (iii) a transferee of
      an
      Acquiring Person (or of any Affiliate or Associate thereof) who becomes a
      transferee prior to or concurrently with the Acquiring Person becoming such
      and
      receives such Rights pursuant to either (A) a transfer (whether or not for
      consideration) from the Acquiring Person to holders of equity interests in
      such
      Acquiring Person or to any Person with whom the Acquiring Person has a
      continuing agreement, arrangement or understanding regarding the transferred
      Rights or (B) a transfer which the Board of Directors of the Company has
      determined is part of a plan, arrangement or understanding which has as a
      primary purpose or effect the avoidance of this Section 7(e), shall become
      null
      and void without any further action and no holder of such Rights shall have
      any
      rights whatsoever with respect to such Rights, whether under any provision
      of
      this Agreement or otherwise. The Company shall use all reasonable efforts to
      insure that the provisions of this Section 7(e) and Section 4(b) hereof are
      complied with, but shall have no liability to any holder of Right Certificates
      or other Person as a result of its failure to make any determinations with
      respect to an Acquiring Person or its Affiliates, Associates or transferees
      hereunder.

     

    -13-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (f)  Notwithstanding
      anything in this Agreement to the contrary, neither the Rights Agent nor the
      Company shall be obligated to undertake any action with respect to a registered
      holder upon the occurrence of any purported exercise as set forth in this
      Section 7 unless such registered holder shall have (i) completed and signed
      the
      certificate contained in the form of election to purchase set forth on the
      reverse side of the Right Certificate surrendered for such exercise, and (ii)
      provided such additional evidence of the identity of the Beneficial Owner (or
      former Beneficial Owner) or Affiliates or Associates thereof as the Company
      shall reasonably request.

     

    Section
      8.    Cancellation
      and Destruction of Right Certificates.  All Right Certificates
      surrendered for the purpose of exercise, transfer, split up, combination or
      exchange shall, if surrendered to the Company or to any of its agents, be
      delivered to the Rights Agent for cancellation or in cancelled form, or, if
      surrendered to the Rights Agent, shall be cancelled by it, and no Right
      Certificates shall be issued in lieu thereof except as expressly permitted
      by
      any of the provisions of this Rights 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 cancelled Right Certificates to the Company, or shall, at the written
      request of the Company, destroy such cancelled Right Certificates, and in such
      case shall deliver a certificate of destruction thereof to the
      Company.

     

    Section
      9.    Reservation
      and Availability of Preferred Shares.  The Company covenants and
      agrees that at all times prior to the occurrence of a Section 11(a)(ii) Event
      it
      will cause to be reserved and kept available out of its authorized and unissued
      Preferred Shares, or any authorized and issued Preferred Shares held in its
      treasury, the number of Preferred Shares that will be sufficient to permit
      the
      exercise in full of all outstanding Rights and, after the occurrence of a
      Section 11(a)(ii) Event, shall, to the extent reasonably practicable, so reserve
      and keep available a sufficient number of Common Shares (and/or other
      securities) which may be required to permit the exercise in full of the Rights
      pursuant to this Agreement.

     

    -14-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    So
      long as the Preferred Shares (and,
      after the occurrence of a Section 11(a)(ii) Event, Common Shares or any other
      securities) issuable upon the exercise of the Rights may be listed on any
      national securities exchange, the Company shall use its best efforts to cause,
      from and after such time as the Rights become exercisable, all shares reserved
      for such issuance to be listed on such exchange upon official notice of issuance
      upon such exercise.

    

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

    

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

     

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    The
      Company shall use its best efforts
      to (i) file, as soon as practicable following the Shares Acquisition Date,
      a
      registration statement under the Act, with respect to the securities purchasable
      upon exercise of the Rights on an appropriate form, (ii) cause such registration
      statement to become effective as soon as practicable after such filing, and
      (iii) cause such registration statement to remain effective (with a prospectus
      at all times meeting the requirements of the Act and the rules and regulations
      thereunder) until the date of the expiration of the rights provided by Section
      11(a)(ii). The Company will also take such action as may be appropriate under
      the blue sky laws of the various states.

    

    Section
      10.    Preferred
      Shares Record Date.  Each Person in whose name any certificate for
      Preferred Shares (or Common Shares and/or other securities, as the case may
      be)
      is issued upon the exercise of Rights shall for all purposes be deemed to have
      become the holder of record of the Preferred Shares (or Common Shares and/or
      other securities, as the case may be) represented thereby on, and such
      certificates 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 Shares
      (or
      Common Shares and/or other securities, as the case may be) transfer books of
      the
      Company are closed, such Person shall be deemed to have become the record holder
      of such shares on, and such Certificate shall be dated, the next succeeding
      Business Day on which the Preferred Shares (or Common Shares and/or other
      securities, as the case may be) transfer books of the Company are open. Prior
      to
      the exercise of the Rights evidenced thereby, the holder of a Right Certificate
      shall not be entitled to any rights of a holder of Preferred Shares (or Common
      Shares and/or other securities, as the case may be) for which the Rights shall
      be exercisable, including, without limitation, the right to vote, to receive
      dividends or other distributions or to exercise any preemptive rights, and
      shall
      not be entitled to receive any notice of any proceedings of the Company, except
      as provided herein.

     

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

     

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    (a)
      (i)  In the event the
      Company shall at any time after the date of this Agreement (A) declare a
      dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide
      the
      outstanding Preferred Shares, (C) combine the outstanding Preferred Shares
      into
      a smaller number of Preferred Shares or (D) issue any shares of its capital
      stock in a reclassification of the Preferred Shares (including any such
      reclassification in connection with a consolidation or merger in which the
      Company is the continuing or surviving corporation), except as otherwise
      provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price
      in
      effect at the time of the record date for such dividend or of the effective
      date
      of such subdivision, combination or reclassification, and the number and kind
      of
      shares of capital stock issuable on such date shall be proportionately adjusted
      so that the holder of any Right exercised after such time shall be entitled
      to
      receive the aggregate number and kind of shares of capital stock which, if
      such
      Right had been exercised immediately prior to such date and at a time when
      the
      Preferred Shares transfer books of the Company were open, such holder would
      have
      owned upon such exercise and been entitled to receive by virtue of such
      dividend, subdivision, combination or reclassification;
      provided,  however, that in no event shall the consideration to be
      paid upon the exercise of one Right be less than the aggregate par value of
      the
      shares of capital stock of the Company issuable upon exercise of one Right.
      If
      an event occurs which would require an adjustment under both Section 11(a)(i)
      and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i)
      shall be in addition to, and shall be made prior to any adjustment required
      pursuant to Section 11(a)(ii);

    

    (ii)  In
      the event any
      Person, alone or together with its Affiliates and Associates, shall become
      an
      Acquiring Person, then proper provision shall be made so that each holder of
      a
      Right (except as provided above in Section 7(e) hereof) shall, after the
      effective date of an appropriate registration statement under the Act pursuant
      to Section 9 hereof, have a right to receive, upon exercise thereof at a price
      equal to the then current Purchase Price, in accordance with the terms of this
      Agreement, such number of Common Shares (or, in the discretion of the Board
      of
      Directors, one one-hundredths of a Preferred Share) as shall equal the result
      obtained by (x) multiplying the then current Purchase Price by the then number
      of one one-hundredths of a Preferred Share for which a Right was exercisable
      immediately prior to the first occurrence of a Section 11(a)(ii) Event, and
      dividing that product by (y) 50% of the then current per share market price
      of
      the Company's Common Shares (determined pursuant to Section 11(d) hereof) on
      the
      date of such first occurrence (such number of shares being referred to as the
      "Adjustment Shares"); provided,  however, that if the transaction that
      would otherwise give rise to the foregoing adjustment is also subject to the
      provisions of Section 13 hereof, then only the provisions of Section 13 hereof
      shall apply and no adjustment shall be made pursuant to this Section
      11(a)(ii);

     

    -17-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (iii)  In
      the event that
      there shall not be sufficient treasury shares or authorized but unissued (and
      unreserved) Common Shares to permit the exercise in full of the Rights in
      accordance with the foregoing subparagraph (ii) and the Rights become so
      exercisable (and the Board has determined to make the Rights exercisable into
      fractions of a Preferred Share), notwithstanding any other provision of this
      Agreement, to the extent necessary and permitted by applicable law, each Right
      shall thereafter represent the right to receive, upon exercise thereof at the
      then current Purchase Price in accordance with the terms of this Agreement,
      (x)
      a number of (or fractions of) Common Shares (up to the maximum number of Common
      Shares which may permissibly be issued) and (y) one one-hundredth of a Preferred
      Share or a number of, or fractions of other equity securities of the Company
      (or, in the discretion of the Board of Directors, debt) which the Board of
      Directors of the Company has determined to have the same aggregate current
      market value (determined pursuant to Section 11(d)(i) and (ii) hereof, to
      the extent applicable), as one Common Share (such number of, or fractions of,
      Preferred Shares, debt, or other equity securities or debt of the Company)
      being
      referred to as a "capital stock equivalent"), equal in the aggregate to the
      number of Adjustment Shares; provided, however, if sufficient Common Shares
      and/or capital stock equivalents are unavailable, then the Company shall, to
      the
      extent permitted by applicable law, take all such action as may be necessary
      to
      authorize additional Common Shares or capital stock equivalents for issuance
      upon exercise of the Rights, including the calling of a meeting of stockholders;
      and provided, further, that if the Company is unable to cause sufficient Common
      Shares and/or capital stock equivalents to be available for issuance upon
      exercise in full of the Rights, then each Right shall thereafter represent
      the
      right to receive the Adjusted Number of Shares upon exercise at the Adjusted
      Purchase Price (as such terms are hereinafter defined). As used herein, the
      term
      "Adjusted Number of Shares" shall be equal to that number of (or fractions
      of)
      Common Shares (and/or capital stock equivalents) equal to the product of (x)
      the
      number of Adjustment Shares and (y) a fraction, the numerator of which is the
      number of Common Shares (and/or capital stock equivalents) available for
      issuance upon exercise of the Rights and the denominator of which is the
      aggregate number of Adjustment Shares otherwise issuable upon exercise in full
      of all Rights (assuming there were a sufficient number of Common Shares
      available) (such fraction being referred to as the "Proration Factor"). The
      "Adjusted Purchase Price" shall mean the product of the Purchase Price and
      the
      Proration Factor. The Board of Directors may, but shall not be required to,
      establish procedures to allocate the right to receive Common Shares and capital
      stock equivalents upon exercise of the Rights among holders of
      Rights.

     

    -18-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (b)  In
      case
      the Company shall fix a record date for the issuance of rights (other than
      the
      Rights), options or warrants to all holders of Preferred Shares entitling them
      (for a period expiring within 45 calendar days after such record date) to
      subscribe for or purchase Preferred Shares (or shares having the same rights,
      privileges and preferences as the Preferred Shares ("equivalent preferred
      shares")) or securities convertible into Preferred Shares or equivalent
      preferred shares at a price per Preferred Share or equivalent preferred share
      (or having a conversion price per share for a security convertible into
      Preferred Shares or equivalent preferred shares) less than the then current
      per
      share market price of the Preferred Shares (as 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 Preferred Shares outstanding on such record date plus
      the
      number of Preferred Shares which the aggregate offering price of the total
      number of Preferred Shares and/or equivalent preferred shares so to be offered
      (and/or the aggregate initial conversion price of the convertible
      securities so to be offered) would purchase at such current per share market
      price, and the denominator of which shall be the number of Preferred Shares
      outstanding on such record date plus the number of additional Preferred Shares
      and/or equivalent preferred shares to be offered for subscription or purchase
      (or into which the convertible securities so to be offered are initially
      convertible); provided.  however, that in no event shall the
      consideration to be paid upon the exercise of one Right be less than the
      aggregate par value of the shares of capital stock of the Company issuable
      upon
      exercise of one Right. In case such subscription price may be paid in a
      consideration part or all of which shall be in a form other than cash, the
      value
      of such consideration shall be determined in good faith by the Board of
      Directors of the Company whose determination shall be described in a statement
      filed with the Rights Agent and shall be binding on the Rights Agent. 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.

     

    
      -19-

      
        
          
          

        

        
          
          

          
          

        

        
          
          

        

      

    

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

     

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      (d) (i)  For the purpose of any computation hereunder, the "current
      per share market price" of any security (a "Security" for the purpose of this
      Section 11(d)(i)) on any date shall be deemed to be the average of the daily
      closing prices per share of such Security for the thirty (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 thirty (30) Trading Days after the
      ex-dividend date for such dividend or distribution, or the record date for
      such
      subdivision, combination or reclassification, then, and in each such case,
      the
      current per share market price shall be appropriately adjusted to reflect the
      current market price per share equivalent of such Security. The closing price
      for each day shall be the last sale price, regular way, or, in case no such
      sale
      takes place on such day, the average of the closing bid and asked prices,
      regular way, in either case as reported in the principal consolidated
      transaction reporting system with respect to securities listed or admitted
      to
      trading on the New York Stock Exchange or, if the Security is not listed or
      admitted to trading on the New York Stock Exchange, as reported in the principal
      consolidated transaction reporting system with respect to securities listed
      on
      the principal national securities exchange on which the Security is listed
      or
      admitted to trading or, if the Security if not listed or admitted to trading
      on
      any national securities exchange, the last quoted price or, if not so quoted,
      the average of the high bid and low asked prices in the over-the-counter market,
      as reported by the National Association of Securities Dealers, Inc. Automated
      Quotations System ("NASDAQ") or such other system then in use, or, if on any
      such date the Security is not quoted by any such organization, the average
      of
      the closing bid and asked prices as furnished by a professional market maker
      making a market in the Security selected by the Board of Directors of the
      Company. If on any such date no such market maker is making a market in the
      Security, the fair value of the Security on such date as determined in good
      faith by the Board of Directors of the Company shall be used. The term "Trading
      Day" shall mean a day on which the principal national securities exchange on
      which the Security is listed or admitted to trading is open for the transaction
      of business or, if the Security is not listed or admitted to trading on any
      national securities exchange, a Business Day.

     

    -21-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

    (e)  Anything
      herein to the contrary notwithstanding, 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 one-millionth of a Preferred Share or one ten-thousandth of any
      other share or security as the case may be. Notwithstanding the first sentence
      of this Section 11(e), any adjustment required by this Section 11 shall be
      made
      no later than the earlier of (i) three years from the date of the transaction
      which requires such adjustment or (ii) the Final Expiration Date.

     

    -22-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    (j)  Before
      taking any action that would cause an adjustment reducing the Purchase Price
      below the then par value, if any, of the number of one one-hundredths of a
      Preferred Share, Common Shares or other securities issuable upon exercise of
      the
      Rights, the Company shall take any corporate action which may, in the opinion
      of
      its counsel, be necessary in order that the Company may validly and legally
      issue such number of fully paid and non-assessable one one-hundredths of a
      Preferred Share, Common Shares or other securities at such adjusted Purchase
      Price.

     

    -24-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

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

     

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

     

    -25-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (n)  The
      Company covenants and agrees that, after the Distribution Date, it will not,
      except as permitted by Section 23 or Section 27 hereof, take (or permit any
      Subsidiary to take) any action the purpose of which is to, or if at the time
      such action is taken it is reasonably foreseeable that the effect of such action
      is to, materially diminish or otherwise eliminate the benefit intended to be
      afforded by the Rights.

     

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

     

    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 Shares and the Preferred
      Shares a copy of such certificate and (c) mail a brief summary thereof to each
      holder of a Right Certificate in accordance with Section 26 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 such
      adjustment unless and until it shall have received such
      certificate.

     

    -26-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

    (a)  In
      the
      event that, on or following the Shares Acquisition Date, directly or indirectly,
      (x) the Company shall consolidate with, or merge with and into, any Interested
      Stockholder or, if in such merger or consolidation all holders of Common Stock
      are not treated alike, any other Person, (y) the Company shall consolidate
      with,
      or merge with, any Interested Stockholder or, if in such merger or consolidation
      all holders of Common Stock are not treated alike, any other Person, and the
      Company shall be the continuing surviving corporation of such consolidation
      or
      merger (other than in a case of any transaction described in (x) or (y), a
      merger or consolidation which would result in all of the securities generally
      entitled to vote in the election of directors ("voting securities") of the
      Company outstanding immediately prior thereto continuing to represent (either
      by
      remaining outstanding or by being converted into securities of the surviving
      entity) all of the voting securities of the Company or such surviving entity
      outstanding immediately after such merger or consolidation and the holders
      of
      such securities not having changed as a result of such merger or consolidation),
      or (z) the Company shall sell or otherwise transfer (or one or more of its
      Subsidiaries shall sell or otherwise transfer), in one transaction or a series
      of related transactions, assets or earning power aggregating more than 50%
      of
      the assets or earning power of the Company and its Subsidiaries (taken as a
      whole) to any Interested Stockholder or Stockholders or, if in such transaction
      all holders of Common Stock are not treated alike, any other Person (other
      than
      the Company or any Subsidiary of the Company in one or more transactions each
      of
      which does not violate Section 11(n) hereof), then, and in each such case
      (except as provided in Section 13(d) hereof), proper provisions shall be made
      so
      that (i) each holder of a Right, except as provided in Section 7(e) hereof,
      shall thereafter have the right to receive, upon the exercise thereof at a
      price
      equal to the then current Purchase Price, in accordance with the terms of this
      Agreement and in lieu of Preferred Shares, such number of freely tradeable
      Common Shares of the Principal Party (as hereinafter defined), not subject
      to
      any liens, encumbrances, rights of first refusal or other adverse claims, as
      shall equal the result obtained by (A) multiplying the then current Purchase
      Price by the number of one one-hundredths of a Preferred Share for which a
      Right
      is then exercisable (without taking into account any adjustment previously
      made
      pursuant to Section 11(a)(ii)) and dividing that product by (B) 50% of the
      then
      current per share market price of the Common Shares of such Principal Party
      (determined pursuant to Section 11(d) hereof) on the date of consummation of
      such Section 13 Event; (ii) such Principal Party shall thereafter be liable
      for,
      and shall assume, by virtue of such Section 13 Event, all the obligations and
      duties of the Company pursuant to this Agreement; (iii) the term "Company"
      shall
      thereafter be deemed to refer to such Principal Party, it being specifically
      intended that the provisions of Section 11 hereof shall apply only to such
      Principal Party following the first occurrence of a Section 13 Event; and (iv)
      such Principal Party shall take such steps (including, but not limited to,
      the
      reservation of a sufficient number of its Common Shares) in connection with
      the
      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 Common Shares thereafter deliverable upon the exercise
      of
      the Rights.

     

    -27-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (b)  "Principal
      Party" shall mean

     

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

     

    (ii)    in
      the case of any transaction described in clause (z) of the first sentence of
      Section 13(a), the Person that is the party receiving the greatest portion
      of
      the assets or earning power transferred pursuant to such transaction or
      transactions; provided, however, that in any of the foregoing cases, (1) if
      the
      Common Shares of such Person are not at such time and have not been continuously
      over the preceding twelve (12) month period registered under Section 12 of
      the
      Exchange Act, and such Person is a direct or indirect Subsidiary of another
      Person the Common Shares of which are and have been so registered, "Principal
      Party" shall refer to such other Person; (2) in case such Person is a
      Subsidiary, directly or indirectly, of more than one Person, the Common Shares
      of two or more of which are and have been so registered, "Principal Party"
      shall
      refer to whichever of such Persons is the issuer of the Common Shares having
      the
      greatest aggregate market value; and (3) in case such Person is owned, directly
      or indirectly, by a joint venture formed by two or more Persons that are not
      owned, directly or indirectly, by the same Person, the rules set forth in (1)
      and (2) above shall apply to each of the chains of ownership having an interest
      in such joint venture as if such party were a "Subsidiary" of both or all of
      such joint ventures and the Principal Parties in each such chain shall bear
      the
      obligations set forth in this Section 13 in the same ratio as their direct
      or
      indirect interests in such Person bear to the total of such
      interests.

     

    -28-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (c)  The
      Company shall not consummate any such consolidation, merger, sale or transfer
      unless the Principal Party shall have a sufficient number of its authorized
      Common Shares which have not been issued or reserved for issuance to permit
      the
      exercise in full of the Rights in accordance with this Section 13 unless prior
      thereto the Company and such Principal Party shall have executed and delivered
      to the Rights Agent a supplemental agreement providing for the terms set forth
      in paragraphs (a) and (b) of this Section 13 and further provided that, as
      soon
      as practicable after the date of any consolidation, merger, sale or transfer
      mentioned in paragraph (a) of this Section 13, the Principal Party at its own
      expense shall:

     

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

     

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

    

     

    (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
      under the Exchange Act.

     

    The
      provisions of this Section 13 shall
      similarly apply to successive mergers or consolidations or sales or other
      transfers. The rights under this Section 13 shall be in addition to the rights
      to exercise Rights and adjustments under Section 11(a) (ii) and shall survive
      any exercise thereof.

    

    (d)  Notwithstanding
      anything in this Agreement to the contrary, Section 13 shall not be applicable
      to a transaction described in subparagraphs (x) and (y) of Section 13(a) if:
      (i)
      such transaction is consummated with a Person or Persons who acquired Common
      Shares pursuant to a Permitted Offer (or a wholly owned Subsidiary of any such
      Person or Persons); (ii) the price per Common Share offered in such transaction
      is not less than the price per Common Share paid to all holders of Common Shares
      whose shares were purchased pursuant to such Permitted Offer; and (iii) the
      form
      of consideration offered in such transaction is the same as the form of
      consideration paid pursuant to such Permitted Offer. Upon consummation of any
      such transaction contemplated by this Section 13(d), all Rights hereunder shall
      expire.

     

    Section
      14.    Fractional
      Rights and Fractional Shares.

     

    (a)  The
      Company shall not be required to issue fractions of Rights 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 purpose 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 ask 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 such date no such market maker is making a market in
      the
      Rights, the fair value of the Rights on such date shall be as determined in
      good
      faith by the Board of Directors of the Company whose determination shall be
      described in a statement filed with the Rights Agent and shall be binding on
      the
      Rights Agent.

     

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    (b)  The
      Company shall not be required to issue fractions of Preferred Shares (other
      than
      fractions which are integral multiples of one one-hundredth of a Preferred
      Share) upon exercise of the Rights or to distribute certificates which evidence
      fractional Preferred Shares (other than fractions which are integral multiples
      of one one-hundredth of a Preferred Share). Fractions of Preferred Shares in
      integral multiples of one one-hundredth of a Preferred Share may, at the
      election of the Company, be evidenced by deposit 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 Shares represented by such
      depositary receipts. In lieu of fractional Preferred Shares that are not
      integral multiples of one one-hundredth of a Preferred Share, the Company shall
      pay to the registered holders of Right Certificates at the time such Rights
      are
      exercised as herein provided an amount in cash equal to the same fraction of
      the
      current market value of one Preferred Share. For the purposes of this Section
      14(b), the current market value of a Preferred Share shall be the closing price
      of a Preferred Share (as determined pursuant to the second sentence of Section
      11(d)(i) hereof) for the Trading Day immediately prior to the date of such
      exercise.

     

    -31-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

    (c)  subject
      to Section 6 and 7(f) hereof, the Company and the Rights Agent may deem and
      treat the Person in whose name the Right Certificate (or, prior to the
      Distribution Date, the associated Common Shares certificate) is registered
      as
      the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
      any notations of ownership or writing on the Right Certificates or the
      associated Common Shares certificate made by anyone other than the Company
      or
      the Rights Agent) for all purposes whatsoever, and neither the Company nor
      the
      Rights Agent shall be affected by any notice to the contrary; and

     

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    (d)  notwithstanding
      anything in this Agreement to the contrary, neither the Company nor the Rights
      Agent shall have any liability to any holder of a Right or a beneficial interest
      in a Right or other Person as a result of its inability to perform any of its
      obligations under this Agreement by reason of any preliminary or permanent
      injunction or other order, decree or ruling issued by a court of competent
      jurisdiction or by a governmental regulatory or administrative agency or
      commission, or any statute, rule, regulation or executive order promulgated
      or
      enacted by any governmental authority, prohibiting or otherwise restraining
      performance of such obligation; provided, however, the Company must use its
      best
      efforts to have any such order, decree or ruling lifted or otherwise overturned
      as soon as possible.

     

    Section
      17.    Right
      Certificate Holder Not Deemed a  Stockholder.  No
      holder, as such, of any Right Certificate shall be entitled to vote, receive
      dividends or be deemed for any purpose the holder of the Preferred Shares or
      any
      other securities of the Company which may at any time be issuable on the
      exercise of the Rights represented thereby, nor shall anything contained herein
      or in any Right Certificate be construed to confer upon the holder of any Right
      Certificate, as such, any of the rights of a stockholder of the Company or
      any
      right to vote for the election of directors or upon any matter submitted to
      stockholders at any meeting thereof, or to give or withhold consent to any
      corporate action, or to receive notice of meetings or other actions affecting
      stockholders (except as provided in Section 25 hereof), or to receive dividends
      or subscription rights, or otherwise, until the Right or Rights evidenced by
      such Right Certificate shall have been exercised in accordance with the
      provisions hereof.

     

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

     

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

    

    Section
      19.    Merger
      or Consolidation or Change of Name of  Rights
      Agent.  Any corporation into which the Rights Agent or any
      successor Rights Agent may be merged or with which it may be consolidated,
      or
      any corporation resulting from any merger or consolidation to which the Rights
      Agent or any successor Rights Agent shall be a party, or any corporation
      succeeding to the 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
      may
      adopt the countersignature of the predecessor Rights Agent and deliver such
      Right certificates so countersigned; and in case at that time any of the Right
      Certificates shall not have been countersigned, any successor Rights Agent
      may
      countersign such Right certificates either in the name of the predecessor Rights
      Agent or in the name of the successor Rights Agent; and in all such cases such
      Right Certificates shall have the full force provided in the Right Certificates
      and in this Agreement.

     

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

     

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    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 any one of the Chairman of the Board, the Chief Executive
      Officer, the President, any Vice President, the Treasurer or the Secretary
      of
      the Company and delivered to the Rights Agent; and such certificate shall be
      full authorization to the Rights Agent for any action taken or suffered in
      good
      faith by it under the provisions of this Agreement in reliance upon such
      certificate.

     

    (c)  The
      Rights Agent shall be liable hereunder to the Company and any other Person
      only
      for its own gross 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.

     

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    (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 7(e) hereof) or any adjustment in the terms of the
      Rights (including the manner, method or amount thereof) provided for in Sections
      3, 11, 13, 23 or 24, 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 the certificate
      described in Section 12 hereof); nor shall it by any act hereunder be deemed
      to
      make any representation or warranty as to the authorization or reservation
      of
      any Preferred Shares to be issued pursuant to this Agreement or any Right
      Certificate or as to whether any Preferred Shares or Common Shares will, when
      issued, be validly authorized and issued, fully paid and
      nonassessable.

     

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

     

    (g)  The
      Rights Agent is hereby authorized and directed to accept instructions with
      respect to the performance of its duties hereunder from any one of the Chairman
      of the Board, the Chief Executive Officer, the President, any Vice President,
      the Secretary or the Treasurer of the Company, and to apply to such officers
      for
      advice or instructions in connection with its duties, and it shall not be liable
      for any action or lack of 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 Rights Agreement and the date on 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
      instruction in response to such application specifying the action to be taken
      or
      omitted.

     

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

     

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

     

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

     

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

     

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    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
      Shares or Preferred Shares by registered or certified mail, and to the holders
      of the Right Certificates by first-class mail.  In the event the
      transfer agency relationship in effect between the Company and the Rights Agent
      terminates, the Rights Agent will be deemed to resign automatically on the
      effective date of such termination; and any required notice will be sent by
      the
      Company.  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 Shares or Preferred Shares by registered or certified mail, and to the
      holders of the Right Certificates by first-class mail. If the Rights Agent
      shall
      resign or be removed or shall otherwise become incapable of acting, the Company
      shall appoint a successor to the Rights Agent. If the Company shall fail to
      make
      such appointment within a period of 30 days after giving notice of such removal
      or after it has been notified in writing of such resignation or incapacity
      by
      the resigning or incapacitated Rights Agent or by the holder of a Right
      Certificate (who shall, with such notice, submit his Right Certificate for
      inspection by the Company), then the registered holder of any Right Certificate
      may apply to any court of competent jurisdiction for the appointment of a new
      Rights Agent. Any successor Rights Agent, whether appointed by the Company
      or by
      such a court, shall be a corporation organized and doing business under the
      laws
      of the United States or of the State of New York or of any other state of the
      United States so long as such corporation is authorized to do business as a
      banking institution in the State of New York, in good standing, having an office
      in 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 Shares
      or Preferred Shares, and mail a notice thereof in writing to the registered
      holders of the Right Certificates. Failure to give any notice provided for
      in
      this Section 21, however, or any defect therein, shall not affect the legality
      of validity of the resignation or removal of the Rights Agent or the appointment
      of the successor Rights Agent, as the case may be.

     

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    Section
      22.    Issuance
      of New Right Certificates.  Notwithstanding any of the provisions
      of this Agreement or of the Rights to the contrary, the Company may, at its
      option, issue new Right Certificates evidencing Rights in such form as may
      be
      approved by its Board of Directors to reflect any adjustment or change in the
      Purchase Price and the number or kind or class of shares or other securities
      or
      property purchasable under the Right Certificates made in accordance with the
      provisions of this Agreement.

     

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

     

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    Section
      23.    Redemption
      and Termination.

     

                 
      (a) (i)  The Board of Directors of the Company may, at its option,
      redeem all but not less than all the then outstanding Rights at a redemption
      price of $.01 per Right, as such amount may be appropriately adjusted to reflect
      any stock split, stock dividend or similar transaction occurring after the
      date
      hereof (such redemption price being hereinafter referred to as the "Redemption
      Price"), at any time prior to the earlier of (x) the occurrence of a Section
      11(a)(ii)Event, or (y) the Final Expiration Date. The Company may, at its
      option, pay the Redemption Price either in Common Shares (based on the "current
      per share market price," as defined in Section 11(d) hereof, of the Common
      Shares at the time of redemption) or cash; provided that if the Company elects
      to pay the Redemption Price in Common Shares, the Company shall not be required
      to issue any fractional Common Shares and the number of Common Shares issuable
      to each holder of Rights shall be rounded down to the next whole
      share.

    

                  
      (ii)  In addition, the Board of Directors of the Company may, at its
      option, at any time, redeem all but not less than all of the then outstanding
      Rights at the Redemption Price (x) in connection with any merger, consolidation
      or sale or other transfer (in one transaction or in a series of related
      transactions) of assets or earning power aggregating 50% or more of the earning
      power of the Company and its subsidiaries (taken as a whole) in which all
      holders of Common Shares are treated alike and not involving (other than as
      a
      holder of Common Shares being treated like all other such holders) an Interested
      Stockholder or (y)(aa) if and for so long as the Acquiring Person is not
      thereafter the Beneficial Owner of 20% of the Common Shares and (bb) at the
      time
      of redemption no other Persons are Acquiring Persons.

    

    (b)  In
      the
      case of a redemption permitted under Section 23(a)(i), immediately upon the
      date
      for redemption set forth (or determined in the manner specified in) in a
      resolution of the Board of Directors of the Company ordering the redemption
      of
      the Rights, evidence of which shall have been filed with the Rights Agent,
      and
      without any further action and without any notice, the right to exercise the
      Rights will terminate and the only right thereafter of the holders of Rights
      shall be to receive the Redemption Price for each Right so held. In the case
      of
      a redemption permitted only under Section 23(a)(ii), evidence of which shall
      have been filed with the Rights Agent, the right to exercise the Rights will
      terminate and represent only the right to receive the Redemption Price upon
      the
      later of ten Business Days following the giving of such notice or the expiration
      of any period during which the Rights under Section 11(a)(ii) may be
      exercised.  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 ten (10) days after such date of redemption set
      forth in a resolution of the Board of Directors ordering the redemption of
      the
      Rights, the Company shall mail a notice of redemption to all the holders of
      the
      then outstanding Rights at their last addresses as they appear upon the registry
      books of the Rights Agent or, prior to the Distribution Date, on the registry
      books of the transfer agent for the Common Shares. 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 will state the method by
      which the payment of the Redemption Price will be made. Neither the Company
      nor
      any of its Affiliates or Associates may redeem, acquire or purchase for value
      any Rights at any time in any manner other than that specifically set forth
      in
      this Section 23 and other than in connection with the purchase of Common Shares
      prior to the Distribution Date.

     

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

     

    Section
      24.    Exchanges.

     

    (a)  The
      Board
      of Directors of the Company may, at its option, at any time, 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 7 (e) hereof)
      for Common Shares at an exchange ratio of one Common Share per Right,
      appropriately adjusted to reflect any stock split, stock dividend or similar
      transaction occurring after the date hereof (such exchange ratio being
      hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
      the Board of Directors shall not be empowered to effect such exchange at any
      time after any Person (other than the Company, any Subsidiary of the Company,
      any employee benefit plan of the Company or any such Subsidiary, or any entity
      holding Common Shares for or pursuant to the terms of any such plan), together
      with all Affiliates and Associates of such Person, become the Beneficial Owner
      of 20% or more of the Common Shares then outstanding.

     

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    (b)  Immediately
      upon 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 Common Shares equal to the number of such Rights held
      by
      such holder multiplied by the Exchange Ratio. The Company shall promptly give
      public notice of any such exchange; provided, however, that the failure to
      give,
      or any defect in, such notice shall not affect the validity of such exchange.
      The Company promptly shall mail a notice of any such exchange to all of the
      holders of such Rights at their last addresses as they appear upon the registry
      books of the Rights Agent. 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
      Common Shares for Rights will be effected and, in the event of any partial
      exchange, the number of Rights which will be exchanged. Any partial exchange
      shall be effected pro rata based on the number of Rights (other than Rights
      which have become void pursuant to the provisions of Section 7 (e) hereof)
      held
      by each holder of Rights.

     

    (c)  In
      any
      exchange pursuant to this Section 24, the Company, at its option, may substitute
      Preferred Shares (or equivalent preferred shares, as such term is defined in
      Section 11(b) hereof) for some or all of the Common Shares exchangeable for
      Rights, at the initial rate of one one-hundredth of a Preferred Share (or
      equivalent preferred share) for each Common Share, as appropriately adjusted
      to
      reflect adjustments in the voting rights of the Preferred Shares pursuant to
      the
      terms thereof, so that the fraction of a Preferred Share delivered in lieu
      of
      each Common Share shall have the same voting rights as one Common
      Share.

     

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    (d)  In
      the
      event that there shall not be sufficient Common Shares issued but not
      outstanding or authorized but unissued to permit any exchange of Rights as
      contemplated in accordance with this Section 24, the Company shall take all
      such
      action as may be necessary to authorize additional Common Shares for issuance
      upon exchange of the Rights.

     

    Section
      25.    Notice
      of Certain Events.

     

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

     

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    (b)  In
      case
      of a Section 11(a)(ii) Event, then (i) the Company shall as soon as
      practicable thereafter give to each holder of a Right Certificate, in accordance
      with Section 26 hereof, a notice of the occurrence of such event, which notice
      shall describe such event and the consequences of such event to holders of
      Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding
      paragraph (a) to Preferred Shares shall be deemed thereafter to refer also
      to
      Common Shares and/or, if appropriate, other securities of the
      Company.

     

    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 first-class mail, postage prepaid, addressed
      (until another address is filed in writing with the Rights Agent) as
      follows:

     

    Old
      Republic International Corporation

    307
      North
      Michigan Avenue

    Chicago,
      Illinois 60601

    Attention:
      Corporate Secretary

    

    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:

     

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    Computershare
      Trust Company, N.A.

    250
      Royall Street, MS 3B

    Canton,
      Massachusetts  02021

    Attention:  Client
      Services

    

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

    

    Section
      27.    Supplements
      and Amendments.  Prior to the Distribution Date, the Company and
      the Rights Agent shall, if the Company so directs, supplement or amend any
      provision of this Agreement without the approval of any holders of certificates
      representing Common Shares.  From and after the Distribution Date, the
      Company and the Rights Agent shall, if the Company so directs, supplement or
      amend this Agreement without the approval of any holders of Right Certificates
      in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
      contained herein which may be defective or inconsistent with any other
      provisions herein, or (iii) to change or supplement the provisions hereunder
      in
      any manner which the Company may deem necessary or desirable for the purpose
      of
      protecting, enhancing or clarifying the rights of, and/or the benefits to,
      the
      holders of Rights, without adversely affecting the interests of the holders
      of
      Right Certificates (other than those of an Acquiring Person or an Affiliate
      or
      Associate of an Acquiring Person). Upon the delivery of a certificate from
      an
      appropriate officer of the Company which states that the proposed supplement
      or
      amendment is in compliance with the terms of this Section 27, the Rights Agent
      shall execute such supplement or amendment, provided that such supplement or
      amendment does not adversely affect the rights or obligations of the Rights
      Agent under Section 18 or Section 20 of this Agreement. Prior to the
      Distribution Date, the interests of the holders of Rights shall be deemed
      coincident with the interests of the holders of Common Shares, notwithstanding
      anything contained in this Rights Agreement to the contrary, in the event that
      a
      majority of the Board of Directors of the Company is comprised of (i) Persons
      elected at a meeting of or by written consent of stockholders and who were
      not
      nominated by the Board of Directors in office immediately prior to such meeting
      or action by written consent and/or (ii) successors of such Persons elected
      to
      the Board of Directors for the purpose of either facilitating a transaction
      with
      a Person or circumventing directly or indirectly the provisions of this Section
      27, then for a period of 180 days following the effectiveness of such action,
      this Rights Agreement shall not be amended or supplemented in any manner
      reasonably likely to have the purpose or effect of facilitating a transaction
      with a Person.

     

    -46-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

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

     

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

     

    -47-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    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.

     

    Section
      35.    Force
      Majeure.  Notwithstanding anything to the contrary contained
      herein, Rights Agent shall not be liable for any delays or failures in
      performance resulting from acts beyond its reasonable control including, without
      limitation, acts of God, terrorist acts, shortage of supply, breakdowns or
      malfunctions, interruptions or malfunction of computer facilities, or loss
      of
      data due to power failures or mechanical difficulties with information storage
      or retrieval systems, labor difficulties, war, or civil unrest.

     

    -48-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto
      have caused this Amended and Restated Rights Agreement to be duly executed
      and
      their respective corporate seals to be hereunto affixed and attested, all as
      of
      the day and year first written above.

    

    OLD
      REPUBLIC INTERNATIONAL CORPORATION

    

    

    

    By: _____________________________________                                                                       

    Title: ____________________________________                                                                       

    

     

    Attest:

    

    By:
      __________________________                                                                

    

    

    

    COMPUTERSHARE
      TRUST COMPANY, N.A.

    

    

    
      By: _____________________________________                                                                       

      Title: ____________________________________                                                                       

      

       

      Attest:

      

      By:
        __________________________                                                                

                                   

     

     

    -49-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Exhibit
      A

    

    CERTIFICATE
      OF DESIGNATIONS

    

    of

    

    SERIES
      A
      JUNIOR PARTICIPATING PREFERRED STOCK

    

    of

    

    OLD
      REPUBLIC INTERNATIONAL CORPORATION

    (Pursuant
      to Section 151 of the

    Delaware
      General Corporation Law)

    

    

    Old
      Republic International Corporation,
      a corporation organized and existing under the General Corporation Law of the
      State of Delaware (hereinafter called the "Corporation"), hereby certifies
      that
      the following resolution was adopted by the Board of Directors of the
      Corporation as required by Section 151 of the General Corporation Law at a
      meeting duly called and held on May 15, 1997.

    

    RESOLVED,
      that pursuant to the
      authority granted to and vested in the Board of Directors of this Corporation
      (hereinafter called the "Board of Directors" or the "Board") in accordance
      with
      the provisions of the Certificate of Incorporation, the Board of Directors
      hereby creates a series of Preferred Stock, par value $.O1 per share (the
      "Preferred Stock"), of the Corporation and hereby states the designation and
      number of shares, and fixes the relative rights, preferences, and limitations
      thereof as follows:

    

    Series
      A Junior Participating Preferred
      Stock:

    

    Section
      1.    Designation,
      Par Value and Amount.  The shares of such series shall be
      designated as "Series A Junior Participating Preferred Stock" (the "Series
      A
      Preferred Stock") and the number of shares constituting the Series A Preferred
      Stock shall be 10,000,000; such number of shares may be increased or decreased
      by resolution of the Board of Directors; provided, that no decrease shall reduce
      the number of shares of Series A Preferred Stock to a number less than the
      number of shares then outstanding plus the number of shares reserved for
      issuance upon the exercise of outstanding options, rights or warrants or upon
      conversion of any outstanding securities issued by the Corporation convertible
      into Series A Preferred Stock.

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Section
      2.    Dividends
      and Distributions.

     

    (A)
      Subject to the rights of the
      holders of any shares of any series of Preferred Stock (or any similar stock)
      ranking prior and superior to the Series A Preferred Stock with respect to
      dividends, the holders of shares of Series A Preferred Stock, in preference
      to
      the holders of Common Stock, par value $1.00 per share (the "Common Stock"),
      of
      the Corporation, and of any other junior stock, shall be entitled to receive,
      when, and if declared by the Board of Directors out of funds legally available
      for the purpose, quarterly dividends payable in cash on the first day of March,
      June, September and December in each year (each such date being referred to
      herein as a "Quarterly Dividend Payment Date"), commencing on the first
      Quarterly Dividend Payment Date after the first issuance of a share or fraction
      of a share of Series A Preferred Stock, in an amount per share (rounded to
      the
      nearest cent) equal to the greater of (a) $1 or (b) subject to the provision
      for
      adjustment hereinafter set forth, 100 times the aggregate per share amount
      of
      all cash dividends, and 100 times the aggregate per share amount (payable in
      kind) of all non-cash dividends or other distributions, other than a dividend
      payable in shares of Common Stock or a subdivision of the outstanding shares
      of
      Common Stock (by reclassification or otherwise), declared on the Common Stock
      since the immediately preceding Quarterly Dividend Payment Date or, with respect
      to the first Quarterly Dividend Payment Date, since the first issuance of any
      share or fraction of a share of Series A Preferred Stock. In the event the
      Corporation shall at any time declare or pay any dividend on the Common Stock
      payable in shares of Common Stock, or effect a subdivision or combination or
      consolidation of the outstanding shares of Common Stock (by reclassification
      or
      otherwise than by payment of a dividend in shares of Common Stock) into a
      greater or lesser number of shares of Common Stock, then in each such case
      the
      amount to which holders of shares of Series A Preferred Stock were entitled
      immediately prior to such event under clause (b) of the preceding sentence
      shall
      be adjusted by multiplying such amount by a fraction, the numerator of which
      is
      the number of shares of Common Stock outstanding immediately after such event
      and the denominator of which is the number of shares of Common Stock that were
      outstanding immediately prior to such event.

     

    -2-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (B)           The
      Corporation shall declare a dividend or distribution on the Series A Preferred
      Stock as provided in paragraph (A) of this Section immediately after it declares
      a dividend or distribution on the Commons Stock (other than a dividend payable
      in shares of Common Stock); provided that, in the event no dividend or
      distribution shall have been declared on the Common Stock during the period
      between any Quarterly Dividend Payment Date and the next subsequent Quarterly
      Dividend Payment Date, a dividend of $1 per share on the Series A Preferred
      Stock shall nevertheless be payable on such subsequent Quarterly Dividend
      Payment Date.

    

    (C)           Dividends
      shall begin to accrue and be cumulative on outstanding shares of Series A
      Preferred Stock from the Quarterly Dividend Payment Date next preceding the
      date
      of issue of such shares, unless the date of issue of such shares is prior to
      the
      record date for the first Quarterly Dividend Payment Date, in which case
      dividends on such shares shall begin to accrue from the date of issue of such
      shares, or unless the date of issue is a Quarterly Dividend Payment Date or
      is a
      date after the record date for the determination of holders of shares of Series
      A Preferred Stock entitled to receive a quarterly dividend and before such
      Quarterly Dividend Payment Date, in either of which events such dividends shall
      begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
      Accrued but unpaid dividends shall not bear interest. Dividends paid on the
      shares of Series A Preferred Stock in an amount less than the total amount
      of
      such dividends at the time accrued and payable on such shares shall be allocated
      pro rata on a share-by-share basis among all such shares at the time
      outstanding. The Board of Directors may fix a record date for the determination
      of holders of shares of Series A Preferred Stock entitled to receive payment
      of
      a dividend or distribution declared thereon, which record date shall be not
      more
      than 60 days prior to the date fixed for the payment thereof.

    

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

     

    (A)           Except
      as provided in paragraph C of this Section 3 and subject to the provision for
      adjustment hereinafter set forth, each share of Series A Preferred Stock shall
      entitle the holder thereof to 100 votes on all matters submitted to a vote
      of
      the stockholders of the Corporation.

     

    -3-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (B)           Except
      as otherwise provided herein or by law, the holders of shares of Series A
      Preferred Stock and the holders of shares of Common Stock shall vote together
      as
      one class on all matters submitted to a vote of stockholders of the
      Corporation.

    

    (C)
      (i)       If, on the date used to determine
      stockholders of record for any meeting of stockholders for the election of
      directors, a default in preference dividends (as defined in subparagraph (v)
      below) on the Series A Preferred Stock shall exist, the holders of the Series
      A
      Preferred Stock shall have the right, voting as a class as described in
      subparagraph (ii) below, to elect two directors (in addition to the directors
      elected by holders of Common Stock of the Corporation). Such right may be
      exercised (a) at any meeting of stockholders for the election of directors
      or
      (b) at a meeting of the holders of shares of Voting Preferred Stock (as
      hereinafter defined), called for the purpose in accordance with the By-laws
      of
      the Corporation, until all such cumulative dividends (referred to above) shall
      have been paid in full or until non-cumulative dividends have been paid
      regularly for at least one year.

    

    (ii)             The
      right of the holders of Series A Preferred Stock to elect two directors, as
      described above, shall be exercised as a class concurrently with the rights
      of
      holders of any other series of Preferred Stock upon which voting rights to
      elect
      such directors have been conferred and are then exercisable. The Series A
      Preferred Stock and any additional series of Preferred Stock which the
      Corporation may issue and which may provide for the right to vote with the
      foregoing series of Preferred Stock are collectively referred to herein as
      "Voting Preferred Stock."

    

    (iii)            Each
      director elected by the holders of shares of Voting Preferred Stock shall be
      referred to herein as a "Preferred Director." A Preferred Director so elected
      shall continue to serve as such director for a term of one year, except that
      upon any termination of the right of all such holders to vote as a class for
      Preferred Directors, the term of office of such directors shall terminate.
      Any
      Preferred Director may be removed by, and shall not be removed except by, the
      vote of the holders of record of a majority of the outstanding shares of Voting
      Preferred Stock then entitled to vote for the election of directors, present
      (in
      person or by proxy) and voting together as a single class (a) at a meeting
      of
      the stockholders, or (b) at a meeting of the holders of shares of such Voting
      Preferred Stock, called for the purpose in accordance with the By-laws of the
      Corporation, or (c) by written consent signed by the holders of a majority
      of
      the then outstanding shares of Voting Preferred Stock then entitled to vote
      for
      the election of directors, taken together as a single class.

     

    -4-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (iv)            So
      long as a default in any preference dividends on the Series A Preferred Stock
      shall exist or the holders of any other series of Voting Preferred Stock shall
      be entitled to elect Preferred Directors, (a) any vacancy in the office of
      a
      Preferred Director may be filled (except as provided in the following clause
      (b)) by an instrument in writing signed by the remaining Preferred Director
      and
      filed with the Corporation and (b) in the case of the removal of any Preferred
      Director, the vacancy may be filled by the vote or written consent of the
      holders of a majority of the outstanding shares of Voting Preferred Stock then
      entitled to vote for the election of directors, present (in person or by proxy)
      and voting together as a single class, at such time as the removal shall be
      effected. Each director appointed as aforesaid by the remaining Preferred
      Director shall be deemed, for all purposes hereof, to be a Preferred Director.
      Whenever (x) no default in preference dividends on the Series A Preferred Stock
      shall exist and (y) the holders of other series of Voting Preferred Stock shall
      no longer be entitled to elect such Preferred Directors, then the number of
      directors constituting the Board of Directors of the Corporation shall be
      reduced by two.

    

    (v)             For
      purposes hereof, a "default in preference dividends" on the Series A Preferred
      Stock shall be deemed to have occurred whenever the amount of cumulative and
      unpaid dividends on the Series A Preferred Stock shall be equivalent to six
      full
      quarterly dividends or more (whether or not consecutive), and, having so
      occurred, such default shall be deemed to exist thereafter until, but only
      until, all cumulative dividends on all shares of the Series A Preferred Stock
      then outstanding shall have been paid through the last Quarterly Dividend
      Payment Date or until, but only until, non-cumulative dividends have been paid
      regularly for at least one year.

    

    (D)           Except
      as set forth herein (or as otherwise required by applicable law), holders of
      Series A Preferred Stock shall have no general or special voting rights and
      their consent shall not be required for taking any corporate
      action.

     

    -5-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Section
      4.    Certain
      Restrictions.

     

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

    

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

    

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

    

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

    

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

     

    -6-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

    Section
      6.    Liquidation,
      Dissolution or Winding Up.

     

    (A)           Subject
      to the prior and superior rights of holders of any shares of any series of
      Preferred Stock ranking prior and superior to the shares of Series A Preferred
      Stock with respect to rights upon liquidation, dissolution or winding up
      (voluntary or otherwise), no distribution shall be made to the holders of shares
      of stock ranking junior (either as to dividends or upon liquidation, dissolution
      or winding up) to the Series A Preferred Stock unless, prior thereto, the
      holders of shares of Series A Preferred Stock shall have received $100 per
      share, plus an amount equal to accrued and unpaid dividends and distributions
      thereon, whether or not declared, to the date of such payment (the "Series
      Liquidation Preference"). Following the payment of the full amount of the Series
      A Liquidation Preference, no additional distributions shall be made to the
      holders of shares of Series A Preferred Stock unless, prior thereto, the holders
      of shares of Common Stock shall have received an amount per share (the "Capital
      Adjustment") equal to the quotient obtained by dividing (i) the Series A
      Liquidation Preference by (ii) 100 (such number in clause (ii), the "Adjustment
      Number"). Following the payment of the full amount of the Series A Liquidation
      Preference and the Capital Adjustment in respect of all outstanding shares
      of
      Series A Preferred Stock and Common Stock, respectively, holders of Series
      A
      Preferred Stock and holders of Common Stock shall receive their ratable and
      proportionate share of the remaining assets to be distributed in the ratio
      of
      the Adjustment Number to 1 with respect to such Preferred Stock and Common
      Stock, on a per share basis, respectively.

     

    -7-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    (B)           In
      the event, however, that there are not sufficient assets available to permit
      payment in full of the Series A Liquidation Preference and the liquidation
      preferences of all other series of preferred stock, if any, which rank on a
      parity with the Series A Preferred Stock, then such remaining assets shall
      be
      distributed ratably to the holders of Series A Preferred Stock and the holders
      of such parity shares in proportion in their respective liquidation preferences.
      In the event, however, that there are not sufficient assets available to permit
      payment in full of the Capital Adjustment, then such remaining assets shall
      be
      distributed ratably to the holders of Common Stock.

    

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

     

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

     

    Section
      9.    Ranking.  The
      Series A Preferred Stock shall rank, with respect to payment of dividends and
      the distribution of assets, junior to all series of any other class of the
      Corporation's Preferred Stock.

     

    -8-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

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

     

    IN
      WITNESS WHEREOF, this Certificate of
      Designations is executed on behalf of the Corporation by its Chairman of the
      Board and attested by its Secretary this
           day of
      May, 1997.

    

    

                                                    ________________________

                                                Chairman
      of the
      Board

     

     

    ATTEST:

     

     

    ___________________________

         Secretary

     

     

     

    

     

     

     

     

    -9-

    
      
        
        

      

      
        
        

      

      
        
        

      

    

    Exhibit
      B

    

    [Form
      of
      Right Certificate]

    

    Certificate
      No. R-                                                                              
      Rights

    

    NOT
      EXERCISABLE AFTER JUNE 26, 2017 OR

    EARLIER
      IF NOTICE OF REDEMPTION IS GIVEN.

    THE
      RIGHTS ARE SUBJECT TO REDEMPTION, AT THE

    OPTION
      OF
      THE COMPANY, AT $.01 PER RIGHT ON

    THE
      TERMS
      SET FORTH IN THE

    AMENDED
      AND RESTATED RIGHTS AGREEMENT

    

    Rights
      Certificate

    

    OLD
      REPUBLIC INTERNATIONAL CORPORATION

    

    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 Amended and Restated Rights Agreement dated as of May 24,
      2007
      (the "Rights Agreement") between Old Republic International Corporation, a
      Delaware corporation (the "Company"), and Computershare Trust Company, N.A.
      (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.
      (Chicago time) on June 26, 2017 at the principal office of the Rights Agent,
      designated for such purpose, or its successors as Rights Agent, one
      one-hundredth of a fully paid non-assessable share of Series A Junior
      Participating Preferred Stock, par value $.01 per share (the "Preferred Shares")
      of the Company, at a purchase price of $100.00 per one one-hundredth of a
      Preferred Share (the "Purchase Price") upon presentation and surrender of this
      Right Certificate with the Form of Election to Purchase duly executed. The
      number of Rights evidenced by this Right Certificate (and the number of one
      one-hundredths of a Preferred Share which may be purchased upon exercise
      thereof) set forth above, and the Purchase Price per share set forth above,
      are
      the number and Purchase Price as of May 24, 2007, based on the Preferred Shares
      as constituted at such date. As provided in the Rights Agreement, the Purchase
      Price and the number of one one-hundredths of a Preferred Share which may be
      purchased upon the exercise of the Rights evidenced by this Right Certificate
      are subject to modification and adjustment upon the happening of certain
      events.

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    This
      Rights 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
      above-mentioned office of the Rights Agent.

    

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

    

    Subject
      to the provisions of the Rights
      Agreement, the Rights evidenced by this Certificate may (i) be redeemed by
      the
      Company at its option at a redemption price of $.05 per Right or (ii) may be
      exchanged in whole or in part for Preferred Shares or shares of the Company's
      Common Stock, par value $1.00 per share.

    

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

    

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

     

    -2-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    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  ________________.

    

    

    
      	
              ATTEST:

               

               

               

              ___________________________________

                      Secretary

            	
              OLD
                REPUBLIC INTERNATIONAL CORPORATION

               

               

               

              By: ________________________________                         

            
	 	 
	 	 
	
              Countersigned:

               

              COMPUTERSHARE
                TRUST

                COMPANY,
                N.A.

               

               

               

              By:  ______________________________                                   

              Title:  _____________________________                                                                

               

            	 

    

    

     

     

     

     

    -3-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    [Form
      of
      Reverse Side of Right Certificate]

    

    FORM
      OF ASSIGNMENT

    

    (To
      be
      executed by the registered holder if such

    holder
      desires to transfer the Right Certificate)

    

    FOR
      VALUE
      RECEIVED  _______________________________________ hereby sells,
      assigns and transfers unto _____________  
      (Please print name and address of
      transferee)_____________________________________________________________________
      _______________________________________________________________________________________________________

    

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

    

    Dated:  __________________________ ,
      20                                           

    

                                                ____________________________

                                        Signature

    

    Signature
      Guaranteed:

    

    Signatures
      must be guaranteed by a member firm of a registered national securities
      exchange, a member of the National Association of Securities Dealers, Inc.,
      or a
      commercial bank or trust company having an office or correspondent in the United
      States.

     

    _____________________________________________________________________________________________________

    _____________________________________________________________________________________________________

    

    The
      undersigned hereby certifies that the Rights evidence by this Right Certificate
      are not beneficially owned by an Acquiring Person or an Affiliate or Associate
      thereof (as defined in the Rights Agreement).

     

    
 

    
                                                  ____________________________

                                          Signature

     

    -4-

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    

    Form
      of
      Reverse Side of Right Certificate -- Continued

     

    FORM
      OF ELECTION TO PURCHASE

    

    (To
      be
      executed if holder desires to

    exercise
      the Right Certificate)

    

    To
      Old
      Republic International Corporation:

    

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

    

    Please
      insert social security

    or
      other
      identifying
      number:___________________________________________________________________.

    ___________________________________________________________________________________________________________

    (Please
      print name and address)

    

    If
      such
      number of Rights shall not be all of 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:  __________________________ ,
        20                                           

      

                                                  ____________________________

                                          Signature

      
                                  (Signature
        must conform in
        all 
        respects
        to

                                                         name
        of holder
        as specified
        on the face of 

                                                        
        this Right
        Certificate)

    

     

     

    

    Signature
      Guaranteed:

     

     

    ________________________________

    

    
-5-Note and Warrant Purchase Agreement

                                                                          Exhibit
      10.34

    
 

    NOTE
      AND
      WARRANT PURCHASE

     

    AGREEMENT

     

    Dated
      as
      of June 15, 2007

     

    by
      and
      among

     

    COMMUNICATION
      INTELLIGENCE CORPORATION

     

    and

     

    THE
      PURCHASERS LISTED ON EXHIBIT A

     

    

     

    
      
        
          2007.06.12
            Note & Warrant Purchase Agreement

        

        
        

      

      
        
        

        
          

        

      

       

    

     

    TABLE
      OF CONTENTS
                                                                    PAGE

    
      
        	
                ARTICLE
                  I PURCHASE AND SALE OF NOTES AND WARRANTS

              
	
                Section
                  1.1 

              	
                Purchase
                  and Sale of Notes and Warrants.

              	
                1

              
	
                Section
                  1.2

              	
                Execution
                  and Borrowing

              	
                1

              
	
                Section
                  1.3

              	
                Warrant
                  Shares

              	
                2

              
	
                 

                ARTICLE
                  II REPRESENTATIONS AND WARRANTIES 

              
	
                Section
                  2.1

              	
                Representations
                  and Warranties of the Company

              	
                2

              
	
                Section
                  2.2

              	
                Representations
                  and Warranties of the Purchasers

              	
                12

              
	
                 

                ARTICLE
                  III COVENANTS 

              	 	
                 

              
	
                Section
                  3.1

              	
                Securities
                  Compliance

              	
                14

              
	
                Section
                  3.2

              	
                Registration
                  and Listing

              	
                14

              
	
                Section
                  3.3

              	
                Compliance
                  with Laws

              	
                14

              
	
                Section
                  3.4

              	
                Keeping
                  of Records and Books of Account

              	
                14

              
	
                Section
                  3.5

              	
                Reporting
                  Requirements

              	
                15

              
	
                Section
                  3.6

              	
                Other
                  Agreements

              	
                15

              
	
                Section
                  3.7

              	
                Use
                  of Proceeds

              	
                15

              
	
                Section
                  3.8

              	
                Reporting
                  Status

              	
                15

              
	
                Section
                  3.9

              	
                Disclosure
                  of Transaction

              	
                15

              
	
                Section
                  3.10

              	
                Disclosure
                  of Material Information

              	
                16

              
	
                Section
                  3.11

              	
                Amendments

              	
                16

              
	
                Section
                  3.12

              	
                Reservation
                  of Shares

              	
                16

              
	
                Section
                  3.13

              	
                Disposition
                  of Assets

              	
                16

              
	
                Section
                  3.14

              	
                Non-Shorting

              	
                16

              
	
                 

                ARTICLE
                  IV CONDITIONS

              	 	
                 

              
	
                Section
                  4.1

              	
                Conditions
                  Precedent to the Obligation of the Company to Close and
                  to Sell the Securities

              	
                16

              
	
                Section
                  4.2

              	
                Conditions
                  Precedent to the Obligation of the Purchasers to Close and
                  to Purchase the Securities

              	
                17

              
	
                 

                ARTICLE
                  V CERTIFICATE LEGEND

              
	
                Section
                  5.1

              	
                Legend

              	
                18

              
	
                 

                ARTICLE
                  VI INDEMNIFICATION

              
	
                Section
                  6.1

              	
                General
                  Indemnity

              	
                19

              
	
                Section
                  6.2

              	
                Indemnification
                  Procedure

              	
                19

              
	
                 

                ARTICLE
                  VII MISCELLANEOUS 

              
	
                Section
                  7.1

              	
                Fees
                  and Expenses

              	
                20

              
	
                Section
                  7.2

              	
                Specific
                  Performance; Consent to Jurisdiction; Venue

              	
                21

              
	
                Section
                  7.3

              	
                Entire
                  Agreement; Amendment

              	
                21

              
	
                Section
                  7.4

              	
                Notices

              	
                21

              
	
                Section
                  7.5

              	
                Waivers

              	
                22

              
	
                Section
                  7.6

              	
                Headings

              	
                22

              
	
                Section
                  7.7

              	
                Successors
                  and Assigns

              	
                22

              
	
                Section
                  7.8

              	
                No
                  Third Party Beneficiaries

              	
                22

              
	
                Section
                  7.9

              	
                Governing
                  Law

              	
                22

              
	
                Section
                  7.10

              	
                Survival

              	
                23

              
	
                Section
                  7.11

              	
                Counterparts

              	
                23

              
	
                Section
                  7.12

              	
                Publicity

              	
                23

              
	
                Section
                  7.13

              	
                Severability

              	
                23

              
	
                Section
                  7.14

              	
                Further
                  Assurances

              	
                23

              
	 	 	 

      

      
        

          
            
              
                2007.06.12
                  Note & Warrant Purchase Agreement

              

              
              

            

            
              
                

              

            

            
              
              

            

          

      

    

    NOTE
      AND
      WARRANT PURCHASE AGREEMENT

     

    This
      NOTE
      AND WARRANT PURCHASE AGREEMENT dated as of June 15, 2007 (this “Agreement”)
      by and
      between Communication Intelligence Corporation, a Delaware corporation (the
      “Company”),
      and
      each of the purchasers of the promissory notes of the Company whose names are
      set forth on Exhibit
      A
      attached
      hereto (each a “Purchaser”
and
      collectively, the “Purchasers”).

     

    The
      parties hereto agree as follows:

     

    ARTICLE
      I

     

    PURCHASE
      AND SALE OF NOTES AND WARRANTS

     

    Section
      1.1  Purchase
      and Sale of Notes and Warrants.

     

    (a)  Upon
      the
      following terms and conditions, the Company shall issue and sell to the
      Purchasers, and the Purchasers shall purchase from the Company, promissory
      notes
      in the aggregate principal amount of up to One
      Million Dollars ($1,000,000) bearing interest at the rate of fifteen percent
      (15%) per annum, in substantially the form attached hereto as Exhibit B (the
      “Notes”). The Company and the Purchasers are executing and delivering this
      Agreement in accordance with and in reliance upon the exemption from securities
      registration afforded by Section 4(2) of the U.S. Securities Act of 1933, as
      amended, and the rules and regulations promulgated thereunder (the “Securities
      Act”), including Regulation D (“Regulation D”), and/or upon such other exemption
      from the registration requirements of the Securities Act as may be available
      with respect to any or all of the investments to be made hereunder.

     

    (b)  Upon
      the
      following terms and conditions, the Purchasers shall be issued (i) Warrants,
      in
      substantially the form attached hereto as Exhibit
      C
      (the
“Warrants”),
      to
      purchase the number of shares of Common Stock set forth opposite such
      Purchaser’s name on Exhibit
      A
      attached
      hereto. The Warrants shall have an exercise price equal to the Warrant Price
      (as
      defined in the respective Warrant) and shall be exercisable as stated therein.
      Each Warrant shall have a term of three (3) years from the later of i) the
      date
      it is issued (the “Issuance Date”) or ii) June 30, 2007.

     

    Section
      1.2  Execution
      and Borrowing.
      

     

    (a) The
      execution of this Agreement shall take place at the offices of Davis Wright
      Tremaine LLP, 1300 S.W. Fifth Avenue, 23rd
      Floor,
      Portland, Oregon 97201 (the “Execution”) at 10:00 a.m., Pacific Daylight Time
      (i) on or before June 15, 2007; provided, that all of the conditions set forth
      in Article IV hereof and applicable to the Closing shall have been fulfilled
      or
      waived in accordance herewith, or (ii) at such other time and place or on such
      date as the Purchasers and the Company may agree upon (the “Execution Date”).

     

    (b) During
      the period commencing on the Execution Date and terminating on December 31,
      2007
      (the Borrowing Period) and subject to the terms and conditions of this
      Agreement, the Company may issue and sell the Notes and Warrants to the
      Purchasers in an amount not to exceed $1,000,000 (such amount or portions
      thereof referred to as the “Purchase Price”). Within five calendar days of the
      execution date, $400,000 of the Purchase Price shall be delivered to the Company
      by wire transfer to an account designated by the Company and thereupon the
      Company shall deliver or cause to be delivered to each Purchaser (x) its Note
      for the amount of the Purchase Price being drawn upon and (y) a Warrant to
      purchase 3,167,898 shares of Common Stock at an exercise price of $0.25. Each
      Note issued under this Section 1.2 shall be due and payable eighteen months
      after the date of issuance. The remaining purchase price may be drawn by the
      Company in $300,000 tranches upon thirty-one business-days written notice to
      the
      Purchaser under the same procedure as described above. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (c)
       The
      number of Warrants and the exercise price thereof for each additional tranche
      shall be determined by the volume weighted average price (“VWAP”)of the
      Company’s common stock for the thirty (30) business days preceding the date that
      the Purchase Price for the specific tranche is due to the Company. The VWAP
      would be rounded to the nearest whole cent. The exercise price would be the
      second strike price out of the money using $0.05 increments. For example, with
      potential exercise prices of $0.10, $0.15, $0.20, $0.25, etc. if the VWAP was
      $0.16 then the exercise price would be $0.25. The number of Warrants shall
      be
      calculated using the Cox-Rubenstein Model with a mutually agreed upon
      calculation utilizing the following assumptions, 100% volatility, zero
      dividends and 7.5% interest rate. Using the calculated VWAP and exercise price,
      this model will yield a value for the Warrants, Purchases shall be entitled
      to
      such number of Warrants the value of which equals 75% of the amount borrowed.
      

     

    Section
      1.3  Warrant
      Shares

     

    .
      If at
      any time any Warrant is exercised and the number of the shares available is
      insufficient to effect the exercise, the Company shall seek authorization at
      the
      next scheduled annual meeting of its shareholders to increase the number of
      the
      shares available to effect the exercise of the Warrants and shall reserve such
      number of shares for that purpose. Any shares of Common Stock issuable upon
      exercise of the Warrants (and such shares when issued) are herein referred
      to as
      the “Warrant Shares.” The Notes, the Warrants and the Warrant Shares are
      sometimes collectively referred to herein as the “Securities”. 

    
 

    ARTICLE
      II

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      2.1  Representations
      and Warranties of the Company

     

    .
      The
      Company hereby represents and warrants to the Purchasers, as of the date hereof
      and the Closing Date (except as set forth on the Schedule of Exceptions attached
      hereto with each numbered Schedule corresponding to the section number herein),
      as follows:

     

    (a)  Organization,
      Good Standing and Power.
      The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Delaware and has the requisite corporate
      power to own, lease and operate its properties and assets and to conduct its
      business as it is now being conducted. The Company does not have any
      Subsidiaries (as defined in Section 2.1(g)) or own securities of any kind in
      any
      other entity except as set forth on Schedule
      2.1(g)
      hereto.
      The Company and each such Subsidiary (as defined in Section 2.1(g)) is duly
      qualified as a foreign corporation to do business and is in good standing in
      every jurisdiction in which the nature of the business conducted or property
      owned by it makes such qualification necessary except for any jurisdiction(s)
      (alone or in the aggregate) in which the failure to be so qualified will not
      have a Material Adverse Effect. For the purposes of this Agreement,
“Material
      Adverse Effect”
means
      any effect on the business (including a material change in management), results
      of operations, prospects, properties, assets or condition (financial or
      otherwise) of the Company that is material and adverse to the Company and its
      subsidiaries, taken as a whole, and/or any condition, circumstance, factor
      or
      situation (including, without limitation, an investigation by the Securities
      and
      Exchange Commission (the “Commission”))
      that
      would prohibit or otherwise materially interfere with the ability of the Company
      from entering into and performing any of its obligations under the Transaction
      Documents (as defined below) in any material respect.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (b)  Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and
      perform this Agreement, the Notes, the Warrants, the Registration Rights
      Agreement by and among the Company and the Purchasers, dated as of the date
      hereof, substantially in the form of Exhibit
      E
      attached
      hereto (the “Registration
      Rights Agreement”)
      (collectively, the “Transaction
      Documents”)
      and to
      issue and sell the Securities in accordance with the terms hereof. The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by it of the transactions contemplated thereby have been
      duly and validly authorized by all necessary corporate action, and, except
      as
      set forth on Schedule
      2.1(b),
      no
      further consent or authorization of the Company, its Board of Directors or
      stockholders is required. When executed and delivered by the Company and each
      Purchaser, each of the Transaction Documents shall constitute a valid and
      binding obligation of the Company enforceable against the Company in accordance
      with its terms, except as such enforceability may be limited by applicable
      bankruptcy, reorganization, moratorium, liquidation, conservatorship,
      receivership or similar laws relating to, or affecting generally the enforcement
      of, creditor’s rights and remedies or by other equitable principles of general
      application.

     

    (c)  Capitalization.
      The
      authorized capital stock of the Company as of December 31, 2006 is set forth
      on
Schedule
      2.1(c)
      hereto.
      All of the outstanding shares of the Common Stock and any other outstanding
      security of the Company have been duly and validly authorized. Except as set
      forth in this Agreement and as set forth on Schedule
      2.1(c)
      hereto,
      no shares of Common Stock or any other security of the Company are entitled
      to
      preemptive rights or registration rights and there are no outstanding options,
      warrants, scrip, rights to subscribe to, call or commitments of any character
      whatsoever relating to, or securities or rights convertible into, any shares
      of
      capital stock of the Company. Furthermore, except as set forth in this Agreement
      and as set forth on Schedule
      2.1(c)
      hereto,
      there are no contracts, commitments, understandings, or arrangements by which
      the Company is or may become bound to issue additional shares of the capital
      stock of the Company or options, securities or rights convertible into shares
      of
      capital stock of the Company. Except for customary transfer restrictions
      contained in agreements entered into by the Company in order to sell restricted
      securities or as provided on Schedule
      2.1(c)
      hereto,
      the Company is not a party to or bound by any agreement or understanding
      granting registration or anti-dilution rights to any person with respect to
      any
      of its equity or debt securities. Except as set forth on Schedule
      2.1(c),
      the
      Company is not a party to, and it has no knowledge of, any agreement or
      understanding restricting the voting or transfer of any shares of the capital
      stock of the Company.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (d)  Issuance
      of Securities.
      The
      Notes and the Warrants to be issued have been duly authorized by all necessary
      corporate action and, when paid for or issued in accordance with the terms
      hereof, the Notes shall be validly issued and outstanding, free and clear of
      all
      liens, encumbrances and rights of refusal of any kind. When the Warrant Shares
      are issued and paid for in accordance with the terms of this Agreement and
      as
      set forth in the Warrants, such shares will be duly authorized by all necessary
      corporate action and validly issued and outstanding, fully paid and
      non-assessable, free and clear of all liens, encumbrances and rights of refusal
      of any kind and the holders shall be entitled to all rights accorded to a holder
      of Common Stock.

     

    (e)  No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company,
      the performance by the Company of its obligations under the Notes and the
      consummation by the Company of the transactions contemplated hereby and thereby,
      and the issuance of the Securities as contemplated hereby, do not and will
      not
      (i) violate or conflict with any provision of the Company’s Certificate of
      Incorporation (the “Certificate”)
      or
      Bylaws (the “Bylaws”),
      each
      as amended to date, or any Subsidiary’s comparable charter documents, (ii)
      conflict with, or constitute a default (or an event which with notice or lapse
      of time or both would become a default) under, or give to others any rights
      of
      termination, amendment, acceleration or cancellation of, any agreement,
      mortgage, deed of trust, indenture, note, bond, license, lease agreement,
      instrument or obligation to which the Company or any of its Subsidiaries is
      a
      party or by which the Company or any of its Subsidiaries’ respective properties
      or assets are bound, or (iii) result in a violation of any federal, state,
      local
      or foreign statute, rule, regulation, order, judgment or decree (including
      federal and state securities laws and regulations) applicable to the Company
      or
      any of its Subsidiaries or by which any property or asset of the Company or
      any
      of its Subsidiaries are bound or affected, except, in all cases, for such
      conflicts, defaults, terminations, amendments, acceleration, cancellations
      and
      violations as would not, individually or in the aggregate, have a Material
      Adverse Effect (other than violations pursuant to clauses (i) or (iii) (with
      respect to federal and state securities laws)). Neither the Company nor any
      of
      its Subsidiaries is required under federal, state, foreign or local law, rule
      or
      regulation to obtain any consent, authorization or order of, or make any filing
      or registration with, any court or governmental agency in order for it to
      execute, deliver or perform any of its obligations under the Transaction
      Documents or issue and sell the Securities in accordance with the terms hereof
      (other than any filings, consents and approvals which may be required to be
      made
      by the Company under applicable state and federal securities laws, rules or
      regulations or any registration provisions provided in the Registration Rights
      Agreement).

     

    (f)  Commission
      Documents, Financial Statements.
      The
      Common Stock of the Company is registered pursuant to Section 12(b) or 12(g)
      of
      the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”),
      and
      the Company has timely filed all reports, schedules, forms, statements and
      other
      documents required to be filed by it with the Commission pursuant to the
      reporting requirements of the Exchange Act (all of the foregoing including
      filings incorporated by reference therein being referred to herein as the
“Commission
      Documents”).
      At
      the times of their respective filings, the Form 10-Q for the fiscal quarters
      ended March 31, 2007, (the “Form
      10-Q”)
      and
      the Form 10-K for the fiscal year ended December 31, 2006, (the “Form
      10-K”)
      complied in all material respects with the requirements of the Exchange Act
      and
      the rules and regulations of the Commission promulgated thereunder and other
      federal, state and local laws, rules and regulations applicable to such
      documents, and the Form 10-Q and Form 10-K did not contain any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary in order to make the statements therein, in light of the
      circumstances under which they were made, not misleading. As of their respective
      dates, the financial statements of the Company included in the Commission
      Documents complied as to form in all material respects with applicable
      accounting requirements and the published rules and regulations of the
      Commission or other applicable rules and regulations with respect thereto.
      Such
      financial statements have been prepared in accordance with generally accepted
      accounting principles (“GAAP”)
      applied on a consistent basis during the periods involved (except (i) as may
      be
      otherwise indicated in such financial statements or the Notes thereto or (ii)
      in
      the case of unaudited interim statements, to the extent they may not include
      footnotes or may be condensed or summary statements), and fairly present in
      all
      material respects the financial position of the Company and its Subsidiaries
      as
      of the dates thereof and the results of operations and cash flows for the
      periods then ended (subject, in the case of unaudited statements, to normal
      year-end audit adjustments).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (g)  Subsidiaries.
      Schedule
      2.1(g)
      hereto
      sets forth each Subsidiary of the Company, showing the jurisdiction of its
      incorporation or organization and showing the percentage of each person’s
      ownership of the outstanding stock or other interests of such Subsidiary. For
      the purposes of this Agreement, “Subsidiary”
shall
      mean any corporation or other entity of which at least a majority of the
      securities or other ownership interest having ordinary voting power (absolutely
      or contingently) for the election of directors or other persons performing
      similar functions are at the time owned directly or indirectly by the Company
      and/or any of its other Subsidiaries. All of the outstanding shares of capital
      stock of each Subsidiary have been duly authorized and validly issued, and
      are
      fully paid and non-assessable. There are no outstanding preemptive, conversion
      or other rights, options, warrants or agreements granted or issued by or binding
      upon any Subsidiary for the purchase or acquisition of any shares of capital
      stock of any Subsidiary or any other securities convertible into, exchangeable
      for or evidencing the rights to subscribe for any shares of such capital stock.
      Neither the Company nor any Subsidiary is subject to any obligation (contingent
      or otherwise) to repurchase or otherwise acquire or retire any shares of the
      capital stock of any Subsidiary or any convertible securities, rights, warrants
      or options of the type described in the preceding sentence except as set forth
      on Schedule
      2.1(g)
      hereto.
      Neither the Company nor any Subsidiary is party to, nor has any knowledge of,
      any agreement restricting the voting or transfer of any shares of the capital
      stock of any Subsidiary.

     

    (h)  No
      Material Adverse Change.
      Since
      March 31, 2007 the Company has not experienced or suffered any Material Adverse
      Effect, except as disclosed on Schedule
      2.1(h)
      hereto.

     

    (i)  No
      Undisclosed Liabilities.
      Except
      as disclosed on Schedule
      2.1(i)
      hereto,
      neither the Company nor any of its Subsidiaries has incurred any liabilities,
      obligations, claims or losses (whether liquidated or unliquidated, secured
      or
      unsecured, absolute, accrued, contingent or otherwise) other than those incurred
      in the ordinary course of the Company’s or its Subsidiaries respective
      businesses or which, individually or in the aggregate, are not reasonably likely
      to have a Material Adverse Effect.

     

    (j)  No
      Undisclosed Events or Circumstances.
      Since
      March 31, 2007, except as disclosed on Schedule
      2.1(j)
      hereto,
      no event or circumstance has occurred or exists with respect to the Company
      or
      its Subsidiaries or their respective businesses, properties, prospects,
      operations or financial condition, which, under applicable law, rule or
      regulation, requires public disclosure or announcement by the Company but which
      has not been so publicly announced or disclosed.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (k)  Indebtedness.
      Schedule
      2.1(k)
      hereto
      sets forth as of the date hereof all outstanding secured and unsecured
      Indebtedness of the Company or any Subsidiary, or for which the Company or
      any
      Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
shall mean (a) any liabilities for borrowed money or amounts owed in excess
      of
      $300,000 (other than trade accounts payable incurred in the ordinary course
      of
      business), (b) all guaranties, endorsements and other contingent obligations
      in
      respect of Indebtedness of others, whether or not the same are or should be
      reflected in the Company’s balance sheet (or the notes thereto), except
      guaranties by endorsement of negotiable instruments for deposit or collection
      or
      similar transactions in the ordinary course of business; and (c) the present
      value of any lease payments in excess of $25,000 due under leases required
      to be
      capitalized in accordance with GAAP. Neither the Company nor any Subsidiary
      is
      in default with respect to any Indebtedness.

     

    (l)  Title
      to Assets.
      Each of
      the Company and the Subsidiaries has good and valid title to all of its real
      and
      personal property reflected in the Commission Documents, free and clear of
      any
      mortgages, pledges, charges, liens, security interests or other encumbrances,
      except for those indicated on Schedule
      2.1(l)
      hereto
      or such that, individually or in the aggregate, do not cause a Material Adverse
      Effect. All said leases of the Company and each of its Subsidiaries are valid
      and subsisting and in full force and effect.

     

    (m)  Actions
      Pending.
      There
      is no action, suit, claim, investigation, arbitration, alternate dispute
      resolution proceeding or other proceeding pending or, to the knowledge of the
      Company, threatened against the Company or any Subsidiary which questions the
      validity of this Agreement or any of the other Transaction Documents or any
      of
      the transactions contemplated hereby or thereby or any action taken or to be
      taken pursuant hereto or thereto. Except as set forth on Schedule
      2.1(m)
      hereto,
      there is no action, suit, claim, investigation, arbitration, alternate dispute
      resolution proceeding or other proceeding pending or, to the knowledge of the
      Company, threatened against or involving the Company, any Subsidiary or any
      of
      their respective properties or assets, which individually or in the aggregate,
      would reasonably be expected, if adversely determined, to have a Material
      Adverse Effect. There are no outstanding orders, judgments, injunctions, awards
      or decrees of any court, arbitrator or governmental or regulatory body against
      the Company or any Subsidiary or any officers or directors of the Company or
      Subsidiary in their capacities as such, which individually or in the aggregate,
      could reasonably be expected to have a Material Adverse Effect.

     

    (n)  Compliance
      with Law.
      The
      business of the Company and the Subsidiaries has been and is presently being
      conducted in accordance with all applicable federal, state and local
      governmental laws, rules, regulations and ordinances, except as set forth in
      the
      Commission Documents or on Schedule
      2.1(n)
      hereto
      or such that, individually or in the aggregate, the noncompliance therewith
      could not reasonably be expected to have a Material Adverse Effect. The Company
      and each of its Subsidiaries have all franchises, permits, licenses, consents
      and other governmental or regulatory authorizations and approvals necessary
      for
      the conduct of its business as now being conducted by it unless the failure
      to
      possess such franchises, permits, licenses, consents and other governmental
      or
      regulatory authorizations and approvals, individually or in the aggregate,
      could
      not reasonably be expected to have a Material Adverse Effect.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (o)  Taxes.
      The
      Company and each of the Subsidiaries has accurately prepared and filed all
      federal, state and other tax returns required by law to be filed by it, has
      paid
      or made provisions for the payment of all taxes shown to be due and all
      additional assessments, and adequate provisions have been and are reflected
      in
      the financial statements of the Company and the Subsidiaries for all current
      taxes and other charges to which the Company or any Subsidiary is subject and
      which are not currently due and payable. Except as disclosed on Schedule
      2.1(o)
      hereto,
      none of the federal income tax returns of the Company or any Subsidiary have
      been audited by the Internal Revenue Service. The Company has no knowledge
      of
      any additional assessments, adjustments or contingent tax liability (whether
      federal or state) of any nature whatsoever, whether pending or threatened
      against the Company or any Subsidiary for any period, nor of any basis for
      any
      such assessment, adjustment or contingency.

     

    (p)  Certain
      Fees.
      Except
      as set forth on Schedule
      2.1(p)
      hereto,
      the Company has not employed any broker or finder or incurred any liability
      for
      any brokerage or investment banking fees, commissions, finders’ structuring
      fees, financial advisory fees or other similar fees in connection with the
      Transaction Documents.

     

    (q)  Disclosure.
      To the
      best of the Company’s knowledge, neither this Agreement or the Schedules hereto
      nor any other documents, certificates or instruments furnished to the Purchasers
      by or on behalf of the Company or any Subsidiary in connection with the
      transactions contemplated by this Agreement contain any untrue statement of
      a
      material fact or omit to state a material fact necessary in order to make the
      statements made herein or therein, in the light of the circumstances under
      which
      they were made herein or therein, not misleading.

     

    (r)  Operation
      of Business.
      Except
      as set forth on Schedule
      2.1(r)
      hereto,
      the Company and each of the Subsidiaries owns or possesses the rights to all
      patents, trademarks, domain names (whether or not registered) and any patentable
      improvements or copyrightable derivative works thereof, websites and
      intellectual property rights relating thereto, service marks, trade names,
      copyrights, licenses and authorizations which are necessary for the conduct
      of
      its business as now conducted without any conflict with the rights of
      others.

     

    (s)  Environmental
      Compliance.
      The
      Company and each of its Subsidiaries have obtained all material approvals,
      authorization, certificates, consents, licenses, orders and permits or other
      similar authorizations of all governmental authorities, or from any other
      person, that are required under any Environmental Laws. “Environmental Laws”
shall mean all applicable laws relating to the protection of the environment
      including, without limitation, all requirements pertaining to reporting,
      licensing, permitting, controlling, investigating or remediating emissions,
      discharges, releases or threatened releases of hazardous substances, chemical
      substances, pollutants, contaminants or toxic substances, materials or wastes,
      whether solid, liquid or gaseous in nature, into the air, surface water,
      groundwater or land, or relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of hazardous
      substances, chemical substances, pollutants, contaminants or toxic substances,
      material or wastes, whether solid, liquid or gaseous in nature. To the best
      of
      the Company’s knowledge, the Company has all necessary governmental approvals
      required under all Environmental Laws as necessary for the Company’s business or
      the business of any of its subsidiaries. To the best of the Company’s knowledge,
      the Company and each of its subsidiaries are also in compliance with all other
      limitations, restrictions, conditions, standards, requirements, schedules and
      timetables required or imposed under all Environmental Laws. Except for such
      instances as would not individually or in the aggregate have a Material Adverse
      Effect, there are no past or present events, conditions, circumstances,
      incidents, actions or omissions relating to or in any way affecting the Company
      or its subsidiaries that violate or may violate any Environmental Law after
      the
      Closing Date or that may give rise to any environmental liability, or otherwise
      form the basis of any claim, action, demand, suit, proceeding, hearing, study
      or
      investigation (i) under any Environmental Law, or (ii) based on or related
      to
      the manufacture, processing, distribution, use, treatment, storage (including
      without limitation underground storage tanks), disposal, transport or handling,
      or the emission, discharge, release or threatened release of any hazardous
      substance.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (t)  Books
      and Records; Internal Accounting Controls.
      The
      records and documents of the Company and its Subsidiaries accurately reflect
      in
      all material respects the information relating to the business of the Company
      and the Subsidiaries, the location and collection of their assets, and the
      nature of all transactions giving rise to the obligations or accounts receivable
      of the Company or any Subsidiary. The Company and each of its Subsidiaries
      maintain a system of internal accounting controls sufficient, in the judgment
      of
      the Company’s board of directors, to provide reasonable assurance that (i)
      transactions are executed in accordance with management’s general or specific
      authorizations, (ii) transactions are recorded as necessary to permit
      preparation of financial statements in conformity with generally accepted
      accounting principles and to maintain asset accountability, (iii) access to
      assets is permitted only in accordance with management’s general or specific
      authorization and (iv) the recorded accountability for assets is compared with
      the existing assets at reasonable intervals and appropriate actions are taken
      with respect to any differences.

     

    (u)  Material
      Agreements.
      Except
      for the Transaction Documents (with respect to clause (i) only), as disclosed
      in
      the Commission Documents or as set forth on Schedule
      2.1(u)
      hereto,
      or as would not be reasonably likely to have a Material Adverse Effect, (i)
      the
      Company and each of its Subsidiaries have performed all obligations required
      to
      be performed by them to date under any written or oral contract, instrument,
      agreement, commitment, obligation, plan or arrangement, filed or required to
      be
      filed with the Commission (the “Material
      Agreements”),
      (ii)
      neither the Company nor any of its Subsidiaries has received any notice of
      default under any Material Agreement and, (iii) to the best of the Company’s
      knowledge, neither the Company nor any of its Subsidiaries is in default under
      any Material Agreement now in effect.

     

    (v)  Transactions
      with Affiliates.
      Except
      as set forth on Schedule
      2.1(v)
      hereto
      and in the Commission Documents, there are no loans, leases, agreements,
      contracts, royalty agreements, management contracts or arrangements or other
      continuing transactions between (a) the Company, any Subsidiary or any of their
      respective customers or suppliers on the one hand, and (b) on the other hand,
      any officer, employee, consultant or director of the Company, or any of its
      Subsidiaries, or any person owning at least 5% of the outstanding capital stock
      of the Company or any Subsidiary or any member of the immediate family of such
      officer, employee, consultant, director or stockholder or any corporation or
      other entity controlled by such officer, employee, consultant, director or
      stockholder, or a member of the immediate family of such officer, employee,
      consultant, director or stockholder which, in each case, is required to be
      disclosed in the Commission Documents or in the Company’s most recently filed
      definitive proxy statement on Schedule 14A, that is not so disclosed in the
      Commission Documents or in such proxy statement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (w)  Securities
      Act of 1933.
      Based
      in material part upon the representations herein of the Purchasers, the Company
      has complied and will comply with all applicable federal and state securities
      laws in connection with the offer, issuance and sale of the Securities
      hereunder. Neither the Company nor anyone acting on its behalf, directly or
      indirectly, has or will sell, offer to sell or solicit offers to buy any of
      the
      Securities or similar securities to, or solicit offers with respect thereto
      from, or enter into any negotiations relating thereto with, any person, or
      has
      taken or will take any action so as to bring the issuance and sale of any of
      the
      Securities under the registration provisions of the Securities Act and
      applicable state securities laws, and neither the Company nor any of its
      affiliates, nor any person acting on its or their behalf, has engaged in any
      form of general solicitation or general advertising (within the meaning of
      Regulation D under the Securities Act) in connection with the offer or sale
      of
      any of the Securities.

     

    (x)  Employees.
      Neither
      the Company nor any Subsidiary has any collective bargaining arrangements or
      agreements covering any of its employees, except as set forth on Schedule
      2.1(x)
      hereto.
      Except as set forth on Schedule
      2.1(x)
      hereto,
      neither the Company nor any Subsidiary has any employment contract, agreement
      regarding proprietary information, non-competition agreement, non-solicitation
      agreement, confidentiality agreement, or any other similar contract or
      restrictive covenant, relating to the right of any officer, employee or
      consultant to be employed or engaged by the Company or such Subsidiary required
      to be disclosed in the Commission Documents that is not so disclosed. No
      officer, consultant or key employee of the Company or any Subsidiary whose
      termination, either individually or in the aggregate, would be reasonably likely
      to have a Material Adverse Effect, has terminated or, to the knowledge of the
      Company, has any present intention of terminating his or her employment or
      engagement with the Company or any Subsidiary.

     

    (y)  Absence
      of Certain Developments.
      Except
      as provided on Schedule
      2.1(y)
      hereto,
      since March 31, 2007, neither the Company nor any Subsidiary has:

     

    (i)  issued
      any stock, bonds or other corporate securities or any right, options or warrants
      with respect thereto;

     

    (ii)  borrowed
      any amount in excess of $300,000 or incurred or become subject to any other
      liabilities in excess of $100,000 (absolute or contingent) except current
      liabilities incurred in the ordinary course of business which are comparable
      in
      nature and amount to the current liabilities incurred in the ordinary course
      of
      business during the comparable portion of its prior fiscal year, as adjusted
      to
      reflect the current nature and volume of the business of the Company and its
      Subsidiaries;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (iii)  discharged
      or satisfied any lien or encumbrance in excess of $250,000 or paid any
      obligation or liability (absolute or contingent) in excess of $250,000, other
      than current liabilities paid in the ordinary course of business;

     

    (iv)  declared
      or made any payment or distribution of cash or other property to stockholders
      with respect to its stock, or purchased or redeemed, or made any agreements
      so
      to purchase or redeem, any shares of its capital stock, in each case in excess
      of $50,000 individually or $100,000 in the aggregate;

     

    (v)  sold,
      assigned or transferred any other tangible assets, or canceled any debts or
      claims, in each case in excess of $250,000, except in the ordinary course of
      business;

     

    (vi)  sold,
      assigned or transferred any patent rights, trademarks, trade names, copyrights,
      trade secrets or other intangible assets or intellectual property rights in
      excess of $250,000, or disclosed any proprietary confidential information to
      any
      person except to customers in the ordinary course of business or to the
      Purchasers or their representatives;

     

    (vii)  suffered
      any material losses or waived any rights of material value, whether or not
      in
      the ordinary course of business, or suffered the loss of any material amount
      of
      prospective business;

     

    (viii)  made
      any
      changes in employee compensation except in the ordinary course of business
      and
      consistent with past practices;

     

    (ix)  made
      capital expenditures or commitments therefor that aggregate in excess of
      $500,000;

     

    (x)  entered
      into any material transaction, whether or not in the ordinary course of
      business;

     

    (xi)  made
      charitable contributions or pledges in excess of $25,000;

     

    (xii)  suffered
      any material damage, destruction or casualty loss, whether or not covered by
      insurance;

     

    (xiii)  experienced
      any material problems with labor or management in connection with the terms
      and
      conditions of their employment; or

     

    (xiv)  entered
      into an agreement, written or otherwise, to take any of the foregoing
      actions.

     

    (z)  Public
      Utility Holding Company Act and Investment Company Act Status.
      The
      Company is not a “holding company” or a “public utility company” as such terms
      are defined in the Public Utility Holding Company Act of 1935, as amended.
      The
      Company is not, and as a result of and immediately upon the Closing will not
      be,
      an “investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as
      amended.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (aa)  ERISA.
      No
      liability to the Pension Benefit Guaranty Corporation has been incurred with
      respect to any Plan by the Company or any of its Subsidiaries which is or would
      be materially adverse to the Company and its Subsidiaries. The execution and
      delivery of this Agreement and the issuance and sale of the Securities will
      not
      involve any transaction which is subject to the prohibitions of Section 406
      of
      the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or in
      connection with which a tax could be imposed pursuant to Section 4975 of the
      Internal Revenue Code of 1986, as amended, provided that, if any of the
      Purchasers, or any person or entity that owns a beneficial interest in any
      of
      the Purchasers, is an “employee pension benefit plan” (within the meaning of
      Section 3(2) of ERISA) with respect to which the Company is a “party in
      interest” (within the meaning of Section 3(14) of ERISA), the requirements of
      Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met. As used in
      this
      Section 2.1(aa), the term “Plan” shall mean an “employee pension benefit plan”
(as defined in Section 3 of ERISA) which is or has been established or
      maintained, or to which contributions are or have been made, by the Company
      or
      any Subsidiary or by any trade or business, whether or not incorporated, which,
      together with the Company or any Subsidiary, is under common control, as
      described in Section 414(b) or (c) of the Code.

     

    (bb)  Independent
      Nature of Purchasers.
      The
      Company acknowledges that the obligations of each Purchaser under the
      Transaction Documents are several and not joint with the obligations of any
      other Purchaser, and no Purchaser shall be responsible in any way for the
      performance of the obligations of any other Purchaser under the Transaction
      Documents. The Company acknowledges that the decision of each Purchaser to
      purchase Securities pursuant to this Agreement has been made by such Purchaser
      independently of any other purchase and independently of any information,
      materials, statements or opinions as to the business, affairs, operations,
      assets, properties, liabilities, results of operations, condition (financial
      or
      otherwise) or prospects of the Company or of its Subsidiaries which may have
      made or given by any other Purchaser or by any agent or employee of any other
      Purchaser, and no Purchaser or any of its agents or employees shall have any
      liability to any Purchaser (or any other person) relating to or arising from
      any
      such information, materials, statements or opinions. The Company acknowledges
      that nothing contained herein, or in any Transaction Document, and no action
      taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute
      the Purchasers as a partnership, an association, a joint venture or any other
      kind of entity, or create a presumption that the Purchasers are in any way
      acting in concert or as a group with respect to such obligations or the
      transactions contemplated by the Transaction Documents. The Company acknowledges
      that it has elected to provide all Purchasers with the same terms and
      Transaction Documents for the convenience of the Company and not because it
      was
      required or requested to do so by the Purchasers. The Company acknowledges
      that
      such procedure with respect to the Transaction Documents in no way creates
      a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to the Transaction Documents or the transactions contemplated
      hereby or thereby.

     

    (cc)  No
      Integrated Offering.
      Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offering of the Securities pursuant to this Agreement to be integrated
      with
      prior offerings by the Company for purposes of the Securities Act which would
      prevent the Company from selling the Securities pursuant to Regulation D and
      Rule 506 thereof under the Securities Act, or any applicable exchange-related
      stockholder approval provisions, nor will the Company or any of its affiliates
      or subsidiaries take any action or steps that would cause the offering of the
      Securities to be integrated with other offerings. Except as set forth on
Schedule
      2.1(cc),
      the
      Company does not have any registration statement pending before the Commission
      or currently under the Commission’s review and, except as set forth in the
      Commission Documents and on Schedule
      2.1(cc),
      the
      Company has not offered or sold any of its equity securities or debt securities
      convertible into shares of Common Stock.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (dd)  Sarbanes-Oxley
      Act

     

    .
      The
      Company is in substantial compliance with the applicable provisions of the
      Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
      Act”),
      and
      the rules and regulations promulgated thereunder, that are effective and intends
      to comply substantially with other applicable provisions of the Sarbanes-Oxley
      Act, and the rules and regulations promulgated thereunder, upon the
      effectiveness of such provisions.

     

    Section
      2.2  Representations
      and Warranties of the Purchasers

     

    .
      Each of
      the Purchasers hereby represents and warrants to the Company with respect solely
      to itself and not with respect to any other Purchaser as follows as of the
      date
      hereof and as of the Closing Date:

     

    (a)  Organization
      and Standing of the Purchasers.
      If the
      Purchaser is an entity, such Purchaser is a corporation, limited liability
      company or partnership duly incorporated or organized, validly existing and
      in
      good standing under the laws of the jurisdiction of its incorporation or
      organization.

     

    (b)  Authorization
      and Power.
      Each
      Purchaser has the requisite power and authority to enter into and perform the
      Transaction Documents and to purchase the Securities being sold to it hereunder.
      The execution, delivery and performance of the Transaction Documents by each
      Purchaser and the consummation by it of the transactions contemplated hereby
      have been duly authorized by all necessary corporate or partnership action,
      and
      no further consent or authorization of such Purchaser or its Board of Directors,
      stockholders, or partners, as the case may be, is required. When executed and
      delivered by the Purchasers and the Company, the other Transaction Documents
      shall constitute valid and binding obligations of each Purchaser enforceable
      against such Purchaser in accordance with their terms, except as such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation, conservatorship, receivership or
      similar laws relating to, or affecting generally the enforcement of, creditor’s
      rights and remedies or by other equitable principles of general
      application.

     

    (c)  No
      Conflict.
      The
      execution, delivery and performance of the Transaction Documents by the
      Purchaser and the consummation by the Purchaser of the transactions contemplated
      thereby and hereby do not and will not (i) violate any provision of the
      Purchaser’s charter or organizational documents, (ii) conflict with, or
      constitute a default (or an event which with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any agreement, mortgage, deed of
      trust, indenture, note, bond, license, lease agreement, instrument or obligation
      to which the Purchaser is a party or by which the Purchaser’s respective
      properties or assets are bound, or (iii) result in a violation of any federal,
      state, local or foreign statute, rule, regulation, order, judgment or decree
      (including federal and state securities laws and regulations) applicable to
      the
      Purchaser or by which any property or asset of the Purchaser are bound or
      affected, except, in all cases, other than violations pursuant to clauses (i)
      or
      (iii) (with respect to federal and state securities laws) above, except, for
      such conflicts, defaults, terminations, amendments, acceleration, cancellations
      and violations as would not, individually or in the aggregate, materially and
      adversely affect the Purchaser’s ability to perform its obligations under the
      Transaction Documents.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (d)  Acquisition
      for Investment.
      Each
      Purchaser is purchasing the Securities solely for its own account for the
      purpose of investment and not with a view to or for sale in connection with
      distribution. Each Purchaser does not have a present intention to sell any
      of
      the Securities, nor a present arrangement (whether or not legally binding)
      or
      intention to effect any distribution of any of the Securities to or through
      any
      person or entity; provided,
      however,
      that by
      making the representations herein, such Purchaser does not agree to hold the
      Securities for any minimum or other specific term and reserves the right to
      dispose of the Securities at any time in accordance with Federal and state
      securities laws applicable to such disposition. Each Purchaser acknowledges
      that
      it (i) has such knowledge and experience in financial and business matters
      such
      that Purchaser is capable of evaluating the merits and risks of Purchaser’s
      investment in the Company, (ii) is able to bear the financial risks associated
      with an investment in the Securities and (iii) has been given full access to
      such records of the Company and the Subsidiaries and to the officers of the
      Company and the Subsidiaries as it has deemed necessary or appropriate to
      conduct its due diligence investigation.

     

    (e)  Rule
      144.
      Each
      Purchaser understands that the Securities must be held indefinitely unless
      such
      Securities are registered under the Securities Act or an exemption from
      registration is available. Each Purchaser acknowledges that such person is
      familiar with Rule 144 of the rules and regulations of the Commission, as
      amended, promulgated pursuant to the Securities Act (“Rule
      144”),
      and
      that such Purchaser has been advised that Rule144 permits resales only under
      certain circumstances. Each Purchaser understands that to the extent that Rule
      144 is not available, such Purchaser will be unable to sell any Securities
      without either registration under the Securities Act or the existence of another
      exemption from such registration requirement.

     

    (f)  General.
      Each
      Purchaser understands that the Securities are being offered and sold in reliance
      on a transactional exemption from the registration requirements of federal
      and
      state securities laws and the Company is relying upon the truth and accuracy
      of
      the representations, warranties, agreements, acknowledgments and understandings
      of such Purchaser set forth herein in order to determine the applicability
      of
      such exemptions and the suitability of such Purchaser to acquire the Securities.
      Each Purchaser understands that no United States federal or state agency or
      any
      government or governmental agency has passed upon or made any recommendation
      or
      endorsement of the Securities. None of the Purchasers has engaged in any short
      sale of the Company’s Common Stock prior to the consummation of the transaction
      contemplated by this Agreement.

     

    (g)  No
      General Solicitation.
      Each
      Purchaser acknowledges that the Securities were not offered to such Purchaser
      by
      means of any form of general or public solicitation or general advertising,
      or
      publicly disseminated advertisements or sales literature, including (i) any
      advertisement, article, notice or other communication published in any
      newspaper, magazine, or similar media, or broadcast over television or radio,
      or
      (ii) any seminar or meeting to which such Purchaser was invited by any of the
      foregoing means of communications. Each Purchaser, in making the decision to
      purchase the Securities, has relied upon independent investigation made by
      it
      and has not relied on any information or representations made by third
      parties.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (h)  Accredited
      Investor.
      Each
      Purchaser is an “accredited investor” (as defined in Rule 501 of Regulation D),
      and such Purchaser has such experience in business and financial matters that
      it
      is capable of evaluating the merits and risks of an investment in the
      Securities. Such Purchaser is not required to be registered as a broker-dealer
      under Section 15 of the Exchange Act and such Purchaser is not a broker-dealer.
      Each Purchaser acknowledges that an investment in the Securities is speculative
      and involves a high degree of risk.

     

    (i)  Certain
      Fees.
      The
      Purchasers have not employed any broker or finder or incurred any liability
      for
      any brokerage or investment banking fees, commissions, finders’ structuring
      fees, financial advisory fees or other similar fees in connection with the
      Transaction Documents.

     

    (j)  Independent
      Investment.
      No
      Purchaser has agreed to act with any other Purchaser for the purpose of
      acquiring, holding, voting or disposing of the Securities purchased hereunder
      for purposes of Section 13(d) under the Exchange Act, and each Purchaser is
      acting independently with respect to its investment in the
      Securities.

     

    ARTICLE
      III 

     

    COVENANTS

     

    The
      Company covenants with each Purchaser as follows, which covenants are for the
      benefit of each Purchaser and their respective permitted assignees.

     

    Section
      3.1  Securities
      Compliance

     

    .
      The
      Company shall notify the Commission in accordance with its rules and
      regulations, of the transactions contemplated by any of the Transaction
      Documents and shall take all other necessary action and proceedings as may
      be
      required and permitted by applicable law, rule and regulation, for the legal
      and
      valid issuance of the Securities to the Purchasers, or their respective
      subsequent holders.

     

    Section
      3.2  Registration
      and Listing

     

    .
      The
      Company shall use its reasonable best efforts to cause its Common Stock to
      continue to be registered under Sections 12(b) or 12(g) of the Exchange Act,
      to
      comply in all respects with its reporting and filing obligations under the
      Exchange Act, to comply with all requirements related to any registration
      statement filed pursuant to this Agreement, and to not take any action or file
      any document (whether or not permitted by the Securities Act or the rules
      promulgated thereunder) to terminate or suspend such registration or to
      terminate or suspend its reporting and filing obligations under the Exchange
      Act
      or Securities Act, except as permitted herein. The Company shall use its
      reasonable best efforts to continue the listing or trading of its Common Stock
      on the OTC Bulletin Board or any successor market.

     

    Section
      3.3  Compliance
      with Laws

     

    .
      The
      Company shall comply, and cause each Subsidiary to comply, with all applicable
      laws, rules, regulations and orders, noncompliance with which would be
      reasonably likely to have a Material Adverse Effect.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    Section
      3.4  Keeping
      of Records and Books of Account

     

    .
      The
      Company shall keep and cause each Subsidiary to keep adequate records and books
      of account, in which complete entries will be made in accordance with GAAP
      consistently applied, reflecting all financial transactions of the Company
      and
      its Subsidiaries, and in which, for each fiscal year, all proper reserves for
      depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
      purposes in connection with its business shall be made.

     

    Section
      3.5  Reporting
      Requirements

     

    .
      If the
      Company ceases to file its periodic reports with the Commission, or if the
      Commission ceases making these periodic reports available via the Internet
      without charge, then the Company shall furnish the following to each Purchaser
      so long as such Purchaser shall be obligated hereunder to purchase the
      Securities or shall beneficially own Warrant Shares:

     

    (a)  Quarterly
      Reports filed with the Commission on Form 10-Q as soon as available, and in
      any
      event within forty-five (45) days after the end of each of the first three
      fiscal quarters of the Company;

     

    (b)  Annual
      Reports filed with the Commission on Form 10-K as soon as available, and in
      any
      event within ninety (90) days after the end of each fiscal year of the Company;
      and

     

    (c)  Copies
      of
      all notices, information and proxy statements in connection with any meetings,
      that are, in each case, provided to holders of shares of Common Stock,
      contemporaneously with the delivery of such notices or information to such
      holders of Common Stock.

     

    Section
      3.6  Other
      Agreements

     

    .
      The
      Company shall not enter into any agreement in which the terms of such agreement
      would restrict or impair the right or ability to perform of the Company or
      any
      Subsidiary under any Transaction Document.

     

    Section
      3.7  Use
      of
      Proceeds

     

    .
      The
      proceeds from the sale of the Securities will be used by the Company for working
      capital and general corporate purposes.

     

    Section
      3.8  Reporting
      Status

     

    .
      So
      long
      as a Purchaser beneficially owns any of the Securities, the Company shall timely
      file all reports required to be filed with the Commission pursuant to the
      Exchange Act, and the Company shall not terminate its status as an issuer
      required to file reports under the Exchange Act even if the Exchange Act or
      the
      rules and regulations thereunder would permit such termination.

     

    Section
      3.9  Disclosure
      of Transaction

     

    .
      The
      Company shall issue a press release describing the material terms of the
      transactions contemplated hereby (the “Press Release”) on the day of the
      Closing; provided, however, that if Closing occurs after 4:00 P.M. Eastern
      Time
      on any Trading Day but in no event later than one hour after the Closing, the
      Company shall issue the Press Release no later than 9:00 A.M. Eastern Time
      on
      the first Trading Day following the Closing Date. The Company shall also file
      with the Commission a Current Report on Form 8-K (the “Form 8-K”) describing the
      material terms of the transactions contemplated hereby (and attaching as
      exhibits thereto this Agreement, the Note, the Registration Rights Agreement
      and
      the form of Warrant) as soon as practicable following the date of execution
      of
      this Agreement but in no event more than two (2) Trading Days following the
      date
      of execution of this Agreement. “Trading Day” means any day during which the
      principal exchange on which the Common Stock is traded shall be open for
      trading.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    Section
      3.10  Disclosure
      of Material Information

     

    .
      The
      Company covenants and agrees that neither it nor any other person acting on
      its
      behalf has provided or will provide any Purchaser or its agents or counsel
      with
      any information that the Company believes constitutes material non-public
      information, unless prior thereto such Purchaser shall have executed a written
      agreement regarding the confidentiality and use of such information.  The
      Company understands and confirms that each Purchaser shall be relying on the
      foregoing representations in effecting transactions in securities of the
      Company.

     

    Section
      3.11  Amendments

     

    .
      The
      Company shall not amend or waive any provision of the Certificate or Bylaws
      of
      the Company in any way that would adversely affect exercise rights, voting
      rights, conversion rights, prepayment rights or redemption rights of the holder
      of the Notes.

     

    Section
      3.12  Reservation
      of Shares

     

    .
      So long
      as any of the Notes or Warrants remain outstanding, the Company shall take
      all
      action necessary to seek authorization at the next scheduled annual meeting
      of
      its shareholders to increase the aggregate number of shares of Common Stock
      needed to provide for the issuance of the Warrant Shares.

     

    Section
      3.13  Disposition
      of Assets

     

    .
      So long
      as the Notes remain outstanding, neither the Company nor any subsidiary shall
      sell, transfer or otherwise dispose of any of its properties, assets and rights
      including, without limitation, its software and intellectual property, to any
      person except for sales to customers in the ordinary course of business or
      with
      the prior written consent of the holders of a majority of the Notes then
      outstanding.

     

    Section
      3.14  Non-Shorting

     

    .
      So long
      as the Notes or Warrants remain outstanding, each Purchaser covenants and agrees
      that it will not engage in any short sales of the Company’s Common
      Stock.

     

    ARTICLE
      IV 

     

    CONDITIONS

     

    Section
      4.1  Conditions
      Precedent to the Obligation of the Company to Close and to Sell the
      Securities

     

    .
      The
      obligation hereunder of the Company to close and issue and sell the Securities
      to the Purchasers at the Closing is subject to the satisfaction or waiver,
      at or
      before the Closing of the conditions set forth below. These conditions are
      for
      the Company’s sole benefit and may be waived by the Company at any time in its
      sole discretion.

     

    (a)  Accuracy
      of the Purchasers’ Representations and Warranties.
      The
      representations and warranties of each Purchaser shall be true and correct
      in
      all material respects as of the date when made and as of the Closing Date as
      though made at that time, except for representations and warranties that are
      expressly made as of a particular date, which shall be true and correct in
      all
      material respects as of such date.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (b)  Performance
      by the Purchasers.
      Each
      Purchaser shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Purchasers at or prior to the
      Closing Date.

     

    (c)  No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    (d)  Delivery
      of Transaction Documents.
      The
      Transaction Documents shall have been duly executed and delivered by the
      Purchasers to the Company.

     

    Section
      4.2  Conditions
      Precedent to the Obligation of the Purchasers to Close and to Purchase the
      Securities

     

    .
      The
      obligation hereunder of the Purchasers to purchase the Securities and consummate
      the transactions contemplated by this Agreement is subject to the satisfaction
      or waiver, at or before the Closing, of each of the conditions set forth below.
      These conditions are for the Purchasers’ sole benefit and may be waived by the
      Purchasers at any time in their sole discretion.

     

    (a)  Accuracy
      of the Company’s Representations and Warranties.
      Each of
      the representations and warranties of the Company in this Agreement and the
      Registration Rights Agreement shall be true and correct in all material respects
      as of the Closing Date, except for representations and warranties that speak
      as
      of a particular date, which shall be true and correct in all material respects
      as of such date.

     

    (b)  Performance
      by the Company.
      The
      Company shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Company at or prior to the Closing
      Date.

     

    (c)  No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    (d)  No
      Proceedings or Litigation.
      No
      action, suit or proceeding before any arbitrator or any governmental authority
      shall have been commenced, and no investigation by any governmental authority
      shall have been threatened, against the Company or any Subsidiary, or any of
      the
      officers, directors or affiliates of the Company or any Subsidiary seeking
      to
      restrain, prevent or change the transactions contemplated by this Agreement,
      or
      seeking damages in connection with such transactions.

     

    (e)  Secretary’s
      Certificate.
      The
      Company shall have delivered to the Purchasers a secretary’s certificate, dated
      as of the Closing Date, as to (i) the resolutions adopted by the Board of
      Directors approving the transactions contemplated hereby, (ii) the Certificate,
      (iii) the Bylaws, each as in effect at the Closing, and (iv) the authority
      and
      incumbency of the officers of the Company executing the Transaction Documents
      and any other documents required to be executed or delivered in connection
      therewith.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (f)  Officer’s
      Certificate.
      On the
      Closing Date, the Company shall have delivered to the Purchasers a certificate
      signed by an executive officer on behalf of the Company, dated as of the Closing
      Date, confirming the accuracy of the Company’s representations, warranties and
      covenants as of the Closing Date and confirming the compliance by the Company
      with the conditions precedent set forth in paragraphs (b)-(d) of this Section
      4.2 as of the Closing Date (provided that, with respect to the matters in
      paragraph (d) of this Section 4.2, such confirmation shall be based on the
      knowledge of the executive officer after due inquiry).

     

    (g)  Registration
      Rights Agreement.
      As of
      the Closing Date, the parties shall have entered into the Registration Rights
      Agreement.

     

    (h)  Material
      Adverse Effect.
      No
      Material Adverse Effect shall have occurred at or before the Closing
      Date.

     

    ARTICLE
      V 

     

    CERTIFICATE
      LEGEND

     

    Section
      5.1  Legend

     

    .
      Each
      certificate representing the Securities shall be stamped or otherwise imprinted
      with a legend substantially in the following form (in addition to any legend
      required by applicable state securities or “blue sky” laws):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
      OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR COMMUNICATION INTELLIGENCE CORPORATION SHALL HAVE
      RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
      SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
      IS
      NOT REQUIRED.

     

    The
      Company agrees to reissue certificates representing any of the Warrant Shares,
      without the legend set forth above if at such time, prior to making any transfer
      of any such Warrant Shares, such holder thereof shall give written notice to
      the
      Company describing the manner and terms of such transfer and removal as the
      Company may reasonably request. Such proposed transfer and removal will not
      be
      effected until: (a) either (i) the Company has received an opinion of counsel
      reasonably satisfactory to the Company, to the effect that the registration
      of
      the Warrant Shares under the Securities Act is not required in connection with
      such proposed transfer, (ii) a registration statement under the Securities
      Act
      covering such proposed disposition has been filed by the Company with the
      Commission and has become effective under the Securities Act, (iii) the Company
      has received other evidence reasonably satisfactory to the Company that such
      registration and qualification under the Securities Act and state securities
      laws are not required, or (iv) the holder provides the Company with reasonable
      assurances that such security can be sold pursuant to Rule 144 under the
      Securities Act; and (b) either (i) the Company has received an opinion of
      counsel reasonably satisfactory to the Company, to the effect that registration
      or qualification under the securities or “blue sky” laws of any state is not
      required in connection with such proposed disposition, (ii) compliance with
      applicable state securities or “blue sky” laws has been effected, or (iii) the
      holder provides the Company with reasonable assurances that a valid exemption
      exists with respect thereto. The Company will respond to any such notice from
      a
      holder within five (5) business days. In the case of any proposed transfer
      under
      this Section 5.1, the Company will use reasonable efforts to comply with any
      such applicable state securities or “blue sky” laws, but shall in no event be
      required, (x) to qualify to do business in any state where it is not then
      qualified, (y) to take any action that would subject it to tax or to the general
      service of process in any state where it is not then subject, or (z) to comply
      with state securities or “blue sky” laws of any state for which registration by
      coordination is unavailable to the Company. The restrictions on transfer
      contained in this Section 5.1 shall be in addition to, and not by way of
      limitation of, any other restrictions on transfer contained in any other section
      of this Agreement. Whenever
      a
      certificate representing the Warrant Shares is required to be issued to a
      Purchaser without a legend, in lieu of delivering physical certificates
      representing the Warrant Shares, provided the Company’s transfer agent is
      participating in the Depository Trust Company (“DTC”)
      Fast
      Automated Securities Transfer program, the Company shall use its reasonable
      best
      efforts to cause its transfer agent to electronically transmit the Warrant
      Shares to a Purchaser by crediting the account of such Purchaser’s Prime Broker
      with DTC through its Deposit Withdrawal Agent Commission (“DWAC”)
      system
      (to the extent not inconsistent with any provisions of this
      Agreement).

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    ARTICLE
      VI 

     

    INDEMNIFICATION

     

    Section
      6.1  General
      Indemnity

     

    .
      The
      Company agrees to indemnify and hold harmless the Purchasers (and their
      respective directors, officers, affiliates, agents, successors and assigns)
      from
      and against any and all losses, liabilities, deficiencies, costs, damages and
      expenses (including, without limitation, reasonable attorneys’ fees, charges and
      disbursements) incurred by the Purchasers as a result of any inaccuracy in
      or
      breach of the representations, warranties or covenants made by the Company
      herein. Each Purchaser severally but not jointly agrees to indemnify and hold
      harmless the Company and its directors, officers, affiliates, agents, successors
      and assigns from and against any and all losses, liabilities, deficiencies,
      costs, damages and expenses (including, without limitation, reasonable
      attorneys’ fees, charges and disbursements) incurred by the Company as result of
      any inaccuracy in or breach of the representations, warranties or covenants
      made
      by such Purchaser herein. The maximum aggregate liability of each Purchaser
      pursuant to its indemnification obligations under this Article VI shall not
      exceed the portion of the Purchase Price paid by such Purchaser hereunder.
      The
      maximum aggregate liability of the Company pursuant to its indemnification
      obligations under this Article VI shall not exceed the aggregate Purchase Price,
      including any actual moneys paid by the Purchasers for the Warrant
      Shares.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    Section
      6.2  Indemnification
      Procedure

     

    .
      Any
      party entitled to indemnification under this Article VI (an “indemnified party”)
      will give written notice to the indemnifying party of any matter giving rise
      to
      a claim for indemnification; provided, that the failure of any party entitled
      to
      indemnification hereunder to give notice as provided herein shall not relieve
      the indemnifying party of its obligations under this Article VI except to the
      extent that the indemnifying party is actually prejudiced by such failure to
      give notice. In case any such action, proceeding or claim is brought against
      an
      indemnified party in respect of which indemnification is sought hereunder,
      the
      indemnifying party shall be entitled to participate in and, unless in the
      reasonable judgment of the indemnifying party a conflict of interest between
      it
      and the indemnified party exists with respect to such action, proceeding or
      claim (in which case the indemnifying party shall be responsible for the
      reasonable fees and expenses of one separate counsel for the indemnified
      parties), to assume the defense thereof with counsel reasonably satisfactory
      to
      the indemnified party. In the event that the indemnifying party advises an
      indemnified party that it will not contest such a claim for indemnification
      hereunder, or fails, within thirty (30) days of receipt of any indemnification
      notice to notify, in writing, such person of its election to defend, settle
      or
      compromise, at its sole cost and expense, any action, proceeding or claim (or
      discontinues its defense at any time after it commences such defense), then
      the
      indemnified party may, at its option, defend, settle or otherwise compromise
      or
      pay such action or claim. In any event, unless and until the indemnifying party
      elects in writing to assume and does so assume the defense of any such claim,
      proceeding or action, the indemnified party’s costs and expenses arising out of
      the defense, settlement or compromise of any such action, claim or proceeding
      shall be losses subject to indemnification hereunder. The indemnified party
      shall cooperate fully with the indemnifying party in connection with any
      negotiation or defense of any such action or claim by the indemnifying party
      and
      shall furnish to the indemnifying party all information reasonably available
      to
      the indemnified party which relates to such action or claim. The indemnifying
      party shall keep the indemnified party fully apprised at all times as to the
      status of the defense or any settlement negotiations with respect thereto.
      If
      the indemnifying party elects to defend any such action or claim, then the
      indemnified party shall be entitled to participate in such defense with counsel
      of its choice at its sole cost and expense. The indemnifying party shall not
      be
      liable for any settlement of any action, claim or proceeding effected without
      its prior written consent. Notwithstanding anything in this Article VI to the
      contrary, the indemnifying party shall not, without the indemnified party’s
      prior written consent, settle or compromise any claim or consent to entry of
      any
      judgment in respect thereof which imposes any future obligation on the
      indemnified party or which does not include, as an unconditional term thereof,
      the giving by the claimant or the plaintiff to the indemnified party of a
      release from all liability in respect of such claim. The indemnification
      obligations to defend the indemnified party required by this Article VI shall
      be
      made by periodic payments of the amount thereof during the course of
      investigation or defense, as and when bills are received or expense, loss,
      damage or liability is incurred, so long as the indemnified party shall refund
      such moneys if it is ultimately determined by a court of competent jurisdiction
      that such party was not entitled to indemnification. The indemnity agreements
      contained herein shall be in addition to (a) any cause of action or similar
      rights of the indemnified party against the indemnifying party or others, and
      (b) any liabilities the indemnifying party may be subject to pursuant to the
      law. No indemnifying party will be liable to the indemnified party under this
      Agreement to the extent, but only to the extent that a loss, claim, damage
      or
      liability is attributable to the indemnified party’s breach of any of the
      representations, warranties or covenants made by such party in this Agreement
      or
      in the other Transaction Documents.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    ARTICLE
      VII 

     

    MISCELLANEOUS

     

    Section
      7.1  Fees
      and Expenses

     

    .
      Each
      party shall pay the fees and expenses of its advisors, counsel, accountants
      and
      other experts, if any, and all other expenses, incurred by such party incident
      to the negotiation, preparation, execution, delivery and performance of this
      Agreement.

     

    Section
      7.2  Specific
      Performance; Consent to Jurisdiction; Venue.

     

    (a)  The
      Company and the Purchasers acknowledge and agree that irreparable damage would
      occur in the event that any of the provisions of this Agreement or the other
      Transaction Documents were not performed in accordance with their specific
      terms
      or were otherwise breached. It is accordingly agreed that the parties shall
      be
      entitled to an injunction or injunctions to prevent or cure breaches of the
      provisions of this Agreement or the other Transaction Documents and to enforce
      specifically the terms and provisions hereof or thereof, this being in addition
      to any other remedy to which any of them may be entitled by law or
      equity.

     

    (b)  The
      parties agree that venue for any dispute arising under this Agreement will
      lie
      exclusively in the state or federal courts located in California and the parties
      irrevocably waive any right to raise forum
      non conveniens
      or any
      other argument that California is not the proper venue. The parties irrevocably
      consent to personal jurisdiction in the state and federal courts of the state
      of
      California. The Company and each Purchaser consent to process being served
      in
      any such suit, action or proceeding by mailing a copy thereof to such party
      at
      the address in effect for notices to it under this Agreement and agrees that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing in this Section 7.2 shall affect or limit any right to serve
      process in any other manner permitted by law. The Company and the Purchasers
      hereby agree that the prevailing party in any suit, action or proceeding arising
      out of or relating to the Securities, this Agreement or the Registration Rights
      Agreement, shall be entitled to reimbursement for reasonable legal fees from
      the
      non-prevailing party.

     

    Section
      7.3  Entire
      Agreement; Amendment

     

    .
      This
      Agreement and the Transaction Documents contain the entire understanding and
      agreement of the parties with respect to the matters covered hereby and, except
      as specifically set forth herein or in the other Transaction Documents, neither
      the Company nor any Purchaser make any representation, warranty, covenant or
      undertaking with respect to such matters, and they supersede all prior
      understandings and agreements with respect to said subject matter, all of which
      are merged herein. No provision of this Agreement may be waived or amended
      other
      than by a written instrument signed by the Company and the Purchasers holding
      at
      least a majority of the principal amount of the Notes then held by the
      Purchasers. Any amendment or waiver effected in accordance with this Section
      7.3
      shall be binding upon each Purchaser (and their permitted assigns) and the
      Company.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    Section
      7.4  Notices

     

    .
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery by telecopy or facsimile at the address or number designated below
      (if
      delivered on a business day during normal business hours where such notice
      is to
      be received), or the first business day following such delivery (if delivered
      other than on a business day during normal business hours where such notice
      is
      to be received) or (b) on the second business day following the date of mailing
      by express courier service, fully prepaid, addressed to such address, or upon
      actual receipt of such mailing, whichever shall first occur. The addresses
      for
      such communications shall be:

     

    If
      to the
      Company:  Communication
      Intelligence Corporation

    275
      Shoreline Drive, Suite 500

    Redwood
      Shores, California 94065

    Attention:
      Frank Dane

    Tel.
      No.:
      (650) 802-7888

    Fax
      No.:
      (650) 802-7777

     

    with
      copies (which copies

    shall
      not
      constitute notice

    to
      the
      Company) to:  Davis
      Wright Tremaine LLP

    1300
      S.W.
      Fifth Ave., 23rd
      Floor

    Portland,
      Oregon 97201

    Attention:
      Michael C. Phillips, Esq.

    Tel.
      No.
      (503) 241-2300

    Fax
      No.:
      (503) 778-5299

     

    If
      to any
      Purchaser: At
      the
      address of such Purchaser set forth on Exhibit
      A
      to this
      Agreement, with copies to Purchaser’s counsel as set forth on Exhibit
      A. 

     

    Any
      party
      hereto may from time to time change its address for notices by giving written
      notice of such changed address to the other party hereto.

     

    Section
      7.5  Waivers

     

    .
      No
      waiver by either party of any default with respect to any provision, condition
      or requirement of this Agreement shall be deemed to be a continuing waiver
      in
      the future or a waiver of any other provision, condition or requirement hereof,
      nor shall any delay or omission of any party to exercise any right hereunder
      in
      any manner impair the exercise of any such right accruing to it
      thereafter.

     

    Section
      7.6  Headings

     

    .
      The
      article, section and subsection headings in this Agreement are for convenience
      only and shall not constitute a part of this Agreement for any other purpose
      and
      shall not be deemed to limit or affect any of the provisions
      hereof.

     

    Section
      7.7  Successors
      and Assigns

     

    .
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and assigns. After the Closing, the assignment by a party
      to
      this Agreement of any rights hereunder shall not affect the obligations of
      such
      party under this Agreement. Subject to Section 5.1 hereof, the Purchasers may
      assign the Securities and its rights under this Agreement and the other
      Transaction Documents and any other rights hereto and thereto without the
      consent of the Company.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    Section
      7.8  No
      Third Party Beneficiaries

     

    .
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

     

    Section
      7.9  Governing
      Law

     

    .
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of California, without giving effect to any of the conflicts
      of law principles which would result in the application of the substantive
      law
      of another jurisdiction. This Agreement shall not be interpreted or construed
      with any presumption against the party causing this Agreement to be
      drafted.

     

    Section
      7.10  Survival

     

    .
      The
      representations and warranties of the Company and the Purchasers shall survive
      the execution and delivery hereof and the Closing until the first anniversary
      of
      the Closing Date, except the agreements and covenants set forth in Articles
      I,
      III, V, VI and VII of this Agreement shall survive the execution and delivery
      hereof and the Closing hereunder.

     

    Section
      7.11  Counterparts

     

    .
      This
      Agreement may be executed in any number of counterparts, all of which taken
      together shall constitute one and the same instrument and shall become effective
      when counterparts have been signed by each party and delivered to the other
      parties hereto, it being understood that all parties need not sign the same
      counterpart.

     

    Section
      7.12  Publicity

     

    .
      The
      Company agrees that it will not disclose, and will not include in any public
      announcement, the names of the Purchasers without the consent of the Purchasers,
      which consent shall not be unreasonably withheld or delayed, or unless and
      until
      such disclosure is required by law, rule or applicable regulation, including
      without limitation any disclosure pursuant to a registration statement
      registering the Warrant Shares, and then only to the extent of such
      requirement.

     

    Section
      7.13  Severability

     

    .
      The
      provisions of this Agreement are severable and, in the event that any court
      of
      competent jurisdiction shall determine that any one or more of the provisions
      or
      part of the provisions contained in this Agreement shall, for any reason, be
      held to be invalid, illegal or unenforceable in any respect, such invalidity,
      illegality or unenforceability shall not affect any other provision or part
      of a
      provision of this Agreement and this Agreement shall be reformed and construed
      as if such invalid or illegal or unenforceable provision, or part of such
      provision, had never been contained herein, so that such provisions would be
      valid, legal and enforceable to the maximum extent possible.

     

    Section
      7.14  Further
      Assurances

     

    .
      From
      and after the date of this Agreement, upon the request of the Purchasers or
      the
      Company, the Company and each Purchaser shall execute and deliver such
      instruments, documents and other writings as may be reasonably necessary or
      desirable to confirm and carry out and to effectuate fully the intent and
      purposes of this Agreement and the other transaction Documents.

     

    [SIGNATURE
      PAGE FOLLOWS]

    

    
      
        
          23

          2007.06.12
            Note & Warrant Purchase Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Note and Warrant Purchase
      Agreement to be duly executed by their respective authorized officers as of
      the
      date first above written.

     

    COMMUNICATION
      INTELLIGENCE CORPORATION

     

    By: 
      /s/ Frank
      Dane                    
                                       

     Name:
      Frank Dane

    Title:
      Chief Financial and Legal Officer

     

                          PURCHASER:

     

    By: 
      /s/ Michael
      Engmann                                               
 

    Name: 
      Michael Engmann

    Title:

     

    

    
      
        
          2007.06.12
            Note & Warrant Purchase Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      A

    LIST
      OF
      PURCHASERS

     

    Names
      and
      Addresses      Investment
      Amount and Number of

    of
      Purchasers       Warrants
      Purchased

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    FORM
      OF
      NOTE

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    FORM
      OF
      WARRANT

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

    FORM
      OF
      REGISTRATION RIGHTS AGREEMENT

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(b)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(c)

    CAPITALIZATION

    

    Preferred
      Shares Authorized: 10,000,000

    

    Common
      Shares Authorized: 125,000,000

    

    No
      exceptions from public filings

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(g)

    SUBSIDIARIES

    

    CICI
      Limited, Incorporated in Bermuda, 100% owned by CIC

    

    Communication
      Intelligence Computer Corporation, Ltd., Joint Venture in China, 90% owned
      by
      CIC, 10% owned by Jiangsu Hongtu Electronics Company, Ltd.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(h)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(i)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(j)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(k)

    

    

    $1,382,692
      in Convertible debt to nine (9) investors. If not converted the debt is payable
      in October 2007. 

    

    $600,000
      in conventional notes to two (2) investors. The notes are due in May of
      2008.

    

    $720,000
      in conventional notes to seven (7) investors. The notes are due in August of
      2008

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(l)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(m)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(n)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(o)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(p)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(r)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(u)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(v)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(x)

    

    None.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2.1(y)

    

    A
      total
      of 125,000 options were issued to two employees subsequent to March 31,
      2007.

    
      	·  	
              SCHEDULE
                2.1(cc)

            

    

    

    None.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]