Document:

Form of Security Agreement

 Exhibit 10.42 
 SECURITY AGREEMENT 
 THIS SECURITY AGREEMENT (this “Agreement”), dated as of
November     , 2008, is made between Unidym, Inc., a Delaware corporation (“Debtor”) and TEL Venture Capital, Inc., a Delaware corporation (“Secured Party”). 
 Debtor and Secured Party hereby agree as follows: 
 SECTION 1 Definitions; Interpretation. 
 (a) As used in this Agreement, the following terms shall have the following
meanings: 
 “Collateral” has the meaning set forth in Section 2. 
 “Contingent Obligations” means the obligations of Debtor to pay Secured Party under or in connection with the exercise of Secured
Party’s put rights (the “Put Rights”) pursuant to Section 5.1 and 5.2 of the Subscription Agreement, including interest that accrues after the commencement by or against Debtor of any bankruptcy or insolvency proceeding naming
such Person as the debtor in such proceeding. 
 “Event of Default” has the meaning set forth in Section 7. 

“Lien” means any mortgage, deed of trust, pledge, security interest, assignment, deposit arrangement, charge or encumbrance, lien, or
other type of preferential arrangement. 
 “Partnership and LLC Collateral” has the meaning set forth in Section 5.

 “Permitted Lien” means (i) any Lien in favor of Secured Party; (ii) any Lien that is subordinate to the Lien on
the Collateral created by this Agreement; (iii) any Liens existing as of the date hereof and disclosed in writing to Secured Party; (iv) Liens (A) upon or in any property acquired or held by Debtor to secure the purchase price of such
property or indebtedness incurred solely for the purpose of financing the acquisition of such property, or (B) existing on such property at the time of its acquisition, provided that the Lien is confined solely to the property so
acquired and improvements thereon; and (v) other Liens which arise in the ordinary course of business and do not materially impair Debtor’s ownership or use of the Collateral or the value thereof. 
 “Person” means an individual, corporation, partnership, joint venture, trust, unincorporated organization, governmental agency or
authority, or any other entity of whatever nature. 
 “Pledged Collateral” means Debtor’s (i) investment property
and (ii) Partnership and LLC Collateral, including any ownership interests in any subsidiaries of Debtor. 
 “Pledged Collateral
Agreements” means any shareholders agreement, operating agreement, partnership agreement, voting trust, proxy agreement or other agreement or understanding with respect to any Pledged Collateral. 
 “Subscription Agreement” means the Subscription Agreement dated November     , 2008 between Debtor and
Secured Party. 
  

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 “UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect
in the State of California. 
 (b) Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the
meanings assigned to them in the UCC. 
 (c) In this Agreement, (i) the meaning of defined terms shall be equally applicable to both the
singular and plural forms of the terms defined; and (ii) the captions and headings are for convenience of reference only and shall not affect the construction of this Agreement. 
 SECTION 2 Security Interest. As security for the payment and performance of the Contingent Obligations, Debtor hereby grants to Secured Party a
security interest in all of Debtor’s right, title and interest in, to and under all of its personal property, wherever located and whether now existing or owned or hereafter acquired or arising, including all accounts, chattel paper, commercial
tort claims, deposit accounts, documents, equipment (including all fixtures), general intangibles, instruments, inventory, investment property, letter-of-credit rights, other goods, money and all products, proceeds and supporting obligations of any
and all of the foregoing (collectively, the “Collateral”); provided that Collateral does not include Debtor’s shares in Ensysce Biosciences and the Debtor’s License Agreement dated April 17, 2007 with William Marsh Rice
University (the “Rice University Agreement”). This Agreement shall create a continuing security interest in the Collateral which shall remain in effect until terminated in accordance with Section 18 hereof. 
 SECTION 3 Financing Statements and other Action. 
 (a) Debtor hereby authorizes Secured Party to file at any time and from time to time any financing statements describing the Collateral, and Debtor shall execute and deliver to Secured Party, and Debtor hereby
authorizes Secured Party to file (with or without Debtor’s signature), at any time and from time to time, all amendments to financing statements, assignments, continuation financing statements, termination statements, account control
agreements, and other documents and instruments, in form reasonably satisfactory to Secured Party, as Secured Party may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the security interest of
Secured Party in the Collateral and to accomplish the purposes of this Agreement. Without limiting the generality of the foregoing, Debtor ratifies and authorizes the filing by Secured Party of any financing statements filed prior to the date
hereof. 
 (b) Upon request of Secured Party, Debtor will join with Secured Party in notifying any third party who has possession of any
Collateral of Secured Party’s security interest therein and obtaining an acknowledgment from the third party that it is holding the Collateral for the benefit of Secured Party. 
 (c) Upon request of Secured Party, Debtor (i) shall cause certificates to be issued in respect of any uncertificated Pledged Collateral,
(ii) shall exchange certificated Pledged Collateral for certificates of larger or smaller denominations, and (iii) shall cause any securities intermediaries to show on their books that Secured Party is the entitlement holder with respect
to any Pledged Collateral. 
  

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 (d) Debtor will not create any chattel paper without placing a legend on the chattel paper acceptable to
Secured Party indicating that Secured Party has a security interest in the chattel paper. 
 SECTION 4 Representations and Warranties.
Debtor represents and warrants to Secured Party that: 
 (a) Debtor is duly organized, validly existing and in good standing under the law of
the jurisdiction of its organization and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. 
 (b) The execution, delivery and performance by Debtor of this Agreement have been duly authorized by all necessary action of Debtor, and this Agreement constitutes the legal, valid and binding obligation of Debtor,
enforceable against Debtor in accordance with its terms. 
 (c) No authorization, consent, approval, license, exemption of, or filing or
registration with, any governmental authority or agency, or approval or consent of any other Person, is required for the due execution, delivery or performance by Debtor of this Agreement, except for any filings necessary to perfect any Liens on any
Collateral. 
 (d) Debtor’s chief executive office and principal place of business (as of the date of this Agreement) is located at the
address set forth in Schedule 1; Debtor’s jurisdiction of organization and organizational identification number are set forth in Schedule 1; Debtor’s exact legal name is as set forth in the first paragraph of this
Agreement; and all other locations where Debtor conducts business or Collateral is kept (as of the date of this Agreement) are set forth in Schedule 2. 
 (e) Debtor has rights in or the power to transfer the Collateral, and Debtor is the sole and complete owner of the Collateral, free from any Lien other than Permitted Liens. 
 (f) All of Debtor’s U.S. and foreign patents and patent applications, copyrights (whether or not registered), applications for copyright,
trademarks, service marks and trade names (whether registered or unregistered), and applications for registration of such trademarks, service marks and trade names, that are considered “Collateral” hereunder are set forth in Schedule
1. 
 (g) To the Debtor’s knowledge, no control agreements exist with respect to any Collateral other than control agreements in
favor of Secured Party. 
 (h) Schedule 3 lists Debtor’s ownership interests in each of its subsidiaries as of the date hereof.
Debtor asserts and Secured Party expressly acknowledges that Ensysce Biosciences and Nexeon Medsystems are not subsidiaries. 
 (i) Debtor is
and will be the legal record and beneficial owner of all Pledged Collateral, and has and will have good and marketable title thereto. 
 (j)
Except as disclosed in writing to Secured Party, there are no Pledged Collateral Agreements which affect or relate to the voting or giving of written consents with respect to any of the Pledged Collateral. To the Debtor’s knowledge, each
Pledged Collateral 
  

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 Agreement contains the entire agreement between the parties thereto with respect to the subject matter thereof, has not
been amended or modified, and is in full force and effect in accordance with its terms. To the best knowledge of Debtor, there exists no material violation or material default under any Pledged Collateral Agreement by Debtor or the other parties
thereto. Debtor has not knowingly waived or released any of its material rights under or otherwise consented to a material departure from the terms and provisions of any Pledged Collateral Agreement. 
 SECTION 5 Covenants. So long as any of the Contingent Obligations remain unsatisfied, Debtor agrees that: 
 (a) Debtor shall appear in and defend any action, suit or proceeding which may affect to a material extent its title to, or right or interest in, or
Secured Party’s right or interest in, the Collateral, and shall do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Collateral. 
 (b) Debtor shall comply in all material respects with all laws, regulations and ordinances, and all policies of insurance, relating in a material way to
the possession, operation, maintenance and control of the Collateral. 
 (c) Debtor shall give prompt written notice to Secured Party (and in
any event not later than 30 days following any change described below in this subsection) of: (i) any change in the location of Debtor’s chief executive office or principal place of business; (ii) any change in the locations set forth
in Schedule 1; (iii) any change in its name; (iv) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading; (v) any change in its registration
as an organization (or any new such registration); or (vi) any change in its jurisdiction of organization; provided that Debtor shall not locate any Collateral outside of the United States nor shall Debtor change its jurisdiction of
organization to a jurisdiction outside of the United States. 
 (d) Debtor shall carry and maintain in full force and effect, at its own
expense and with financially sound and reputable insurance companies, insurance with respect to the Collateral in such amounts, with such deductibles and covering such risks as is customarily carried by companies engaged in the same or similar
businesses and owning similar properties in the localities where Debtor operates. 
 (e) Debtor shall keep the Collateral free of all Liens
except Permitted Liens. 
 (f) Debtor shall pay and discharge all taxes, fees, assessments and governmental charges or levies imposed upon it
with respect to the Collateral prior to the date on which penalties attach thereto, except to the extent such taxes, fees, assessments or governmental charges or levies are being contested in good faith by appropriate proceedings. 
 (g) Debtor shall maintain and preserve its legal existence, its rights to transact business and all other rights, franchises and privileges necessary or
desirable in the normal course of its business and operations and the ownership of the Collateral. 
 (h) If and when Debtor shall obtain
rights to any new patents (other than rights to patents under the Rice University Agreement), trademarks, service marks, trade names or copyrights, or otherwise acquire or become entitled to the benefit of, or apply for registration of, any of the
foregoing, Debtor (i) shall promptly notify Secured Party thereof and (ii) hereby authorizes Secured Party to modify, amend, or supplement Schedule 2 and from time to time to include any of the foregoing and make all necessary or
appropriate filings with respect thereto. 
  

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 (i) Without limiting the generality of subsection (i), Debtor shall not register with the U.S. Copyright
Office any unregistered copyrights (whether in existence on the date hereof or thereafter acquired, arising, or developed) unless Debtor provides Secured Party with written notice of its intent to register such copyrights not less than 30 days prior
to the date of the proposed registration. 
 (j) At Secured Party’s request, Debtor will use commercially reasonable efforts to obtain
from each Person from whom Debtor leases any premises, and from each other Person at whose premises any Collateral is at any time present (including any bailee, warehouseman or similar Person), any such collateral access, subordination, landlord
waiver, bailment, consent and estoppel agreements as Secured Party may require, in form and substance satisfactory to Secured Party. 
 (k)
Debtor shall comply with all of its obligations under any Pledged Collateral Agreements to which it is a party and shall enforce all of its rights thereunder. In the event that Debtor acquires rights in any subsidiary after the date hereof, it shall
deliver to Secured Party a completed supplement to Schedule 3, reflecting such new subsidiary. Notwithstanding the foregoing, it is understood and agreed that the security interest of Secured Party shall attach to any such subsidiary
immediately upon Debtor’s acquisition of rights therein and shall not be affected by the failure of Debtor to deliver any such supplement to Schedule 3. 
 SECTION 6 Rights of Secured Party; Authorization; Appointment. 
 (a) At the request of Secured Party,
upon the occurrence and during the continuance of any Event of Default, all remittances received by Debtor in respect of its accounts and other rights to payment shall be held in trust for Secured Party and, in accordance with Secured Party’s
instructions, remitted to Secured Party or deposited to an account of Secured Party in the form received (with any necessary endorsements or instruments of assignment or transfer). 
 (b) At the request of Secured Party, upon the occurrence and during the continuance of any Event of Default, Secured Party shall be entitled to receive
all distributions and payments of any nature with respect to any Pledged Collateral or instrument Collateral, and all such distributions or payments received by the Debtor shall be held in trust for Secured Party and, in accordance with Secured
Party’s instructions, remitted to Secured Party or deposited to an account designated by Secured Party in the form received (with any necessary endorsements or instruments of assignment or transfer). Further, upon the occurrence and during the
continuance of any Event of Default any such distributions and payments with respect to any Pledged Collateral held in any securities account shall be held and retained in such securities account, in each case as part of the Collateral hereunder,
and Secured Party shall have the right, following prior written notice to the Debtor, to vote and to give consents, ratifications and waivers with respect to any Pledged Collateral and instruments, and to exercise all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining thereto, as if Secured Party were the absolute owner thereof; provided that Secured Party shall have no duty to exercise any of the foregoing rights afforded to it and shall
not be responsible to the Debtor or any other Person for any failure to do so or delay in doing so. 
  

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 (c) Secured Party shall have the right to, in the name of Debtor, or in the name of Secured Party or
otherwise, upon notice to but without the requirement of assent by Debtor, and Debtor hereby constitutes and appoints Secured Party (and any of Secured Party’s officers, employees or agents designated by Secured Party) as Debtor’s true and
lawful attorney-in-fact, with full power and authority to: (i) sign and file any of the financing statements and other documents and instruments which must be executed or filed to perfect or continue perfected, maintain the priority of or
provide notice of Secured Party’s security interest in the Collateral; (ii) assert, adjust, sue for, compromise or release any claims under any policies of insurance; (iii) give notices of control, default or exclusivity (or similar
notices) under any account control agreement or similar agreement with respect to exercising control over deposit accounts or securities accounts; and (iv) execute any and all such other documents and instruments, and do any and all acts and
things for and on behalf of Debtor, which Secured Party may deem reasonably necessary or advisable to maintain, protect, realize upon and preserve the Collateral and Secured Party’s security interest therein and to accomplish the purposes of
this Agreement. Secured Party agrees that, except upon and during the continuance of an Event of Default, it shall not exercise the power of attorney, or any rights granted to Secured Party, pursuant to clauses (ii), (iii) and (iv). The
foregoing power of attorney is coupled with an interest and irrevocable so long as the Contingent Obligations have not been paid and performed in full. Debtor hereby ratifies, to the extent permitted by law, all that Secured Party shall lawfully and
in good faith do or cause to be done by virtue of and in compliance with this Section 6. 
 SECTION 7 Events of Default. Any of
the following events which shall occur and be continuing shall constitute an “Event of Default”: 
 (a) Debtor shall fail to pay
when due any amount payable under the Subscription Agreement following the exercise by the Secured Party of its Put Right. 
 (b) Any
representation or warranty by Debtor under or in connection with this Agreement shall prove to have been incorrect in any material respect when made or deemed made. 
 (c) Debtor shall fail to perform or observe in any material respect any other term, covenant or agreement contained in this Agreement on its part to be performed or observed and any such failure shall remain
unremedied for a period of 30 days from the occurrence thereof. 
 (d) Debtor shall admit in writing its inability to, or shall fail
generally or be generally unable to, pay its debts (including its payrolls) as such debts become due, or shall make a general assignment for the benefit of creditors; or Debtor shall file a voluntary petition in bankruptcy or a petition or answer
seeking reorganization, to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act of 1978, as amended or recodified from time to time (the “Bankruptcy Code”) or under any other state or
federal law relating to bankruptcy or reorganization granting relief to debtors, whether now or hereafter in effect, or shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition filed
against Debtor pursuant to the Bankruptcy Code or any such other state or federal law; or Debtor shall be adjudicated a bankrupt, or shall apply for or consent to the appointment of any custodian, receiver or trustee for all or any substantial part
of Debtor’s property, or shall take any action to authorize any of the actions set forth above in this paragraph; or an involuntary petition seeking any of the relief specified in this paragraph shall be filed 
  

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 against Debtor; or any order for relief shall be entered against Debtor in any involuntary proceeding under the
Bankruptcy Code or any such other state or federal law referred to in this subsection (d). 
 (e) Debtor shall (i) liquidate, wind
up or dissolve (or suffer any liquidation, wind-up or dissolution), except to the extent expressly permitted by the Note, (ii) suspend its operations other than in the ordinary course of business, or (iii) take any action to authorize any
of the actions or events set forth above in this subsection (e). 
 (f) Any material impairment in the value of the Collateral or the
priority of Secured Party’s Lien hereunder. 
 (g) Any levy upon, seizure or attachment of any of the Collateral which shall not have
been rescinded or withdrawn. 
 (h) Any loss, theft or substantial damage to, or destruction of, any material portion of the Collateral
(unless within 10 days after the occurrence of any such event, Debtor furnishes to Secured Party evidence satisfactory to Secured Party that the amount of any such loss, theft, damage to or destruction of the Collateral is fully insured under
policies naming Secured Party as an additional named insured or loss payee). 
 SECTION 8 Remedies. 
 (a) Upon the occurrence and during the continuance of any Event of Default, Secured Party may declare any of the Contingent Obligations to be immediately
due and payable and shall have, in addition to all other rights and remedies granted to it in this Agreement, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing,
(i) Secured Party may peaceably and without notice enter any premises of Debtor, take possession of any the Collateral, remove or dispose of all or part of the Collateral on any premises of such Debtor or elsewhere, or, in the case of
equipment, render it nonfunctional, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the
Collateral, as Secured Party may determine; (ii) Secured Party may require any Debtor to assemble all or any part of the Collateral and make it available to Secured Party at any place and time designated by Secured Party; (iii) Secured
Party may secure the appointment of a receiver of the Collateral or any part thereof (to the extent and in the manner provided by applicable law); (iv) Secured Party may sell, resell, lease, use, assign, license, sublicense, transfer or
otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of Debtor’s assets, without charge or liability to Secured Party
therefor) at public or private sale, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit, or for future delivery without assumption of any credit risk, all as Secured Party deems advisable;
provided, however, that Debtor shall be credited with the net proceeds of sale only when such proceeds are finally collected by Secured Party. Debtor recognizes that Secured Party may be unable to make a public sale of any or all of
the Pledged Collateral, by reason of prohibitions contained in applicable securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not with a view to any distribution thereof shall
be considered a commercially reasonable sale. Secured Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of

  

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 any right or equity of redemption, which right or equity of redemption Debtor hereby releases, to the extent permitted by
law. Secured Party shall give Debtor such notice of any private or public sales as may be required by the UCC or other applicable law. 
 (b)
For the purpose, and solely for the purpose, of enabling Secured Party to exercise its rights and remedies under this Section 8 or otherwise upon the occurrence and during the continuation of any Event of Default under this Agreement, Debtor
hereby grants to Secured Party an irrevocable, non-exclusive and assignable license (exercisable without payment or royalty or other compensation to Debtor) to use, license or sublicense any intellectual property Collateral; provided, however, that
unless and until there has been an Event of Default, the license granted hereby shall not include any intellectual property Collateral that is owned by a third party and licensed to Debtor, the license of which hereunder would require the approval
of or notice to such third party. Upon the occurrence and during the continuation of any Event of Default under this Agreement, Debtor will use commercially reasonable efforts to obtain the approval of such third party or to take any other action
reasonable necessary to include such intellectual property Collateral in the license hereunder. 
 (c) Secured Party shall not have any
obligation to clean up or otherwise prepare the Collateral for sale. Secured Party has no obligation to attempt to satisfy the Contingent Obligations by collecting them from any other Person liable for them, and Secured Party may release, modify or
waive any Collateral provided by any other Person to secure any of the Contingent Obligations, all without affecting Secured Party’s rights against Debtor. Debtor waives any right it may have to require Secured Party to pursue any third Person
for any of the Contingent Obligations. Secured Party may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. Secured Party may sell the Collateral without giving any warranties as to the Collateral. Secured Party may specifically disclaim any warranties of title or the like. This procedure will not be
considered adversely to affect the commercial reasonableness of any sale of the Collateral. If Secured Party sells any of the Collateral upon credit, Debtor will be credited only with payments actually made by the purchaser, received by Secured
Party and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Secured Party may resell the Collateral and Debtor shall be credited with the proceeds of the sale. 
 (d) To the extent Debtor uses the proceeds of any of the Contingent Obligations to purchase Collateral, Debtor’s repayment of the Contingent
Obligations shall apply on a “first-in, first-out” basis so that the portion of the Contingent Obligations used to purchase a particular item of Collateral shall be paid in the chronological order the Debtor purchased the Collateral.

 (e) The cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in
respect of the Collateral the application of which is not otherwise provided for herein, shall be applied first, to the payment of the reasonable costs and expenses of Secured Party in exercising or enforcing its rights hereunder and in
collecting or attempting to collect any of the Collateral, and to the payment of all other amounts payable to Secured Party pursuant to Section 12 hereof; and second, to the payment of the Contingent Obligations. Any surplus thereof
which exists after payment and performance in full of the Contingent Obligations shall be promptly paid over to Debtor or otherwise disposed of in accordance with the UCC or other applicable law. Debtor shall remain liable to Secured Party for any
deficiency which exists after any sale or other disposition or collection of Collateral. 
  

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 SECTION 9 Certain Waivers. Debtor waives, to the fullest extent permitted by law, (i) any
right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Contingent Obligations; (ii) any right to require
Secured Party (A) to proceed against any Person, (B) to exhaust any other collateral or security for any of the Contingent Obligations, (C) to pursue any remedy in Secured Party’s power, or (D) to make or give any
presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Collateral; and (iii) all claims, damages, and demands against Secured Party arising out of the
repossession, retention, sale or application of the proceeds of any sale of the Collateral. 
 SECTION 10 Notices. All notices or
other communications hereunder shall be in writing (including by facsimile transmission or by email) and mailed (by certified or registered mail), sent or delivered to the respective parties hereto at or to their respective addresses, facsimile
numbers or email addresses set forth below their names on the signature pages hereof, or at or to such other address, facsimile number or email address as shall be designated by any party in a written notice to the other parties hereto. All such
notices and communications shall be effective (i) if delivered by hand, sent by certified or registered mail or sent by an overnight courier service, when received; and (ii) if sent by facsimile transmission or electronic mail, when sent.
Electronic mail may be used only for routine communications, such as distribution of informational documents or documents for execution by the parties thereto, and may not be used for any other purpose. 
 SECTION 11 No Waiver; Cumulative Remedies. No failure on the part of Secured Party to exercise, and no delay in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to Secured Party. 
 SECTION 12 Costs and Expenses; Indemnification. 
 (a) Debtor agrees to pay on demand all costs and expenses of Secured Party, and the fees and disbursements of counsel, in connection with the enforcement or attempted enforcement of, and preservation of any rights or
interests under, this Agreement and the Note, including in any out-of-court workout or other refinancing or restructuring or in any bankruptcy case, and the protection, sale or collection of, or other realization upon, any of the Collateral,
including all expenses of taking, collecting, holding, sorting, handling, preparing for sale, selling, or the like, and other such expenses of sales and collections of Collateral. 
 (b) Debtor hereby agrees to indemnify Secured Party, any affiliate thereof, and their respective directors, officers, employees, agents, counsel and
other advisors (each an “Indemnified Person”) against, and hold each of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever, including the reasonable fees and disbursements of counsel to an Indemnified Person, which may be imposed on or incurred by any Indemnified 
  

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 Person, or asserted against any Indemnified Person by any third party or by Debtor, in any way relating to or arising out
of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the
transactions contemplated hereby or the Collateral, or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a
third party or by Debtor (the “Indemnified Liabilities”); provided that Debtor shall not be liable to any Indemnified Person for any portion of such Indemnified Liabilities to the extent they are found by a final decision of a court
of competent jurisdiction to have resulted from such Indemnified Person’s gross negligence or willful misconduct. If and to the extent that the foregoing indemnification is for any reason held unenforceable, Debtor agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. 
 (c) Any
amounts payable to Secured Party under this Section 12 or otherwise under this Agreement if not paid upon demand shall bear interest from the date of such demand until paid in full, at the rate of 9% per annum or the highest rate permitted
by law, if less. 
 SECTION 13 Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by
Debtor, Secured Party and their respective successors and assigns and shall bind any Person who becomes bound as a debtor to this Agreement. 
 SECTION 14 Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of California, except as required by mandatory provisions of law and to the extent the validity or perfection of
the security interests hereunder, or the remedies hereunder, in respect of any Collateral are governed by the law of a jurisdiction other than California. 
 SECTION 15 Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and shall not be amended except by the written agreement of the
parties. 
 SECTION 16 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under all applicable laws and regulations. If, however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified
to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions
of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction. 
 SECTION 17 Counterparts. This
Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same
agreement. 
 SECTION 18 Termination. Upon payment and performance in full of all Contingent Obligations, the security interest
created under this Agreement shall terminate and Secured Party shall promptly execute and deliver to Debtor such documents and instruments reasonably requested by Debtor as shall be necessary to evidence termination of all security interests given
by Debtor to Secured Party hereunder. 
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 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. 

 

			
	Unidym, Inc.
		
	By	 	 /s/    Arthur L. Swift

		 	CEO and President
	
	 1430 O’Brien Drive, Suite G
 Menlo Park,
CA 94025

	
	TEL Venture Capital, Inc.
		
	By	 	 /s/    M. Yamaguchi

		 	Title: President
	
	 2953 Bunker Hill Lane, Suite 300
 Santa
Clara, CA 95054

  

 S-11EXECUTION DRAFT 

	 

AMENDED AND RESTATED 
RIGHTS
AGREEMENT 

 

AMTECH SYSTEMS, INC. 

 

and 

 

COMPUTERSHARE TRUST COMPANY, N.A.

Rights Agent 

Dated as of December 15, 2008

	 

TABLE OF CONTENTS 

	  	       	  	Page
  
	Section 1. 		Certain Definitions 	2
	Section
    2. 		Appointment of
      Rights Agent 	10
	Section 3. 		Issue of Rights Certificates 	10 
	Section
    4. 		Form of Rights
      Certificates 	12 
	Section 5. 		Countersignature and Registration 	13 
	Section
    6. 		Transfer, Split
      Up, Combination and Exchange of Rights Certificates; 	  
	  		Mutilated,
      Destroyed, Lost or Stolen Rights Certificates 	14 
	Section 7.  		Exercise of Rights; Purchase Price; Expiration Date of
      Rights 	15 
	Section
    8. 		Cancellation and
      Destruction of Rights Certificates 	17 
	Section 9. 		Reservation and Availability of Capital Stock 	17 
	Section
    10.		Securities
      Record Date 	19 
	Section 11. 		Adjustment of Purchase Price, Number and Kind of Shares or Number
      of 	 
	  		Rights 	19 
	Section
      12. 		Certificate of
      Adjusted Purchase Price or Number of Shares 	27 
	Section 13. 		Consolidation, Merger or Sale or Transfer of Assets or Earning
      Power 	27 
	Section
      14. 		Fractional
      Rights and Fractional Shares 	31 
	Section 15. 		Rights of Action 	32 
	Section
      16. 		Agreement of
      Rights Holders 	33 
	Section 17. 		Rights Certificate Holder Not Deemed a Stockholder 	33 
	Section
      18. 		Concerning the
      Rights Agent 	34 
	Section 19. 		Merger or Consolidation or Change of Name of Rights Agent
	34 
	Section
      20. 		Rights and
      Duties of Rights Agent 	35 
	Section 21. 		Change of Rights Agent 	37 
	Section
      22. 		Issuance of New
      Rights Certificates 	38 
	Section 23. 		Redemption and Termination  	38 
	Section
      24. 		Exchange
    	39 
	Section 25. 		Notice of Certain Events  	40 
	Section
      26. 		Notices
    	41 
	Section 27. 		Supplements and Amendments  	42 
	Section
      28. 		Successors 	42 
	Section 29. 		Determinations and Actions by the Board, Etc 	43 

i 

TABLE OF CONTENTS 
(continued)

	  	       	  	Page
  
	Section 30. 		Benefits of this Agreement  	43 
	Section
      31. 	 	Severability 	43 
	Section 32. 	 	Governing Law 	44 
	Section
      33. 		Counterparts 	44 
	Section 34. 		Descriptive Headings 	44 
	Section
      35. 		Force
      Majeure 	44 
	  
	EXHIBIT A 		CERTIFICATE OF DESIGNATION OF SERIES A PARTICIPATING 	  
	  		PREFERRED STOCK OF AMTECH SYSTEMS, INC. 	A-1 
	EXHIBIT B
    		FORM OF RIGHTS
      CERTIFICATE  	B-1

	EXHIBIT C 		SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK 	C-1 

ii 

AMENDED AND RESTATED 
RIGHTS
AGREEMENT 

     This
AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of December 15, 2008 (this
“Rights Agreement”), between Amtech Systems, Inc., an Arizona corporation (the
“Company”),
and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agent”). 

     WHEREAS,
on May 17, 1999 (the “Rights Dividend
Declaration Date”), the Board of Directors of
the Company (the “Board”) authorized the issuance of, and declared a dividend payable
in, one right for each share of Common Stock of the Company outstanding at the
close of business on June 9, 1999 (the “Record
Date”), each such right initially
representing the right to purchase one one-thousandth of a share of Preferred
Stock of the Company having the rights, powers and preferences set forth in the
form of Certificate of Designation, Preferences and Rights attached hereto as
Exhibit A,
upon the terms and subject to the conditions hereinafter set forth
(individually, a “Right” and collectively, the “Rights”); 

     WHEREAS,
the Board of Directors of the Company further authorized the issuance of one (as
such number may hereinafter be adjusted pursuant to the provisions of Section
11(q) hereof) Right for each share of Common Stock issued between the Record
Date (whether originally issued or delivered from the Company’s treasury) and
the Distribution Date, and, in certain circumstances provided in Section 22 of
this Agreement, after the Distribution Date;

     WHEREAS,
the Company and American Securities Transfer & Trust, Inc., as the original
rights agent, entered into the Rights Agreement, dated as of May 17, 1999 (the
“Prior
Agreement”);

     WHEREAS,
the Board has determined that it is in the best interest of the Company and its
shareholders to amend and restate the Prior Agreement, and the Rights Agent has
agreed to the amendment and restatement of the Prior Agreement, in each case, as
set forth herein;

     WHEREAS,
the Company has determined that, pursuant to Section 26 of the Prior Agreement,
the Prior Agreement may be amended and restated as set forth herein, without the
approval of the holders of Rights; 

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

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

          (a) “Acquiring Person” shall mean collectively 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
(other than as a result of a Permitted Offer) or was such a Beneficial Owner at
any time after the date hereof, whether or not such Person together with all
Affiliates or Associates of such Person continues to be the Beneficial Owner of
15% or more of the then outstanding Common Stock. Notwithstanding the foregoing,
(A) the term “Acquiring Person” shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company
or of any Subsidiary of the Company, (iv) any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan (including, without limitation, any trust or other entity organized,
appointed, established or holding common stock for or pursuant to the terms of
any such plan), or (v) any Person together with all Affiliates and Associates of
such Person who or which becomes the Beneficial Owner of 15% or more of the then
outstanding shares of Common Stock as a result of the acquisition of Common
Stock directly from the Company (each of (i) through (v), an “Exempted Person”); (B) no
Person shall become an “Acquiring Person” as a result of an acquisition of
Common Stock by the Company which, by reducing the number of such shares then
outstanding, increases the proportionate number of shares beneficially owned by
such Person together with all Affiliates and Associates of such Person to 15% or
more of the outstanding Common Stock, except that if such Person, after such
share purchases by the Company, becomes the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the then outstanding shares of
Common Stock other than pursuant to a Permitted Offer, such Person shall be
deemed to be an “Acquiring Person”; and (C) if the Board determines in good
faith that a Person, together with all Affiliates and Associates of such Person,
who would otherwise be an “Acquiring Person” has become such inadvertently, and
such Person, together with all Affiliates and Associates of such Person, divests
as promptly as practicable a sufficient number of shares of Common Stock so that
such Person, together with all Affiliates and Associates of such Person, would
no longer be an Acquiring Person (or, in the case solely of Derivative Common
Shares (as such term is hereinafter defined), such Person terminates the subject
derivative transaction or transactions or disposes of the subject derivative
security or securities, or establishes to the satisfaction of the Board of
Directors that such Derivative Common Shares are not held with any intention of
changing or influencing control of the Company), then such Person shall not be
deemed to be an “Acquiring Person”. The term “outstanding”, when used with
reference to a Person’s Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to beneficially own hereunder. For the avoidance of
doubt, both parties to any transaction involving Derivative Common Shares shall
be considered one “Acquiring Person” (with regard to the Derivative Common
Shares) for purposes of this Rights Agreement. 

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

          (c) “Adjustment Shares” shall have the meaning set forth in
Section 11(a)(ii) of this Agreement. 

          (d) “Affiliate” shall have the meaning set forth in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act as amended and in
effect on the date hereof. 

2 

          (e) “Associate” of a Person shall mean (i) with respect to a
corporation (other than the Company or a majority-owned Subsidiary of the
Company), any officer or director thereof or of any Subsidiary (as such term is
hereinafter defined) thereof, or any Beneficial Owner (as such term is
hereinafter defined) of 10% or more of any class of equity security thereof,
(ii) with respect to an association, joint venture or other unincorporated
organization, any officer or director thereof or of a Subsidiary thereof or any
Beneficial Owner of 10% or more ownership interest therein, (iii) with
respect to a partnership, any general partner thereof or any limited partner
thereof who is, directly or indirectly, the Beneficial Owner of a 10% or greater
ownership interest therein, (iv) with respect to a limited liability company,
any officer, director or manager thereof or of a Subsidiary thereof or any
member thereof who is, directly or indirectly, the Beneficial Owner of a 10% or
greater ownership interest therein, (v) with respect to a business trust, any
officer or trustee thereof or of any Subsidiary thereof, (vi) with respect to
any other trust or an estate, any trustee, executor or similar fiduciary or any
Person who has a 10% or greater interest as a beneficiary in the income from or
principal of such trust or estate, (vii) with respect to a natural person, any
relative or spouse of such person, or any relative of such spouse, who has the
same home as such person or who is a director or officer of the registrant or
any of its parents or subsidiaries, and (viii) any Affiliate of such Person.

          (f) A Person shall be deemed the “Beneficial Owner” of, and shall
be deemed to “beneficially own,” any securities: 

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

               (ii) which such Person or any of such Person’s Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
“beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act as amended and in effect on the
date hereof), including pursuant to any agreement, arrangement or understanding,
whether or not in writing; provided, however, that a Person shall not be deemed
the “Beneficial Owner” of, or to “beneficially own,” any security under this
subparagraph (ii) as a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
provisions of the rules and regulations under the Exchange Act as amended and as
in effect on the date hereof, and (B) is not also then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or successor report,
other than by reference to a proxy or consent solicitation being conducted by
such Person);

3 

               (iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person (or
any of such Person’s Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (f)) or disposing of any voting
securities of the Company; provided, however, that nothing in this paragraph (f)
shall cause a person engaged in business as an underwriter of securities to be
the “Beneficial Owner” of, or to “beneficially own,” any securities acquired
through such person’s participation in good faith in a bona fide firm commitment
underwriting until the expiration of forty days after the date of such
acquisition. Notwithstanding anything in this definition of Beneficial Owner to
the contrary, a Person who, prior to the Distribution Date, is a member of the
Board or an officer of the Company or who is an Affiliate or Associate of a
member of the Board or officer of the Company (each, an “Excluded Person”) shall
not be deemed to “beneficially own” shares of Common Stock held by another
Excluded Person solely by reason of any agreement, arrangement or understanding,
written or otherwise, entered into in opposition to any transaction or in
support of a Permitted Offer; or

               (iv) that are the subject of a derivative transaction entered into
by such Person, or derivative security acquired by such Person, which gives such
Person the economic equivalent of ownership of an amount of such securities due
to the fact that the value of the derivative is explicitly determined by
reference to the price or value of such securities, without regard to whether
(a) such derivative conveys any voting rights in such securities to such Person,
(b) the derivative is required to be, or capable of being, settled through
delivery of such securities, or (c) such Person may have entered into other
transactions that hedge the economic effect of such derivative. In determining
the number of Common Shares deemed Beneficially Owned by virtue of the operation
of this Section 1.3(iv), the subject Person shall be deemed to Beneficially Own
(without duplication) the number of Common Shares that are synthetically owned
pursuant to such derivative transactions or such derivative securities. Such
Common Shares that are deemed so Beneficially Owned pursuant to the operation of
this Section 1.3(iv) shall be referred to herein as "Derivative Common
Shares."

          (g) “Board” shall have the meaning set forth in the Recitals of
this Agreement. 

          (h) “Business Day” shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Arizona or the
Commonwealth of Massachusetts are authorized or obligated by law or executive
order to close. 

          (i) “Close of business” on any given date shall mean 5:00 p.m.,
New York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York City time, on the next succeeding
Business Day. 

4 

          (j) “Common Stock” shall mean the common stock, par value $0.001
per share, of the Company (or in the event of a subdivision, combination or
reclassification with respect to such shares of Common Stock, the shares of
Common Stock resulting from such subdivision, combination or reclassification),
except, subject to the proviso in Section 13(b) of this Agreement, that “Common
Stock” when used with reference to any Person other than the Company (A)
which shall be organized in corporate form, shall mean the capital stock or
other equity security or equity interest with the greatest voting power to
control the management of such Person or, if such other Person is a Subsidiary
of another Person, the Person or Persons which ultimately control such
first-mentioned Person, or (B) which shall not be organized in corporate form,
shall mean units of beneficial interest which shall represent the right to
participate in profits, losses, deductions and credits of such Person and which
shall be entitled to exercise the greatest voting power to direct the management
of such Person, or if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.

          (k) “Common Stock Equivalents” shall have the meaning set forth in
Section 11(a)(iii) of this Agreement. 

          (l) “Company” shall have the
meaning set forth in the Preamble. 

          (m) “Current Market Price” shall have the meaning set forth in
Section 11(d(i). 

          (n) “Current Value” shall have the meaning set forth in Section
11(a)(iii) of this Agreement. 

          (o) “Distribution Date” shall have the meaning set forth in
Section 3(a) of this Agreement. 

          (p) “Equivalent preferred stock” shall have the meaning set forth
in Section 11(b) of this Agreement. 

          (q) “Exchange Act” shall mean the Securities Exchange Act of 1934,
as amended and in effect on the date hereof. 

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

          (s) “Excluded Person” shall have the meaning set forth in Section
1(f) of this Agreement. 

          (t) “Exempted Person” shall have the meaning set forth in Section
1(a) of this Agreement. 

          (u) “Expiration Date” shall have the meaning set forth in Section
7(a) of this Agreement. 

          (v) “Final Expiration Date” shall have the meaning set forth in
Section 7(a) of this Agreement.

5 

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

          (x) “NASDAQ” shall mean the National Association of Securities
Dealers Automated Quotation System. 

          (y) “Original Rights” shall have the meaning set forth in Section
1(f)(i) of this Agreement. 

          (z) “Permitted Offer” shall mean an acquisition of shares of
Common Stock pursuant to a tender offer or an exchange offer for all outstanding
shares of Common Stock that meets all of the following requirements: 

              
(i) the consideration of the offer is cash or publicly traded
securities and, in the case of a cash offer, is fully-financed; 

              
(ii) such offer remains open for at least 60 calendar days from the
date it commenced (within the meaning of Rule 14d-2(a), as in effect on the date
hereof, under the Exchange Act); 

              
(iii) on or prior to the date such offer is commenced (within the
meaning of Rule 14d-2(a), as in effect on the date hereof, under the Exchange
Act), the Person on whose behalf such offer is being made has, and has provided
to the Company, firm written commitments from responsible financial
institutions, which have been accepted by such Person (or one of its
Affiliates), to provide, subject only to customary terms and conditions, funds
for such offer which, when added to the amount of cash and cash equivalents
which such Person then has available and has irrevocably committed in writing to
the Company to utilize for purposes of such offer, will be sufficient to pay for
all shares of Common Stock then outstanding and all related expenses;

              
(iv) shares representing at least a majority of the Common Stock
then outstanding as of the day immediately prior to the date of commencement of
such offer (within the meaning of Rule 14d-2(a), as in effect on the date
hereof, under the Exchange Act), but excluding therefrom any shares of Common
Stock beneficially owned immediately prior to such offer by the Person on whose
behalf such offer is being made and such Person’s Affiliates and Associates, are
tendered and purchased pursuant to such offer; 

              
(v) prior to or on the date that such offer is commenced (within
the meaning of Rule 14d-2(a), as currently in effect, under the Exchange Act),
the Person on whose behalf such offer is being made makes an irrevocable written
commitment to the Company (A) to consummate a transaction or transactions
promptly upon the completion of such offer in which the consideration in such
transaction or transactions is fully-financed cash or publicly-traded securities
and whereby all shares of Common Stock not purchased in such offer will be
acquired at the same price per share of Common Stock paid in such offer,
provided that the Board shall have granted any approvals required to enable such
Person to consummate such transaction or transactions following consummation of
such offer without obtaining the vote of any other stockholder, (B) that such
Person will not make any amendment to the original offer which reduces the per
share price offered (other than a reduction to reflect any dividend declared by
the Company after the commencement of such offer or any material change in the
capital structure of the Company initiated by the Company after the commencement
of such offer, whether by way of recapitalization, reorganization, repurchase or
otherwise), changes the form of consideration offered, reduces the number of
shares being sought or which is in any other respect materially adverse to the
holders of Common Stock (other than the Person on whose behalf such Offer is
being made and such Person’s Affiliates and Associates); and

6 

               (vi) such offer is at a price and on other terms determined by at
least a majority of the members of the Board, after receiving an opinion from
one or more nationally recognized investment banking firms selected by the Board
that the price offered is fair, from a financial point of view, to be (A) fair
(taking into account all factors which the Board may deem relevant, including,
without limitation, the Company’s long-term prospects and prices which could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) to stockholders (other than the Person
or any Affiliate or Associate hereof on whose behalf the offer is being made)
and (B) otherwise in the best interests of the Company and its stockholders
(other than the Person or any Affiliate or Associate thereof on whose behalf the
offer is being made) taking into account all factors that the Board may deem
relevant; provided, however, that (1) such determination is made by the Board
prior to the purchase of shares under such tender offer or exchange offer, and
(2) a majority of the members of the Board are independent (within the meaning
of Rule 4200 of the NASDAQ Stock Market rules (or any successor rule) and under
applicable Nevada case law) and disinterested (each such member is neither an
Acquiring Person or a Person on whose behalf the tender offer for Common Stock
is being made, nor an Affiliate, Associate, nominee or representative of an
Acquiring Person or a Person on whose behalf the tender offer for Common Stock
is being made). 

          (aa) “Person” shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity, and shall include
any successor (by merger or otherwise) thereof or thereto. 

          (bb) “Preferred Stock” shall mean shares of Series A Participating
Preferred Stock, par value $0.001 per share, of the Company (or in the event of
a subdivision, combination or reclassification with respect to such shares of
Preferred Stock, the shares of Preferred Stock resulting from such subdivision,
combination or reclassification), and, to the extent that there is not a
sufficient number of shares of Series A Participating Preferred Stock authorized
to permit the full exercise of the Rights, any other series of preferred stock
of the Company designated for such purpose containing terms substantially
similar to the terms of the Series A Participating Preferred Stock. 

          (cc) “Principal Party” shall have the meaning set forth in Section
13(b) of this Agreement. 

          (dd) “Prior Agreement” shall have the meaning set forth in the
Recitals of this Agreement. 

          (ee) “Purchase Price” shall have the meaning set forth in Section
4(a) of this Agreement. 

7 

          (ff) “Record Date” shall have the meaning set forth in the Recitals
of this Agreement. 

          (gg) “Redemption Date” shall have the meaning set forth in Section
7(a) of this Agreement. 

          (hh) “Redemption Price” shall have the meaning set forth in Section
23 of this Agreement. 

          (ii) “Rights” shall have the meaning set forth in the first
“WHEREAS” clause at the beginning of this Agreement. 

          (jj) “Rights Agent” shall have the meaning set forth in the
introductory paragraph of this Agreement. 

          (kk) “Rights Agreement” shall have the meaning set forth in the
Recitals of this Agreement. 

          (ll) “Rights Certificates” shall have the meaning set forth in
Section 3(a) of this Agreement. 

          (mm) “Rights Dividend Declaration Date” shall have the meaning set
forth in the Recitals of this Agreement. 

          (nn) “Section 11(a)(ii) Event” shall have the meaning set forth in
Section 11(a)(ii) of this Agreement. 

          (oo) “Section 11(a)(ii) Trigger Date” shall have the meaning set
forth in Section 11(a)(iii) of this Agreement. 

          (pp) “Section 13 Event” shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) of this Agreement. 

          (qq) “Spread” shall have the meaning set forth in Section
11(a)(iii) of this Agreement. 

          (rr) “Stock Acquisition Date” shall mean the earlier of the date of
(i) the public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed under the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such or (ii)
the public disclosure of facts by the Company or an Acquiring Person indicating
that an Acquiring Person has become an Acquiring Person, which date may occur
prior to the Record Date; provided, however, that if such Person is determined
not to have become an Acquiring Person pursuant to Section 1(a)(C) hereof, then
no Stock Acquisition Date shall be deemed to have occurred. 

8 

          (ss) “Subsidiary” shall mean, with reference to any Person, any
corporation or other Person of which an amount of voting securities sufficient
to elect at least a majority of the directors or others having similar authority
over such corporation or other Person is beneficially owned, directly or
indirectly, by such first-named Person, or otherwise controlled by such
first-named Person. 

          (tt) “Substitution Period” shall have the meaning set forth in
Section 11(a)(iii) of this Agreement. 

          (uu) “Summary of Rights” shall have the meaning set forth in
Section 3(b) of this Agreement. 

          (vv) “Trading Day” shall have the meaning set forth in Section
11(d)(i) of this Agreement. 

          (ww) “Transaction” shall mean any merger, consolidation or sale of
assets or earning power described in Section 13(a) hereof or any acquisition of
Common Stock which, without regard to any required approval of the Company,
would result in a Person becoming an Acquiring Person. 

          (xx) “Triggering Event” shall mean any Section 11(a)(ii) Event or
any Section 13 Event. 

          (yy) “Vote” shall mean, with respect to any entity, the ability to
cast a vote at a stockholders’, members’ or comparable meeting of such entity
with respect to the election of directors, managers or other members of such
entity’s governing body, or the ability to cast a general partnership or
comparable vote. 

          (zz) “Voting Power” shall mean, with respect to any entity as at
any date, the aggregate number of Votes outstanding as at such date in respect
of such entity. 

          (aaa) “Voting Securities” shall mean the Common Stock and any other
securities of the Company the holders of which are ordinarily, in the absence of
contingencies, entitled to Vote, even though the right to such Vote has been
suspended by the happening of such a contingency. 

          (bbb) “Voting Stock” shall mean (i) the Common Stock of the Company
and (ii) any other shares of capital stock of the Company entitled to vote
generally in the election of directors. For purposes of this Agreement, Voting
Stock shall include securities of the type referred to in clauses (i) and (ii)
above that trade on a “when issued” basis on a national securities exchange or
an inter-dealer quotation system. For purposes of this Agreement, a stated
percentage of the Voting Stock shall mean a number of shares of the Voting Stock
as shall equal in voting power that stated percentage of the total voting power
of the then outstanding shares of Voting Stock in the election of a majority of
the Board or in respect of any merger, consolidation, sale of all or
substantially all of the Company’s assets, liquidation, dissolution or winding
up. 

9 

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

     Section 3. Issue of Rights
Certificates. 

          (a) Until the earlier of (i) the Close of business on the tenth
Business Day after the Stock Acquisition Date (or, if the tenth Business Day
after the Stock 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 the Board shall determine) after the date of
the earlier of commencement by any Person (other than an Exempted Person) of, or
the first public announcement of the intention of any Person (other than an
Exempted Person) to commence, a tender or exchange offer (other than a Permitted
Offer) the consummation of which would result in any Person becoming an
Acquiring Person (including any such date which is on or after the date of this
Agreement and prior to the issuance of the Rights) (the earlier of (i) and (ii)
being herein referred to as the “Distribution
Date”), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) of this Agreement) by the
certificates for the Common Stock registered in the names of the record holders
of the Common Stock (which certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company); provided, however,
that if a tender or exchange offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as a result of such
tender or exchange offer. The Board may defer the date set forth in clause (ii)
of the preceding sentence (with prompt written notice thereof to the Rights
Agent) to a specified later date or to an unspecified later date, each to be
determined by action of the Board. As soon as practicable after the Distribution
Date, the Company shall 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 and provided with all necessary information, send) by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock as of
the Close of business on the Distribution Date, at the address of such holder
shown on the registry books for the Common Stock of the Company, one or more
rights certificates, in substantially the form of Exhibit B hereto (the “Rights Certificates”),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(q) hereof,
at the time of distribution of the Rights Certificates, the Company shall make
the necessary and appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates and may be transferred by the transfer of the Rights
Certificate as permitted hereby, separately and apart from any transfer of one
or more shares of Common Stock. 

10 

          (b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit C (the “Summary of
Rights”), by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the Close of business on
the Record Date, at the address of such holder shown on the records of the
transfer agent. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and the
record holders of the Common Stock shall also be the record holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration
Date, the transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock. 

          (c) The Company shall promptly notify the Rights Agent in writing
upon the occurrence of the Distribution Date and, if such notification is given
orally, the Company shall confirm same in writing on or prior to the Business
Day next following. Until such notice is received by the Rights Agent, the
Rights Agent may presume conclusively for all purposes that the Distribution
Date has not occurred. 

          (d) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company’s
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date, and, in certain circumstances provided in Section
22 of this Agreement, 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 the Amended and Restated Rights Agreement
between Amtech Systems, Inc., an Arizona corporation (the “Company”), and
Computershare Trust Company, N.A., dated as of December 15, 2008, as it may be
amended from time to time (the “Rights Agreement”), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal offices of the Company. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge, promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement, Rights
issued to, or Beneficially Owned 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 Beneficially Owned or 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 the Distribution Date or
the Expiration Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone and record
holders of Common Stock shall also be the record holders of the associated
Rights, and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates. In the event the Company purchases or acquires any Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated
with such Common Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Stock
which are no longer outstanding. Notwithstanding this paragraph (d), the
omission of a legend shall not affect the enforceability of any part of this
Rights Agreement or the rights of any holder of the Rights. 

11 

          (e) In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the Expiration
Date, the Company (i) shall, with respect to shares of Common Stock so issued or
sold (x) pursuant to the exercise of stock options or under any employee plan or
arrangement or (y) upon the exercise, conversion or exchange of other securities
issued by the Company prior to the Distribution Date and (ii) may, in any other
case, if deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided that no such Rights Certificate shall be issued if, and to the
extent that, (i) the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued or (ii)
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof. 

     Section 4. Form of Rights
Certificates. 

          (a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit
B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate (but which do not affect the
rights, duties or immunities of the Rights Agent) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto, or with any
rule or regulation of any stock exchange or inter-dealer quotation system or
transactor reporting system on which or with whom the Rights may from time to
time be listed or quoted, or to conform to usage or otherwise. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall entitle the record holders thereof to purchase such
number of one one-thousandths of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price per one
one-thousandth of a share, the “Purchase Price”), but the amount and the type
of securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein. 

          (b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights Beneficially Owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board 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 the Rights Agent has notice thereof and 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, or may have already become, null and void in the
circumstances specified in Section 7(e) of such Agreement. 

12 

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

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

          (b) Following the Distribution Date and receipt by the Rights
Agent of notice to that effect and all other relevant information referred to in
Section 3(a), the Rights Agent will keep or cause to be kept, at its office
designated for such purpose, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of
the respective record 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. The Company and Rights Agent may deem and treat the
person in whose name any Rights Certificate (or prior to the Distribution Date,
the associated Common Stock certificate) is recorded on the books for the
registration and transfer of Rights (or, the Common Stock) as the absolute owner
thereof, for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary. 

13 

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

          (a) Subject to the provisions of Section 4(b), Section 7(e),
Section 7(f), Section 11, Section 14, Section 23 and Section 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
Certificates (other than Rights Certificates representing Rights that have
become null and void pursuant to Section 7(e) or that have been exchanged
pursuant to Section 24 hereof) may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the record
holder to purchase a like number of one one-thousandths of a share of Preferred
Stock (or, following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any record holder desiring to transfer, split up, combine
or exchange any Rights Certificate or Certificates shall make such request in
writing in a form acceptable and delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be 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 or Certificates until the record holder shall have (i) properly
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate or Certificates, (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof, or of the Rights
evidenced thereby, as the Company or the Rights Agent shall reasonably request,
and (iii) paid a sum sufficient to cover any tax or charge that may be imposed
in connection with any transfer, split up, combination or exchange of Rights
Certificates as required by Section 9(e) hereof. Thereupon, the Rights Agent
shall, subject to Section 4(b), Section 7(e), Section 7(f), Section 11, Section
14, Section 23 and Section 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 or the Rights Agent may require payment by the
record holder of a Rights Certificate of a sum sufficient to cover any
applicable tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates, and the
Company and the Rights Agent shall have no duty or obligation under this Section
unless and until it is satisfied that all such taxes and/or governmental charges
have been paid. 

          (b) Subject to the provisions of Section 4(b), Section 7(e),
Section 7(f), Section 11, Section 14, Section 23 and Section 24 hereof, 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 to the
Rights Agent and the Company satisfactory to the Rights Agent and the Company
and reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate, if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the record holder in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated. 

14 

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

          (a) Subject to Section 7(e),
Section 7(f) and Section 14 hereof, the record holder of any Rights Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(ii), Section 11(a)(iii), Section 23(a) and Section
24(b) hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the office of the Rights Agent designated for such purpose, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, together with payment of the aggregate Purchase Price
with respect to the total number of one one-thousandths of a share of Preferred
Stock (or, following the occurrence of a Triggering Event, Common Stock or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of (i) the
Close of business on December 14, 2018 (the “Final Expiration Date”), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the
“Redemption Date”), (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof, or (iv) the consummation of a transaction contemplated by
Section 13(d) hereof (the earliest of (i), (ii), (iii) and (iv) being herein
referred to as the “Expiration
Date”). 

          (b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $51.60,
and shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) hereof and shall be payable in accordance with paragraph (c) below.

          (c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed
and properly completed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one one-thousandth of a share of Preferred
Stock (or other shares, securities, cash or other assets, as the case may be) to
be purchased as set forth below and an amount equal to any tax or charge
required to be paid by the holder of such Rights Certificate in accordance with
Section 9 hereof, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of one one-thousandths of a
share of Preferred Stock to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the record
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, if any, to or upon the order of the record holder of such
Rights Certificate. The payment of the Purchase Price (as such amount may be
reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by
certified bank check or bank draft payable to the order of the Company, in each
case in lawful money of the United States of America. In the event that the
Company is obligated to issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when necessary to comply with this Agreement. The Company
reserves the right to require, prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock would be issued. 

15 

          (d) In case the record 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 exercisable and unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
record holder of such Rights Certificate, registered in such name or names as
may be designated by such holder, subject to the provisions of Section 14
hereof. 

          (e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any 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
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has the purpose
or effect the avoidance of this Section 7(e), shall become null and void without
any further action, and any record holder of such Rights shall have no 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 neither the Rights Agent nor the Company shall have any liability to
any record holder of Rights Certificates or any other Person as a result of the
Company’s failure to make any determinations with respect to an Acquiring Person
or its Affiliates, Associates or transferees hereunder. The Company or the
Rights Agent may require (or cause any transfer agent of the Company to require)
any Person who submits a Rights Certificate (or a certificate representing
shares of Common Stock that evidences, or but for the provisions of this Section
7(e) would evidence, Rights) for transfer on the registry books or to exercise
the Rights represented thereby to establish to the satisfaction of the Company
in its sole discretion that such Rights have not become null and void pursuant
to the provisions of this Section 7(e). 

          (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 record holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such holder shall have (i)
properly completed and duly executed 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, or any transferee referred to in clause (ii) or (iii) of
Section 7(e) hereof, or of the Rights evidenced thereby, in any such case, as
the Company or the Rights Agent shall reasonably request. 

16 

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

     Section 9. Reservation and
Availability of Capital Stock. 

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

          (b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange or national automated quotation system, 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 or authorized to be quoted on such quotation system upon official
notice of issuance upon such exercise. 

          (c) If then required by applicable law, the Company shall use its
best efforts to (i) file, as soon as practicable following the earliest date
after the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii) hereof, a registration
statement under the Act with respect to the securities purchasable upon exercise
of the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, (B) the
Expiration Date or (C) the date the Company receives an opinion of counsel to
the effect that the maintenance of such registration statement in effect is no
longer necessary. If then required by applicable law, the Company will also take
such action as may be appropriate under, or to ensure compliance with, the
securities or “blue sky” laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed one hundred twenty (120) days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement and permit it to
become effective or to comply with such blue sky laws.

17 

Upon any such suspension, the Company
shall make a public announcement, and shall give simultaneous written notice to
the Rights Agent, stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement, and simultaneous
written notice to the Rights Agent, at such time as the suspension is no longer
in effect. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective, and shall provide the Rights
Agent with written notice of such suspension. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained, the exercise thereof shall not be permitted under applicable law
or a registration statement shall not have been declared effective. 

          (d) The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all one one-thousandths of a share of Preferred
Stock (and, following the occurrence of a Triggering Event, Common Stock and/or
other securities, as the case may be) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares, Common Stock, or
other securities, as the case may be (subject to payment of the Purchase Price),
be duly and validly authorized and issued, and fully paid and nonassessable
including, without limitation, effecting such changes to the accounts of the
Company as may be necessary to accomplish the foregoing purposes. 

          (e) The Company further covenants and agrees that it will pay when due and
payable any and all taxes and governmental charges which may be payable in
respect of the issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock or other securities, as the case may be) upon the exercise of
the Rights. The Company shall not, however, be required to pay any tax or charge
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 a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) in
respect of a name other than that of, the record holder of the Rights
Certificates evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number of one one-thousandths of a share of Preferred
Stock (or, following the occurrence of a Triggering Event, Common Stock or other
securities, as the case may be) in a name other than that of the record holder
upon the exercise of any Rights until such tax or charge shall have been paid
(any such tax or charge being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the Company’s or
the Rights Agent’s satisfaction that no such tax or charge is due. 

18 

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

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

          (a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that the record
holder of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof. 

19 

               (ii) Subject to Section 24 hereof, in the event any Person, alone
or together with its Affiliates and Associates, shall, at any time after the
Rights Dividend Declaration Date, become an Acquiring Person (such an event
being referred to herein as a “Section
11(a)(ii) Event”), then, promptly following
the occurrence of such Section 11(a)(ii) Event, proper provision shall be made
by the Company so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall have the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
in lieu of fractional interests in shares of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event at issue,
and (y) dividing that product (which, following such first occurrence, shall
thereafter be referred to as the “Purchase
Price” for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such first
occurrence (such number of shares being referred to as the “Adjustment Shares”); provided,
however, that if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). The Company shall give the Rights Agent
written notice of the identity of any such Acquiring Person, Associate or
Affiliate, or the nominee of any of the foregoing, and the Rights Agent may rely
on such notice in carrying out its duties under this Agreement and shall be
deemed not to have any knowledge of the identity of any such Acquiring Person,
Associate or Affiliate, or the nominee of any of the foregoing unless and until
it shall have received such notice. 

               (iii) Subject to such limitations existing as of the date hereof as are
necessary to prevent a default under any agreement to which the Company is a
party, in the event that the number of shares of Common Stock which are
authorized by the Company’s articles of incorporation, as amended, 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 in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by resolution of its Board shall (A) determine the excess of (x)
the value of the Adjustment Shares issuable upon the exercise of a Right
determined as set forth below (the “Current
Value”), over (y) the Purchase Price (such
excess, the “Spread”), and (B) with respect to each Right (subject to Section 7(e) hereof),
make adequate provision to substitute for the Adjustment Shares, upon the
exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares or units of shares of
preferred stock, such as the Preferred Stock, which the Board has deemed to have
essentially the same value or economic rights as shares of Common Stock (such
shares of preferred stock or other equity securities being referred to as
“Common
Stock Equivalents”)), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value (less the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board based upon the advice of a
nationally recognized investment banking firm selected by the Board; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the date on
which the Company’s right of redemption pursuant to Section 23(a) expires (such
date 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 Purchase Price (other than an amount equal to
the par value of the shares of Common Stock to be issued), shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board determines
in good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the authorization of
such additional shares (such thirty (30) day period, as it may be extended, is
herein called the “Substitution Period”).

20 

To the extent that action is to be
taken pursuant to the first and/or second sentences of this Section 11(a)(iii),
the Company (1) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek such stockholder approval for such authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall make a public announcement and shall give
simultaneous written notice to the Rights Agent stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement,
and simultaneous written notice to the Rights Agent, at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
Current Value of each Adjustment Share shall be the Current Market Price per
share of the Common Stock on the Section 11(a)(ii) Trigger Date, and the per
share or per unit value of any Common Stock Equivalent shall be deemed to equal
the Current Market Price per share of the Common Stock on such date. 

          (b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all record holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock (“equivalent preferred stock”)) or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock) less
than the Current Market Price per share of Preferred Stock on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock and equivalent preferred stock outstanding on such record date, plus the
number of shares of Preferred Stock and equivalent preferred stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock and equivalent preferred stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Shares of Preferred Stock and
equivalent preferred stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed, and
in the event that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed. 

21 

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

          (d) (i) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) hereof, the “Current Market Price” per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty (30) consecutive Trading
Days immediately prior to but not including such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following but not including such date;
provided, however, that in the event that the Current Market Price per share of
the Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and the ex-dividend or
ex-distribution date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification shall not have occurred prior
to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading
Day period, as set forth above, then, and in each such case, the Current Market
Price shall be properly adjusted to reflect the current market per share
equivalent. 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 NASDAQ or, if the shares of Common Stock
are not listed or admitted to trading on the NASDAQ, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities exchange, the
last sale price, regular way, 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
shares of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board. If on any such date
no market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board shall be used. The
term “Trading Day”
shall mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or traded, Current Market
Price per share shall mean the fair value per share as determined in good faith
by the Board, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. 

22 

               (ii) For the purpose of any computation hereunder, the Current Market Price
per share of Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this Section 11(d) (other than the
last sentence thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in clause (i) of
this Section 11(d), the Current Market Price per share of Preferred Stock shall
be conclusively deemed to be an amount equal to 1000 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of
this Agreement) multiplied by the Current Market Price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is publicly held or
so listed or traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this Agreement, the
Current Market Price of one one-thousandth of a share of Preferred Stock shall
be equal to the Current Market Price of one share of Preferred Stock divided by
1000. 

          (e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest hundred-thousandth of a share of Common
Stock or other share or one-millionth of a share of Preferred Stock, as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date. 

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

23 

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

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

          (i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one-millionth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement and shall give simultaneous written notice to the Rights
Agent of its election to adjust the number of Rights, indicating the record date
for the adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (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(i), the Company shall, as
promptly as practicable, cause to be distributed to holders 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 in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement. 

24 

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

          (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of one
one-thousandths of a share of Preferred Stock, or the par value, if any, of any
shares of any other capital stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
such number of fully paid and non-assessable one one-thousandths of a share of
Preferred Stock (or such other shares) at such adjusted Purchase Price. If upon
any exercise of the Rights, a holder is to receive a combination of Common Stock
and Common Stock Equivalents, a portion of the consideration paid upon such
exercise, equal to at least the then par value of a share of Common Stock, shall
be allocated as the payment for each share of Common Stock so received.

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

          (m) Anything in this Section 11 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that in its good faith judgment the Board shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less than the
Current Market Price thereof, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends, or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such holders. 

25 

          (n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or exchanged pursuant to Section 24
hereof, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(p) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(p) hereof), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction, or
a series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with Section
11(p) hereof), if (x) at the time of or immediately after such consolidation,
merger or sale there are any articles of incorporation or bylaw provisions or
any rights, warrants or other instruments or securities outstanding or
agreements in effect or other actions taken which would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of the Person who constitutes, or would constitute, the
Principal Party for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates, and (z) the form or nature of organization of the Principal
Party would preclude or limit the exercise of Rights or otherwise diminish or
substantially limit the benefits intended to be afforded by the Rights.

          (o) The Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with Section 11(n). 

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

          (q) Anything in this Agreement to the contrary notwithstanding, in the event
that the Company shall at any time after the Rights Dividend Declaration Date
and prior to the Distribution Date (i) declare or pay any dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide or split the outstanding shares of Common Stock into a greater number
of shares, or (iii) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, then, and in each such event, the number of
Rights associated with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event. 

26 

     Section
12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made or any
event affecting the Rights or their exercisability (including without limitation
an event which causes the Rights to become null and void) occurs as provided in
Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment or describing such event, and a
brief, reasonably detailed statement of the facts, computations and methodology
accounting for such adjustment, (b) promptly file with the Rights Agent, and
with each transfer agent for the Preferred Stock and the Common Stock, a copy of
such certificate, and (c) mail a brief summary thereof to each record holder of
a Rights Certificate (or, if prior to the Distribution Date, to each record
holder of a certificate representing shares of Common Stock) in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment or statement therein contained and shall
have no duty or liability with respect to, and shall not be deemed to have
knowledge of, any adjustment or any such event unless and until it shall have
received such certificate. 

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

          (a) In the event that, following the Stock Acquisition Date (which for
purposes of this Section 13(a) only shall also include the date of the first
public announcement (including, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) that 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),
together with any of such Person’s Affiliates and Associates, has become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
pursuant to a Permitted Offer), directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(p)
hereof), and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(p) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(p) hereof), then, upon the
first occurrence of such event (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made so that: (i) each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid, non-assessable and freely tradeable shares of Common
Stock of the Principal Party (as such term is hereinafter defined), not subject
to any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-thousandths of a share of Preferred
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the “Purchase Price” for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation, provided that the Purchase Price and the number of
shares of Common Stock of such Principal Party issuable upon exercise of each
Right shall be further adjusted as provided in Section 11(f) of this Agreement
to reflect any events occurring in respect of such Principal Party after the
date of such Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
“Company” shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply only
to such Principal Party following the first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any
Section 13 Event.

27 

          (b) “Principal Party” shall mean

               (i) in the case of any transaction described in clause (x) or (y) of the
first sentence of Section 13(a): (A) the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, or if there is more than one such issuer, the
issuer of the shares of Common Stock which has the greatest aggregate market
value of shares outstanding, or (B) if no securities are so issued, (1) 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 has the greatest aggregate market value of shares
outstanding or (2) 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 (3) the Person resulting from the consolidation; and

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

28 

          (c) The Company shall not consummate any such consolidation, merger, sale or
transfer unless the Principal Party covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued shares of
Common Stock or out of its authorized and issued shares held in its treasury,
the number of shares of its Common Stock that will be sufficient to permit the
exercise in full of all outstanding Rights under this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that the
requirements set forth in paragraphs (a) and (b) of this Section 13 shall be
promptly performed in accordance with their terms and further providing that, as
soon as practicable after executing such agreement pursuant to this Section 13,
the Principal Party will: 

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

               (ii) use its best efforts, if the shares of Common Stock of the Principal
Party shall be listed or admitted to trading on a national securities exchange
or NASDAQ to list or admit to trading (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights on such securities
exchange or NASDAQ and, if the shares of Common Stock of the Principal Party
shall not be listed or admitted to trading on a national securities exchange or
NASDAQ, to cause the Rights and the securities purchasable upon exercise of the
Rights to be eligible for trading in the over-the-counter market and reported by
such other system then in use; 

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

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

29 

The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a). If, for any reason, the Rights cannot be exercised
for Common Stock of the Company or such Principal Party, then a holder of Rights
will have the right to exchange such Rights for cash from the Company or such
Principal Party in an amount equal to the number of shares of such Common Stock
such holder would otherwise be entitled to purchase times 50% of the then
Current Market Price, as determined pursuant to Section 11(d)(i) hereof, of such
stock of such Principal Party or the Company. If, for any reason, including,
without limitation, such Principal Party is an individual, private partnership
or private company, the foregoing formulation cannot be applied to determine the
cash amount into which the Rights are exchangeable, then the Board, based upon
advice from one or more nationally recognized investment banking firms, shall
determine such amount reasonably and with utmost good faith to the holders of
Rights. Any such determination shall be binding and final. 

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

          (e) The Company shall not enter into any transaction of the kind referred to
in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. Without limiting the generality of the preceding
sentence, in case the Principal Party which is to be a party to a transaction of
the kind referred to in this Section 13 has a provision in any of its authorized
securities or in its certificate or articles of incorporation or bylaws or other
instrument governing its corporate affairs (or organizational affairs if
organized other than in corporate form), which provision would have the effect
of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction of the kind referred to in
this Section 13, Common Stock of such Principal Party at less than the then
Current Market Price per share (determined pursuant to Section 11(d)(i)) or
securities exercisable for or convertible into Common Stock of such Principal
Party at less than such then Current Market Price per share (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of Common
Stock of such Principal Party pursuant to the provisions of Section 13; then, in
such event, the Company shall not consummate any such transaction unless prior
thereto the provision in question of such Principal Party shall have been
canceled, waived or amended so as to avoid any of the effects referred to in
clauses (i) and (ii) of this paragraph, or the authorized securities shall have
been redeemed, so that the applicable provision will have no effect in
connection with, or as a consequence of, the consummation of the proposed
transaction. 

30 

     Section
14. Fractional
Rights and Fractional Shares. 

          (a) The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(q) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the record holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the NASDAQ or, if the
Rights are not listed or admitted to trading on the NASDAQ, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last 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 Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board.
If on any such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by the Board
shall be used. 

          (b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than, except as provided in Section 7(c), fractions which
are integral multiples of one one-thousandth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock). Fractions of shares of
Preferred Stock in integral multiples of one one-thousandth of a share of
Preferred Stock may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided, however, that such agreement shall provide
that the holders of such depositary receipts shall have the rights, privileges
and preferences to which they are entitled as beneficial owners of the shares of
Preferred Stock represented by such depositary receipts. In lieu of fractional
shares of Preferred Stock that are not integral multiples of one one-thousandth
of a share of Preferred Stock, the Company may pay to the record holders of
Rights Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise. 

31 

          (c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock or distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock the Company may pay to the record holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one share of Common Stock. For purposes of this Section 14(c), the
current market value of one share of Common Stock shall be determined in a
manner set forth in Section 11(d)(i) hereof for the Trading Day immediately
prior to the date of such exercise. 

          (d) The record holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
(other than, except as provided in Section 7(c), fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) upon exercise of
a Right or to receive any certificates which evidence such Rights or shares,
except as permitted by this Section 14. 

          (e) Whenever a payment for fractional Rights or fractional shares is to be
made by the Rights Agent, the Company shall (i) promptly prepare and deliver to
the Rights Agent a certificate setting forth in reasonable detail the facts
related to such payments and the prices and/or formulas utilized in calculating
such payments, and (ii) provide sufficient monies to the Rights Agent in the
form of fully collected funds to make such payments. The Rights Agent shall be
fully protected in relying upon such a certificate and shall have no duty with
respect to, and shall not be deemed to have knowledge of any payment for
fractional Rights or fractional shares under any Section of this Agreement
relating to the payment of fractional Rights or fractional shares unless and
until the Rights Agent shall have received such a certificate and sufficient
monies. 

     Section
15. Rights of
Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent, are
vested in the respective record holders of the Rights Certificates (and, prior
to the Distribution Date, the record holders of the Common Stock); and any
record holder of any Rights Certificate (or, prior to the Distribution Date, of
the Common Stock), without the consent of the Rights Agent or of the record
holder of any other Rights Certificate (or, prior to the Distribution Date, of
the Common Stock), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the record holders of Rights, it is specifically
acknowledged that such holders of Rights would not have an adequate remedy at
law for any breach by the Company of this Agreement and shall be entitled to
specific performance of the obligations hereunder and injunctive relief against
actual or threatened violations by the Company of the obligations hereunder of
any Person subject to this Agreement. After a Triggering Event, holders of
Rights shall be entitled to reissue the reasonable costs and expenses, including
attorneys’ fees, incurred by them to enforce the provisions of this Agreement.

32 

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

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

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

          (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered on the transfer books of the Rights Agent 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
required to be affected by any notice to the contrary; 

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

          (e) Rights that become Beneficially Owned by the Persons specified in Section
7(e) hereof are automatically null and void pursuant to that Section.

     Section
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 the holder of the number of one
one-thousandths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a 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. 

33 

     Section 18. Concerning the Rights
Agent. 

          (a) The Company agrees to pay to the Rights Agent reasonable compensation as
shall be agreed upon in writing between the Company and the Rights Agreement 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 preparation, negotiation, execution, delivery, amendment and
administration of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent including its
members, directors, officers, employees, shareholders and agents, for, and to
hold it harmless against, any loss, liability, damage, judgment, fine, penalty,
claim, demand, settlement, cost or expense (including, without limitation, the
reasonable fees and expenses of legal counsel) incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
any action taken, suffered or omitted by the Rights Agent in connection with the
acceptance, administration, exercise and performance of its duties under this
Agreement, including, without limitation, the costs and expenses of defending
against and appealing any claim of liability arising therefrom, directly or
indirectly. The provisions of this Section 18 and Section 20 below shall survive
the exercise or expiration of the Rights, the termination of this Agreement, or
the resignation or removal of the Rights Agent. The costs and expenses incurred
in enforcing this right of indemnification shall be paid by the Company.

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

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

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

34 

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

     Section
20. Rights and
Duties of Rights Agent. The Rights Agent
undertakes to perform the duties and obligations expressly imposed by this
Agreement, and no implied duties or obligations, 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 or an employee of the Rights Agent), and the advice or opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect of
any action taken, suffered or omitted by it and in accordance with such 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 Market Price”) be proved or established by the Company prior to
taking, suffering or omitting to take any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, any Vice Chairman, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall be
full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted 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 or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.

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

35 

          (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, any Vice Chairman, the President, the Chief Executive
Officer, the Chief Financial Officer, the Chief Accounting Officer, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such instructions shall be full
authorization and protection to the Rights Agent and the Rights Agent shall not
be liable for or in respect of any action taken, suffered or omitted by it in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. The Rights Agent shall be fully authorized
and protected in relying upon the most recent instructions received by any such
officer. 

          (h) The Rights Agent and any stockholder, affiliate, 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 the Rights Agent were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such stockholder, affiliate, director, officer or employee from
acting in any other capacity for the Company or for any other Person.

          (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 (through its
directors, officers or employees) or by or through its attorneys or agents, and
the Rights Agent shall not be answerable or accountable for any act, omission,
default, neglect or misconduct of any such attorneys or agents or for any loss
to the Company or any other Person resulting from any such act, omission,
default, neglect or misconduct, absent gross negligence or bad faith 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
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it. 

36 

          (k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company. 

          (l) The Rights Agent shall have no responsibility to the Company, any holders
of Rights or any holders of shares of Common Stock for interest or earnings on
any moneys held by the Rights Agent pursuant to this Agreement. 

          (m) The Rights Agent shall not be required to take notice or be deemed to
have notice of any event or condition hereunder, including, but not limited to,
a Distribution Date, a Redemption Date, any adjustment of the Purchase Price of
the Common Stock, and adjustment to the Purchase Price of the Preferred Stock,
the existence of an Acquiring Person or any other event or condition that may
require action by the Rights Agent, unless the Rights Agent shall be
specifically notified in writing of such event or condition by the Company, and
all notices or other instruments required by this Agreement to be delivered to
the Rights Agent must, in order to be effective, be received by the Rights Agent
as specified in Section 26 hereof, and in the absence of such notice so
delivered, the Rights Agent may conclusively assume no such event or condition
exists. 

     Section
21. Change of
Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days’ notice in writing, mailed to the Company and
shall provide notice thereof to each transfer agent of the Common Stock or
Preferred Stock known to the Rights Agent by registered or certified mail and to
the holders of the Rights Certificates in accordance with Section 26 hereof, or
if prior to the Distribution Date, to the holders of Rights through any filing
made by the Company pursuant to the Exchange Act. 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’ notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and shall provide notice thereof to
each transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates in accordance with
Section 26 hereof, or, if prior to the Distribution Date, to the holders of
Rights through any filing made by the Company pursuant to the Exchange Act. 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 it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the record holder of a Rights Certificate (who shall, with such notice,
submit his Rights Certificate for inspection by the Company), then the Company
shall become the Rights Agent until a successor Rights Agent has been appointed,
and any record holder of any Rights Certificate or the Rights Agent may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a Person organized and doing business under the laws of the United
States or of the State of Arizona or the State of New York (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking institution in the State of Arizona or the State of New
York), in good standing, and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a
Person described in clause (a).

37 

After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred Stock, and mail a notice
thereof in writing to the registered holders of the Rights Certificates in
accordance with Section 26 hereof, or, if prior to the Distribution Date, give
notice to the holders of Rights through any filing made by the Company pursuant
to the Exchange Act. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be. 

     Section
22. Issuance of
New 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 to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with respect
to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of securities
issued by the Company on or prior to the Distribution Date, and (b) may, in any
other case, if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificates
shall be issued and this sentence shall be null and void ab initio if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.

     Section 23. Redemption and
Termination. 

          (a) The Board, at its option, at any time prior to the earlier of (i) the
close of business on the tenth Business Day following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth Business Day following the Record Date), or
(ii) the time at which the Rights expire pursuant to this Agreement, redeem all
but not less than all the then outstanding Rights at a redemption price of
$0.001 per Right (such redemption price being hereinafter referred to as the
“Redemption Price”). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company’s right of redemption
hereunder has expired. The Company may, at its option, pay the Redemption Price
in cash, shares of Common Stock (based on the Current Market Price of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board. The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board in its sole
discretion may establish. 

38 

          (b) Immediately upon the action of the Board ordering the redemption of the
Rights pursuant to Section 23(a) (or at such later time as the Board may
establish for the effectiveness of such redemption), notice of which shall have
been provided to the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action by the Board ordering the
redemption of the Rights becoming effective, the Company shall provide notice of
such redemption to the holders of the then outstanding Rights, with prompt
written notice thereof to the Rights Agent, each in accordance with Section 26
hereof (provided that the failure to provide, or any defect in, such notice
shall not affect the legality or validity of such redemption). Any notice which
is provided in the manner herein provided shall be deemed given, whether or not
the record holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.

     Section 24. Exchange. 

          (a) The Board may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become null and 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”), provided that the shares of Common Stock so exchanged shall be of the
same class or series which the holders of such Rights would have been entitled
to receive upon the exercise thereof. Notwithstanding the foregoing, the Board
shall not be empowered to effect such exchange at any time after any Person
(other than an Exempted Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of Voting Securities of the Company
then outstanding representing 50% or more of the Voting Power of the Company.

          (b) Immediately upon the action of the Board ordering the exchange of any
Rights pursuant to Section 24(a) and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of the holders 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, provided that the shares of Common Stock so
exchanged shall be of the same class or series which the holder of such Rights
would have been entitled to receive upon the exercise thereof. The Company shall
promptly make a public announcement of any such exchange (with prompt written
notice thereof to the Rights Agent); provided, however, that the failure to
make, or any defect in, such public announcement shall not affect the legality
or validity of such exchange. Promptly after the action of the Board ordering
the exchange of the Rights becoming effective, the Company shall provide notice
of such exchange to the holders of the then outstanding Rights in accordance
with Section 26 hereof (provided that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange). Any notice which is
mailed in the manner provided in Section 26 hereof 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 based on the
number of Rights (other than Rights which have become null and void pursuant to
the provisions of Section 7(e) hereof) held by each holder of Rights.

39 

          (c) In the event that there shall not be authorized and unissued shares of
the applicable class or series of Common Stock and/or authorized and issued
shares of the applicable class or series of Common Stock held in its treasury
sufficient to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of the applicable class or series of Common Stock
for issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional shares of the applicable class or series of Common
Stock, the Company shall substitute, for each share of such class or series of
Common Stock that would otherwise be issuable upon exchange of a Right, a number
of shares of the applicable series of Preferred Stock or fraction thereof
(subject to Section 14(b) hereof) such that the Current Market Price per share
of the applicable series of Preferred Stock multiplied by such number or
fraction is equal to the Current Market Price per share of such class or series
of Common Stock as of the date of issuance of such shares of such series of
Preferred Stock or fraction thereof. 

          (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, the Company shall pay
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 Price per share of the
applicable class or series of Common Stock as of the Trading Day immediately
prior to the record date of exchange pursuant to this Section 24. 

     Section 25. Notice of Certain
Events. 

          (a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation or merger into
or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(p) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(p) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least ten (10) days prior
to the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least ten
(10) days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock whichever
shall be the earlier.

40 

          (b) In the event that a Section 11(a)(ii) Event shall occur, then in any such
case (i) the Company shall as soon as practicable thereafter give to the Rights
Agent and 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 Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred Stock
shall be deemed thereafter to refer to Common Stock and/or, if appropriate,
other securities of the Company. 

     Section
26. Notices. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by the holder of
any 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) or by facsimile transmission as
follows: 

		Amtech
      Systems, Inc.  
		131
      South Clark Drive  
		Tempe,
      AZ 85281  
		Attention: Chief Financial Officer  
		Facsimile No: (480) 967-5146  
		  
		With a
      copy to:  
		  
		Squire
      Sanders & Dempsey LLP  
		Two
      Renaissance Square  
		40
      North Central Avenue  
	 	Phoenix, Arizona 85004-4498  
		Attention: 	Christopher D. Johnson,
      Esq.   
			Scott I. Gruber,
      Esq.   
		Facsimile No: (602) 253-8129  

41 

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

	 	Computershare
      Trust Company, N.A.  
		250 Royall
      Street  
		Canton, MA
      02021  
		Attention:
      Client Services  

Notices or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent to the holder
of any Rights Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock) shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of the Company as
held and maintained by the Rights Agent (or, if prior to the Distribution Date,
on the registry books of the transfer agent for the Common Stock of the
Company). 

     Section
27. Supplements
and Amendments. Subject to the provisions of
this Section 27, for so long as the Rights are then redeemable, the Company may
in its sole and absolute discretion, and the Rights Agent shall if the Company
so directs, supplement or amend any provision of this Agreement without the
approval of any holders of the Rights. At any time when the Rights are no longer
redeemable, but subject to the provisions of this Section 27, the Company may,
and the Rights Agent shall if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order 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) change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable; provided that no such supplement or amendment adversely
affects the interests of the holders of Rights as such (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person) and no such
amendment may cause the Rights again to become redeemable or cause the Agreement
again to become amendable other than in accordance with this sentence. Upon the
delivery of a certificate from an appropriate officer of the Company and, if
requested by the Right Agent, an opinion of counsel, which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment; provided,
however, that the Rights Agent may, but shall not be obligated to, enter into
any such supplement or amendment which adversely affects the Rights Agent’s own
rights, duties, obligations or immunities under this Agreement and the Rights
Agent shall not be bound by supplements or amendments not executed by it.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price. Prior
to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock. 

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

42 

     Section
29. Determinations and Actions by the Board, 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 as amended and in effect on the date
hereof. The Board, except as otherwise specifically provided for herein, shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not 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, prior to the Distribution Date, record holders of the Common Stock) and
all other parties, and (y) not subject the Board to any liability to the holders
of the Rights. The Rights Agent is entitled always to assume the Company’s Board
acted in good faith and shall be fully protected and incur no liability in
reliance thereon. 

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

     Section
31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated; 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 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
Business Day (or such longer period of time as permitted pursuant to Section 27
of this Agreement) following the date of such determination by the Board.
Without limiting the foregoing, if any provision requiring that a determination
be made by less than the entire Board (or at a time or with the concurrence of a
group of directors consisting of less than the entire Board) is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board in accordance
with applicable law and the Company’s Certificate of Incorporation and Bylaws.

43 

     Section
32. Governing
Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Arizona and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State; provided, however, that all
provisions regarding the rights, duties, obligations and immunities of the
Rights Agent shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts applicable to contracts made and to be
performed entirely within such State. 

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

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

     Section
35. Force Majeure. Notwithstanding anything to the contrary contained herein, 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
nature, 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.

44 

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

		AMTECH
      SYSTEMS, INC.  
		  
		  
		By: 
    	/s/ Robert T. Hass   

			Name: Robert T.
      Hass  
			Title: Chief
      Accounting Officer  
	 	  
		  
		COMPUTERSHARE TRUST COMPANY, N.A.,  
		as
      Rights Agent  
		  
		  
		By: 
    	/s/ Dennis V.
      Moccia      
			Name: Dennis V.
      Moccia    
			Title: Manager, Contract
      Administration    

EXHIBIT A 

AMENDED AND RESTATED 
CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES 
AND
PRIVILEGES OF 
SERIES A PARTICIPATING
PREFERRED STOCK 
OF 
AMTECH SYSTEMS, INC.

     Amtech Systems Inc., a corporation
organized and existing under the laws of the State of Arizona (the
"Corporation"), in accordance with the provisions of Section 10-0001 thereof,
DOES HEREBY CERTIFY: 

     That
pursuant to the authority conferred upon the Board of Directors by the Articles
of Incorporation, as amended, of the said Corporation, the said Board of
Directors on December 9, 2008, adopted this Amended and Restated Certificate of
Designation of Rights, Preferences and Privileges of Series A Participating
Preferred Stock with the following designations, powers, preferences and
relative and other special rights and the qualifications, limitations and
restrictions (all terms used herein which are defined in the Articles of
Incorporation, as amended, shall be deemed to have the meanings provided
therein): 

     1.
DESIGNATION AND AMOUNT. The shares of such series shall be designated as "Series
A Participating Preferred Stock" and the number of shares constituting such
series shall initially be 100,000 with no par value, such number of shares to be
subject to increase or decrease by action of the Board of Directors. 

     2. DIVIDENDS AND DISTRIBUTIONS.

          (a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A 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 of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $5.00 or (b)
subject to the provision for adjustment hereinafter set forth, 1000 times the
aggregate per share amount of all cash dividends, and 1000 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, $.01 par value, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Participating
Preferred Stock. In the event the Corporation shall at any time after May 17,
1999 (the "Rights Declaration Date"), (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event. 

A-1 

          (b) The Corporation shall declare a dividend or distribution
on the Series A Participating Preferred Stock as provided in paragraph (a) above
concurrently with its declaration of a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $5.00 per share of the
Series A Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. 

          (c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A 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 and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
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 of Directors 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 thirty (30) days prior to the date fixed for the payment thereof.

     3. VOTING
RIGHTS. The holders of shares of Series A Participating Preferred Stock shall
have voting rights as set forth in Section 3.7 of the Bylaws of the Corporation.

     4. CERTAIN RESTRICTIONS. 

           (a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred Stock as provided
herein 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 Corporation shall
not (i) declare or pay dividends on, make any other distributions on, or redeem
or purchase or otherwise acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Participating Preferred Stock; (ii) declare or pay dividends on
or make any other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A 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) purchase or otherwise
acquire for consideration any shares of Series A Participating Preferred Stock,
except in accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the annual dividend
rates and other rights and preferences of the series, shall determine in good
faith will result in fair and equitable treatment to the holders of such series.

A-2 

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

     5.
REACQUIRED SHARES. Any shares of Series A Participating Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired promptly after the acquisition thereof. 

      6.
LIQUIDATION, DISSOLUTION OR WINDING UP. 

            (a) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Participating Preferred Stock unless, prior thereto,
the holders of shares of Series A Participating Preferred Stock shall have
received $51.60 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). 

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

     7. NO
REDEMPTION. The shares of Series A Participating Preferred Stock shall not be
redeemable. 

     8.
RANKING. The Series A Participating Preferred Stock shall rank equal to all
other series of the Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets. 

A-3 

     9.
AMENDMENT. The Articles of Incorporation, as amended, of the Corporation shall
not be further amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of two-thirds (2/3) or more of the outstanding shares of the Series
A Participating Preferred Stock, voting separately as a class. 

     10.
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. 

A-4 

EXHIBIT B 

FORM OF RIGHTS CERTIFICATE 

	Certificate No. R-	________
  Rights

NOT EXERCISABLE AFTER DECEMBER 14, 2018
OR EARLIER IF REDEEMED BY THE COMPANY OR THE OCCURRENCE OF A SECTION 11(a)(ii)
EVENT (AS DEFINED IN THE RIGHTS AGREEMENT). THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BECOME NULL AND VOID. THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A SUBSEQUENT HOLDER OF SUCH
RIGHTS. ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
SHALL BECOME, OR MAY ALREADY HAVE BECOME, NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT AND MAY NOT BE TRANSFERRED TO ANY
PERSON. 

RIGHTS CERTIFICATE 
AMTECH SYSTEMS,
INC. 

     This
certifies that _____________________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of December 15, 2008, as it may from time to time be
supplemented or amended (the “Rights Agreement”), between Amtech Systems, Inc.,
an Arizona corporation (the “Company”), and Corporate Stock Transfer, Inc, a
Colorado corporation, the Rights Agent (the “Rights Agent”), to purchase from
the Company at any time prior to 5:00 P.M. (New York City time) on December 14,
2018 (the “Final Expiration Date”) at the office of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one one-thousandth of a
fully paid, nonassessable share of Series A Participating Preferred Stock (the
“Preferred Stock”) of the Company, at a purchase price of $51.60 per one
one-thousandth of a share (the “Purchase Price”), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed and properly completed. The number of Rights
evidenced by this Rights Certificate (and the number of one one-thousandth of a
share which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as
of December 15, 2008, based on the Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price, the number and kind of
shares of Preferred Stock or other securities of the Company or any other Person
(as such term is defined in the Rights Agreement) or other property, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate, and the timing of permitted exercise, are subject to modification
and adjustment upon the happening of certain events including a Triggering Event
(as such term is defined in the Rights Agreement). 

B-1 

     Upon the
occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Rights Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement), (ii) a transferee of
an Acquiring Person or of any such Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event. 

     This
Rights Certificate is subject to all of the terms, provisions and conditions of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.

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

     Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $0.001 per Right at any time prior to the earlier of the close of business on
(i) the tenth business day following the Stock Acquisition Date, and (ii) the
Final Expiration Date. In addition, subject to the provisions of the Rights
Agreement, each Right evidenced by this Certificate may be exchanged by the
Company at its option for one share of Common Stock of the Company (subject to
adjustment for any stock split, stock dividend or similar transaction) following
the Stock Acquisition Date and prior to the time an Acquiring Person owns 50% or
more of the shares of Common Stock then outstanding. 

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

B-2 

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

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

     WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal. 

	Dated as of
      ____________, 20__.  	AMTECH
      SYSTEMS, INC.  
	  
	  
	  	By: 
    	 
	 	 	Name:   
	  		Title:   

	ATTEST:  	
	  	
	 
    	
	Name:  	
	Title:  	
	  	 
	  	
	Countersigned:  	
	  	
	  	,
	as
      Rights Agent  	
	  	
	By: 
    	 	
	 	Name:     	
		Title:    	

B-3 

[Form of Reverse Side of Rights
Certificate] 

FORM OF ASSIGNMENT 

(To be executed by the registered holder
if such 
holder desires to transfer the Rights Certificate.) 

	       FOR VALUE
      RECEIVED  	 

	hereby sells, assigns and transfers unto 
      	 
	 
	(Please print name and address of transferee)

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

	Dated: 	 	, 	           
    		 
	  		Signature  

Signature Guaranteed: 

Certificate 

     The undersigned hereby certifies by
checking the appropriate boxes that: 

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

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

	Dated: 	 	, 	           
    		 
	  		Signature  

Signature Guaranteed: 

NOTICE 

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

B-4 

FORM OF ELECTION TO
PURCHASE 

     (To be
executed if holder desires to 
exercise Rights represented by the Rights
Certificate.) 

To: AMTECH SYSTEMS, INC.: 

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

	Please insert
      social security or taxpayer identification number  	  
	 	 
	(Please print name and
address) 

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

	Please insert
      social security or taxpayer identification number  	  
	 	 
	(Please print name and address) 

	Dated: 	 	, 	           
    		 
	  		Signature  

Signature Guaranteed: 

B-5 

Certificate 

     The undersigned hereby certifies by
checking the appropriate boxes that: 

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

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

	Dated: 	 	, 	           
    		 
	  		Signature  

Signature Guaranteed: 

NOTICE 

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

B-6 

EXHIBIT C 

AMENDED AND RESTATED RIGHTS AGREEMENT

AMTECH
SYSTEMS, INC. 

Summary of Rights 

	Distribution
      and
Transfer of Rights;
Rights Certificate:	        	The Board of Directors of Amtech
      Systems, Inc. (the “Company”) has authorized the issuance of a
      dividend of one Right for each Amtech Systems, Inc. Common Share
      outstanding. Prior to the Distribution Date
      referred to below, the Rights will be evidenced by and trade with the
      certificates for the Common Shares. After the Distribution Date, the
      Company will mail Rights certificates to the Company’s shareholders and the Rights will
      become transferable apart from the Common Shares.
			  
	Distribution
      Date:		Rights will separate from the
      Common Shares and become exercisable following (a) the tenth business day
      (or such later date as may be determined by the Company’s Board of
      Directors) after a person or group acquires beneficial ownership of 15% or
      more of the Company’s Common Shares or (b) the tenth business day (or such
      later date as may be determined by the Company’s Board of Directors) after
      a person or group announces a tender or exchange offer, the consummation
      of which would result in ownership by a person or group of 15% or more of the Company’s Common
      Shares.
			 
	Preferred Stock
      
Purchasable Upon 
Exercise of Rights:		After the Distribution Date, each
      Right will entitle the holder to purchase for $51.60 (the “Exercise Price”), a fraction of a
      share of the Company’s Preferred Shares with economic attributes
      substantially equivalent to one of the Company’s Common
  Shares.
			 
	Flip-In:		If an acquirer (an “Acquiring Person”) obtains 15% or
      more of the Company’s Common Shares, then each Right (other than Rights
      owned by an Acquiring Person or its affiliates) will entitle the holder
      thereof to purchase, for the Exercise Price, a number of the Company’s
      Common Shares having a then-current market value of twice the
      Exercise
      Price.
			 
	Flip-Over:		If, after an Acquiring Person
      obtains 15% or more of the Company’s Common Shares, (a) the Company merges
      into another entity, (b) an acquiring entity merges into the Company or
      (c) the Company sells more than 50% of the Company’s assets or earning
      power, then each Right
      (other than Rights owned by an Acquiring Person or its affiliates) will
      entitle the holder thereof to purchase, for the Exercise Price, a number
      of Common Shares of the person engaging in the transaction having a then
      current market value of twice the Exercise Price.
			 
	Exchange
      Provision:		At any time after the date on
      which an Acquiring Person obtains 15% or more of the Company’s Common
      Shares and prior to the acquisition by the Acquiring Person of 50% of the
      outstanding Common Shares, the Board of Directors of the Company may
      exchange the Rights (other than Rights owned by the Acquiring Person or
      its affiliates), in whole or in part, for Common Shares of the Company at
      an exchange ratio of one Common
      Share per Right (subject to adjustment).
			 
	Redemption of the
      
Rights:		Rights will be redeemable at the
      Company’s option for $0.001 per Right at any time on or prior to the fifth
      day (or such later date as may be determined by the Company’s Board of
      Directors) after public announcement that a Person has acquired beneficial
      ownership of 15% or more of the
      Company’s Common Shares.
			 
	Expiration of the
      
Rights:		The Rights expire on the earliest
      of (a) December 14, 2018 or (b) exchange or redemption of the Rights as described
above.
			 
	Amendment of Terms
      
of Rights:		The terms of the Rights and the
      Rights Agreement may be amended in any respect without the consent of the
      Rights holders on or prior to the Distribution Date; thereafter, the terms
      of the Rights and the Rights Agreement may be amended without the consent
      of the Rights holders in order to cure any ambiguities or to make changes
      which do not adversely affect the interests of Rights holders (other than
      the Acquiring Person). 

C-1 

	Voting
      Rights:	       	Rights will not have any voting
      rights.
	 		
	Anti-Dilution
      
Provisions:		Rights will have the benefit of
      certain customary anti-dilution provisions.
		 	
	Taxes:		
      The Rights distribution should not be
      taxable for federal income tax purposes. However, following an event which
      renders the Rights exercisable or upon redemption of the Rights, stockholders may recognize
      taxable income.

     The
foregoing is a summary of certain principal terms of the Rights Agreement only
and is qualified in its entirety by reference to the Amended and Restated
Preferred Shares Rights Agreement dated as of December 15, 2008 between the
Company and Computershare Trust Company, N.A., as Rights Agent (the “Rights
Agreement”). The Rights Agreement may be amended from time to time. A copy of
the Rights Agreement was filed with the Securities and Exchange Commission as an
Exhibit to a Current Report on Form 8-K dated December 15, 2008. A copy of the
Rights Agreement is available free of charge from the Company. 

C-2

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