Document:

Exhibit 10.32

Summary of
Non-Employee Director Compensation

     Ruddick Corporation (the “Company”) compensates each member of its
Board of Directors (the “Board) who is not an employee of the Company or its
subsidiaries. Effective January 1, 2009, non-employee directors will receive
$34,000 per year for services as a director, plus $2,000 for each Board meeting
or committee meeting attended. In addition to the general fees for directors
described above, the Chairman of the Audit Committee of the Board is paid an
additional annual fee of $6,000 for services as chairman of that
committee.

     Non-employee directors of the Company may
defer the payment of the annual fee and/or Board meeting fees, pursuant to the
Company’s Director Deferral Plan (the “Deferral Plan”). The deferred fees are
converted into units representing shares of Common Stock of the Company (the
“Common Stock”) with a fair market value equal to the value of the fees
deferred, and the number of units is then credited to the director’s account,
along with additional units representing the amount of any dividends or stock
distributions. Upon termination of service as a director or in the event of
death, the balance of the director’s account will be distributed to the director
or a designated beneficiary in the form of Common Stock.

     Under the Company’s 1995 Comprehensive
Stock Option Plan (the “1995 Plan”), the Company automatically granted each
non-employee director at the time the 1995 Plan was adopted a ten-year option to
purchase 10,000 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock on the date of the option grant. Since that
time, pursuant to the provisions of the Company’s stock option plans, the
Company has automatically granted a ten-year option to purchase 10,000 shares of
Common Stock to each new non-employee director upon his or her initial election
as director. These options are immediately vested, and the exercise price of
these options is equal to the fair market value of the Common Stock on the date
of the director’s election.

     The Company grants additional equity
awards to its non-employee directors from time to time, at the Board’s
discretion. These equity awards generally have taken the form of stock option
grants and discretionary contributions by the Company to the Deferral Plan for
the benefit of each non-employee director, however, other award types may be
granted in the future at the discretion of the Board. On November 20, 2008, the
Board approved discretionary contributions by the Company to the Deferral Plan
for the benefit of each non-employee director in the amount of
$14,000.

     The Company also provides term life
insurance coverage for each non-employee director.EXHIBIT 4.2

 

RIGHTS AGREEMENT 

between: 

     AVIGEN, INC., 
a Delaware corporation; 

and 

AMERICAN STOCK TRANSFER & TRUST CO. LLC, 
a New York Limited Liability Trust Company, 
as Rights Agent 

__________________________

Dated as of November 21, 2008

__________________________

 

TABLE OF CONTENTS 

	  	       	  	PAGE  
	SECTION 1.  	 	CERTAIN DEFINITIONS  	1 
	SECTION
      2.  		APPOINTMENT OF RIGHTS AGENT  	5 
	SECTION 3.  		ISSUE OF RIGHT CERTIFICATES  	5 
	SECTION
      4.  		FORM OF RIGHT CERTIFICATES  	7 
	SECTION 5.  		COUNTERSIGNATURE AND REGISTRATION 
    	8 
	SECTION
      6.  		TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT  	  
	  		CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT  	  
	  		CERTIFICATES  	8 
	SECTION 7.  		EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS  	9 
	SECTION
      8.  		CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES 
    	11 
	SECTION 9.  		AVAILABILITY OF PREFERRED SHARES  	11 
	SECTION
      10.  		PREFERRED SHARES RECORD DATE  	12 
	SECTION 11.  		ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF 
	  
	  		RIGHTS  	12 
	SECTION
      12.  		CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES  	20 
	SECTION 13.  		CONSOLIDATION, MERGER OR
      SALE OR
      TRANSFER OF
      ASSETS
      OR  	  
	  		EARNING POWER  	20 
	SECTION
      14.  		FRACTIONAL RIGHTS AND FRACTIONAL SHARES  	23 
	SECTION 15.  		RIGHTS OF ACTION  	25 
	SECTION
      16.  		AGREEMENT OF RIGHT HOLDERS  	25 
	SECTION 17.  		RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER  	26 
	SECTION
      18.  		CONCERNING THE RIGHTS AGENT  	26 
	SECTION 19.  		MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT  	27 
	SECTION
      20.  		DUTIES OF RIGHTS AGENT  	27 
	SECTION 21.  		CHANGE OF RIGHTS AGENT  	29 
	SECTION
      22.  		ISSUANCE OF NEW RIGHT CERTIFICATES  	30 
	SECTION 23.  		REDEMPTION  	31 
	SECTION
      24.  		EXCHANGE  	32 
	SECTION 25.  		NOTICE OF CERTAIN EVENTS  	33 
	SECTION
      26.  		NOTICES  	34 
	SECTION 27.  		SUPPLEMENTS AND AMENDMENTS 
    	35 

i. 

TABLE
OF CONTENTS

(CONTINUED)

	  	      	  	PAGE 
	SECTION 28.  	  	DETERMINATION AND ACTIONS BY THE BOARD
      OF DIRECTORS, ETC.  	35 
	SECTION
      29.  		SUCCESSORS  	36 
	SECTION 30.  		BENEFITS OF THIS AGREEMENT  	36 
	SECTION
      31.  		SEVERABILITY  	36 
	SECTION 32.  		GOVERNING LAW  	36 
	SECTION
      33.  		COUNTERPARTS  	36 
	SECTION 34.  		DESCRIPTIVE HEADINGS  	36 

ii.

RIGHTS AGREEMENT 

     THIS RIGHTS AGREEMENT
(“Agreement”) is dated as of
November 21, 2008 and is made between AVIGEN, INC., a Delaware corporation
(the “Company”), and AMERICAN STOCK TRANSFER
& TRUST CO. LLC, a New York Limited
Liability Trust Company, as rights agent (“Rights Agent”). 

RECITALS 

     The Board
of Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Right”) for each Common Share (as
such term is hereinafter defined) outstanding at the Close of Business on
December 1, 2008 (the “Record
Date”), each Right representing the right
to purchase one one-hundredth of a Preferred Share (as such term is hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest to occur of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined); provided, however, that
Rights may be issued with respect to Common Shares that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date in accordance with the provisions of Section 22
hereof. 

AGREEMENT 

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

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

     (a) “Acquiring Person” shall mean any
Person (as such term is hereinafter defined) who or that, together with all
Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares then outstanding. Notwithstanding the
foregoing, (A) the term Acquiring Person shall not include (i) the Company, (ii)
any Subsidiary (as such term is hereinafter defined) of the Company, (iii) any
employee benefit or compensation plan of the Company or any Subsidiary of the
Company, (iv) any entity holding Common Shares for or pursuant to the terms of
any such employee benefit or compensation plan of the Company or any Subsidiary
of the Company, or (v) any Person, together with all Affiliates and Associates
of such Person, who is the Beneficial Owner of 20% or more of the Common Shares
outstanding as of the date of this Agreement until such time after the date of
this Agreement that such Person, together with all Affiliates and Associates of
such Person, shall become the Beneficial Owner of any additional 

1. 

Common Shares (other than by means of a
dividend made by the Company on the Common Shares outstanding or pursuant to a
split, subdivision or other reclassification of the Common Shares undertaken by
the Company) and shall then beneficially own more than 20% of the Common Shares
outstanding, and (B) no Person shall become an “Acquiring Person” either (x) as
the result of an acquisition of Common Shares by the Company that, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the Common Shares then
outstanding; provided,
however, that if a Person shall become the
Beneficial Owner of 20% or more of the Common Shares then outstanding by reason
of share purchases by the Company and shall, following written notice from, or
public disclosure by the Company of such share purchases by the Company, become
the Beneficial Owner of any additional Common Shares without the prior consent
of the Company and shall then be the Beneficial Owner more than 20% of the
Common Shares then outstanding, then such Person shall be deemed to be an
“Acquiring Person,” (y) as the result of the acquisition of Common Shares
directly from the Company, provided,
however, that if a Person shall become the
Beneficial Owner of 20% or more of the Common Shares then outstanding by reason
of share purchases directly from the Company and shall, after that date, become
Beneficial Owner of any additional Common Shares without the prior written
consent of the Company and shall then Beneficially Own more than 20% of the
Common Shares then outstanding, then such Person shall be deemed to be an
“Acquiring Person” or (z) if the Board of Directors determines in good faith
that a Person who would otherwise be an “Acquiring Person,” as defined pursuant
to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests, as promptly as practicable (as
determined in good faith by the Board of Directors), following receipt of
written notice from the Company of such event, of Beneficial Ownership of a
sufficient number of Common Shares so that such Person would no longer be an
Acquiring Person, as defined pursuant to the foregoing provisions of this
paragraph (a), or, in the case of any Derivative Securities underlying a
transaction entered into by such Person or otherwise acquired by such Person,
such Person terminates such transaction or otherwise disposes of such Derivative
Securities so that such Person would no longer be an Acquiring
Person, then such
Person shall not be deemed to be an “Acquiring Person” for any purposes of this
Agreement; provided, however, that if such Person shall again become the Beneficial Owner
of 20% or more of the Common Shares then outstanding, such Person shall be
deemed an “Acquiring Person,” subject to the exceptions set forth in this
Section 1(a). 

     (b) “Affiliate” and
“Associate”
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), as in effect on the date of this
Agreement; provided, however, that the limited partners of a limited partnership shall not
be deemed to be Associates of such limited partnership solely by virtue of their
limited partnership interests. 

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

2. 

          (i) that such Person or any of such Person’s Affiliates
or Associates is deemed to beneficially own, within the meaning of Rule 13d-3 of
the General Rules and Regulations under the Exchange Act as in effect on the
date of this Agreement; 

          (ii)
that such Person or any of such Person’s
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities and other than agreements between the Company and
any corporate partner pursuant to which the right to purchase shares is
conditioned upon the achievement of research or development milestones), or upon
the exercise of conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person’s Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); 

         
(iii)
that are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B) hereof) or disposing of any securities of the
Company; provided, however, an agreement, arrangement or understanding for purposes of
this Section 1(c)(iii) shall not be deemed to include actions, including any
agreement, arrangement or understanding, or statements by any member of the
Company’s Board of Directors as of the date of this Agreement, any subsequent
directors of the Company (the “Successor
Directors”) who have been nominated by a
majority of directors who are directors as of the date of this Agreement or who
are Successor Directors, or by any Person of whom such a director is an
Affiliate or Associate, provided, however
that this exception shall not apply to a
particular Person or Persons if and to the extent that such Person or Persons,
after the date of this Agreement, acquires Beneficial Ownership of more than an
additional 5% of the then outstanding Common Shares of the Company unless (A)
the shares are acquired directly from the Company or as part of an employee
benefit or compensation plan of the Company or a subsidiary of the Company or
(B) the Person establishes to the satisfaction of the directors of the Company
that it is acting on its own behalf and not in concert with any other Person and
will not, upon completion of any purchases, be the Beneficial Owner of 20% or
more of the outstanding Common Shares; or 

3. 

          (iv)
that are Derivative Securities provided that
the number of Common Shares deemed Beneficially Owned as a result of such
Derivative Securities shall equal the number of Common Shares that are
synthetically owned pursuant to the derivative transactions underlying such
Derivative Securities. 

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

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

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

     (f) “Common Shares” shall mean
the shares of common stock, par value $0.001 per share, of the Company;
provided, however, that, “Common Shares,” when used in this Agreement in connection with a
specific reference to any Person other than the Company, shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person or
Persons that ultimately control such first-mentioned Person. 

     (g) “Derivative
Securities” shall mean securities underlying
a derivative transaction entered into by a Person, or derivative securities
acquired by a Person, which give such Person the economic equivalent of
ownership of an amount of securities in the Company due to the fact that the
value of the derivative transaction is explicitly determined by reference to the
price or value of securities in the Company, without regard to whether (i) such
derivative securities convey any voting rights in securities in the Company to
such Person, (ii) such derivative securities are required to be, or capable of
being, settled through delivery of securities in the Company, or (iii) such
Person may have entered into other transactions that hedge the economic effect
of such derivative securities. 

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

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

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

4. 

     (k) “Person” shall mean any individual,
firm, corporation, limited liability company, partnership, joint venture,
association, trust, unincorporated organization or other entity, and shall
include any successor (by merger or otherwise) of such entity. 

     (l) “Preferred Shares” shall mean shares
of Series A Junior Participating Preferred Stock, par value $0.001 per share, of
the Company having the designations and the powers, preferences and rights, and
the qualifications, limitations and restrictions set forth in the Form of
Certificate of Designation attached to this Agreement as Exhibit A. 

     (m) “Purchase
Price” shall have the meaning set forth
in Section 7(b) hereof. 

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

     (o) “Shares Acquisition Date” shall mean
the date 10 days following the first date of public announcement by the Company
or an Acquiring Person that an Acquiring Person has become such; provided, however, that, if
such Person is determined not to have become an Acquiring Person pursuant to
clause (z) of Subsection 1(a)(B) hereof, then no Shares Acquisition Date shall
be deemed to have occurred. 

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

     (q) “Transaction” shall mean any merger,
consolidation or sale of assets described in Section 13(a) hereof or any
acquisition of Common Shares that would result in a Person becoming an Acquiring
Person or a Principal Party (as such term is hereinafter defined). 

     (r) “Transaction Person” with respect to a
Transaction shall mean (i) any Person who (x) is or will become an Acquiring
Person or a Principal Party (as such term is hereinafter defined) if the
Transaction were to be consummated and (y) directly or indirectly proposed or
nominated a director of the Company, which director is in office at the time of
consideration of the Transaction, or (ii) an Affiliate or Associate of such a
Person. 

SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights Agent to act as agent
for the Company in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from time to time
appoint such co-rights agents as it may deem necessary or desirable. 

SECTION 3. ISSUE OF RIGHT CERTIFICATES. 

     (a) Until the earlier of the Close of Business on (i) the Shares Acquisition
Date or (ii) the tenth Business Day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement (determined in accordance
with Rule 14d-2 under the Exchange Act) by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of 

5. 

the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of any
such plan) of, or of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer (which intention to commence remains in
effect for five Business Days after such announcement), the consummation of
which would result in any Person becoming an Acquiring Person (including any
such date that is after the date of this Agreement and prior to the issuance of
the Rights, the earlier of such dates being herein referred to as the
“Distribution Date”), (x) the Rights will be evidenced by the certificates for
Common Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the Rights (and the right to receive Right Certificates
therefor) will be transferable only in connection with the transfer of Common
Shares. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested and provided
with all necessary information, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit B hereto (a
“Right Certificate”), evidencing one Right for each Common Share so held,
subject to the adjustment provisions of Section 11 of this Rights Agreement. As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

     (b) On the Record Date, or as soon as practicable thereafter, the Company
will send (directly or through the Rights Agent or its transfer agent) a copy of
a Summary of Rights to Purchase Preferred Shares, in substantially the form of
Exhibit C hereto (the “Summary of
Rights”), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company.
With respect to certificates for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof. Until the
Distribution Date (or the earlier of the Redemption Date and the Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. 

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

     THIS
CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS
SET FORTH IN A RIGHTS AGREEMENT BETWEEN AVIGEN, INC. (THE “COMPANY”) AND

6. 

AMERICAN STOCK TRANSFER & TRUST CO. LLC, AS RIGHTS AGENT
(THE “RIGHTS AGENT”), DATED AS OF NOVEMBER 21, 2008, AS 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 EXECUTIVE 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 WITHOUT CHARGE AFTER RECEIPT OF
A WRITTEN REQUEST THEREFOR. AS DESCRIBED IN THE RIGHTS AGREEMENT, RIGHTS ISSUED
TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN RELATED PERSONS,
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, SHALL BECOME NULL AND VOID.

     With
respect to such certificates containing the foregoing legend, until the
Distribution Date (or, if earlier, the earlier of the Redemption Date or the
Final Expiration Date), the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares that are no
longer outstanding. Notwithstanding this Section 3(c), 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.

SECTION 4. FORM OF RIGHT CERTIFICATES.

     (a) The
Right Certificates (and the form of election to purchase Preferred Shares, the
form of assignment and the form of certification to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or quotation system
on which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11 and 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the
Purchase Price (as

7.

defined in Section 7(b)), but the
number of such one one-hundredths of a Preferred Share and the Purchase Price
shall be subject to adjustment as provided herein.

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

     THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY ARE NULL
AND VOID.

     The
provisions of Section 11(a)(ii) hereof shall be operative whether or not the
foregoing legend is contained on any such Right Certificate. The Company shall
give written notice to the Rights Agent promptly after it becomes aware of the
existence of any Acquiring Person.

SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Vice Chairman of the Board, its Chief
Financial Officer, or any of its Vice Presidents, either manually or by
facsimile signature, shall have affixed thereto the Company’s seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned by the Rights Agent either manually or by
facsimile signature and shall not be valid for any purpose unless countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.

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

SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHT CERTIFICATES. Subject to the provisions

8.

of Section 11(a)(ii), Section 14 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 earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right Certificates
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of one one-hundredths of a Preferred Share as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject
to Section 11(a)(ii), Section 14 and Section 24 hereof, countersign and deliver
to the person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates. The Rights Agent shall have no duty or obligation to take any
action under any section of this Agreement which requires payment by a Rights
holder of applicable taxes and charges to the Company unless and until the
Company provides a written certificate to the Rights Agent certifying that all
such taxes and/or charges have been paid.

     Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security
satisfactory to them, and, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
issue, execute and deliver a new Right Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.

     Notwithstanding any other provisions hereof, the Company and the Rights
Agent may amend this Rights Agreement to provide for uncertificated Rights in
addition to or in place of Rights evidenced by Rights Certificates.

SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.

     (a) The
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price in cash, or by certified 

9.

check or cashier’s check payable to the
order of the Company for each one one-hundredth of a Preferred Share (or such
other number of shares or other securities) as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of Business on December
1, 2018 (the “Final Expiration
Date”), (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof (the “Redemption Date”), or
(iii) the time at which such Rights are exchanged as provided in Section 24
hereof. 

     (b) The
purchase price for each one one-hundredth of a Preferred Share pursuant to the
exercise of a Right shall initially be $8.00 (the “Purchase Price”) and
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below. 

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

     In
addition, in the case of an exercise of the Rights by a holder pursuant to
Section 11(a)(ii) hereof, the Rights Agent shall return such Right Certificate
to the registered holder thereof after imprinting, stamping or otherwise
indicating thereon that the rights represented by such Right Certificate no
longer include the rights provided by Section 11(a)(ii) hereof, and, if fewer
than all the Rights represented by such Right Certificate were so exercised,

10. 

the Rights Agent shall indicate on the
Right Certificate the number of Rights represented thereby that continue to
include the rights provided by Section 11(a)(ii) hereof.

     (d) In case the registered holder of any Right Certificate shall exercise
fewer than all the Rights evidenced thereby (other than a partial exercise of
rights pursuant to Section 11(a)(ii) as described in Section 7(c) hereof), a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to the provisions
of Section 14 hereof.

     (e) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares or any
Preferred Shares held in its treasury, the number of Preferred Shares that will
be sufficient to permit the exercise in full of all outstanding Rights in
accordance with this Section 7.

     (f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certification following the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, (ii) tendered the Purchase Price (and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9) to the Company in the manner set forth
in Section 7(c), and (iii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall reasonably request.

SECTION 8. CANCELLATION AND DESTRUCTION
OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if delivered or surrendered to the Rights
Agent, shall be canceled by it, and no Right 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 Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right Certificates
to the Company approximately one and one-half years after the cancellation date,
or shall, at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.

SECTION 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants
and agrees that so long as the Preferred Shares (and, after the time a person
becomes an Acquiring Person, Common Shares or any other securities) issuable
upon the exercise of the Rights may be listed on any national securities
exchange or quotation system, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed on such exchange or quotation system upon
official notice of issuance upon such exercise.

11.

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

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

     As soon
as practicable after the Distribution Date, the Company shall use its best
efforts to:

          (i) prepare and file a registration statement under the Securities Act of
1933, as amended (the “Act”), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, will
use its best efforts to cause such registration statement to become effective as
soon as practicable after such filing and will use its best efforts to cause
such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final Expiration Date;
and

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

SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose name
any certificate for Preferred Shares or other securities is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Shares or other securities represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered with the forms of election and
certification duly executed and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided,
however, that if the date of such surrender
and payment is a date upon which the Preferred Shares or other securities
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Shares or other
securities transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate, as such, shall not
be entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right 

12.

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

          (ii) Subject to Section 24 hereof and the provisions of the next
paragraph of this Section 11(a)(ii), in the event any Person shall become an
Acquiring Person, each holder of a Right shall, for a period of 60 days after
the later of such time any Person becomes an Acquiring Person or the effective
date of an appropriate registration statement filed under the Act pursuant to
Section 9 hereof (provided, however that, if at any time prior to the expiration
or termination of the Rights there shall be a temporary restraining order, a
preliminary injunction, an injunction, or temporary suspension by the Board of
Directors, or similar obstacle to exercise of the Rights (the “Injunction”) that
prevents exercise of the Rights, a new 60-day period shall commence on the date
the Injunction is removed), have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-hundredths
of a 

13.

Preferred Share for which a Right is
then exercisable and dividing that product by (B) 50% of the then current per
share market price of the Common Shares (determined pursuant to Section 11(d)
hereof) on the date such Person became an Acquiring Person; 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). In the event that any Person shall become an Acquiring Person
and the Rights shall then be outstanding, the Company shall not take any action
that would eliminate or diminish the benefits intended to be afforded by the
Rights. The Company shall give the Rights Agent written notice of the identity
of any Acquiring Person, any Associate or Affiliate of such Acquiring Person
known to the Company, and any nominee of any of the foregoing known to the
Company, 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.

     Notwithstanding anything in this Agreement to the contrary, from and
after the time any Person becomes an Acquiring Person, any Rights beneficially
owned by (i) such Acquiring Person or an Associate or Affiliate of such
Acquiring Person, (ii) a transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
became such, or (iii) a transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person’s becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board of Directors
has determined is part of a plan, arrangement or understanding that has as a
primary purpose or effect the avoidance of this Section 11(a)(ii), shall become
null and void without any further action and no holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 11(a)(ii) and Section 4(b) hereof are
complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of Right Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. No Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence shall be canceled. 

          (iii) In lieu of issuing Common Shares in accordance with Section
11(a)(ii) hereof, the Company may, if a majority of the Board of Directors then
in office determines that such action is necessary or appropriate and not
contrary to the interests of holders of Rights, elect to (and, in the event that
the Board of Directors has not exercised the exchange right contained in Section
24(c) hereof and there are not sufficient treasury shares and authorized but
unissued 

14. 

Common Shares to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the
Company shall) take all such action as may be necessary to authorize, issue or
pay, upon the exercise of the Rights, cash (including by way of a reduction of
the Purchase Price), property, Common Shares, other securities or any
combination thereof having an aggregate value equal to the value of the Common
Shares that otherwise would have been issuable pursuant to Section 11(a)(ii)
hereof, which aggregate value shall be determined by a nationally recognized
investment banking firm selected by a majority of the Board of Directors then in
office. For purposes of the preceding sentence, the value of the Common Shares
shall be determined pursuant to Section 11(d) hereof. Any such election by the
Board of Directors must be made within 60 days following the date on which the
event described in Section 11(a)(ii) hereof shall have occurred. Following the
occurrence of the event described in Section 11(a)(ii) hereof, a majority of the
Board of Directors then in office may suspend the exercisability of the Rights
for a period of up to 60 days following the date on which the event described in
Section 11(a)(ii) hereof shall have occurred to the extent that such directors
have not determined whether to exercise their rights of election under this
Section 11(a)(iii). In the event of any such suspension, the Company shall issue
a public announcement (with prompt written notice thereof to the Rights Agent)
stating that the exercisability of the Rights has been temporarily suspended.

     (b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Shares (or shares having the same designations and the
powers, preferences and rights, and the qualifications, limitations and
restrictions as the Preferred Shares (“Equivalent Preferred Shares”)) or
securities convertible into Preferred Shares or Equivalent Preferred Shares at a
price per Preferred Share or Equivalent Preferred Share (or having a conversion
price per share, if a security convertible into Preferred Shares or Equivalent
Preferred Shares) less than the then current per share market price of the
Preferred Shares (as such term is hereinafter defined) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares that the
aggregate offering price of the total number of Preferred Shares and/or
Equivalent Preferred Shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or Equivalent Preferred Shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided,
however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent. Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a 

15. 

record date is fixed; and in the event
that such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed. 

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

     (d) 

          (i) For the purpose of any computation hereunder, the “current per
share market price” of any security (a “Security” for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security or securities
convertible into such shares, or (C) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal 

16. 

consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or as reported
on the NASDAQ Global Market or, if the Security is not listed or admitted to
trading on any national securities exchange or reported on the NASDAQ Global
Market, the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System
(“Nasdaq”) or such other system then in use, or, if on any such date the Security
is not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Security selected by the Board of Directors or, if on any such date no
professional market maker is making a market in the Security, the price as
determined in good faith by the Board of Directors. The term “Trading Day” shall
mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day. 

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

     (e) No
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments that by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-hundredth of a Preferred Share or one
ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction that requires such adjustment or (ii) the
date of the expiration of the right to exercise any Rights. 

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

17. 

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

     (h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and Section 11(c) hereof, 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-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a Preferred 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 substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement (with prompt written notice thereof 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 Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates to be so distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement. 

     (j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a Preferred Share issuable upon the exercise of
the Rights, the Right 

18. 

Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share that was expressed in the initial Right
Certificates issued hereunder. 

     (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the opinion of its counsel, be necessary to
enable the Company to validly and legally issue fully paid and nonassessable
Preferred Shares at such adjusted Purchase Price. 

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

     (m) The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the effect of such action
is to, materially diminish or eliminate the benefits intended to be afforded by
the Rights. Any such action taken by the Company during any period after any
Person becomes an Acquiring Person but prior to the Distribution Date shall be
null and void unless such action could be taken under this Section 11(m) from
and after the Distribution Date. 

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

     (o) In
the event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (A) the number 

19. 

of one one-hundredths of a Preferred
Share purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of a Preferred Share
so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (B) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights that
each Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(o) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.

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

SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE
OR NUMBER OF SHARES. Whenever an adjustment or any event affecting the Rights or their
exercisability (including without limitation an event which causes the Rights to
become null and void) is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment
or describing such event, and a brief statement of the facts accounting for such
adjustment or describing such event, (b) file with the Rights Agent and with
each transfer agent for the Common Shares or the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 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 obligated or responsible for calculating any adjustment nor
shall it be deemed to have knowledge of such adjustment 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 Distribution Date, directly or indirectly (x) the
Company shall consolidate with, or merge with and into, any Interested
Stockholder, or if in such merger or consolidation all holders of Common Stock
are not treated alike, any other Person, (y) any Interested Stockholder, or if
in such merger or consolidation all holders of Common Stock are not treated
alike, any other Person shall consolidate with the Company, or merge with and
into the Company, and the Company shall be the continuing or surviving
corporation of such merger (other than, in the case of either transaction
described in (x) or (y), a merger or consolidation that would result in all of
the voting power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all
of the voting power represented by the securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation and
the holders of such securities not having changed as a 

20.

result of such merger or
consolidation), or (z) the Company shall sell, mortgage or otherwise transfer
(or one or more of its subsidiaries shall sell, mortgage or otherwise transfer),
in one or more transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its subsidiaries (taken as a
whole) to any Interested Stockholder or Stockholders, or if in such transaction
all holders of Common Stock are not treated alike, any other Person, (other than
the Company or any Subsidiary of the Company in one or more transactions each of
which individually and the aggregate does not violate Section 13(d) hereof)
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right, subject to Section 11(a)(ii) hereof, shall have the right to
receive, upon the exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of freely tradeable Common Shares
of the Principal Party (as such term is hereinafter defined), free and clear of
liens, rights of call or first refusal, encumbrances or other adverse claims, as
shall be equal to the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and dividing that product
by (B) 50% of the then current per share market price of the Common Shares of
such Principal Party (determined pursuant to Section 11(d) hereof) on the date
of consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, 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 to such Principal
Party; and (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Shares in accordance with Section 9 hereof) in connection with such consummation
as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights. 

     (b) “Principal Party” shall mean: 

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

          (ii) in the case of any transaction described in clause (z) of
Section 13(a) hereof, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions; 

provided, however, that in any case, (1) if the Common Shares of such Person are
not at such time and have not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary or Affiliate of

21. 

another Person the Common Shares of
which are and have been so registered, “Principal Party” shall refer to such
other Person; (2) if such Person is a Subsidiary, directly or indirectly, or
Affiliate of more than one Person, the Common Shares of two or more of which are
and have been so registered, “Principal Party” shall refer to whichever of such
Persons is the issuer of the Common Shares having the greatest aggregate market
value; and (3) if such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such party were a “Subsidiary” of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.

     (c) The Company shall not consummate any such consolidation, merger, sale or
transfer unless the Principal Party shall have a sufficient number of authorized
Common Shares that have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and each Principal Party and each other Person who may
become a Principal Party as a result of such consolidation, merger, sale or
transfer shall have (i) executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13, and (ii) prepared, filed and had declared and remain
effective a registration statement under the Act on the appropriate form with
respect to the Rights and the securities exercisable upon exercise of the
Rights, and the Company shall have furnished to the Rights Agent a certificate
setting forth the number of shares of Common Stock of such issuer which may be
purchased upon the exercise of each Right after the consummation of such
consolidation, merger, sale or transfer and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or transfer of
assets mentioned in paragraph (a) of this Section 13, the Principal Party at its
own expense will: 

          (i) cause the registration statement under the Act with respect to
the Rights and the securities purchasable upon exercise of the Rights on an
appropriate form to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date; 

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

          (iii) list the Rights and the securities purchasable upon exercise
of the Rights on each national securities exchange on which the Common Shares
were listed prior to the consummation of such consolidation, merger, sale or
transfer of assets or on the NASDAQ Global Market if the Common Shares were
listed on the NASDAQ Global Market or, if the Common Shares were not listed on a
national securities exchange or the NASDAQ Global Market prior to the
consummation of such consolidation, merger, sale or transfer of assets, on a
national securities exchange or the NASDAQ Global Market; and 

22. 

          (iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that comply in all
material respects with the requirements for registration on Form 10 under the
Exchange Act.

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

     (d) After the Distribution Date, the Company covenants and agrees that it
shall not (i) consolidate with, (ii) merge with or into, or (iii) sell or
transfer to, in one or more 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, any other Person (other than a Subsidiary of the Company in a
transaction that does not violate Section 11(m) hereof), if (x) at the time of
or after such consolidation, merger or sale there are any charter or bylaw
provisions or any rights, warrants or other instruments or securities
outstanding, agreements in effect or any other action taken that would diminish
or otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of the Person who constitutes, or would constitute, the
“Principal Party” for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates. The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such other Person shall
have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 13(d).

SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL
SHARES.

     (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates that evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the 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 for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or as reported on the NASDAQ Global
Market or, if the Rights are not listed or admitted to trading on any national
securities exchange or reported on the NASDAQ Global Market, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by Nasdaq or such other system then in
use or, if on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors.
If on any such date no such market

23.

maker is making a market in the Rights,
the fair value of the Rights on such date as determined in good faith by the
Board of Directors shall be used. 

     (b) The Company shall not be required to issue fractions of Preferred Shares
(other than fractions that are integral multiples of one one-hundredth of a
Preferred Share) upon exercise of the Rights or to distribute certificates that
evidence fractional Preferred Shares (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share). Fractions of Preferred
Shares in integral multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts;
provided, however, that holders of such depositary receipts shall have all of the
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions to which they are entitled as beneficial owners of
the Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one one-hundredth
of a Preferred Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Preferred
Share. For the purposes of this Section 14(b), the current market value of a
Preferred Share shall be the current per share market price of the Preferred
Shares (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise (or,
if not publicly traded, in accordance with Section 11(d)(ii) hereof).

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

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

     (e) Whenever a payment for a fractional Right or fractional share 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 payment 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,

24. 

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 under Sections 18 and 20 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares) and any registered holder of
any Right Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach by the Company of this
Agreement and will be entitled to specific performance of the obligations under,
and injunctive relief against actual or threatened violations by the Company of
the obligations of any Person subject to, this Agreement. Holders of Rights
shall be entitled to recover from the Company the reasonable costs and expenses,
including attorneys fees, incurred by them in any successful action to enforce
the provisions of this Agreement.

SECTION 16. AGREEMENT OF
RIGHT HOLDERS. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:

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

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

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

     (d) notwithstanding anything in this Agreement to the contrary, the Rights
Agent shall not have any liability to any holder of a Right or other Person as a
result of its inability to

25.

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 of competent jurisdiction 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
obligation.

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

SECTION 18. CONCERNING THE
RIGHTS AGENT. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation,
delivery, amendment, administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense (including, without limitation, the reasonable fees and expenses of
counsel), incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable judgment of a court of
competent jurisdiction), 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 any claim of liability and appealing
any claim of liability arising therefrom, directly or indirectly. The provisions
of this Section 18 and Section 20 below shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation,
replacement or removal of the Rights Agent.

      The
Rights Agent shall be protected and shall incur no liability for or in respect
of any action taken, suffered or omitted by it in connection with its acceptance
and administration of this Agreement and in the exercise and performance of its
duties hereunder, in reliance upon any Rights Certificate or certificate
representing Preferred Shares or Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed, executed and,
when necessary, verified, guaranteed

26.

or acknowledged by the proper Person or
Persons, or otherwise upon advice of counsel as set forth in Section 20 below,
in the absence of gross negligence, bad faith or willful misconduct on the part
of the Rights Agent (which gross negligence, bad faith or willful misconduct
must be determined by a final, non-appealable judgment of a court of competent
jurisdiction). The Rights Agent shall not be deemed to have any knowledge of any
event of which it was supposed to receive notice thereof hereunder, and the
Rights Agent shall be fully protected and shall incur no liability for failing
to take action in connection therewith unless and until it has received such
notice in writing.

SECTION 19. MERGER OR CONSOLIDATION OR CHANGE
OF NAME
OF RIGHTS AGENT.
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
shareholder services or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or document 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 Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.

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

SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement (and no implied
duties) upon the following terms and conditions, by all of which the Company and
the holders of Right Certificates, by their acceptance thereof, shall be
bound:

     (a) The Rights Agent may consult with legal counsel of its choice (who may be
legal counsel for the Company or an employee of the Rights Agent), and the
opinion or advice 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 in accordance with
such opinion or advice.

27.

     (b) Whenever in the performance of its duties under this Agreement the Rights
Agent shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking, 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 any one of the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full 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 only for its own gross
negligence, bad faith or willful misconduct (each as determined by a final,
non-appealable judgment of a court of competent jurisdiction). 

     (d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only. The Rights Agent makes no representations as to the
validity or sufficiency of this Agreement or of the Rights
Certificates.

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

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

     (g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Financial Officer, any Vice President, the

28. 

Secretary or the 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 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. Any application by the
Rights Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken, suffered or
omitted by the Rights Agent with respect to its duties or obligations under this
Agreement and the date on and/or after which such action shall be taken,
suffered or omitted and the Rights Agent shall not be liable for any action
taken, suffered or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be less
than three Business Days after the date indicated in such application unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking, suffering or omitting any such action, the Rights Agent has received
written instructions in response to such application specifying the action to be
taken, suffered or omitted.

     (h) The Rights Agent and any member, affiliate, stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such stockholder, member, 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 (or through its
directors, officers and 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, bad faith or willful
misconduct (each as determined by a final, non-appealable judgment of a court of
competent jurisdiction) in the selection and continued employment
thereof.

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

SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days’ notice in writing mailed to the Company and to each
transfer agent for the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days’

29.

notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
for the Common Shares or Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be either (a) a Person organized and doing business under
the laws of the United States or of any other state of the United States that is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
that has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million or (b) a direct or indirect wholly owned
Subsidiary of such Person or its wholly-owning parent. 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 for the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or
any defect therein, shall not affect the legality 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
RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date, the Company (a) shall with respect to Common Shares so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement in existence prior to the Distribution Date, or upon the exercise,
conversion or exchange of securities, notes or debentures issued by the Company
and in existence prior to the Distribution Date, and (b) may, in any other case,
if deemed necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) the Company shall not
be obligated to issue any such Right Certificates if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax

30.

consequences to the Company or the
Person to whom such Right Certificate would be issued, and (ii) no Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.

SECTION 23. REDEMPTION.

     (a) The Rights may be redeemed by action of the Board of Directors pursuant
to Section 23(b) hereof and shall not be redeemed in any other
manner.

     (b) 

          (i) The Board of Directors may, at its option, at any time prior
to the earlier of (A) such time as any Person becomes an Acquiring Person, or
(B) the Final Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption
Price”), and the Company may, at its
option, pay the Redemption Price in Common Shares (based on the “current
per-share market price,” as such term is defined in Section 11(d) hereof, of the
Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. The redemption of
the Rights by the Board of Directors may be made effective at such time, on such
basis and subject to such conditions as the Board of Directors in its sole
discretion may establish. Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable pursuant to Section
11(a)(ii) hereof prior to the expiration or termination of the Company’s right
of redemption under this Section 23(b)(i).

          (ii) In addition, the Board of Directors may, at its option, at any
time after the time a Person becomes an Acquiring Person and after the
expiration of any period during which the holder of Rights may exercise the
rights under Section 11(a)(ii) hereof but prior to any event described in clause
(x), (y) or (z) of the first sentence of Section 13 hereof, redeem all but not
less than all of the then outstanding Rights at the Redemption Price (x) in
connection with any merger, consolidation or sale or other transfer (in one
transaction or in a series of related transactions) of assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
subsidiaries (taken as a whole) in which all holders of Common Shares are
treated alike and not involving (other than as a holder of Common Shares being
treated like all other such holders) an Interested Stockholder or a Transaction
Person or (y)(A) if and for so long as the Acquiring Person is not thereafter
the Beneficial Owner of 20% or more of the then outstanding Common Shares, and
(B) at the time of redemption no other Persons are Acquiring Persons.

     (c) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(b) hereof, and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give public notice of
any such redemption (with prompt written notice thereof to the Rights
Agent);

31.

provided, however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. Within 10 days after such
action of the Board of Directors ordering the redemption of the Rights pursuant
to Section 23(b) hereof, the Company shall mail a notice of redemption to all
the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent (with a copy thereof to the
Rights Agent) or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares, provided, however, that failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption. Any notice that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date. 

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

SECTION 24. EXCHANGE. 

     (a) The Board of Directors may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding. 

     (b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to Section 24(a) hereof and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange (with prompt written notice thereof to the Rights
Agent); provided, however, that the failure to give, or any defect in, such notice shall
not affect the

32. 

validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent; provided,
however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. Any
notice that is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Shares for Rights will be
effected and, in the event of any partial exchange, the number of Rights that
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

     (c) In lieu of issuing Common Shares in accordance with Section 24(a) hereof,
the Company may, if a majority of the Board of Directors then in office
determines that such action is necessary or appropriate and not contrary to the
interests of the holders of Rights, elect to (and, in the event that there are
not sufficient treasury shares and authorized but unissued Common Shares to
permit any exchange of the Rights in accordance with Section 24(a) hereof, the
Company shall) take all such action as may be necessary to authorize, issue or
pay, upon the exchange of the Rights, cash, property, Common Shares, other
securities or any combination thereof having an aggregate value equal to the
value of the Common Shares that otherwise would have been issuable pursuant to
Section 24(a) hereof, which aggregate value shall be determined by a nationally
recognized investment banking firm selected by a majority of the Board of
Directors then in office. For purposes of the preceding sentence, the value of
the Common Shares shall be determined pursuant to Section 11(d) hereof. Any
election pursuant to this Section 24(c) by the Board of Directors must be made
by resolution within 60 days following the date on which the event described in
Section 11(a)(ii) hereof shall have occurred. Following the occurrence of the
event described in Section 11(a)(ii) hereof, a majority of the Board of
Directors then in office may suspend the exercisability of the Rights for a
period of up to 60 days following the date on which the event described in
Section 11(a)(ii) hereof shall have occurred to the extent that such directors
have not determined whether to exercise their rights of exchange under this
Section 24(c). In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended (with prompt written notice thereof to the Rights Agent).

     (d) The Company shall not be required to issue fractions of Common Shares or
to distribute certificates that evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the purposes of this Section
24(d), the current market value of a whole Common Share shall be the closing
price of a Common Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately after the date of the
first public announcement by the Company that an exchange is to be effected
pursuant to this Section 24. 

33. 

SECTION 25. NOTICE OF CERTAIN
EVENTS.

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

     (b) In case the event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall as soon as practicable thereafter give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.

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

          American
Stock Transfer & Trust Co. LLC
          Administrative
Support
          6201
15th Avenue
          Brooklyn,
NY 11219
          Attention:
Donna Ansbro

34.

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

          Avigen,
Inc.
          1301 Harbor Bay Parkway
          Alameda,
CA 94502
          Attention:
Chief Financial Officer

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

SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of the
Rights. From and after the Distribution Date, the Company and the Rights Agent
shall, if the Company so directs, from time to time supplement or amend any
provision of this Agreement without the approval of any holders of Right
Certificates in order to (i) cure any ambiguity, (ii) correct or supplement any
provision contained herein that may be defective or inconsistent with any other
provisions herein, or (iii) change any other provisions with respect to the
Rights that the Company may deem necessary or desirable; provided,
however, that no such supplement or amendment shall be made that would
adversely affect the interests of the holders of Rights (other than the
interests of an Acquiring Person or its Affiliates or Associates). Any
supplement or amendment adopted during any period after any Person has become an
Acquiring Person but prior to the Distribution Date shall become null and void
unless such supplement or amendment could have been adopted by the Company from
and after the Distribution Date. Any such supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent. Upon delivery
of a certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment; provided,
however, that the Rights Agent may, but shall not be obligated to, enter into
any such supplement or amendment that affects the Rights Agent’s own rights,
duties, obligations or immunities under this Agreement and shall not be bound by
any such supplement or amendment not executed by it. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.

SECTION 28. DETERMINATION AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any
calculation of the number of Common Shares outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding Common Shares or any other securities of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement. The

35.

Board of Directors shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or 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 that are done or made by the Board in good
faith, shall be final, conclusive and binding on the Rights Agent and the
holders of the Rights. The Rights Agent is entitled always to assume the
Company’s Board of Directors acted in good faith and shall be fully protected
and incur no liability in reliance thereon.

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

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

SECTION 31. SEVERABILITY. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. 

SECTION 32. GOVERNING LAW. This Agreement and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely within such
State.

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

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

36. 

     The
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written. 

	AVIGEN, INC. 		AMERICAN STOCK
      TRANSFER &
      TRUST CO.  
	  		      	LLC, AS RIGHTS
      AGENT  
	  
				  
	By:  	 	 	By: 
    	  
	Name: 	 		Name: 	 
	Title:  	 		Title:  	 

37. 

EXHIBIT A TO
RIGHTS AGREEMENT

FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

(Pursuant to Section 151 of
the
Delaware General Corporation Law)

     AVIGEN, INC., a corporation organized
and existing under the General Corporation Law of the State of Delaware
(hereinafter called the “Company”), hereby certifies that
the following resolution was adopted by the Board of Directors of the
Corporation as required by Section 151 of the General Corporation Law at a
meeting duly called and held on November 21, 2008:

     RESOLVED, that pursuant to the authority granted to and vested in the
Board of the Company in accordance with the provisions of the Company’s Amended
and Restated Certificate of Incorporation, as amended (the
“Charter”), the Board hereby creates a series of Preferred Stock,
par value $0.001 per share, of the Company and hereby states the designation and
number of shares, and fixes the designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions thereof (in
addition to the provisions set forth in the Charter, which are applicable to the
Preferred Stock of all classes and series), as follows:

SERIES A JUNIOR PARTICIPATING PREFERRED
STOCK:

     Section 1. Designation and Amount. 300,000 shares of Preferred Stock, $0.001 par value per share, are
designated “Series A Junior Participating Preferred Stock” with the designations
and the powers, preferences and rights, and the qualifications, limitations and
restrictions specified herein (the “Junior
Preferred Stock”). Such number of shares
may be increased or decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Junior Preferred Stock to a number
less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Junior Preferred Stock.

     Section
2. Dividends and Distributions.

          (A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Junior Preferred Stock with respect

A-1

to dividends, the holders of shares of
Junior Preferred Stock, in preference to the holders of Common Stock, par value
$0.001 per share (the “Common
Stock”), of the Company, and of any other
junior 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 first day of April, July, October and January
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 Junior Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the greater of (a)
$l.00 or (b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Junior Preferred Stock. In the event the Company shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Junior
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. 

          (B) The Company shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares 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 $1.00 per share on the Junior
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 Junior 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 Junior 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 Junior 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 Junior Preferred

A-2 

Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not more
than sixty (60) days prior to the date fixed for the payment thereof.

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

          (A) Subject to the provision for adjustment hereinafter set forth,
each share of Junior Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Company. In
the event the Company shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. 

          (B) Except as otherwise provided herein, in any other Certificate
of Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Junior Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Company having general voting
rights shall vote together as one class on all matters submitted to a vote of
stockholders of the Company. 

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

     Section
4. Certain Restrictions. 

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

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

               (ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Preferred Stock, except
dividends paid ratably on the Junior 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; 

A-3 

               (iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock, provided that the
Company may at any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the Company ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to the
Junior Preferred Stock; or 

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

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

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

     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the
Company, no distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Junior Preferred Stock unless, prior thereto, the holders of
shares of Junior Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, provided that the holders of
shares of Junior Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Company shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which holders of shares of
Junior 

A-4 

Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) 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.

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

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

     Section 9. Rank. The Junior Preferred
Stock shall rank, with respect to the payment of dividends and the distribution
of assets, junior to all series of any other class of the Company’s Preferred
Stock. 

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

A-5 

     The
undersigned has executed this certificate as of November 21, 2008. 

	 
	Andrew A. Sauter  
	Chief Financial Officer  

A-6 

EXHIBIT B TO RIGHTS AGREEMENT 

FORM OF RIGHT CERTIFICATE

	Certificate
      No. R-[___]  	[_____]
      Rights 

NOT EXERCISABLE AFTER DECEMBER 1, 2018 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

RIGHT CERTIFICATE
AVIGEN, 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 November 21, 2008 (the “Rights Agreement”),
between Avigen, Inc., a Delaware corporation (the “Company”), and
American Stock Transfer & Trust Co. LLC (the “Rights Agent”),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 p.m., New York time,
on December 1, 2018 at the office of the Rights Agent designated for such
purpose, or at the office of its successor as Rights Agent, one one-hundredth of
a fully paid non-assessable share of Series A Junior Participating Preferred
Stock, par value $0.001 per share (the “Preferred Shares”), of the
Company, at a purchase price of $8.00 per one one-hundredth of a Preferred
Share (the “Purchase Price”), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of December 1, 2008, based on the Preferred Shares as
constituted at such date. 

     From and
after the time any Person becomes an Acquiring Person, (as such terms are
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate who becomes a transferee after the Acquiring Person becomes such, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of any such Acquiring Person, Associate or Affiliate who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such,
such Rights shall become null and void without any further action and no holder
hereof shall have any right with respect to such Rights from and after the time
any Person becomes an Acquiring Person. 

B-1 

     As
provided in the Rights Agreement, the Purchase Price and the number of one
one-hundredths of a Preferred Share which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events. 

     This
Right Certificate is subject to all of the terms, provisions and conditions of
the Rights Agreement, as amended from time to time, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned offices of the Rights Agent. 

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

     Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $0.001
per Right or (ii) may be exchanged in whole or in part for shares of the
Company’s common stock, par value $0.001 per share, or, upon circumstances set
forth in the Rights Agreement, cash, property or other securities of the
Company, including fractions of a share of Preferred Stock. 

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

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

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

B-2 

     WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal. Dated as of __________, 20__.

	AVIGEN, INC.  
	 	
	By:  	 
	Name: 	 
	Title:  	  

COUNTERSIGNED:

AMERICAN STOCK TRANSFER & TRUST CO. LLC
as Rights
Agent

	By:  	 
	Name: 	 
	Title:  	 

B-3

Form of Reverse Side of Right
Certificate

FORM OF ASSIGNMENT

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

     FOR
VALUE RECEIVED
______________________________________
hereby sells, assigns and transfers unto

	 
	 (Please print name and address
      of transferee) 

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

	Dated: 	 

	 
	 
	Signature 

B-4

SIGNATURE GUARANTEED:

Signatures must be guaranteed by a
member or participant in the Securities Transfer Agent Medallion Program, the
New York Stock Exchange Medallion Signature Program or the Stock Exchange
Medallion Program.

---------------------------------------------------------------------------------------------

     The
undersigned hereby certifies that (1) the Rights evidenced by this Right
Certificate are not being sold, assigned or transferred by or on behalf of a
Person who is or was an Acquiring Person, an Interested Stockholder or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement); and (2) after due inquiry and to the best of the knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person, an Interested
Stockholder, or an Affiliate or Associate thereof.

	 
	Signature 

B-5

FORM OF ELECTION TO PURCHASE

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

To American Stock Transfer & Trust
Co. LLC, as Rights Agent:

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

	Please insert social
      security  	
	or other identifying
      number:  	                    
    

	 
	 (Please print
      name and address)

 

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

	Please insert social
      security  	
	or other identifying
      number:  	                    
    

	 
	 (Please print
      name and address) 
	 
 

	Dated:  	 

	 
	 
	Signature 

B-6

SIGNATURE GUARANTEED:

Signatures must be guaranteed by a
member or participant in the Securities Transfer Agent Medallion Program, the
New York Stock Exchange Medallion Signature Program or the Stock Exchange
Medallion Program.

---------------------------------------------------------------------------------------------

     The
undersigned hereby certifies that (1) the Rights evidenced by this Right
Certificate are not beneficially owned by nor are they being exercised on behalf
of an Acquiring Person, an Interested Stockholder or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement); and (2) after due
inquiry and to the best of the knowledge of the undersigned, the undersigned did
not acquire the Rights evidenced by this Right Certificate from any Person who
is or was an Acquiring Person, an Interested Stockholder, or an Affiliate or
Associate thereof.

	  
	Signature 

---------------------------------------------------------------------------------------------

NOTICE

     The
signature in the Form of Assignment or Form of Election to Purchase, as the case
may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

     In the
event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement) and such Assignment or Election to Purchase
will not be honored.

B-7

EXHIBIT C TO RIGHTS AGREEMENT

AVIGEN, INC.

SUMMARY OF RIGHTS
TO PURCHASE
PREFERRED SHARES

     On
November 21, 2008, the Board of Directors of AVIGEN, INC., a Delaware corporation
(the “Company”), declared a dividend of one preferred share purchase right
(a “Right”) for each outstanding share of common stock, par value $0.001 per share
(the “Common Shares”), of the Company. The dividend is effective as of the close
of business on December 1, 2008 (the “Record Date”) with respect to the
stockholders of record on that date. The Rights will also attach to new Common
Shares issued after the Record Date. Each Right entitles the registered holder
to purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $0.001 per share (the
“Preferred Shares”), of the Company at a price of $8.00 per one one-hundredth
of a Preferred Share (the “Purchase
Price”), subject to adjustment. Each
Preferred Share is designed to be the economic equivalent of one hundred (100)
Common Shares. The description and terms of the Rights are set forth in a Rights
Agreement dated as of November 21, 2008 (the “Rights Agreement”), between the
Company and American Stock Transfer & Trust Co. LLC (the “Rights Agent”).

DETACHMENT AND
TRANSFER OF
RIGHTS

     Initially, the Rights will be evidenced by the stock certificates
representing Common Shares then outstanding, and no separate Right Certificates
will be distributed. Until the earlier to occur of (i) the date 10 days
following a public announcement that a person or group of affiliated or
associated persons, has become an “Acquiring Person” (as such term is defined in
the Rights Agreement) or (ii) 10 business days (or such later date as the Board
may determine) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer which would result in the beneficial
ownership by an Acquiring Person of 20% or more of the outstanding Common Shares
(the earlier of such dates being called the “Distribution Date”), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate.

     In
general, an “Acquiring Person” is a person, the affiliates or associates of such
person, or a group, which has acquired beneficial ownership of 20% or more of
the outstanding Common Shares; provided, however, that generally, under the Rights
Agreement, an “Acquiring Person” does not include (i) the Company, (ii) a
subsidiary of the Company, (iii) any employee benefit or compensation plan of
the Company, (iv) any entity holding Common Shares for or pursuant to the terms
of any such employee benefit or compensation plan or (v) any person or entity
that, together with its affiliates and associates, beneficially owned 20% or
more of the outstanding Common Shares as of November 21, 2008, until such person
or entity or its affiliates or associates becomes the beneficial owner of any
additional Common Shares. In addition, except under limited circumstances, no
person or entity will become an Acquiring Person as the result of the
acquisition of Common Shares by the Company that, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such person or

C-1

entity to 20% or more of the Common
Shares then outstanding. Further, except under certain circumstances, no person
will become an Acquiring Person due to the acquisition of Common Shares directly
from the Company.

     The
Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferable with
and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights) the
surrender or transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of this Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights (“Right
Certificates”) will be mailed to holders
of record of the Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the
Rights.

EXERCISABILITY OF RIGHTS

     The
Rights are not exercisable until the Distribution Date. The Rights will expire
on December 1, 2018 (the “Final Expiration
Date”), unless the Final Expiration Date
is extended or unless the Rights are earlier redeemed or exchanged by the
Company in each case as described below. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends.

     The
Purchase Price payable, and the number of Preferred Shares or other securities
or property issuable or payable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution. The number of outstanding
Rights and the number of one one-hundredths of a Preferred Share issuable upon
exercise of each Right are also subject to adjustment in the event of a stock
split of the Common Shares or a stock dividend on the Common Shares payable in
Common Shares, or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date. With certain
exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional Preferred Shares will be issued (other than fractions which
are integral multiples of one one-hundredth (1/100) of a Preferred Share, which
may, at the election of the Company, be evidenced by depositary receipts) and in
lieu thereof, an adjustment in cash will be made based on the market price of
the Preferred Shares on the last trading day prior to the date of
exercise.

TERMS OF
PREFERRED SHARES

     Preferred
Shares purchasable upon exercise of the Rights will not be redeemable. Each
Preferred Share will be entitled to a minimum preferential quarterly dividend
payment of one dollar ($l.00) per share but will be entitled to an aggregate
dividend of one hundred times (100x) the dividend declared per Common Share. In
the event of liquidation, the holders of the

C-2

Preferred Shares will be entitled to a
minimum preferential liquidation payment of one hundred dollars ($100) per share
but will be entitled to an aggregate payment of one hundred (100x) times the
payment made per Common Share. Each Preferred Share will have one hundred (100)
votes, voting together with the Common Shares. Finally, in the event of any
merger, consolidation or other transaction in which Common Shares are exchanged,
each Preferred Share will be entitled to receive one hundred times (100x) the
amount received per Common Share. These rights are protected by customary
anti-dilution provisions. Because of the nature of the Preferred Shares’
dividend, liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share. The Preferred Shares would rank
junior to any other series of the Company’s preferred stock.

TRIGGER OF FLIP-IN AND FLIP-OVER RIGHTS

     In the
event that any person or group of affiliated or associated persons becomes an
Acquiring Person, proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person or any affiliate or
associate thereof (which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having a market
value of two times (2x) the exercise price of the Right. This right will
commence on the date 10 days following public announcement that a person has
become an Acquiring Person (or the effective date of a registration statement
relating to distribution of the rights, if later) and terminate sixty (60) days
later (subject to adjustment in the event exercise of the rights is
enjoined).

     In the
event that the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold
to an Acquiring Person, its affiliates or associates or certain other persons in
which such persons have an interest, proper provision will be made so that each
such holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times (2x) the exercise price of the
Right.

REDEMPTION AND
EXCHANGE OF
RIGHTS

     At any
time prior to the earliest of (i) the close of business on the day 10 days
following the first public announcement that a person has become an Acquiring
Person, or (ii) the Final Expiration Date, the Board of Directors of the Company
may redeem the Rights in whole, but not in part, at a price of $0.001 per Right
(the “Redemption Price”). In general, the redemption of the Rights may be made
effective at such time on such basis with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption
Price.

     At any
time after any Person becomes an Acquiring Person and prior to the acquisition
by such person or group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by such person or group which will have become void), in whole or in part,
at an exchange ratio of one Common Share,

C-3

or, under circumstances set forth in
the Rights Agreement, cash, property or other securities of the Company,
including fractions of a Preferred Share (or of a share of a class or series of
the Company’s preferred stock having equivalent designations and the powers,
preferences and rights, and the qualifications, limitations and restrictions),
per Right (with value equal to such Common Shares).

AMENDMENT OF RIGHTS

     The terms
of the Rights generally may be amended by the Board of Directors of the Company
without the consent of the holders of the Rights, except that from and after
such time as the Rights are distributed no such amendment may adversely affect
the interests of the holders of the Rights (excluding the interest of any
Acquiring Person).

ADDITIONAL INFORMATION

     A copy of
the Rights Agreement has been filed with the Securities and Exchange Commission
as an Exhibit to a Current Report on Form 8-K filed on November 24, 2008. A copy
of the Rights Agreement is available from the Company by writing to: Avigen,
Inc., 1301 Harbor Bay Parkway, Alameda, California 94502, Attention: Investor
Relations. This summary description of the Rights is not intended to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.

C-4

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