Document:

Exhibit 10.1

                                                                 67 Federal Road
                                                           Building A, Suite 300
                                                                      Brookfield
                                                                        CT 06804
March 25, 2005

Via Email

Mr. Michael Millon
Macrocom Investors, LLC

Dear Michael:

This letter will confirm our understanding with respect to the Finance Agreement
between Macrocom Investors, LLC and NetFabric Corporation ("NetFabric") of July
22, 2004 ("Agreement") with respect to the shell company that you brought to us.

Specifically, under the terms of that agreement, it was agreed and understood
that Macrocom Investors, LLC or a company formed by you would either bring to
NetFabric a shell for purchase or purchase a shell and propose it to NetFabric
as a vehicle for merger or acquisition. In either event, the shell was subject
to acceptance by NetFabric after it conducted its own due diligence, and you
were to be compensated in post-closing stock of the shell company used for such
merger or acquisition.

As it happened, Littlehampton Investments, LLC, ("Littlehampton") a company
formed by you, purchased a controlling interest in Houston Operating Company
("HOC") and proposed HOC as the company for merger with NetFabric. We conducted
our due diligence, agreed to merge with HOC and proceeded to closing on December
9, 2004. At the time of the merger, Littlehampton had and retained 1,000,000
shares of post-closing stock of HOC as a result of its previous purchase of the
shell, which purchase NetFabric was not a party to, and you received no other
compensation for the providing the shell to NetFabric.

As a result, you have received all compensation due to you under the terms of
the Agreement for bringing the company, HOC, to NetFabric for purposes of the
merger transaction.

Please confirm your above understanding of the above by signing a copy of this
letter and returning an original to me for our files.

Sincerely,

Walter Carozza
CFO, Houston Operating Company and NetFabric Corporation

Understood and agreed to:

------------------------------
Michael Millon, for Macrocom Investors, LLC
and Littlehampton Investments, LLCEXHIBIT
        4.1

      

      Rights
        Agreement with Exhibits

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        RIGHTS
          AGREEMENT

        

        

        Between

        

        

        FORGENT
          NETWORKS, INC.

        

        

        and

        

        

        AMERICAN
          STOCK TRANSFER & TRUST COMPANY,

        

        as
          Agent

        

        

        December
          19, 2005

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      TABLE
        OF CONTENTS

      

      
        	 Section 1. Certain
                Definitions 	 1
	 Section 2. Appointment of Rights
                Agent 	 4
	 Section 3. Issue of Rights
                Certificates	 4
	 Section 4. Form of Rights
                Certificates	 6
	 Section 5. Countersignature and
                Registration	 7
	 Section 6. Transfer, Split Up,
                Combination and Exchange of Rights Certificates;
                Mutilated,  Destroyed,
                Lost or Stolen Rights Certificates	 7
	 Section 7. Exercise of Rights; Purchase
                Price; Expiration Date of Rights	 8
	 Section 8. Cancellation and Destruction
                of Rights Certificate	 10
	 Section 9. Reservation and Availability
                Of Capital Stock	 10
	 Section 10. Preferred Stock Record
                Date	 12
	 Section 11. Adjustment of Purchase
                Price, Number and Kind of Shares or Number of Rights	 12
	 Section 12. Certificate of Adjusted
                Purchase Price or Number of Shares	 19
	 Section 13. Consolidation, Merger
                or
                Sale or Transfer of Assets or Earnings Power	 20
	 Section 14. Fractional Rights and
                Fractional Shares	 22
	 Section 15. Rights of
                Action 	 23
	 Section 16. Agreement of Rights
                Holders 	 23
	 Section 17. Rights Certificate Holder
                Not Deemed a Shareholder	 24
	 Section 18. Concerning the Rights
                Agent	 24
	 Section 19. Merger or Consolidation
                or
                Change of Name of Rights Agent	 25
	 Section 20. Duties of Rights
                Agent	 25
	 Section 21. Change of Rights
                Agent 	 27
	 Section 22. Issuance of New Rights
                Certificates	 28
	 Section 23. Redemption and
                Termination	 28
	 Section 24. Notice of Certain
                Events	 29
	 Section 25. Notices	 31
	 Section 26. Supplements and
                Amendments 	 31
	 Section 27. Successors 	 32
	 Section 28. Determinations and Actions
                by the Board Of Directors, Etc	 32
	 Section 29. Benefits of this
                Agreement 	 32
	 Section 30. Severability	 32
	 Section 31. Governing Law	 32
	 Section 32. Counterparts	 33
	 Section 33. Descriptive
                Headings 	 33

      

       

       

      
        
          
            
            

          

          
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      RIGHTS
        AGREEMENT

       

      RIGHTS
        AGREEMENT, dated as of December 19, 2005 (the "Agreement"),
        between Forgent Networks, Inc., a Delaware corporation (the "Company"),
        and
        American Stock Transfer & Trust Company, a New York corporation (the
        "Rights
        Agent").

       

      On
        December 15, 2005 (the "Rights
        Dividend Declaration Date"),
        the
        Board of Directors of the Company authorized and declared a dividend
        distribution of one Right (as hereinafter defined) for each share of common
        stock, par value $.01 per share, of the Company (the "Common
        Stock")
        outstanding at the close of business on December 31, 2005 (the "Record
        Date"),
        and
        has authorized the issuance of one Right (as such number may hereinafter
        be
        adjusted pursuant to the provisions of SECTION 11(p) hereof) for each share
        of
        Common Stock of the Company issued between the Record Date (whether originally
        issued or delivered from the Company's treasury) and the Distribution Date
        (as
        hereinafter defined), each Right initially representing the right to purchase
        one one-thousandth of a share of Series A Preferred Stock of the Company
        having
        the rights, powers and preferences set forth in the form of Certificate of
        Designations for Series A Preferred Stock attached hereto as Exhibit A,
        upon
        the terms and subject to the conditions hereinafter set forth (singularly,
        a
        "Right," collectively "Rights").

       

      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 15% or more of
        the
        shares of Common Stock then outstanding, but shall not include (i) any Exempt
        Person, (ii) a Qualified Institutional Investor,
        or
        (iii)
        any Person, who alone or together with its Affiliates and Associates, shall
        become the Beneficial Owner of 15% or more of the shares of Common Stock
        then
        outstanding solely as a result of a reduction in the number of shares of
        Common
        Stock outstanding due to the repurchase of Common Stock by the Company, unless
        and until such time as such Person or any Affiliate or Associate of such
        Person
        shall purchase or otherwise become the Beneficial Owner of additional shares
        of
        Common Stock constituting 1% or more of the then outstanding shares of Common
        Stock, or any other Person (or Persons) who is (or collectively are) the
        Beneficial Owner(s) of shares of Common Stock, constituting 1% or more of
        the
        then outstanding shares of Common Stock, shall become an Affiliate or Associate
        of such Person, unless, in either such case, such Person, together with its
        Affiliates and Associates, is not then the Beneficial Owner of 15% or
        more
        of the shares of Common Stock then outstanding. Notwithstanding the foregoing,
        if the Board of Directors of the Company determines in good faith that any
        Person that would otherwise be an "Acquiring Person" has become such
        inadvertently (including, without limitation, because (i) such Person
        was
        unaware that it beneficially owned a percentage of Common Stock that would
        otherwise cause such Person to be an "Acquiring Person" or (ii) such Person
        was
        aware of the extent of its Beneficial Ownership of Common Stock but had no
        actual knowledge of the consequences of such Beneficial Ownership under this
        Agreement), and without any intention of changing or influencing control
        of the
        Company, and if any such Person as promptly as practicable divested or divests
        itself of Beneficial Ownership of a sufficient number of shares of Common
        Stock
        so that such Person would no longer be an "Acquiring Person," then such Person
        shall not be deemed to be or to have become an "Acquiring Person" for any
        purposes of this Agreement.

       

      
        
          
          

        

        
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      (b)  "Affiliate"
        and "Associate" shall have the respective meanings ascribed to such terms
        in
        Rule l2b-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").

       

      (c)  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, directly or
        indirectly, has the right to acquire (whether such right is exercisable
        immediately or only after the passage of time) pursuant to any agreement,
        arrangement or understanding (whether or not in writing) or upon the exercise
        of
        conversion rights, exchange rights, rights, warrants or options, or otherwise;
        provided, however, that a Person shall not be deemed the "Beneficial Owner"
        of,
        or to "beneficially own," (A) securities tendered pursuant to a tender
        or
        exchange offer made by such Person or any of such Person's Affiliates or
        Associates until such tendered securities are accepted for purchase or exchange,
        or (B) securities issuable upon exercise of Rights at any time prior to the
        occurrence of a Triggering Event, or (C) securities issuable upon exercise
        of
        Rights from and after the occurrence of a Triggering Event which Rights were
        acquired by such Person or any of such Person's Affiliates or Associates
        prior
        to the Distribution Date or pursuant to SECTION 3(a) or SECTION 22 hereof
        (the
        "Original
        Rights")
        or
        pursuant to SECTION 11(i) hereof in connection with an adjustment made with
        respect to any Original Rights;

       

      (ii)  which
        such Person or any of such Person's Affiliates or Associates, directly or
        indirectly, has the right to vote or dispose of or has "beneficial ownership"
        of
        (as determined pursuant to Rule 13d-3 of the General Rules and Regulations
        under
        the Exchange Act), including pursuant to any agreement, arrangement or
        understanding, whether or not in writing; provided, however, that a Person
        shall
        not be deemed the "Beneficial Owner" of, or to "beneficially own," any security
        under this subparagraph (ii) as a result of an agreement, arrangement or
        understanding to vote such security if such agreement, arrangement or
        understanding (A) arises solely from a revocable proxy given in response
        to a
        public proxy or consent solicitation made pursuant to, and in accordance
        with
        the applicable provisions of the General Rules and Regulations under the
        Exchange Act and (B) is not also then reportable by such Person on Schedule
        l3D
        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
        (whether or not in writing), for the purpose of acquiring, holding, voting
        (except pursuant to a revocable proxy as described in the proviso to
        subparagraph (ii) of this PARAGRAPH (D)), or disposing of any voting
        securities of the Company; provided, however, that nothing in this PARAGRAPH
        (D)
        shall cause a person engaged in business as an underwriter of securities
        to be
        the "Beneficial Owner" of, or to "beneficially own," any securities acquired
        through such person's participation in good faith in a firm commitment
        underwriting until the expiration of forty days after the date of such
        acquisition.

       

      
        
          
          

        

        
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      (d)  "Business
        Day" shall mean any day other than a Saturday, Sunday or a day on which banking
        institutions in the State of Texas or in the state of the Rights Agent's
        principal place of business are authorized or obligated by law or executive
        order to close.

       

      (e)  "Close
        of
        Business" on any given date shall mean 4:00 p.m., Dallas time, on such date;
        provided, however, that if such date is not a Business Day it shall mean
        4:00
        p.m., Dallas time, on the next succeeding Business Day.

       

      (f)  "Common
        Stock" shall mean the common stock, par value $.0l per share, of the Company
        except that "Common Stock" when used with reference to any Person other than
        the
        Company shall mean the capital stock of such Person with the greatest voting
        power, or the equity securities or other equity interest having power to
        control
        or direct the management, of such Person

       

      (g)  "Distribution
        Date" shall mean any date described in SECTION 3(a).

       

      (h)  "Exempt
        Person" shall mean 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. 

       

      (i)  "Flip-in
        Event" shall mean any event described in SECTION 11(a)(ii).

       

      (j)  "Flip-over
        Event" shall mean any event described in CLAUSES (x), (y) or (z) of SECTION
        13(a) hereof.

       

      (k)  "Person"
        shall mean any individual, firm, corporation, partnership, association, group
        or
        other entity.

       

      (l)  "Preferred
        Stock" shall mean shares of Series A Preferred Stock, $0.01 par value, of
        the
        Company and, to the extent that there are not a sufficient number of shares
        of
        Series A Preferred Stock authorized to permit the full exercise of
        the
        Rights, any other series of Preferred Stock, $0.01 par value, of the Company
        designated for such purpose containing terms substantially similar to the
        terms
        of the Series A Preferred Stock.

       

      (m)  “Qualified
        Institutional Investor” shall mean, as of any time of determination, a Person
        that is described in Rule 13d-1(b)(1) promulgated under the Exchange
        Act
        (as such Rule is in effect on the date hereof) and is eligible to report
        (and,
        if such Person is the Beneficial Owner of greater than 5% of the Common Stock
        of
        the Corporation, does in fact report and continues to report) beneficial
        ownership of Common Stock of the Corporation on Schedule 13G, and
        such
        Person (i) is not required to file a Schedule 13D (or any successor
        or
        comparable report) with respect to its beneficial ownership of Common Stock
        of
        the Corporation, (ii) shall be the Beneficial Owner of less than 15%
        of the
        Common Stock of the Corporation then outstanding (including in such calculation
        the holdings of all of such Person’s Affiliates and Associates other than those
        which, under published interpretations of the SEC or its Staff, are eligible
        to
        file separate reports on Schedule 13G with respect to their beneficial
        ownership of the Common Stock of the Corporation) and (iii) shall
        be the
        Beneficial Owner of less than 25% of the Common Stock of the Corporation
        then
        outstanding (including in such calculation the holdings of all of such Person’s
        Affiliates and Associates, including those which, under published
        interpretations of the SEC or its Staff, are eligible to file separate reports
        on Schedule 13G with respect to their beneficial ownership of the
        Common
        Stock of the Corporation).

       

      
        
          
          

        

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

       

      (o)  "Subsidiary"
        shall mean, with reference to any Person, any corporation or other entity
        of
        which a majority of the voting power of the equity securities or a majority
        of
        the equity interest is beneficially owned, directly or indirectly by such
        Person, or otherwise controlled by such Person.

       

      (p)  "Trading
        Day" shall mean a day on which the principal national securities exchange
        on
        which the shares of Common Stock are listed or admitted to trading is open
        for
        the transaction of business or, if the shares of Common Stock are not listed
        or
        admitted to trading on any national securities exchange, a Business Day.
        

       

      (q)  "Triggering
        Event" shall mean any Flip-in Event or any Flip-over Event.

       

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

       

      Section
        3.   Issue
        of Rights Certificates.

       

      (a)  Until
        the
        earlier of (i) the close of business on the tenth day after the Stock
        Acquisition Date or (ii) the close of business on the tenth Business Day
        after
        the date that a tender or exchange offer by any Person (other than an Exempt
        Person) is first published or sent or given within the meaning of Rule 14d-2(a)
        of the General Rules and Regulations under the Exchange Act, if upon
        consummation thereof such Person would be an Acquiring Person (the earlier
        of
        (i) and (ii) being herein referred to as the "Distribution
        Date"),
        (x)
        the Rights will be evidenced (subject to the provisions of Subsection
        (b) of this SECTION 3) by the certificates for the Common Stock registered
        in the names of the holders of the Common Stock and not by separate certificates
        and (y) the Rights will be transferable only in connection with the transfer
        of
        the underlying shares of Common Stock (including a transfer to the Company);
        provided that, if the foregoing results in a Distribution Date being prior
        to
        the Record Date, the Distribution Date shall be the Record Date and provided
        further that if any tender or exchange offer referred to in CLAUSE (ii) of
        this
        SECTION 3(a) is canceled, terminated or otherwise withdrawn prior to the
        Distribution Date, such offer shall be deemed, for purposes of this SECTION
        3(a), never to have been made. As soon as practicable after the Distribution
        Date, the Rights Agent will send by first- class, insured, postage prepaid
        mail
        to each record holder of the Common Stock as of the close of business on
        the
        Distribution Date, at the address of such holder shown on the records of
        the
        Company, one or more rights certificates, in substantially the form of
Exhibit
        B hereto
        (the "Rights Certificates"), evidencing one Right for each share of Common
        Stock
        so held, subject to adjustment as provided herein. In the event that an
        adjustment in the number of Rights per share of Common Stock has been made
        pursuant to SECTION 11(p) hereof, at the time of distribution of the Rights
        Certificates, the Company shall make the necessary and appropriate rounding
        adjustments (in accordance with SECTION 14(a) hereof) so that Rights
        Certificates representing only whole numbers of Rights are distributed and
        cash
        is paid in lieu of any fractional Rights. As of and after the Distribution
        Date,
        the Rights will be evidenced solely by such Rights Certificates.

       

      
        
          
          

        

        
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      (b)  As
        promptly as practicable following the Record Date the Company will send a
        copy
        of a Summary of Rights, in substantially the form attached hereto as
Exhibit
        C
        (the
        "Summary
        of Rights"),
        by
        first-class, postage prepaid mail, to each record holder of the Common Stock
        as
        of the close of business on the Record Date, at the address of such holder
        shown
        on the records of the Company. With respect to certificates for the Common
        Stock
        outstanding as of the Record Date, until the Distribution Date or the earlier
        transfer or exchange thereof, the Rights associated with the shares of Common
        Stock represented by such certificates shall be evidenced by such certificates
        for the Common Stock together with a copy of the Summary of Rights and the
        registered holders of the Common Stock shall also be the registered holders
        of
        the associated Rights. Until the earlier of the Distribution Date or the
        Expiration Date (as such term is defined in SECTION 7 hereof), the transfer
        of
        any of the certificates for the Common Stock outstanding on the Record Date,
        with or without a copy of the Summary of Rights, shall also constitute the
        transfer of the Rights associated with the Common Stock represented by such
        certificates.

       

      (c)  Rights
        shall be issued in respect of all shares of Common Stock that become outstanding
        (whether originally issued or from the Company treasury) after the Record
        Date
        but prior to the earlier of the Distribution Date or the Expiration Date
        or, in
        certain circumstances provided in SECTION 22 hereof, after the Distribution
        Date. Certificates issued for shares of Common Stock that shall become
        outstanding or shall be transferred or exchanged after the Record Date but
        prior
        to the earlier of the Distribution Date or the Expiration Date shall also
        be
        deemed to be certificates for Rights, and shall bear the following
        legend:

       

      THIS
        CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS
        AS
        SET FORTH IN THE RIGHTS AGREEMENT BETWEEN FORGENT NETWORKS, INC. (THE "COMPANY")
        AND AMERICAN STOCK TRANSFER & TRUST COMPANY, AS IT MAY BE AMENDED FROM TIME
        TO TIME (THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE INCORPORATED HEREIN
        BY
        REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE
        COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
        SUCH
        RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE
        EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE REGISTERED HOLDER
        OF
        THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS IN EFFECT ON THE DATE
        OF
        MAILING, WITHOUT CHARGE PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
        UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS MAY
        BE
        REDEEMED. RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES
        AN
        ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS DEFINED IN THE
        RIGHTS
        AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
        SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.

       

      
        
          
          

        

        
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      With
        respect to such certificates containing the foregoing legend, until the earlier
        of (i) the Distribution Date or (ii) the Expiration Date, the Rights
        associated with the Common Stock represented by such certificates shall be
        evidenced by such certificates alone and registered holders of Common Stock
        shall also be the registered holders of the associated Rights, and the transfer
        of any of such certificates shall also constitute the transfer of the Rights
        associated with the Common Stock represented by such certificates.

       

      Section
        4.   Form
        of Rights Certificates.

       

      (a)  The
        Rights Certificates (and the forms of election to purchase and of assignment
        to
        be printed on the reverse thereof) shall each be substantially in the form
        set
        forth in Exhibit
        B
        hereto
        and may have such marks of identification or designation and such legends,
        summaries or endorsements printed thereon as the Company may deem appropriate
        and as are not inconsistent with the provisions of this Agreement, or as
        may be
        required to comply with any applicable law or with any rule or regulation
        made
        pursuant thereto or with any rule or regulation of any stock exchange or
        inter-dealer quotation system of a registered national securities association
        on
        which the Rights may from time to time be listed, traded or quoted or to
        conform
        to usage. Subject to the provisions of SECTION 11 and SECTION 22 hereof,
        the
        Rights Certificates, whenever distributed, shall be dated as of the Record
        Date
        and on their face shall entitle the holders thereof to purchase such number
        of
        one one-thousandths of a share of Preferred Stock as shall be set forth therein
        at the price set forth therein (such exercise price per one one-thousandth
        of a
        share, 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.

       

      (b)  Any
        Rights Certificate issued pursuant to SECTION 3(a) or SECTION 22 hereof that
        represents Rights beneficially owned by (i) an Acquiring Person or any Associate
        or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
        (or of any such Associate or Affiliate) who becomes a transferee after the
        Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
        (or
        of any such Associate or Affiliate) who becomes a transferee prior to or
        concurrently with the Acquiring Person's becoming such and receives such
        Rights
        pursuant to either (A) a transfer (whether or not for consideration) from
        the
        Acquiring Person to holders of equity interests in such Acquiring Person
        or to
        any Person with whom such Acquiring Person has any 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 avoidance
        of SECTION 7(e) hereof, and any Rights Certificate issued pursuant to SECTION
        6,
        SECTION 11 or SECTION 22 hereof upon transfer, exchange, replacement or
        adjustment of any other Rights Certificate referred to in this sentence,
        shall
        contain (to the extent feasible) the following legend:

       

      
        
          
          

        

        
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      THE
        RIGHTS REPRESENTED BY THIS RIGHTS 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 RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
        BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
        AGREEMENT.

       

      Section
        5.   Countersignature
        and Registration.

       

      (a)  The
        Rights Certificates shall be executed on behalf of the Company by its Chairman
        of the Board, its President or any Vice President, either manually or by
        facsimile signature, and shall have affixed thereto the Company's seal or
        a
        facsimile thereof which shall be attested by the Secretary or an Assistant
        Secretary of the Company, either manually or by facsimile signature. The
        Rights
        Certificates shall be manually countersigned by the Rights Agent and shall
        not
        be valid for any purpose unless so countersigned. In case any officer of
        the
        Company who shall have signed any of the Rights Certificates shall cease
        to be
        such officer of the Company before countersignature by the Rights Agent and
        issuance and delivery by the Company, such Rights 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 Rights
        Certificates had not ceased to be such officer of the Company; and any Rights
        Certificate may be signed on behalf of the Company by any person who, at
        the
        actual date of the execution of such Rights Certificate shall be a proper
        officer of the Company to sign such Rights Certificate, although at the date
        of
        the execution of this Agreement any such person was not such an
        officer.

       

      (b)  Following
        the Distribution Date, the Rights Agent will keep or cause to be kept, at
        its
        principal office or offices designated as the appropriate place for surrender
        of
        Rights Certificates upon exercise or transfer, books for registration and
        transfer of the Rights Certificates issued hereunder. Such books shall show
        the
        names and addresses of the holders of the Rights Certificates, the number
        of
        Rights evidenced on its face by each of the Rights Certificates and the date
        of
        each of the Rights Certificates.

       

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

       

      (a)  Subject
        to the provisions of SECTION 4(b), SECTION 7(e) and SECTION 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 Expiration Date, any Rights Certificate or
        Certificates may be transferred, split up, combined or exchanged for another
        Rights Certificate or other Rights Certificates, entitling the registered
        holder
        to purchase a like number of one one-thousandths of a share of Preferred
        Stock
        (or, following a Triggering Event, Common Stock, other securities, cash or
        other
        assets, as the case may be) as the Rights Certificate or 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 Rights Certificate or Certificates shall make such
        request in writing delivered to the Rights Agent, and shall surrender the
        Rights
        Certificate or Certificates to be transferred, split up, combined or exchanged
        at the principal office or offices 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 Rights
        Certificate until the registered holder shall have completed and signed the
        certificate contained in the form of assignment on the reverse side of such
        Rights Certificate and shall have provided such additional evidence of the
        identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
        or
        Associates thereof as the Company shall reasonably request. Thereupon the
        Rights
        Agent shall, subject to SECTION 4(b), SECTION 7(e) and SECTION 14 hereof,
        countersign and deliver to the Person entitled thereto a Rights Certificate
        or
        Rights 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 Rights Certificates.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (b)  Upon
        receipt by the Company and the Rights Agent of evidence reasonably satisfactory
        to them of the loss, theft, destruction or mutilation of a Rights Certificate,
        and, in case of loss, theft or destruction, of indemnity or security reasonably
        satisfactory to them, and 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 Rights Certificate if mutilated, the Company
        will
        execute and deliver a new Rights Certificate of like tenor to the Rights
        Agent
        for countersignature and delivery to the registered owner in lieu of the
        Rights
        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 Rights Certificate may
        exercise the Rights evidenced thereby (except as otherwise provided herein,
        including, without limitation, the restrictions on exercisability set forth
        in
        SECTION 9(c), SECTION 11(a)(iii), SECTION 23(b), and SECTION 24(b) hereof),
        in
        whole or in part at any time after the Distribution Date upon surrender of
        the
        Rights Certificate, with the form of election to purchase and the certificate
        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 with respect to the total number
        of one
        one-thousandths of a share (or other securities, cash or other assets, as
        the
        case may be) as to which such surrendered Rights are then exercisable, at
        or
        prior to the earliest of (i) the close of business on December 31, 2015 (the
        "Final Expiration Date"), (ii) the time at which the Rights are redeemed
        as
        provided in SECTION 23 hereof, and (iii) the time at which the Rights are
        exchanged as provided in SECTION 24 hereof, (the earliest of (i), (ii), and
        (iii) being herein referred to as the "Expiration
        Date").

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (b)  The
        Purchase Price for each one one-thousandth of a share of Preferred Stock
        pursuant to the exercise of a Right shall initially be $13 and shall be subject
        to adjustment from time to time as provided in SECTIONS 11 and 13(a) hereof
        and
        shall be payable in accordance with SECTION 7(c) below.

       

      (c)  Upon
        receipt of a Rights Certificate representing exercisable Rights, with the
        form
        of election to purchase and the certificate duly executed, accompanied by
        payment, with respect to each Right so exercised, of the Purchase Price per
        one
        one-thousandth of a share of Preferred Stock (or other shares, securities,
        cash
        or other assets, as the case may be) to be purchased as set forth below and
        an
        amount equal to any applicable transfer taxes, the Rights Agent shall, subject
        to SECTION 20(k) hereof, thereupon promptly (i) (A) requisition from any
        transfer agent of the shares of Preferred Stock (or make available, if the
        Rights Agent is the transfer agent for such shares) certificates for the
        total
        number of one one-thousandths of a share of Preferred Stock to be purchased,
        and
        the Company hereby irrevocably authorizes its transfer agent to comply with
        all
        such requests, or (B) if the Company shall have elected to deposit the total
        number of shares of Preferred Stock issuable upon exercise of the Rights
        hereunder with a depository agent, requisition from the depository agent
        depository receipts representing such number of one one-thousandths of a
        share
        of Preferred Stock as are to be purchased (in which case certificates for
        the
        shares of Preferred Stock represented by such receipts shall be deposited
        by the
        transfer agent with the depository agent), and the Company will direct the
        depository agent to comply with such request, (ii) requisition from the Company
        the amount of cash, if any, to be paid in lieu of fractional shares in
        accordance with SECTION 14 hereof, (iii) after receipt of such certificates
        or
        depository receipts, cause the same to be delivered to or upon the order
        of the
        registered holder of such Rights Certificate, registered in such name or
        names
        as may be designated by such holder, and (iv) after receipt thereof, deliver
        such cash, if any, to or upon the order of the registered holder of such
        Rights
        Certificate. The payment of the Purchase Price (as such amount may be reduced
        pursuant to SECTION 11(a)(iii) hereof) may be made in cash or by certified
        bank
        check or money order payable to the order of the Company. In the event that
        the
        Company is obligated to issue other securities (including Common Stock) of
        the
        Company, pay cash and/or distribute other property pursuant to SECTION 11(a)
        hereof, the Company will make all arrangements necessary so that such other
        securities, cash and/or other property are available for distribution by
        the
        Rights Agent, if and when appropriate.

       

      (d)  In
        case
        the registered holder of any Rights Certificate shall exercise less than
        all the
        Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent
        to the Rights remaining unexercised shall be issued by the Rights Agent and
        delivered to, or upon the order of, the registered holder of such Rights
        Certificate, registered in such name or names as may be designated by such
        holder, subject to the provisions of SECTION 14 hereof.

       

      (e)  Notwithstanding
        anything in this Agreement to the contrary, from and after the first occurrence
        of a Triggering Event, any Rights beneficially owned by (i) an Acquiring
        Person
        or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of
        an
        Acquiring Person (or of any such Associate or Affiliate) who becomes a
        transferee after the Acquiring Person becomes such, or (iii) a transferee
        of an
        Acquiring Person (or of any such Associate or Affiliate) who becomes a
        transferee prior to or concurrently with the Acquiring Persons becoming such
        and
        receives such Rights pursuant to either (A) a transfer (whether or not for
        consideration) from the Acquiring Person to holders of equity interests in
        such
        Acquiring Person or to any Person with whom the Acquiring Person has any
        continuing agreement, arrangement or understanding regarding the transferred
        Rights or (B) a transfer which the Board of Directors of the Company has
        determined is part of the 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
        ensure 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 Rights 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.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

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

       

      Section
        9.   Reservation
        and Availability Of Capital Stock.

       

      (a)  The
        Company covenants and agrees that it will use reasonable efforts to cause
        to be
        reserved and kept available out of its authorized and unissued shares of
        Preferred Stock (and, following the occurrence of a Triggering Event, out
        of its
        authorized and unissued shares of Common Stock and/or other securities or
        out of
        its authorized and issued shares held in its treasury), the number of shares
        of
        Preferred Stock (and, following the occurrence of a Triggering Event, Common
        Stock and/or other securities) that, as provided in this Agreement including
        SECTION 11(a)(iii) hereof will be sufficient to permit the exercise in full
        of
        all outstanding Rights.

       

      (b)  So
        long
        as the shares of Preferred Stock (and, following the occurrence of a Triggering
        Event, Common Stock and/or securities) issuable and deliverable upon the
        exercise of the Rights may be listed on any national securities exchange
        or
        inter-dealer quotation system of a registered national securities association
        on
        which the Preferred Stock may from time to time be listed, traded or quoted,
        the
        Company shall use its best efforts to cause, from and after such time as
        the
        Rights become exercisable, all shares reserved for such issuance to be listed
        on
        such exchange or quotation system upon official notice of issuance upon such
        exercise.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (c)  To
        the
        extent legally required, the Company shall use its best efforts to (i) file,
        as
        soon as practicable following the earliest date after the first occurrence
        of a
        Flip-in Event on which the consideration to be delivered by the Company upon
        exercise of the Rights has been determined pursuant to this Agreement (including
        in accordance with SECTION 11(a)(iii) hereof), a registration statement under
        the Securities Act of 1933, as amended (the "Act"), with respect to the
        securities purchasable upon exercise of the Rights on an appropriate form,
        (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)
        until the earlier of (A) the date as of which the Rights are no longer
        exercisable for such securities, and (B) the date of the expiration of the
        Rights. The Company will also take such action as may be appropriate under,
        or
        to ensure compliance with, the securities or "blue sky' laws of the various
        states in connection with the exercisability of the Rights. The Company may
        temporarily suspend, for a period of time not to exceed 120 days after the
        date
        set forth in CLAUSE (i) of the first sentence of this SECTION 9(c), the
        exercisability of the Rights in order to prepare and file such registration
        statement and permit it to become effective. Upon any such suspension, the
        Company shall issue a public announcement stating that the exercisability
        of the
        Rights has been temporarily suspended, as well as a public announcement at
        such
        time as the suspension is no longer in effect that the Rights are currently
        exercisable. In addition, if the Company shall determine that a registration
        statement is required following the Distribution Date, the Company may
        temporarily suspend the exercisability of the Rights until such time as a
        registration statement has been declared effective.

       

      Notwithstanding
        any provision of this Agreement to the contrary, the Rights shall not be
        exercisable in any jurisdiction if the requisite qualification in such
        jurisdiction shall not have been obtained or the exercise thereof shall not
        be
        permitted under applicable law.

       

      (d)  The
        Company covenants and agrees that it will take all such action as may be
        necessary to ensure that all one one-thousandths of a share of Preferred
        Stock
        (and, following the occurrence of a Triggering Event, Common Stock and/or
        other
        securities) delivered upon exercise of Rights shall, at the time of delivery
        of
        the certificates for such shares (subject to payment of the Purchase Price),
        be
        duly and validly authorized and issued and fully paid and
        nonassessable.

       

      (e)  The
        Company further covenants and agrees that it will pay when due and payable
        any
        and all federal and state transfer taxes and charges which may be payable
        in
        respect of the issuance or delivery of the Rights Certificates and of any
        certificates for a number of one one-thousandths of a share of Preferred
        Stock
        (or Common Stock 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 Rights
        Certificates to a Person other than, or the issuance or delivery of a number
        of
        one one-thousandths of a share of Preferred Stock (or Common Stock and/or
        other
        securities, as the case may be) in respect of a name other than that of,
        the
        registered holder of the Rights Certificates evidencing Rights surrendered
        for
        exercise or to issue or deliver any certificates for a number of one
        one-thousandths of a share of Preferred Stock (or Common Stock and/or other
        securities, as the case may be) in a name other than that of the registered
        holder upon the exercise of any Rights until such tax shall have been paid
        (any
        such tax being payable by the holder of such Rights Certificate at the time
        of
        surrender) or until it has been established to the Company's satisfaction
        that
        no such tax is due.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      Section
        10.   Preferred
        Stock Record Date.
        Each
        Person in whose name any certificate for a number of one one-thousandths
        of a
        share of Preferred Stock (or Common Stock 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 such fractional shares of Preferred
        Stock
        (or Common Stock and/or other securities, as the case may be) represented
        thereby on, and such certificate shall be dated, the date upon which the
        Rights
        Certificate evidencing such Rights was duly surrendered and payment of the
        Purchase Price (and all applicable transfer taxes) was made; provided, however,
        that if the date of such surrender and payment is a date upon which the
        Preferred Stock (or Common Stock 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 (fractional or otherwise) on, and
        such
        certificate shall be dated, the next succeeding Business Day on which the
        Preferred Stock (or Common Stock 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 Rights Certificate shall not be entitled
        to
        any rights of a shareholder of the Company with respect to shares for which
        the
        Rights shall be exercisable, including, without limitation, the right to
        vote,
        to receive dividends or other distributions or to exercise any preemptive
        rights, and shall not be entitled to receive any notice of any proceedings
        of
        the Company, except as provided herein.

       

      Section
        11.   Adjustment
        of Purchase Price, Number 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.

       

      (a) (i)
        In
        the event the Company shall at any time after the date of this Agreement
        (A) declare a dividend on the Preferred Stock payable in shares of
        Preferred Stock (or other capital stock), (B) subdivide the outstanding
        Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
        number of shares, or (D) issue any shares of its capital stock in a
        reclassification of the Preferred Stock (including any such reclassification
        in
        connection with a consolidation or merger in which the Company is the continuing
        or surviving corporation), except as otherwise provided in this SECTION 11(a)
        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 Preferred Stock
        or
        capital stock, as the case may be, issuable on such date, shall be
        proportionately adjusted so that the holder of any Right exercised after
        such
        time shall be entitled to receive, upon payment of the Purchase Price then
        in
        effect, the aggregate number and kind of shares of Preferred Stock or capital
        stock, as the case may be, which, if such Right had been exercised immediately
        prior to such date and at a time when the Preferred Stock transfer books
        of the
        Company were open he would have owned upon such exercise and been entitled
        to
        receive by virtue of such dividend, subdivision, combination or
        reclassification. If an event occurs which would require an adjustment under
        both this SECTION 11 (a)(i) and SECTION 11 (a)(ii) hereof, the adjustment
        provided for in this SECTION 11 (a)(i) shall be in addition to, and shall
        be
        made prior to any adjustment required pursuant to SECTION 11 (a)(ii)
        hereof.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (ii) Subject
        to action of the Board of Directors of the Company pursuant to SECTIONS 23
        or 24
        hereof, in the event any Person shall become an Acquiring Person, then each
        holder of a Right (except as provided below and in SECTION 7(e) hereof) shall
        thereafter have the right to receive, upon exercise thereof at the then current
        Purchase Price as it may have been adjusted in accordance with the terms
        of this
        Agreement (which, following the first occurrence of a Flip-In Event, shall
        thereafter be the "Purchase
        Price"
        for
        each Right and for all purposes of this Agreement), in lieu of the number
        of one
        one-thousandths of a share of Preferred Stock, such number of shares of Common
        Stock of the Company as shall equal the result obtained by (x) multiplying
        the
        then current Purchase Price by the then number of one one-thousandths of
        a share
        of Preferred Stock for which a Right was exercisable immediately prior to
        the
        first occurrence of a Flip-in Event, and (y) dividing that product by 50%
        of the
        current market price determined pursuant to SECTION 11(d) hereof per share
        of
        Common Stock on the date of such first occurrence (such number of shares,
        the
        "Adjustment
        Shares").

       

      (iii) In
        the
        event that the number of shares of Common Stock that is authorized by the
        Company's Certificate of Incorporation but not outstanding or not reserved
        for
        issuance for purposes other than upon exercise of the Rights is insufficient
        to
        permit the exercise in full of the Rights in accordance with the foregoing
        subparagraph (ii) of this SECTION 11(a), the Company shall (A) determine
        the
        excess of (1) the value of the Adjustment Shares issuable upon the exercise
        of a
        Right (computed using the current market price used to determine the number
        of
        Adjustment Shares) (the "Current
        Value")
        over
        (2) the Purchase Price (such excess, the "Spread"), and (B) with respect
        to each
        Right, make adequate provision to substitute for the Adjustment Shares, upon
        payment of the applicable Purchase Price, (1) Preferred Stock, (2) cash,
        (3) a
        reduction in the Purchase Price, (4) Common Stock or other equity securities
        of
        the Company that the Board of Directors of the Company has deemed to have
        the
        same economic value as shares of Common Stock (such equity securities, "common
        stock equivalents")), (5) debt securities of the Company, (6) other assets,
        or
        (7) any combination of the foregoing having an aggregate value equal to the
        Current Value, where such aggregate value has been determined by the Board
        of
        Directors of the Company; provided, however, if the Company shall not have
        made
        adequate provisions to deliver value pursuant to CLAUSE (B) above within
        30 days
        following the later of (x) the first occurrence of a Flip-in Event and (y)
        the
        date on which the Company's right of redemption pursuant to SECTION 23(a)
        expires (the later of (x) and (y) being referred to herein as the "Flip-in
        Trigger Date"), then the Company shall be obligated to deliver, upon the
        surrender for exercise of a Right and without requiring payment of the Purchase
        Price, shares of Common Stock (to the extent available) and then, if necessary,
        cash, which shares and/or cash have an aggregate value equal to the Spread.
        If
        the Board of Directors of the Company shall determine in good faith that
        it is
        likely that sufficient additional shares of Common Stock could be authorized
        for
        issuance upon exercise in full of the Rights, the 30-day Period set forth
        above
        may be extended to the extent necessary but not more than 120 days after
        the
        Flip-in Trigger Date, in order that the Company may seek shareholder approval
        for the authorization of such additional shares (such period, as it may be
        extended, the "Substitution
        Period").
        To
        the extent that the Company determines that some action needs be taken pursuant
        to the first and/or second sentences of this SECTION 11(a)(iii), the Company
        (x)
        shall provide, subject to SECTION 7(e) hereof, that such action shall apply
        uniformly to all outstanding Rights, and (y) may suspend the exercisability
        of
        the Rights until the expiration of the Substitution Period in order to seek
        any
        authorization of additional shares and/or to decide the appropriate form
        of
        distribution to be made pursuant to such first sentence and to determine
        the
        value thereof. In the event of any such suspension, the Company shall issue
        a
        public announcement stating that the exercisability of the Rights has been
        temporarily suspended, as well as a public announcement at such time as the
        suspension is no longer in effect. For purposes of this SECTION 11(a)(iii),
        the
        value of the Common Stock to be received pursuant to the proviso above shall
        be
        the current market price (as determined pursuant to SECTION 11(d) hereof)
        per
        share of the Common Stock on the Flip-in Trigger Date and the value of any
        "common stock equivalent" shall be deemed to have the same value as the Common
        Stock on such date.

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      (b) In
        case
        the Company shall fix a record date for the issuance of rights, options or
        warrants to all holders of Preferred Stock entitling them to subscribe for
        or
        purchase (for a period expiring within 45 calendar days after such record
        date)
        Preferred Stock (or shares having the same rights, privileges and preferences
        as
        the shares of Preferred Stock ("equivalent preferred stock")) or securities
        convertible into Preferred Stock or "equivalent preferred stock" at a price
        per
        share of Preferred Stock or per share of "equivalent preferred stock" (or
        having
        a conversion price per share, if a security convertible into Preferred Stock
        or
        "equivalent preferred stock") less than the current market price (as determined
        pursuant to SECTION 11(d) hereof) per share of Preferred Stock on such record
        date, the Purchase Price to be in effect after such record date shall be
        determined by multiplying the Purchase Price in effect immediately prior
        to such
        record date by a fraction, the numerator of which shall be the number of
        shares
        of Preferred Stock outstanding on such record date, plus the number of shares
        of
        Preferred Stock which the aggregate offering price of the total number of
        shares
        of Preferred Stock and/or equivalent preferred stock so to be offered (and/or
        the aggregate initial conversion price of the convertible securities so to
        be
        offered, including the price required to be paid to purchase such convertible
        security) would purchase at such current market price, and the denominator
        of
        which shall be the number of shares of Preferred Stock outstanding on such
        record date, plus the number of additional shares of Preferred Stock and/or
        "equivalent preferred stock" to be offered for subscription or purchase (or
        into
        which the convertible securities so to be offered are initially convertible)
        .
        In case such subscription price may be paid by delivery of consideration
        part or
        all of which may be in a form other than cash, the value of such consideration
        shall be as determined in good faith by the Board of Directors of the Company,
        whose determination shall be described in a statement filed with the Rights
        Agent and shall be binding on the Rights Agent and the holders of the Rights.
        Shares of Preferred Stock 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 or warrants are not so issued, the Purchase
        Price
        shall be adjusted to be the Purchase Price which would then be in effect
        if such
        record date had not been fixed.

       

      (c) In
        case
        the Company shall fix a record date for a distribution to all holders of
        Preferred Stock (including any such distribution made in connection with
        a
        consolidation or merger in which the Company is the continuing corporation)
        of
        evidences of indebtedness, cash (other than a regular quarterly cash dividend
        out of the earnings or retained earnings of the Company), assets (other than
        a
        dividend payable in Preferred Stock, but including any dividend payable in
        stock
        other than Preferred Stock) or subscription rights or warrants (excluding
        those
        referred to in SECTION 11(b) hereof), the Purchase Price to be in effect
        after
        such record date shall be determined by multiplying the Purchase Price in
        effect
        immediately prior to such record date by a fraction, the numerator of which
        shall be the current market price (as determined pursuant to SECTION 11(d)
        hereof) per share of Preferred Stock on such record date, less the fair market
        value (as determined in good faith by the Board of Directors of the Company,
        whose determination shall be described in a statement filed with the Rights
        Agent) of the portion of the cash, assets or evidences of indebtedness so
        to be
        distributed or of such subscription rights or warrants applicable to a share
        of
        Preferred Stock and the denominator of which shall be such current market
        price
        (as determined pursuant to SECTION 11(d) hereof) per share of Preferred Stock.
        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 be adjusted to be the Purchase Price which would have been in
        effect
        if such record date had not been fixed.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      (d) (i) For
        the
        purpose of any computation hereunder, other than computations made pursuant
        to
        SECTION 11 (a)(iii) hereof, the "current market price" per share of Common
        Stock
        on any date shall be deemed to be the average of the daily closing prices
        per
        share of such Common Stock for the 30 consecutive Trading Days (as such term
        is
        hereinafter defined) immediately prior to such date, and for purposes of
        computations made pursuant to SECTION 11 (a)(iii) hereof, the current market
        price per share of Common Stock on any date shall be deemed to be the average
        of
        the daily closing prices per share of such Common Stock for the ten consecutive
        Trading Days immediately following such date; provided, however, that in
        the
        event that the current market price per share of the Common Stock is determined
        during a period following the announcement by the issuer of such Common Stock
        of
        (A) a dividend or distribution on such Common Stock payable in shares of
        such
        Common Stock or securities convertible into shares of such Common Stock (other
        than the Rights), or (B) any subdivision, combination or reclassification
        of
        such Common Stock, and prior to the expiration of the requisite 30-Trading-Day
        or ten-Trading-Day period, as set forth above, 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
        market price" shall be properly adjusted to take into account ex-dividend
        trading. 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 shares
        of Common stock 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
        or Nasdaq National Market System on which the shares of Common stock are
        listed
        or admitted to trading or, if the shares of Common Stock are not listed or
        admitted to trading on any national securities exchange or Nasdaq National
        Market System, 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 Quotation System
        ("NASDAQ") or such other system then in use, or, if on any such date the
        shares
        of Common Stock 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 Common Stock selected by the Board of Directors of the Company.
        If on any such date no market maker is making a market in the Common Stock,
        the
        fair value of such shares on such date as determined in good faith by the
        Board
        of Directors of the Company and described in a statement filed with the Rights
        Agent shall be used, and shall be conclusive for all purposes. 

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      (ii) For
        the
        purpose of any computation hereunder, the "current market price" per share
        of
        Preferred Stock shall be determined in the same manner as set forth above
        for
        the Common Stock in CLAUSE (i) of this SECTION 11(d) (other than the last
        sentence thereof) . If the current market price per share of Preferred Stock
        cannot be determined in the manner provided above or if the Preferred Stock
        is
        not publicly held or listed or traded in a manner described in CLAUSE (i)
        of
        this SECTION 11(d), the "current market price" per share of Preferred Stock
        shall be conclusively deemed to be an amount equal to 1,000 (as such number
        may
        be appropriately adjusted for such events as stock splits, stock dividends
        and
        recapitalizations with respect to the Common Stock occurring after the date
        of
        this Agreement) multiplied by the current market price per share of the Common
        Stock. If neither the Common Stock nor the Preferred Stock is publicly held
        or
        so listed or traded, "current market price" per share of the Preferred Stock
        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 conclusive for all purposes. For
        all
        purposes of this Agreement, the "current market price" of one one-thousandth
        of
        a share of Preferred Stock shall be equal to the "current market price" of
        one
        share of Preferred Stock divided by 1,000.

       

      (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 one percent (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 ten thousandth of a share of Common Stock or other share or
        one-millionth of a share of Preferred Stock, 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 mandates such adjustment, or (ii) the Expiration
        Date.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      (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 other than Preferred Stock, thereafter
        the
        number of such other shares so receivable upon exercise of any Right and
        the
        Purchase Price thereof shall be subject to adjustment from time to time in
        a
        manner and on terms as nearly equivalent as practicable to the provisions
        with
        respect to the Preferred Stock contained in SECTIONS 11(a), (b), (c), (e),
        (g),
        (h), (i), (j), (k) and (l), and the provisions of SECTIONS 7, 9, 10, 13 and
        14
        hereof with respect to the Preferred Stock shall apply on like terms to any
        such
        other shares.

       

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

       

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

       

      (i) The
        Company may elect on or after the date of any adjustment of the Purchase
        Price
        to adjust the number of Rights, in lieu of any adjustment in the number of
        one
        one-thousandths of a share of Preferred Stock purchasable upon the exercise
        of a
        Right. Each of the Rights outstanding after the adjustment in the number
        of
        Rights shall be exercisable for the number of one one-thousandths of a share
        of
        Preferred Stock for which a Right was exercisable immediately prior to such
        adjustment. Each Right held of record prior to such adjustment of the number
        of
        Rights shall become that number of Rights (calculated to the nearest one
        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 Rights Certificates
        have
        been issued, shall be at least ten days later than the date of the public
        announcement. If Rights Certificates have been issued, upon each adjustment
        of
        the number of Rights pursuant to this SECTION 11(i), the Company shall, as
        promptly as practicable, cause to be distributed to holders of record of
        Rights
        Certificates on such record date Rights Certificates evidencing, subject
        to
        SECTION 14 hereof, the additional Rights to which such holder 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
        Rights Certificates held by such holders prior to the date of adjustment,
        and
        upon surrender thereof, if required by the Company, new Rights Certificates
        evidencing all the Rights to which such holders shall be entitled after such
        adjustment. Rights Certificates so to be distributed shall be issued, executed
        and countersigned in the manner provided for herein (and may bear, at the
        option
        of the Company, the adjusted Purchase Price) and shall be registered in the
        names of the holders of record of Rights Certificates on the record date
        specified in the public announcement.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      (j) Irrespective
        of any adjustment or change in the Purchase Price or the number of one
        one-thousandths of a share of Preferred Stock issuable upon the exercise
        of the
        Rights, the Rights Certificates theretofore and thereafter issued may continue
        to express the Purchase Price per one one-thousandth of a share and the number
        of one one-thousandths of a share which were expressed in the initial Rights
        Certificates issued hereunder.

       

      (k) Before
        taking any action that would cause any adjustment reducing the Purchase Price
        below the then stated value, if any, of the number of one one-thousandths
        of a
        share of Preferred Stock 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 fully paid and
        nonassessable such number of one one-thousandths of a share of Preferred
        Stock
        at such adjusted Purchase Price.

       

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

       

      (m) Anything
        in this SECTION 11 to the contrary notwithstanding, the Company shall be
        entitled to make such reductions in the Purchase Price, in addition to those
        adjustments expressly required by this SECTION 11, as and to the extent that
        in
        their good faith judgment the Board of Directors of the Company shall determine
        to be advisable in order that any (i) consolidation or subdivision of the
        Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
        Stock
        at less than the current market price, (iii) issuance wholly for cash of
        shares
        of Preferred Stock or securities which by their terms are convertible into
        or
        exchangeable for shares of Preferred Stock, (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 Stock shall not be taxable to such
        shareholders.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      (n) 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 complies with SECTION 11(o)
        hereof), (ii) merge with or into any other Person (other than a Subsidiary
        of
        the Company in a transaction which complies with SECTION 11(o) hereof), or
        (iii)
        sell, lease or transfer (or permit any Subsidiary to sell, lease or transfer),
        in one transaction, or a series of related transactions, assets aggregating
        more
        than 50% of the assets (measured by either book value or fair market value)
        or
        generating more than 50% of the operating income or cash flow 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 complies with SECTION 11(o) hereof), if (x) at the time of or immediately
        after such consolidation, merger, sale or lease there are any rights, warrants
        or other instruments or securities outstanding or agreements in effect that
        would substantially diminish or otherwise eliminate the benefits intended
        to be
        afforded by the Rights, (y) prior to, simultaneously with or immediately
        after
        such consolidation, merger, sale or lease, the shareholders 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 or (z) the form or nature
        of
        organization of the Principal Party would preclude or limit the exercise
        of
        Rights.

       

      (o) 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 if at the time such action is taken it is
        reasonably foreseeable that such action will diminish substantially or otherwise
        eliminate the benefits intended to be afforded by the Rights.

       

      (p) Anything
        in this Agreement to the contrary notwithstanding, in the event that the
        Company
        shall at any time after the Rights Dividend Declaration Date and prior to
        the
        Distribution Date (i) declare a dividend on the outstanding shares of Common
        Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares
        of Common Stock, (iii) combine the outstanding shares of Common Stock into
        a
        smaller number of shares, or (iv) issue any shares of its capital stock in
        a
        reclassification of the Common Stock (including any such reclassification
        in
        connection with a consolidation or merger in which the Company is the continuing
        or surviving corporation), the number of Rights associated with each share
        of
        Common Stock then outstanding, or issued or delivered thereafter but prior
        to
        the Distribution Date, shall be proportionately adjusted so that the number
        of
        Rights thereafter associated with each share of Common Stock following any
        such
        event shall equal the result obtained by multiplying the number of Rights
        associated with each share of Common Stock immediately prior to such event
        by a
        fraction the numerator of which shall be the total number of shares of Common
        Stock outstanding immediately prior to the occurrence of the event and the
        denominator of which shall be the total number of shares of Common Stock
        outstanding immediately following the occurrence of such event.

       

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

       

      
        
          
          

        

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

       

      (a)  In
        the
        event that, on or after the Stock Acquisition Date, directly or indirectly,
        (x)
        the Company shall consolidate or otherwise combine with, or merge with and
        into,
        any other Person (other than a Subsidiary of the Company in a transaction
        which
        complies with SECTION 11(o) hereof), and the Company shall not be the continuing
        or surviving corporation of such consolidation, combination or merger, (y)
        any
        Person (other than a Subsidiary of the Company in a transaction which complies
        with SECTION 11(o) hereof) shall consolidate or otherwise combine with, or
        merge
        with and into, the Company, and the Company shall be the continuing or surviving
        corporation of such consolidation, combination or merger and, in connection
        with
        such consolidation or merger, all or part of the outstanding shares of Common
        Stock shall be changed into or exchanged for stock or other securities of
        the
        Company or any other Person or cash or any other property, or (z) the Company
        shall sell, lease or otherwise transfer (or one or more of its Subsidiaries
        shall sell, lease or otherwise transfer), in one transaction or a series
        of
        related transactions, assets aggregating more than 50% of the assets (measured
        by either book value or fair market value) or generating more than 50% of
        the
        operating income or cash flow of the Company and its Subsidiaries (taken
        as a
        whole) to any Person or Persons (other than the Company or any Subsidiary
        of the
        Company in one or more transactions each of which complies with SECTION 11(o)
        hereof), then, and in each such case (except as may be contemplated by SECTION
        13(d) hereof), proper provision 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 the then current Purchase
        Price
        as it may have been adjusted in accordance with the terms of this Agreement
        (which, following the first occurrence of a Flip-over Event, shall be the
        "Purchase
        Price"
        for
        each Right and for all purposes of this Agreement), such number of validly
        authorized and issued, fully paid, nonassessable and freely tradeable shares
        of
        common stock of the Principal Party (as such term is hereinafter defined),
        not
        subject to any liens, encumbrances, rights of first refusal or other adverse
        claims, as shall be equal to the result obtained by (1) multiplying the then
        current Purchase Price by the number of one one-thousandths of a share of
        Preferred Stock for which a Right is exercisable immediately prior to the
        first
        occurrence of a Flip-over Event (or, if a Flip-in Event has occurred prior
        to
        the first occurrence of a Flip-over Event, multiplying the number of such
        one
        one-thousandths of a share for which a Right was exercisable immediately
        prior
        to the first occurrence of a Flip-in Event by the Purchase Price in effect
        immediately prior to such first occurrence), and dividing the product by
        (2) 50%
        of the current market price (determined pursuant to SECTION 11(d)(i) hereof)
        per
        share of the common stock of such Principal Party on the date of consummation
        of
        such Flip-over Event; (ii) such Principal Party shall thereafter be liable
        for,
        and shall assume, by virtue of such Flip-over 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 Flip-over Event; and
        (iv)
        such Principal Party shall take such steps (including, but not limited to,
        the
        reservation of a sufficient number of shares of its common stock) 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 its shares of common stock thereafter deliverable
        upon
        the exercise of the Rights.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      (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), (A) the Person that is the issuer of any securities into which
        shares of Common Stock of the Company are converted in such merger or
        consolidation, or, if there is more than one such issuer, the issuer of the
        common stock of which has the greatest aggregate market value, or (B) if
        no
        securities are so issued, (x) the Person that survives such consolidation
        or is
        the other Party to the merger and survives such merger, or, if there is more
        than one such Person, the Person the common stock of which has the greatest
        aggregate market value or (y) if the Person that is the other party to the
        merger does not survive the merger, the Person that does survive the merger
        (including the Company if it survives); 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, operating income or cash flow transferred pursuant to such transaction
        or transactions, or, if each Person that is a party to such transaction or
        transactions receives the same portion of the assets, operating income or
        cash
        flow so transferred, or, if the Person receiving the greatest portion of
        the
        assets, operating income or cash flow cannot be determined, the Person the
        common stock of which has the greatest aggregate market value; 

       

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

       

      (c)  The
        Company shall not consummate any such consolidation, merger, sale, lease
        or
        transfer unless the Principal Party shall have a sufficient number of authorized
        shares of its common stock which have not been issued or reserved for issuance
        to permit the exercise in full of the Rights in accordance with this SECTION
        13
        and unless prior thereto the Company and such Principal Party shall have
        executed and delivered to the Rights Agent a supplemental agreement providing
        for the terms set forth in Subsections (a) and (b) of this SECTION 13 and
        further providing that, as soon as practicable after the date of any
        consolidation, merger, sale or lease of assets mentioned in Subsection (a)
        of
        this SECTION 13, the Principal Party will

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      (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) until
        the
        Expiration Date; and

       

      (ii)  will
        deliver to holders of the Rights historical financial statements for the
        Principal Party and each of its Affiliates 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,
        consolidations, sales, leases or other transfers. In the event that a Flip-over
        Event shall occur at any time after the occurrence of a Flip-in Event, the
        Rights which have not theretofore been exercised shall thereafter become
        exercisable in the manner described in SECTION 13 (a).

       

      Section
        14.   Fractional
        Rights and Fractional Shares.

       

      (a)  The
        Company shall not be required to issue fractions of Rights except prior to
        the
        Distribution Date as provided in SECTION 11(p) hereof, or to distribute Rights
        Certificates which evidence fractional Rights. In lieu of such fractional
        Rights, there shall be paid to the registered holders of the Rights 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 purposes of this SECTION 14(a), the current market value of a
        whole
        Right shall be the closing price of the Rights for the Trading Day immediately
        prior to the date on which such fractional Rights would have been otherwise
        issuable. The closing price of the Rights 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
        or the Nasdaq National Market System 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 or the Nasdaq National Market System, the last
        quoted price or, if not so quoted, the average of the high bid and low asked
        prices in the over-the-counter market, as reported by NASDAQ or such other
        system then in use or, if on any such date the Rights are not quoted by any
        such
        organization, the average of the closing bid and asked prices as furnished
        by a
        professional market maker making a market in the Rights selected by the Board
        of
        Directors of the Company. If on any such date no such market maker is making
        a
        market in the Rights the fair value of the Rights on such date as determined
        in
        good faith by the Board of Directors of the Company shall be used.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      (b)  The
        Company shall not be required to issue fractions of shares of Preferred Stock
        (other than fractions that are integral multiples of one one-thousandth of
        a
        share of Preferred Stock) upon exercise of the Rights or to distribute
        certificates that evidence fractional shares of Preferred Stock (other than
        fractions that are integral multiples of one one-thousandth of a share of
        Preferred Stock) . In lieu of fractional shares of Preferred Stock that are
        not
        integral multiples of one one-thousandth of a share of Preferred Stock the
        Company may pay to the registered holders of Rights 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 one-thousandth of a share of
        Preferred Stock. For purposes of this SECTION 14(b), the current market value
        of
        one one-thousandth of a share of Preferred Stock shall be one one-thousandth
        of
        the closing price of a share of Preferred Stock (as determined pursuant to
        SECTION 11(d)(ii) hereof) for the Trading Day immediately prior to the date
        of
        such exercise.

       

      (c)  Following
        the occurrence of a Triggering Event, the Company shall not be required to
        issue
        fractions of shares of Common Stock upon exercise or exchange of the Rights
        or
        to distribute certificates that evidence fractional shares of Common Stock.
        In
        lieu of fractional shares of Common Stock, the Company may pay to the registered
        holders of Rights 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 (1) share of Common Stock. For purposes of this SECTION 14(c),
        the
        current market value of one share of Common Stock shall be the closing price
        of
        one share of Common Stock (as determined pursuant to SECTION 11(d)(i) hereof)
        for the Trading Day immediately prior to the date of such exercise.

       

      (d)  The
        holder of a Right by the acceptance of the Rights expressly waives his right
        to
        receive any fractional Rights or any fractional shares upon exercise or exchange
        of a Right, except as permitted by this SECTION 14.

       

      Section
        15.   Rights
        of Action.
        All
        rights of action in respect of this Agreement are vested in the respective
        registered holders of the Rights Certificates (and, prior to the Distribution
        Date, the registered holders of the Common Stock); and any registered holder
        of
        any Rights Certificate (or, prior to the Distribution Date, of the Common
        Stock), without the consent of the Rights Agent or of the holder of any other
        Rights Certificate (or, prior to the Distribution Date, of the Common Stock),
        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
        Rights Certificate in the manner provided in such Rights Certificate and
        in this
        Agreement. Without limiting the foregoing or any remedies available to the
        holders of Rights it is specifically acknowledged that the holders of Rights
        would not have an adequate remedy at law for any breach of this Agreement
        and
        shall be entitled to specific performance of the obligations hereunder and
        injunctive relief against actual or threatened violations of the obligations
        hereunder of any person subject to this Agreement.

       

      Section
        16.   Agreement
        of Rights 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 Common Stock;

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      (b)  after
        the
        Distribution Date, the Rights Certificates are transferable only on the registry
        books of the Rights Agent if surrendered at the principal office or offices
        of
        the Rights Agent designated for such purposes duly endorsed or accompanied
        by a
        proper instrument of transfer and with the appropriate forms and certificates
        fully executed;

       

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

       

      (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 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.   Rights
        Certificate Holder Not Deemed a Shareholder.
        No
        holder, as such, of any Rights Certificate shall be entitled to vote, receive
        dividends or be deemed for any purpose the holder of the number of one
        one-thousandth of a share of Preferred Stock 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 Rights
        Certificate be construed to confer upon the holder of any Rights Certificate,
        as
        such, any of the rights of a shareholder of the Company or any right to vote
        for
        the election of directors or upon any matter submitted to shareholders at
        any
        meeting thereof, or to give or withhold consent to any corporate action,
        or to
        receive notice of meetings or other actions affecting shareholders (except
        as
        provided in SECTION 24 hereof), or to receive dividends or subscription rights,
        or otherwise, until the Right or Rights evidenced by such Rights Certificate
        shall have been exercised in accordance with the provisions hereof.

       

      Section
        18.   Concerning
        the Rights Agent.

       

      (a)  The
        Company agrees to pay to the Rights Agent reasonable compensation pursuant
        to a
        schedule provided to the Company 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 disbursements and other disbursements incurred in the
        administration and execution of this Agreement and the exercise and performance
        of its duties hereunder. The Company also agrees to indemnify the Rights
        Agent
        for, and to hold it harmless against, any loss, liability, or expense, incurred
        without negligence, bad faith or willful misconduct on the part of the Rights
        Agent, for anything done or omitted by the Rights Agent in connection with
        the
        acceptance and administration of this Agreement, including the costs and
        expenses of defending against any claim of liability in the
        premises.

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

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

       

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

       

      (a)  Any
        entity into which the Rights Agent or any successor Rights Agent may be merged
        or with which it may be consolidated, or any entity resulting from any merger
        or
        consolidation to which the Rights Agent or any successor Rights Agent shall
        be a
        party, or any entity succeeding to the corporate trust or stock transfer
        business of the Rights Agent or any successor Rights Agent, shall be the
        successor to the Rights Agent under this Agreement without the execution
        or
        filing of any paper or any further act on the part of any of the parties
        hereto;
        provided, however, that such entity 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 Rights 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 Rights Certificates so countersigned;
        and in case at that time any of the Rights Certificates shall not have been
        countersigned, any successor Rights Agent may countersign such Rights
        Certificates either in the name of the predecessor Rights Agent or in the
        name
        of the successor Rights Agent; and in all such cases such Rights Certificates
        shall have the full force provided in the Rights Certificates and in this
        Agreement.

       

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

       

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

       

      (a)  The
        Rights Agent may consult with legal counsel (who may be legal counsel for
        the
        Company), and the opinion of such counsel 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.

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      (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 (including, without
        limitation, the identity of any Acquiring Person and the determination of
        "current market price") be proved or established by the Company prior to
        taking
        or suffering any action hereunder, such fact or matter (unless other evidence
        in
        respect thereof be herein specifically prescribed) may be deemed to be
        conclusively proved and established by a certificate signed by the Chairman
        of
        the Board, the President, any Vice President, the Treasurer, any Assistant
        Treasurer, the Secretary or any Assistant 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 only for its own negligence, bad faith
        or
        willful misconduct. The Company shall indemnify the Rights Agent for, and
        hold
        it harmless against, any loss, liability or expense incurred without negligence
        or bad faith on its part arising out of or in connection with its agency
        under
        this Agreement, including the costs and expenses of defending itself against
        any
        claim or liability in connection with its exercise or performance of any
        of its
        duties under this Agreement. Anything in this Agreement to the contrary
        notwithstanding, in no event shall the Rights Agent be liable for special,
        indirect or consequential loss or damage of any kind whatsoever (including
        but
        not limited to lost profits), even if the Rights Agent has been advised of
        the
        likelihood of such loss or damage and regardless of the form of the
        action.

       

      (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 Rights Certificates
        or be
        required to verify the same (except as to its countersignature on such Rights
        Certificates), but all such statements and recitals are and shall be deemed
        to
        have been made by the Company only.

       

      (e)  The
        Rights Agent shall not be under any responsibility in respect of the validity
        of
        this Agreement or the execution and delivery hereof (except the due execution
        hereof by the Rights Agent) or in respect of the validity or execution of
        any
        Rights 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 Rights Certificate; nor shall it be responsible
        for
        any adjustment required under the provisions of SECTION 11 or SECTION 13
        hereof
        or responsible for the manner, method or amount of any such adjustment or
        the
        ascertaining of the existence of facts that would require any such adjustment
        (except with respect to the exercise of Rights evidenced by Rights Certificates
        after actual notice of any such adjustment); nor shall it by any act hereunder
        be deemed to make any representation or warranty as to the authorization
        or
        reservation of any shares of Common Stock or Preferred Stock to be issued
        pursuant to this Agreement or any Rights Certificate or as to whether any
        shares
        of Common Stock or Preferred Stock will, when so issued be validly authorized
        and issued, fully paid and nonassessable.

       

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

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

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

       

      (h)  The
        Rights Agent and any shareholder, 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 by 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, however, 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 either not been completed or
        indicates an affirmative response to CLAUSE 1 and/or 2 thereof, the Rights
        Agent
        shall not take any further action with respect to such requested exercise
        of
        transfer without first consulting with the Company.

       

      Section
        21.   Change
        of Rights Agent.
        The
        Rights Agent or any successor Rights Agent may resign and be discharged from
        its
        duties under this Agreement upon 30 days advance notice in writing mailed
        to the
        Company and to each transfer agent of the Common Stock and Preferred Stock,
        by
        registered or certified mail, and to the holders of the Rights Certificates
        by
        first-class mail. The Company may remove the Rights Agent or any successor
        Rights Agent upon 30 days advance notice in writing, mailed to the Rights
        Agent
        or successor Rights Agent, as the case may be, and to each transfer agent
        of the
        Common Stock and Preferred Stock, by registered or certified mail, and to
        the
        holders of the Rights 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
        Rights Certificate (who shall, with such notice, submit his Rights Certificate
        for inspection by the Company), then any registered holder of any Rights
        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 (i) a corporation organized and
        doing
        business under the laws of the United States or of the States of Texas or
        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 States of Texas
        or New
        York), in good standing, 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 an equity of at least $100,000,000, or (ii) an
        affiliate of a corporation described in CLAUSE (i) of this sentence. After
        appointment, the successor Rights Agent shall be vested with the same powers,
        rights, duties and responsibilities as if it had been originally named as
        Rights
        Agent without further act or deed; but the predecessor Rights Agent shall
        deliver and transfer to the successor Rights Agent any property at the time
        held
        by it hereunder, and execute and deliver any further assurance, conveyance,
        act
        or deed necessary for the purpose. Not later than the effective date of any
        such
        appointment, the Company shall file notice thereof in writing with the
        predecessor Rights Agent and each transfer agent of the Common Stock and
        the
        Preferred Stock, and mail a notice thereof in writing to the registered holders
        of the Rights Certificates. Failure to give any notice provided for in this
        SECTION 21, however, or any defect therein, shall not affect the legality
        or
        validity of the resignation or removal of the Rights Agent or the appointment
        of
        the successor Rights Agent, as the case may be.

       

      
        
          
          

        

        
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      Section
        22.   Issuance
        of New Rights Certificates.
        Notwithstanding any of the provisions of this Agreement or of the Rights
        to the
        contrary, the Company may, at its option, issue new Rights Certificates
        evidencing Rights in such form as may be approved by 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 Rights
        Certificates made in accordance with the provisions of this Agreement. In
        addition, in connection with the issuance or sale of shares of Common Stock
        following the Distribution Date and prior to the redemption or expiration
        of the
        Rights the Company (a) shall, with respect to shares of Common Stock so issued
        or sold under any employee plan or arrangement, or upon the exercise, conversion
        or exchange of securities hereinafter 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 or
        Rights
        in connection with such issuance or sale; provided, however, that (i) no
        such
        Rights Certificate shall be issued if, and to the extent that, the Company
        shall
        be advised by counsel for the Company that such issuance more likely than
        not
        would (a) cause any incentive stock option plan of the Company to not or
        to no
        longer meet or satisfy the requirements of Section 422 of the Code or (b)
        otherwise create a risk of material adverse tax consequences to the Company,
        to
        the Person to whom such Rights Certificates would be issued, or to other
        employees or former employees of the Company, and (ii) no such Rights
        Certificate shall be issued if, and to the extent that, appropriate adjustment
        shall otherwise have been made in lieu of the issuance thereof.

       

      Section
        23.   Redemption
        and Termination.

       

      (a)  The
        Board
        of Directors of the Company may, at its option, at any time prior to the
        earlier
        of (i) the close of business on the tenth day after the
        Stock
        Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior
        to
        the Record Date, the
        close
        of business on the tenth day following the Record Date), or (ii) the Final
        Expiration Date, redeem all but not less than all the then outstanding Rights
        at
        a price of $.0l 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"), and the Company may, at its option, pay the Redemption
        Price in shares of Common Stock (based on the "current market value," as
        defined
        in SECTION 11(d)(i) hereof, of the shares of Common Stock at the time of
        redemption), cash or any other form of consideration deemed appropriate by
        the
        Board of Directors.

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      (b)  Immediately
        upon the action 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. The Company
        shall promptly give public notice of any such redemption; provided, however,
        that the failure to give, or any defect in, such notice shall not affect
        the
        validity of such redemption. Following the action of the Board of Directors
        ordering the redemption of the Rights, the Company shall give notice of such
        redemption to the Rights Agent and the holders of the then outstanding Rights
        by
        mailing such notice to all such holders at each holder's last address as
        it
        appears upon the registry books of the Rights Agent or, prior to the
        Distribution Date, on the registry books of the Transfer Agent for the Common
        Stock. Any notice which is mailed in the manner herein provided shall be
        deemed
        given, whether or not the holder receives the notice. Each such notice of
        redemption will state the method by which the payment of the
        Redemption Price will be made.

       

      Section
        24.   Exchange.

       

      (a)  The
        Board
        of Directors of the Company may, at its option, at any time after any Person
        becomes an Acquiring Person, exchange all or part of the then outstanding
        and
        exercisable Rights (which shall not include Rights that have become void
        pursuant to the provisions of SECTION 7(e) hereof) for shares of Common Stock
        at
        an exchange ratio of one share of Common Stock per Right, appropriately adjusted
        to reflect any stock split, stock dividend or similar transaction occurring
        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 an Exempt Person), together with all Affiliates and Associates of such
        Person, becomes the Beneficial Owner of 50% or more of the shares of Common
        Stock then outstanding. 

       

      (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 shares of Common Stock equal to the number of such
        Rights
        held by such holder multiplied by the Exchange Ratio. The Company shall promptly
        give public notice of any such exchange; provided, however, that the failure
        to
        give, or any defect in, such notice shall not affect the validity of such
        exchange. The Company 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 shares of Common Stock for Rights will be effected and, in the event
        of
        any partial exchange, the number of Rights which will be exchanged. Any partial
        exchange shall be effected pro rata based on the number of Rights (other
        than
        Rights which have become void pursuant to the provisions of SECTION 7(e)
        hereof)
        held by each holder of Rights. 

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      (c)  In
        the
        event that there shall not be sufficient shares of Common Stock 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 shares of Common Stock
        for
        issuance upon exchange of the Rights. In the event the Company shall, after
        good
        faith effort, be unable to take all such action as may be necessary to authorize
        such additional shares of Common Stock, the Company shall substitute, for
        each
        share of Common Stock that would otherwise be issuable upon exchange of a
        Right,
        a number of Preferred Shares or fraction thereof such that the current per
        share
        market price of one Preferred Share multiplied by such number or fraction
        is
        equal to the current per share market price of one share of Common Stock
        as of
        the date of issuance of such Preferred Shares or fraction thereof.

       

      Section
        25.   Notice
        of Certain Events.

       

      (a)  In
        case
        the Company shall propose, at any time after the Distribution Date, (i) to
        pay
        any dividend payable in stock of any class to the holders of Preferred Stock
        or
        to make any other distribution to the holders of Preferred Stock (other than
        a
        regular quarterly cash dividend out of earnings or retained earnings of the
        Company), or (ii) to offer to the holders of Preferred Stock rights or warrants
        to subscribe for or to purchase any additional shares of Preferred Stock
        or
        shares of stock of any class or any other securities, rights or options,
        or
        (iii) to effect any reclassification of its Preferred Stock (other than a
        reclassification involving only the subdivision of outstanding shares of
        Preferred Stock), or (iv) to effect any consolidation or merger into or with
        any
        other Person (other than a Subsidiary of the Company in a transaction which
        complies with SECTION 11(o) hereof), or to effect any sale, lease or other
        transfer (or to permit one or more of its Subsidiaries to effect any sale,
        lease
        or other transfer), in one transaction or a series of related transactions,
        of
        assets aggregating more than 50% of the assets (measured by either book value
        or
        fair market value) or generating more than 50% of the operating income or
        cash
        flow 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 complies with SECTION 11(o) hereof), or (v) to
        effect
        the liquidation, dissolution or winding up of the Company then, in each such
        case, the Company shall give to each holder of a Rights Certificate, to the
        extent feasible and 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, distribution of rights or warrants, or the date on which
        such
        reclassification, consolidation, merger, sale, lease, transfer, liquidation,
        dissolution, or winding up is to take place and the date of participation
        therein by the holders of the shares of Preferred Stock, if any such date
        is to
        be fixed, and such notice shall be so given in the case of any action covered
        by
        CLAUSE (i) or (ii) above at least 20 days prior to the record date for
        determining holders of the shares of Preferred Stock for purposes of such
        action, and in the case of any such other action, at least 20 days prior
        to the
        date of the taking of such proposed action or the date of participation therein
        by the holders of the shares of Preferred Stock whichever shall be the
        earlier.

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      (b)  In
        case
        any of the events set forth in SECTION 11(a)(ii) hereof shall occur, then,
        in
        any such case, (i) the Company shall as soon as practicable thereafter give
        to
        each holder of a Rights Certificate, to the extent feasible and in accordance
        with SECTION 26 hereof, a notice of the occurrence of such event, which shall
        specify the event and the consequences of the event to holders of Rights
        under
        SECTION 11(a)(ii) hereof, and (ii) all references in the preceding subsection
        to
        Preferred Stock shall be deemed thereafter to refer to Common Stock and/or,
        if
        appropriate, other securities.

       

      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 Rights Certificate to or on the Company shall be
        sufficiently given or made if sent by first-class mail, postage prepaid,
        addressed (until another address is filed in writing with the Rights Agent)
        as
        follows:

       

                                          American
        Stock
        Transfer & Trust Company

                                          59
        Maiden
        Lane

                                          New
        York, NY
        10038

         

      Subject
        to the provisions of SECTION 21, any notice or demand authorized by this
        Agreement to be given or made by the Company or by the holder of any Rights
        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:

       

                                          Forgent
        Networks,
        Inc.

                                          108
        Wild Basin
        Road

                                          Austin,
        Texas
        78746

                                          Attn:
        President

      

      Notices
        or demands authorized by this Agreement to be given or made by the Company
        or
        the Rights Agent to the holder of any Rights Certificate (or, if prior to
        the
        Distribution Date, to the holder of certificates representing shares of Common
        Stock) 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 shares of Common Stock.
        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 Rights 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, (iii) to shorten or lengthen
        any time period hereunder or (iv) to change or supplement the provisions
        hereunder in any manner which the Company may deem necessary or desirable
        and
        which shall not adversely affect the interests of the holders of Rights
        Certificates (other than an Acquiring Person or an Affiliate or Associate
        of an
        Acquiring Person); provided, this Agreement may not be supplemented or amended
        to lengthen pursuant to CLAUSE (iii) of this sentence, (A) a time period
        relating to when the Rights may be redeemed at such time as the Rights are
        not
        then redeemable, or (B) any other time period unless lengthening such other
        time
        period is for the purpose of protecting, enhancing or clarifying the rights
        of,
        and/or the benefits to the holders of Rights. 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. Notwithstanding
        anything contained in this Agreement to the contrary, no supplement or amendment
        shall be made which changes rights or duties of the Rights Agent under this
        Agreement without the consent of the Rights Agent. Prior to the Distribution
        Date, the interests of the holders of Rights shall be deemed coincident with
        the
        interests of the holders of Common Stock.

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

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

       

      Section
        29.   Determinations
        and Actions by the Board Of Directors, Etc.
        For all
        purposes of this Agreement, any calculation of the number of shares of Common
        Stock outstanding at any particular time, including for purposes of determining
        the particular percentage of such outstanding shares of Common Stock of which
        any Person is the Beneficial Owner, shall be made in accordance with the
        last
        sentence of Rule l3d-(d)(1)(i) of the General Rules and Regulations under
        the
        Exchange Act in effect on the date hereof. he 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 to the
        Company, or as may be necessary or advisable in the administration of this
        Agreement, including, without limitation, the right and power to (i) interpret
        the provisions of this Agreement, and (ii) make all determinations deemed
        necessary or advisable for the administration of this Agreement (including
        a
        determination to redeem or not to redeem the Rights or to amend the Agreement).
        All such actions, calculations, interpretations and determinations (including,
        for purposes of CLAUSE (y) below, all omissions with respect to the foregoing)
        which are done or made by the Board in good faith, shall be final, conclusive
        and binding on the Rights Agent and the holders of the Rights, and all other
        parties, and (y) not subject the Board to any liability to the holders of
        the
        Rights.

       

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

       

      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, each Right and each Rights 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 made and to be performed entirely within such
        State.

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

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

       

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

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

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

       

      

      
        
          	Attest:                                                

	 	 	FORGENT NETWORKS, INC.
	 	 	 	 
	 	 	 	 
	By: /s/
                  Paul Tesluk	 	 	By: 
                  /s/ Jay C. Peterson
	
                  

                	 	 	
                  

                
	Name:
                  Paul Tesluk
Title: Assistant Treasurer	 	 	Name:
                  Jay C. Peterson
Title: Chief Financial
                  Officer

        

      

      
        	Attest:
                	 	 	 AMERICAN
                STOCK TRANSFER & TRUST COMPANY
	 	 	 	 
	 	 	 	 
	By:
                /s/ Susan Silber	 	 	By:
                /s/ Herbert J. Lemmer
	
                

              	 	 	
                

              
	Name:
                Susan Silber
Title: Assistant Secretary	 	 	Name:
                Herbert J. Lemmer
Title: Vice
                President

      

      

      

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

      

      CERTIFICATE
        OF DESIGNATIONS

      FOR
        DESIGNATING SERIES A

      PREFERRED
        STOCK OF

      FORGENT
        NETWORKS, INC. 

      (f.k.a.
        VTEL Corporation)

      

      

      To
        the
        Secretary of State

      of
        the
        State of Delaware:

      

      Pursuant
        to the provisions of the Delaware General Corporation Law, the undersigned
        corporation submits the following certificate for the purpose of designating
        series of its preferred stock and fixing and determining the relative rights
        and
        preferences thereof:

      

      1. The
        name
        of the corporation is Forgent Networks, Inc. (f.k.a. VTEL
        Corporation).

      

      2. The
        following resolution establishing and designating the Series A Preferred
        Stock
        and fixing and determining the relative rights and preferences thereof was
        duly
        adopted by the Board of Directors of the Corporation on July 10,
        1996:

      

      RESOLVED,
        that pursuant to the authority vested in the Board of Directors of this Company
        in accordance with the provisions of its Certificate of Incorporation, a
        series
        of Preferred Stock of the Corporation be and it hereby is created, and that
        the
        designation and amount thereof and the voting powers, preferences and relative,
        participating, optional and other special rights of the shares of such series,
        and the qualifications, limitations or restrictions thereof are as
        follows:

      

      

      SECTION
        1. Designation
        and Amount.      

       

      The
        shares of such series shall be designated as "Series A Preferred Stock,"
        shall
        have $0.01 par value per share, and the number of shares constituting such
        series shall be 150,000. 

      

      

      SECTION
        2. Dividends
        and Distributions.

       

      (A)
        Subject to the prior and superior rights of the 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 dividends, if any, the holders of shares
        of
        Series A Preferred Stock shall be entitled to receive, when, as and if declared
        by the Board of Directors out of funds legally available for the purpose,
        quarterly dividends payable in cash on the last 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 1,000 times the aggregate per share amount of all cash dividends,
        and
        1,000 times the aggregate per share amount (payable in kind) of all non-cash
        dividends or other distributions other than a dividend payable in shares
        of
        Common Stock or a subdivision of the outstanding shares of Common Stock (by
        reclassification or otherwise), declared on the Common Stock, par value $.01
        per
        share, of the Corporation (the "Common Stock") subject to the provision for
        adjustment hereinafter set forth, 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 after July
        10,
        1996 (the "Rights Declaration Date"), (i) declare any dividend on Common
        Stock
        payable in shares of Common Stock, (ii) subdivide the outstanding Common
        Stock,
        or (iii) combine the outstanding Common Stock into a smaller number of shares,
        then in each such case the amount to which holders of shares of Series A
        Preferred Stock were entitled immediately prior to such event 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.

      

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      (B)
        The
        Corporation shall declare a dividend or distribution on the Series A Preferred
        Stock as provided in paragraph (A) above immediately after it declares a
        dividend or distribution on the Common Stock (other than a dividend payable
        in
        shares of Common Stock).

      

      (C)
        Dividends shall begin to accrue (if payable pursuant to PARAGRAPH (A) above)
        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
        of Series A Preferred Stock, 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 no
        more
        than 30 days prior to the date fixed for the payment thereof.

      

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

      SECTION
        3. Voting
        Rights. 

       

      The
        holders of shares of Series A Preferred Stock shall have the following voting
        rights:

      

      (A) Subject
        to the provisions for adjustment hereinafter set forth, each one one-thousandth
        share of Series A Preferred Stock shall entitle the holder thereof to one
        vote
        on all matters submitted to a vote of the shareholders of the Corporation.
        In
        the event the Corporation shall at any time after the Rights Declaration
        Date
        (i) declare any dividend on Common Stock payable in shares of Common Stock,
        (ii)
        subdivide the outstanding Common Stock or (iii) combine the outstanding Common
        Stock into a smaller number of shares, then in each such case the number
        of
        votes per one one-thousandth of a share to which holders of shares of Series
        A
        Preferred Stock were entitled immediately prior to such event shall be adjusted
        by multiplying such number by a fraction the numerator of which is the number
        of
        shares of Common Stock outstanding immediately after such event and the
        denominator of which is the number of shares of Common Stock that were
        outstanding immediately prior to such event.

      

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

      

      (C) (i) If
        at any
        time dividends on any Series A Preferred Stock shall be in arrears in an
        amount
        equal to four (4) quarterly dividends thereon (whether or not consecutive),
        the
        occurrence of such contingency shall mark the beginning of a period (herein
        called a "default period") which shall extend until such time when all accrued
        and unpaid dividends for all previous quarterly dividend periods on all shares
        of Series A Preferred Stock then outstanding shall have been declared and
        paid
        or set apart for payment. During each default period, all holders of Preferred
        Stock (including holders of the Series A Preferred Stock) with dividends
        in
        arrears in an amount equal to four (4) quarterly dividends thereon, voting
        as a
        class, irrespective of series, shall have the right to elect two (2)
        Directors.

      

      (ii) During
        any default period, such voting right of the holders of Series A Preferred
        Stock
        may be exercised initially at a special meeting called pursuant to subparagraph
        (iii) of this SECTION 3(C) or at any annual meeting of shareholders, and
        thereafter at annual meetings of shareholders provided that neither such
        voting
        right nor the right of the holders of any other series of Preferred Stock,
        if
        any, to increase, in certain cases, the authorized number of Directors shall
        be
        exercised unless the holders of ten percent (10%) in number of shares of
        Preferred Stock outstanding shall be present in person or by proxy. The absence
        of a quorum of the holders of Common Stock shall not affect the exercise
        by the
        holders of Preferred Stock of such voting right. At any meeting at which
        the
        holders of Preferred Stock shall exercise such voting right initially during
        an
        existing default period, they shall have the right, voting as a class, to
        elect
        Directors to fill such vacancies, if any, in the Board of Directors as may
        then
        exist up to two (2) Directors or, if such right is exercised at an annual
        meeting, to elect two (2) Directors. If the number which may be so elected
        at
        any special meeting does not amount to the required number, the holders of
        the
        Preferred Stock shall have the right to make such increase in the number
        of
        Directors as shall be necessary to permit the election by them of the required
        number. After the holders of the Preferred Stock shall have exercised their
        right to elect Directors in any default period and during the continuance
        of
        such period, the number of Directors shall not be increased or decreased
        except
        by vote of the holders of Preferred Stock as herein provided or pursuant
        to the
        rights of any equity securities ranking senior to or pari passu with the
        Series
        A Preferred Stock.

      

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

      (iii) Notwithstanding
        anything to the contrary contained in the Corporation's Certificate of
        Incorporation or Bylaws, unless the holders of Preferred Stock shall, during
        an
        existing default period, have previously exercised their right to elect
        Directors, the Board of Directors may order, or any shareholder or shareholders
        owning in the aggregate not less than ten percent (10%) of the total number
        of
        shares of Preferred Stock outstanding, irrespective of series, may request,
        the
        calling of a special meeting of the holders of Preferred Stock, which meeting
        shall thereupon be called by the President, a Vice-President or the Secretary
        of
        the Corporation. Notice of such meeting and of any annual meeting at which
        holders of Preferred Stock are entitled to vote pursuant to this subparagraph
        (C)(iii) shall be given to each holder of record of Preferred Stock by mailing
        a
        copy of such notice to him at his last address as the same appears on the
        books
        of the Corporation. Such meeting shall be called for a time not earlier than
        10
        days and not later than 60 days after such order or request or in default
        of the
        calling of such meeting within 60 days after such order or request, such
        meeting
        may be called on similar notice by any shareholder or shareholders owning
        in the
        aggregate not less than ten percent (10%) of the total number of shares of
        Preferred Stock outstanding. Notwithstanding the provisions of this subparagraph
        (C)(iii), no such special meeting shall be called during the period within
        60
        days immediately preceding the date fixed for the next annual meeting of
        the
        shareholders.

      

      (iv)
        In
        any default period, the holders of Common Stock, and other classes of stock
        of
        the Corporation, if applicable, shall continue to be entitled to elect the
        whole
        number of Directors until the holders of Preferred Stock shall have exercised
        their right to elect two (2) Directors voting as a class, after the exercise
        of
        which right (x) the Directors so elected by the holders of Preferred Stock
        shall
        continue in office until their successors shall have been elected by such
        holders or until the expiration of the default period, and (y) the Common
        Stock
        and Preferred Stock, voting together as a class, shall be entitled to elect
        the
        remaining directors.

      

      (v)
        Immediately upon the expiration of a default period, (x) the right of the
        holders of Preferred Stock as a class to elect directors shall cease, (y)
        the
        term of any directors elected by the holders of Preferred Stock as a class
        shall
        terminate, and (z) the number of Directors shall be such number as may be
        provided for in the Certificate of Incorporation or Bylaws irrespective of
        any
        increase made pursuant to the provisions of subparagraph (C)(ii) of this
        SECTION
        3 (such number being subject, however, to change thereafter in any manner
        provided by law or in the Certificate of Incorporation or Bylaws). Any vacancies
        in the Board of Directors effected by the provisions of CLAUSES (Y) and (Z)
        in
        the preceding sentence may be filled by a majority of the remaining Directors.
        

      

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

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

      

         SECTION
        4. Certain
        Restrictions.

      

      (A) Whenever
        quarterly dividends or other dividends or distributions payable on the Series
        A
        Preferred Stock, as provided in SECTION 2 hereof, 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 on, make any other distributions on, or redeem or purchase
        or
        otherwise acquire for consideration 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 on 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
        on
        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
        on a
        parity (either as to dividends or upon liquidation, dissolution or winding
        up)
        with the Series A Preferred Stock, provided that the Corporation may at any
        time
        redeem, purchase or otherwise acquire shares of any such parity 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)
         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.

      

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

      (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 subsection (A) of is SECTION 4, purchase
        or
        otherwise acquire such shares at such time and in such manner.

      

      

      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 canceled 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 to be created by resolution or
        resolutions of the Board of Directors subject to the conditions and restrictions
        on issuance set forth herein.

       

      SECTION
        6. Liquidation,
        Dissolution or Winding-Up. 

       

      (A) Upon
        any
        liquidation (voluntary or otherwise), dissolution or winding-up of the
        Corporation, 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 $10 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 A 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 "Common
        Adjustment") equal to the quotient obtained by dividing (i) the absolute
        value
        of the Series A Liquidation Preference by (ii) 1,000 (as appropriately adjusted
        as set forth in subsection C below to reflect such events as stock splits,
        stock
        dividends and recapitalizations with respect to the Common Stock) (such number
        in CLAUSE (II), the "Adjustment Number"). Following the payment of the full
        amount of the Series A Liquidation Preference and the Common 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 shares 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 l
        with respect to such Preferred Stock and Common Stock on a per share basis,
        respectively. 

      

      (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 such parity shares in proportion to their respective
        liquidation preferences. In the event, however, that there are not sufficient
        assets available to permit payment in full of the Common Adjustment, then
        such
        remaining assets shall be distributed ratably to the holders of Common
        Stock.

      

      
        
          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

      (C) In
        the
        event the Corporation shall at any time after the Rights Declaration Date
        (i)
        declare any dividend on Common Stock payable in shares of Common Stock, (ii)
        subdivide the outstanding Common Stock, or (iii) combine the outstanding
        Common
        Stock into a smaller number of shares, then in each such case the Adjustment
        Number in effect immediately prior to such event shall be adjusted by
        multiplying such Adjustment Number by a fraction the numerator of which is
        the
        number of shares of Common Stock outstanding immediately after such event
        and
        the denominator of which is the number of shares of Common Stock that were
        outstanding immediately prior to such event.

      

      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 the shares of Series A Preferred Stock shall at the same time be similarly
        exchanged or changed in an amount per share (subject to the provision for
        adjustment hereinafter set forth) equal to 1,000 times the aggregate amount
        of
        stock, securities, cash and/or any other property (payable in kind), as the
        case
        may be, into which or for which each share of Common Stock is changed or
        exchanged. In the event the Corporation shall at any time after the Rights
        Declaration Date (i) declare any dividend on Common Stock payable in shares
        of
        Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
        the
        outstanding Common Stock into a smaller number of shares, 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 junior to all other series of the
        Corporation's Preferred Stock as to the payment of dividends and the
        distribution of assets, unless the terms of any such series shall provide
        otherwise.

       

      
        
          
          

        

        
          A-7

          
            

          

        

        SECTION
          10. Amendment.
          

      

       

      The
        Certificate of Incorporation of the Corporation shall not be further 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 a majority or more of the
        outstanding shares of Series A Preferred Stock, voting separately as a
        class.

       

      SECTION
        11. Fractional
        Shares. 

      

      Series
        A
        Preferred Stock may be issued in fractions of a share which shall entitle
        the
        holder thereof, in proportion to such holder's fractional shares, to exercise
        voting rights, receive dividends, participate in distributions and to have
        the
        benefit of all of the rights of holders of shares of Series A Preferred Stock.
        

      

       

      

      
        	 	 	 
	 Dated:
                July 11, 1996 	FORGENT
                NETWORKS, INC (f.k.a. VTEL CORPORATION)
	 
 	 
 	 
 
	 	By:  	/s/ F.
                H. (Dick) Moeller 
	 	
                
Chief
                Executive Officer 

      

      
        
          	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ Rodney
                  S. Bond 
	 	
                  
Vice
                  President-Finance 
	 	 

        

      

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

       

      [Form
        of
        Rights Certificate]

      

      Certificate
        No. R- _____        

      Rights
        

       

      NOT
        EXERCISABLE AFTER DECEMBER 31, 2015 OR EARLIER IF REDEEMED BY THE COMPANY.
        THE
        RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
        RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
        CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
        AN
        AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
        AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
        [THE RIGHTS REPRESENTED BY THIS RIGHTS 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 RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
        HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
        7(E)
        OF SUCH AGREEMENT.]1

      

      Rights
        Certificate

      Forgent
        Networks, Inc.

      

      This
        certifies that ____________________, or registered assigns, is the registered
        owner of the number of Rights set forth above, each of which entitles the
        owner
        thereof subject to the terms, provisions and conditions of the Rights Agreement,
        dated as of December 19, 2005 (the "Rights Agreement"), between Forgent
        Networks, Inc., a Delaware corporation (the "Company"), and American Stock
        Transfer and Trust Company, as Rights Agent (the "Rights Agent"), to purchase
        from the Company at any time prior to close of business on December 31, 2015
        at
        the office or offices of the Rights Agent, designated for such purposes or
        its
        successors as Rights Agent, one one-thousandth of a fully paid, non-assessable
        share of Series A Preferred Stock (the "Preferred Stock") of the Company,
        at a
        purchase price of $13 per one one-thousandth of a share (the "Purchase Price"),
        upon presentation and surrender of this Rights Certificate with the Form
        of
        Election to Purchase and related Certificate duly executed. The Purchase
        Price
        shall be paid in cash or by certified bank check or money order payable to
        the
        order of the Company. The number of Rights evidenced by this Rights Certificate
        (and the number of shares 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 December 15, 2005, based on the Preferred Stock
        as
        constituted at such date.

      

      ______________________

      

       1
        [The
        portion of the legend in brackets shall be inserted only if
        applicable]

       

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

      Upon
        the
        occurrence of a Triggering Event (as such term is defined in the Rights
        Agreement), if the Rights evidenced by this Rights Certificate are beneficially
        owned by (i) an Acquiring Person or an Affiliate or Associate of any such
        Acquiring Person (as such terms are defined in the Rights Agreement), (ii)
        a
        transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
        under
        certain circumstances specified in the Rights Agreement, a transferee of
        a
        person who, after such transfer, became an Acquiring Person, or an Affiliate
        or
        Associate of an Acquiring Person, such Rights shall become null and void
        and no
        holder hereof shall have any right with respect to such Rights from and after
        the occurrence of such Triggering Event.

      

      As
        provided in the Rights Agreement, the Purchase Price and the number and kind
        of
        shares of Preferred Stock or other securities which may be purchased upon
        the
        exercise of the Rights evidenced by this Rights Certificate are subject to
        modification and adjustment upon the happening of certain events, including
        Triggering 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 Rights Certificates, which
        limitations of rights include the temporary suspension of the exercisability
        of
        such Rights under the specific circumstances set forth in the Rights Agreement.
        Copies of the Rights Agreement are on file at the office of the Company and
        are
        also available upon written request to the Company.

      

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

      

       Subject
        to the provisions of the Rights Agreement, the Rights evidenced by this
        Certificate may be redeemed by the Company at its option at a redemption
        price
        of $.01 per Right in cash or in shares of Common Stock or in any other form
        of
        consideration deemed appropriate by the Board of Directors at any time prior
        to
        the earlier of the close of business on (i) the tenth day following the Stock
        Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior
        to
        the Record Date, the close of business on the tenth day following the Record
        Date), and (ii) the Final Expiration Date. 

      

      In
        addition, the Company may, at any time after any Person becomes an Acquiring
        Person, exchange all or a portion of the outstanding and exercisable Rights
        for
        shares of Common Stock at an exchange ratio of one share of Common Stock
        per
        Right, subject to adjustment to reflect stock splits, stock dividends or
        similar
        transactions. Immediately upon the action of the Board of Directors ordering
        an
        exchange of Rights, the Rights so exchanged will terminate and the only right
        of
        the holders of such Rights will be to receive the shares of Common Stock
        in
        exchange. 

      

      
        
          
          

        

        
          B-2

          
            

          

        

        
          
          

        

      

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

      

      No
        holder
        of this Rights Certificate shall be entitled to vote or receive dividends
        or be
        deemed for any purpose the holder of shares of Preferred Stock 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
        shareholder of the Company or any right to vote for the election of directors
        or
        upon any matter submitted to shareholders at any meeting thereof or to give
        or
        withhold consent to any corporate action, or, to receive notice of meetings
        or
        other actions affecting shareholders (except as provided in the Rights
        Agreement), or to receive dividends or subscription rights, or otherwise,
        until
        the Right or Rights evidenced by this Rights Certificate shall have been
        exercised as provided in the Rights Agreement. 

      

      This
        Rights 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.

      

      
        
          	ATTEST:	 	 FORGENT
                  NETWORKS, INC.
	 	 	 	 
	 	 	 By:	 
	
                  
Secretary
	 	 Title:	
                  

                
	
                	 	 	
                  

                

        
   

      
        
          	Countersigned:	 	 	 
	 	 	 	 
	
                  

                	 	 	
                
	
                  By:   

                    
  
Authorized
                    Signature

                	 	 	
                

        

      

       

      
        
          
          

        

        
          B-3

          
            

          

        

        
          
          

        

      

       

      

      [Form
        of
        Reverse Side of Rights Certificate]

      

      FORM
        OF ASSIGNMENT

       

      (To
        be
        executed by the registered holder if such

      holder
        desires to transfer the Rights Certificate.)

      

      FOR
        VALUE
        RECEIVED ____________________ hereby sells, assigns and transfers unto
        _______________________________________________________________________________________  (Please
        print name and address of transferee) this
        Rights Certificate, together with all right, title and interest therein,
        and
        does hereby irrevocably constitute and appoint ___________________ Attorney,
        to
        transfer the within Rights Certificate on the books of the within-named Company,
        with full power of substitution.

       

      
 

      Dated:
        __________, 20____

      
        	 	 	 
	 	 
	 
 	 
 	 
 
	 	 	 
	 	
                
Signature
	 	 

                                                         
            

      

      Signature
        Guaranteed:

      

      
        
          
          

        

        
          B-4

          
            

          

        

        
          
          

        

      

      Certificate

      

      The
        undersigned hereby certifies by checking the appropriate boxes that:

      

      (1)
        this
        Rights Certificate [  ] is [  ] is not being sold, assigned
        and
        transferred by or on behalf of a Person who is or was an Acquiring Person
        or an
        Affiliate or Associate of any such Acquiring Person (as such terms are defined
        pursuant to the Rights Agreement);

      

      (2)
        after
        due inquiry and to the best knowledge of the undersigned, it [ ] did [ ]
        did not
        acquire the Rights evidenced by this Rights Certificate from any Person who
        is,
        was or subsequently became an Acquiring Person or an Affiliate or Associate
        of
        an Acquiring Person.

      

      

      Dated:
        ________, 20___                                                  ___________________________________
        

                                            
        Signature

      

      

      Signature
        Guaranteed:

      

      

      

      NOTICE

      
 

      The
        signature to the foregoing Assignment and Certificate must correspond to
        the
        name as written upon the face of this Rights Certificate in every particular,
        without alteration or enlargement or any change whatsoever. 

       

       

       

      
        
          
          

        

        
          B-5

          
            

          

        

        
          
          

        

      

      FORM
        OF ELECTION TO PURCHASE

      

      (To
        be
        executed if holder desires to

      exercise
        Rights represented by the

      Rights
        Certificate.)

      

      

      To
        ______________:

      

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

      

      Please
        insert social security

      or
        other
        identifying number: ________________________

      

      

      __________________________________________________________________________
        

          (Please
        print name and address)

      

      __________________________________________________________________________
        

      

      If
        such
        number of Rights shall not be all the Rights evidenced by this Rights
        Certificate, a new Rights Certificate for the balance 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
        Guaranteed:

      

      
        
          
          

        

        
          B-6

          
            

          

        

        
          
          

        

      

      

      Certificate

      

      The
        undersigned hereby certifies by checking the appropriate boxes that:

      

      (1)
        the
        Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised
        by or on behalf of a Person who is or was an Acquiring Person or an Affiliate
        or
        Associate of any such Acquiring Person (as such terms are defined pursuant
        to
        the Rights Agreement);

      

      (2)
        after
        due inquiry and to the best knowledge of the undersigned, it [ ] did [ ]
        did not
        acquire the Rights evidenced by this Rights Certificate from any Person who
        is,
        was or became an Acquiring Person or an Affiliate or Associate of an Acquiring
        Person.

      

      

      Dated:
        _________, 20____                                                 ___________________________________
        

                                            Signature

      

      

      Signature
        Guaranteed:

       

      

      

      NOTICE

      

      The
        signature to the foregoing Election to Purchase and Certificate must correspond
        to the name as written upon the face of this Rights Certificate in every
        particular, without alteration or enlargement or any change whatsoever.

      

      

      
        
          
          

        

        
          B-7

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        C

      
 

      SUMMARY
        OF

      FORGENT
        NETWORKS, INC.

      STOCKHOLDER
        RIGHTS PLAN

      

      Effective
        as of December 31, 2005

      

      In
        connection with the expiration of the Rights Agreement between Forgent Networks,
        Inc. f/k/a VTEL Corporation (the "Company") and First National Bank of Boston,
        dated July 10, 1996 (the "Expiring Rights Agreement"), and the December 31,
        2005
        expiration of the associated rights issued thereunder, on December 15, 2005,
        the
        Board of Directors of the Company approved the execution of a new Rights
        Agreement (the "New Rights Agreement") between the Company and American Stock
        Transfer &
        Trust
        Company, as Rights Agent (the "Rights Agent").

       

      To
        implement the purpose of the new Rights Agreement, on December 15, 2005,
        the
        Board of Directors of the Company declared a dividend distribution of one
        Right
        for each outstanding share of common stock, par value $0.01 per share, of
        the
        Company (the "Common Stock"). The distribution is payable to the stockholders
        of
        record at the close of business on December 31, 2005, and is effective
        simultaneous with the expiration of the rights granted under the Expiring
        Rights
        Agreement. 

       

      Each
        newly issued Right will entitle the registered holder to purchase from the
        Company one one-thousandth of a share of Series A Preferred Stock, $0.01
        par
        value (the "Preferred Stock"), subject to adjustment, at a purchase price
        of
        $13, subject to adjustment (the "Purchase Price"). The description and terms
        of
        the Rights are set forth in the New Rights Agreement, a copy of which is
        attached hereto as Exhibit 1.

       

      Initially,
        the Rights will be attached to all Common Stock certificates representing
        shares
        then outstanding, and no separate Rights Certificates will be distributed.
        The
        Rights will separate from the Common Stock and a distribution date (the
        "Distribution Date") will occur upon the earlier of (i) 10 days following
        the date (the "Stock Acquisition Date") of a public announcement that a person
        or group of affiliated or associated persons (an "Acquiring Person") has
        acquired, or obtained the right to acquire, beneficial ownership of 15% or
        more
        of the outstanding shares of Common Stock or (ii) 10 business days
        following the commencement of a tender offer or exchange offer that would
        result
        in a person or group beneficially owning 15% or more of such outstanding
        shares
        of Common Stock. Until the Distribution Date, (i) the Rights will
        be
        evidenced by the Common Stock certificates (together with a copy of this
        Summary
        of Rights or bearing the notation referred to below) and will be transferred
        with and only with such Common Stock certificates, (ii) Common Stock
        certificates issued after December 31, 2005 will contain a notation
        incorporating the New Rights Agreement by reference and (iii) the
        surrender
        for transfer of any certificate for Common Stock outstanding (with or without
        a
        copy of this Summary of Rights) will also constitute the transfer of the
        Rights
        associated with the Common Stock represented by such certificate.

       

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

      The
        Rights are not exercisable until the Distribution Date and will expire at
        the
        close of business on December 31, 2015, unless that date is extended
        or the
        Rights are earlier redeemed or exchanged by the Company as described
        below.

       

      As
        soon
        as practicable after the Distribution Date, Rights Certificates will be mailed
        to holders of record of the Common Stock as of the close of business on the
        Distribution Date and, thereafter, the separate Rights Certificates alone
        will
        represent the Rights.

       

      Ten
        business days after any person or group announces a tender offer for 15%
        or more
        of the Company's outstanding Common Stock, the Rights will become exercisable.
        Thereafter, the Rights will trade separately from the Company's Common Stock
        and
        separate certificates representing the Rights will be issued, which will
        entitle
        the holder of a Right to purchase from the Company one one-thousandth of
        a share
        of Preferred Stock for the Purchase Price.

       

      In
        addition, if any person or group acquires 15% or more of the Common Stock,
        each
        Right not owned by the acquiror would become exercisable for the number of
        shares of the Company's Common Stock that at the time have a market value
        of two
        times the Purchase Price of the Right. For example, at a Purchase Price of
        $13
        per Right, each Right not owned by an Acquiring Person (or by certain related
        parties) following an event set forth in the preceding paragraph would entitle
        its holder to purchase $26 worth of Common Stock (or other consideration,
        as
        noted above) for $13. Assuming that the Common Stock had a per share value
        of $2
        at such time, the holder of each valid Right would be entitled to purchase
        13
        shares of Common Stock for $13.

       

      If,
        after
        any person or group acquires 15% or more of the Common Stock, the Company
        is (i)
        acquired in a merger or other business transaction in which the Company is
        not
        the surviving corporation or the capital stock of the Company is exchanged
        for
        the capital stock of the acquiring company, or (ii) involved in a sale of
        at
        least 50% of its assets, then the Rights, under certain circumstances, will
        be
        modified so as to entitle the holder to buy a number of the acquiring company's
        common shares having a market value of two times the Purchase Price of each
        Right.

       

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

       

      With
        certain exceptions, no adjustment in the Purchase Price will be required
        until
        cumulative adjustments amount to at least 1% of the Purchase Price. No
        fractional Units will be issued and, in lieu thereof, an adjustment in cash
        will
        be made based on the market price of the Preferred Stock on the last trading
        date prior to the date of exercise.

       

      In
        general, at any time until 10 days after the Stock Acquisition Date, the
        Company
        may redeem the Rights in whole, but not in part, at a price of $.01 per Right
        in
        cash, shares of Common Stock or other consideration approved by the Board.
        Immediately upon the action of the Board of Directors ordering redemption
        of the
        Rights, the Rights will terminate and the only right of the holders of Rights
        will be to receive the $.0l redemption price.

       

      
        
          
          

        

        
          C-2

          
            

          

        

        
          
          

        

      

      In
        addition, the Company may, at any time after any person or group acquires
        15% or
        more
        of the Common Stock, exchange all or a portion of the outstanding and
        exercisable Rights for shares of Common Stock at an exchange ratio of one
        share
        of Common Stock per Right, subject to adjustment to reflect stock splits,
        stock
        dividends or similar transactions. Immediately upon the action of the Board
        of
        Directors ordering an exchange of Rights, the Rights so exchanged will terminate
        and the only right of the holders of such Rights will be to receive the shares
        of Common Stock in exchange.

       

      Until
        a
        Right is exercised, the holder thereof, as such, will have no rights as a
        shareholder of the Company, including, without limitation, the right to vote
        or
        to receive dividends. While the distribution of the Rights will not be taxable
        to shareholders or to the Company, shareholders may, depending upon the
        circumstances, recognize taxable income in the event that the Rights become
        exercisable for Common Stock (or other consideration) of the Company or for
        common stock of the acquiring company as set forth above.

       

      Other
        than those provisions relating to the rights and duties of the Rights Agent,
        any
        of the provisions of the New Rights Agreement may be amended by the Board
        of
        Directors of the Company prior to the Distribution Date. After the Distribution
        Date, the provisions of the New Rights Agreement may be amended by the Board
        in
        order to cure any ambiguity to make changes which do not adversely affect
        the
        interests of holders of Rights (excluding the interest of any Acquiring Person),
        or to shorten or lengthen any time period under the New Rights Agreement;
        provided, however, that no amendment to adjust the time period governing
        redemption shall be made at such time as the Rights are not
        redeemable.

       

      The
        Rights have certain anti-takeover effects. Exercise of the Rights will cause
        substantial dilution to a person or group that attempts to acquire the Company
        on terms not approved by the Company's Board of Directors. The existence
        of
        Rights, however, should not affect an offer at a price which is fair to all
        stockholders and otherwise in the best interests of the Company and its
        stockholders as determined by the Board of Directors. The Rights should not
        interfere with any merger or other business combination approved by the Board
        of
        Directors since the Board of Directors may, at its option, at any time until
        ten
        days following the Stock Acquisition Date (as such period may be extended
        or
        shortened by the Board of Directors) redeem all but not less than all of
        the
        then outstanding Rights at the $.01 redemption price.

       

      This
        summary description of the Rights does not purport to be complete and is
        qualified in its entirety by reference to the New Rights Agreement. A copy
        of
        the New Rights Agreement is available free of charge from the Company for
        record
        holders of the Common Stock.

      

      

      
        
          
          

        

        
          C-3

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