Document:

syn_ex41-80731.htm

    Exhibit
4.1

     

     

     

     

     

     

     

     

     

    
 

    Synthetech,
Inc.

     

    and

     

    Computershare
Trust Company, N.A.,

    Rights
Agent

     

    Amended
and Restated Rights Agreement

     

    Dated
as of July 31, 2008

     

    

     

    

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    TABLE
OF CONTENTS

    
    

     

    
      	
              Section 1.

            	Certain
      Definitions	
               1

            
	 	 	 
	Section 2.	Appointment
      of Rights Agent	
               4

            
	 	 	 
	Section 3.	Issue of
      Right Certificates	
               4

            
	 	 	 
	Section 4.	Form of Right
      Certificates	
               6

            
	 	 	 
	Section 5.	Countersignature
      and Registration	
               6

            
	 	 	 
	Section 6.	Transfer,
      Split Up, Combination and Exchange of Right Certificates; Mutilated,
      Destroyed, Lost or Stolen Right Certificates	
               7

            
	 	 	 
	Section 7.	Exercise of
      Rights; Purchase Price; Expiration Date of Rights	
               8

            
	 	 	 
	Section 8.	Cancellation
      and Destruction of Right Certificates	
               9

            
	 	 	 
	Section 9.	Availability
      of Common Stock	
               9

            
	 	 	 
	Section 10.	Common Stock
      Record Date	
               9

            
	 	 	 
	Section 11.	Adjustment of
      Purchase Price, Number of Shares or Number of Rights	
               10

            
	 	 	 
	Section 12.	Certificate
      of Adjusted Purchase Price or Number of Shares	
               16

            
	 	 	 
	Section 13.	Consolidation,
      Merger or Sale or Transfer of Assets or Earning Power	
               16

            
	 	 	 
	Section 14.	Fractional
      Rights and Fractional Shares	
               17

            
	 	 	 
	Section 15.	Rights of
      Action	
               18

            
	
               

            	 	 
	Section 16.	Agreement of
      Right Holders	
               18

            
	 	 	 
	Section
      17.	Right
      Certificate Holder Not Deemed a Shareholder	
               19

            
	 	 	 
	Section 18.	Concerning
      the Rights Agent	
               19

            
	 	 	 
	Section 19.	Merger or
      Consolidation or Change of Name of Rights Agent	
               20

            
	 	 	 
	Section 20.	Duties of
      Rights Agent	
               20

            
	 	 	 
	Section 21.	Change of
      Rights Agent	
               22

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	Section 22.	Issuance of
      New Right Certificates	
               23

            
	 	 	 
	Section 23.	Redemption	
               23

            
	 	 	 
	Section 24.	Exchange	
               23

            
	 	 	 
	Section 25.	Notice of
      Certain Events	
               25

            
	 	 	 
	Section 26.	Notices	
               25

            
	 	 	 
	Section 27.	Supplements
      and Amendments	
               26

            
	 	 	 
	Section 28.	Successors	
               26

            
	 	 	 
	Section 29.	Benefits of
      This Agreement	
               26

            
	 	 	 
	Section 30.	Severability	
               27

            
	 	 	 
	Section 31.	Governing
      Law	
               27

            
	 	 	 
	Section 32.	Counterparts	
               27

            
	 	 	 
	Section 33.	Descriptive
      Headings	
               27

            
	 	 	 
	Section
34.	

              Force
      Majeure

            	
              27

            
	 	 	 
	Exhibit A
      Form of Right Certificate	
               29

            

    

     

    
 

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          
             

          

           

        

        
          -ii- 

          
            

          

        

        
           

        

      

    

    

    AMENDED
AND RESTATED RIGHTS AGREEMENT

     

    
      AMENDED
AND RESTATED RIGHTS AGREEMENT (this "Agreement"), dated as
of July 31, 2008, between SYNTHETECH, INC., an Oregon corporation (the "Company"), and
COMPUTERSHARE TRUST COMPANY, N.A. (successor to American Securities Transfer
& Trust, Inc.) (the "Rights
Agent").

    

     

    RECITALS

     

    
      
        	
                A.  

              	
                On
      July 23, 1998, the Board of Directors of the Company authorized and
      declared a dividend of one Right (as defined below) for each share of
      Common Stock, par value $0.001 per share, of the Company (the "Common Stock")
      outstanding on August 4, 1998 (the "Record Date"),
      each Right initially representing the right to purchase one share of
      Common Stock, upon the terms and subject to the conditions set forth in
      the Rights Agreement, dated as of July 23, 1998 (the "Original Rights
      Agreement"), between the Company and the Rights Agent, and further
      authorized and directed the issuance of one Right with respect to each
      share of Common Stock that would become outstanding between the Record
      Date and the earliest of the Distribution Date, the Redemption Date and
      the Final Expiration Date (as such terms are hereinafter
      defined).

              

      

       

      
        	
                

                  B.  

                

              	
                The
      Original Rights Agreement provides that the Rights will expire on
      August 3, 2008 and that the Exercise Price of the rights is $30.00
      per share.  The Original Rights Agreement also provides that the
      Company may from time to time amend or supplement the Original Rights
      Agreement.  The Company desires to amend the Original Rights
      Agreement to extend the expiration date of the Rights to August 3, 2018,
      to reduce the
      Exercise Price from $30.00 per share to $2.00 per share and to make
      related changes to the Original Rights Agreement and to restate the
      Original Rights Agreement. 

              

      

       

      
        	
                C.  

              	
                The
      Company and the Rights Agent hereby amend and restate the terms of the
      Original Rights Agreement as set forth
herein.

              

      

       

      
        	
                D.  

              	
                This
      Agreement restates and supersedes in its entirety the Original Rights
      Agreement.

              

      

       

    

    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 who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of the
shares of Common Stock of the Company then outstanding, but shall not include
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan.  Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of shares of Common Stock by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the outstanding shares of
Common Stock of the Company; provided, however, that if a
Person shall become the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock of the Company by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional shares of Common Stock of the Company, then
such Person shall be deemed to be an "Acquiring
Person."  Notwithstanding the foregoing, if the Board of Directors of
the Company 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 a sufficient number of share of Common Stock so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this
Agreement.

     

    (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.

     

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

     

    (i)           which
such Person or any of such Person's Affiliates or Associates beneficially owns,
directly or indirectly;

     

    (ii)           which
such Person or any of such Person's Affiliates or Associates has (A) the
right to acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than 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); or

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (iii)           which
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)) or disposing
of any securities of the Company.

     

    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 which 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 Commonwealth of Massachusetts 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., Boston, Massachusetts
time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 p.m., Boston, Massachusetts
time, on the next succeeding Business Day.

    

     

    (f)   
        "Common Stock" means the shares
of common stock, par value $0.001 per share, of the Company.  "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned
Person.

     

    (g)           "Continuing
Director" means any member of the Board of Directors of the Company who
(i) is not an Acquiring Person or an Affiliate or Associate of an Acquiring
Person and (ii) was either a member of the Board of Directors of the
Company on the date of this Agreement or who subsequently became a director of
the Company and whose initial election or initial nomination for election was
approved by a majority of the Continuing Directors then on the Board of
Directors of the Company.

     

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

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (k)           "Purchase
Price" shall have the meaning set forth in Section 7 hereof.

     

    (l)  
         "Redemption Date" shall
have the meaning set forth in Section 7 hereof.

     

    (m)          "Redemption
Price" shall have the meaning set forth in Section 23 hereof.

     

    (n)           "Requisite
Majority" means, at any time, the affirmative vote of a majority of the
Continuing Directors then in office.

     

    (o)           "Stock
Acquisition Date" shall mean the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become
such.

     

    (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.

     

    
      	
              Section 2.

            	
              Appointment
      of Rights Agent

            

    

     

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

    

     

    
      	
              Section 3.

            	
              Issue
      of Right Certificates

            

    

     

    (a)           Until
the earlier of (i) the 10th day after the Stock Acquisition Date and
(ii) the 10th business day (or such later date as may be determined by
action of the Board of Directors before such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any 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 the
consummation of which would result in any Person becoming the Beneficial Owner
of shares of Common Stock aggregating 15% or more of the outstanding shares of
Common Stock (including any such date which is after the date of this Agreement
and before the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for shares of Common Stock
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates as hereinafter defined) and not by separate
Right Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of shares of Common
Stock.  As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, insured, postage-prepaid mail, to each record holder of
shares of Common Stock as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit A hereto
(a "Right
Certificate"), evidencing one Right for each share of Common Stock so
held (subject to appropriate adjustments, as hereinafter defined).  As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
      (b)           On
the Record Date, or as soon as practicable thereafter, the Company sent a copy
of a Summary of Rights, in substantially the form of Exhibit B to the Original
Rights Agreement (the "Summary of Rights"),
by first class, postage-prepaid mail, to each record holder of shares of Common
Stock as of the close of business on the Record Date, at the address of such
holder shown on the records of the Company.  With respect to
certificates for shares of Common Stock outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof, together with a copy of the
Summary of Rights attached thereto.  Until the earlier of the
Distribution Date, the Redemption Date and the Final Expiration Date, the
surrender for transfer of any certificate for shares of Common Stock outstanding
on the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
shares of Common Stock represented thereby.

       

    

    (c)           Certificates
for shares of Common Stock which become outstanding after the Record Date but
before the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:

     

    
      Through
July 31, 2008:

       

      This
certificate also evidences and entitles the holder hereof to certain rights as
set forth in a Rights Agreement between Synthetech, Inc. and American Securities
Transfer & Trust, Inc., dated as of July 23, 1998 (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 Synthetech,
Inc.  Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate.  Synthetech, Inc. will mail
to the holder of this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor.  Under certain
circumstances, as set forth in the Rights Agreement, Rights issued to any Person
who becomes an Acquiring Person (as defined in the Rights Agreement) may become
null and void.

       

      After
July 31, 2008:

       

      This
certificate also evidences and entitles the holder hereof to certain rights as
set forth in an Amended and Restated Rights Agreement, dated as of July 31,
2008, between Synthetech, Inc. and Computershare Trust Company, N.A.
(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
Synthetech, Inc.  Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate.  Synthetech, Inc.
will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.  Under
certain circumstances, as set forth in the Rights Agreement, Rights issued to
any Person who becomes an Acquiring Person (as defined in the Rights Agreement)
may become null and void.

       

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    With
respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the shares of Common Stock represented
thereby.  If the Company purchases or acquires any shares of Common
Stock after the Record Date but before the Distribution Date, any Rights
associated with such shares of Common Stock shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock which are no longer
outstanding.

     

    
      	
              Section 4.

            	
              Form
      of Right Certificates

            

    

     

    The Right Certificates (and the forms
of election to purchase and of assignment to be printed on the reverse thereof)
shall be substantially the same as Exhibit A 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 Section 22
hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of shares of Common Stock as shall be set forth therein at the price
per share set forth therein (the "Purchase Price"), but
the number of such shares and the Purchase Price shall be subject to adjustment
as provided herein.

     

    
      	
              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, any of its Vice Presidents, or its Treasurer,
either manually or by facsimile signature.  The Right Certificates
shall be countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned.  In case any officer of the Company who
shall have signed any of the 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 the Rights Agreement any such person was not such an
officer.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its principal office, 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 of
Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or before the close of business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates (other than Right Certificates representing Rights that have become
void pursuant to Section 11(a) (ii) hereof or that have been exchanged
pursuant to Section 24 hereof) 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 shares 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 principal office of the Rights Agent.  Thereupon the
Rights Agent shall 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.

     

    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 reasonably satisfactory to them, and, at
the Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    
      	
              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 principal office of the Rights Agent, together with payment
of the Purchase Price for each shares as to which the Rights are exercised, at
or prior to the earliest of (i) the close of business on August 3, 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 share of Common Stock purchasable pursuant to the
exercise of a Right shall initially be $2.00, and shall be subject to adjustment
from time to time as provided in Section 11 or 13 hereof (the "Purchase Price") 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 transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Section 9 hereof by certified check, cashier's check or money order
payable to the order of the Company, the Rights Agent shall thereupon promptly
(i) (A) requisition from any transfer agent of the shares of Common
Stock certificates for the number of shares of Common Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) requisition from the depositary agent depositary
receipts representing such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares of Common Stock 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.

     

    (d)           In
case the registered holder of any Right Certificate shall exercise less than all
the Rights evidenced thereby, 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 or her duly
authorized assigns, subject to the provisions of Section 14
hereof.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    
      	
              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 cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled 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
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

     

    
      	
              Section 9.

            	
              Availability
      of Common Stock

            

    

     

    The Company covenants and agrees that
it will cause to be reserved and kept available out of its authorized and
unissued shares of Common Stock the number of shares of Common Stock that will
be sufficient to permit the exercise in full of all outstanding
Rights.  The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares of Common Stock (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable
shares.

     

    The Company further covenants and
agrees that it will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Common Stock upon the
exercise of Rights.  The Company shall not, however, be required to
pay any transfer tax which may be payable in respect of any transfer or delivery
of Right Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the shares of Common Stock 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 shares of Common Stock 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 reasonable satisfaction that no such tax is
due.

     

    
      	
              Section 10.

            	
              Common
      Stock Record Date

            

    

     

    Each person in whose name any
certificate for shares of Common Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Common Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; 

     

    
      
        
        

      

      
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    provided, however, that if the
date of such surrender and payment is a date upon which the Common Stock
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 shares of Common Stock transfer
books of the Company are open.  Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of shares of Common Stock for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.

     

    
      	
              Section 11.

            	
              Adjustment
      of Purchase Price, Number of Shares or Number of
  Rights

            

    

     

    The Purchase Price, the number of
shares of Common Stock 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 Common Stock payable in shares of Common
stock, (B) subdivide the outstanding Common Stock, (C) combine the
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (D) issue any shares of its capital stock in a reclassification of
the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), 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 which, if such Right had been exercised immediately prior to such
date and at a time when the Common Stock transfer books of the Company were
open, he or she 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.

     

    (ii)           Subject
to Section 24 of this Agreement, in the event any Person becomes an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of shares of Common Stock for which a Right is
then exercisable, in accordance with the terms of this Agreement, such number of
shares of Common Stock as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right is then exercisable and dividing that product by
(y) 50% of the then current per share market price of the Company's Common
Stock (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event.  If any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not take any
action which would eliminate or diminish the benefits intended to be afforded by
the Rights.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    From and after the occurrence of such
event, any Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall
be void and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement.  No Right
Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void pursuant to
the preceding sentence or any Associate or Affiliate thereof; 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 cancelled.

     

    (iii)           If
there shall not be sufficient shares of Common Stock issued but not outstanding
or authorized but unissued 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 additional shares of Common Stock
for issuance upon exercise of the Rights.  In the event the Company
shall, after good faith effort, be unable to take all such action as may be
necessary to authorize such additional shares of Common Stock, the Company shall
(A) determine the value of the shares issuable upon the exercise of a Right
(the "Current Value"), and (B) with respect to each Right, make adequate
provision to substitute for the shares issuable upon exercise of a Right
(1) cash, (2) a reduction in the Purchase Price, (3) other equity
securities of the Company (including, without limitation, shares, or units of
shares, of preferred stock), that a Requisite Majority has deemed to have
essentially the same rights, privileges and preferences as shares of Common
Stock ("Common Stock Equivalents")), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
conclusively determined by a Requisite Majority based upon the advice of a
nationally recognized investment banking firm selected by a Requisite Majority;
provided, however, that if the Company has not made adequate provision to
deliver value pursuant to clause (b) above within 30 days following the first
occurrence of a Section 11(a)(ii) Event, then the Company will be obligated
to deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares or cash have an aggregate value equal
to the Spread.  The term "Spread" means the excess of (i) the
Current Value over (ii) the Purchase Price.  For purposes of this
Section 11(a)(iii), the Current Value of each share of Common Stock
issuable upon exercise of a Right will be the Current Market Price per share of
the Common Stock on the effective date of the Section 11(a)(ii) Event and
the per share or per unit value of any Common Stock Equivalent will be deemed to
equal the Current Market Price per share of the Common Stock on such
date.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (b)           In
case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of shares of Common Stock entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase shares of Common Stock or securities convertible into shares of Common
Stock or equivalent shares at a price per share (or having a conversion price
per share, if a security convertible into Common Stock) less than the then
current per share market price of the Common Stock (as defined in
Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such record
date plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock and/or equivalent 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 shares of Common Stock outstanding
on such record date plus the number of additional shares of Common Stock and/or
equivalent 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 of the Company, whose determination shall be described
in a statement filed with the Rights Agent.  Shares of Common Stock
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation.  Such adjustment shall be
made successively whenever such a record date is fixed; and if such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.

     

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

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (d)           For
the purpose of any computation hereunder, the "current per share market
price" of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided,
however, that
if the current per share market price of the Common Stock is determined during a
period following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock payable in shares of
such Common Stock or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Common Stock 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 Common Stock.  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 Common Stock is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use, or, if on any
such date the Common Stock 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 Common Stock selected by the Board of Directors of the
Company.  If the Common Stock is not publicly held or so listed or
traded, "current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent.  The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Stock is listed or admitted to
trading is open for the transaction of business or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, a Business
Day.

     

    (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 which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one one-hundredth of a share of Common
Stock.  Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires
such adjustment and (ii) the date of the expiration of the right to
exercise any Rights.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (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 Common Stock, 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 Common Stock
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 with respect to the Common Stock shall apply on
like terms to any such other shares.

     

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

     

    (h)           Unless
the Company shall have exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price as a result of the calculations made
in Sections 11(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of shares of Common Stock (calculated
to the nearest one-hundredth of a share of Common Stock) obtained by
(i) multiplying (x) the number of shares 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 shares of Common Stock 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 shares of Common Stock
for which a Right was exercisable immediately prior to such
adjustment.  Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one hundredth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price.  The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made.  This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the 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 

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    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 so to be 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 shares of
Common Stock issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price and
the number of shares of Common Stock which were expressed in the initial Right
Certificates issued hereunder.

     

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

     

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

     

    (m)           Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent
that it in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Common Stock, issuance wholly for cash of
any shares of Common Stock at less than the current market price, issuance
wholly for cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for Common Stock, dividends on Common Stock
payable in Common Stock or issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to holders of
its Common Stock shall not be taxable to such shareholders.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    (n)           If
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 Stock
payable in Common Stock or (ii) effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock) into a greater or lesser number of shares
of Common Stock, then in any such case (A) the number of shares of Common
Stock purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of shares of Common Stock so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of shares Common Stock outstanding immediately before such event and the
denominator of which is the number of shares of Common Stock outstanding
immediately after such event, and (B) each share of Common Stock
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each share of Common Stock outstanding immediately
prior to such event had issued with respect to it.  The adjustments
provided for in this Section 11(n) shall be made successively whenever such
a dividend is declared or paid or such a subdivision, combination or
consolidation is effected.

     

    
      	
              Section 12.

            	
              Certificate
      of Adjusted Purchase Price or Number of
Shares

            

    

     

    Whenever an adjustment is made as
provided in Section 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Stock 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.

     

    
      	
              Section 13.

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

            

    

     

    In the event, directly or indirectly,
at any time after a Person has become an Acquiring Person, (a) the Company
shall consolidate with, or merge with and into, any other Person, (b) any
Person shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than the Company or
one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except
as otherwise provided herein) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current Purchase Price, such
number of shares of Common Stock of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number
of shares of Common Stock 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 Stock of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Stock shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all 

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such issuer; and
(iv) such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in accordance
with Section 9 hereof) in connection with such consummation as may be
necessary to ensure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Stock thereafter
deliverable upon the exercise of the Rights.  The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Company and such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement so providing.  The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at
the time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights.  The provisions of
this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.

     

    
      	
              Section 14.

            	
              Fractional
      Rights and Fractional Shares

            

    

     

    (a)           The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which 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, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company.  If
on any such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used.

     

    (b)           The
Company shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock.  In lieu of fractional shares of Common Stock,
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 shares of Common
Stock.

     

    
      
        
        

      

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

     

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

     

    
      	
              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 are transferable only in connection with
the transfer of the shares of Common Stock;

     

    (b)           after
the Distribution Date, the Right Certificates are transferable 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
Stock 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 Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to the
contrary; and

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

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

     

    
      	
              Section
      17.

            	
              Right
      Certificate Holder Not Deemed a
Shareholder

            

    

     

    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 shares of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 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 administration and
execution of this Agreement and the exercise and performance of its duties
hereunder.  The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the
premises.

     

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

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    
      	
              Section 19.

            	
              Merger
      or Consolidation or Change of Name of Rights
  Agent

            

    

     

    Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the stock transfer or corporate trust powers of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof.  In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the 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 imposed by this Agreement 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 (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.

     

    (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 or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer or the Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    (c)           The
Rights Agent shall be liable hereunder to the Company and any other Person only
for its own gross negligence, bad faith or willful misconduct.

     

    (d)           The
Rights Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the 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.

     

    (e)           The
Rights Agent shall not be under any responsibility in respect of the validity of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any
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
Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice that such
change or adjustment is required); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation of
any shares of Common Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Common Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.

     

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

     

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

     

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

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

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

     

    
      	
              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 of the Common Stock 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' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
by registered or certified mail, and to the holders of the Right Certificates by
first-class mail.  In the event the transfer agency relationship in
effect between the Company and the Rights Agent terminates, the Rights Agent
will be deemed to have resigned automatically and be discharged from its duties
under this Agreement as of the effective date of such termination, and the
Company shall be responsible for sending any required notice.  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 or
her 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 a corporation
organized and doing business under the laws of the United States or of the State
of Oregon or New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of Oregon or New York), in good standing, having an office in the State of
Oregon or New York, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus, along with its Affiliates, of at
least $50 million.  After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose.  Not later than the effective date of any such appointment
the Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock, 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.

       

    

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    
      	
              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.

     

    
      	
              Section 23.

            	
              Redemption

            

    

     

    (a)           The
Board of Directors of the Company may, at its option, at any time prior to the
earlier of the Distribution Date or the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $.0001
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").  The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish.

     

    (b)           Immediately
upon the action of the Board of Directors of the Company ordering the redemption
of the Rights pursuant to paragraph (a) of this Section 23, and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price.  The Company shall promptly
give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption.  Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights, 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
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares.  Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice.  Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made.

     

    
      	
              Section 24.

            	
              Exchange

            

    

     

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

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    (b)           Immediately
upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to paragraph (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.  The
Company shall promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange.  The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent.  Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.  Each such notice of exchange will
state the method by which the exchange of the Common Shares for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged.  Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 11(a)(ii) hereof) held by each holder of
Rights.

     

    (c)           If
there shall not be sufficient shares of Common Stock authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the
Rights or shall take such other action specified in Section 11(a)(iii)
hereof.

     

    (d)           The
Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common
Stock.  In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock.  For the purposes of this paragraph (d),
the current market value of a whole share of Common Stock 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 prior to the date
of exchange pursuant to this Section 24.

     

    
      	
              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 Common Stock or to make any other distribution to
the holders of Common Stock (other than a regular quarterly cash dividend),
(ii) to offer to the holders of Common Stock rights or warrants to
subscribe for or to purchase any additional shares of Common Stock or shares of
stock of any class or any other securities, rights or options, 

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    (iii) to
effect any reclassification of Common Stock (other than a reclassification
involving only the subdivision of outstanding Common Stock), (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 Stock
payable in Common Stock or to effect a subdivision, combination or consolidation
of the Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock), 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, which shall specify the record date for the
purposes 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 Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of Common Stock 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
Common Stock, 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 such event and the
consequences of such 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 or overnight delivery
service, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:

       

      Synthetech,
Inc.

      1290
Industrial Way

      Albany,
OR  97321

       

                 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 or overnight delivery service, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:

       

    

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    
       

      Computershare
Trust Company, N.A.

      250
Royall Street

      Canton,
MA  02021

      Attention:
Client Services

       

      Notices or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent to the holder
of any 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

            

    

     

    
      The
Company may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions
with respect to the Rights which the Company may deem necessary or desirable,
any such supplement or amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however, that from
and after such time as any Person becomes an Acquiring Person, this Agreement
shall not be amended in any manner which would adversely affect the interests of
the holders of Rights.  The Rights Agent will duly execute and deliver
any supplement or amendment hereto requested by the Company, provided that such
supplement or amendment does not affect the rights, duties or obligations of the
Rights Agent under this Agreement.

    

     

    
      	
              Section 28.

            	
              Successors

            

    

     

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

     

    
      	
              Section 29.

            	
              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 shares of Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
shares of Common Stock).

     

    
      	
              Section 30.

            	
              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.

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    
      	
              Section 31.

            	
              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 Oregon 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,
except that the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts applicable to contracts to be made and performed entirely within
such Commonwealth.

    

     

    
      	
              Section 32.

            	
              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 33.

            	
              Descriptive
      Headings

            

    

     

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

     

    
      
        	
                Section
      34. 

              	
                Force
      Majeure

              

      

       

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

       

     

    

     

    

     

    

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

     

    [Signatures
on following page.]

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

     

     

     

     

     

     

    
      
        
          
             

          

           

        

        
          -28-

          
            

          

        

        
           

        

      

    

    

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

     

    
      
        	 	SYNTHETECH,
      INC.	 
	 	 	 	 
	 	
                By:
      

              	/s/ Dr.
      Gregory R. Hahn	 
	 	Name:	Dr.
      Gregory R. Hahn	 
	 	Its:	
                President and Chief
      Executive Officer

              	 
	 	 	 	 

      

    

     

    
       

      
        
          	 	COMPUTERSHARE
      TRUST COMPANY, N.A.	 
	 	 	 	 
	 	
                  By:
      

                	/s/ Kellie
      Gwinn	 
	 	Name:	Kellie
      Gwinn	 
	 	Its:	
                  Vice President - Trust
      Officer

                	 
	 	 	 	 

        

      

       

       

    

     

    

     

    

     

    

    
      
        
          
             

          

           

        

        
          -28-

          
            

          

        

        
           

        

      

    

    

    Exhibit
A

     

    Form
of Right Certificate

     

    Certificate
No. R-  _____ Rights

     

    NOT
EXERCISABLE AFTER AUGUST 3, 2018 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.0001 PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

     

    Right
Certificate

     

    SYNTHETECH,
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 Amended and
Restated Rights Agreement, dated as of July 31, 2008  (the "Rights Agreement"),
between Synthetech, Inc., an Oregon corporation (the "Company"), and
Computershare Trust Company, N.A. (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., Boston,
Massachusetts time, on August 3, 2018 at the principal office of the Rights
Agent, or at the office of its successor as Rights Agent, a fully paid
non-assessable share of Common Stock, par value $.001 per share (the "Common Stock"), of
the Company, at a purchase price of $2.00 per 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 shares of Common Stock 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 July 31, 2008, based
on the Common Stock as constituted at such date.  As provided in the
Rights Agreement, the Purchase Price and the number of shares of Common Stock
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, 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 offices of the Rights
Agent.

     

    This Right Certificate, with or without
other Right Certificates, upon surrender at the principal office of the Rights
Agent, 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 shares of Common Stock 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 $0.0001 per Right or (ii) may be
exchanged in whole or in part for shares of the Company's Common Stock, no par
value per share.

     

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

     

    

     

    

    
      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    WITNESS
the facsimile signature of the proper officers of the Company.  Dated
as of ______________.

     

    
      
        	 	SYNTHETECH,
      INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 

      

    

     

     

     

    
      
        	 	 	 	 	 	 
	 	
                Countersigned:

              	 	 	 	 
	 	 	 	 	 	 
	 	
                

                  COMPUTERSHARE
      TRUST COMPANY, N.A.

                

              	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:
      	
                /s/

              	 	 	 	 
	 	
                
                  Authorized
      Signature

                

              	 	 	 	 
	 	 	 	 	 	 
	Title:	
                 

              	 	 	
                 

              	 

      
                 

     

    

     

     

     

    

     

    

     

    

    
      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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 this Right Certificate on the books of the within-named Company, with
full power of substitution.

     

    The undersigned hereby certifies that
the Rights evidenced by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).

     

    Dated: _________________________

     

     

    
      
        	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	Signature	 
	 	 	 	 
	
                Signature
      Guarantee*

              	 	 	 
	 	 	 	 

      

      
        

      

    

    *Your
signature must be guaranteed by an eligible guarantor institution (a bank, stock
brokerage firm, savings and loan association or credit union with membership in
an approved signature medallion program).

     

     

    

    
      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Form of
Reverse Side of Right Certificate -- continued

     

    FORM
OF ELECTION TO PURCHASE

    (To be
executed if holder desires to exercise

    Rights
represented by the Right Certificate.)

    

    To:           SYNTHETECH,
INC.

     

    The undersigned hereby irrevocably
elects to exercise ____________________ Rights represented by this Right
Certificate to purchase the shares of Common Stock issuable upon the exercise of
such Rights and requests that certificates for such shares of Common Stock 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)

       

      __________________________________________________________________________________________________________

       

    

    The undersigned hereby certifies that
the Rights evidenced by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).

     

    
       

      Dated: _________________________

       

       

      
        
          	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	Signature	 
	 	 	 	 
	
                  Signature
      Guarantee*

                	 	 	 
	 	 	 	 

        

        
          

        

      

      *Your
signature must be guaranteed by an eligible guarantor institution (a bank, stock
brokerage firm, savings and loan association or credit union with membership in
an approved signature medallion program).

    
      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Form of
Reverse Side of Right Certificate -- continued

     

    
      __________________________________________________________________________________________________________

    

    

     

    
      __________________________________________________________________________________________________________

       

    

    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.LYRIS, INC.
ANNUAL INCENTIVE BONUS PLAN

     1. Objectives.
The objectives of the Lyris, Inc. (the
“Company”) Annual Incentive Bonus Plan (the “Plan”) are: (a) to communicate and
focus employees’ attention on significant business goals; (b) to achieve strong
business performance; (c) to maintain high quality employees; (d) to identify
and reward superior performance; and (e) to provide a competitive compensation
package to attract and retain high quality key employees. The Plan is intended
to encourage key employees to achieve and surpass company and individual
objectives through the establishment of a mechanism whereby individual
performance goals and quarterly and annual Company performance goals are
established, such performance goals are reviewed, and cash bonuses are awarded
based on the achievement of such goals. 

     2. Administration.

          (a) The Plan shall be administered under the direction of the Compensation
Committee (the “Committee”) of the board of
directors of the Company (the “Board”). If the Board elects to
administer this Plan instead of delegating it to the Committee, references
herein to the “Committee” shall be deemed to be references to the “Board.”

          (b) The responsibility for ensuring that administrative procedures are
established for Plan operation, that the Plan is managed in a timely and
effective manner and that periodic analyses of the Plan’s effectiveness are
undertaken shall be the duty of a plan administrator (the “Plan Administrator”)
appointed by the Committee, who need not be a member of the Committee. The Plan
Administrator shall report his findings, conclusions and recommendations
regarding the Plan’s operation and effectiveness to the Committee from time to
time. 

          (c) Subject to the express provisions of the Plan, the Committee shall have
the authority, in its sole and absolute discretion, to (i) adopt, amend, and
rescind administrative and interpretive rules and regulations relating to the
Plan; (ii) determine the eligible persons to whom, and the time or times at
which, bonuses shall be granted; (iii) determine the amount of cash that shall
be the subject of each bonus; (iv) construe the Plan; (v) delegate its duties
under the Plan to such agents as it may appoint from time to time; (vi) subject
to ratification by the Board, terminate, modify, or amend the Plan; and (vii)
make all other determinations, perform all other acts, and exercise all other
powers and authority necessary or advisable for administering the Plan,
including the delegation of those ministerial acts and responsibilities as the
Committee deems appropriate. The Committee may correct any defect, supply any
omission, or reconcile any inconsistency in the Plan, in the manner and to the
extent it deems necessary or desirable to carry the Plan into effect, and the
Committee shall be the sole and final judge of that necessity or desirability.
Although it is the present intention of the Company to continue the Plan in
effect for an indefinite period of time, the Company reserves the right,
pursuant to Section 11, to terminate the Plan in its entirety at any time or to
modify the Plan as it exists from time to time. 

          (d) The Plan year for the Plan shall be the Company’s fiscal year (the
“Plan Year”). Bonuses may accrue annually each Plan Year and during each of the
four quarters of a Plan Year (“Bonus
Cycles”). The Bonus Cycles for the Plan
shall be:

          (i) July 1 – September 30;

          (ii) October 1 – December 31;

          (iii) January 1 – March 31; and

          (iv) April 1 – June 30.

     3. Eligibility.
Employees eligible to receive bonuses under
the Plan are those key employees of the Company and its affiliates who may have
a substantial impact on the operating performance of the Company and its
affiliates and who are designated by the Committee (each, a “Participant”).

     4. Bonus Opportunities.
The bonus opportunities under the Plan with respect to each Participant shall be
designed to reflect the overall impact of the Participant on Company
performance. For each Plan Year, a Participant will be eligible to receive a
bonus (each, an “Annual
Bonus”), all or a portion of which may be
based on the Participant’s attainment of specified individual quarterly or
annual performance objectives (an “Individual Incentive Bonus”) and
all or a portion of which may be based on the attainment of Company performance
objectives achieved in each Bonus Cycle (each a “Bonus Cycle Performance Award”)
and in each Plan Year (an “Additional Bonus
Award” and, together with the four Bonus
Cycle Performance Award with respect to a Plan Year, a “Performance Bonus”).
For each Plan Year, the Committee will specify in writing a percentage of the
Participant’s total Annual Bonus that will be an Individual Incentive Bonus and
a percentage of the Participant’s total Annual Bonus that will be a Performance
Bonus.

     5. Performance Criteria and
Bonus Award Amounts.

          (a) Individual Incentive Bonuses. The
right of a Participant to receive payment of an Individual Incentive Bonus for a
Plan Year or Bonus Cycle will be subject to individual performance criteria and
the attainment of a targeted level or levels of performance with respect to such
criteria as determined by the Committee in its sole discretion. Such performance
criteria and targets need not be uniform with respect to all Participants. With
respect to each Bonus Cycle, a Participant will be eligible to earn up to
one-fourth of the total Individual Incentive Bonus for a Plan Year (each a
“Bonus Cycle Individual Incentive
Award”). 

          (b) Performance Bonuses. Performance
Bonuses will be based upon the following performance criteria: (A) net new
monthly rate of revenue (the “MRR
Criteria”), (B) total revenue (the
“Revenue Criteria”), and (C) corporate earnings before interest, taxes,
depreciation and amortization (the “EBITDA
Criteria,” and together with the MRR
Criteria and the Revenue Criteria, the “Performance Criteria”). In
addition, the Committee may select additional performance criteria, including,
but not limited to, the performance criteria set forth in the Company’s 2005
Equity Based Compensation Plan (or other equity compensation plan maintained by
the Company as may be in effect from time to time) and such additional criteria will be Performance Criteria for
purposes of the Plan.

2 

With respect to each Bonus Cycle and Plan Year, the
Committee will establish in writing the target level or levels that must be
achieved with respect to each Performance Criteria in order for the Performance
Bonus to be earned in full for such Plan Year. With respect to each Performance
Bonus amount for a Plan Year the Committee will establish in writing the portion
of the Performance Bonus that is contingent upon achievement of the applicable
target level(s) with respect to each Performance Criteria (e.g., 50% contingent upon
achievement of the MRR Criteria, 30% contingent upon achievement of the Revenue
Criteria, and 20% contingent upon achievement of the EBITDA
Criteria).

          (i) Bonus Cycle Awards. With respect to
each Bonus Cycle, a Participant will be eligible to earn a Bonus Cycle
Performance Award. The target amount a Participant is eligible to earn with
respect to each of the four Bonus Cycle Performance Awards for a Plan Year will
be established by the Committee. A Participant will receive payment of a Bonus
Cycle Award (A) to the extent the applicable targets are satisfied with respect
to each of the Performance Criteria for the Bonus Cycle, and (B) provided the
Participant is employed by the Company through the end of the Bonus Cycle and
from the end of the Bonus Cycle until the date the Bonus Cycle Award is
paid.

          (ii) Additional Bonus Awards. Participants
shall be eligible for an Additional Bonus Award with respect to a Plan Year (A)
to the extent the applicable targets are satisfied or exceeded with respect to
each of the Performance Criteria for the Plan Year, and (B) provided the
Participant is employed by the Company through the end of the Plan Year and from
the end of the Plan Year until the date of the Additional Bonus Award payment
applicable to the Plan Year.

     6. Review and
Modifications. 

          (a) Performance will be revised at appropriate intervals as financial and
operating results are available. All financial and operating results will be
revised by the controller of the Company and the achievement of all objectives
shall be approved by the Committee prior to the payment of awards by the Plan
Administrator.

          (b) At the discretion of the Committee, an Individual Incentive Bonus or a
Performance Bonus, either individually or collectively, may be increased,
decreased, or completely eliminated at any time before payment on the basis of
the following considerations: (i) Company performance relative to its
competitors; (ii) balancing of long-term versus short-term considerations; (iii)
handling of unforeseen opportunities and obstacles; or (iv) individual
professional conduct. 

     7. Bonus Award
Payments.

          (a) Payment of earned Bonus Cycle Individual Incentive Awards and Bonus Cycle
Performance Awards (collectively, “Bonus
Cycle Awards”) will be made as soon as
possible after the close of each Bonus Cycle upon the approval of the Committee
but in no event later than September 15 of the year following the end of the
Plan Year to which the Bonus Cycle Award relates.

3 

          (b) Individual Incentive Bonuses and Additional Bonus Awards earned will be
paid as soon as possible after the close of the applicable Plan Year upon
approval of the Committee but in no event later than September 15 of the year
following the end of the Plan Year to which such bonuses relate.

          (c) The Company is authorized to withhold from any bonus granted, or any
payment relating to a bonus under this Plan, amounts of withholding and other
taxes due or potentially payable in connection with such payment, and to take
such other action as the Committee may deem advisable to enable the Company and
Participant to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any payment under the Plan. The Company may
also withhold from such amounts any loans or other amounts due to the Company by
the Participant. 

          (d) If, due to mistake or for any other reason, a person receives benefits
under the Plan in excess of what the Plan provides, that person shall repay the
overpayment to the Company in a lump sum within thirty (30) days of notice of
the amount of overpayment. If that person fails to repay the overpayment, then
without limiting any other remedies available to the Company, the Company may
deduct the amount, to the extent allowable by law, of the overpayment from any
other amounts payable to the person.

     8. Notices. Any notice
required or permitted to be given by the Company or the Committee pursuant to
the Plan shall be deemed given when personally delivered or deposited in the
United States mail, registered or certified, postage prepaid, addressed to the
Participant, his heirs, executors, administrators, successors, assigns or
transferees, at the last address shown for the Participant on the records of the
Company or subsequently provided in writing to the Company. 

     9. Limitation of
Liability.

          (a) The Plan Administrator and the Committee and each member thereof shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him/her by any officer or employee of the Company or a subsidiary
thereof, the Company’s legal counsel, independent auditors, consultants or any
other agents assisting in the administration of this Plan. The Plan
Administrator and members of the Committee and any officer or employee of the
Company or a subsidiary acting at the direction or on behalf of the Committee
shall not be personally liable for any action or determination taken or made in
good faith with respect to this Plan, and shall, to the fullest extent permitted
by law, be indemnified and held harmless by the Company with respect to any such
action or determination. 

          (b) Neither this Plan nor any action taken hereunder shall be construed as
(i) giving any Participant or employee the right to continue in the employ or
service of the Company or a subsidiary, (ii) interfering in any way with the
right of the Company or a subsidiary to terminate any Participant’s or
employee’s employment or service at any time, or (iii) giving a Participant or
employee any claim to be granted any bonus under this Plan or to be treated
uniformly with other Participants and employees, or in any way preventing the
Company from dealing with any employee without regard to the existence of the
Plan. 

4 

          (c) The Plan shall at all times be entirely unfunded and no provision shall
at any time be made with respect to segregating assets of the Company or any
subsidiary thereof for payment of any bonuses hereunder. No Participant or any
other person shall have any interest in any particular assets of the Company or
any subsidiary thereof by reason of the right to receive a bonus under the Plan
and any such participant or any other person shall have only the rights of a
general unsecured creditor of the Company or any subsidiary thereof with respect
to any rights under the Plan. 

     10. Termination or Amendment. The Board
may amend, alter, suspend, discontinue or terminate this Plan or the Committee’s
authority to grant bonuses under this Plan without the consent of employees who
may be eligible to receive bonuses. The Committee may waive any conditions or
rights under, or amend, alter, suspend, discontinue or terminate any bonus which
has not been paid. If the Plan is terminated before the end of a Bonus Cycle or
Plan Year or before a Bonus Cycle Award is paid, no Annual Bonus for such Plan
Year shall be distributed to Participants unless the Board determines otherwise,
in which case the applicable bonus amounts may be distributed pro rata according
to a formula chosen in the sole discretion of the Committee; provided, however,
that to the extent any Bonus Cycle Award has previously been paid during the
Plan Year in which such termination occurs, Participants shall be entitled to
retain the amounts previously paid.

     11. Company Powers. The adoption of this
Plan by the Board shall not be construed as creating any limitations on the
power of the Board or a committee thereof to adopt such other incentive
arrangements as it may deem desirable. Nothing contained in this Plan shall be
construed to prevent the Company or any subsidiary from taking any corporate
action which is deemed by the Company or such subsidiary to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
this Plan or any bonus award made under this Plan. 

     12. Severability and Governing Law. If any
provision of this Plan is held to be illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining provisions hereof, but
such provision shall be fully severable and the Plan shall be construed and
enforced as if the illegal or invalid provision had never been included herein.
All questions arising with respect to the provisions of the Plan shall be
determined by application of the laws of the State of Texas, without giving
effect to any conflict of law provisions thereof, except to the extent Texas law
is preempted by federal law. 

     13. Effective Date. This Plan is effective as of July
1, 2008. 

	 	LYRIS, INC.  
	 		
		By: 	/s/ Luis Rivera 
	 	 	 
		Name: 	Luis Rivera 
	 	 	 
		Title: 	Chief Executive
  Officer 

5 

APPENDIX A 

LYRIS, INC.
ANNUAL INCENTIVE BONUS PLAN
ANNUAL PERFORMANCE CRITERIA

	[EXECUTIVE]  	  	  	  	  	
	PLAN
      YEAR  	_____________ 		$___________ 	
	 	  	  	  		
	  	
	  	
	  	
	Total
      Target  	  	  	Key variables 	  	
	Compensation (TTC)  	  	  	  	  	
	(All currency in USD unless otherwise described)  	  	  	  	
	  	
	Base
      Pay: 	$_________  	  	  	  	
	Target
      Incentive: 	$_________  	annualized 	  	  	
	TTC  	$___________ 	  	Target 	  	
	  	  	  	Incentive 	  	
	Incentive Split: 	Net New MRR 	               ____%
    	$_________ 	  	
	  	Total Revenue 	____% 	$_________ 	  	
	  	EBITDA 	____% 	$_________ 	  	
	  	
	Incentive Plan Details  	  	  	  	  	
	  	
	1. Net New
      MRR - $000s  	Potential
      Award 	$_________ 
    	   Net New MRR = new MRR
      minus churn 	
	  	@ 100% = 	  	  	  	
	 	 	 	 	 	 
	Plan Year Total 	% achievement 
    	Target Payout 	Payout
      ($US) 	  	
	  	  	% 	  	  	
	$_________ 	_____%  	_____% 	$_________ 	  	
	$_________ 	_____%  	_____% 	$_________ 	  	
	$_________ 	_____%  	_____% 	$_________ 	  	
	$_________ 	_____%  	_____% 	$_________ 	  	
	$_________ 	_____%  	_____% 	$_________ 	  	
	 	 	 	 	 	
	Quarter  	Target
      Revenue 	Target 	Revenue 	Incentive 	
	  	($000) 	Incentive 	Attained 	Paid
      ($US) 	
	  	  	($US) 	($000) 	  	
	Q1  	$_________ 	$_________ 	  	 	 
	Q2  	$_________ 	$_________ 	 	 	
	Q3  	$_________ 	$_________ 	 	  	
	Q4  	$_________ 	$_________ 	  	  

A-1 

	2. Total
      Revenue - $M 	Potential
      Award 	$_________ 	 	 	
	  	@ 100% = 	  	  	  	
	  	 	  	 	 	
	Plan Year
      Total 	%
      achievement 	Target
      Payout 	Payout
      ($US) 	  	
	  	  	% 	  	  	
	$_________ 	 _____%  	 _____%  	$_________ 	  	
	$_________ 	 _____%  	 _____%  	$_________ 	  	
	$_________ 	 _____%  	 _____%  	$_________ 	  	
	$_________ 	 _____%  	 _____%  	$_________ 	  	
	$_________ 	 _____%  	 _____%  	$_________ 	  	
	  	
	Quarter 	Target
      Revenue 	Target 	Revenue 	Incentive 	
	  	($M) 	Incentive 	Attained ($M) 	Paid ($US) 	
	  	  	($US) 	  	  	
	Q1 	 $_________ 	 $_________ 	  	  	
	Q2 	 $_________ 	 $_________ 	  	  	
	Q3 	 $_________ 	 $_________ 	  	  	
	Q4 	 $_________ 	 $_________ 	  	  	
	  	
	  	
	3. CORP
      EBITDA - $000 	Potential
      Award 	$_________ 	  	  	
	  	@ 100% = 	  	  	  	
	  	 	  	 	 	
	Plan Year
      Total 	%
      achievement 	Target
      Payout 	Payout
      ($US) 	Incentive 	
	  	  	% 	  	Paid
      ($US) 	
	$_________ 	 _____%  	 _____% 	 $_________ 	  	
	$_________ 	 _____%  	 _____% 	 $_________ 	  	
	$_________ 	 _____%  	 _____% 	 $_________ 	  	
	$_________ 	 _____%  	 _____% 	 $_________ 	  	
	$_________ 	 _____%  	 _____% 	 $_________ 	  	
	  	
	Quarter 	Target
      Revenue 	Target 	Revenue 	Incentive 	
	  	($000) 	Incentive 	Attained 	Paid ($US) 	
	  	  	($US) 	($000) 	  	
	Q1 	 $_________ 	 $_________ 	  	  	
	Q2 	 $_________
    	 $_________ 	  	  	
	Q3 	 $_________
    	 $_________ 	  	  	
	Q4 	 $_________
    	 $_________ 	  	  	

Calculation and Payment of
Incentive 

Incentive payments will be calculated
and paid quarterly to a maximum of 100% achievement per quarter. Unless
otherwise specified, incentive payments in excess of 100% will be calculated and
presented to the Board of Directors at the end of the fiscal year and will be
paid to the Executive pursuant to the terms of the Annual Incentive Bonus Plan.
This award is subject to the terms and conditions of and will be construed and
interpreted in accordance with the terms of the Annual Incentive Bonus Plan.

2 

	Signature:  
	 
	 	 

	Date:  
	 
	 	 
	 	

	Quarter 	Target
      Revenue 	Prior
      Rev 	Diff 	Target 	Revenue 	Incentive 
	  	($M) 	  	  	Incentive 	Attained 	Paid 
	  	  	  	  	($US) 	($M) 	($US) 
	Q1 	$_________  	$_________  	$_________  	$_________  	  	  
	Q2 	$_________  	$_________  	$_________  	$_________  	 	 
	Q3 	$_________  	$_________  	$_________  	$_________  	  	  
	Q4 	$_________  	$_________  	$_________  	$_________  	  	  

3

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