Document:

mis_8k0118ex1011.htm

    Exhibit
      10.11

    

    SUBORDINATION
      AGREEMENT

    

    

    This
      Subordination Agreement, dated as of January 14, 2008, is made by BDeWees,
      Inc.,
      an Ohio corporation and XGen III, Ltd., an Ohio limited liability
      company  (collectively, the “Subordinated Creditors”), for the benefit
      of Wells Fargo Bank, National Association, acting through its Wells Fargo
      Business Credit operating division (the “Lender”).

     

    MISCOR
      Group, Ltd., an Indiana corporation (“MISCOR”), Magnetech Industrial Services,
      Inc., an Indiana corporation (“MIS”), Martell Electric, LLC, an Indiana
      limited liability company (“Martell”), HK Engine Components, LLC, an Indiana
      limited liability company (“HK”), Magnetech Power Services, LLC, an Indiana
      limited liability company (“MPS”), Ideal Consolidated, Inc., an Indiana
      corporation (“Ideal”) and 3-D Service, Ltd., an Ohio limited liability company
      (“3D”) AND American Motive Power, Inc., a Nevada corporation (“AMP” and together
      with MISCOR, MIS, Martell, HK, MPS, Ideal and 3D, the “Borrowers” and each a
“Borrower”) are now or hereafter may be indebted to the Lender on account of
      loans or the other extensions of credit or financial accommodations from the
      Lender to the Borrowers, or to any other person under the guaranty or
      endorsement of the Borrowers.

     

    MISCOR
      has issued two promissory Notes, one each to BDeWees, Inc., and XGen III, Ltd.,
      each Note in the original principal amount of Two Million Dollars
      ($2,000,000.00), in partial payment of the purchase price for the membership
      interest units of 3D, a copy of which promissory Notes are attached hereto
      as
Exhibit A and
      Exhibit B (together with all
      renewals, extensions and modifications thereof and any Notes or Notes issued
      in
      substitution therefore, the “Subordinated Notes”).

     

    As
      a condition to making any loan or extension of credit to the Borrowers, the
      Lender has required that the Subordinated Creditors subordinate the payment
      of
      the Subordinated Notes to the payment of any and all indebtedness of the
      Borrowers to the Lender.  Assisting the Borrowers in obtaining credit
      accommodations from the Lender and subordinating its interests pursuant to
      the
      terms of this Agreement are in the Subordinated Creditors’ best interest.

     

    ACCORDINGLY,
      in consideration of the loans and other financial accommodations that have
      been
      made and may hereafter be made by the Lender for the benefit of the Borrower,
      and for other good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Subordinated Creditors hereby agree as
      follows:

     

    1.           
      Definitions.  As
      used herein, the following terms have the meanings set forth below:

     

    “Borrower
      Default” means a Default or Event of Default as defined in any agreement or
      instrument evidencing, governing, or issued in connection with Lender

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    Indebtedness,
      including, but not limited to, the Credit Agreement, or any default under or
      breach of any such agreement or instrument.

     

    “Collateral”
      means all collateral now or hereafter securing payment of the Lender
      Indebtedness, including all proceeds thereof.

     

    “Credit
      Agreement” means that certain Credit and Security Agreement dated as of January
      14, 2008, by and among the Borrowers and the Lender as the same may hereafter
      be
      amended, supplemented or restated from time to time.

     

    “Lender
      Indebtedness” means each and every debt, liability and obligation of every type
      and description which the Borrowers may now or at any time hereafter owe to
      the
      Lender, whether such debt, liability or obligation now exists or is hereafter
      created or incurred, and whether it is or may be direct or indirect, due or
      to
      become due, absolute or contingent, primary or secondary, liquidated or
      unliquidated, or joint, several or joint and several, all interest thereon
      and
      all fees, costs and other charges related thereto (including all interest,
      fees,
      costs and other charges accruing after the commencement of any case, proceeding
      or other action relating to the bankruptcy insolvency or reorganization of
      any
      Borrower, whether or not allowed in such proceeding or other action), all
      renewals, extensions and modifications thereof and any Notes issued in whole
      or
      partial substitution therefor.

     

    “Lien”
      means any security interest, mortgage, deed of trust, pledge, lien, charge,
      encumbrance, title retention agreement or analogous instrument or device,
      including the interest of each lessor under any capitalized lease and the
      interest of any bondsman under any payment or performance bond, in, of or on
      any
      assets or properties of a person, whether now owned or hereafter acquired and
      whether arising by agreement or operation of law.

     

    “Subordinated
      Indebtedness” means all obligations arising under the Subordinated Notes and
      each and every other debt, liability and obligation of every type and
      description which any Borrower may now or at any time hereafter owe to the
      Subordinated Creditor, whether such debt, liability or obligation now exists
      or
      is hereafter created or incurred, and whether it is or may be direct or
      indirect, due or to become due, absolute or contingent, primary or secondary,
      liquidated or unliquidated, or joint, several or joint and several.

     

    2.           
      Subordination.  The
      payment of all of the Subordinated Indebtedness is hereby expressly subordinated
      to the extent and in the manner hereinafter set forth to the payment in full
      of
      the Lender Indebtedness; and regardless of any priority otherwise available
      to
      the Subordinated Creditors by law or by agreement, the Lender shall hold a
      first
      priority Lien in the Collateral, and any Lien claimed therein (including any
      proceeds thereof) by the Subordinated Creditors shall be and remain fully
      subordinate for all purposes to the Lien of the Lender therein for all purposes
      whatsoever.  The Subordinated Indebtedness shall continue to be
      subordinated to the Lender Indebtedness even if the Lender Indebtedness
      is

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    subordinated,
      avoided or disallowed under the United States Bankruptcy Code or other
      applicable law.

     

    3.           
      Payments.  Until
      all of the Lender Indebtedness has been paid in full and the Lender has released
      its Lien in the Collateral, the Subordinated Creditors shall not, without the
      Lender’s prior written consent, demand, receive or accept any payment (whether
      of principal, interest or otherwise) from any Borrower in respect of the
      Subordinated Indebtedness, or exercise any right of or permit any setoff in
      respect of the Subordinated Indebtedness, except that the Borrowers shall be
      permitted to exercise any right of set off they may have against the
      Subordinated Notes and the Subordinated Creditors may accept scheduled
      payments (but not prepayments) of interest and the final payment of principal
      required to be paid under the Subordinated Notes, so long as at the time of
      each
      such payment no Borrower Default has occurred and is continuing or will occur
      as
      a result of or immediately following any such payment.

     

    4.           
      Receipt of Prohibited
      Payments.  If the Subordinated Creditors receive any payment on
      the Subordinated Indebtedness that the Subordinated Creditors are not entitled
      to receive under the provisions of this Agreement, the Subordinated Creditors
      will hold the amount so received in trust for the Lender and will forthwith
      turn
      over such payment to the Lender in the form received (except for the endorsement
      of the Subordinated Creditors where necessary) for application to then-existing
      Lender Indebtedness (whether or not due), in such manner of application as
      the
      Lender may deem appropriate.  If the Subordinated Creditors exercise
      any right of setoff which the Subordinated Creditors are not permitted to
      exercise under the provisions of this Agreement, the Subordinated Creditors
      will
      promptly pay over to the Lender, in immediately available funds, an amount
      equal
      to the amount of the claims or obligations offset.  If the
      Subordinated Creditors fail to make any endorsement required under this
      Agreement, the Lender, or any of its officers or employees or agents on behalf
      of the Lender, is hereby irrevocably appointed as the attorney-in-fact (which
      appointment is coupled with an interest) for the Subordinated Creditors to
      make
      such endorsement in the Subordinated Creditors’ name.

     

    5.           
      Action on Subordinated
      Indebtedness.  The Subordinated Creditors will not commence any
      action or proceeding against any Borrower to recover all or any part of the
      Subordinated Indebtedness, or join with any Creditors (unless the Lender shall
      so join) in bringing any proceeding against any Borrower under any bankruptcy,
      reorganization, readjustment of debt, arrangement of debt receivership,
      liquidation or insolvency law or statute of the federal or any state government,
      or take possession of, sell, or dispose of any Collateral, or exercise or
      enforce any right or remedy available to the Subordinated Creditors with respect
      to any such Collateral, unless and until the Lender Indebtedness has been paid
      in full and the Lender has released its Lien in the Collateral.

     

    6.           
      Action Concerning
      Collateral.

     

    (a)           
      Notwithstanding any Lien now held or hereafter acquired by the Subordinated
      Creditor, the Lender may take possession of, sell, dispose of, and

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    otherwise
      deal with all or any part of the Collateral, and may enforce any right or remedy
      available to it with respect to any Borrower or the Collateral, all without
      notice to or consent of the Subordinated Creditors except as specifically
      required by applicable law.

     

    (b)           
      In addition, and without limiting the generality of the foregoing, if (i) a
      Borrower Default has occurred and is continuing, (ii) a Borrower or the Lender
      intends to sell or otherwise dispose of any Collateral to an unrelated third
      party outside the ordinary course of business, (iii) the Lender has given
      written notice thereof to the Subordinated Creditor, and (iv) the Subordinated
      Creditors have failed, within ten (10) days after receipt of such notice, to
      purchase for cash the Lender Indebtedness for the full amount thereof, the
      Subordinated Creditors shall be deemed to have consented to such sale or
      disposition, to have released any Lien it may have in such Collateral and to
      have authorized the Lender and its agents to file partial releases with respect
      to such Collateral.

     

    (c)           
      The Lender shall have no duty to preserve, protect, care for, insure, take
      possession of, collect, dispose of, or otherwise realize upon any of the
      Collateral, and in no event shall the Lender be deemed the Subordinated
      Creditors’ agent with respect to the Collateral.  All proceeds
      received by the Lender with respect to any Collateral may be applied, first,
      to
      pay or reimburse the Lender for all costs and expenses (including reasonable
      attorneys’ fees) incurred by the Lender in connection with the collection of
      such proceeds, and, second, to any Lender Indebtedness secured by the Lender’s
      Lien in that Collateral in any order that it may choose.

     

    7.           
      Bankruptcy and
      Insolvency.  In the event of any receivership, insolvency,
      bankruptcy, assignment for the benefit of creditors, reorganization or
      arrangement with creditors, whether or not pursuant to bankruptcy law, the
      sale
      of all or substantially all of the assets of any Borrower, dissolution,
      liquidation or any other marshalling of the assets or liabilities of any
      Borrower, the Subordinated Creditors will file all claims, proofs of claim
      or
      other instruments of similar character necessary to enforce the obligations
      of
      such Borrower in respect of the Subordinated Indebtedness and will hold in
      trust
      for the Lender and promptly pay over to the Lender in the form received (except
      for the endorsement of the Subordinated Creditors where necessary) for
      application to the then-existing Lender Indebtedness, any and all moneys,
      dividends or other assets received in any such proceedings on account of the
      Subordinated Indebtedness, unless and until the Lender Indebtedness has been
      paid in full and the Lender’s Lien in the Collateral has been
      terminated.  If the Subordinated Creditors shall fail to take any such
      action, the Lender, as attorney-in-fact for the Subordinated Creditor, may
      take
      such action on the Subordinated Creditors’ behalf.  The Subordinated
      Creditors hereby irrevocably appoints the Lender, or any of its officers or
      employees on behalf of the Lender, as the attorney-in-fact for the Subordinated
      Creditors (which appointment is coupled with an interest) with the power but
      not
      the duty to demand, sue for, collect and receive any and all such moneys,
      dividends or other assets and give acquittance therefor and to file any claim,
      proof of claim or other instrument of similar character, to vote claims
      comprising Subordinated Indebtedness to accept or reject any plan

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    of
      partial or complete liquidation, reorganization, arrangement, composition or
      extension and to take such other action in the Lender’s own name or in the name
      of the Subordinated Creditors as the Lender may deem necessary or advisable
      for
      the enforcement of the agreements contained herein; and the Subordinated
      Creditors will execute and deliver to the Lender such other and further
      powers-of-attorney or instruments as the Lender may request in order to
      accomplish the foregoing.  If the Lender desires to permit the use of
      cash collateral or to provide post-petition financing to a Borrower, the
      Subordinated Creditors shall not object to the same or assert that their
      interests are not being adequately protected.

     

    8.           
      Restrictive Legend;
      Transfer of Subordinated Indebtedness.  The Subordinated
      Creditors will cause the Subordinated Notes and all other Notes, bonds,
      debentures or other instruments evidencing the Subordinated Indebtedness or
      any
      part thereof to contain a specific statement thereon to the effect that the
      indebtedness thereby evidenced is subject to the provisions of this Agreement,
      and the Subordinated Creditors will mark their books conspicuously to evidence
      the subordination effected hereby.  Attached hereto is a true and
      correct copy of the Subordinated Notes bearing such legend.  At the
      request of the Lender, the Subordinated Creditors shall deposit with the Lender
      the Subordinated Notes and all of the other Notes, bonds, debentures or other
      instruments evidencing the Subordinated Indebtedness, which Notes, bonds,
      debentures or other instruments may be held by the Lender so long as any Lender
      Indebtedness remains outstanding or the Lender’s Lien in the Collateral has not
      been terminated.  The Subordinated Creditors are the lawful holders of
      the Subordinated Notes and have not transferred any interest therein to any
      other person or entity.  Without the prior written consent of the
      Lender, the Subordinated Creditors will not assign, transfer or pledge to any
      other person any of the Subordinated Indebtedness or agree to a discharge or
      forgiveness of the same.

     

    9.           
      Continuing
      Effect.  This Agreement shall constitute a continuing agreement
      of subordination, and the Lender may, without notice to or consent by the
      Subordinated Creditor, modify any term of the Lender Indebtedness in reliance
      upon this Agreement.  Without limiting the generality of the
      foregoing, the Lender may, at any time and from time to time, without the
      consent of or notice to the Subordinated Creditors and without incurring
      responsibility to the Subordinated Creditors or impairing or releasing any
      of
      the Lender’s rights or any of the Subordinated Creditors’ obligations
      hereunder:

     

    (a)           
      change the interest rate or change the amount of payment or extend the time
      for
      payment or renew or otherwise alter the terms of any Lender Indebtedness or
      any
      instrument evidencing the same in any manner;

     

    (b)           
      sell, exchange, release or otherwise deal with any property at any time securing
      payment of the Lender Indebtedness or any part thereof;

     

    (c)           
      release anyone liable in any manner for the payment or collection of the Lender
      Indebtedness or any part thereof;

     

    (d)           
      exercise or refrain from exercising any right against any Borrower or any other
      person (including the Subordinated Creditor); and

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (e)           
      apply any sums received by the Lender, by whomsoever paid and however realized,
      to the Lender Indebtedness in such manner as the Lender shall deem
      appropriate.

     

    10.           
      No
      Commitment.  None of the provisions of this Agreement shall be
      deemed or construed to constitute or imply any commitment or obligation on
      the
      part of the Lender to make any future loans or other extensions of credit or
      financial accommodations to the Borrowers.

     

    11.           
      Marshalling.  The
      Subordinated Creditors hereby waive any and all rights to require the
      marshalling of assets in connection with the exercise of any of the Lender’s
      remedies permitted by applicable law or agreement.

     

    12.           
      Notice.  All
      notices and other communications hereunder shall be in writing and shall be
      (i) personally delivered, (ii) transmitted by registered mail, postage
      prepaid, or (iii) transmitted by telefacsimile, in each case addressed to
      the party to whom notice is being given at its address as set forth
      below:

     

    If
      to the Lender:

     

    Wells
      Fargo Business Credit

    111
      East Wayne Street, 2nd
      Floor

    MAC
      N8622-02A

    Fort
      Wayne, Indiana 46802

    Attention:  Lynn
      A. Gruber

    Telefacsimile:  260/461-6037

    

     

    If
      to the Subordinated Creditor:

     

    BDeWees,
      Inc.

    5316
      Hawick Street, NW

    Canton,
      OH 44708

    Attn:  Bernard
      L.
      DeWees

    

    XGen
      III, Ltd.

    3029
      Prospect Ave

    Cleveland
      Ohio 44115

    Attn:  Thomas
      J. Embrescia

    

    with
      a copy to:

    Day
      Ketterer Ltd.

    Millenium
      Centre #300

    200
      Market Avenue, N.

    Canton,
      Ohio  44701

    Attn:  Daniel
      A. Minkler

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    or
      at such other address as may hereafter be designated in writing by that
      party.  All such notices or other communications shall be deemed to
      have been given on (i) the date received if delivered personally,
      (ii) the date of posting if delivered by mail, or (iii) the date of
      transmission if delivered by telefacsimile.

     

    13.           
      Conflict in
      Agreements.  If the subordination provisions of any instrument
      evidencing Subordinated Indebtedness conflict with the terms of this Agreement,
      the terms of this Agreement shall govern the relationship between the Lender
      and
      the Subordinated Creditor.

     

    14.           
      No
      Waiver.  No waiver shall be deemed to be made by the Lender of
      any of its rights hereunder unless the same shall be in writing signed on behalf
      of the Lender, and each such waiver, if any, shall be a waiver only with respect
      to the specific matter or matters to which the waiver relates and shall in
      no
      way impair the rights of the Lender or the obligations of the Subordinated
      Creditors to the Lender in any other respect at any time.

     

    15.           
      Binding Effect;
      Acceptance.  This Agreement shall be binding upon the
      Subordinated Creditors and the Subordinated Creditors’ heirs, legal
      representatives, successors and assigns and shall inure to the benefit of the
      Lender and its participants, successors and assigns irrespective of whether
      this
      or any similar agreement is executed by any other subordinated creditor of
      any
      Borrower.  Notice of acceptance by the Lender of this Agreement or of
      reliance by the Lender upon this Agreement is hereby waived by the Subordinated
      Creditor.

     

    16.           
      Miscellaneous.  The
      paragraph headings herein are included for convenience of reference only and
      shall not constitute a part of this Agreement for any other
      purpose.  This Agreement may be executed in any number of
      counterparts, each of which shall be an original, but all of which together
      shall constitute one instrument.

     

    17.           
      Governing Law; Consent
      to Jurisdiction and Venue; Waiver of Jury Trial.  This
      Agreement shall be governed by and construed in accordance with the substantive
      laws (other than conflict laws) of the State of Wisconsin.  Each party
      consents to the personal jurisdiction of the state and federal courts located
      in
      the State of Wisconsin in connection with any controversy related to this
      Agreement, waives any argument that venue in any such forum is not convenient,
      and agrees that any litigation initiated by any of them in connection with
      this
      Agreement may be venued in either the state or federal courts located in
      Milwaukee County, Wisconsin.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    THE
      PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
      ON OR
      PERTAINING TO THIS ACKNOWLEDGMENT.

     

    IN
      WITNESS WHEREOF, the Subordinated Creditors have executed this Subordination
      Agreement as of the date and year first above-written.

     

    

    
      	 	 	 
	 	
              BDEWEES,
                INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Bernard L.
                DeWees

            
	 	 	
              Bernard
                L. DeWees, President

            
	 	 	 
	 	 	 
	 	
              XGEN
                III, LTD.

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Thomas J.
                Embrescia

            
	 	 	
              Thomas
                J. Embrescia, Manager

            

    

    

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ACKNOWLEDGMENT
      BY BORROWERS

    

    

    The
      undersigned, being the Borrowers referred to in the foregoing Agreement, hereby
      (i) acknowledges receipt of a copy thereof, (ii) agrees to all of the
      terms and provisions thereof, (iii) agrees to and with the Lender that it
      shall make no payment on the Subordinated Indebtedness that the Subordinated
      Creditors would not be entitled to receive under the provisions of the
      Agreement, (iv) agrees that any such payment will constitute a default
      under the Lender Indebtedness, and (v) agrees to mark its books
      conspicuously to evidence the subordination of the Subordinated Indebtedness
      effected hereby.

    

    
      	
              MISCOR
                GROUP, LTD.

            	 	
              MAGNETECH
                POWER SERVICES, LLC

            
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	
              /s/
                Richard J. Mullin

            	 	
              By:

            	
              /s/
                Richard J. Mullin

            
	 	
              Richard
                J. Mullin, Treasurer

            	 	 	
              Richard
                J. Mullin, Treasurer

            
	 	 	 	 	 
	 	 	 	 	 
	
              MAGNETECH
                INDUSTRIAL SERVICES, INC.

            	 	
              IDEAL
                CONSOLIDATED, INC.

            
	 	 	 	 	 
	
              By:

            	
              /s/
                Richard J. Mullin

            	 	
              By:

            	
              /s/
                Richard J. Mullin

            
	 	
              Richard
                J. Mullin, Treasurer

            	 	 	
              Richard
                J. Mullin, Treasurer

            
	 	 	 	 	 
	
              MARTELL
                ELECTRIC, LLC

            	 	
              3-D
                SERVICE, LTD.

            
	 	 	 	 	 
	
              By:

            	
              /s/
                Richard J. Mullin

            	 	
              By:

            	
              /s/
                Richard J. Mullin

            
	 	
              Richard
                J. Mullin, Treasurer

            	 	 	
              Richard
                J. Mullin, Treasurer

            
	 	 	 	 	 
	
              HK
                ENGINE COMPONENTS, LLC

            	 	
              AMERICAN
                MOTIVE POWER, INC.

            
	 	 	 	 	 
	
              By:

            	
              /s/
                Richard J. Mullin

            	 	
              By:

            	
              /s/
                Richard J. Mullin

            
	 	
              Richard
                J. Mullin, Treasurer

            	 	 	
              Richard
                J. Mullin, Treasurer

            

    

     

    

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    Exhibit
      A

     

    Attach
      copy of Subordinated Notes with following legend:

     

    THIS
      INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT BY BDEWEES,
      INC.
      AND XGEN III, LTD. IN FAVOR OF WELLS FARGO BANK, NATIONAL ASSOCIATION, ACTING
      THROUGH ITS WELLS FARGO BUSINESS CREDIT OPERATING DIVISION, DATED AS OF JANUARY
      14, 2008.d845259_ex4-2.htm

    

    
      
        EXECUTION
          COPY

      

    

    

    STOCKHOLDERS
      RIGHTS AGREEMENT

     

    This
      Stockholders Rights Agreement (this “Rights Agreement”) is
      made and entered into as of January 18, 2008, by and between DryShips Inc.,
      a
      Marshall Islands corporation (the “Company”), and
      American Stock Transfer & Trust Company, as Rights Agent (the “Rights
      Agent”).

     

    WHEREAS,
      the Board of Directors of the Company (the “Board”) has (a)
      authorized and declared a dividend of one right (the “Right”) for each
      share of the Company’s common stock, par value U.S. $.01 per share (the “Common Stock”) held
      of record as of the Close of Business (as hereinafter defined) on February
      4,
      2008 (the “Record
      Date”) and (b) has further authorized the issuance of one Right in
      respect of each share of Common Stock that shall become outstanding (i) at
      any
      time between the Record Date and the earliest of the Distribution Date, the
      Redemption Date or the Final Expiration Date (as such terms are hereinafter
      defined) or (ii) upon the exercise or conversion, prior to the earlier of the
      Redemption Date or the Final Expiration Date, of any option or other security
      exercisable for or convertible into shares of Common Stock, which option or
      other such security is outstanding on the Distribution Date; and

     

    WHEREAS,
      each Right represents the right of the holder thereof to purchase one
      one-thousandth of a share of Series A Participating Preferred Stock (as such
      number may hereafter be adjusted pursuant to the provisions hereof), upon the
      terms and subject to the conditions set forth herein, having the rights,
      preferences and privileges set forth in the Certificate of Designations of
      Series A Participating Preferred Stock, attached hereto as Exhibit
      A.

     

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

     

    1.           
      Certain
      Definitions.

     

    “Acquiring
      Person”
shall mean any Person who or which, together with all Affiliates and
      Associates
      of such Person, shall be the Beneficial Owner of 15% or more of the shares
      of
      Common Stock then outstanding, but shall not include the Company, any Subsidiary
      of the Company or any employee benefit plan of the Company or of any Subsidiary
      of the Company, or any entity holding shares of Common Stock for or pursuant
      to
      the terms of any such plan.  Notwithstanding the foregoing, no Person
      shall be deemed to be an Acquiring Person as the result of an acquisition of
      shares of Common Stock by the Company which, by reducing the number of shares
      outstanding, increases the proportionate number of shares beneficially owned
      by
      such Person to 15% or more of the shares of Common Stock of the Company then
      outstanding; provided, however,
      that a
      Person who (i) becomes the Beneficial Owner of 15% or more of the shares of
      Common Stock of the Company then outstanding by reason of share purchases by
      the
      Company and (ii) then after such share purchases by the Company, becomes the
      Beneficial Owner of any additional shares of Common Stock of the Company (other
      than pursuant to a dividend or distribution paid or made by the Company on
      the
      outstanding shares of Common Stock in shares of Common Stock or pursuant to
      a
      split or subdivision of the outstanding shares of Common Stock), such Person
      shall be deemed to be an Acquiring Person

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    unless
      upon becoming the Beneficial Owner of such additional shares of Common Stock
      of
      the Company such Person does not beneficially own 15% or more of the shares
      of
      Common Stock of the Company then outstanding.  Notwithstanding the
      foregoing: (i) if the Company’s Board of Directors determines in good faith that
      a Person who would otherwise be an “Acquiring Person,” as defined herein, has
      become such inadvertently (including, without limitation, because (A) such
      Person was unaware that it beneficially owned a percentage of the shares of
      Common Stock that would otherwise cause such Person to be an “Acquiring Person,”
as defined herein, or (B) such Person was aware of the extent of the shares
      of
      Common Stock it beneficially owned but had no actual knowledge of the
      consequences of such beneficial ownership under this Agreement) and without
      any
      intention of changing or influencing control of the Company, and if such Person
      divested or divests as promptly as practicable a sufficient number of shares
      of
      Common Stock so that such Person would no longer be an “Acquiring Person,” as
      defined herein, then such Person shall not be deemed to be or to have become
      an
“Acquiring Person” for any purposes of this Agreement; and (ii) if, as of the
      date hereof, any Person is the Beneficial Owner of 15% or more of the shares
      of
      Common Stock outstanding, such Person shall not be or become an “Acquiring
      Person,” as defined herein, unless and until such time as such Person shall
      become the Beneficial Owner of additional shares of Common Stock in an amount
      equal to 5% of the Company’s outstanding common stock, other than pursuant to a
      grant under a Company equity incentive plan, a dividend or distribution paid
      or
      made by the Company on the outstanding shares of Common Stock in shares of
      Common Stock or pursuant to a split or subdivision of the outstanding shares
      of
      Common Stock, unless, upon becoming the Beneficial Owner of such additional
      shares of Common Stock, such Person is not then the Beneficial Owner of 15%
      or
      more of the shares of Common Stock then outstanding.

     

    “Adjustment
      fraction”
shall have the meaning set forth in Section 11(a)(i) hereof.

     

    “Affiliate”
and
“Associate”
shall
      have
      the respective meanings ascribed to such terms in Rule 12b-2 of the General
      Rules and Regulations under the “Exchange Act” as hereinafter defined, as in
      effect on the date of this Agreement.

     

    A
      Person shall be deemed the “Beneficial Owner” of
      and shall be deemed to “Beneficially Own” any
      securities:

     

    
      	
               

            	
              (i)

            	
              which
                such Person or any of such Person’s Affiliates or Associates beneficially
                owns, directly or indirectly, for purposes of Section 13(d) of the
                Exchange Act and Rule 13d-3 thereunder (or any comparable or successor
                law
                or regulation); 

            

    

     

    
      	
               

            	
              (ii)

            	
              which
                such Person or any of such Person’s Affiliates or Associates has (A) the
                right to acquire (whether such right is exercisable immediately or
                only
                after the passage of time) pursuant to any agreement, arrangement
                or
                understanding (other than customary agreements with and between
                underwriters and selling group members with respect to a bona fide
                public
                offering of securities), or upon the exercise of conversion rights,
                exchange rights, rights (other than the Rights), warrants or options,
                or
                otherwise; provided,
however,
                that a
                Person shall not be deemed pursuant to this subsection (ii)(A) to
                be
                the

            

    

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Beneficial
      Owner of, or to beneficially own, (1) securities tendered pursuant to a tender
      or exchange offer made by or on behalf of such Person or any of such Person’s
      Affiliates or Associates until such tendered securities are accepted for
      purchase or exchange, or (2) securities which a Person or any of such Person’s
      Affiliates or Associates may be deemed to have the right to acquire pursuant
      to
      any merger or other acquisition agreement between the Company and such Person
      (or one or more of its Affiliates or Associates) if such agreement has been
      approved by the Board of Directors of the Company prior to there being an
      Acquiring Person; or (B) the right to vote pursuant to any agreement,
      arrangement or understanding; provided, however,
      that a
      Person shall not be deemed the Beneficial Owner of, or to beneficially own,
      any
      security under this subsection (ii)(B) if the agreement, arrangement or
      understanding to vote such security (1) arises solely from a revocable proxy
      or
      consent given to such Person in response to a public proxy or consent
      solicitation made pursuant to, and in accordance with, the applicable rules
      and
      regulations of the Exchange Act and (2) is not also then reportable on Schedule
      13D under the Exchange Act (or any comparable or successor report);
      or

     

    
      	
               

            	
              (iii)

            	
              which
                are beneficially owned, directly or indirectly, by any other Person
                (or
                any Affiliate or Associate thereof) with which such Person or any
                of such
                Person’s Affiliates or Associates has any agreement, arrangement or
                understanding, whether or not in writing (other than customary agreements
                with and between underwriters and selling group members with respect
                to a
                bona fide public offering of securities) for the purpose of acquiring,
                holding, voting (except to the extent contemplated by the proviso
                to
                subsection (ii)(B) above) or disposing of any securities of the Company;
                provided,
                however,
                that in no case shall an officer or director of the Company be deemed
                (x)
                the Beneficial Owner of any securities beneficially owned by another
                officer or director of the Company solely by reason of actions undertaken
                by such persons in their capacity as officers or directors of the
                Company
                or (y) the Beneficial Owner of securities held of record by the trustee
                of
                any employee benefit plan of the Company or any Subsidiary of the
                Company
                for the benefit of any employee of the Company or any Subsidiary
                of the
                Company, other than the officer or director, by reason of any influence
                that such officer or director may have over the voting of the securities
                held in the plan. 

            

    

     

    “Business
      Day” shall
      mean any day other than a Saturday, Sunday or a day on which the New York Stock
      Exchange is authorized or obligated by law or executive order to
      close.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

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

     

    “Common
      Stock” shall
      have the meaning set forth in the preamble.  Common Stock when used
      with reference to any Person other than the Company shall mean the capital
      stock
      (or equity interest) with the greatest voting power of such other Person or,
      if
      such other Person is a Subsidiary of another Person, the Person or Persons
      which
      ultimately control such first-mentioned Person.

     

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

     

    “Company”
shall
      have
      the meaning set forth in the preamble, subject to the terms of Section
      13(a)(iii)(c) hereof.

     

    “Current
      Per Share Market
      Price” of any security (a “Security” for purposes of this definition),
      for all computations other than those made pursuant to Section 11(a)(iii)
      hereof, shall mean the average of the daily closing prices per share of such
      Security for the thirty (30) consecutive Trading Days immediately prior to
      such
      date, and for purposes of computations made pursuant to Section 11(a)(iii)
      hereof, the Current Per Share Market Price of any Security on any date shall
      be
      deemed to be the average of the daily closing prices per share of such Security
      for the ten (10) consecutive Trading Days immediately prior to such date; provided, however,
      that in the
      event that the Current Per Share Market Price of the Security is determined
      during a period following the announcement by the issuer of such Security of
      (i)
      a dividend or distribution on such Security payable in shares of such Security
      or securities convertible into such shares or (ii) any subdivision, combination
      or reclassification of such Security, and prior to the expiration of the
      applicable thirty (30) Trading Day or ten (10) Trading Day period, after the
      ex-dividend date for such dividend or distribution, or the record date for
      such
      subdivision, combination or reclassification, then, and in each such case,
      the
      Current Per Share Market Price shall be appropriately adjusted to reflect the
      current market price per share equivalent of such Security.  The
      closing price for each day shall be the last sale price, regular way, or, in
      case no such sale takes place on such day, the average of the closing bid and
      asked prices, regular way, in either case as reported in the principal
      consolidated transaction reporting system with respect to securities listed
      or
      admitted to trading on the New York Stock Exchange or, if the Security is not
      listed or admitted to trading on the New York Stock Exchange, as reported in
      the
      principal consolidated transaction reporting system with respect to securities
      listed on the principal national securities exchange on which the Security
      is
      listed or admitted to trading or, if the Security is not listed or admitted
      to
      trading on any national securities exchange, the last sale price or, if such
      last sale price is not reported, the average of the high bid and low asked
      prices in the over-the-counter market, as reported by Nasdaq or such other
      system then in use, or, if on any such date the Security is not quoted by any
      such organization, the average of the closing bid and asked prices as furnished
      by a professional market maker making a market in the Security selected by
      the
      Board of Directors of the Company.  If on any such date no market
      maker is making a market in the Security, 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 the Preferred Shares are not publicly traded, the Current
      Per Share Market Price of the Preferred Shares shall be conclusively
      deemed to be

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    the
      Current Per Share Market Price of the shares of Common Stock as determined
      pursuant to this definition, as appropriately adjusted to reflect any stock
      split, stock dividend or similar transaction occurring after the date hereof,
      multiplied by 1000.  If the Security is not publicly held or so listed
      or traded, Current Per Share Market Price shall mean the fair value per share
      as
      determined in good faith by the Board of Directors of the Company, whose
      determination shall be described in a statement filed with the Rights Agent
      and
      shall be conclusive for all purposes.

     

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

     

    “Distribution
      Date”
shall mean the earlier of (i) the Close of Business on the tenth day
      after the
“Shares Acquisition Date” as hereinafter defined (or, if the tenth day after the
      Shares Acquisition Date occurs before the Record Date, the Close of Business
      on
      the Record Date) or (ii) the Close of Business on the tenth Business Day (or
      such later date as may be determined by action of the Company’s Board of
      Directors) after the date that a tender or exchange offer by any Person (other
      than the Company, any Subsidiary of the Company, any employee benefit plan
      of
      the Company or of any Subsidiary of the Company, or any Person or entity
      organized, appointed or established by the Company for or pursuant to the terms
      of any such plan) is first published or sent or given within the meaning of
      Rule
      14d-2(a) of the General Rules and Regulations under the Exchange Act, if,
      assuming the successful consummation thereof, such Person would be an Acquiring
      Person.

     

    “Equivalent
      Shares”
shall mean Preferred Shares and any other class or series of capital
      stock of
      the Company which is entitled to the same rights, privileges and preferences
      as
      the Preferred Shares.

     

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

     

    “Exchange
      Ratio” shall
      have the meaning set forth in Section 24(a) hereof.

     

    “Exercise
      Price” shall
      have the meaning set forth in Section 4(a) hereof.

     

    “Expiration
      Date”
shall mean the earliest to occur of: (i) the Close of Business on the
      Final
      Expiration Date, (ii) the Redemption Date, or (iii) the time at which the Board
      of Directors orders the exchange of the Rights as provided in Section 24
      hereof.

     

    “Final
      Expiration
      Date” shall mean February 4, 2018.

     

    “Nasdaq”
shall
      mean
      the National Association of Securities Dealers, Inc. Automated Quotations
      System.

     

    “Person”
shall
      mean
      any individual, firm, corporation or other entity, and shall include any
      successor (by merger or otherwise) of such entity.

     

    “Post-event
      Transferee” shall have the meaning set forth in Section 7(e)
      hereof.

     

    “Preferred
      Shares”
shall mean shares of Series A Participating Preferred Stock, U.S. $0.01
      par
      value, of the Company.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    “Pre-event
      Transferee”
shall have the meaning set forth in Section 7(e) hereof.

     

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

     

    “Record
      Date” shall
      have the meaning set forth in the recitals at the beginning of this Rights
      Agreement.

     

    “Redemption
      Date”
shall have the meaning set forth in Section 23(a) hereof.

     

    “Redemption
      Price”
shall have the meaning set forth in Section 23(a) hereof.

     

    “Rights
      Agent” shall
      mean American Stock Transfer & Trust Company, or its successor or
      replacement as provided in Sections 19 and 21 hereof.

     

    “Rights
      Certificate”
shall mean a certificate substantially in the form attached hereto as
Exhibit
      B.

     

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

     

    “Section
      13 Event”
shall mean any event described in clause (i), (ii) or (iii) of Section
      13(a)
      hereof.

     

    “Securities
      Act” shall
      mean the Securities Act of 1933, as amended.

     

    “Shares
      Acquisition
      Date” shall mean the first date of public announcement (which, for
      purposes of this definition, shall include, without limitation, a report filed
      pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring
      Person that an Acquiring Person has become such; provided that, if such Person
      is determined not to have become an Acquiring Person as defined herein, then
      no
      Shares Acquisition Date shall be deemed to have occurred.

     

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

     

    “Subsidiary”
of
      any
      Person shall mean any corporation or other entity of which an amount of voting
      securities sufficient to elect a majority of the directors or Persons having
      similar authority of such corporation or other entity is beneficially owned,
      directly or indirectly, by such Person, or any corporation or other entity
      otherwise controlled by such Person.

     

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

     

    “Summary
      of Rights”
shall mean a summary of this Agreement substantially in the form attached
      hereto
      as Exhibit
      C.

     

    “Total
      Exercise Price”
shall have the meaning set forth in Section 4(a) hereof.

     

    “Trading
      Day” shall
      mean a day on which the principal national securities exchange on which a
      referenced security is listed or admitted to trading is open for thetransaction
      of business or, if a referenced security is not listed or admitted to trading
      on
      any national securities exchange, a Business Day.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    A
      “Triggering
      Event” shall be deemed to have occurred upon any Person becoming an
      Acquiring Person.

     

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

     

    3.         Issuance
      of Rights
      Certificates.

     

    (a)           
      Until the Distribution Date, (i) the Rights will be evidenced (subject to the
      provisions of Sections 3(b) and 3(c) hereof) by the certificates for shares
      of
      Common Stock registered in the names of the holders thereof (which certificates
      shall also be deemed to be Rights Certificates) and not by separate Rights
      Certificates and (ii) the right to receive Rights Certificates will be
      transferable only in connection with the transfer of shares of Common Stock.
      Until the earlier of the Distribution Date or the Expiration Date, the surrender
      for transfer of certificates for shares of Common Stock shall also constitute
      the surrender for transfer of the Rights associated with the shares of Common
      Stock represented thereby. As soon as practicable after the Distribution Date,
      the Company will prepare and execute, the Rights Agent will countersign, and
      the
      Company will send or cause to be sent (and the Rights Agent will, if requested,
      send) by first-class, postage-prepaid mail, to each record holder of shares
      of
      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, a Rights Certificate
      evidencing one Right for each share of Common Stock so held, subject to
      adjustment as provided herein. In the event that an adjustment in the number
      of
      Rights per share of Common Stock has been made pursuant to Section 11 hereof,
      then at the time of distribution of the Rights Certificates, the Company shall
      make the necessary and appropriate rounding adjustments (in accordance with
      Section 14(a) hereof) so that Rights Certificates representing only whole
      numbers of Rights are distributed and cash is paid in lieu of any fractional
      Rights. As of the Distribution Date, the Rights will be evidenced solely by
      such
      Rights Certificates and may be transferred by the transfer of the Rights
      Certificates as permitted hereby, separately and apart from any transfer of
      shares of Common Stock, and the holders of such Rights Certificates as listed
      in
      the records of the Company or any transfer agent or registrar for the Rights
      shall be the record holders thereof.

     

    (b)           
      On the Record Date or as soon as practicable thereafter, the Company will send
      a
      copy of the Summary of Rights by first-class, postage-prepaid mail, to each
      record holder of shares of 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’s
      transfer agent and registrar.  With respect to certificates for shares
      of Common Stock outstanding as of the Record Date, until the Distribution Date,
      the Rights will be evidenced by such certificates registered in the names of
      the
      holdersthereof
      together with the Summary of Rights.  Until the Distribution Date (or,
      if earlier, the Expiration Date), the surrender for transfer of any certificate
      for shares of Common Stock outstanding on the Record Date, with or without
      a
      copy of the Summary of Rights, shall also constitute the transfer of the Rights
      associated with the shares of Common Stock represented thereby.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    (c)           
      Unless the Board of Directors by resolution adopted at or before the time of
      the
      issuance of any shares of Common Stock specifies to the contrary, Rights shall
      be issued in respect of all shares of Common Stock that are issued after the
      Record Date but prior to the earlier of the Distribution Date or the Expiration
      Date or, in certain circumstances provided in Section 22 hereof, after the
      Distribution Date. Certificates representing such shares of Common Stock shall
      also be deemed to be certificates for Rights, and shall bear the following
      legend:

     

    THIS
      CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS
      AS
      SET FORTH IN A STOCKHOLDER RIGHTS AGREEMENT BETWEEN DRYSHIPS INC. AND AMERICAN
      STOCK TRANSFER & TRUST COMPANY, AS THE RIGHTS AGENT, DATED AS OF JANUARY 18,
      2008, (THE “RIGHTS AGREEMENT”), THE TERMS OF WHICH ARE HEREBY INCORPORATED
      HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
      OFFICES OF DRYSHIPS INC.  UNDER CERTAIN
      CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE
      EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
      CERTIFICATE.  DRYSHIPS INC. WILL MAIL TO THE HOLDER OF THIS
      CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF
      A
      WRITTEN REQUEST THEREFOR.  UNDER CERTAIN CIRCUMSTANCES 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.

    

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

     

    (d)           
      In the event that the Company purchases or acquires any shares of Common Stock
      after the Record Date but prior to the Distribution Date, any Rights associated
      with such shares of Common Stock shall be deemed canceled and retired so that
      the Company shall not be entitled to exercise any Rights associated with the
      shares of Common Stock which are no longer outstanding.

     

    4.        Form
      of Rights
      Certificates.

     

    (a)           
      The Rights Certificates (and the forms of election to purchase shares of Common
      Stock and of assignment to be printed on the reverse thereof) shall be
      substantially in the form of Exhibit B hereto and
      may have such marks of identification or designation and such legends, summaries
      or endorsements printed thereon as the Company may deem appropriate and as
      are
      not inconsistent with the provisions of this Agreement, or as may be required
      to
      comply with any applicable law or with any rule or regulation made pursuant
      thereto or with any rule or regulation of any stock exchange or a national
      market system, on which the Rights may from time to time be listed or included,
      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 (or in the case
      of
      Rights issued with respect to shares of Common Stock issued by the Company
      after
      the Record Date, as of the date of issuance of such shares of Common Stock)
      and
      on their face shall entitle the holders thereof to purchase such number of
      one-
      thousandths of a Preferred Share as shall be set forth therein at the price
      set
      forth therein (such exercise price per one one-thousandth of a Preferred Share
      being hereinafter referred to as the “Exercise Price” and
      the aggregate Exercise Price of all Preferred Shares issuable upon exercise
      of
      one Right being hereinafter referred to as the “Total Exercise
      Price”), but the number and type of securities purchasable upon the
      exercise of each Right and the Exercise Price shall be subject to adjustment
      as
      provided herein.

     

    (b)           
      Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof
      that
      represents Rights beneficially owned by: (i) an Acquiring Person or any
      Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
      Person (or of any such Associate or Affiliate) who becomes a transferee after
      the Acquiring Person becomes such or (iii) a transferee of an Acquiring Person
      (or of any such Associate or Affiliate) who becomes a transferee prior to or
      concurrently with the Acquiring Person becoming such and receives such Rights
      pursuant to either (A) a transfer (whether or not for consideration) from the
      Acquiring Person to holders of equity interests in such Acquiring Person or
      to
      any Person with whom such Acquiring Person has any continuing agreement,
      arrangement or understanding regarding the transferred Rights or (B) a transfer
      which the Company’s Board of Directors has determined is part of a plan,
      arrangement or understanding which has as a primary purpose or effect avoidance
      of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section
      6
      or Section 11 hereof upon transfer, exchange, replacement or adjustment of
      any
      other Rights Certificate referred to in this sentence, shall contain (to the
      extent feasible) the following legend:

     

    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 THE RIGHTS AGREEMENT.

     

    5.         Countersignature
      and
      Registration.

     

    (a)           
      The Rights Certificates shall be executed on behalf of the Company by its
      Chairman of the Board, its Chief Executive Officer, its Chief Financial Officer,
      its President or any Vice President, either manually or by facsimile signature,
      and by the Secretary or an Assistant Secretary of the Company, either manually
      or by facsimile signature, and shall have affixed thereto the Company’s seal (if
      any) or a facsimile thereof.  The Rights Certificates shall be
      manually countersigned by the Rights Agent and shall not be valid for any
      purpose unless countersigned.  In case any officer of the Company who
      shall have signed any of the Rights Certificates shall cease to be such officer
      of the Company before countersignature by the Rights Agent and issuance and
      delivery by the Company, such Rights Certificates, nevertheless, may be
      countersigned by the Rights Agent and issued and delivered by the Company with
      the same force and effect as though the person who signed such Rights
      Certificates on behalf of the Company had not ceased to be such officer of
      the
      Company; and any Rights Certificate may be signed on behalf of the Company
      by
      any person who, at the actual date of the execution of such RightsCertificate,
      shall be a proper officer of the Company to sign such Rights Certificate,
      although at the date of the execution of this Rights Agreement any such person
      was not such an officer.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

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

     

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

     

    (a)           
      Subject to the provisions of Sections 7(e), 14 and 24 hereof, at any time after
      the Close of Business on the Distribution Date, and at or prior to the Close
      of
      Business on the Expiration Date, any Rights Certificate or Rights Certificates
      may be transferred, split up, combined or exchanged for another Rights
      Certificate or Rights Certificates, entitling the registered holder to purchase
      a like number of one-thousandths of a Preferred Share (or, following a
      Triggering Event, other securities, cash or other assets, as the case may be)
      as
      the Rights Certificate or Rights Certificates surrendered then entitled such
      holder to purchase. Any registered holder desiring to transfer, split up,
      combine or exchange any Rights Certificate or Rights Certificates shall make
      such request in writing delivered to the Rights Agent, and shall surrender
      the
      Rights Certificate or Rights 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 signed the
      certificate contained in the form of assignment on the reverse side of such
      Rights Certificate and shall have provided such additional evidence of the
      identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
      or
      Associates thereof as the Company shall reasonably request. Thereupon the Rights
      Agent shall, subject to Sections 7(e), 14 and 24 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)           
      Upon receipt by the Company and the Rights Agent of evidence reasonably
      satisfactory to them of the loss, theft, destruction or mutilation of a Rights
      Certificate, and, in case of loss, theft or destruction, of indemnity or
      security reasonably satisfactory to them, and, at the Company’s request,
      reimbursement to the Company and the Rights Agent of all reasonable expenses
      incidental thereto, and upon surrender to the Rights Agent and cancellation
      of
      the Rights Certificate if mutilated, the Company will make and deliver a new
      Rights Certificate of like tenor to the Rights Agent for delivery to the
      registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
      or mutilated.

     

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

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

    

          (a)           
      Subject to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of
      any
      Rights Certificate may exercise the Rights evidenced thereby (except as
      otherwise provided herein) in whole or in part at any time after the
      Distribution Date and prior to the Close of Business on the Expiration Date
      by
      surrender of the Rights Certificate, with the form of election to purchase
      on
      the reverse side thereof duly executed, to the Rights Agent at the office of
      the
      Rights Agent designated for such purpose, together with payment of the Exercise
      Price for each one-thousandth of a Preferred Share (or, following a Triggering
      Event, other securities, cash or other assets as the case may be) as to which
      the Rights are exercised.

     

    (b)           
      The Exercise Price for each one-thousandth of a Preferred Share issuable
      pursuant to the exercise of a Right shall initially be one hundred and thirty
      dollars (U.S. $130), shall be subject to adjustment from time to time as
      provided in Sections 11 and 13 hereof and shall be payable in lawful money
      of
      the United States of America in accordance with paragraph (c)
      below.

     

    (c)           
      Upon receipt of a Rights Certificate representing exercisable Rights, with
      the
      form of election to purchase duly executed, accompanied by payment of the
      Exercise Price for the number of one-thousandths of a Preferred Share (or,
      following a Triggering Event, other securities, cash or other assets as the
      case
      may be) to be purchased and an amount equal to any applicable transfer tax
      required to be paid by the holder of such Rights Certificate in accordance
      with
      Section 9(e) hereof, the Rights Agent shall, subject to Section 20(k) hereof,
      thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
      Shares (or make available, if the Rights Agent is the transfer agent for the
      Preferred Shares) a certificate or certificates for the number of
      one-thousandths of a Preferred Share (or, following a Triggering Event, other
      securities, cash or other assets as the case may be) to be purchased and the
      Company hereby irrevocably authorizes its transfer agent to comply with all
      such
      requests or (B) if the Company shall have elected to deposit the total number
      of
      one-thousandths of a Preferred Share (or, following a Triggering Event, other
      securities, cash or other assets as the case may be) issuable upon exercise
      of
      the Rights hereunder with a depositary agent, requisition from the depositary
      agent depositary receipts representing such number of one-thousandths of a
      Preferred Share (or, following a Triggering Event, other securities, cash or
      other assets as the case may be) as are to be purchased (in which case
      certificates for the Preferred Shares (or, following a Triggering Event, other
      securities, cash or other assets as the case may be) represented by such
      receipts shall be deposited by the transfer agent with the depositary agent)
      and
      the Company hereby directs the depositary agent to comply with such request,
      (ii) when appropriate, requisition from the Company the amount of cash to be
      paid in lieu of issuance of fractional shares in accordance with Section 14
      hereof, (iii) after receipt of such certificates or depositary receipts, cause
      the same to be delivered to or upon the order of the registered holder of such
      Rights Certificate, registered in such name or names as may be designated by
      such holder and (iv) when appropriate, after receipt thereof, deliver such
      cash
      to or upon the order of the registered holder of such Rights Certificate. The
      payment of the Exercise Price (as such amount may be reduced (including to
      zero)
      pursuant to Section 11(a)(iii) hereof) and an amount equal to any applicable
      transfer tax required to be paid by the holder of such Rights Certificate in
      accordance with Section 9(e) hereof, may be made in cash or by certified bank
      check, cashier’s check or bank draft payable to the order of the
      Company.  In the event that the Company is obligated to issue
      securities of the Company other than Preferred Shares, pay cash and/or
      distribute other property pursuant to Section 11(a) hereof, the Company will
      make all arrangements necessary so that suchother
      securities, cash and/or other property are available for distribution by the
      Rights Agent, if and when appropriate.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    (d)           
      In case the registered holder of any Rights Certificate shall exercise less
      than
      all the Rights evidenced thereby, a new Rights Certificate evidencing Rights
      equivalent to the Rights remaining unexercised shall be issued by the Rights
      Agent to the registered holder of such Rights Certificate or to his or her
      duly
      authorized assigns, subject to the provisions of Section 14 hereof.

     

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

     

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

     

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

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    9.         Reservation
      and Availability
      of Preferred Shares.

     

    (a)           
      The Company covenants and agrees that it will use its best efforts to cause
      to
      be reserved and kept available out of its authorized and unissued Preferred
      Shares not reserved for another purpose (and, following the occurrence of a
      Triggering Event, out of its authorized and unissued shares of Common Stock
      and/or other securities), the number of Preferred Shares (and, following the
      occurrence of the Triggering Event, Common Stock and/or other securities) that
      will be sufficient to permit the exercise in full of all outstanding
      Rights.

     

    (b)           
      If the Company shall hereafter list any of its Preferred Shares on a national
      securities exchange, then so long as the Preferred Shares (and, following the
      occurrence of a Triggering Event, shares of Common Stock and/or other
      securities) issuable and deliverable upon exercise of the Rights may be listed
      on such exchange, the Company shall use its best efforts to cause, from and
      after such time as the Rights become exercisable (but only to the extent that
      it
      is reasonably likely that the Rights will be exercised), all shares reserved
      for
      such issuance to be listed on such exchange upon official notice of issuance
      upon such exercise.

     

    (c)           
      The Company shall use its best efforts to (i) file, as soon as practicable
      following the earliest date after the first occurrence of a Triggering Event
      in
      which the consideration to be delivered by the Company upon exercise of the
      Rights is described in Section 11(a)(ii) or Section 11(a)(iii) hereof, or as
      soon as is required by law following the Distribution Date, as the case may
      be,
      a registration statement under the Securities Act with respect to the securities
      purchasable upon exercise of the Rights on an appropriate form, (ii) cause
      such
      registration statement to become effective as soon as practicable after such
      filing and (iii) cause such registration statement to remain effective (with
      a
      prospectus at all times meeting the requirements of the Securities Act) until
      the earlier of (A) the date as of which the Rights are no longer exercisable
      for
      such securities and (B) the date of expiration of the Rights. The Company may
      temporarily suspend, for a period not to exceed ninety (90) days after the
      date
      set forth in clause (i) of the first sentence of this Section 9(c), the
      exercisability of the Rights in order to prepare and file such registration
      statement and permit it to become effective. Upon any such suspension, the
      Company shall issue a public announcement and notify the Rights Agent that
      the
      exercisability of the Rights has been temporarily suspended, as well as a public
      announcement and notification to the Rights Agent at such time as the suspension
      is no longer in effect. The Company will also take such action as may be
      appropriate under, or to ensure compliance with, the securities or “blue sky”
laws of the various states in connection with the exercisability of the
      Rights.  Notwithstanding any provision of this Agreement to the
      contrary, the Rights shall not be exercisable in any jurisdiction, unless the
      requisite qualification in such jurisdiction shall have been obtained, or an
      exemption therefrom shall be available, and until a registration statement
      has
      been declared effective.

     

    (d)           
      The Company covenants and agrees that it will take all such action as may be
      necessary to ensure that all Preferred Shares (or other securities of the
      Company) deliveredupon
      exercise of Rights shall, at the time of delivery of the certificates for such
      securities (subject to payment of the Exercise Price), be duly and validly
      authorized and issued and fully paid and nonassessable shares.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    (e)           
      The Company further covenants and agrees that it will pay when due and payable
      any and all federal and state transfer taxes and charges which may be payable
      in
      respect of the original issuance or delivery of the Rights Certificates or
      of
      any Preferred Shares (or other securities of the Company) upon the exercise
      of
      Rights. The Company shall not, however, be required to pay any transfer tax
      which may be payable in respect of any transfer or delivery of Rights
      Certificates to a person other than, or the issuance or delivery of certificates
      or depositary receipts for the Preferred Shares (or other securities of the
      Company) in a name other than that of, the registered holder of the Rights
      Certificate evidencing Rights surrendered for exercise or to issue or to deliver
      any certificates or depositary receipts for Preferred Shares (or other
      securities of the Company) 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.

     

    10.       Record
      Date.  Each Person in whose name any certificate for a number
      of one-thousandths of a Preferred Share (or other securities of the Company)
      is
      issued upon the exercise of Rights shall for all purposes be deemed to have
      become the holder of record of Preferred Shares (or other securities of the
      Company) represented thereon, and such certificate shall be dated, the date
      upon
      which the Rights Certificate evidencing such Rights was duly surrendered and
      payment of the Total Exercise Price with respect to which the Rights have been
      exercised (and any applicable transfer taxes) was made; provided, however,
      that if the
      date of such surrender and payment is a date upon which the transfer books
      of
      the Company are closed, such Person shall be deemed to have become the record
      holder of such shares on, and such certificate shall be dated, the next
      succeeding Business Day on which the transfer books of the Company are
      open.  Prior to the exercise of the Rights evidenced thereby, the
      holder of a Rights Certificate shall not be entitled to any rights of a holder
      of Preferred Shares (or other securities of the Company) 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.

     

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

     

    (a)           
      (i) Notwithstanding anything in this Agreement to the contrary, in the event
      the
      Company shall at any time after the date of this Agreement (A) declare a
      dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide
      the
      outstanding Preferred Shares, (C) combine the outstanding Preferred Shares
      (by
      reverse stock split or otherwise) into a smaller number of Preferred Shares,
      or
      (D) issue any shares of its capital stock in a reclassification of the Preferred
      Shares (including any such reclassification in connection with a consolidation
      or merger in which the Company is the continuing or surviving corporation),
      then, in each such event, except as otherwise

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    provided
      in this Section 11 and Section 7(e) hereof: (1) the Exercise Price in effect
      at
      the time of the record date for such dividend or of the effective date of such
      subdivision, combination or reclassification shall be adjusted so that the
      Exercise Price thereafter shall equal the result obtained by dividing the
      Exercise Price in effect immediately prior to such time by a fraction (the
      “Adjustment
      Fraction”), the numerator of which shall be the total number of Preferred
      Shares (or shares of capital stock issued in such reclassification of the
      Preferred Shares) outstanding immediately following such time and the
      denominator of which shall be the total number of Preferred Shares outstanding
      immediately prior to such time; provided, however,
      that in no
      event shall the consideration to be paid upon the exercise of one Right be
      less
      than the aggregate par value of the shares of capital stock of the Company
      issuable upon exercise of such Right; and (2) the number of one-thousandths
      of a
      Preferred Share (or share of such other capital stock) issuable upon the
      exercise of each Right shall equal the number of one-thousandths of a Preferred
      Share (or share of such other capital stock) as was issuable upon exercise
      of a
      Right immediately prior to the occurrence of the event described in clauses
      (A)-(D) of this Section 11(a)(i), multiplied by the Adjustment Fraction; provided, however,
      that, no
      such adjustment shall be made pursuant to this Section 11(a)(i) to the extent
      that there shall have simultaneously occurred an event described in clause
      (A),
      (B), (C) or (D) of Section 11(n) with a proportionate adjustment being made
      thereunder.  Each share of Common Stock that shall become outstanding
      after an adjustment has been made pursuant to this Section 11(a)(i) shall have
      associated with it the number of Rights, exercisable at the Exercise Price
      and
      for the number of one-thousandths of a Preferred Share (or shares of such other
      capital stock) as one share of Common Stock has associated with it immediately
      following the adjustment made pursuant to this Section 11(a)(i).

     

    (ii)
      Subject to Section 24 of this Agreement, in the event a Triggering Event shall
      have occurred, then promptly following such Triggering Event each holder of
      a
      Right, except as provided in Section 7(e) hereof, shall thereafter have the
      right to receive for each Right, upon exercise thereof in accordance with the
      terms of this Agreement and payment of the Exercise Price in effect immediately
      prior to the occurrence of the Triggering Event, in lieu of a number of
      one-thousandths of a Preferred Share, such number of shares of Common Stock
      of
      the Company as shall equal the result obtained by multiplying the Exercise
      Price
      in effect immediately prior to the occurrence of the Triggering Event by the
      number of one-thousandths of a Preferred Share for which a Right was exercisable
      (or would have been exercisable if the Distribution Date had occurred)
      immediately prior to the first occurrence of a Triggering Event, and dividing
      that product by 50% of the Current Per Share Market Price for shares of Common
      Stock on the date of occurrence of the Triggering Event; provided, however,
      that the
      Exercise Price and the number of shares of Common Stock of the Company so
      receivable upon exercise of a Right shall be subject to further adjustment
      as
      appropriate in accordance with Section 11(e) hereof to reflect any events
      occurring in respect of the shares of Common Stock of the Company after the
      occurrence of the Triggering Event.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (iii)
      In lieu of issuing shares of Common Stock in accordance with Section 11(a)(ii)
      hereof, the Company may, if the Company’s Board of Directors determines that
      such action is necessary or appropriate and not contrary to the interest of
      holders of Rights and, in the event that the number of shares of 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 are not sufficient to permit the exercise in full of the Rights,
      or
      if any necessary regulatory approval for such issuance has not been obtained
      by
      the Company, the Company shall: (A) determine the excess of (1) the value of
      the
      shares of Common Stock issuable upon the exercise of a Right (the “Current Value”) over
      (2) the Exercise Price (such excess, the “Spread”) and (B)
      with
      respect to each Right, make adequate provision to substitute for such shares
      of
      Common Stock, upon exercise of the Rights, (1) cash, (2) a reduction in the
      Exercise Price, (3) other equity securities of the Company (including, without
      limitation, shares or units of shares of any series of preferred stock which
      the
      Company’s Board of Directors has deemed to have the same value as Common Stock
      (such shares or units of shares of preferred stock are herein called “Common Stock
      Equivalents”)), except to the extent that the Company has not obtained
      any necessary stockholder or regulatory approval for such issuance, (4) debt
      securities of the Company, except to the extent that the Company has not
      obtained any necessary stockholder or regulatory approval for such issuance,
      (5)
      other assets or (6) any combination of the foregoing, having an aggregate value
      equal to the Current Value, where such aggregate value has been determined
      by
      the Company’s Board of Directors based upon the advice of a nationally
      recognized investment banking firm selected by the Company’s Board of Directors;
provided, however,
      if the
      Company shall not have made adequate provision to deliver value pursuant to
      clause (B) above within thirty (30) days following the later of (x) the first
      occurrence of a Triggering 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 and without requiring payment of the Exercise
      Price, Common Stock (to the extent available), except to the extent that the
      Company has not obtained any necessary stockholder or regulatory approval for
      such issuance, and then, if necessary, cash, which shares and/or cash have
      an
      aggregate value equal to the Spread.  If the Company’s Board of
      Directors shall determine in good faith that it is likely that sufficient
      additional Common Stock could be authorized for issuance upon exercise in full
      of the Rights or that any necessary regulatory approval for such issuance will
      be obtained, the thirty (30) day period set forth above may be extended to
      the
      extent necessary, but not more than ninety (90) days after the Section 11(a)(ii)
      Trigger Date, in order that the Company may seek stockholder approval for the
      authorization of such additional shares or take action to obtain such regulatory
      approval (such period, as it may be extended, the “Substitution
      Period”).  To the extent that the Company determines that some
      action need be taken pursuant to the first and/or second sentences of this
      Section 11(a)(iii), the Company (x) shall provide, subject to Section
      7(e) hereof, that such action shall

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    apply
      uniformly to all outstanding Rights and (y) may suspend the exercisability
      of
      the Rights until the expiration of the Substitution Period in order to seek
      any
      authorization of additional shares, to take any action to obtain any required
      regulatory approval and/or to decide the appropriate form of distribution to
      be
      made pursuant to such first sentence and to determine the value
      thereof.  In the event of any such suspension, the Company shall issue
      a public announcement stating that the exercisability of the Rights has been
      temporarily suspended, as well as a public announcement at such time as the
      suspension is no longer in effect.  For purposes of this Section
      11(a)(iii), the value of the Common Stock shall be the Current Per Share Market
      Price of the 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 Common
      Stock on such date.

     

    (b)           
      In case the Company shall, at any time after the date of this Agreement, fix
      a
      record date for the issuance of rights, options or warrants to all holders
      of
      Preferred Shares entitling such holders (for a period expiring within forty-five
      (45) calendar days after such record date) to subscribe for or purchase
      Preferred Shares or Equivalent Shares or securities convertible into Preferred
      Shares or Equivalent Shares at a price per share (or having a conversion price
      per share, if a security convertible into Preferred Shares or Equivalent Shares)
      less than the then Current Per Share Market Price of the Preferred Shares or
      Equivalent Shares on such record date, then, in each such case, the Exercise
      Price to be in effect after such record date shall be determined by multiplying
      the Exercise Price in effect immediately prior to such record date by a
      fraction, the numerator of which shall be the number of Preferred Shares and
      Equivalent Shares (if any) outstanding on such record date, plus the number
      of
      Preferred Shares or Equivalent Shares, as the case may be, which the aggregate
      offering price of the total number of Preferred Shares or Equivalent Shares,
      as
      the case may be, to be offered or issued (and/or the aggregate initial
      conversion price of the convertible securities to be offered or issued) would
      purchase at such current market price, and the denominator of which shall be
      the
      number of Preferred Shares and Equivalent Shares (if any) outstanding on such
      record date, plus the number of additional Preferred Shares or Equivalent
      Shares, as the case may be, to be offered for subscription or purchase (or
      into
      which the convertible securities so to be offered are initially convertible);
      provided, however,
      that in no
      event shall the consideration to be paid upon the exercise of one Right be
      less
      than the aggregate par value of the shares of capital stock of the Company
      issuable upon exercise of one Right.  In case such subscription price
      may be paid in a consideration part or all of which shall be in a form other
      than cash, the value of such consideration shall be as determined in good faith
      by the Company’s Board of Directors, 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.  Preferred Shares and Equivalent Shares
      owned by or held for the account of the Company shall not be deemed outstanding
      for the purpose of any such computation.  Such adjustment shall be
      made successively whenever such a record date is fixed, and in the event that
      such rights, options or warrants are not so issued, the Exercise Price shall
      be
      adjusted to be the Exercise Price which would then be in effect if such record
      date had not been fixed.

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    
      (c)           
        In case the Company shall, at any time after the date of this Agreement,
        fix a
        record date for the making of a distribution to all holders of the Preferred
        Shares or of any class or series of Equivalent Shares (including any such
        distribution made in connection with a consolidation or merger in which the
        Company is the continuing or surviving corporation) of evidences of indebtedness
        or assets (other than a regular quarterly cash dividend, if any, or a dividend
        payable in Preferred Shares) or subscription rights, options or warrants
        (excluding those referred to in Section 11(b)), then, in each such case,
        the
        Exercise Price to be in effect after such record date shall be determined
        by
        multiplying the Exercise Price in effect immediately prior to such record
        date
        by a fraction, the numerator of which shall be the Current Per Share Market
        Price of a Preferred Share or an Equivalent Share on such record date, less
        the
        fair market value per Preferred Share or Equivalent 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) of the portion of the
        cash, assets or evidences of indebtedness so to be distributed or of such
        subscription rights or warrants applicable to a Preferred Share or Equivalent
        Share, as the case may be, and the denominator of which shall be such Current
        Per Share Market Price of a Preferred Share or Equivalent Share on such record
        date; provided,
however,
        that
        in no event shall the consideration to be paid upon the exercise of one Right
        be
        less than the aggregate par value of the shares of capital stock of the Company
        issuable upon exercise of one Right.  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 Exercise Price shall be adjusted to be the
        Exercise Price which would have been in effect if such record date had not
        been
        fixed.

    

     

    (d)           
      Notwithstanding anything to the contrary, no adjustment in the Exercise Price
      shall be required unless such adjustment would require an increase or decrease
      of at least 1% in the Exercise Price; provided, however,
      that any
      adjustments which by reason of this Section 11(d) are not required to be made
      shall be carried forward and taken into account in any subsequent
      adjustment.  All calculations under this Section 11 shall be made to
      the nearest cent or to the nearest ten-thousandth of a share of Common Stock
      or
      other share or one hundred-thousandth of a Preferred Share, as the case may
      be.  Notwithstanding the first sentence of this Section 11(d), 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 requires such
      adjustment or (ii) the Expiration Date.

     

    (e)           
      If as a result of an adjustment made pursuant to Section 11(a) or 13(a) hereof,
      the holder of any Right thereafter exercised shall become entitled to receive
      any shares of capital stock other than Preferred Shares, thereafter the number
      of such other shares so receivable upon exercise of any Right and, if required,
      the Exercise Price thereof, shall be subject to adjustment from time to time
      in
      a manner and on terms as nearly equivalent as practicable to the provisions
      with
      respect to the Preferred Shares contained in Sections 11(a), 11(b), 11(c),
      11(d), 11(g), 11(h), 11(i), 11(j), 11(k) and 11(l), and the provisions of
      Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply
      on
      like terms to any such other shares.

     

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

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (g)           
      Unless the Company shall have exercised its election as provided in Section
      11(h), upon each adjustment of the Exercise Price as a result of the
      calculations made in Section 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 Exercise Price, that number of Preferred Shares
      (calculated to the nearest one hundred-thousandth of a share) obtained by (i)
      multiplying (x) the number of Preferred Shares covered by a Right immediately
      prior to this adjustment, by (y) the Exercise Price in effect immediately prior
      to such adjustment of the Exercise Price, and (ii) dividing the product so
      obtained by the Exercise Price in effect immediately after such adjustment
      of
      the Exercise Price.

     

    (h)           
      The Company may elect on or after the date of any adjustment of the Exercise
      Price as a result of the calculations made in Section 11(b) or (c) to adjust
      the
      number of Rights, in substitution for any adjustment in the number of Preferred
      Shares purchasable upon the exercise of a Right. Each of the Rights outstanding
      after such adjustment of the number of Rights shall be exercisable for the
      number of one-thousandths of a Preferred Share for which a Right was exercisable
      immediately prior to such adjustment. Each Right held of record prior to such
      adjustment of the number of Rights shall become that number of Rights
      (calculated to the nearest one hundred-thousandth) obtained by dividing the
      Exercise Price in effect immediately prior to adjustment of the Exercise Price
      by the Exercise Price in effect immediately after adjustment of the Exercise
      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 Exercise Price is adjusted or any day thereafter,
      but,
      if the Rights Certificates have been issued, shall be at least ten (10) days
      later than the date of the public announcement. If Rights Certificates have
      been
      issued, upon each adjustment of the number of Rights pursuant to this Section
      11(h), 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 so to be
      distributed shall be issued, executed and countersigned in the manner provided
      for herein (and may bear, at the option of the Company, the adjusted Exercise
      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.

     

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

     

    (j)           
      Before taking any action that would cause an adjustment reducing the Exercise
      Price below the par or stated value, if any, of the number of one-thousandths
      of
      a Preferred Share 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 mayvalidly
      and legally issue as fully paid and nonassessable shares such number of
      one-thousandths of a Preferred Share at such adjusted Exercise
      Price.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    (k)           
      In any case in which this Section 11 shall require that an adjustment in the
      Exercise Price be made effective as of a record date for a specified event,
      the
      Company may elect to defer until the occurrence of such event the issuing to
      the
      holder of any Right exercised after such record date of the number of
      one-thousandths of a Preferred Share and other capital stock or securities
      of
      the Company, if any, issuable upon such exercise over and above the number
      of
      one-thousandths of a Preferred Share and other capital stock or securities
      of
      the Company, if any, issuable upon such exercise on the basis of the Exercise
      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) upon the occurrence of the event requiring such
      adjustment.

     

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

     

    (m)           
      The Company covenants and agrees that, after the Distribution Date, it will
      not,
      except as permitted by Sections 23, 24 or 27 hereof, take (or permit to be
      taken) 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.

     

    (n)           
      In the event the Company shall at any time after the date of this Agreement
      (A)
      declare a dividend on the Common Stock payable in shares of Common Stock, (B)
      subdivide the outstanding shares of Common Stock, (C) combine the outstanding
      Common Stock (by reverse stock split or otherwise) into a smaller number of
      shares of Common Stock, or (D) issue any shares of its capital stock in a
      reclassification of the shares of Common Stock (including any such
      reclassification in connection with a consolidation or merger in which the
      Company is the continuing or surviving corporation), then, in each such event,
      except as otherwise provided in this Section 11(a) and Section 7(e) hereof:
      (1)
      each share of Common Stock (or shares of capital stock issued in such
      reclassification of the Common Stock) outstanding immediately following such
      time shall have associated with it the number of Rights as were associated
      with
      one share of Common Stock immediately prior to the occurrence of the event
      described in clauses (A)-(D) above; (2) the Exercise Price in effect at the
      time
      of the record date for such dividend or of the effective date of such
      subdivision, combination or reclassification shall be adjusted so that the
      Exercise Price thereafter shall equal the result obtained by multiplying the
      Exercise Price in effect immediately prior to such time by a fraction, the
      numerator of which shall be the total number of shares of Common Stock
      outstanding immediately prior to the event described in clauses (A)-(D) above,
      and the denominator of which shall be the total number of shares of

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Common
      Stock outstanding immediately after such event; provided, however,
      that in no
      event shall the consideration to be paid upon the exercise of one Right be
      less
      than the aggregate par value of the shares of capital stock of the Company
      issuable upon exercise of such Right; and (3) the number of one-thousandths
      of a
      Preferred Share (or shares of such other capital stock) issuable upon the
      exercise of each Right outstanding after such event shall equal the number
      of
      one- thousandths of a Preferred Share (or shares of such other capital stock)
      as
      were issuable with respect to one Right immediately prior to such
      event.  Each share of Common Stock that shall become outstanding after
      an adjustment has been made pursuant to this Section 11(n) shall have associated
      with it the number of Rights, exercisable at the Exercise Price and for the
      number of one-thousandths of a Preferred Share (or shares of such other capital
      stock) as one share of Common Stock has associated with it immediately following
      the adjustment made pursuant to this Section 11(n).  If an event
      occurs which would require an adjustment under both this Section 11(n) and
      Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(n)
      shall be in addition to, and shall be made prior to, any adjustment required
      pursuant to Section 11(a)(ii) hereof.

     

    12.       Certificate
      of Adjusted
      Exercise Price or Number of Shares.  Whenever an adjustment is
      made as provided in Sections 11 and 13 hereof, the Company shall promptly (a)
      prepare a certificate setting forth such adjustment and a brief statement of
      the
      facts accounting for such adjustment, (b) file with the Rights Agent and with
      each transfer agent for the Preferred Shares a copy of such certificate and
      (c)
      mail a brief summary thereof to each holder of a Rights Certificate in
      accordance with Section 26 hereof.  Notwithstanding the foregoing
      sentence, the failure of the Company to make such certification or give such
      notice shall not affect the validity of such adjustment or the force or effect
      of the requirement for such adjustment.  The Rights Agent shall be
      fully protected in relying on any such certificate and on any adjustment
      contained therein and shall not be deemed to have knowledge of such adjustment
      unless and until it shall have received such certificate.

     

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

     

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

     

    (i)
      the Company shall consolidate with, or merge with and into, any other Person
      (other than a wholly-owned Subsidiary of the Company in a transaction the
      principal purpose of which is to change the state of incorporation of the
      Company and which complies with Section 11(m) hereof);

    

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

    

    (iii)
      the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
      shall sell or otherwise transfer), in one or more transactions, assets or
      earning power aggregating 50% or more of the assets or earning power of
      theCompany
      and its Subsidiaries (taken as a whole) to any other Person or Persons (other
      than the Company or one or more of its wholly owned Subsidiaries in one or
      more
      transactions, each of which individually (and together) complies with Section
      11(m) hereof),

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    then,
      concurrent with and in each such case:

     

    (a)           
      each holder of a Right (except as provided in Section 7(e) hereof) shall
      thereafter have the right to receive, upon the exercise thereof, at a price
      equal to the Total Exercise Price applicable immediately prior to the occurrence
      of the Section 13 Event in accordance with the terms of this Agreement, such
      number of validly authorized and issued, fully paid, nonassessable and freely
      tradeable shares of Common Stock of the Principal Party (as hereinafter
      defined), free of any liens, encumbrances, rights of first refusal or other
      adverse claims, as shall be equal to the result obtained by dividing such Total
      Exercise Price by 50% of the Current Per Share Market Price of the shares of
      Common Stock of such Principal Party on the date of consummation of such Section
      13 Event, provided, however,
      that the
      Exercise Price and the number of shares of Common Stock of such Principal Party
      so receivable upon exercise of a Right shall be subject to further adjustment
      as
      appropriate in accordance with Section 11(e) hereof;

     

    (b)           
      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;

     

    (c)           
      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;

     

    (d)           
      such Principal Party shall take such steps (including, but not limited to,
      the
      reservation of a sufficient number of its Common Stock) in connection with
      the
      consummation of any such transaction as may be necessary to ensure that the
      provisions hereof shall thereafter be applicable, as nearly as reasonably may
      be, in relation to its shares of Common Stock thereafter deliverable upon the
      exercise of the Rights; and

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (e)           
      upon the subsequent occurrence of any consolidation, merger, sale or transfer
      of
      assets or other extraordinary transaction in respect of such Principal Party,
      each holder of a Right shall thereupon be entitled to receive, upon exercise
      of
      a Right and payment of the Total Exercise Price as provided in this Section
      13(a), such cash, shares, rights, warrants and other property which such holder
      would have been entitled to receive had such holder, at the time of such
      transaction, owned the shares of Common Stock of the Principal Party receivable
      upon the exercise of such Right pursuant to this Section 13(a), and such
      Principal Party shall take such steps (including, but not limited to,
      reservation of shares of stock) as may be necessary to permit the subsequent
      exercise of the Rights in accordance with the terms hereof for such cash,
      shares, rights, warrants and other property.

     

    (f)           
      For purposes hereof, the “earning power” of the Company and its Subsidiaries
      shall be determined in good faith by the Company’s Board of Directors on the
      basis of the operating earnings of each business operated by the Company and
      its
      Subsidiaries during the three fiscal years preceding the date of such
      determination (or, in the case of any business not operated by the Company
      or
      any Subsidiary during three full fiscal years preceding such date, during the
      period such business was operated by the Company or any
      Subsidiary).

     

    (b)           
      For purposes of this Agreement, the term “Principal Party”
shall mean:

     

    (i)
      in the case of any transaction described in clause (i) or (ii) of Section 13(a)
      hereof: (A) the Person that is the issuer of the securities into which the
      shares of Common Stock are converted in such merger or consolidation, or, if
      there is more than one such issuer, the issuer the shares of Common Stock of
      which have the greatest aggregate market value of shares outstanding, or (B)
      if
      no securities are so issued, (x) the Person that is the other party to the
      merger, if such Person survives said merger, or, if there is more than one
      such
      Person, the Person the shares of Common Stock of which have the greatest
      aggregate market value of shares outstanding or (y) if the Person that is the
      other party to the merger does not survive the merger, the Person that does
      survive the merger (including the Company if it survives) or (z) the Person
      resulting from the consolidation; and

    

    (ii)
      in the case of any transaction described in clause (iii) of Section13 (a)
      hereof, the Person that is the party receiving the greatest portion of the
      assets or earning power transferred pursuant to such transaction or
      transactions, or, if more than one Person that is a party to such transaction
      or
      transactions receives the same portion of the assets or earning power so
      transferred and each such portion would, were it not for the other

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

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

     

    (c)           
      The Company shall not consummate any Section 13 Event unless the Principal
      Party
      shall have a sufficient number of authorized shares of Common Stock that have
      not been issued or reserved for issuance to permit the exercise in full of
      the
      Rights in accordance with this Section 13 and unless prior thereto the Company
      and such issuer shall have executed and delivered to the Rights Agent a
      supplemental agreement confirming that such Principal Party shall, upon
      consummation of such Section 13 Event, assume this Agreement in accordance
      with
      Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive
      rights in respect of the issuance of shares of Common Stock of such Principal
      Party upon exercise of outstanding Rights have been waived, that there are
      no
      rights, warrants, instruments or securities outstanding or any agreements or
      arrangements which, as a result of the consummation of such transaction, would
      eliminate or substantially diminish the benefits intended to be afforded by
      the
      Rights and that such transaction shall not result in a default by such Principal
      Party under this Agreement, and further providing that, as soon as practicable
      after the date of such Section 13 Event, such Principal Party will:

     

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

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (ii)
      use its best efforts to list (or continue the listing of) the Rights and the
      securities purchasable upon exercise of the Rights on a national securities
      exchange or to meet the eligibility requirements for quotation on Nasdaq and
      list (or continue the listing of) the Rights and the securities purchasable
      upon
      exercise of the Rights on Nasdaq; and

     

    (iii)
      deliver to holders of the Rights historical financial statements for such
      Principal Party which comply in all respects with the requirements for
      registration on Form F-1 (or any successor form) under the Exchange
      Act.

     

    In
      the event that at any time after the occurrence of a Triggering Event some
      or
      all of the Rights shall not have been exercised at the time of a transaction
      described in this Section 13, the Rights which have not theretofore been
      exercised shall thereafter be exercisable in the manner described in Section
      13(a) (without taking into account any prior adjustment required by Section
      11(a)(ii)).

     

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

     

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

     

    (f)           
      The provisions of this Section 13 shall similarly apply to successive mergers
      or
      consolidations or sales or other transfers.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      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 registered holders of the Rights Certificates
      with regard to which such fractional Rights would otherwise be issuable, an
      amount in cash equal to the same fraction of the current market value of a
      whole
      Right. For the purposes of this Section 14(a), the current market value of
      a
      whole Right shall be the closing price of the Rights for the Trading Day
      immediately prior to the date on which such fractional Rights would have been
      otherwise issuable, as determined pursuant to this Agreement.

     

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

     

    (c)           
      The Company shall not be required to issue fractions of shares of Common Stock
      or to distribute certificates which evidence fractional shares of Common Stock
      upon the exercise or exchange of Rights. In lieu of such fractional shares
      of
      Common Stock, the Company shall pay to the registered holders of Rights
      Certificates at the time such Rights are exercised as herein provided an amount
      in cash equal to the same fraction of the current market value of a share of
      Common Stock. For purposes of this Section 14(c), the current market value
      of a
      share of Common Stock shall be the closing price of a share of Common Stock
      (as
      determined pursuant to the terms hereof) for the Trading Day immediately prior
      to the date of such exercise.

     

    (d)           
      The holder of a Right by the acceptance of the Right expressly waives his or
      her
      right to receive any fractional Rights or any fractional shares (other than
      fractions that are integral multiples of one one-thousandth of a Preferred
      Share) upon exercise of a Right.

     

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    
      15.       Rights
        of
        Action.  All rights of action in respect of this Agreement,
        excepting the rights of action given to the Rights Agent under Section 18
        hereof, are vested in the respective registered holders of the Rights
        Certificates (and, prior to the Distribution Date, the registered holders
        of the
        shares of Common Stock); and any registered holder of any Rights Certificate
        (or, prior to the Distribution Date, of the shares of Common Stock), without
        the
        consent of the Rights Agent or of the holder of any other Rights
        Certificate (or, prior to the Distribution Date, of the shares of Common
        Stock),
        may, in his or her own behalf and for his or her own benefit, enforce, and
        may
        institute and maintain any suit, action or proceeding against the Company
        to
        enforce, or otherwise act in respect of, his or her 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 will be entitled to specific performance of
        the
        obligations under, and injunctive relief against actual or threatened violations
        of, the obligations of any Person subject to this Agreement.

    

     

    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 the shares of 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 principal office
      or
      offices of the Rights Agent designated for such purposes, duly endorsed or
      accompanied by a proper instrument of transfer and with the appropriate forms
      and certificates fully executed; and

     

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

     

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

     

     

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

    18.       The
      Rights
      Agent.

     

    
      (a)           
        The Company agrees to pay to the Rights Agent reasonable compensation for
        all
        services rendered by it hereunder and, from time to time, on demand of the
        Rights Agent, its reasonable expenses and counsel fees and other
        disbursements incurred in the administration and execution of this Agreement
        and
        the exercise and performance of its duties hereunder.  The Company
        also agrees to indemnify the Rights Agent for, and to hold it harmless against,
        any loss, liability or expense, incurred without gross negligence, bad faith
        or
        willful misconduct on the part of the Rights Agent, for anything done or
        omitted
        by the Rights Agent in connection with the acceptance and administration
        of this
        Agreement, including the costs and expenses of defending against any claim
        of
        liability in the premises.  In no event will the Rights Agent be
        liable for special, indirect, incidental or consequential loss or damage
        of any
        kind whatsoever, even if the Rights Agent has been advised of the possibility
        of
        such loss or damage.

    

     

    (b)           
      The Rights Agent shall be protected and shall incur no liability for, or in
      respect of any action taken, suffered or omitted by it in connection with,
      its
      administration of this Agreement in reliance upon any Rights Certificate or
      certificate for the Preferred Shares or shares of 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 reasonably believed by it
      to
      be genuine and to be signed, executed and, where necessary, verified or
      acknowledged, by the proper Person or Persons, or otherwise upon the advice
      of
      counsel as set forth in Section 20 hereof.

     

    19.       Merger
      or Consolidation or
      Change of Name of Rights Agent.  Any corporation into which the
      Rights Agent or any successor Rights Agent may be merged or with which it may
      be
      consolidated, or any corporation resulting from any merger or consolidation
      to
      which the Rights Agent or any successor Rights Agent shall be a party, or any
      corporation succeeding to the corporate trust business of the Rights Agent
      or
      any successor Rights Agent, shall be the successor to the Rights Agent under
      this Agreement without the execution or filing of any paper or 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 the
      predecessor Rights Agent and deliver such Rights Certificates so countersigned;
      and in case at that time any of the Rights Certificates shall not have been
      countersigned, any successor Rights Agent may countersign such Rights
      Certificates either in the name of the predecessor Rights Agent or in the name
      of the successor Rights Agent; and in all such cases such Rights Certificates
      shall have the full force provided in the Rights Certificates and in this
      Agreement.  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.

     

    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 advice or 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 written advice
      or 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 Per Share Market Price) be proved or established by the Company prior
      to
      taking or suffering any action hereunder, such fact or matter (unless other
      evidence in respect thereof be herein specifically prescribed) may be deemed
      to
      be conclusively proved and established by a certificate signed by any one of
      the
      Chairman of the Board, the Chief Executive Officer, the President, any Vice
      President, the Chief Financial Officer, 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 to the Company and any other Person
      only for its own gross negligence, bad faith or willful misconduct.

     

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

     

    (e)           
      The Rights Agent shall not be under any responsibility in respect of the
      validity of this Agreement or the execution and delivery hereof (except the
      due
      execution hereof by the Rights Agent) or in respect of the validity or execution
      of any Rights Certificate (except its countersignature thereof); nor shall
      it be
      responsible for any breach by the Company of any covenant or condition contained
      in this Agreement or in any Rights Certificate; nor shall it be responsible
      for
      any change in the exercisability of the Rights or any adjustment in the terms
      of
      the Rights (including the manner, method or amount thereof) provided for in
      Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts
      that
      would require any such change or adjustment (except with respect to the exercise
      of Rights evidenced by Rights Certificates after receipt by the Rights Agent
      of
      a certificate furnished pursuant to Section 12 describing such change or
      adjustment); nor shall it by any act hereunder be deemed to make any
      representation or warranty as to the authorization or reservation of any
      Preferred Shares to be issued pursuant to this Agreement or any Rights
      Certificate or as to whether any Preferred Shares will, when issued, be validly
      authorized and issued, fully paid and nonassessable.

     

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

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    
      (g)           
        The Rights Agent is hereby authorized and directed to accept instructions
        with
        respect to the performance of its duties hereunder from any one of the Chairman
        of the Board, the Chief Executive Officer, the Chief Financial Officer,
        the President, any Vice President, the Secretary or any Assistant Secretary
        of
        the Company, and to apply to such officers for advice or instructions in
        connection with its duties, and it shall not be liable for any action taken
        or
        suffered by it in good faith in accordance with instructions of any such
        officer
        or for any delay in acting while waiting for those instructions.  Any
        application by the Rights Agent for written instructions from the Company
        may,
        at the option of the Rights Agent, set forth in writing any action proposed
        to
        be taken or omitted by the Rights Agent under this Rights 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 (5) Business Days after the date any officer
        of
        the Company actually receives such application, unless any such officer shall
        have consented in writing to an earlier date) unless, prior to taking any
        such
        action (or the effective date in the case of an omission), the Rights Agent
        shall have received written instructions in response to such application
        specifying the action to be taken or omitted.

    

     

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

     

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

     

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

     

    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 (30)
      days’ written notice mailed to the Company and to each transfer agent of the
      Preferred Shares and the Common Stock by registered or certified mail, and
      to
      the holders of the Rights Certificates by first-class mail.  In the
      event the transfer agency relationship in effect between the Company and the
      Rights Agent terminates, the Rights Agent will be deemed to have resigned
      automatically and be discharged from its duties under this Agreement as of
      the
      effective date of such termination, and the Company shall be responsible for
      sending any required notice.  The Company may remove the Rights Agent
      or any successor Rights Agent upon thirty (30) days’ written notice, mailed to
      the Rights Agent or successor Rights Agent, as the case may be, and to each
      transfer agent of the Preferred Shares and the Common 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 (30) days after giving notice of such removal or after
      receiving written notice 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 or her Rights Certificate for inspection by the
      Company), then the 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 corporation organized and doing business under
      the laws of the United States or of any state of the United States, in good
      standing, which is authorized under such laws to exercise corporate trust or
      stockholder services powers and is subject to supervision or examination by
      federal or state authority and which has at the time of its appointment as
      Rights Agent, along with its Affiliates, a combined capital and surplus of
      at
      least U.S. $50 million.  After appointment, the successor Rights Agent
      shall be vested with the same powers, rights, duties and responsibilities as
      if
      it had been originally named as Rights Agent without further act or deed; but
      the predecessor Rights Agent shall deliver and transfer to the successor Rights
      Agent any property at the time held by it hereunder, and execute and deliver
      any
      further assurance, conveyance, act or deed necessary for the
      purpose.  Not later than the effective date of any such appointment,
      the Company shall file notice thereof in writing with the predecessor Rights
      Agent and each transfer agent of the Preferred Shares and the Common Stock,
      and
      mail a written notice thereof to the registered holders of the Rights
      Certificates.  Failure to give any notice provided for in this Section
      21, however, or any defect therein, shall not affect the legality or validity
      of
      the resignation or removal of the Rights Agent or the appointment of the
      successor Rights Agent, as the case may be.

     

    22.       Issuance
      of New Rights
      Certificates.  Notwithstanding any of the provisions of this
      Agreement or of the Rights to the contrary, the Company may, at its option,
      issue new Rights Certificates evidencing Rights in such form as may be approved
      by its Board of Directors to reflect any adjustment or change in the Exercise
      Price and the number or kind or class of shares or other securities or property
      purchasable under the Rights Certificates made in accordance with the provisions
      of this Agreement.  In addition, in connection with the issuance or
      sale of shares of Common Stock following the Distribution Date and prior to
      the
      redemption or expiration of the Rights, the Company (a) shall, with respect
      to
      shares of Common Stock so issued or sold pursuant to the exercise of stock
      options or under any employee plan or arrangement or upon the exercise,
      conversion or exchange of other securities of the Company outstanding at the
      date hereof 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 and this sentence shall be null and
      void
      ab initio if, and to the extent that, such issuance or this sentence would
      create a significant risk of or result in material adverse tax consequences
      to
      the Company or the Person to whom such Rights Certificate would be issued or
      would create a significant risk of or result in such options’ or employee plans’
or arrangements’ failing to qualify for otherwise available special tax
      treatment 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.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    23.       Redemption.

     

    (a)           
      The Company may, at its option and with the approval of the Board of Directors,
      at any time prior to the Close of Business on the earlier of (i) the Shares
      Acquisition Date and (ii) the Final Expiration Date, redeem all but not less
      than all the then outstanding Rights at a redemption price of U.S. $0.001 per
      Right, appropriately adjusted to reflect any stock split, stock dividend or
      similar transaction occurring after the date hereof (such redemption price
      being
      herein referred to as the “Redemption Price”)
      and the Company may, at its option, pay the Redemption Price either in shares
      of
      Common Stock (based on the Current Per Share Market Price thereof 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.  The date on
      which the Board of Directors elects to make the redemption effective shall
      be
      referred to as the “Redemption
      Date”.

     

    (b)           
      Immediately upon the action of the Board of Directors of the Company ordering
      the redemption of the Rights, evidence of which shall have been filed with
      the
      Rights Agent, and without any further action and without any notice, the right
      to exercise the Rights will terminate and the only right thereafter of the
      holders of Rights shall be to receive the Redemption Price. The Company shall
      promptly give public notice of any such redemption; provided, however,
      that the
      failure to give or any defect in, any such notice shall not affect the validity
      of such redemption.  Within ten (10) days after the action of the
      Board of Directors ordering the redemption of the Rights, the Company shall
      give
      notice of such redemption to the Rights Agent and the holders of the then
      outstanding Rights by mailing such notice to all such holders at their last
      addresses as they appear upon the registry books of the Rights Agent or, prior
      to the Distribution Date, on the registry books of the transfer agent for the
      Common Stock.  Any notice which is mailed in the manner herein
      provided shall be deemed given, whether or not the holder receives the
      notice.  Each such notice of redemption will state the method by which
      the payment of the Redemption Price will be made.  Neither the Company
      nor any of its Affiliates or Associates may redeem, acquire or purchase for
      value any Rights at any time in any manner other than that specifically set
      forth in this Section 23 or in Section 24 hereof, and other than in connection
      with the purchase of shares of Common Stock prior to the Distribution
      Date.

     

    24.       Exchange.

     

    (a)           
      Subject to applicable laws, rules and regulations, and subject to subsection
      24(c) below, the Company may, at its option, by action of the Board of
      Directors, at any time after the occurrence of a Triggering Event, exchange
      all
      or part of the then outstanding and exercisable Rights (which shall not include
      Rights that have become void pursuant to the provisions of Section 7(e) hereof)
      for shares of Common Stock at an exchange ratio of one share of Common Stock
      per
      Right, appropriately adjusted to reflect any stock split, stock dividend or
      similar transaction occurring after the date hereof (such exchange ratio being
      hereinafter referred to as the “Exchange
      Ratio”).  Notwithstanding the foregoing, the Board of Directors
      shall not be empowered to effect such exchange at any time after any Person
      (other than the Company, any Subsidiary of the Company, any employee benefit
      plan of the Company or any such Subsidiary, or any entity holding Common Stock
      for or pursuant to the terms of any such plan), together with all Affiliates
      and
      Associates of such Person, becomes the Beneficial Owner of 50% or more of the
      Common Stock then outstanding.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (b)           
      Immediately upon the action of the Board of Directors ordering the exchange
      of
      any Rights pursuant to subsection 24(a) of this Section 24 and without any
      further action and without any notice, the right to exercise such Rights shall
      terminate and the only right thereafter of a holder of such Rights shall be
      to
      receive that number of shares of Common Stock equal to the number of such Rights
      held by such holder multiplied by the Exchange Ratio. The Company shall give
      public notice of any such exchange; provided, however,
      that the
      failure to give, or any defect in, such notice shall not affect the validity
      of
      such exchange.  The Company shall mail a notice of any such exchange
      to all of the holders of such Rights at their last addresses as they appear
      upon
      the registry books of the Rights Agent.  Any notice which is mailed in
      the manner herein provided shall be deemed given, whether or not the holder
      receives the notice.  Each such notice of exchange will state the
      method by which the exchange of the shares of Common Stock for Rights will
      be
      effected and, in the event of any partial exchange, the number of Rights which
      will be exchanged.  Any partial exchange shall be effected pro rata
      based on the number of Rights (other than Rights which have become void pursuant
      to the provisions of Section 7(e) hereof) held by each holder of
      Rights.

     

    (c)           
      In the event that there shall not be sufficient shares of Common Stock issued
      but not outstanding or authorized but unissued to permit any exchange of Rights
      as contemplated in accordance with Section 24(a), the Company shall either
      take
      such action as may be necessary to authorize additional shares of Common Stock
      for issuance upon exchange of the Rights or alternatively, at the option of
      a
      majority of the Board of Directors, with respect to each Right (i) pay cash
      in
      an amount equal to the Current Value (as hereinafter defined), in lieu of
      issuing shares of Common Stock in exchange therefor, or (ii) issue debt or
      equity securities or a combination thereof, having a value equal to the Current
      Value, in lieu of issuing shares of Common Stock in exchange for each such
      Right, where the value of such securities shall be determined by a nationally
      recognized investment banking firm selected by majority vote of the Board of
      Directors, or (iii) deliver any combination of cash, property, shares of Common
      Stock and/or other securities having a value equal to the Current Value in
      exchange for each Right. For purposes of this Section 24(c) only, the Current
      Value shall mean the product of the Current Per Share Market Price of shares
      of
      Common Stock on the date of the occurrence of the event described above in
      subparagraph (a), multiplied by the number of shares of Common Stock for which
      the Right otherwise would be exchangeable if there were sufficient shares
      available. To the extent that the Company determines that some action need
      be
      taken pursuant to clauses (i), (ii) or (iii) of this Section 24(c), the Board
      of
      Directors may temporarily suspend the exercisability of the Rights for a period
      of up to sixty (60) days following the date on which the event described in
      Section 24(a) shall have occurred, in order to seek any authorization of
      additional shares of Common Stock and/or to decide the appropriate form of
      distribution to be made pursuant to the above provision and to determine the
      value thereof. In the event of any such suspension, the Company shall issue
      a
      public announcement stating that the exercisability of the Rights has been
      temporarily suspended.

     

    (d)           
      The Company shall not be required to issue fractions of shares of Common Stock
      or to distribute certificates which evidence fractional shares of Common Stock.
      In lieu of such fractional shares of Common Stock, there shall be paid to the
      registered holders of the Rights Certificates with regard to which such
      fractional shares of Common Stock would otherwise be issuable, an amount in
      cash
      equal to the same fraction of the current market value of a whole share of
      Common Stock (as determined pursuant to the terms hereof).

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (e)           
      The Company may, at its option, by majority vote of the Board of Directors,
      at
      any time before any Person has become an Acquiring Person, exchange all or
      part
      of the then outstanding Rights for rights of substantially equivalent value,
      as
      determined reasonably and with good faith by the Board of Directors, based
      upon
      the advice of one or more nationally recognized investment banking
      firms.

     

    (f)           
      Immediately upon the action of the Board of Directors ordering the exchange
      of
      any Rights pursuant to subsection 24(e) of this Section 24 and without any
      further action and without any notice, the right to exercise such Rights shall
      terminate and the only right thereafter of a holder of such Rights shall be
      to
      receive that number of rights in exchange therefor as has been determined by
      the
      Board of Directors in accordance with subsection 24(e) above. The Company shall
      give public notice of any such exchange; provided, however,
      that the
      failure to give, or any defect in, such notice shall not affect the validity
      of
      such exchange.  The Company shall mail a notice of any such exchange
      to all of the holders of such Rights at their last addresses as they appear
      upon
      the registry books of the transfer agent for the shares of Common Stock of
      the
      Company.  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 Rights will be effected.

     

    25.       Notice
      of Certain
      Events.

     

    (a)           
      In case the Company shall propose to effect or permit to occur any Triggering
      Event or Section 13 Event, the Company shall give notice thereof to each holder
      of Rights in accordance with Section 26 hereof at least twenty (20) days prior
      to occurrence of such Triggering Event or such Section 13 Event.

     

    (b)           
      In case any Triggering Event or Section 13 Event shall occur, then, in any
      such
      case, the Company shall as soon as practicable thereafter give to each holder
      of
      a Rights Certificate, in accordance with Section 26 hereof, a notice of the
      occurrence of such event, which shall specify the event and the consequences
      of
      the event to holders of Rights under Sections 11(a)(ii) and 13
      hereof.

     

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

     

    DryShips
      Inc.

    80
      Kifissias Avenue

    Marousi

    Athens
      - 15125

    Greece

    Attention:
      George Economou

     

    with
      a copy to:

     

    Seward
      & Kissel LLP

    One
      Battery Park Plaza

    New
      York, New York 10004

    Attention:
      Gary J. Wolfe, Esq.

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    Subject
      to the provisions of Section 21 hereof, any notice or demand authorized by
      this
      Agreement to be given or made by the Company or by the holder of any Rights
      Certificate to or on the Rights Agent shall be sufficiently given or made if
      sent by first-class mail, postage prepaid, addressed (until another address
      is
      filed in writing with the Company) as follows:

    

    American
      Stock Transfer & Trust Company

    59
      Maiden Lane

    Plaza
      Level

    New
      York, NY 10038

    

    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 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.

     

    27.       Supplements
      and
      Amendments.  Prior to the occurrence of a Distribution Date,
      the Company may supplement or amend this Agreement in any respect without the
      approval of any holders of Rights and the Rights Agent shall, if the Company
      so
      directs, execute such supplement or amendment.  From and after the
      occurrence of a Distribution Date, the Company and the Rights Agent may from
      time to time supplement or amend this Agreement without the approval of any
      holders of Rights in order to (i) cure any ambiguity, (ii) correct or supplement
      any provision contained herein which may be defective or inconsistent with
      any
      other provisions herein, (iii) shorten or lengthen any time period hereunder
      or
      (iv) to change or supplement the provisions hereunder in any manner that the
      Company may deem necessary or desirable and that shall not adversely affect
      the
      interests of the holders of Rights (other than an Acquiring Person or an
      Affiliate or Associate of an Acquiring Person); provided, this Agreement may
      not
      be supplemented or amended to lengthen, pursuant to clause (iii) of this
      sentence, (A) a time period relating to when the Rights may be redeemed at
      such
      time as the Rights are not then redeemable or (B) any other time period unless
      such lengthening is for the purpose of protecting, enhancing or clarifying
      the
      rights of, and/or the benefits to, the holders of Rights (other than an
      Acquiring Person or an Affiliate or Associate of an Acquiring
      Person).  Upon the delivery of a certificate from an appropriate
      officer of the Company that states that the proposed supplement or amendment
      is
      in compliance with the terms of this Section 27, the Rights Agent shall execute
      such supplement or amendment, provided that such supplement or amendment does
      not adversely affect the rights, duties or obligations of the Rights Agent
      under
      this Agreement.  Prior to the Distribution Date, the interests of the
      holders of Rights shall be deemed coincident with the interests of the holders
      of shares of Common Stock.

     

    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.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

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

    

     

    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, the
      shares of 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, the shares of Common Stock).

     

    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,
      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 day following the
      date
      of such determination by the Board of Directors.

     

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

     

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

     

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

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

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

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    IN
      WITNESS WHEREOF, the parties have executed this Stockholder Rights Agreement
      as
      of the date first written above.

     

    DRYSHIPS
      INC.

    

    

    By:_________________________________

    Name:
      George Economou

    Title:   President
      and Chief Executive Officer

    

    

    

    AMERICAN
      STOCK TRANSFER & TRUST COMPANY

    

    

    By:_________________________________

    Name:

    Title:

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

     

    Exhibit
      A

     

    

    CERTIFICATE
      OF DESIGNATIONS OF RIGHTS, PREFERENCES AND PRIVILEGES OF SERIES A PARTICIPATING
      PREFERRED STOCK OF

    DRYSHIPS
      INC.

    

    The
      undersigned, Mr. George Economou and Ms. Olga Lambrianidou do hereby
      certify:

    

    1.          That
      they are the duly elected and acting President/Chief Executive Officer and
      Corporate Secretary, respectively, of DryShips Inc., a Marshall Islands
      corporation (the “Company”).

    

    2.          That
      pursuant to the authority conferred by the Company’s Amended and Restated
      Articles of Incorporation, the Company’s Board of Directors on January 16, 2008
      adopted the following resolution designating and prescribing the relative
      rights, preferences and limitations of the Company’s Series A Participating
      Preferred Stock:

    

    RESOLVED,
      that pursuant to the authority vested in the Board of Directors (the “Board”) of the
      Company by the Articles of Incorporation, the Board does hereby establish a
      series of preferred stock, par value U.S. $0.01 per share, and the designation
      and certain powers, preferences and other special rights of the shares of such
      series, and certain qualifications, limitations and restrictions thereon, are
      hereby fixed as follows:

     

    Section
      1.    Designation
      and
      Amount.  The shares of such series shall be designated as
“Series A
      Participating Preferred Stock”.  The Series A Participating
      Preferred Stock shall have a par value of U.S. $0.01 per share, and the number
      of shares constituting such series shall initially be 10,000,000, which number
      the Board may from time to time increase or decrease (but not below the number
      then outstanding).

     

    Section
      2.        Proportional
      Adjustment.  In the event the Company shall at any time after
      the issuance of any share or shares of Series A Participating Preferred Stock
      (i) declare any dividend on the common stock of the Company par value U.S.
      $0.01
      per share (the “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 Company shall simultaneously effect a
      proportional adjustment to the number of outstanding shares of Series A
      Participating Preferred Stock.

     

    Section
      3.        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 A
      Participating Preferred Stock with respect to dividends, the holders of shares
      of Series A Participating Preferred Stock shall be 

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    entitled
      to receive when, as and if declared by the Board out of funds legally available
      for the purpose, quarterly dividends payable in quarterly in each year (each
      such date being referred to herein as a “Quarterly Dividend
      Payment
      Date”), commencing on the first Quarterly Dividend Payment Date after the
      first issuance of a share or fraction of a share of Series A Participating
      Preferred Stock, in an amount per share (rounded to the nearest cent) equal
      to
      1,000 times the aggregate per share amount of all cash dividends, and 1,000
      times the aggregate per share amount (payable in kind) of all non-cash dividends
      or other distributions other than a dividend payable in shares of Common Stock
      or a subdivision of the outstanding shares of Common Stock (by reclassification
      or otherwise), declared on the Common Stock since the immediately preceding
      Quarterly Dividend Payment Date, or, with respect to the first Quarterly
      Dividend Payment Date, since the first issuance of any share or fraction of
      a
      share of Series A Participating Preferred Stock.

     

    (b)           
      The Company shall declare a dividend or distribution on the Series A
      Participating 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 on outstanding shares of Series A Participating
      Preferred Stock from the Quarterly Dividend Payment Date immediately preceding
      the date of issue of such shares of Series A Participating Preferred Stock,
      unless the date of issue of such shares is prior to the record date for the
      first Quarterly Dividend Payment Date, in which case dividends on such shares
      shall begin to accrue from the date of issue of such shares, or unless the
      date
      of issue is a Quarterly Dividend Payment Date or is a date after the record
      date
      for the determination of holders of shares of Series A Participating 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 from such Quarterly Dividend Payment Date. Accrued but unpaid dividends
      shall not bear interest. Dividends paid on the shares of Series A Participating
      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
      may fix a record date for the determination of holders of shares of Series
      A
      Participating 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
      4.    Voting
      Rights.  The holders of shares of Series A Participating
      Preferred Stock shall have the following voting rights:

     

    (a)       Each
      share of Series A Participating Preferred Stock shall entitle the holder thereof
      to 1,000 votes on all matters submitted to a vote of the stockholders of the
      Company .

     

    (b)       Except
      as otherwise provided herein or by law, the holders of shares of Series A
      Participating 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 Company .

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (c)       Except
      as required by law, holders of Series A Participating 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
      5.        Certain
      Restrictions.

     

    (a)       The
      Company 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 A
      Participating Preferred Stock unless concurrently therewith it shall declare
      a
      dividend on the Series A Participating Preferred Stock as required by Section
      3
      hereof.

     

    (b)       Whenever
      quarterly dividends or other dividends or distributions payable on the Series
      A
      Participating Preferred Stock as provided in Section 3 are in arrears,
      thereafter and until all accrued and unpaid dividends and distributions, whether
      or not declared, on shares of Series A Participating Preferred Stock outstanding
      shall have been paid in full, the Company shall not (i) declare or pay dividends
      on, make any other distributions on, or redeem or purchase or otherwise acquire
      for consideration any shares of stock ranking junior (either as to dividends
      or
      upon liquidation, dissolution or winding up) to the Series A Participating
      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 A Participating Preferred
      Stock, except dividends paid ratably on the Series A Participating Preferred
      Stock and all such parity stock on which dividends are payable or in arrears
      in
      proportion to the total amounts to which the holders of all such shares are
      then
      entitled; (iii) redeem or purchase or otherwise acquire for consideration shares
      of any stock ranking on a parity (either as to dividends or upon liquidation,
      dissolution or winding up) with the Series A Participating Preferred Stock,
      provided that the Company may at any time redeem, purchase or otherwise acquire
      shares of any such parity stock in exchange for shares of any stock of the
      Company ranking junior (either as to dividends or upon dissolution, liquidation
      or winding up) to the Series A Participating Preferred Stock; (iv) purchase
      or
      otherwise acquire for consideration any shares of Series A Participating
      Preferred Stock, or any shares of stock ranking on a parity with the Series
      A
      Participating Preferred Stock, except in accordance with a purchase offer made
      in writing or by publication (as determined by the Board) to all holders of
      such
      shares upon such terms as the Board, 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.

     

    (c)       The
      Company shall not permit any subsidiary of the Company to purchase or otherwise
      acquire for consideration any shares of stock of the Company unless the Company
      could, under paragraph (a) of this Section 5, purchase or otherwise acquire
      such
      shares at such time and in such manner.

     

    Section
      6.       Reacquired
      Shares.  Any shares of Series A Participating Preferred Stock
      purchased or otherwise acquired by the Company  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 newseries
      of preferred stock to be created by resolution or resolutions of the Board,
      subject to the conditions and restrictions on issuance set forth herein and,
      in
      the Articles of Incorporation, as then amended.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    Section
      7.       Liquidation, Dissolution
      or
      Winding Up.  Upon any liquidation, dissolution or winding up of
      the Company, the holders of shares of Series A Participating Preferred Stock
      shall be entitled to receive an aggregate amount per share equal to 1,000 times
      the aggregate amount to be distributed per share to holders of shares of Common
      Stock plus an amount equal to any accrued and unpaid dividends on such shares
      of
      Series A Participating Preferred Stock.

     

    Section
      8.        Consolidation, Merger,
      etc.  In case the Company shall enter into any consolidation,
      merger, combination or other transaction in which the shares of Common Stock
      are
      exchanged for or changed into other stock or securities, cash and/or any other
      property, then in any such case the shares of Series A Participating Preferred
      Stock shall at the same time be similarly exchanged or changed in an amount
      per
      share equal to 1,000 times the aggregate amount of stock, securities, cash
      and/or any other property (payable in kind), as the case may be, into which
      or
      for which each share of Common Stock is changed or exchanged.

     

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

     

    Section
      10.       Ranking.  The
      Series A Participating Preferred Stock shall rank junior to all other series
      of
      the Company’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
      11.       Amendment.  The
      Articles of Incorporation of the Company shall not be further amended in any
      manner which would materially alter or change the powers, preference or special
      rights of the Series A Participating Preferred Stock so as to affect them
      adversely without the affirmative vote of the holders of a majority of the
      outstanding shares of Series A Participating Preferred Stock, voting separately
      as a class.

     

    Section
      12.       Fractional
      Shares.  Series A Participating 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 A Participating Preferred Stock.

     

    RESOLVED
      FURTHER, that the President, Chief Executive Officer or any Vice President
      and
      the Secretary or any Assistant Secretary of this Company 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 Marshall Islands law and to take such actions as they
      may
      deem necessary or appropriate to carry out the intent of the foregoing
      resolution.”

     

    

    REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
            EXECUTION
              COPY

          

        

      

    

    

    

    

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

    

    Executed
      in Athens, Greece on January 18, 2008.

    

    

    
      	 	
              
              

              ________________________________

              George
                Economou

              President
                & Chief Executive Officer

            
	 	 
	 	
              
              

              ________________________________

              Olga
                Lambrianidou

              Corporate
                Secretary

            
	 	 
	 	 

    

    

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Exhibit
      B

    
      FORM
        OF RIGHTS CERTIFICATE

       

       

    

    

    
      	 	 	 
	
              DRYSHIPS
                INC.

              INCORPORATED
                UNDER THE LAWS

              OF
                THE MARSHALL ISLANDS

            	
              SHARES

            	 
	
            	
            	
              SEE
                REVERSE FOR

              CERTAIN
                DEFINITIONS

            
	
            	
            	
            
	
            	
            	
              CUSIP
                Y2109Q 10 1

            
	
              THIS
                IS TO CERTIFY THAT

            	
            	
            
	
            	
              SPECIMEN

            	
            
	
            	
            	
            
	
              IS
                THE OWNER OF

            	
            	
            
	
            	
            	
            
	
              FULLY-PAID
                AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $.01 EACH OF THE COMMON
                STOCK OF

            
	
            	
            	
            
	
              DRYSHIPS
                INC.

            
	 	 	 
	
            	
            	
            
	
              transferable
                on the books of the Corporation by the holder hereof in person or
                by duly
                authorized attorney upon surrender of this certificate properly
                endorsed.

            
	 
	
            
	
              This
                certificate is not valid unless countersigned and registered by the
                Transfer Agent and Registrar.

            
	
              WITNESS
                the facsimile seal of the Corporation and the facsimile signatures
                of its
                duly authorized officers.

            
	
              Dated:

            
	 
	
            
	
              [Signature]

            	
            	
              [Signature]

            
	 
	
            
	
              CHIEF
                FINANCIAL OFFICER, VICE PRESIDENT

            	
               

            	
              CHAIRMAN,
                CHIEF EXECUTIVE OFFICER, PRESIDENT

            
	 	 	 	 	 	 

    

    
      	
              COUNTERSIGNED
                AND REGISTERED:

            
	
              AMERICAN
                STOCK TRANSFER & TRUST COMPANY

            
	
              TRANSFER
                AGENT AND REGISTRAR

            
	
              (New
                York, N.Y.)

            
	 
	
            
	
              by:

            	
            
	 	 
	
            	
            
	
            	
              AUTHORIZED
                SIGNATURE

               

               

            

    

     

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    The
      following abbreviations, which used in the inscription on the face of this
      certificate, shall be construed as though they were written out in full
      according to applicable laws or regulations:

     

    
      	
              TEN
                COM

            	
              —

            	
              as
                tenants in common

            	
            	
              UNIF
                GIFT MIN ACT

            	
              —

            	
              ......................Custodian..................

            
	
              TEN
                ENT

            	
              —

            	
              as
                tenants by the entireties

            	
            	
            	
            	
              (Cust)                                (Minor)

            
	
              JT
                TEN

            	
              —

            	
              as
                joint tenants with right of

            	
            	
            	
            	
              under
                Uniform Gifts to Minors

            
	
            	
            	
              survivorship
                and not as tenantsin common

            	
            	
            	
            	
              Act.................................................

            
	
            	
            	
               

            	
            	
            	
            	
              (State)

            

    

    Additional
      abbreviations may also be used though not in the above list.

     

    FOR
      VALUE
      RECEIVED,                                                                         
      hereby sell, assign and transfer unto

     

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER

    IDENTIFYING
      NUMBER OF ASSIGNEE

     

    
      	
            	 
	
            	 

    

    
      	
               

               

               

            
	
              (PLEASE
                PRINT
                OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)

            
	
               

            	
               

            
	
               

            
	
               

            	
               

            
	
               

            
	
               

            	
               

            
	
               

            	
              Shares

            
	
              of
                the capital stock represented by the within Certificate, and do hereby
                irrevocably constitute and appoint

            	
               

            
	
               

            	
               

            
	
               

            	
              Attorney

            
	
              to
                transfer the said stock on the books of the within named Corporation
                with
                full power of substitution in the premises.

            	
               

            
	
               

            	
               

            
	
               

            	
               

            
	 	 	 

    

    
      	
              Dated

            	
            	
            	
            
	
            	
            	
            	
            
	
            	
            	
            	
            
	
            	
            	
            	
              NOTICE:
                The signature to this assignment must correspond with the name as
                written
                upon the face of the certificate in every particular without alteration
                or
                enlargement or any change whatever. The signature of the person executing
                this power must be guaranteed by an Eligible Credit Union, or a Savings
                Association participating in a Medallion program approved by the
                Securities Transfer Association, Inc.

            
	
            	
            	
            	
            

    

    
      	
               

            	
               
                

            

    

    Signature(s)
      Guaranteed

     

    
      	
              By

            	
            
	
               

            	
              The
                signature(s)
                must be guaranteed by an eligible guarantor institution (banks,
                stockbrokers, savings and loan associations and credit unions with
                membership in an 
approved signature guarantee medallion program),
                pursuant to S.E.C. Rule 17Ad-15.  

            

    

     

    KEEP
      THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROYED
      THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
      OF A REPLACEMENT CERTIFICATE.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Exhibit
      C

     

    SUMMARY
      OF RIGHTS

     

    
      	
              Distribution
                and Transfer of Rights; Distribution Date:

              
              

              
              

            	
              The
                rights will separate from the common stock and become exercisable
                after
                (1) a person or group acquires ownership of 15% or more of the company's
                common stock or (2) the 10th business day (or such later date as
                determined by the company’s board of directors) after a person or group
                announces a tender or exchange offer which would result in that person
                or
                group holding 15% or more of the company's common stock.

              
              

              
              

            
	
               

              Preferred
                Stock Purchaseable Upon Exercise of Rights:

              
              

            	
               

              On
                the Distribution Date, each holder of a right will be entitled to
                purchase
                for U.S. $130 (the “Exercise Price”) a fraction (1/1000th) of one share of
                the company’s preferred stock which has similar economic terms as one
                share of common stock.

              
              

              
              

            
	
               

              Flip-in:

              
              

            	
               

              If
                an acquiring person (an “Acquiring Person”) acquires more than 15% of the
                company's common stock then each holder of a right (except that acquiring
                person) will be entitled to buy at the Exercise Price, a number of
                shares
                of the company's common stock which has a market value of twice the
                Exercise Price.

              
              

              
              

            
	
               

              Flip-over:

              
              

            	
               

              If
                after an Acquiring Person acquires more than 15% of the company's
                common
                stock, the company merges into another company (either as the surviving
                corporation or as the disappearing entity) or the company sells more
                than
                50% of its assets or earning power, then each holder of a right (except
                for those owned by the acquirer) will be entitled to purchase at
                the
                Exercise Price, a number of shares of common stock of the surviving
                entity
                which has a then current market value of twice the Exercise
                Price.

              
              

              
              

            

       

      	
              Exchange
                Provision:

              
              

            	
              Any
                time after the date an Acquiring Person obtains more than 15% of
                the
                company's common stock and before that Acquiring Person acquires
                more than
                50% of the company's outstanding common stock, the company may exchange
                each right owned by all other rights holders, in whole or in part,
                for one
                share of the company's common stock.

              
              

              
              

            
	
               

              Redemption
                of Rights:

              
              

            	
               

              The
                company can redeem the rights at any time prior to a public announcement
                that a person has acquired ownership of 15% or more of the company's
                common stock.

              
              

              
              

            
	
               

              Expiration
                of Rights:

              
              

            	
               

              The
                rights expire on the earliest of (1) February 4, 2018 or (2) the
                exchange
                or redemption of the rights as described above.

              
              

            
	
               

              Amendment
                of Terms of Rights:

              
              

            	
               

              The
                terms of the rights and the Stockholder Rights Plan may be amended
                without
                the consent of the rights holders at any time on or prior to the
                Distribution Date.  After the Distribution Date, the terms of
                the rights and the Stockholder Rights Plan may be amended to make
                changes,
                which do not adversely affect the rights of the rights holders (other
                than
                the Acquiring Person).

              
              

            
	
               

              Voting
                Rights:

              
              

            	
               

              The
                rights will not have any voting rights.

              
              

            
	
               

              Anti-dilution
                Provisions:

              
              

            	
               

              The
                rights will have the benefit of certain customary anti-dilution
                protections.

              
              

            

    

    

    SK
      23113 0002 845259
      v3

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