Document:

EXHIBIT
10.2

     

    Prepared
by and when recorded, please return to:

     

    
      
        	
                Porter
      & Hedges, LLP

              
	
                1000
      Main, 36th
      Floor

              
	
                Houston,
      Texas 77002

              
	
                Attention:
      Ephraim del Pozo

              

      

    

    

    CONVEYANCE
OF NET PROFITS INTEREST

     

    THIS
CONVEYANCE OF NET PROFITS INTEREST (this “Conveyance”), dated
effective as 7:00 am M.S.T on June 3, 2009 (the “Effective Date”), is
made from and by RANCHER ENERGY
CORP., a Nevada corporation doing business in the State of Wyoming as
RANCHER ENERGY OIL & GAS
CORP. (the “Grantor”), to and in
favor of GASROCK CAPITAL
LLC, a Delaware limited liability company (the “Grantee”).

     

    ARTICLE
I

     

    Defined
Terms

     

    Section
1.1    Defined
Terms.  When used in this Conveyance or in any exhibit or
schedule hereto (unless otherwise defined in any such exhibit or schedule), the
following terms have the respective meanings assigned to them in this section or
in the sections, subsections, exhibits and schedules referred to
below:

     

    “Affiliate” of any
Person means (a) any Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with such Person, or (b) any Person
who is a director, manager, managing member, general partner or officer (i) of
such Person, (ii) of any subsidiary of such Person or (iii) of any Person
described in clause (a) above.  For purposes of this definition,
control of a Person means the power, direct or indirect, (A) to vote 10% or more
of the equity interests having ordinary voting power for the election of
directors of such Person or other Persons performing similar functions for any
such Person, or (B) to direct or cause the direction of the management and
policies of such Person whether by ownership of equity interests, contract or
otherwise.

     

    “Applicable Law”
means, as to any Person, any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement of
any governmental authority, whether now or hereafter in effect, including
Environmental Laws, energy regulations and the occupational, safety and health
standards or controls in each case applicable or binding upon such Person or its
property or to which such Person or its property is subject.

     

    “Business Day” means
for all purposes, a day other than a Saturday, Sunday or legal holiday, on which
commercial banks are authorized or required to be open in Houston, Texas,
U.S.A.

     

    “COPAS” means the
accounting procedures which are a part of an applicable operating agreement or,
in the event that there is not an operating agreement in effect, the Accounting
Procedures for Joint Operations recommended by the Council of Petroleum
Accountants then in effect.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Defensible Title”
means with respect to the Subject Interests, such title that: (a) with regard to
leasehold interests (i) entitles Grantor to receive production of Hydrocarbons
for the productive life of Subject Interests (subject only to the Permitted
Encumbrances); and (ii) obligates Grantor to bear costs and expenses relating to
the maintenance, development and operation of the Subject Interests for the
productive life of the Subject Interests free and clear of any encumbrances
(except for Permitted Encumbrances), and (b) with regard to fee interests,
entitles Grantor to receive production of Hydrocarbons equal to the undivided
fee interest owned by the Grantor (except for Permitted
Encumbrances).

     

    “Environmental Laws”
means any and all Applicable Laws relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.

     

    “Fixed Rate” means,
for any day, the rate that is the lesser of (a) twelve percent (12%) per annum,
based on actual days elapsed and a year of 360 days or (b) the Maximum
Rate.

     

    “Grantee Indemnitees”
has the meaning assigned to such term in Section 6.6.

     

    “Grantee Taxes” means
any taxes imposed on Grantee in relation to its income, worth or
assets.

     

    “Gross Proceeds”
means, from and after the Effective Date, the aggregate gross amount of proceeds
received by Grantor from or attributable to (a) the sale or other disposition
for value of Subject Hydrocarbons, provided that such amount shall include all
consideration received, directly or indirectly from the sale or other
disposition for value of Subject Hydrocarbons, including without limitation (i)
advance payments, payments under take-or-pay (recoupable or non-recoupable),
production payments or similar provisions of production sales agreements,
(ii) any gains realized under any financially settled hedge transactions in
relation to the Subject Hydrocarbons; provided that such gains
relate to hedge transactions in existence as of the Effective Date and (b) the
sale or other disposition for value of any portion of the Subject Interests
(without duplication with regard to any amounts Grantee receives from a sale of
the Sold NPI under Section 4.7).

     

    “Hazardous Substance”
has the meaning specified in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980.

     

    “Hydrocarbons” means
oil, gas, drip gasoline, natural gasoline, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons and all products refined or separated
therefrom.

     

    “Leases” means oil,
gas and/or mineral leases or portions thereof and the lands covered
thereby.

     

    “Marketing Terms and
Conditions” has the meaning assigned to such term in Section
3.1.

     

    “Maximum Rate” means
the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received by a creditor
under Applicable Law, if any.

     

    “Month” means the
period between 7:00 a.m. Mountain Standard Time or Mountain Daylight Time, as
the case may be, on the first day of each calendar month and 7:00 a.m.
Mountain Standard Time, or Mountain Daylight Time, as the case may be, on the
first day of the next succeeding calendar month.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Net Profit” means the
amount by which Gross Proceeds exceeds the sum of (i) Production Costs and (ii)
any losses realized under any financially settled hedge transactions in relation
to the Subject Hydrocarbons; provided that such losses
relate to hedge transactions in existence as of the Effective Date.

     

    “NPI” is defined in
Section 2.1.

     

    “Permitted
Encumbrances” means:

     

    (a)           liens
for taxes, assessments or other governmental charges or levies which are not due
or which are being contested in good faith by appropriate action promptly
initiated and diligently conducted and for the payment of which Grantor has
reserved adequate funds and which do not materially impair the value of the
NPI;

     

    (b)           `liens
of vendors, contractors, subcontractors, carriers, warehousemen, mechanics,
laborers or materialmen or other like liens arising by law or contract in the
ordinary course of business for sums which are not due or which are being
contested in good faith by appropriate action promptly initiated and diligently
conducted and for the payment of which Grantor has reserved adequate funds and
which do not materially impair the value of the NPI;

     

    (c)           covenants,
restrictions, easements, servitudes, permits, conditions, exceptions,
reservations, minor rights, minor encumbrances, minor irregularities in title or
conventional rights of reassignment prior to abandonment which do not materially
interfere with the occupation, use and enjoyment by Grantor or Grantee of their
respective interests in the Subject Interests in the normal course of business
as presently conducted or to be conducted, materially impair the value thereof
for the purpose of such business, or materially impair the value of the
NPI;

     

    (d)           liens
and security interests granted by Grantor in favor of Grantee or its
Affiliates;

     

    (e)           liens
of operators under joint operating agreements or similar contractual
arrangements with respect to Grantor’s proportionate share of the expense of
exploration, development and operation of oil, gas and mineral leasehold or fee
interests owned jointly with others, to the extent that such liens secure sums
which are not due or which are being contested in good faith by appropriate
action promptly initiated and diligently conducted and for the payment of which
Grantor has reserved adequate funds and which do not materially impair the value
of the NPI;

     

    (f)           any
prior contractual obligations to which Grantee has been advised exists as of the
Effective Date; and

     

    (g)           all
royalties, overriding royalties and net profits interests or other burdens
recorded with the applicable county clerk prior to the Effective
Date.

     

    “Person” means any
individual, sole proprietorship, general partnership, limited partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, limited liability
partnership, institution, public benefit corporation, joint venture, entity or
governmental authority (whether federal, state, county, city, municipal or
otherwise, including any instrumentality, division, agency, body or department
thereof).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Production Costs”
means, on a cash accounting basis the aggregate, without duplication, of
Grantor’s proportionate share of the Specified Costs from and after the
Effective Date; provided, however, that such
costs shall not
include any general and administrative expenses.  Notwithstanding
anything to the contrary set in this Conveyance, Production Costs shall be
reduced by the following, only if such proceeds are included in the definition
of Specified Costs:

     

    (a)           all
proceeds received by Grantor from the sale or other disposition for value, from
and after the Effective Date, of any materials, supplies, equipment and other
personal property or fixtures, or any part thereof or interest therein, located
on or used in connection with the Subject Interests;

     

    (b)           all
insurance proceeds received by Grantor as a consequence of the loss or damage
from and after the Effective Date to the Subject Interests, or any part thereof
or interest therein, or any materials, supplies, equipment or other personal
property or fixtures located on or used in connection with any of the Subject
Interests or any Subject Hydrocarbons unless such proceeds are used by Grantor
within sixty (60) days of receipt to replace any such lost or damaged materials,
supplies, equipment and other personal property;

     

    (c)           the
proceeds of all judgments and claims received by Grantor for damages from and
after the Effective Date directly or indirectly related to the Subject Interests
or the Subject Hydrocarbons, or any part thereof or interest therein, or any
materials, supplies, equipment or other personal property or fixtures, or any
part thereof or interest therein, located on or used in connection with any of
the Subject Interests or any Subject Hydrocarbons and which is specifically
allocated to the Subject Interests, the Subject Hydrocarbons or the materials,
supplies, equipment or other personal property or fixtures or any party thereof
located on or used in connection with any of the Subject Interests or any
Subject Hydrocarbons; and

     

    (d)           all
proceeds of and/or from each of the following amounts received by Grantor (to
the extent attributable to periods from and after the Effective Date) with
respect to the Subject Interests (i) delay rentals, (ii) lease bonuses, (iii)
shut in gas well royalties or payments, (iv) rentals from reservoir use or
storage, (v) payments in connection with the drilling or deferring of any
Subject Well and (vi) all other proceeds from whatever source relating to the
Subject Interests or the Subject Hydrocarbons and not included in Gross
Proceeds.

     

    Provided
that, to the extent that Production Costs are reduced below zero for any Month,
the amount of such reduction below zero shall be carried forward and utilized in
the calculation of Production Costs in subsequent Months until the negative
balance has been eliminated.

     

    “Reimbursable
Expenses” means all reasonable costs and expenses paid or incurred by or
on behalf of Grantee which are related to: (a) the negotiation, acquisition,
ownership, enforcement, or termination of the NPI, this Conveyance, or any
waivers or amendments hereto or thereto, or (b) any litigation, contest, release
or discharge of any adverse claim or demand made or proceeding instituted by any
Person, other than Grantor or Grantee, affecting in any manner whatsoever the
NPI, this Conveyance, the enforcement or defense hereof or
thereof.  Included among the Reimbursable Expenses are (i) all
recording and filing fees, (ii) all actual and reasonable fees and expenses of
legal counsel, consulting engineers, consulting accountants and other
consultants, experts and advisors for Grantee and mortgagees, and (iii) all
amounts which Grantee is entitled to receive hereunder and all costs of Grantee
in exercising any of its remedies hereunder.

     

    “Release” has the
meaning specified in the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Sold Subject
Interest” is defined in Section 4.5.

     

    “Sold NPI” is defined
in Section 4.5.

     

    “Specified Costs”
means collectively and without duplication, the Specified LOE, Specified Taxes,
Specified Marketing Costs, and Specified Transportation Costs.

     

    “Specified LOE” means
all direct costs paid by Grantor, including but not limited to overhead charges,
for operating, producing, and maintaining the Subject Interests, with respect to
Subject Hydrocarbons, calculated in accordance with COPAS.

     

    “Specified Marketing
Costs” means all direct costs paid by Grantor for marketing the Subject
Hydrocarbons; provided,
however, that no such
costs shall exceed the fair and reasonable costs for the area which would have
been charged at the time in arm’s-length dealings with parties other than
Affiliates of Grantor.

     

    “Specified Taxes”
means all ad valorem or property taxes and all conservation taxes, severance
taxes or similar taxes incurred by Grantor against or measured by production and
severance of Subject Hydrocarbons or the value thereof, and any personal
property taxes assessed against production equipment.

     

    “Specified Transportation
Costs” means all direct costs paid by Grantor (or any other operator of
Subject Interests on behalf of Grantor) to gatherers, processors or transporters
for transporting Subject Hydrocarbons from the lease to the point of sale or for
processing Subject Hydrocarbons off of the Subject Interests to meet pipeline or
transporter specifications and qualifications; provided, however, that no such costs
shall exceed fair and reasonable costs for the area which would have been
charged at the time in arm’s-length dealings with parties other than Affiliates
of Grantor.

     

    “Subject Hydrocarbons”
is defined in Section 2.1.

     

    “Subject Interests”
means:

     

    (a)           all
of Grantor’s right, title and interest, now owned or hereafter acquired, in and
to the leasehold interests, overriding royalties, productions payments, net
profits interest, fee mineral interests, and other property interests described
in or referred to on Exhibit A attached
hereto (including the lands related thereto) and any and all extensions,
renewals or replacements thereof in which Grantor now owns or hereafter acquires
an interest and the rights appurtenant to any of the foregoing as set forth in
Section 2.5; and

     

    (b)           all
of Grantor’s right, title and interest, now owned or hereafter acquired, in and
to, or otherwise derived from, all Units relating to the properties described in
subsection (a) above in this definition.

     

    “Subject Wells” means
all of Grantor’s right, title and interest in and to all wells producing or
capable of producing Hydrocarbons and all service wells, now or hereafter
located on the Subject Interests (whether fully drilled and completed or not),
including without limitation, the wells described or referred to on Exhibit A
attached hereto.

     

    “Unit” means a pooled
(compulsory or voluntary) unit, proration unit, production unit, regulatory
unit, field-wide unit or similar designation or allocation of lands of similar
impact in order to comply with (i) the terms of any applicable pooling or
unitization agreements, unit operating agreements or the like or (ii) the
applicable rules and regulations of the applicable governmental authorities
related to pooling, unitization, well spacing or the like.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section 1.2    Rules
of Construction. All references in this Conveyance to articles, sections,
subsections and other subdivisions refer to corresponding articles, sections,
subsections and other subdivisions of this Conveyance unless expressly provided
otherwise.  Titles appearing at the beginning of any of such
subdivisions are for convenience only and shall not constitute part of such
subdivisions and shall be disregarded in construing the language contained in
such subdivisions.  All references in this Conveyance to exhibits and
schedules refer to exhibits and schedules to this Conveyance unless expressly
provided otherwise, and all such exhibits and schedules are hereby incorporated
herein by reference and made a part hereof for all purposes.

     

    ARTICLE
II

     

    Granting and Payment
Provisions

     

    Section 2.1    Granting
Clause.  For a good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby GRANT,
BARGAIN, SELL, TRANSFER, ASSIGN, CONVEY, WARRANT and DELIVER to Grantee a net
profits interest in and to all Hydrocarbons in and under and that may be
produced and saved from the Subject Interests (the “Subject
Hydrocarbons”) equal to ten percent (10%) of the Net Profit attributable
to Grantor’s interest therein from and after the Effective Date as calculated
for each Month (the “NPI”), together with
all and singular the rights and appurtenances thereto in anywise
belonging.

     

    TO HAVE
AND TO HOLD the NPI unto Grantee, its successors and assigns, forever, subject
to the following terms, provisions and conditions.  This Conveyance is
made with full substitution and subrogation of Grantee in and to all covenants
and warranties by others heretofore given or made.

     

    Section 2.2    Cost
Bearing Interest.  The NPI is a non-operating interest in and
to the Subject Interests and shall be free and clear of, and, except for
Specified Costs, shall bear no burden or part of, any and all other costs,
including: (a) all taxes of any kind, except for Grantee Taxes, (b) all costs
and expenses associated with acquiring, exploring, developing, reworking,
recompleting, and remediating the Subject Interests, (c) all royalties,
overriding royalties, production payments, other charges burdening the Subject
Interests, and (d) all costs for separating, gathering, compressing, or
processing the Subject Hydrocarbons or of transporting the Subject Hydrocarbons
to the point of sale in a condition to meet pipeline or transporter
specifications and qualifications.  Grantor shall promptly pay, or
cause to be promptly paid, all taxes, except for Grantee Taxes, costs and
expenses, royalties, overriding royalties, production payments, and similar
charges, on or before the dates the same become delinquent (unless being
disputed in good faith by appropriate proceedings being diligently pursued and
for which adequate reserves have been established).  In addition,
Grantor will, upon demand by Grantee, reimburse Grantee for any Reimbursable
Expenses which have been paid by or on behalf of Grantee.  Each amount
which is to be paid by Grantor pursuant to this Section 2.2 which is instead
paid by or on behalf of Grantee shall bear interest at the Fixed Rate on each
day from and including the date of such payment until but not including the date
repaid by Grantor.

     

    Section
2.3    Payments.

     

    (a)           Payments to Begin following
the Effective Date.  On or before the last Business Day of the
second Month immediately following the Month during which the Effective Date
occurs and continuing on the last Business Day of each Month thereafter for as
long as this Conveyance is in effect, Grantor shall pay to Grantee the
NPI.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)           Payment
Instructions.  All amounts due under this Conveyance will be
paid to Grantee by Grantor, by such party as follows:

     

    If by
wire transfer:

    

    GasRock
Capital LLC

    GasRock
Operating Account

    Amegy
Bank, Houston, TX

    Account
#3718840

    ABA #
113011258

    

    If by
check via US Mail or courier:

    

    GasRock
Capital LLC

    Attention:
Marshall Lynn Bass

    1301
McKinney, Suite 2800

    Houston,
TX 77010

    

    Phone
number for courier: (713) 300-1400

    

    The funds
received by Grantor for or on account of Grantee shall be collected by Grantor
and shall constitute trust funds in Grantor’s hands, to be immediately paid over
to Grantee by wire transfer or check to such account or location as Grantee may
direct from time to time in writing (or by such other form of transfer
reasonably specified by Grantee).  If by check, checks should be made
payable to “GasRock Capital LLC.”  The directions for payments may be
modified by notice to Grantor pursuant to Section 6.5 below.

     

    (c)           Interest on Past Due
Payments.  Provided Grantor has received Proceeds from the sale
of Subject Hydrocarbons, any amount not paid by Grantor to Grantee, when due,
shall bear, and Grantor shall pay, interest in an amount equal to the Fixed Rate
in effect during the period such amount shall remain outstanding and such
interest shall be paid from such due date until such amount is
paid.

     

    (d)           Overpayment.  If
at any time Grantor inadvertently pays Grantee an amount that is more than the
amount due, Grantee shall not be obligated to return any such overpayment, but
the amount or amounts otherwise payable for any subsequent period or periods
shall be reduced by such overpayment without any interest component being
imputed on such overpayment.

     

    Section 2.4    Measurement.  Grantor
hereby represents, warrants and covenants to Grantee that production from each
Subject Well is and will be measured at a point prior to any point where Subject
Hydrocarbons from each such Subject Well are commingled with Hydrocarbons from
any other well or wells that are not Subject Wells.

     

    Section 2.5    Renewals
and Extensions.  This Conveyance and the NPI granted hereunder
shall apply to Grantor’s and any of its Affiliate’s, successor’s, or permitted
assign’s interests in all renewals, extensions, replacements and other similar
arrangements of each of the Subject Interests (or other determinable interest),
whether such renewals, extensions, replacements or arrangements have heretofore
been obtained or are hereafter obtained and whether or not the same are
described in or referred to on Exhibit
A.

     

    For the
purposes of the preceding paragraph, a new Lease that covers the same interest
(or any part thereof) covered by a prior Lease covering any of the Subject
Interests, and which is acquired within one (1) year after the expiration,
termination, or release of such prior Lease, shall be treated as a renewal or
extension of such prior Lease.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
III

     

    Marketing of Subject
Hydrocarbons

     

    Section 3.1    Nature
of Marketing Arrangements.  Grantor shall have the obligation
to prudently market, or cause to be prudently marketed, the Subject Hydrocarbons
in transactions with reputable purchasers, with each such marketing arrangement,
including those arrangements relating to sales, treating, transportation,
compression and processing, to be made upon terms and conditions (the “Marketing Terms and
Conditions”) that (a) are the best terms and conditions reasonably
obtainable in the general field or area, and (b) are at least as favorable as
Grantor or any of its Affiliates obtains for Grantor’s share of the Hydrocarbons
attributable to any other properties in the same field or general
area.  No Subject Hydrocarbons are or will become subject to any sales
arrangement whereby (y) payment for Subject Hydrocarbons is or can be deferred
for a substantial period after the Month in which the Subject Hydrocarbons are
delivered (i.e., in excess of sixty (60) days), or (z) payments may be made
other than by checks, drafts, wire transfer or similar communications for the
immediate payment of money. Grantor shall duly and prudently perform all
obligations performable by it under any arrangements by which Subject
Hydrocarbons are sold or otherwise marketed, and shall take all appropriate
measures to enforce the performance under each such arrangement of the
obligations of the other parties thereto. As to any third parties, all acts of
Grantor in marketing the Subject Hydrocarbons and all sales or other marketing
agreements executed by Grantor in accordance herewith shall be binding on
Grantee and the NPI; it being understood that the right and obligation to market
the Subject Hydrocarbons is at all times vested in Grantor, and Grantee does not
have any such right or obligation.  Accordingly, it shall not be
necessary for Grantee to join in any production sales or marketing agreements or
any amendments to existing production sales or marketing
agreements.

     

    Section 3.2    Production
Records and Statements.  Grantor shall keep full, true, and
correct records of:  (a) the production and sale of the Subject
Hydrocarbons, (b) all costs associated with producing, processing, transporting,
and marketing the Subject Hydrocarbons, and (c) any other records necessary to
keep proper accounts in accordance with the provisions of this
Conveyance.  Such records may be inspected by Grantee or its
authorized representatives and copies made thereof at all reasonable
times.  On or before the last Business Day of each Month, commencing
upon the last Business Day of the Month following the second Month during which
the Effective Date occurs, Grantor shall send to Grantee a statement setting
forth (w) the production from the Subject Interests for the preceding Month, (x)
the Gross Proceeds and Production Costs attributable to the sale of Subject
Hydrocarbons, (y) the calculation of the NPI, and (z) such other data as Grantee
may reasonably request.

     

    ARTCLE
IV

     

    Representations, Warranties
and Covenants

     

    Grantor
hereby represents, warrants and covenants for the benefit of Grantee as
follows:

     

    Section 4.1    Operations.  The
Subject Interests and properties unitized therewith are being (and, to the
extent the same could adversely affect the ownership or operation of the Subject
Interests after the date hereof, have during Grantor’s tenure of ownership been)
maintained, operated and developed in a good and workmanlike manner, in
accordance with prudent industry standards and in conformity with all Applicable
Laws, and in conformity, in all material respects, with all Leases, deeds and
other contracts and agreements forming a part of or pertaining to the Subject
Interests.  Grantor, directly or through appropriate agreements with
the operator of the Subject Interests, has all governmental licenses and permits
necessary or appropriate to own and operate the Subject Interests, and Grantor
has not received notice of any material violations in respect of any such
licenses or permits.  Grantor shall develop, operate and maintain the
Subject Interests as would a prudent operator.  As to any portions of
the Subject Interests as to which Grantor is not the operator, Grantor shall
take all actions and exercise all legal rights and remedies as are available to
it to cause the operator to so develop, maintain and operate such portions of
the Subject Interests in accordance with this Section 4.1.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section 4.2    Title;
Permitted Encumbrances.  Grantor has Defensible Title to the
Subject Interests, free and clear of all liens, security interests, and
encumbrances except for Permitted Encumbrances as defined
herein.  Such qualification as to Permitted Encumbrances is made for
the sole purpose of limiting the representations and warranties of Grantor made
herein, and is not intended to restrict the description of the Subject
Interests, nor is it intended that reference herein to any Permitted Encumbrance
shall subordinate the NPI to such Permitted Encumbrance or otherwise cause this
Conveyance or any rights of Grantee hereunder to be made subject to, or reduced
or encumbered by, such Permitted Encumbrance.  Notwithstanding the
definition of Permitted Encumbrances, Grantor has obtained all consents and has
satisfied preferential rights and similar rights required to grant the NPI to
Grantee.  Grantor hereby binds itself to WARRANT and FOREVER DEFEND
all and singular title to the NPI unto Grantee, its successors and assigns,
against every Person lawfully claiming or to claim the same or any part
thereof.

     

    This
Conveyance is made with full substitution and subrogation of Grantee in and to
all covenants, representations and warranties by others heretofore given or made
with respect to the Subject Interests.

     

    Section 4.3    Leases,
Deeds and Contracts; Performance of Obligations.  The Leases,
contracts, servitudes, fees, deeds, and other agreements forming a part of the
Subject Interests or are set forth on Exhibit A, to the
extent the same cover or otherwise relate to the Subject Interests, are in full
force and effect, and Grantor agrees to so maintain them, or to cause them to be
so maintained, in full force and effect to the extent a prudent operator would
do so.

     

    Section 4.4.    Compliance
with Laws.  (a) The Subject Interests, and Grantor’s present
and proposed operations thereon, are in compliance in all material respects with
all Applicable Laws; (b) Grantor has taken all steps reasonably necessary to
determine and has determined that, except as otherwise disclosed to Grantee, no
Release of Hazardous Substance has occurred on the Subject Interests or as a
result of operations on the Subject Interests, and the use which Grantor makes
and intends to make of the Subject Interests will not result in any such
Release; (c) to the best of Grantor’s knowledge, none of such operations of
Grantor, and none of the Subject Interests, is the subject of any federal, state
or local investigation evaluating whether any remedial action is needed to
respond to a Release of any Hazardous Substance into the environment or to the
improper storage or disposal (including storage or disposal at offsite
locations) of any Hazardous Substance; (d) neither Grantor nor, to the knowledge
of Grantor, any other Person has filed any notice under any Environmental Law
indicating that Grantor is responsible for the Release into the environment, or
the improper storage or disposal, of any Hazardous Substance that are now
located on, were removed from, or are in any way related to any Subject
Interests, or that any Hazardous Substance have been Released, or are improperly
stored or disposed of, upon any Subject Interests; and (e) neither Grantor nor
any of its Affiliates otherwise has any material contingent liability in
connection with operations on any Subject Interests for the Release into the
environment, or the improper storage or disposal, of any Hazardous
Substance.  Grantor will not cause or permit the Subject Interests or
Grantor to be in violation of any Environmental Laws or other Applicable Laws
with respect to the Subject Interests or do anything or permit anything to be
done which will subject Grantor, Grantee or the Subject Interests to any
material remedial obligations under any Environmental Laws, assuming in each
case disclosure to the applicable governmental authorities of all relevant
facts, conditions and circumstances, if any, pertaining to the Subject
Interests, and Grantor will promptly notify Grantee in writing of any existing,
pending or, to the knowledge of Grantor, threatened investigation or inquiry of
a material nature affecting any Subject Interest by any private party or
governmental authority in connection with any Environmental
Laws.  Grantor will take all steps reasonably necessary to determine
that no Hazardous Substance are disposed of or otherwise Released on or to the
Subject Interests in violation of any Environmental Laws.  Grantor
will not cause or permit the Release of any Hazardous Substance on or to the
Subject Interests in violation of any Environmental Law and covenants and agrees
to remove or remediate any Hazardous Substance which have been Released on the
Subject Interests in amounts which would violate any Environmental
Laws.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section 4.5    NPI
Right to Join in Sales.  Whenever Grantor has, and intends to
take, the opportunity to sell any of its interest (a “Sold Subject
Interest”) in any properties and interests subject to this Conveyance,
Grantor shall take all necessary action to ensure that Grantee has the
opportunity to sell that portion of the NPI that relates to or burdens the
properties and interests to be sold (a “Sold NPI”) as a part
of such transaction.  In exercising such option, Grantee may elect to
resell the Sold NPI to Grantor (for further sale on to the purchaser) or to sell
the Sold NPI directly to the purchaser.  Any such resale to Grantor
shall specially warrant Grantee’s title to the Sold NPI.  Grantor
shall give Grantee at least thirty (30) days notice of any such potential
sale.  Grantee shall notify Grantor in writing within fifteen (15)
days after receiving such notice whether Grantee elects to participate in such
sale, and failure to so notify Grantor shall irrevocably be deemed to be an
election not to participate in such sale.

     

    ARTICLE
V

     

    Assignments and
Transfers

     

    Section 5.1    Assignment
and Transfer by Grantee.  Grantee may, and nothing herein
contained shall in any way limit or restrict the right of Grantee to, sell,
convey, assign, mortgage or otherwise dispose of any NPI (including its rights,
titles, interests, estates, remedies, powers and privileges appurtenant or
incident to such NPI under this Conveyance), in whole or in part.  No
change of ownership of any NPI shall be binding upon Grantor, however, until
Grantor is furnished with copies of the original recorded documents evidencing
such change.  Upon receipt by Grantor of copies of the original
documents evidencing a sale, conveyance, assignment, mortgage or other
disposition of any NPI, and to the extent of such transfer, Grantor shall
thereafter deal with the transferee Grantee in place of the transferring Grantee
and references herein to the Grantee shall thereafter be deemed to be references
to such transferee Grantee rather than such transferring Grantee, provided that
such transferring Grantee shall, with respect to such transferred NPI, continue
to have, and benefit from, all rights to indemnification and reimbursement that
are provided herein.

     

    Section 5.2    Assignment
and Transfer by Grantor.  The Conveyance shall inure to the
benefit of and be binding to the parties and their respective successors and
permitted assigns except to the extent expressly stated otherwise
herein.  Any sale, conveyance, assignment, mortgage or other
disposition of the Subject Interests, or any part thereof or interest therein,
by Grantor shall be subject to this Conveyance.  Any assignment or
transfer by Grantor not in compliance with this Section 5.2 shall be null and
void.

     

    Section 5.3    Covenants
Running With the Subject Interests.  All covenants and
agreements of Grantor herein contained shall be deemed to be covenants running
with the Subject Interests.  All of the provisions hereof shall inure
to the benefit of Grantee and its Affiliates, and their respective successors
and assigns.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
VI

     

    Miscellaneous
Provisions

     

    Section 6.1    Further
Assurances.  Grantor agrees to execute and deliver to Grantee,
and, to the extent it is within Grantor’s power to do so, to cause any third
parties to execute and deliver to Grantee, all such other and additional
instruments and to do all such further acts and things as may be necessary or
appropriate to more fully vest in and assure to Grantee, from time to time, all
of the rights, titles, interests, remedies, powers and privileges herein granted
or intended so to be.

     

    Section 6.2    No
Waiver.  The failure of either party to insist upon strict
performance of a covenant hereunder or of any obligation hereunder, irrespective
of the length of time for which such failure continues, shall not be a waiver of
that party’s right to demand strict compliance in the future.  No
consent or waiver, express or implied, to or of any breach or default in the
performance of any obligation hereunder shall constitute a consent or waiver to
or of any other breach or default in the performance of the same or any other
obligation hereunder.  No provision of this Conveyance shall be deemed
a waiver by a party of any rights granted to the party under Applicable Law
governing net profits interests and the rights and privileges of the owners or
grantors thereof.

     

    Section 6.3    Applicable
Law.  THIS CONVEYANCE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, BE
GOVERNED BY AND INTERPRETED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF WYOMING.

     

    Section 6.4    Severability.  Every
provision in this Conveyance is intended to be severable.  If any term
or provision hereof is determined to be invalid, illegal or unenforceable for
any reason whatsoever, such invalidity, illegality or unenforceability shall not
affect the validity, legality and enforceability of the remainder of this
Conveyance.

     

    Section 6.5    Notices.  Unless
otherwise stated herein, all notices authorized or required by the terms of this
Conveyance shall be in writing and shall be delivered by United States Postal
Service, courier or facsimile to the party to be notified, or by delivering such
notice in person to such party.  Notice shall be deemed effective only
upon receipt by the party to whom such notice is directed.  Any party
may change its address for notice at any time by giving written notice of the
new address to the other party in the manner set forth herein.  For
purposes of notice, the addresses of Grantor and Grantee shall be as
follows:

     

    
      
        	
                GRANTOR

                Rancher
      Energy Corp.

                999
      18th
      Street, Suite 3400

                Denver,
      Colorado 80202

                Attention:  John
      Works

                Facsimile:
      (702) 904-5698

              	
                GRANTEE

                GasRock
      Capital LLC

                1301
      McKinney Street, Suite 2800

                Houston,
      Texas 77010-2026

                Attention:
      Marshall Lynn Bass

                Facsimile:
      (713) 300-1401

              

      

    

    

    Section
6.6    No
Liability of Grantee; Indemnity.  No Grantee
Indemnitee (defined below) shall ever be responsible for payment of any part of
the costs, expenses or liabilities incurred in connection with the exploring,
developing, operating, owning, maintaining, reworking or recompleting of the
Subject Interests, any obligations of Grantor with respect to any tax
partnerships burdening the Subject Interests, the physical condition of the
Subject Interests, any costs or liabilities incurred by Grantor or any other
lessee attributable to the Subject Interests or the Subject Hydrocarbons
(including any sums previously paid by Grantor to Grantee pursuant to this
Conveyance) or the handling, treating or transporting of Subject Hydrocarbons
(including any costs, expenses, losses or liabilities related to compliance with
or violation of an Environmental Law or otherwise related to damage to or
remediation of the environment, whether the same arise out of Grantee’s
ownership of an interest in property or out of the actions of Grantor or of
third parties or arise otherwise). Grantor
agrees to protect, defend, indemnify and hold each Grantee Indemnitee harmless
from and against all costs, expenses, losses and liabilities incurred by any
Grantee Indemnitee (i) in connection with any of the foregoing, (ii) in
connection with this Conveyance, or the transactions, activities and events
(including the enforcement or defense thereof or hereof) at any time associated
with or contemplated in any of the foregoing or (iii) in connection with any tax
partnership burdening any of the Subject Interests.  Such indemnity
shall also cover all reasonable  costs and expenses of any Grantee
Indemnitee, including reasonable legal fees and expenses, which are incurred
incident to the matters indemnified against.  As used in this Article
VI, “Grantee
Indemnitees” means Grantee and Grantee’s successors and assigns and
purchasers (including any Person who at any time purchases all or part of the
NPI or the Subject Interests attributable thereto), all of their respective
Affiliates, and all of the officers, directors, agents, beneficiaries, trustees,
attorneys and employees of themselves and their Affiliates.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
foregoing indemnity shall apply WHETHER OR NOT ARISING OUT
OF THE JOINT OR CONCURRENT NEGLIGENCE, FAULT OR STRICT LIABILITY of any
Grantee Indemnitee (except for the intentional act or willful misconduct of any
Grantee Indemnitee, in which event the indemnities set forth in this section 6.6
in favor of such Grantee Indemnitee shall not apply), and shall apply, without
limitation, to any liability imposed upon any Grantee Indemnitee as a result of
any theory of strict liability or any other doctrine of Law, provided that the
foregoing indemnity shall not apply to any costs, expenses, losses or
liabilities incurred by any Grantee Indemnitee to the extent caused by the
intentional act or willful misconduct of such Grantee Indemnitee.  The
foregoing indemnity shall survive any termination of this
Conveyance.

     

    Section 6.7    Counterparts.  This
Conveyance is being executed in several counterparts, all of which are
identical, except that, to facilitate recordation, in certain counterparts
hereof only that portion of Exhibit A which contains specific descriptions of
the Subject Interests located in the recording jurisdiction in which the
counterpart is to be recorded shall be included, and all other portions of
Exhibit A shall be included by reference only.  All of such
counterparts together shall constitute one and the same
instrument.  Complete copies of this Conveyance, containing the entire
Exhibit A, have been retained by Grantor and Grantee.

     

    (Signature
and Acknowledgment Pages follow)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, this Conveyance is executed as of the acknowledgement date of
each of the parties hereto, but shall be effective as of the Effective
Date.

     

    
      
        
          
            
              	 	GRANTOR:	 
	 	 	 
	 	      
                      RANCHER
      ENERGY CORP.,

                      a
      Nevada corporation d/b/a

                      RANCHER
      ENERGY OIL & GAS CORP.

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/
      John Works	 
	 	 	John
      Works 	 
	 	 	President
      and Chief Executive Officer	 

            

          

        

      

    

    

    

    
      
        
          	
                  STATE
      OF COLORADO 

                	
                  §

                
	 	      
                  §

                
	
                  COUNTY
      OF DENVER

                	      
                  §

                

        

      

    

     

    The
foregoing instrument was acknowledged before me on June 3, 2009 by John
Works, President and Chief Executive Officer of Rancher Energy Corp. a Nevada
corporation doing business in the State of Wyoming as Rancher Energy Oil &
Gas Corp., on behalf of said corporation.

     

     

    
      
        
          
            	 	
                    /s/  
      Denise R. Greer

                  
	 	
                    Notary
      Public, State of
Colorado

                  

          

        

      

    

    

    My Commission Expires:  May
9, 2011

     

    
      
         

      

      
        
          Signature
and Acknowledgment Page to Conveyance of Net Profits
Interest

        

        
          

        

      

      
         

      

    

     

    
      	 	GRANTEE:	 
	 	 	 
	 	      
                    
                GASROCK
      CAPITAL LLC,

                a
      Delaware limited liability company

              

            	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/
      Marshall Lynn Bass	 
	 	 	Marshall
      Lynn Bass	 
	 	 	Principal	 

     

     

    
      	
              STATE
      OF TEXAS

            	
              §

            
	 	      
              §

            
	
              COUNTY
      OF HARRIS

            	      
              §

            

    

     

    The
foregoing instrument was acknowledged before me on June 3, 2009 by Marshall Lynn
Bass, Principal of GasRock Capital LLC, a Delaware limited liability company on
behalf of said limited liability company.

     

    
      	 	
              /s/  
      Jan Louise Spencer

            
	 	
              Notary
      Public, State of Texas

            

    

     

    

    
      My
Commission Expires: June 27, 2010

       

      
        
           

        

        
          
            Signature
and Acknowledgment Page to Conveyance of Net Profits
InterestUnassociated Document

    STOCKHOLDER
RIGHTS AGREEMENT

     

    Dated
as of June 1, 2009

     

    BY
AND BETWEEN

     

    NURX
PHARMACEUTICALS, INC.

     

    and

     

    CONTINENTAL
STOCK TRANSFER & TRUST COMPANY

    as
RIGHTS AGENT

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      
        
          	
                  Section
      1.  Certain Definitions

                	 	 	1	 
	 
      	 	 	 	 
	
                  Section
      2.  Appointment of Rights Agent

                	 	 	6	 
	 
      	 	 	 	 
	
                  Section
      3.  Distribution Date; Issue of Right
    Certificates

                	 	 	6	 
	 
      	 	 	 	 
	
                  Section
      4.  Form of Right Certificates

                	 	 	7	 
	 
      	 	 	 	 
	
                  Section
      5.  Countersignature and Registration

                	 	 	8	 
	 
      	 	 	 	 
	
                  Section
      6.  Transfer, Split Up, Combination and Exchange of Right
      Certificates; Mutilated, Destroyed, Lost or Stolen Right
      Certificates

                	 	 	9	 
	 
      	 	 	 	 
	
                  Section
      7.  Exercise of Rights; Purchase Price; Expiration Date of
      Rights

                	 	 	10	 
	 
      	 	 	 	 
	
                  Section
      8.  Cancellation and Destruction of Right
      Certificates

                	 	 	11	 
	 
      	 	 	 	 
	
                  Section
      9.  Availability of Preferred Shares

                	 	 	12	 
	 
      	 	 	 	 
	
                  Section
      10. Preferred Shares Record Date

                	 	 	13	 
	 
      	 	 	 	 
	
                  Section
      11. Adjustment of Purchase Price, Number of Shares or Number of
      Rights

                	 	 	13	 
	 
      	 	 	 	 
	
                  Section
      12. Certificate of Adjusted Purchase Price or Number of
    Shares

                	 	 	20	 
	 
      	 	 	 	 
	
                  Section
      13. Consolidation, Merger, Liquidation or Sale or Transfer of
      Assets

                	 	 	21	 
	 
      	 	 	 	 
	
                  Section
      14. Fractional Rights and Fractional Shares

                	 	 	24	 
	 
      	 	 	 	 
	
                  Section
      15. Rights of Action

                	 	 	25	 
	 
      	 	 	 	 
	
                  Section
      16. Agreement of Right Holders

                	 	 	25	 
	 
      	 	 	 	 
	
                  Section
      17. Right Certificate Holder Not Deemed a Stockholder

                	 	 	25	 
	 
      	 	 	 	 
	
                  Section
      18. Concerning the Rights Agent

                	 	 	26	 
	 
      	 	 	 	 
	
                  Section
      19. Merger or Consolidation or Change of Name of Rights
    Agent

                	 	 	26	 
	 
      	 	 	 	 
	
                  Section
      20. Duties of Rights Agent

                	 	 	27	 
	 
      	 	 	 	 
	
                  Section
      21. Change of Rights Agent

                	 	 	29	 
	 
      	 	 	 	 
	
                  Section
      22. Issuance of New Right Certificates

                	 	 	30	 
	 
      	 	 	 	 
	
                  Section
      23. Redemption

                	 	 	30	 

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  Section
      24. Exchange

                	 	 	31	 
	 
      	 	 	 	 
	
                  Section
      25. Notice of Certain Events

                	 	 	32	 
	 
      	 	 	 	 
	
                  Section
      26. Notices

                	 	 	32	 
	 
      	 	 	 	 
	
                  Section
      27. Supplements and Amendments

                	 	 	33	 
	 
      	 	 	 	 
	
                  Section
      28. Successors

                	 	 	33	 
	 
      	 	 	 	 
	
                  Section
      29. Determinations and Actions by the Board of Directors

                	 	 	33	 
	 
      	 	 	 	 
	
                  Section
      30. Benefits of this Agreement

                	 	 	34	 
	 
      	 	 	 	 
	
                  Section
      31. Severability

                	 	 	34	 
	 
      	 	 	 	 
	
                  Section
      32. Governing Law

                	 	 	34	 
	 
      	 	 	 	 
	
                  Section
      33. Counterparts

                	 	 	34	 
	 
      	 	 	 	 
	
                  Section
      34. Descriptive Headings

                	 	 	34	 

        

      

    

     

    Exhibit A
- Certificate of Designation of Series C Preferred Stock

     

    Exhibit B
- Form of Right Certificate

     

    Exhibit C
- Summary of Rights to Acquire Preferred Stock

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    STOCKHOLDER RIGHTS
AGREEMENT

    

    STOCKHOLDER
RIGHTS AGREEMENT, dated as of June 1, 2009 (this “Agreement”), by and
between NURX PHARMACEUTICALS, INC., a Nevada corporation (the “Company”), and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY (the “Rights
Agent”).

     

    WHEREAS,
effective on June 1, 2009 (the “Rights Dividend Declaration
Date”), the Board of Directors of the Company authorized and declared a
distribution of one Right for each share of Company Common Stock outstanding at
the Close of Business on June 1, 2009 (the “Record Date”), and
has authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant hereto) for each share of Company Common Stock issued between
the Record Date (whether originally issued or delivered from the Company’s
treasury), and except as otherwise provided in Section 22, the Distribution
Date, each Right initially representing the right to purchase upon the terms and
subject to the conditions hereinafter set forth one one-hundredth (1/100) of a
share of Company Preferred Stock (the “Rights”);

     

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

     

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

     

    “Acquiring Person”
means any Person (a) which is on the Rights Dividend Declaration Date or (b)
upon the acquisition of additional shares of Company Common Stock after the
Rights Dividend Declaration Date becomes, the Beneficial Owner of twenty percent
(20%) or more of the shares of Company Common Stock from time to time
outstanding; provided,
however, that the term
“Acquiring Person” shall not include an Exempt
Person.  Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith (with the concurrence of a majority of
Continuing Directors then in office prior to the time of the event causing a
Person to become an Acquiring Person) that a Person who would otherwise be an
“Acquiring Person” has become such a Person inadvertently, including, without
limitation under the circumstances described in Subsections (i) and (ii) below,
then such Person shall not be deemed to be or have become an “Acquiring Person”
at any time for any purposes of this Agreement.  Such circumstances
shall include the following:

     

    (i)           such
Person was unaware that it Beneficially Owned (as defined below in this Section
1) a percentage of the 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 no intention of changing or influencing control of the
Company, and such Person divests as promptly as practicable a sufficient number
of Common Stock so that such Person would no longer be an Acquiring Person (or,
in the case solely of Derivative Common Stock (as defined below in this Section
1), such Person terminates the subject derivative transaction or transactions or
disposes of the subject derivative security or securities, or establishes to the
satisfaction of the Board of Directors (with the concurrence of a majority of
Continuing Directors then in office prior to the time of the event causing a
Person to become an Acquiring Person) that such Derivative Common Stock are not
held with any intention of changing or influencing control of the
Company).

    
      
         

      

      
        - 1
-

        
          

        

      

      
         

      

    

    “Affiliate” and “Associate” shall have
the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act (“Rule 12b-2”), as in
effect on the date hereof; provided, however, that the
term “Associate” shall not include any Person who would be an Associate only as
a result of clause (2) of the definition of Associate contained in such Rule
12b-2.

     

    “Beneficial Owner” or
“Beneficial
Ownership”  A Person shall be deemed the “Beneficial Owner” or
possessing “Beneficial Ownership” of, and shall be deemed to “beneficially own”,
any securities:

     

    (i)           of
which such Person or any of such Person’s Affiliates or Associates is considered
to be a Beneficial Owner under Rule 13d-3 of the General Rules and Regulations
under the Exchange Act (the “Exchange Act
Regulations”) as in effect on the date hereof; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any securities
under this Paragraph (i) as a result of an agreement, arrangement or
understanding to vote such securities if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy given in response to a
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the Exchange Act Regulations, and
(B) is not reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report);

     

    (ii)           which
are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate of such other Person) with which such Person (or any of
such Person’s Affiliates or Associates) has any agreement, arrangement or
understanding, whether or not in writing (other than customary agreements with
and between or among underwriters and selling group members with respect to a
bona fide firmly committed public offering), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to the above Paragraph (i) or disposing of such securities;

     

    (iii)           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 or upon the satisfaction of
conditions) pursuant to any agreement, arrangement or understanding, whether or
not in writing (other than customary agreements with and between or among
underwriters and selling group members with respect to a bona fide firmly
committed public offering), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however, that under this
Paragraph (iii) 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 in accordance with the Exchange Act or Exchange Act Regulations by such
Person or any of such Person’s Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities that may be
issued upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities that may be issued 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(c) 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; or

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    (iv)           which
are the subject of a derivative transaction entered into by such Person, or
derivative security acquired by such Person, which gives such Person the
economic equivalent of ownership of an amount of such securities due to the fact
that the value of the derivative is explicitly determined by reference to the
price or value of such securities, without regard to whether (A) such derivative
conveys any voting rights in such securities to such Person, (B) the derivative
is required to be, or capable of being, settled through delivery of such
securities, or (C) such Person may have entered into other transactions that
hedge the economic effect of such derivative. In determining the number of
Common Stock deemed Beneficially Owned by virtue of the operation of this
Section 1, the subject Person shall be deemed to Beneficially Own (without
duplication) the number of Common Stock that are synthetically owned pursuant to
such derivative transactions or such derivative securities. Common Stock deemed
to be Beneficially Owned pursuant to the operation of this Section 1 is referred
to herein as “Derivative Common Stock.”

     

    “Business Day” means
any day other than a Saturday, Sunday or a day on which banking institutions in
New York, New York are authorized or obligated by law or executive order to
close.

     

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

     

    “Common Stock” of any
Person other than the Company means the capital stock of such Person with the
greatest voting power, or, if such Person shall have no capital stock, the
equity securities or other equity interest having power to control or direct the
management of such Person.

     

    “Common Stock
Equivalents” has the meaning set forth in Section 11(a)(ii).

     

    “Company Common Stock”
means the Common Stock, par value $0.001, of the Company.

     

    “Company Preferred
Stock” means the Series C Preferred Stock, par value $0.001, of the
Company with the rights, preferences and privileges set forth in the Certificate
of Designation attached hereto as Exhibit
A.

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    “Continuing Director”
shall mean (i) any member of the Board of Directors of the Company, while a
member of the Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an Acquiring Person or
of any such Affiliate or Associate, and who was a member of the Board prior to
the date of this Agreement, or (ii) any Person who subsequently becomes a member
of the Board, while a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by a
majority of the Continuing Directors.

     

    “Current Market Price”
has the meaning set forth in Section 11(d).

     

    “Current Value” has
the meaning set forth in Section 11(a)(ii).

     

    “Depositary Agent” has
the meaning set forth in Section 7(c).

     

    “Derivative Common
Stock” has the meaning set forth in Subsection (iv) of the definition of
Beneficial Ownership above.

     

    “Distribution Date”
has the meaning set forth in Section 3(a).

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

     

    “Exempt Person”
means:

     

    (i)           the
Company, any Subsidiary of the Company, any employee benefit plan or employee
stock plan of the Company or of any Subsidiary of the Company, or any person or
entity organized, appointed, established or holding Company Common Stock for or
pursuant to the terms of any such plan;

     

    (ii)           any
Person who would otherwise become an Acquiring Person solely by virtue of a
reduction in the number of outstanding shares of Company Common Stock; provided, however, that any such Person
shall not be an Exempt Person if, subsequent to such reduction, such Person
shall become the Beneficial Owner of any additional shares of Company Common
Stock; or

     

    (iii)           Dr.
Parkash Gill and his immediate family members and their Affiliates and
Associates, provided,
however, that any such
Person shall not be an Exempt Person if such Person shall become the Beneficial
Owner of any additional shares of Company Common Stock after the effective time
of this Agreement.

     

    “Expiration Date” has
the meaning set forth in Section 7(a).

     

    “Final Expiration
Date” has the meaning set forth in Section 7(a).

     

    “NASDAQ” has the
meaning set forth in Section 11(d).

    
      
         

      

      
        - 4
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    “Person” shall mean
any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange
Act.

     

    “Preferred Stock
Equivalents” has the meaning set forth in
Section 11(b).

     

    “Principal Party” has
the meaning set forth in Section 13(b).

     

    “Purchase Price” has
the meaning set forth in Section 7(b).

     

    “Record Date” has the
meaning set forth in the recital hereto.

     

    “Redemption Price” has
the meaning set forth in Section 23.

     

    “Registered Common
Stock” has the meaning set forth in Section 13(b).

     

    “Registration Date”
has the meaning set forth in Section 9(c).

     

    “Registration
Statements” has the meaning set forth in Section 9(c).

     

    “Right” has the
meaning set forth in the recital hereto.

     

    “Rights Certificate”
has the meaning set forth in Section 3(a).

     

    “Rights Dividend Declaration
Date” has the meaning set forth in the recital hereto.

     

    “Section 11(a)(ii)
Event” means any event described in Section 11(a)(ii)(A), (B), (C), (D)
or (E).

     

    “Section 11(a)(ii) Trigger
Date” has the meaning set forth in Section 11(a)(ii).

     

    “Section 13 Event”
means any event described in clause (x), (y) or (z) of Section
13(a).

     

    “Securities Act” has
the meaning set forth in Section 9(c).

     

    “Spread” has the
meaning set forth in Section 11(a)(ii).

     

    “Stock Acquisition
Date” means the earlier of (i) the date of the first public announcement
(including, without limitation, the filing of any report pursuant to
Section 13(d) of the Exchange Act) by the Company or an Acquiring Person
that an Acquiring Person has become such (or if a Person is obligated to make
such a public announcement pursuant to Section 13(d) of the Exchange Act but has
failed to do so as required by applicable law, the actual date upon which such
Person is first required to make such a public announcement) or (ii) such
earlier date that the Board of Directors of the Company first becomes aware of
the existence of an Acquiring Person as evidenced by a resolution of the Board
to such effect.

     

    “Subsidiary” means,
with reference to any Person, any other Person of which an amount of voting
securities or equity interests sufficient to elect at least a majority of the
directors or equivalent governing body of such other Person is beneficially
owned, directly or indirectly, by such Person, or otherwise controlled by such
first-mentioned Person.

    
      
         

      

      
        - 5
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    “Summary of Rights”
has the meaning set forth in Section 3(b).

     

    “Trading Day” has the
meaning set forth in Section 11(d).

     

    “Triggering Event”
means any Section 11(a)(ii) Event or any Section 13 Event.

     

    “Unit” has the meaning
set forth in Section 7(b).

     

    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.  With the consent of the Rights Agent, the
Company may from time to time appoint such “co-Rights Agents” as it may deem
necessary or desirable.

     

    SECTION
3.   Distribution Date; Issue of
Rights Certificates.

     

    (a)           Until
the earlier of (i) the Close of Business on the tenth (10th) Business Day after
the Stock Acquisition Date (or such later date as may be determined by action of
a majority of Continuing Directors then in office prior to such time and of
which the Company will give the Rights Agent prompt written notice), and (ii)
the Close of Business on the tenth (10th) Business Day (or such later date as
may be determined by action of a majority of Continuing Directors then in office
prior to such time and of which the Company will give the Rights Agent prompt
written notice) after the date that a tender or exchange offer by any Person
(other than by the Company, any Subsidiary of the Company, any employee benefit
plan maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity) is first published
or sent or given within the meaning of Rule 14d-4(a) of the Exchange Act
Regulations or any successor rule, if upon consummation thereof such Person
would be the Beneficial Owner of twenty percent (20%) or more of the shares of
Company Common Stock then outstanding (the earlier of (i) and (ii) above being
the “Distribution
Date”), (x) the Rights will be evidenced (subject to the provisions of
Subsection (b) of this Section 3) by the shares of Company Common Stock, whether
represented by certificates or uncertificated, registered in the names of the
holders of shares of Company Common Stock as of and subsequent to the Record
Date (which shares of Company Common Stock shall be deemed also to represent the
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Company Common Stock (including a transfer to the Company) and not
separately.

     

    As
promptly as reasonably practicable after the Distribution Date, the Rights Agent
will send by first-class, insured, postage prepaid mail, to each record holder
of shares of Company 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 Company Common
Stock so held, subject to adjustment as provided herein.  In the event
that an adjustment in the number of Rights per share of Company Common Stock has
been made pursuant to Section 11(o) hereof, at the time of distribution of the
Rights Certificates, the Company may 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.

    
      
         

      

      
        - 6
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    (b)           As
promptly as reasonably practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Acquire Company Preferred Stock in a form
which may be appended to certificates that represent shares of Company Common
Stock which may be written statements describing shares of Company Preferred
Stock, in substantially the form attached hereto as Exhibit C (the “Summary of Rights”),
by first-class, postage prepaid mail, to each record holder of shares of Company
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.

     

    (c)           Rights
shall, without any further action, be issued in respect of all shares of Company
Common Stock which are issued (including any shares of Company Common Stock held
in treasury) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date.  Certificates representing such shares
of Company Common Stock and written statements delivered to registered holders
of the shares of Company Common Stock describing uncertificated shares of
Company Common Stock registered to such holder, issued or delivered after the
Record Date shall bear the following legend/notice substantially as
follows:

     

    “This certificate also evidences and
entitles the holder hereof to certain Rights as set forth in the Stockholder
Rights Agreement between NuRx Pharmaceuticals,
Inc. (the “Company”) and Continental Stock Transfer
& Trust Company (the “Rights
Agent”) dated as of
June 1, 2009 (the “Rights
Agreement”), the terms
of which are hereby incorporated herein by reference and a copy of which is on
file at the principal office of the stock transfer administration office of the
Rights Agent.  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 the shares of stock described herein.  The
Company will mail to the holder of the shares of stock described herein a copy
of the Rights Agreement, as in effect on the date of mailing, without charge as
promptly as reasonably practicable after receipt of a written request
therefor.  Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms are
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.”

     

    SECTION
4.   Form of Rights
Certificates.

     

    (a)           The
Rights Certificates (and the forms of election to exercise, assignment and
certificate 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 any rule or regulation thereunder or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed or to conform to usage.  Subject to the provisions of
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 acquire such number of Units of Company Preferred Stock as shall be
set forth therein at the price set forth therein, but the amount and type of
securities, cash or other assets that may be acquired upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as provided
herein.

    
      
         

      

      
        - 7
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    (b)           Any
Rights Certificate issued pursuant hereto 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) which becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and which receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or such Associate or Affiliate) or to any Person with whom
such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred Rights,
shares of Company Common Stock or the Company or (B) a transfer which the Board
of Directors of the Company has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section
7(e) hereof shall, upon the written direction of the Board of Directors of the
Company, contain (to the extent feasible) the following legend:

     

    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)           Rights
Certificates shall be executed on behalf of the Company by its Chairman, its
Chief Executive Officer, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries.  The signature of any of these officers on the
Rights Certificates may be manual or facsimile.  Rights Certificates
bearing the manual or facsimile signatures of the individuals who were at any
time the proper officers of the Company shall bind the Company, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the countersignature of such Rights Certificates or did not hold such offices at
the date of such Rights Certificates.  No Rights Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose unless
there appears on such Rights Certificate a countersignature duly executed by the
Rights Agent by manual signature of an authorized signatory, and such
countersignature upon any Rights Certificate shall be conclusive evidence, and
the only evidence, that such Rights Certificate has been duly countersigned as
required hereunder.

    
      
         

      

      
        - 8
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    (b)           Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its
office designated 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 name and address of each holder
of the Rights Certificates, the number of Rights evidenced on its face by each
Rights Certificate and the date of each Rights Certificate.

     

    
      	    
      	
              SECTION 6.   

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

            

    

     

    (a)           Subject
to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Certificates (other
than Right Certificates representing Rights that have become void pursuant to
Section 7(e) hereof or that have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to acquire a like
number of Units of Company Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder to
acquire.  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 office of the Rights Agent designated for such
purpose.  Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and executed the certificate set forth 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) of the
Rights represented by such Rights Certificate or Affiliates or Associates
thereof as the Company shall reasonably request; whereupon the Rights Agent
shall, subject to the provisions of 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.

     

    (b)           If
a Rights Certificate shall be mutilated, lost, stolen or destroyed, upon request
by the registered holder of the Rights represented thereby and upon payment to
the Company and the Rights Agent of all reasonable expenses incident thereto,
there shall be issued, in exchange for and upon cancellation of the mutilated
Rights Certificate, or in substitution for the lost, stolen or destroyed Rights
Certificate, a new Rights Certificate, in substantially the form of the prior
Rights Certificate, of like tenor and representing the equivalent number of
Rights, but, in the case of loss, theft or destruction, only upon receipt of
evidence satisfactory to the Company and the Rights Agent of such loss, theft or
destruction of such Rights Certificate and, if requested by the Company or the
Rights Agent, indemnity also satisfactory to it.

    
      
         

      

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

     

    (a)           Prior
to the earlier of (i) the Close of Business on the fifth (5th)
anniversary hereof (the “Final Expiration
Date”), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the earlier of (i) and (ii) being the “Expiration Date”), or
the time at which such Rights are exchanged as provided in Section 24 hereof,
the registered holder of any Rights Certificate may, subject to the provisions
of Sections 7(e) and 9(c) hereof, exercise the Rights evidenced thereby in whole
or in part at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to exercise and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together (if applicable) with payment
of the aggregate Purchase Price (as defined in Subsection (b) below) for the
number of Units of Company Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) for which such
surrendered Rights are then exercisable.

     

    (b)           The
purchase price for each one one-hundredth (1/100) of a share (each such one
one-hundredth (1/100) of a share being a “Unit”) of Company
Preferred Stock upon exercise of Rights shall be $5.00, subject to adjustment
from time to time as provided in Sections 11 and 13(a) hereof (such purchase
price, as so adjusted, being the “Purchase Price”), and
shall be payable in accordance with Subsection (c) below.

     

    (c)           As
promptly as reasonably practicable following the occurrence of the Distribution
Date, the Company shall deposit with a corporation in good standing organized
under the laws of the United States or any State of the United States, 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 (such
institution being the “Depositary Agent”),
shares of Company Preferred Stock that may be acquired upon exercise of the
Rights and shall cause such Depositary Agent to enter into an agreement pursuant
to which the Depositary Agent shall issue receipts representing interests in the
shares of Company Preferred Stock so deposited.  Upon receipt of a
Rights Certificate representing exercisable Rights, with the form of election to
exercise and the certificate duly executed, accompanied (if applicable) by
payment, with respect to each Right so exercised, of the Purchase Price for the
Units of Company Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased thereby as
set forth below and an amount equal to any applicable transfer tax or evidence
satisfactory to the Company of payment of such tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) requisition from the
Depositary Agent depositary receipts representing such number of Units of
Company Preferred Stock as are to be acquired and the Company will direct the
Depositary 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 depositary
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.  In the event that the Company is obligated to issue
Company Preferred Stock, other securities 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 Company Preferred Stock, other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.  The payment (if applicable) of
the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(ii)
hereof) may be made by certified or bank check or money order payable to the
order of the Rights Agent (i.e., Continental Stock Transfer & Trust
Company).  The Rights Agent shall promptly transfer the amount of such
payments received by it pursuant to this paragraph to the Company.

     

    
      
         

      

      
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    (d)           In
case the registered holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing 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 any Section 11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of a Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and which receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or any such
Associate or Affiliate) or to any Person with whom the Acquiring Person (or such
Associate or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights, shares of Company Common Stock
or the Company or (B) a transfer which the Board of Directors of the Company has
determined to be part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall be null
and void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, nor shall any such Person be
entitled to receive any property or securities in an exchange pursuant to
Section 24 hereof, 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 or any other
Person as a result of its failure to make any determination under this
Section 7(e) or such Section 4(b) with respect to an Acquiring Person
or its Affiliates, Associates or transferees.

     

    (f)           Notwithstanding
anything in this Agreement or any Rights Certificate 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 by
such registered holder unless such registered holder shall have
(i) completed and executed the certificate following the form of election
to exercise 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) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request.

     

    SECTION
8.   Cancellation and Destruction
of Rights Certificates.  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 cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement.  The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any Rights Certificates acquired by the Company otherwise than upon the exercise
thereof.  The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy the cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.

    
      
         

      

      
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    SECTION
9.    Reservation and Availability
of Capital Stock.

     

    (a)           The
Company shall at all times prior to the Expiration Date cause to be reserved and
kept available, out of its authorized and unissued shares of Company Preferred
Stock, the number of shares of Company Preferred Stock that, as provided in this
Agreement, will be sufficient to permit the exercise in full of all outstanding
Rights or the number of shares of Company Common Stock that, as provided in this
Agreement, will be sufficient to permit any exchange pursuant to Section 24
hereof.  Upon the occurrence of any events resulting in an increase in
the aggregate number of shares of Company Preferred Stock (or Company Common
Stock or other equity securities of the Company, as the case may be) issuable
upon exercise of all outstanding Rights above the number then reserved, the
Company shall make appropriate increases in the number of shares so
reserved.

     

    (b)           If
the shares of Company Preferred Stock (or Company Common Stock or other equity
securities of the Company, as the case may be) to be issued and delivered upon
the exercise of the Rights may be listed on any national securities exchange,
the Company shall during the period from the Distribution Date through the
Expiration Date use its best efforts to cause all securities reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.

     

    (c)           To
the extent necessary to permit the Rights to be exercised in accordance with the
terms of this Agreement without conflict with applicable law, the Company shall
use its best efforts (i) as soon as practicable following a Distribution Date
(the date on which such registration statement is filed being the “Registration Date”),
to file a registration statement on an appropriate form under the Securities Act
of 1933, as amended (the “Securities Act”),
with respect to the securities that may be acquired upon exercise of the Rights
(the “Registration
Statement”), (ii) to cause the Registration Statement to become effective
as soon as practicable after such filing, (iii) to cause the Registration
Statement to continue to be effective (and to include a prospectus complying
with the requirements of the Securities Act) until the earlier of (A) the date
as of which the Rights are no longer exercisable for the securities covered by
the Registration Statement, and (B) the Expiration Date and (iv) to take as
soon as practicable following the Registration Date such action as may be
required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or “blue sky”
laws.

     

    (d)           The
Company shall take such action as may be necessary to ensure that all shares of
Company Preferred Stock (or Company Common Stock or other equity securities of
the Company, as the case may be, that may be delivered upon exercise of Rights)
issued upon exercise of the Rights shall be, at the time of delivery of the
certificates representing such securities, written statements describing such
securities or depositary receipts for such securities, duly and validly
authorized and issued and fully paid and non-assessable.

    
      
         

      

      
        - 12
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     (e)       
  The Company shall pay any documentary, stamp or transfer tax imposed
in connection with the issuance or delivery of the Rights Certificates or upon
the exercise of Rights; provided, however, the Company shall
not be required to pay any such tax imposed in connection with the issuance or
delivery of Units of Company Preferred Stock, or any certificates representing,
written statements describing or depositary receipts for such Units of Company
Preferred Stock (or, following the occurrence of a Triggering Event, any other
securities, cash or assets, as the case may be) to any person other than the
registered holder of the Rights Certificates evidencing the Rights surrendered
for exercise.  The Company shall not be required to issue or deliver
any certificates, written statements or depository receipts for Units of Company
Preferred Stock (or, following the occurrence of a Triggering Event, any other
securities, cash or assets, as the case may be) to, or in a name other than that
of, the registered holder upon the exercise of any Rights until any 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.

     

    SECTION
10.        Company Preferred Stock
Record Date.  Each Person in whose name any Units of Company
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) are issued and registered upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Units of Company
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) on, and the date of such issuance and registration shall be, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (if applicable) and any applicable
transfer taxes was made; provided, however, that if the date of
such surrender and payment is a date upon which the Company Preferred Stock (or,
following the occurrence of a Triggering Event, other securities) transfer books
of the Company are closed, such Person shall be deemed to have become the record
holder of such securities on, and the date of such issuance and registration
shall be, the next succeeding Business Day on which the Company Preferred Stock
(or, following the occurrence of a Triggering Event, other securities) transfer
books of the Company are open and, further provided, however, that if delivery of
Units of Company Preferred Stock is delayed pursuant to Section 9(c) hereof,
such Persons shall be deemed to have become the record holders of such Units of
Company Preferred Stock only when such Units first become
deliverable.  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 securities 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 securities covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

    
      
         

      

      
        - 13
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     (a)          (i)     
      In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the Company Preferred
Stock payable in shares of Company Preferred Stock, (B) subdivide the
outstanding Company Preferred Stock, (C) combine the outstanding Company
Preferred Stock into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Company Preferred Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the 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 Company
Preferred Stock or capital stock, as the case may be, issuable on such date upon
exercise of the Rights, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon payment
(if applicable) of the Purchase Price then in effect, the aggregate number and
kind of shares of Company Preferred Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately prior to such date, such
holder 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.

     

    (ii)       
   Subject to Section 24 of this Agreement, in the event
that:

     

    (A)           any
Person shall become an Acquiring Person, other than pursuant to any transaction
set forth in Section 13(a) hereof;

     

    (B)           any
Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any
time after the date of this Agreement, directly or indirectly, (1) shall merge
into the Company or otherwise combine with the Company and the Company shall be
the continuing or surviving corporation of such merger or combination and
Company Common Stock shall remain outstanding and unchanged, (2) shall, in one
transaction or a series of transactions, transfer any assets to the Company or
to any of its Subsidiaries in exchange (in whole or in part) for shares of
Company Common Stock, for other equity securities of the Company or any such
Subsidiary, or for securities exercisable for or convertible into shares of
equity securities of the Company or any of its Subsidiaries (whether Company
Common Stock or otherwise) or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of such
equity securities or securities exercisable for or convertible into such equity
securities (other than pursuant to a pro rata distribution to all holders of
Company Common Stock);

     

    (C)           during
such time as there is an Acquiring Person, there shall be any reclassification
of securities (including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions involving the
Company or any of its Subsidiaries, other than a transaction or transactions to
which the provisions of Section 13(a) apply (whether or not with or into or
otherwise involving an Acquiring Person), which has the effect, directly or
indirectly, of increasing by more than one percent (1%) the proportionate share
of the outstanding shares of any class of equity securities of the Company or
any of its Subsidiaries that is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person;

    
      
         

      

      
        - 14
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    (D)           during
such time as there is an Acquiring Person, the Company shall issue new shares of
capital stock to an Acquiring Person having voting power in the election of
directors of the Company (other than Company Preferred Stock); or

     

    (E)           during
such time as there is an Acquiring Person, the Company shall take material steps
to liquidate or dissolve;

     

    then, immediately
upon the date of the occurrence of an event described in Section
11(a)(ii)(A)-(E) hereof (a “Section 11(a)(ii)
Event”), each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon full or partial
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of a number of one one-hundredth (1/100) of a share
of Preferred Stock, up to such number of shares of Company Common Stock as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the then number of Units for which a Right is then exercisable and dividing that
product by (y) fifty percent (50%) of the Current Market Price per share of
Company Common Stock (determined pursuant to Section 11(d) hereof) on the
earlier of (a) the date on which any Person becomes an Acquiring Person and (b)
the date on which a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) is first published or sent or given within
the meaning of Rule 14d-4(a) of the Exchange Act Regulations or any successor
rule, if upon consummation thereof such Person would be the Beneficial Owner of
twenty percent (20%) or more of the shares of Company Common Stock then
outstanding.

     

    (iii)           In
the event that the number of shares of Company Common Stock which are authorized
by the Company’s Certificate of Incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with the
foregoing Paragraph (ii) of this Section 11(a), or in any exchange of the Rights
pursuant to Section 24 hereof, the Company, by the vote of the Board of
Directors shall: (A) determine the excess of (1) the value of the shares
issuable upon the exercise of a Right (the “Current Value”) over
(2) the Purchase Price (such excess being the “Spread”), and (B)
with respect to each Right, make adequate provision to substitute for the shares
of Company Common Stock so issuable, upon payment of the Purchase Price, (1)
cash, (2) other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock (such other shares being “Common Stock
Equivalents”)), (3) debt securities of the Company, (4) other assets, or
(5) 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, after receiving advice from an investment banking
firm; provided, however, that if the Company
shall not have made adequate provision to deliver value pursuant to clause (B)
above within thirty days following the later of (x) the first occurrence of a
Section 11(a)(ii) 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 “Section 11(a)(ii) Trigger
Date”), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right, shares of Company Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash shall have an
aggregate value equal to the Spread.  Any substitution pursuant to
Subsection (ii) of this Section 11(a) or pursuant to Section 24(c) shall be
effected by the Company, by the vote of the Board of Directors, subject to
Section 11(e) hereof, in its sole and absolute discretion.  For
purposes of this Section 11(a)(ii), the value of a share of Company Common Stock
shall be the Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Company Common Stock on the Section 11(a)(ii) Trigger Date
and the value of any common stock equivalent shall be deemed to have the same
value as the Company Common Stock on such date.

    
      
         

      

      
        - 15
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    (b)           In
case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Company Preferred Stock entitling them to subscribe
for or purchase (for a period expiring within forty-five calendar days after
such record date) shares of Company Preferred Stock (or shares having
substantially the same rights, privileges and preferences as shares of Company
Preferred Stock (“Preferred Stock
Equivalents”)) or securities convertible into Company Preferred Stock or
Preferred Stock Equivalents at a price per share of Company Preferred Stock or
per share of Preferred Stock Equivalents (or having a conversion price per
share, if a security convertible into Company Preferred Stock or Preferred Stock
Equivalents) less than the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Company 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 sum of the number of shares
of Company Preferred Stock outstanding on such record date plus the number of
shares of Company Preferred Stock which the aggregate offering price of the
total number of shares of Company Preferred Stock and/or Preferred Stock
Equivalents so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such Current
Market Price, and the denominator of which shall be the number of shares of
Company Preferred Stock outstanding on such record date plus the number of
additional shares of Company Preferred Stock and/or Preferred Stock Equivalents
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 Company Preferred Stock owned by or held for the
account of the Company or any Subsidiary 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.

    
      
         

      

      
        - 16
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    (c)           In
case the Company shall fix a record date for a distribution to all holders of
shares of Company 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 shares of Company Preferred Stock, but
including any dividend payable in stock other than Company 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 Company 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 and
shall be binding on the Rights Agent and the holder of the Rights) of the cash,
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants distributable in respect of a share of Company Preferred
Stock, and the denominator of which shall be such Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Company 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.

     

    (d)           For
the purpose of any computation hereunder, the “Current Market Price” per share
of Company Common Stock or Company Preferred Stock on any date shall be deemed
to be the average of the daily closing prices per share of such shares for the
ten (10) consecutive Trading Days (as defined in this Section 11(d) below)
immediately prior to such date; provided, however, if prior to the
expiration of such requisite ten Trading Day period the issuer announces either
(A) a dividend or distribution on such shares payable in such shares or
securities convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such shares, then, following the
ex-dividend date for such dividend or the record date for such subdivision, as
the case may be, the Current Market Price shall be properly adjusted to take
into account such event.  The closing price for each day shall be, if
the shares are listed and admitted to trading on a national securities exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which such shares are listed or admitted to trading or, if such shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System (“NASDAQ”) or such
other system then in use, or, if on any such date such shares 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 such shares selected
by the Board of Directors of the Company.  If on any such date no
market maker is making a market in such shares, the fair value of such shares on
such date as determined in good faith by the Board of Directors of the Company
shall be used.  If such shares are not publicly held or not so listed
or traded, Current Market Price per share 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.  The term “Trading Day” shall
mean, if such shares are listed or admitted to trading on any national
securities exchange, a day on which the principal national securities exchange
on which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.

    
      
         

      

      
        - 17
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    (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 Unit of Company Common
Stock or Company Preferred Stock or other share.  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 (3) years from the date of
the transaction which mandates such adjustment and (ii) the Expiration
Date.

     

    (f)           If
as a result of an adjustment made pursuant to Section 11(a)(ii) or 13(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock other than Company 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 Company Preferred Stock contained in Sections 11(a), (b), (c),
(d), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of Sections
7, 9, 10, 13 and 14 hereof with respect to the Company 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 Units of Company Preferred Stock (or other
securities or amount of cash or combination thereof) that may be acquired 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 Units of Company Preferred Stock
(calculated to the nearest ten-thousandth of a Unit) obtained by
(i) multiplying (x) the number of Units of Company Preferred Stock 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.

    
      
         

      

      
        - 18
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    (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 Units
of Company Preferred Stock that may be acquired 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 Units of Company
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
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, provided, however, that if the Rights
Certificates have been issued, the record date shall be at least ten days later
than the date of such 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 holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the 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 to be so 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.

     

    (j)           Irrespective
of any adjustment or change in the Purchase Price or the number of Units of
Company Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per Unit and the number of Units of Company Preferred Stock which
were expressed in the Initial Rights Certificates issued hereunder.

     

    (k)           Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then par value of the number of Units of Company 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 such fully paid and non-assessable number
of Units of Company 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 of that number of Units
of Company Preferred Stock and shares of other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
Units of Company Preferred Stock and shares of 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.

    
      
         

      

      
        - 19
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    (m)           Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions to 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 Company Preferred Stock, (ii) issuance wholly for cash
of any shares of Company Preferred Stock at less than the Current Market Price,
(iii) issuance wholly for cash of shares of Company Preferred Stock or
securities which by their terms are convertible into or exchangeable for shares
of Company 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 Company Preferred Stock, shall not be taxable to such
holders or shall reduce the taxes payable by such holders.

     

    (n)           After
the Distribution Date, the Company shall not, except as permitted by Section 23
or Section 25 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.

     

    (o)           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 Company
Common Stock payable in shares of Company Common Stock, (ii) subdivide the
outstanding shares of Company Common Stock, (iii) combine the outstanding shares
of Company Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock in a reclassification of Company 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 Company 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 Company Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each share of Company Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Company
Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Company 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 Company Common Stock or
Company Preferred Stock, a copy of such certificate, and (c) if Rights
Certificates have been issued, mail a brief summary thereof to each holder of a
Rights Certificate in accordance with Section 25 hereof.  The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such
certificate.

    
      
         

      

      
        - 20
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    SECTION
13.       Consolidation, Merger, Liquidation or Sale or
Transfer of Assets.

     

    (a)           In
the event that, following the Stock Acquisition Date, directly or
indirectly,

     

    (i)           the
Company shall consolidate with, or merge with and into, any other Person, and
the Company shall not be the continuing or surviving corporation of such
consolidation or merger,

     

    (ii)          any
Person shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Company Common Stock shall be converted into or
exchanged for stock or other securities of any other Person or cash or any other
property,

     

    (iii)         the
Company shall sell, dividend, distribute or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer) to any Person or Persons,
in one or more transactions, cash, other assets or earning power aggregating
more than fifty percent (50%) of the cash, other assets or earning power of the
Company and its Subsidiaries taken as a whole (any such event described in
paragraphs (i)-(v) above being a “Section 13
Event”),

     

    then, and in each
such case, 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 full or partial exercise thereof at the then current Purchase
Price in accordance with this Agreement, up to such number of validly authorized
and issued, fully paid and nonassessable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), which shares shall not be subject
to any liens, encumbrances, rights of first refusal, transfer restrictions or
other adverse claims, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of Units of Company
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event and (y) dividing that product by fifty percent
(50%) of the Current Market Price per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term “Company” shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (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 ensure that
the provisions of this Agreement shall thereafter be applicable to its shares of
Common Stock thereafter deliverable upon the exchange of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no further effect following
the first occurrence of any Section 13 Event.

    
      
         

      

      
        - 21
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    (b)          “Principal Party”
shall mean:

     

    (i)           in
the case of any transaction described in clause (a)(i) or (a)(ii) of Section
13(a) hereof, (A) the Person that is the issuer of any securities into which
shares of Company Common Stock are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer of Common Stock that has
the highest aggregate Current Market Price and (B) if no securities are so
issued, the Person that is the other party to such merger or consolidation, or,
if there is more than one such Person, the Person the Common Stock of which has
the highest aggregate Current Market Price; and

     

    (ii)          in
the case of any transaction described in clause (a)(iii) of Section 13(a)
hereof, the Person that is the party receiving the largest portion of the assets
or earning power transferred pursuant to such transaction or transactions, or,
if each Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power transferred pursuant to such
transaction or transactions or if the Person receiving the largest portion of
the assets or earning power cannot be determined, whichever Person the Common
Stock of which has the highest aggregate Current Market Price;

     

    provided, however, that in any such
case, (1) if the Common Stock of such Person is not at such time and has not
been continuously over the preceding twelve-month period registered under
Section 12 of the Exchange Act (“Registered Common
Stock”), or such Person is not a corporation, and such Person is a direct
or indirect Subsidiary of another Person that has Registered Common Stock
outstanding, “Principal Party”
shall refer to such other Person; (2) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is
a direct or indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person which has Registered Common Stock
outstanding, “Principal Party”
shall refer to the ultimate parent entity of such first-mentioned Person; (3) if
the Common Stock of such Person is not Registered Common Stock or such Person is
not a corporation, and such Person is directly or indirectly controlled by more
than one Person, and one or more of such other Persons has Registered Common
Stock outstanding, “Principal Party”
shall refer to whichever of such other Persons is the issuer of the Registered
Common Stock having the highest aggregate Current Market Price; and (4) if the
Common Stock of such Person is not Registered Common Stock or such Person is not
a corporation, and such Person is directly or indirectly controlled by more than
one Person, and none of such other Persons have Registered Common Stock
outstanding, “Principal Party”
shall refer to whichever ultimate parent entity is the corporation having the
greatest shareholders equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.

     

    (c)           The
Company shall not consummate any such consolidation, merger, sale 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 Paragraphs (a) and (b) of this
Section 13 and further providing that the Principal Party
will:

    
      
         

      

      
        - 22
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    (i)           (A)
file on an appropriate form, as soon as practicable following the execution of
such agreement, a registration statement under the Securities Act with respect
to the Common Stock that may be acquired upon exercise of the Rights,
(B) cause such registration statement to remain effective (and to include a
prospectus complying with the requirements of the Securities Act) until the
Expiration Date, and (C) as soon as practicable following the execution of
such agreement, take such action as may be required to ensure that any
acquisition of such Common Stock upon the exercise of the Rights complies with
any applicable state security or “blue sky” laws; and

     

    (ii)          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.

     

    (d)          In
case the Principal Party which is to be a party to a transaction referred to in
this Section 13 has a provision in any of its authorized securities or in
its Certificate of Incorporation or Bylaws or other instrument governing its
corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then Current Market Price per
share or securities exercisable for, or convertible into, Common Stock of such
Principal Party at less than such then Current Market Price (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of this Section 13;
then, in such event, the Company shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been cancelled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.

     

    (e)           The
provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers.  In the event that a
Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).

     

    
      
        
        

      

      
        - 23
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    SECTION
14.        Fractional Rights and Fractional
Shares.

    (a)           The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights.  In lieu of such
fractional Rights, there shall be paid to the Persons to which such fractional
Rights would otherwise be issuable, an amount in cash equal to such fraction of
the market value of a whole Right.  For purposes of this
Section 14(a), the 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, if the Rights are listed or admitted
to trading on a national securities exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company.  If
on any 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 and such determination shall be described
in a statement filed with the Rights Agent.

     

    (b)           In
connection with any exercise of Rights, or any exchange of Rights pursuant to
Section 24 hereof, the Company shall not be required to issue fractions of
Company Common Stock or to distribute certificates which evidence fractional
Company Common Stock, nor shall the Company be required to issue fractions of
Company Preferred Stock (other than fractions which are integral multiples of
one one-hundredth (1/100) of a share of Company Preferred Stock) or to
distribute certificates which evidence Company Preferred Stock in any such odd
fraction.  Fractions of Company Preferred Stock in integral multiples
of one one-hundredth (1/100) of a share of Company Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it; provided, that such agreement
shall provide that the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as beneficial
owners of the Company Preferred Stock represented by such depositary
receipts.  If the Company elects not to issue fractional Company
Common Stock or odd fractional Company Preferred Stock, then, in lieu of such
fractional shares, the Company shall pay to the registered holder of each Right
otherwise entitled to receive the same at the time such Right is exercised or
exchanged as herein provided an amount in cash equal to the same fraction of the
current market value of a whole share.  For the purposes of this
Subsection (b), the current market value of a whole share of Company Common
Stock or share of Company Preferred Stock shall be the closing price of a share
of Company Common Stock or Company Preferred Stock, as the case may be (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise or
exchange.

     

    (c)           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 of a Right,
except as permitted by this Section 14.

    
      
         

      

      
        - 24
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    SECTION
15.       Rights of
Action.  All rights of action in respect of this Agreement,
other than rights of action vested in the Rights Agent pursuant to Section 18
hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
shares of Company Common Stock); and any registered holder of a Rights
Certificate (or, prior to the Distribution Date, of shares of Company 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 shares of Company
Common Stock), may, on its own behalf and for its own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company or any
other Person 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 Company Common Stock;

     

    (b)          after
the Distribution Date, the Rights Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the office 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 duly
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 shares of Company Common Stock) 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 applicable to the associated shares of Company Common Stock 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 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 any 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.

     

    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 shares of Company 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, except as provided in Section 24 hereof, to receive
notice of meetings or other actions affecting shareholders, 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.

     

    
      
        
        

      

      
        - 25
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    SECTION
18.       Concerning the Rights
Agent.

     

    (a)           The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses, including reasonable fees and
disbursements of its counsel, incurred in connection with the execution and
administration of this Agreement and the exercise and performance of its duties
hereunder.  The Company shall indemnify the Rights Agent for, and 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 hereunder.

     

    (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,
certificate for Company Common Stock, or written statement describing shares of
Company 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 have been 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
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust or
shareholder services businesses 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 document or any further act on the part of any of
the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof.  In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of a 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 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.

    
      
         

      

      
        - 26
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      (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 written opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.

       

      (b)           Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (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 specified herein) may be deemed to be conclusively proved and
established by a certificate signed by the Chief Executive Officer, President,
Chief Financial Officer, 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 gross negligence, bad
faith or willful misconduct.  Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental 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.

       

      (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 have any responsibility for the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof
by the Rights Agent) or for 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 failure by the Company to satisfy
conditions contained in this Agreement or in any Rights Certificate; nor shall
it be responsible for any adjustment required under the provisions of
Section 11, Section 13 or Section 24 hereof or 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 receipt by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12 hereof);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Company Common
Stock or Company Preferred Stock or any other securities to be issued pursuant
to this Agreement or any Rights Certificate or as to whether any shares of
Company Common Stock or Company Preferred Stock or any other securities will,
when so issued, be validly authorized and issued, fully paid and
nonassessable.

       

      
        
          
          

        

        
          - 27
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    (f)           The
Company shall perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the performance by the Rights Agent of its duties under this Agreement and shall
provide free upon request of any holder of a Right a copy of this
Agreement.

     

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

     

    (h)          The
Rights Agent and any 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 the Rights Agent under this
Agreement.  Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal
entity.

     

    (i)           The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its attorneys
or agents.

     

    (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 or in the exercise of its rights hereunder if the Rights Agent
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.

    
      
         

      

      
        - 28
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    (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 exercise, as the case may be, has either not been completed, not
signed 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 or transfer without first consulting with the Company.  If
such certificate has been completed and signed and shows a negative response to
clauses 1 and 2 of such certificate, unless previously instructed otherwise in
writing by the Company (which instructions may impose on the Rights Agent
additional ministerial responsibilities, but no discretionary responsibilities),
the Rights Agent may assume without further inquiry that the Rights Certificate
is not owned by a person described in Section 4(b) or Section 7(e)
hereof and shall not be charged with any knowledge to the contrary.

     

    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 thirty days’ prior notice in writing mailed to
the Company, and to each transfer agent of the Company Common Stock and Company
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 thirty days’ prior notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Company Common Stock and Company 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 thirty 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 (a) a corporation organized and
doing business under the laws of the United States or any state of the United
States in good standing, shall be authorized under such laws to exercise
corporate trust or stock transfer powers, shall be subject to supervision or
examination by federal or state authorities and shall have at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000 or (b) an Affiliate of a corporation described in clause
(a).  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 Company Common Stock and Company 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.

    
      
         

      

      
        - 29
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    SECTION
22.  Issuance of New Rights
Certificates.  Notwithstanding
any of the provisions of this Agreement or 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 the Board of Directors of the Company to reflect
any adjustment or change made in accordance with the provisions of this
Agreement in the Purchase Price or the number or kind or class of shares or
other securities or property that may be acquired under the Rights
Certificates.  In addition, in connection with the issuance or sale of
shares of Company Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (a) shall, with respect to shares of Company Common
Stock so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities 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 of 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 that such issuance would create a significant risk of
material adverse tax consequences to the Company or the person to whom such
Rights Certificate would be issued, 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)           Subject
to Section 30 hereof, the Company may, at its option, by action of the Board of
Directors of the Company, at any time prior to the earlier of (i) the Close of
Business on the tenth (10th) Business Day following the Stock Acquisition Date
(or such later date as may be determined by action of a majority of Continuing
Directors then in office prior to such time) or (ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $0.001 per Right, 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 the “Redemption Price”),
and the Company may, at its option, by action of the Board of Directors of the
Company, pay the Redemption Price either in shares of Company Common Stock
(based on the Current Market Price of the shares of Company Common Stock at the
time of redemption) or cash.  Such redemption of the Rights by the
Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish; provided, however, if the
Board of Directors of the Company authorizes redemption of the Rights on or
after the time a Person becomes an Acquiring Person, then there must be
Continuing Directors then in office and such authorization shall require the
concurrence of a majority of such Continuing Directors.

     

    (b)          Immediately
upon the action of the Board of Directors of the Company ordering the redemption
of the Rights, evidence of which shall be 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.  Promptly after the action of the Board of Directors of the
Company 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 Company
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.

    
      
         

      

      
        - 30
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    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 Company Common Stock at
an exchange ratio of one share of Company Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the effective date of this Agreement (such exchange ratio being
the “Exchange
Ratio”).

     

    (b)          Immediately
upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to Subsection (a) of this Section 24 (or at such later
time as may be specified by the Board in taking such action) 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 Company 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 in accordance with Section 25
hereof.  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 Company 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.

     

    (c)          In
any exchange pursuant to this Section 24, the Company, (i) at its option may,
and (ii) in the event there are not sufficient Common Stock available (that
is, shares constituting treasury shares or authorized but unissued shares, after
excluding any Company Common Stock previously reserved for other purposes) to
permit the full exchange of the Rights ordered by the Board of Directors of the
Company shall, substitute (in whole or in part) Company Preferred Stock (or
Preferred Stock Equivalent, as such term is defined in Section 11(b) hereof) for
Company Common Stock exchangeable for Rights, at the initial rate of one
one-hundredth (1/100) of a share of Company Preferred Stock (or Preferred Stock
Equivalent) for each Common Share, as appropriately adjusted to reflect
adjustments in the voting rights of the Company Preferred Stock pursuant to the
terms thereof, so that the fraction of a share of Company Preferred Stock
delivered in lieu of each share of Company Common Stock shall have the same
voting rights as one share of Company Common Stock.  Exchange pursuant
to this Section 24 is also subject to the provisions of Section 11(a)(ii)
hereof.

    
      
         

      

      
        - 31
-

        
          

        

      

      
         

      

    

    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
Company Preferred Stock or to make any other distribution to the holders of
Company Preferred Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), (ii) to offer to the holders
of Company Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Company Preferred Stock or shares of stock of any class
or any other securities, rights or options, (iii) to effect any reclassification
of its Company Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Company Preferred Stock), (iv) to
effect any consolidation or merger into or with any other Person, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
fifty percent (50%) of the assets or of the Company and its Subsidiaries (taken
as a whole) to any other Person or earning power Persons, or (v) to effect the
liquidation, dissolution or winding up of the Company, (vi) to declare or pay
any dividend on the Company Common Stock payable in Company Common Stock or to
effect a subdivision, combination or consolidation of the Company Common Stock
(by reclassification or otherwise than by payment of dividends in Company Common
Stock), 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 25
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, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Company 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 twenty (20) days
prior to the record date for determining holders of the shares of Company
Preferred Stock for purposes of such action, and in the case of any such other
action, at least twenty (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 Company Preferred Stock whichever shall be the earlier.

     

    (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 reasonably practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 25 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)(iii) hereof.

     

    SECTION
26.  Notices.  All
notices and other communications provided for hereunder shall, unless stated
herein, be in writing and mailed or sent or delivered, if to the Company, at its
address at:

     

    
      	
              NuRx
      Pharmaceuticals, Inc.

            
	
              18
      Technology

            
	
              Suite
      130

            
	
              Irvine,
      CA 92618

            
	 
      
	
              and
      if to the Rights Agent, at its address at:

            
	 
      
	
              Continental
      Stock Transfer & Trust Company

            
	
              17
      Battery Place, 8th Floor

            
	
              New
      York, NY  10004

            

    

     

    
      
         

      

      
        - 32
-

        
          

        

      

      
         

      

    

    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 shares of Company 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 and subject to this Section 27, the Company may, 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 shares of
Company Common Stock.  From and after the Distribution Date and
subject to the penultimate sentence of this Section 27 as described below, 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
(which lengthening or shortening, following the first time a Person becomes an
Acquiring Person, shall be effective only if there are Continuing Directors and
shall require the concurrence of a majority of such Continuing Directors), 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, however, that  this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) subject to Section 30 hereof, 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 such lengthening 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 the
Redemption Price, the Purchase Price, the Expiration Date or the number of Units
of Company Preferred Stock for which a Right is exercisable without the approval
of the Board of Directors of the Company (and with the concurrence of a majority
of the Continuing Directors, where specifically provided for
herein).  Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders of
Company Common Stock.

    

    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.  For
all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange
Act Regulations as in effect on the date hereof.  Except as otherwise
specifically provided herein, the Board of Directors of the Company (and, where
specifically provided for herein, the Continuing Directors) shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company (or, where
specifically provided for herein, the Continuing Directors), or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement.  All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Company in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board, any member thereof or the
Continuing Directors to any liability to the holders of the
Rights.

    
      
         

      

      
        - 33
-

        
          

        

      

      
         

      

    

    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 shares of Company
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 shares of Company
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; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement and the Rights shall
not then be redeemable, the right of redemption set forth
in  Section 23 hereof shall be reinstated and shall not expire
until the Close of Business on the tenth (10th) Business Day following the date
of such determination by the Board of Directors of the Company.

     

    SECTION
32.  Governing
Law.  This
Agreement, each Right and each Rights Certificate issued hereunder shall be
governed by, and construed in accordance with, the laws of the State of Nevada
applicable to contracts executed in and to be performed entirely in such
State.

     

    SECTION
33.  Counterparts.  This
Agreement may be executed (including by facsimile) in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same instrument.

     

    SECTION
34.  Descriptive
Headings.  The
headings contained in this Agreement are for descriptive purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.

    
      
         

      

      
        - 34
-

        
          

        

      

      
         

      

    

    [Signature Page
Follows]

    
      
         

      

      
        - 35
-

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              
                
                  
                    	
                            NURX
      PHARMACEUTICALS, INC.

                          
	 
	
                            By  

                          	
                            /s/
      Harin Padma-Nathan  

                          
	 
      	
                            Name:
      Harin Padma-Nathan  

                          
	 
      	
                            Title:
      President and CEO

                          
	 
	
                            CONTINENTAL
      STOCK TRANSFER & TRUST

                            COMPANY,
      as Rights Agent

                          
	 
	
                            By

                          	
                            /s/
      John W. Comer, Jr.

                          
	 
      	
                            Name:
      John W. Comer, Jr.

                          
	 
      	
                            Title:
      Vice
President

                          

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        - 36
-

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    CERTIFICATE
OF DESIGNATION

    OF

    SERIES
C PREFERRED STOCK

    

    The
undersigned, Harin Padma-Nathan, does hereby certify:

     

    1.      That he
is the duly elected and acting President of NuRx Pharmaceuticals, Inc., a
Nevada corporation (the “Corporation”).

     

    2.      That the
authorized number of shares of Preferred Stock of the Corporation is 5,000,000
and that no shares of Preferred Stock are currently issued or
outstanding.

     

    3.      That
pursuant to the authority conferred upon the Board of Directors by the Amended
and Restated Articles of Incorporation of the said Corporation, the said Board
of Directors adopted the following resolution creating a series of 300,000
shares of Preferred Stock designated as Series C Preferred Stock:

     

    “RESOLVED, that pursuant to the
authority vested in the Board of Directors of the corporation by the Amended and
Restated Articles of Incorporation, the Board of Directors does hereby provide
for the issue of a series of Preferred Stock, par value $0.001 per share, of the
Corporation, to be designated “Series C Preferred Stock,” initially consisting
of 300,000 shares and to the extent that the designations, powers, preferences
and relative and other special rights and the qualifications, limitations and
restrictions of the Series C Preferred Stock are not stated and expressed in the
Amended and Restated Articles of Incorporation, does hereby fix and herein state
and express such designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions thereof, as
follows (all terms used herein which are defined in the Amended and Restated
Articles of Incorporation shall be deemed to have the meanings provided
therein):

     

    SECTION
1.       DESIGNATION AND
AMOUNT.  The shares of such series shall be designated as “Series C
Preferred Stock,” par value $.001 per share, and the number of shares
constituting such series shall be 300,000.

     

    SECTION
2.       DIVIDENDS AND
DISTRIBUTIONS.

     

    (A)      Subject
to the prior and superior right of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the shares of Series C Preferred
Stock with respect to dividends, the holders of shares of Series C 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 September, December, March and June 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 C Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to, subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock of the Corporation (the “Common Stock”) since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series C Preferred Stock.  In the event the
Corporation shall at any time after June 1, 2009 (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 C Preferred Stock were entitled
immediately prior to such event under the preceding sentence shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    (B)      The
Corporation shall declare a dividend or distribution on the Series C 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 and be cumulative on outstanding shares of Series C
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date
of issue of such shares of Series C 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 C 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 C 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 C
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.

     

    SECTION
3.       VOTING RIGHTS.   The
holders of shares of Series C Preferred Stock shall have the following voting
rights:

     

    (A)      Subject
to the provision for adjustment hereinafter set forth, each share of Series C
Preferred Stock shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders 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 share to which holders of shares of Series C 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.

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

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

     

    (C)      Except
as required by law, holders of Series C 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)      The
Corporation shall not declare any dividend on, make any distribution on, or
redeem or purchase or otherwise acquire for consideration any shares of Common
Stock after the first issuance of a share or fraction of a share of Series C
Preferred Stock unless concurrently therewith it shall declare a dividend on the
Series C Preferred Stock as required by Section 2 hereof.

     

    (B)      Whenever
quarterly dividends or other dividends or distributions payable on the Series C
Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series C 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 C
Preferred Stock;

     

    (ii)    declare
or pay dividends on, 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 Series C Preferred Stock, except dividends paid ratably on the Series C
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 C 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 C
Preferred Stock; or

     

    (iv)    purchase
or otherwise acquire for consideration any shares of Series C Preferred Stock,
or any shares of stock ranking on a parity with the Series C 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-3

        
          

        

      

      
        
        

      

    

     

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

     

    SECTION
5.       REACQUIRED SHARES.  Any
shares of Series C 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 C Preferred Stock unless, prior thereto, the holders
of shares of Series C Preferred Stock shall have received $500.00 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 C 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 C 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 Series C Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalization with respect to the Common Stock) (such number in clause (ii),
the “Adjustment
Number”).  Following the payment of the full amount of the
Series C Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series C Preferred Stock and Common Stock, respectively,
holders of Series C 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 1 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 to the Series C Liquidation Preference and the liquidation preferences
of all other series of Preferred Stock, if any, which rank on a parity with the
Series C 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-4

        
          

        

      

      
        
        

      

    

     

    (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 C 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 100 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged.  In the event the Corporation shall at any
time 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 C 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 C Preferred Stock shall not be redeemable.

     

    SECTION
9.       RANKING.  The Series C
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.

     

    SECTION
10.      AMENDMENT.  The Amended and
Restated Articles of Incorporation of the Corporation shall not be further
amended in any manner which would materially alter or change the powers,
preference or special rights of the Series C 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 C Preferred Stock, voting separately as a
class.

     

    SECTION
11.      FRACTIONAL SHARES.  Series C
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder’s fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series C Preferred Stock.

     

    RESOLVED FURTHER, that the President or
any Vice President and the Secretary or any Assistant Secretary of this
corporation be, and they hereby are, authorized and directed to prepare and file
a Certificate of Designation of Rights, Preferences and Privileges in accordance
with the foregoing resolution and the provisions of Nevada law and to take such
actions as they may deem necessary or appropriate to carry out the intent of the
foregoing resolution.”

     

    [The
remainder of this page is intentionally left blank.]

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

     

    I further declare under penalty of
perjury that the matters set forth in the foregoing Certificate of Designation
are true and correct of my own knowledge.

     

    Executed at Los Angeles, California as
of ________, 2009.

     

    
      
        	
                ______________________________________________

              
	
                Harin
      Padma-Nathan, President

              

      

    

     

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    [Form of
Rights Certificate]

     

    Certificate
No. __________

     

    NOT
EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW).  THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.  [UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE
RIGHTS AGREEMENT) OR 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 REFERRED TO BELOW).  ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*

     

    Rights
Certificate

     

    NURX
PHARMACEUTICALS, INC.

     

    This
certifies that ______________ or its registered assigns is the registered holder
of the number of Rights set forth above, each of which entitles the registered
holder thereof, subject to the terms and conditions of the Stockholder Rights
Agreement dated as of June 1, 2009 (the “Rights Agreement”)
between NuRx Pharmaceuticals, Inc., a Nevada corporation (the “Company”), and
Continental Stock Transfer & Trust Company, as Rights Agent (which term
shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Distribution Date and prior to
the Expiration Date at the office of the Rights Agent, one one-hundredth (1/100)
of a fully paid and non-assessable share of Series C Preferred Stock, par value
$0.001 per share (the “Company Preferred
Stock”), of the Company at the Purchase Price initially of $5.00 per one
one-hundredth (1/100) share (each such one one-hundredth of a share being a
“Unit”) of
Company Preferred Stock, upon presentation and surrender of this Rights
Certificate with the Election to Exercise and related certificate duly
executed.  The number of Rights evidenced by this Rights Certificate
(and the number of Units which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per Unit set forth above shall be subject to
adjustment in certain events as provided in the Rights
Agreement.  Terms defined in the Rights Agreement shall have the same
meaning in this Rights Certificate unless otherwise defined differently
herein.

     

    
      
        

      

      
        
          	
                  *

                	
                  The
      portion of the legend in brackets shall be inserted where applicable and
      shall replace the preceding
sentence.

                

        

      

    

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    Upon the
occurrence of a Section 11(a)(ii) Event, if the Rights evidenced by this Rights
Certificate are beneficially owned by an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person or, under certain circumstances described
in the Rights Agreement, a transferee of any such Acquiring Person, Associate or
Affiliate, 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
Section 11(a)(ii) Event.

     

    In
certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to receive, upon exercise of
such Rights, Common Stock of the Company or cash or other assets, all as
provided in the Rights Agreement.

     

    In
certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to receive, upon exercise of
such Rights, capital stock of an entity other than the Company or cash or other
assets, all as provided in the Rights Agreement.

     

    This
Rights Certificate is subject to all of the terms and conditions of the Rights
Agreement, which terms 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.  Copies of the Rights
Agreement are on file at the principal office of the Company and are available
from the Company upon written request.

     

    This
Rights Certificate, with or without other Rights Certificates, upon surrender at
the office of the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates
surrendered.  If this Rights Certificate shall be exercised in part,
the registered 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 under certain circumstances at its
option at a redemption price of $0.001 per Right, payable at the Company’s
option in cash or in common stock of the Company, subject to adjustment in
certain events as provided in the Rights Agreement.  No fractional
shares of Company 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-hundredth (1/100) of a share of Company Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.

     

    No holder
of this Rights Certificate, as such, shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Company Preferred Stock or
of any other securities 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 Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.

    
      
         

      

      
        B-2

        
          

        

      

      
         

      

    

     

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

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

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

     

    
      
        
          	
                  ATTEST:

                	
                  NURX
      PHARMACEUTICALS, INC.

                
	 
      	 
      	 
      
	 
      	
                  By

                	
                  _____________________

                
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                

        

      

    

     

    Countersigned:

     

    Continental
Stock Transfer & Trust Company, as Rights Agent

     

    
      
        
          	
                  By

                	_____________________ 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

     

    
      
         

      

      
        B-4

        
          

        

      

      
         

      

    

    [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:
____________, ____

     

    
      
        	
                _____________________

              
	
                Signature

              

      

    

    

    Signature
Guaranteed:

    
      
         

      

      
        B-5

        
          

        

      

      
         

      

    

    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);
and

     

    (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:
____________, ____

     

    
      
        	
                _____________________

              
	
                Signature

              

      

    

    

    Signature
Guaranteed:

    
      
         

      

      
        B-6

        
          

        

      

      
         

      

    

    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.

     

    Signatures
must be guaranteed by an approved eligible financial institution acceptable to
the Rights Agent in its sole discretion or by a participant in the Securities
Transfer Agents Medallion Program, the Stock Exchange Medallion Program or the
New York Stock Exchange Medallion Program.

     

    In the
event the certification set forth above is not completed, the Company will deem
the beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend to that effect
on any Rights Certificates issued in exchange for this Rights
Certificate.

    
      
         

      

      
        B-7

        
          

        

      

      
         

      

    

    FORM OF ELECTION TO
EXERCISE

     

    (To be
executed if the registered holder

    desires
to exercise Rights represented

    by the
Rights Certificate.)

     

    
      	
              To: 

            	
              NURX
      PHARMACEUTICALS, INC.

            

    

     

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

    _________________________________

    (Please
print name and address)

     

    _________________________________

    Please
insert social security

    or other
identifying numbers:__________

     

    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
print name and address)

     

    _________________________________

    Please
insert social security

    or other
identifying numbers:__________

     

    Dated:
____________, ____

     

    
      
        	
                _____________________

              
	
                Signature

              

      

    

     

    Signature
Guaranteed:

    
      
         

      

      
        B-8

        
          

        

      

      
         

      

    

    Certificate

     

    The
undersigned hereby certifies by checking the appropriate boxes
that:

     

    (1)           the
Rights evidenced by this Rights Certificate  ̈ are
 ̈
are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate thereof (as defined in the Rights Agreement); and

     

    (2)           after
due inquiry and to the best knowledge of the undersigned, the undersigned  ̈ 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 thereof.

     

    Dated:
____________, ____

     

    
      
        	
                _____________________

              
	
                Signature

              

      

    

     

    Signature
Guaranteed:

    
      
         

      

      
        B-9

        
          

        

      

      
         

      

    

    NOTICE

     

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

     

    Signatures
must be guaranteed by an approved eligible financial institution acceptable to
the Rights Agent in its sole discretion or by a participant in the Securities
Transfer Agents Medallion Program, the Stock Exchange Medallion Program or the
New York Stock Exchange Medallion Program.

     

    In the
event the certification set forth above is not completed, the Company will deem
the beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an Assignment, will affix a legend to that effect
on any Rights Certificates issued in exchange for this Rights
Certificate.

    
      
         

      

      
        B-10

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    SUMMARY
OF RIGHTS TO ACQUIRE PREFERRED STOCK

     

    Effective
as of June 1, 2009, the Board of Directors of NURX PHARMACEUTICALS, INC., a
Nevada corporation (the “Company”), declared a
distribution of one Right for each outstanding share of Common Stock, par value
$0.001 per share (the “Company Common
Stock”), to stockholders of record at the close of business on June 1,
2009 (the “Record
Date”) and for each share of Company Common Stock issued (including
shares distributed from treasury) by the Company thereafter and prior to the
Distribution Date.  Each Right entitles the registered holder, subject
to the terms of the Rights Agreement (as defined below), to purchase from the
Company one one-hundredth (1/100) of a share (a “Unit”) of Series C
Preferred Stock, par value $0.001 per share (the “Company Preferred
Stock”), at a Purchase Price of $5.00 per Unit, subject to
adjustment.  The Purchase Price is payable in cash or by certified or
bank check or money order payable to the order of the Company.  The
description and terms of the Rights are set forth in a Stockholder Rights
Agreement between the Company and Continental Stock Transfer & Trust
Company, as Rights Agent (the “Rights
Agreement”).

     

    Copies of
the Rights Agreement have been filed with the Securities and Exchange Commission
as exhibits to a Registration Statement on Form 8-A dated June 5, 2009 (the
“Form
8-A”).  Copies of the Rights Agreement are available free of
charge from the Company.  This summary description of the rights does
not purport to be complete and is qualified in its entirety by reference to all
the provisions of the Rights Agreement, including the definitions therein of
certain terms, which Rights Agreement is incorporated herein by
reference.

     

    The Stockholder Rights
Agreement

     

    Initially,
the Rights will be attached to the certificates representing outstanding shares
of Common Stock, and no separate Rights certificates will be
distributed.  The Rights are not exercisable until the Distribution
Date (as defined below) and will expire at the close of business on June 5,
2014 (the “Expiration
Date”), unless earlier redeemed by the Company as described
below.  Until the Distribution Date, (i) the Rights will be
evidenced by and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after June 1, 2009,
will contain a legend incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any certificate for Common Stock will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.

     

    As
promptly as reasonably 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.  Except as otherwise
determined by the Board of Directors, the only Common Stock that will be issued
with Rights is Common Stock issued prior to the earliest of (i) the
Distribution Date, and (ii) the Expiration Date.

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

    Initially,
the Rights will attach to all shares of outstanding Company Common Stock, and no
separate Rights Certificates will be distributed.  The Rights will
separate from the Company Common Stock and the “Distribution Date”
will occur upon the earlier of (i) ten (10) business days following a public
announcement that a person or group of affiliated or associated persons (an
“Acquiring
Person”) has acquired, obtained the right to acquire, or otherwise
obtained beneficial ownership of twenty percent (20%) or more of the outstanding
shares of Company Common Stock (or an earlier date under certain circumstances
specified in the Rights Agreement) (the “Stock Acquisition
Date”), and (ii) ten (10) business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning twenty percent (20%) or more of the outstanding Company
Common Stock.  The Continuing Directors (defined as the directors who
are not affiliated or associated with an Acquiring Person) may vote to extend
these timeframes in their discretion.

     

    In the
event that (i) an Acquiring Person becomes the beneficial owner of twenty
percent (20%) or more of the then outstanding shares of Company Common Stock,
(ii) the Company is the surviving corporation in a merger with an Acquiring
Person and shares of Company Common Stock shall remain outstanding,
(iii) an Acquiring Person engages in one or more “self-dealing”
transactions as set forth in the Rights Agreement, (iv) the Company takes steps
to liquidate or dissolve, or (v) during such time as there is an Acquiring
Person, an event occurs which results in such Acquiring Person’s ownership
interest being increased by more than one percent (1%) (e.g., by means of a
reverse stock split or recapitalization), then, in each such
case, each holder of a Right will thereafter have the right to acquire, upon
exercise of such Right, up to that number of shares of Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times (2x) the exercise price of the Right.  The
exercise price is the Purchase Price multiplied by the number of Units of
Company Preferred Stock issuable upon exercise of a Right prior to the events
described in this paragraph.  Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void.

     

    For
example, at an exercise price of $10 per Right, each Right not owned by the
Acquiring Person (or by certain related parties or transferees) following the
event set forth in the preceding paragraphs would entitle its holder to purchase
$20 worth of Common Stock (or other consideration, as noted above) for $10.
Assuming that the Common Stock had a per share value of $2.50 at such time, the
holder of each valid Right would be entitled to purchase eight (8) shares
of Common Stock for $10.

     

    In the
event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described above), (ii) any Person consolidates or merges with the
Company and all or part of the Company Common Stock is converted or exchanged
for securities, cash or property of any other Person, or (iii) the Company
sells, dividends, distributes or otherwise transfers assets or earning power
aggregating more than fifty percent (50%) of the assets or earning power of the
Company, then each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to acquire, upon
exercise of such Right, up to that number of shares of common stock of the
Principal Party having a value equal to two times (2x) the exercise price of the
Right.

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    

    The
Purchase Price and the number of Units of the Company Preferred Stock 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 subdivision,
combination or reclassification of, the Company Preferred Stock, (ii) if
holders of the Company Preferred Stock are granted certain rights or warrants to
subscribe for Company Preferred Stock or convertible securities at less than the
Current Market Price of the Company Preferred Stock, or (iii) upon the
distribution to the holders of the Company Preferred Stock of evidences of
indebtedness, cash 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 one percent (1%) of the Purchase
Price.  The Company is not required to issue fractional Units or
shares of the Company Preferred Stock.  In lieu thereof, an adjustment
in cash may be made based on the market price of the Company Preferred Stock
prior to the date of exercise or exchange.

     

    At any
time until ten (10) business days following the Stock Acquisition Date, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $0.001 per Right (subject to adjustment in certain events)
(the “Redemption
Price”), payable, at the election of the Board of Directors of the
Company, in cash or shares of Company Common Stock.  Immediately upon
the action of the Board of Directors of the Company ordering the redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.

     

    Until a
Right is exercised or exchanged, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote o to receive dividends.  While the distribution of the Rights
will not be taxable to stockholder or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable or exchangeable for Units or shares of Company
Preferred Stock (or other consideration).

     

    At any
time after a person becomes an Acquiring Person, but before any person becomes
the beneficial owner of fifty percent or more of the Company’s Common Stock, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by such Acquiring Person or group which become void), in whole or in part,
at an exchange ratio of one share of Common Stock, or one one-hundredth of a
share of Preferred Stock (or of a share of a class or series of the Company’s
preferred stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).

     

     The
Preferred Stock will be non-redeemable. The Preferred Stock may rank on a lower
priority in respect of the preference as to dividends and the distribution of
assets with other classes or series of the Company’s preferred stock. Each share
of Preferred Stock will be entitled to an aggregate of 100 times the cash and
non-cash (payable in kind) dividends and distributions (other than dividends and
distributions payable in Common Stock) declared on the Company’s Common Stock.
In the event of liquidation, the holders of Preferred Stock will be entitled to
receive a liquidation payment in an amount equal to 100 times the payment made
per share of Common Stock, plus an amount equal to declared and unpaid dividends
and distributions thereon. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 100 times the amount received per
share of Common Stock. The dividend and liquidation rights of the Preferred
Stock are protected by antidilution provisions. Each share of Preferred Stock
will be entitled to 100 votes (subject to certain adjustments) on all matters
submitted to the shareholders.

    
      
         

      

      
        C-3

        
          

        

      

      
         

      

    

     

    Any
provision in the Rights Agreement may be amended by the Board of Directors prior
to the Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board of Directors in order to cure any
ambiguity, make corrections, lengthen or shorten time periods (which lengthening
or shortening, following the first time a person becomes an Acquiring Person,
shall be effective only if there are Continuing Directors (as defined below) and
shall require the concurrence of a majority of such Continuing Directors) and to
otherwise make changes which do not adversely affect the interests of holders of
Rights (excluding the interests of any Acquiring Person); provided, however,
that no amendment to adjust the time period governing redemption may be made at
such time as the Rights are not redeemable or to lengthen any time period unless
for the purpose of protecting or enhancing the rights or benefits of the holders
of the Rights.  “Continuing Directors”
are defined as directors who are not affiliated with a hostile shareholder and
who were seated as directors prior to the time the Rights Agreement was adopted,
or directors who are subsequently elected or appointed by the nomination or
approval of the Continuing Directors.

     

    The
Rights Agreement excludes from the definition of Acquiring Person certain
defined Exempt Person(s) and any Person the Board of Directors determines in
good faith (with the concurrence of a majority of Continuing Directors then in
office prior to the time of the event causing a Person to become an Acquiring
Person) that a Person who would otherwise be an “Acquiring Person” has become
such a Person inadvertently.  Dr. Parkash Gill and his immediate
family members and their affiliates and associates are defined as an Exempt
Person, provided, however, that they will not
be an Exempt Person if they become the Beneficial Owner of any additional shares
of Company Common Stock after the effective time of the Rights
Agreement.

     

    This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement and the
Certificate of Designation of Series C Preferred Stock, each of which is
available from the Company upon request.

    
      
         

      

      
        C-4

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