Document:

NEITHER THIS NOTE NOR THE SECURITIES  ISSUABLE UPON THE CONVERSION  HEREOF,  NOR
ANY INTEREST HEREIN OR THEREIN,  HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933,  AS AMENDED  (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES  LAWS AND
NEITHER THIS NOTE, ANY SUCH  SECURITIES,  NOR ANY INTEREST HEREIN OR THEREIN MAY
BE OFFERED,  SOLD,  PLEDGED,  ASSIGNED,  OR OTHERWISE  TRANSFERRED  UNLESS (1) A
REGISTRATION  STATEMENT WITH RESPECT  THERETO IS EFFECTIVE  UNDER THE SECURITIES
ACT AND ANY APLICABLE  STATE  SECURITIES  LAWS,  OR (2) THE COMPANY  RECEIVES AN
OPINION OF COUNSEL TO THE HOLDER OF THIS NOTE OR SUCH SECURITIES, AS APPLICABLE,
WHICH COUNSEL AND OPINION ARE REASONABLY  SATISFACTORY TO THE COMPANY, THAT THIS
NOTE OR SUCH SECURITIES, AS APPLICABLE, MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED,
OR  TRANSFERRED  IN THE MANNER  CONTEMPLATED  WITHOUT AN EFFECTIVE  REGISTRATION
STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

                         SYNOVICS PHARMACEUTICALS, INC.
                           CONVERTIBLE PROMISSORY NOTE

$_________                                                     ___________, 2006
                                                              NEW YORK, NEW YORK

         SYNOVICS  PHARMACEUTICALS,  INC., a Nevada corporation (the "COMPANY"),
for  value  received,   hereby  promises  to  pay  to  ____________________,   a
______________ with an address of ___________________ or registered assigns (the
"HOLDER"),  the principal  amount of  _________________  UNITED  STATES  DOLLARS
($_________________)  on  the  Maturity  Date  (as  defined  below),  and to pay
interest  on  the  unpaid  principal  balance  hereof  at  the  rate  per  annum
(calculated  on the basis of a 360-day year  consisting of twelve 30-day months)
of 9% from the date hereof until the Maturity Date or the earlier  prepayment or
conversion  in full of this  Note.  Accrued  interest  on the  unpaid  principal
balance  hereof shall be payable on the  quarterly  in arrears on each  Interest
Repayment  Date (as defined  below),  including  the Maturity  Date, or upon the
earlier  repayment  or  conversion  in full of this Note.  In no event shall any
interest to be paid  hereunder  exceed the maximum rate permitted by law. In any
such event,  this Note shall  automatically be deemed amended to permit interest
charges at an amount equal to, but no greater than,  the maximum rate  permitted
by law. This Note is convertible  into  securities of the Company as provided in
Section 8 hereof.

         1.       AGREEMENT; PRIORITY.

         This Note was issued by the  Company in  exchange  for the  Convertible
Promissory Note, dated October 3, 2005,  between the Holder and the Company.  In
connection  with  the  Agreement,   the  Holder  has  made  representations  and
warranties to the Company upon which the Company is relying in  connection  with
the transaction evidenced hereby.

<PAGE>

         2.       PAYMENTS.

         (a)      The principal of this Note shall be due and payable in full on
the Maturity Date. The "MATURITY DATE" shall be April 3, 2009.

         (b)      Interest  on this Note  shall  accrue on a daily  basis on the
principal  amount hereof from the date of issuance  hereof  through the Maturity
Date or the earlier prepayment or conversion in full of this Note at the rate of
9.0% per annum.  Interest  on this Note shall be payable  quarterly  in arrears,
commencing _______________, 2006. Each date upon which interest shall be payable
hereunder shall be hereinafter referred to as an "INTEREST PAYMENT DATE".

         (c)      If an Interest  Payment Date or the  Maturity  Date falls on a
day that is not a Business  Day (as  defined  below),  the  payment  due on such
Interest  Payment Date or the Maturity Date will be made on the next  succeeding
Business Day with the same force and effect as if made on the  Interest  Payment
Date or the Maturity Date, respectively. For purposes hereof, the term "BUSINESS
DAY" shall  mean any day which is not a  Saturday  or Sunday and is not a day on
which banking institutions are generally authorized or obligated to close in the
City of New York, New York.

         (d)      Commencing on May ___, 2007, the Company may prepay all or any
part of the  principal of this Note,  provided  that the Company shall pay a 10%
premium of any amount prepaid.  All payments on this Note shall be applied first
to accrued interest hereon and the balance to the payment of principal hereof.

         (e)      Payments of principal  of, and interest on, this Note shall be
made by check  sent to the  Holder's  address  set forth  above or to such other
address  as the  Holder  may  designate  for such  purpose  from time to time by
written notice to the Company,  in such coin or currency of the United States of
America  as at the time of  payment  shall be legal  tender  for the  payment of
public and private  debts.  Alternatively,  principal  of, and interest on, this
Note with respect to the Maturity Date may be paid by  electronic  wire transfer
in accordance with  instructions  provided by the Holder to the Company at least
ten Business Days prior to the Maturity Date.

         (f)      The obligations to make the payments provided for in this Note
are  absolute  and  unconditional  and  not  subject  to any  defense,  set-off,
counterclaim,  rescission,  recoupment,  or adjustment  whatsoever.  The Company
hereby  expressly   waives  demand  and  presentment  for  payment,   notice  of
non-payment,  notice of dishonor,  protest, notice of protest, bringing of suit,
and diligence in taking any action to collect any amount  called for  hereunder,
and shall be directly and primarily liable for the payment of all sums owing and
to be owing  hereon,  regardless of and without any notice,  diligence,  act, or
omission with respect to the collection of any amount called for hereunder.

<PAGE>

         3.       RANKING OF NOTE.

         The payment of principal  of, and accrued and unpaid  interest on, this
Note is senior unsecured indebtedness of the Company.

         4.       COVENANTS.

         The Company  covenants  and agrees with the Holder that, so long as any
amount  remains  unpaid on the Note,  unless  the  consent  of the  majority  in
interest  of all of the  Holders is  obtained  or except as  otherwise  provided
herein, the Company:

         (a)      Shall not pay any  dividend  or make any  distribution  on, or
purchase,  redeem,  or retire,  any shares of its capital stock or any warrants,
options,  or other rights to reacquire any such shares,  except that the Company
may pay dividends payable solely in shares of its capital stock.

         (b)      Shall deliver to each Holder  promptly after the Company shall
obtain  knowledge  of the  occurrence  of any Event of Default  (as  hereinafter
defined) or any event which with notice or lapse of time or both would become an
Event of Default (an Event of Default or such other event being a "DEFAULT"),  a
notice  specifying that such notice is a "NOTICE OF DEFAULT" and describing such
Default  in  reasonable  detail,  and,  in such  Notice  of  Default  or as soon
thereafter as practicable,  a description of the action the Company has taken or
proposes to take with respect thereto.

         5.       EVENTS OF DEFAULT.

         The occurrence of any of the following events shall constitute an event
of default (an "EVENT OF DEFAULT"):

         (a)      A default in the payment of the principal  amount of the Note,
when and as the same shall become due and payable.

         (b)      A default in the payment of any interest on the Note, when and
as the same shall become due and payable,  which default shall continue for five
business days after the date fixed for the making of such interest payment.

         (c)      A  default  in the  performance,  or a  breach,  of any of the
covenants of the Company contained in Sections 2 or 4 of this Note.

         (d)      A  default  in the  performance,  or a  breach,  of any  other
covenant or  agreement of the Company in (i) this Note and  continuance  of such
default  or breach  for a period of 30 days  after  receipt  of notice  from the
Holder as to such breach or after the  Company had or should have had  knowledge
of such breach, (ii) the Subscription, or (iii) the Guarantee.

         (e)      Any  representation,  warranty,  or certification  made by the
Company pursuant to this Note shall prove to have been false or misleading as of
the date made in any material respect.

                                     - 3 -
<PAGE>

         (f)      A final  judgment  or  judgments  for the  payment of money in
excess of $500,000  in the  aggregate  shall be rendered by one or more  courts,
administrative or arbitral tribunals or other bodies having jurisdiction against
the Company and the same shall not be discharged (or provision shall not be made
for such  discharge),  or a stay of  execution  thereof  shall not be  procured,
within 60 days from the date of entry thereof and the Company shall not,  within
such 60-day  period,  or such longer period  during which  execution of the same
shall have been stayed,  appeal therefrom and cause the execution  thereof to be
stayed during such appeal.

         (g)      The entry of a decree or order by a court having  jurisdiction
adjudging  the Company  bankrupt or insolvent,  or approving a petition  seeking
reorganization,  arrangement, adjustment, or composition of or in respect of the
Company, under federal bankruptcy law, as now or hereafter  constituted,  or any
other applicable federal or state bankruptcy,  insolvency, or other similar law,
and the  continuance  of any such decree or order  unstayed  and in effect for a
period of 60 days; or the  commencement by the Company of a voluntary case under
federal bankruptcy law, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency, or other similar law, or the consent by
it to the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief
under federal  bankruptcy law or any other  applicable  federal or state law, or
the  consent by it to the filing of such  petition  or to the  appointment  of a
receiver,  liquidator,  assignee, trustee,  sequestrator, or similar official of
the Company or of any substantial  part of its property,  or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its  inability  to pay its debts  generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action.

         6.       REMEDIES UPON DEFAULT.

         (a)      Upon the  occurrence  of an Event of  Default  referred  to in
Section 5(g), the principal amount then outstanding of, and the accrued interest
on, this Note shall  automatically  become  immediately  due and payable without
presentment, demand, protest, or other formalities of any kind, all of which are
hereby  expressly  waived by the  Company.  Upon the  occurrence  of an Event of
Default  referred to in Section  5(a) or (b),  the Holder,  by notice in writing
given to the Company,  may declare the entire  principal amount then outstanding
of, and the accrued  interest  on, this Note to be due and payable  immediately,
and upon any such  declaration  the same  shall  become  and be due and  payable
immediately, without presentation,  demand, protest, or other formalities of any
kind, all of which are expressly  waived by the Company.  Upon the occurrence of
an Event of Default other than one referred to in Sections 5(a), (b) or (g), the
Holders  of not less  than 50% in  principal  amount of then  outstanding  Notes
(e.g.,  including Notes issuable upon transfer of this Notes,  but excluding any
Notes held by or for the account of the Company or any affiliate of the Company)
may declare the principal  amount then  outstanding of, and the accrued interest
on, the Notes to be due and payable  immediately,  and upon such declaration the
same shall become due and payable  immediately,  without  presentation,  demand,
protest,  or other formalities of any kind, all of which are expressly waived by
the Company.

                                     - 4 -
<PAGE>

         (b)      The Holder may institute such actions or proceedings in law or
equity as it shall  deem  expedient  for the  protection  of its  rights and may
prosecute  and enforce  its claims  against  all assets of the  Company,  and in
connection with any such action or proceeding  shall be entitled to receive from
the Company payment of the principal  amount of this Note plus accrued  interest
to the date of  payment  plus  reasonable  expenses  of  collection,  including,
without limitation, attorneys' fees and expenses.

         7.       TRANSFER.

         (a)      This  Note   shall  be   transferable   solely  to   Permitted
Transferees (as hereinafter  defined).  For purposes hereof, the term "PERMITTED
TRANSFEREES" shall mean any Affiliate (as hereinafter  defined) of the Holder, a
Family  Member (as  hereinafter  defined) of the Holder,  a trust or other legal
entity  wholly-owned  by, or for the sole benefit of, the relevant Holder and/or
his or  its  Affiliates  or  Family  Members.  For  purposes  hereof,  the  term
"AFFILIATE"  shall mean with  respect to the Holder,  any other person or entity
directly or indirectly controlling, controlled by, or under common control with,
the Holder;  a person or entity shall be deemed to "control"  another  person or
entity if such person or entity possesses,  directly or indirectly, the power to
direct or cause the direction of the management or policies of such other person
or entity,  whether through the ownership of voting  securities,  by contract or
otherwise.  For purposes hereof, the term "FAMILY MEMBER" shall mean any parent,
spouse,  child,  brother,  sister or any other relative with a relationship  (by
blood, marriage, or adoption) not more remote than first cousin.

         (b)      Any Notes  issued  upon the  transfer  of this  Note  shall be
numbered  and shall be  registered  in a Note  Register as they are issued.  The
Company shall be entitled to treat the registered holder of any Note on the Note
Register as the owner in fact thereof for all purposes and shall not be bound to
recognize  any  equitable or other claim to or interest in such Note on the part
of any other person, and shall not be liable for any registration or transfer of
Notes which are registered or to be registered in the name of a fiduciary or the
nominee of a fiduciary unless made with the actual knowledge that a fiduciary or
nominee is  committing  a breach of trust in  requesting  such  registration  or
transfer,  or with the  knowledge of such facts that its  participation  therein
amounts to bad faith.  This Note shall be transferable  only on the books of the
Company  upon  delivery  thereof  duly  endorsed  by  the  Holder,  a  Permitted
Transferee,  or by his, her, or its duly authorized  attorney or representative,
or accompanied by proper  evidence of  succession,  assignment,  or authority to
transfer.  In all cases of transfer  by an  attorney,  executor,  administrator,
guardian, or other legal representative,  duly authenticated  evidence of his or
its authority shall be produced.  Upon any registration of transfer, the Company
shall deliver a new Note or Notes to the person entitled thereto.  This Note may
be exchanged,  at the option of the Holder  thereof,  for another Note, or other
Notes  of  different  denominations,  of  like  tenor  and  representing  in the
aggregate a like  principal  amount,  upon  surrender to the Company or its duly
authorized  agent.  Notwithstanding  the  foregoing,  the Company  shall have no
obligation  to cause Notes to be  transferred  on its books to any person if, in
the opinion of counsel to the Company,  such  transfer  does not comply with the
provisions  hereof  or of the  Securities  Act and  the  rules  and  regulations
thereunder.

                                     - 5 -
<PAGE>

         (c)      The  Holder  acknowledges  that  he has  been  advised  by the
Company that this Note has not been  registered  under the Securities  Act, that
this Note is being issued on the basis of the  statutory  exemption  provided by
Section  4(2)  of the Act or  Regulation  D  promulgated  thereunder,  or  both,
relating to  transactions  by an issuer not involving any public  offering.  The
Holder acknowledges that he has been informed by the Company of, or is otherwise
familiar with, the nature of the  limitations  imposed by the Securities Act and
the  rules  and  regulations  thereunder  on  the  transfer  of  securities.  In
particular,  the Holder agrees that no sale, assignment or transfer of this Note
shall be valid or  effective,  and the Company shall not be required to give any
effect  to  any  such  sale,  assignment  or  transfer,  unless  (i)  the  sale,
assignment,  or transfer of this Note is registered under the Securities Act, it
being  understood  that this Note is not currently  registered for sale and that
the Company has no  obligation  or intention  to so register the Notes,  or (ii)
this  Note  is  sold,  assigned,  or  transferred  in  accordance  with  all the
requirements and limitations of Rule 144 under the Act, it being understood that
Rule 144 is not available at the time of the original  issuance of this Note for
the sale of this  Note and that  there can be no  assurance  that Rule 144 sales
will be available at any  subsequent  time, or (iii) such sale,  assignment,  or
transfer is otherwise exempt from registration under the Securities Act.

         8.       CONVERSION.

         (a)      At  any  time  prior  to the  Maturity  Date  or  the  earlier
prepayment  of this Note  pursuant  hereto,  the Holder may elect to convert the
principal amount of, and interest on, this Note into shares of common stock, par
value $0.001 per share (the "COMMON STOCK"), of the Company.

         (b)      The number of shares of Common Stock to be delivered upon such
conversion  shall equal the quotient of (X) divided by (Y), where (X) equals the
unpaid  principal  amount of, and accrued and unpaid interest on, this Note, and
where (Y) equals the  Conversion  Price.  For  purposes  of this Note,  the term
"CONVERSION  PRICE"  shall mean $2.50 per share,  subject to  adjustment  as set
forth in paragraph (d) of this Section 8.

         (c)      If at any  time  prior to the  earlier  of (x) the date of the
optional conversion of this Note into shares of Common Stock or (y) the Maturity
Date, the Common Stock trades at a 30-day  trailing  average closing price equal
to 300% of the then applicable Conversion Price per share and the average Common
Stock share volume during such 30-day  trailing  period equals or exceeds 40,000
shares per day,  this  Convertible  Note shall  automatically  and  without  any
further  action by any Person  convert into Common Stock at the then  applicable
Conversion  Price,  provided that, this mandatory  conversion right will only be
applicable to the holder of this Convertible Note if the Common Stock into which
this  Convertible  Note is convertible  is subject to an effective  registration
statement  relating  to the  resale  of such  common  stock  at the time of such
mandatory conversion.

         (d)      (i)      In the event that the Company shall at any time prior
to the earlier of the conversion of this Note or the Maturity Date (1) declare a
dividend on the outstanding Common Stock payable in shares of its capital stock,
(2) subdivide the outstanding  Common Stock, (3) combine the outstanding  Common
Stock into a smaller  number of shares,  or (4) issue any shares of its  capital
stock  by   reclassification   of  the   Common   Stock   (including   any  such
reclassification  in  connection  with a  consolidation  or  merger in which the
Company is the continuing corporation),

                                     - 6 -
<PAGE>

then, in each case, the Conversion  Price at the time of the record date for the
determination of stockholders  entitled to receive such dividend or distribution
or of the effective date of such subdivision,  combination,  or reclassification
shall be adjusted so that it shall equal the  Conversion  Price  theretofore  in
effect  multiplied by a fraction,  the numerator of which shall equal the number
of shares outstanding  immediately prior to the effective date of such event and
the  denominator  of  which  shall  equal  the  number  of  shares   outstanding
immediately following the effective date of such event.

                  (ii)     If the Company at any time shall offer,  sell,  grant
any  option to  purchase  or  offer,  sell or grant  any  right to  reprice,  or
otherwise  dispose of or issue, any Common Stock or Common Stock Equivalents (as
hereinafter  defined) entitling any person to acquire shares of Common Stock, at
an effective price per share less than the then effective Conversion Price (such
issuances,  individually and collectively,  a "DILUTIVE ISSUANCE") then the then
effective  Conversion  Price shall be reduced in  accordance  with the following
formula:

                              X =     ((A)(Y)) + ((B)(Z))
                                      ------------------
                                             Y + Z

              where:       X =   the new Conversion Price;

                           A =   the  Conversion  Price  in  effect  immediately
                                 before the Dilutive Issuance;

                           Y =   the   number  of   shares   of   Common   Stock
                                 outstanding  immediately  before  the  Dilutive
                                 Issuance,  including all shares of Common Stock
                                 issuable upon exercise,  conversion or exchange
                                 of   Common   Stock   Equivalents   outstanding
                                 immediately   before  the  Dilutive   Issuance,
                                 whether or not then exercisable, convertible or
                                 exchangeable,   but   excluding   any  treasury
                                 shares;

                           B =   Base Share Price (as defined in clauses  (A)and
                                 (B) below); and

                           Z =   the number of shares of Common  Stock issued in
                                 the   Dilutive   Issuance  or   issuable   upon
                                 conversion   or   exercise   of  Common   Stock
                                 Equivalents issued in the Dilutive Issuance.

         Such  adjustment  to the  Conversion  Price  shall  be made  upon  each
occurrence of a Dilutive Issuance.  Notwithstanding the foregoing, no adjustment
to the Conversion  Price shall be made under this Section 8(d)(ii) in respect of
an Exempt Issuance (as defined below).

                  (A)      In the case of the issuance of Common Stock for cash,
         the Base  Share  Price  shall be deemed  to be the  amount of cash paid
         therefore.

                  (B)      In the case of the issuance of the Common Stock for a
         consideration in whole or in part other than cash, the Base Share Price
         shall be deemed  to be the sum of such cash and the fair  value of such
         consideration  as determined by the Board of Directors  irrespective of
         any accounting treatment.

                                     - 7 -
<PAGE>

                  (C)      In  the  case  of  the   issuance  of  Common   Stock
         Equivalents,  the following  provisions shall apply for all purposes of
         this Section 4:

                           (i)      The  aggregate  maximum  number of shares of
         Common Stock deliverable upon conversion or exercise of, or in exchange
         for,  any such Common  Stock  Equivalents  shall be deemed to have been
         issued at the time such Common Stock  Equivalents were issued and for a
         consideration  equal  to the  consideration,  if any,  received  by the
         Company for the Common Stock  Equivalents  (excluding any cash received
         on account of accrued interest or accrued dividends),  plus the minimum
         additional  consideration,  if  any,  to be  received  by  the  Company
         (without taking into account potential anti-dilution  adjustments) upon
         the conversion,  exchange or exercise of such Common Stock Equivalents;
         PROVIDED  that if the minimum  amount of  consideration  payable to the
         Company upon the exercise or conversion of Common Stock  Equivalents is
         reduced over time or on the occurrence or  non-occurrence  of specified
         events other than by reason of anti-dilution adjustments, the then Base
         Share  Price  shall be  recalculated  using the  figure  to which  such
         minimum amount of  consideration  is reduced;  PROVIDED FURTHER that if
         the minimum  amount of  consideration  payable to the Company  upon the
         exercise or conversion of such Common Stock Equivalents is subsequently
         increased,  the then Base Share Price shall be again recalculated using
         the increased  minimum amount of  consideration  payable to the Company
         upon the exercise or conversion of such Common Stock Equivalents.

                           (ii)     Upon the  expiration or  termination  of any
         Common Stock  Equivalents,  the  Conversion  Price shall be adjusted to
         reflect the  Conversion  Price in effect  prior to the issuance of such
         Common Stock Equivalents  (assuming no further Dilutive  Issuances have
         occurred).

                           (iii)    No  further  adjustment  of  the  Conversion
         Price, as adjusted upon the issuance of Common Stock Equivalents, shall
         be made as a result of the actual issuance of shares of Common Stock on
         the  exercise  of any such rights or options or the  conversion  of any
         such Common Stock Equivalents.

         As used in this  Section 8, the  following  terms have the meanings set
forth below:

         "COMMON STOCK  EQUIVALENTS"  means any securities of the Company or any
of its  subsidiaries  which would  entitle the holder  thereof to acquire at any
time Common Stock,  including  without  limitation,  any debt,  preferred stock,
rights,  options,  warrants or other  instrument that is at any time convertible
into or exchangeable  for, or otherwise  entitles the holder thereof to receive,
Common Stock.

         "EXEMPT  ISSUANCE"  means the issuance (i) of shares of Common Stock or
options to employees, officers or directors of the Company pursuant to any stock
or option  plan duly  adopted  by the Board of  Directors  of the  Company  or a
majority of the members of a committee of non-employee directors established for
such  purpose,  (ii)  of  securities  upon  the  exercise  of or  conversion  of
convertible  securities,  options or warrants issued and outstanding on the date
hereof (including,  without  limitation,  securities issuable upon conversion of
the Multiple Advance  Non-Revolving

                                     - 8 -
<PAGE>

Note, dated June 20, 2001, by the Company in favor of HealthSTAR Holdings,  LLC,
1-800-Doctors,  Inc., Ropart,  LLC, Xiagen,  Ltd. William M. McCormick,  William
Rittger,  Ronald H. Lane and Frederick  Rentschler,  pursuant to the  Conversion
Agreement,   dated  as  of  April  21,   2006,   between  the  Company  and  the
aforementioned  holders of such note),  provided,  however, that such securities
have not been  amended  since the date of this Note to  hereof to  increase  the
number of such securities or to decrease the exercise or conversion price of any
such securities  (other than by the antidilution  provisions  thereof,  if any),
(iii) of securities issued pursuant to strategic transactions,  as determined by
the  Company's  Board of Directors,  including,  without  limitation,  strategic
transactions  with Nostrum  Pharmaceuticals,  Inc. or Dr.  Nirmal Mulye or their
respective   affiliates,   provided  any  such  issuance  shall  not  include  a
transaction in which the Company is issuing securities primarily for the purpose
of raising  capital or to an entity  whose  primary  business  is  investing  in
securities and (iv) issuances of securities upon the conversion of the Company's
convertible notes outstanding as of the date hereof.

         (e)      In case of any capital reorganization, other than in the cases
referred to above,  or the  consolidation  or merger of the Company with or into
another  Company (other than a merger or  consolidation  in which the Company is
the continuing  corporation and which does not result in any reclassification of
the  outstanding  shares of Common Stock or the  conversion of such  outstanding
shares  of  Common  Stock  into  shares of other  stock or other  securities  or
property),  or in  the  case  of any  sale,  lease,  or  conveyance  to  another
corporation  of the  property  and  assets of any  nature of the  Company  as an
entirety  or  substantially  as an  entirety  (such  actions  being  hereinafter
collectively  referred  to as  "REORGANIZATIONS"),  there  shall  thereafter  be
deliverable  upon  conversion  of the Notes (in lieu of the  number of shares of
Common  Stock  theretofore  deliverable)  the number of shares of stock or other
securities or property to which a holder of the  respective  number of shares of
Common Stock which would  theretofore  have been deliverable upon the conversion
of such share of Notes would have been entitled upon such Reorganization if such
Notes had been converted  immediately prior to such  Reorganization.  In case of
any Reorganization,  appropriate adjustment,  as determined in good faith by the
Board of  Directors  of the  Company,  shall be made in the  application  of the
provisions  herein set forth with  respect  to the rights and  interests  of the
holders of the Notes so that the provisions set forth herein shall thereafter be
applicable,  as nearly as possible,  in relation to any shares or other property
thereafter  deliverable  upon conversion of the Notes. Any such adjustment shall
be made by, and set forth in, a supplemental  agreement between the Company,  or
any successor thereto,  and the holders of the Notes, and shall for all purposes
hereof conclusively be deemed to be an appropriate adjustment. The Company shall
not effect any such  Reorganization  unless,  upon or prior to the  consummation
thereof,  the  successor  corporation,  or if the Company shall be the surviving
corporation  in any such  Reorganization  and is not the issuer of the shares of
stock or other  securities  or property to be  delivered to holders of shares of
the capital stock of the Company outstanding at the effective time thereof, then
such issuer, shall assume by written instrument the obligation to deliver to the
holders of the Notes such shares of stock,  securities,  cash, or other property
as such holders shall be entitled to purchase in  accordance  with the foregoing
provisions.

         (f)      In case of any  reclassification  or change  of the  shares of
Common Stock or other  securities  issuable upon  conversion of the Notes (other
than a change in par value or from a

                                     - 9 -
<PAGE>

specified  par  value  to no par  value,  or as a  result  of a  subdivision  or
combination,  but including any change in the shares into two or more classes or
series  of  shares),  or in case  of any  consolidation  or  merger  of  another
corporation into the Company in which the Company is the continuing  corporation
and in which there is a  reclassification  or change  (including a change to the
right to receive cash or other  property) of the shares of Common Stock or other
securities  issuable  upon  conversion  of the Notes (other than a change in par
value,  or from no par  value to a  specified  par  value,  or as a result  of a
subdivision or  combination,  but including any change in the shares into two or
more classes or series of shares),  the Notes shall  thereafter  be  convertible
into  solely  the kind and  amount of  shares  of stock  and  other  securities,
property,    cash,   or   any   combination   thereof   receivable   upon   such
reclassification,  change, consolidation, or merger by a holder of the number of
shares of Common  Stock for which  Notes might have been  exercised  immediately
prior to such reclassification,  change,  consolidation,  or merger. Thereafter,
appropriate  provision  shall be made for  adjustments  which shall be as nearly
equivalent as practicable to the adjustments in this Section 5.

         (g)      The  adjustment,  provided by paragraph  (c) of this Section 5
shall be made successively whenever any event listed above shall occur and shall
become effective at the close of business on such record date or at the close of
business on the date  immediately  preceding such effective date, as applicable.
The provisions of paragraphs (d) and (e) of this Section 5 shall similarly apply
to  successive  reclassifications  and changes of shares of Common  Stock and to
successive consolidations, mergers, sales, leases, or conveyances.

         9.       MISCELLANEOUS.

         (a)      Any notice or other communication  required or permitted to be
given  hereunder  shall be in  writing  and shall be mailed by  certified  mail,
return  receipt  requested,  or by  Federal  Express,  Express  Mail or  similar
overnight  delivery or courier  service or delivered  (in person or by telecopy,
telex or similar  telecommunications  equipment) against receipt to the party to
whom it is to be given, (i) if to the Company, at its address, 2575 E. Camelback
Rd., Suite 450, Phoenix,  Arizona, 85016, Attention:  Ronald H. Lane, (ii) if to
the  Holder,  at its  address  set forth on the first page  hereof,  or (iii) in
either case, to such other address as any party shall have  furnished in writing
in accordance with the provisions of this Section 9(a).  Notice to the estate of
any party  shall be  sufficient  if  addressed  to the party as provided in this
Section 9(a). Any notice or other communication given by certified mail shall be
deemed given at the time of certification thereof,  except for a notice changing
a party's  address  which shall be deemed given at the time of receipt  thereof.
Any notice  given by other means  permitted by this Section 9(a) shall be deemed
given at the time of receipt thereof.

         (b)      Upon  receipt of evidence  satisfactory  to the Company of the
loss, theft, destruction, or mutilation of this Note (and upon surrender of this
Note if  mutilated),  the Company  shall execute and deliver to the Holder a new
Note of like date, tenor, and denomination.

         (c)      No course of dealing  and no delay or  omission on the part of
the Holder in exercising  any right or remedy shall operate as a waiver  thereof
or otherwise prejudice the Holder's rights, powers or remedies. No right, power,
or remedy conferred by this Note upon the Holder shall be

                                     - 10 -
<PAGE>

exclusive  of any other  right,  power,  or remedy  referred to herein or now or
hereafter  available at law, in equity,  by statute or  otherwise,  and all such
remedies may be exercised singly or concurrently.

         (d)      This Note may be amended only by a written instrument executed
by the Company and the Holder hereof.  Any amendment shall be endorsed upon this
Note, and all future Holders shall be bound thereby.

         (e)      This Note has been  negotiated and consummated in the State of
New York and shall be governed by, and construed in accordance with, the laws of
the State of New York, without giving effect to principles  governing  conflicts
of law.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     - 11 -
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Note to be executed and
dated the day and year first above written.

                                              SYNOVICS PHARMACEUTICALS, INC.

                                              BY:
                                                  ------------------------------
                                                  NAME:  RONALD H. LANE
                                                  TITLE: CHIEF EXECUTIVE OFFICER

                                     - 12 -RIGHTS  AGREEMENT  (the "RIGHTS  AGREEMENT"),  effective as of September 8,
2006,  between  SYNOVICS  PHARMACEUTICALS,   INC.,  a  Nevada  corporation  (the
"COMPANY")  with  executive  offices  at 2575 East  Camelback  Road,  Ste.  450,
Phoenix,  Arizona 85016,  and CONTINENTAL  STOCK TRANSFER & TRUST COMPANY,  (the
"RIGHTS AGENT"),  a New York  corporation  with executive  offices located at 17
Battery Place, 8th Floor, New York, New York, 10004.

                                  INTRODUCTION

     On September 8, 2006,  the Board of Directors of the Company (the "BOARD OF
DIRECTORS")  authorized  and  declared a dividend of one common  share  purchase
Right (as  hereinafter  defined) for each share of Common Stock (as  hereinafter
defined)  outstanding  at the close of business on  September  ___,  2006,  (the
"RECORD  DATE"),  each right  representing  the right to  purchase  one share of
Common Stock upon the terms, and subject to the conditions, herein set forth. At
that time, the Board of Directors  further  authorized and directed the issuance
of one right with respect to each share of Common Stock that became  outstanding
between the Record Date and the Distribution Date (as hereinafter defined).

                                    AGREEMENT

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

     SECTION 1.  CERTAIN  DEFINITIONS.  Purposes of this Rights  Agreement,  the
following terms have the meanings set forth below:

     (a)  "ACQUIRING  PERSON" shall mean any Person who or which,  together with
all Affiliates and  Associates of such Person,  shall become,  at any time after
the date of this Rights Agreement  (whether or not such status continues for any
period), the Beneficial Owner of shares of Common Stock representing 20% or more
of the Common  Stock  then  outstanding,  other than as a result of a  Permitted
Offer,  or any  Person  who or  which,  on the date  hereof,  together  with all
Affiliates and  Associates of such Person,  owns in excess of 20% or more of the
Common Stock  outstanding as of the date hereof,  who or which  becomes,  at any
time  after  the date  hereof  (whether  or not such  status  continues  for any
period),  the Beneficial Owner of additional shares of Common Stock representing
1% or more of the Common Stock then  outstanding  above that number of shares of
Common Stock of which such Person,  together with all  Affiliates and Associates
of such Person,  was the  Beneficial  Owner on the date hereof,  other than as a
result  of a  Permitted  Offer.  Notwithstanding  the  foregoing,  (A) the  term
"ACQUIRING  PERSON"  shall not include (i) the Company,  any  Subsidiary  of the
Company,  or any employee  benefit plan of the Company or any  Subsidiary of the
Company,  or (ii) any Person,  which together with all Affiliates and Associates
of such  Person,  shall become the  Beneficial  Owner of 20% or more of the then
outstanding  Common  Stock as a result  of the  acquisition  of shares of Common
Stock directly from the Company  following the date hereof  (provided,  however,
that if, after such  acquisition,  such Person,  or an Affiliate or Associate of
such Person,  becomes the Beneficial  Owner of any  additional  shares of Common
Stock in an  acquisition  not made directly  from the Company,  then such Person
shall be deemed an Acquiring Person),  or (iii) any Person,  which

<PAGE>

together with all Affiliates  and  Associates of such Person,  owns in excess of
20% or more of the Common Stock outstanding as of the date hereof,  shall become
the Beneficial Owner of an additional 1% or more of the then outstanding  Common
Stock as a result of the acquisition of shares of Common Stock directly from the
Company  following  the date  hereof  (provided,  however,  that if,  after such
acquisition,  such Person, or an Affiliate or Associate of such Person,  becomes
the Beneficial Owner of any additional  shares of Common Stock in an acquisition
not made  directly  from the  Company,  then  such  Person  shall be  deemed  an
Acquiring Person) and (B) no Person shall be deemed to be an "ACQUIRING  PERSON"
either  (X) as a result of the  acquisition  of  shares  of Common  Stock by the
Company  which,  by reducing the number of shares of Common  Stock  outstanding,
increases the proportional  number of shares  beneficially  owned by such Person
together with all Affiliates and Associates of such Person; except that if (i) a
Person would become an Acquiring Person (but for the operation of this subclause
(X)) as a result of the  acquisition  of shares of Common  Stock by the Company,
and (ii)  after  such share  acquisition  by the  Company,  such  Person,  or an
Affiliate  or  Associate of such  Person,  becomes the  Beneficial  Owner of any
additional shares of Common Stock, then such Person shall be deemed an Acquiring
Person,  or (Y) if (x) (i) such  Person,  or an  Affiliate  or Associate of such
Person  inadvertently  becomes  the  Beneficial  Owner  of  20% or  more  of the
outstanding Common Stock, (ii) within eight days thereafter such Person notifies
the Board of Directors that such Person did so  inadvertently,  and (iii) within
two days after such  notification,  such Person is the Beneficial  Owner of less
than 20% of the outstanding Common Stock, or (y) (i) such Person,  together with
all Affiliates and Associates of such Person, that owns in excess of 20% or more
of the Common  Stock  outstanding  as of the date  hereof,  shall  inadvertently
become the Beneficial  Owner of an additional 1% or more of the then outstanding
Common Stock,  (ii) within eight days  thereafter such Person notifies the Board
of Directors  that such Person did so  inadvertently,  and (iii) within two days
after such  notification,  such Person is the Beneficial Owner of less than that
number of share of Common  Stock held as of the date  hereof plus 1% of the then
outstanding Common Stock.

     (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
Exchange Act.

     (c) A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be deemed
to have  acquired  "beneficial  ownership"  of, or to  "beneficially  own",  any
securities:

          (i) which such Person or any of such Person's Affiliates or Associates
     beneficially owns,  directly or indirectly,  as determined pursuant to Rule
     13d-3 of the General Rules and Regulations under the Exchange Act as of the
     date hereof;

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

                                      -2-
<PAGE>

     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

          (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
     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  OWNER"  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) "BOARD OF  DIRECTORS"  shall have the meaning set forth in the recitals
to this Rights Agreement.

     (e) "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, or a
day on  which  banking  institutions  in the City of New  York,  New  York,  are
authorized or obligated by law or executive order to close.

     (f) "CLOSE OF  BUSINESS"  on any given date shall mean 5:00 P.M.,  New York
City  local  time on such date;  provided,  however,  that if such date is not a
Business  Day it shall  mean 5:00  P.M.,  New York City  local  time on the next
succeeding Business Day.

     (g) "COMMON STOCK," when used with reference to the Company, shall mean the
Company's  common  stock,  par value  $0.001 per share,  and any other  class or
classes or series of common stock of the Company resulting from any subdivision,
combination,  recapitalization,  or  reclassification  of shares of such  common
stock.  "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.

                                      -3-
<PAGE>

     (h)  "COMPANY"  shall  have  the  meaning  set  forth  in the  introductory
paragraph to this Rights Agreement.

     (i)  "DISTRIBUTION  DATE" shall have the meaning set forth in Section  3(a)
hereof.

     (j)  "EXCHANGE  ACT" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

     (k)  "EXCHANGE  RATIO"  shall have the meaning  set forth in Section  24(a)
hereof.

     (l) "FINAL  EXPIRATION  DATE"  shall have the  meaning set forth in Section
7(a) hereof.

     (m) "NASDAQ" shall have the meaning set forth in Section 11(d) hereof.

     (n) "PERMITTED  OFFER" shall mean a tender or exchange offer or other offer
which is for all  outstanding  Common Stock at a price and on terms  determined,
prior to the purchase of shares under such tender or exchange offer, by at least
a majority of the members of the Board of Directors  who are not officers of the
Company  and who are not (or  would  not  be,  if the  offer  were  consummated)
Acquiring Persons or Affiliates,  Associates, nominees, or representatives of an
Acquiring  Person,  to be adequate  and  otherwise  in the best  interest of the
Company  and its  stockholders  (other  than  the  Person  or any  Affiliate  or
Associate  thereof  on whose  basis the  offer is being  made).  In  determining
whether an offer is  adequate  or in the best  interests  of the Company and its
stockholders,  the Board of Directors  may take into account all factors that it
deems  relevant  including,  without  limitation,  (1) the  consideration  being
offered in the proposal in relation to the Board's  estimate of: (i) the current
value of the  Company  in a freely  negotiated  sale of either  the  Company  by
merger,  consolidation,  or  otherwise,  or  all  or  substantially  all  of the
Company's assets,  (ii) the current value of the Company if orderly  liquidated,
and  (iii)  the  future  value  of the  Company  over a  period  of  years as an
independent  entity  discounted to current value;  (2) then existing  political,
economic,  and other factors bearing on security prices generally or the current
market value of the Company's securities in particular; (3) whether the proposal
might violate  federal,  state, or local laws; (4) the financial  conditions and
earnings  prospects of the person  making the  proposal,  including the person's
ability to service its debt and other existing or likely financial  obligations;
and (5) the  competence,  experience,  and  integrity  of the person  making the
acquisition proposal.

     (o) "PERSON" shall mean any  individual,  firm,  partnership,  corporation,
trust,  association,  joint  venture,  or other  entity,  and shall  include any
successor  (by merger or  otherwise)  of such entity.  Notwithstanding  anything
herein to the contrary,  when two or more Persons act as a partnership,  limited
partnership, syndicate, or other group for the purpose of acquiring, holding, or
disposing of shares of Common  Stock or other  securities  of the Company,  such
partnership, limited partnership, syndicate, or group shall be deemed a "PERSON"
for the purposes of this Agreement.

     (p)  "PRINCIPAL  PARTY"  shall have the meaning set forth in Section  13(b)
hereof.

                                      -4-
<PAGE>

     (q)  "PURCHASE  PRICE"  shall have the  meaning  set forth in Section  7(a)
hereof.

     (r) "RECORD  DATE" shall have the meaning set forth in the recitals to this
Rights Agreement.

     (s)  "REDEMPTION  DATE" shall have the  meaning  set forth in Section  7(a)
hereof.

     (t)  "REDEMPTION  PRICE"  shall  have the  meaning  set forth in Section 23
hereof.

     (u)  "RIGHTS"  shall mean the  rights to  purchase  shares of Common  Stock
authorized by the Board of Directors of the Company after the Record Date.

     (v) "RIGHTS  AGENT"  shall have the  meaning set forth in the  introductory
paragraph to this Rights Agreement.

     (w) "RIGHTS AGREEMENT" shall have the meaning set forth in the introductory
paragraph to this Rights Agreement.

     (x) "RIGHT  CERTIFICATES"  shall have the  meaning set forth in the Section
3(a) hereof.

     (y) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

     (z)  "SHARES  ACQUISITION  DATE"  shall  mean  the  first  date of a public
announcement  (which,  for purposes of this definition,  shall include,  without
limitation,  a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an  Acquiring  Person that an  Acquiring  Person has become such;
provided,  that,  if such Person is  determined  not to have become an Acquiring
Person pursuant to Section 1(a) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.

     (aa)  "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.

     (bb)  "SUMMARY OF RIGHTS"  shall have the meaning set forth in Section 3(b)
hereof.

     (cc)  "TRADING  DAY" shall  have the  meaning  set forth in  Section  11(d)
hereof.

     (dd) "VOTING  SECURITIES" shall have the meaning set forth in Section 13(a)
hereof.

     SECTION 2.  APPOINTMENT OF RIGHTS AGENT.  The Company  hereby  appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof,  shall, prior to the Distribution Date also
be the holders of the Common Stock) in accordance  with the terms and conditions
hereof,  and the Rights Agent hereby accepts such  appointment.  The Company may
from time to time  appoint  such  co-Rights  Agents as it may deem  necessary or
desirable, and which will be deemed a "Rights Agent" for all purposes hereunder.

                                      -5-
<PAGE>

     SECTION 3. ISSUE OF RIGHT CERTIFICATES.

     (a) Until the  earlier of (i) the close of  business on the tenth day after
the Shares  Acquisition Date, or (ii) the close of business on the tenth day (or
such later date as may be  determined by action of the Board of Directors of the
Company prior to such time as any Person becomes an Acquiring  Person) after the
date that a tender or exchange offer by any Person (other than the Company,  any
Subsidiary  of the Company,  any employee  benefit plan of the Company or of any
Subsidiary  of the Company or any entity  holding  shares of Common Stock for or
pursuant  to the  terms of any such  plan) is first  published  or sent or given
within the meaning of Rule 14d-2 of the General Rules and Regulations  under the
Exchange Act, if upon consummation  thereof, such Person would be either (X) the
Beneficial Owner of 20% or more of the shares of Common Stock then  outstanding,
or (Y) the  Beneficial  Owner  of an  additional  1% of the  Common  Stock  then
outstanding,  provided  (with respect to clause (Y)) such Person owned in excess
of 20% or more of Common Stock outstanding as of the date hereof (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 the  shares of  Common  Stock  registered  in the names of the
holders thereof (which  certificates shall also be deemed to be certificates for
Rights) and not by separate  certificates,  and (y) the Rights (and the right to
receive separate certificates ("RIGHT  CERTIFICATES")) will be transferable only
in  connection  with the  transfer  of the  underlying  shares of  Common  Stock
(including  a transfer to the  Company) as more fully set out below.  As soon as
practicable  after the Distribution  Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class,  postage-prepaid
mail,  to each  record  holder  of  shares  of  Common  Stock as of the close of
business on the  Distribution  Date,  at the address of such holder shown on the
records of the Company, a Right Certificate, which shall be in substantially the
form of Exhibit A hereto, evidencing one Right for each share of Common Stock so
held. As of and after the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.

     (b) As promptly as reasonably  practicable  following the Record Date,  the
Company  will send a copy of a Summary  of Rights to  Purchase  Shares of Common
Stock, in substantially  the form of Exhibit B hereto (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.  Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration  Date), the surrender for
transfer of any  certificate  for shares of Common  Stock  outstanding,  with or
without a copy of the Summary of Rights attached thereto,  shall also constitute
the transfer of the Rights associated with such shares of Common Stock.

     (c)  Certificates  for  shares of Common  Stock  which  become  outstanding
(including,  without  limitation,   reacquired  shares  which  are  subsequently
disposed of by the Company)  after the Record Date, but prior to the earliest of
the Distribution  Date, the Redemption Date, or the Final Expiration Date, shall
have impressed on, printed on, written on, or otherwise affixed to them a legend
in substantially the form set forth below:

                                      -6-
<PAGE>

     "THIS  CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
     RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT, AS IT MAY FROM TIME TO TIME BE
     SUPPLEMENTED  OR  AMENDED,  BETWEEN  SYNOVICS  PHARMACEUTICALS,   INC.  AND
     CONTINENTAL  STOCK TRANSFER & TRUST COMPANY,  THE TERMS OF WHICH ARE HEREBY
     INCORPORATED  HEREIN  BY  REFERENCE  AND A COPY OF  WHICH IS ON FILE AT THE
     PRINCIPAL EXECUTIVE OFFICES OF SYNOVICS PHARMACEUTICALS, INC. UNDER CERTAIN
     CIRCUMSTANCES,  AS SET FORTH IN THE RIGHTS  AGREEMENT,  SUCH  RIGHTS MAY BE
     REDEEMED  OR  EXCHANGED,  MAY  EXPIRE,  OR MAY  BE  EVIDENCED  BY  SEPARATE
     CERTIFICATES  AND NO  LONGER BE  EVIDENCED  BY THIS  CERTIFICATE.  SYNOVICS
     PHARMACEUTICALS, INC. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF
     THE RIGHTS  AGREEMENT  WITHOUT  CHARGE  WITHIN FIVE DAYS AFTER RECEIPT OF A
     WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES, RIGHTS ISSUED TO, OR
     HELD BY,  ACQUIRING  PERSONS  OR THEIR  AFFILIATES  OR  ASSOCIATES  AND ANY
     SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID."

     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  therewith.  In the event  that the  Company
purchases or acquires any shares of Common Stock prior to the Distribution Date,
any Rights  associated with such shares of Common Stock shall be deemed canceled
and retired unless and until such shares of Common Stock are subsequently issued
by the Company 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.

     (a) 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 provided for in Section 3(a) hereof 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 Rights  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  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
and kind of shares of Common  Stock as shall be set forth  therein  at the price
per share set forth  therein,  but the number and kind of such  shares of Common
Stock and the price per share shall be subject to adjustment as provided herein.

                                      -7-
<PAGE>

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

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

     Notwithstanding  the above  provision,  failure to place such legend on any
Right Certificate representing Rights which are otherwise null and void pursuant
to the terms of this Rights  Agreement shall not affect the null and void status
of such Rights.

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

     Following the Distribution  Date, the Rights Agent will keep or cause to be
kept, at its principal office or offices designated as the appropriate place for
surrender  or transfer of such Right  Certificate,  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 prior to 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

                                      -8-
<PAGE>

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,  respectively,
entitling the registered  holder to purchase a like number and kind of shares of
Common Stock 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 or offices of the Rights Agent
designated for such purpose.  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.

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

     (a) Subject to Section 11(a)(ii) hereof, 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 or offices of the Rights Agent designated for such purpose, together with
payment of the price per share  (rounded to the nearest  cent)  provided  for in
paragraph (b) below (the "PURCHASE  PRICE") for each share of Common Stock as to
which the Rights are exercised,  at or prior to the earliest of (i) the Close of
Business on September 7, 2011 (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  pursuant  to the
exercise of a Right shall  initially be $1,200,  subject to adjustment from time
to time as provided in Sections 11 and 13 hereof, and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.

     (c) Upon receipt of a Right Certificate  representing  exercisable  Rights,
with the form of election to purchase duly  executed,  accompanied by payment of
the Purchase  Price for the shares of Common Stock 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)  requisition  from any transfer agent of the
Common

                                      -9-
<PAGE>

Stock  certificates  for the  number  and kind of shares  of Common  Stock to be
purchased (or  depository  receipts  when  appropriate)  and the Company  hereby
irrevocably  authorizes  its transfer  agents to comply with all such  requests,
(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, 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 duly
authorized assigns, subject to the provisions of Section 14 hereof.

     (e) So long as the Common Stock issuable upon the exercise of Rights may be
listed on any national securities exchange, the Company shall use its reasonable
best efforts to cause all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.

     (f)  Notwithstanding  the  foregoing,  the Rights shall not be  exercisable
under  any  circumstances  unless  there  shall  be at the time of  exercise  an
effective  registration  statement  under the  Securities  Act  relating  to the
issuance of the shares of Common Stock upon the exercise thereof or the exchange
thereof pursuant to Section 24 hereof.

     (g)  Notwithstanding  anything  herein  to the  contrary,  no  Right  shall
constitute  an  offer  to  sell  or the  solicitation  of an  offer  to buy  any
securities,  nor shall there by any sale of Rights or the issuance of securities
upon exercise of the Rights in any state in which such offer,  solicitation,  or
sale  would be  unlawful  prior  to  registration  or  qualification  under  the
securities laws of any such states.

     SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHT  CERTIFICATES.  All Right
Certificates  surrendered  for the  purpose  of  exercise,  transfer,  split up,
combination,  or exchange  shall, if surrendered to the Company or to any of its
agents,  be delivered to the Rights Agent for  cancellation or in canceled form,
or, if  surrendered  to the Rights Agent,  shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof,  except as expressly  permitted by
any of the provisions of this Rights 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 that upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company,  destroy such canceled  Right  Certificates,  and, in such case,
shall deliver a certificate of destruction thereof to the Company.

     SECTION 9. AVAILABILITY OF SHARES OF COMMON STOCK.

     (a) The Company  covenants and agrees that it will cause to be reserved and
kept  available out of its  authorized  and unissued  Common Stock or any Common
Stock held in its  treasury,  the number and kind of shares of Common Stock that
will be sufficient to permit the exercise in full of all  outstanding  Rights in
accordance with this Rights Agreement.

                                      -10-
<PAGE>

     (b) 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  (subject  to  payment  of the  Purchase  Price),  be  duly  and  validly
authorized and issued and fully paid and nonassessable shares of Common Stock.

     (c) The Company  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  (i) 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 depository  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 (ii) to issue or to
deliver any  certificates  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. RECORD  HOLDERS OF COMMON STOCK ISSUED UPON EXERCISE OF RIGHTS.
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; provided, however, that if the date of such
surrender and payment is a date upon which the Company's  transfer books for the
shares of Common  Stock 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 such transfer books 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 Common  Stock for which the
Rights evidenced thereby shall be exercisable,  including,  without  limitation,
the right to vote, to receive dividends or other  distributions,  or to exercise
any  preemptive  rights,  and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

     SECTION  11.  ADJUSTMENT  OF PURCHASE  PRICE,  NUMBER AND KIND OF SHARES OF
COMMON STOCK OR NUMBER OF RIGHTS.  The Purchase  Price,  the number of shares of
Common Stock or other securities covered by each Right, and the number of Rights
outstanding  are  subject to  adjustment  from time to time as  provided in this
Section 11.

     (a)  (i) In the event the  Company  shall at any time after the Record Date
          (A) declare a dividend on the Common  Stock  payable in Common  Stock,
          (B)  subdivide the  outstanding  shares of Common Stock into a greater
          number of such shares,  (C) combine the  outstanding  shares of Common
          Stock into a smaller

                                      -11-
<PAGE>

          number of such shares, 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
          for Rights 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,  upon payment of the Purchase
          Price then in effect,  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 would have owned
          upon such  exercise  and been  entitled  to  receive by virtue of such
          dividends,  subdivision,  combination, or reclassification;  provided,
          however,  that in no event shall the consideration to be paid upon the
          exercise of one such Right be less than the per share par value of the
          Common  Stock.  If an event occurs which would  require an  adjustment
          under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment
          provided  for in this  Section  11(a)(i)  shall be in addition to, and
          shall be made prior to, any  adjustment  required  pursuant to Section
          11(a)(ii).

          (ii) Subject to Section 24 of this Rights Agreement,  in the event any
          Person becomes an Acquiring  Person,  then the Purchase Price for each
          share of Common  Stock  issuable  upon  exercise  of  Rights  shall be
          reduced to an amount equal to 33 1/3% of the current per share  market
          price of such Common Stock  (determined  pursuant to Section 11(d)) on
          the  Shares  Acquisition  Date).  Notwithstanding  the  above,  if the
          transaction that would otherwise give rise to the  classification of a
          Person as an  Acquiring  Person is also subject to the  provisions  of
          Section 13 hereof, then only the provisions of Section 13 hereof shall
          apply  and no  adjustment  shall  be made  pursuant  to  this  Section
          11(a)(ii).

          From and  after  the  occurrence  of a Person  becoming  an  Acquiring
          Person,  any Rights that are or were acquired or beneficially owned by
          such Acquiring Person, or any subsequently deemed Acquiring Person (or
          any  Associate or Affiliate of each such  Acquiring  Person)  shall be
          void and any such Acquiring  Person shall  thereafter have no right to
          exercise such Rights under any provision of this Rights 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 or from an  Acquiring
          Person whose Rights would be void pursuant to the  preceding  sentence
          or any  Associate  or  Affiliate  thereof or to or from any nominee of
          such  Acquiring  Person,   Associate  or  Affiliate;   and  any  Right
          Certificate  delivered  to the Rights Agent for transfer to or from an
          Acquiring  Person  (or any  Associate,  Affiliate  or  nominee of such
          Acquiring Person) whose Rights would be void pursuant to the preceding
          sentence shall be canceled.

                                      -12-
<PAGE>

          (iii) In the event that 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, the Company shall, to the extent permitted by applicable
          law, take all such action as may be necessary to authorize  additional
          shares of Common  Stock for  issuance  upon  exercise  of the  Rights,
          including  the  calling  of  a  meeting  of  stockhholders;  provided,
          however,  if the  Company  is  unable to cause  the  authorization  of
          additional  shares of Common  Stock,  then the Company,  to the extent
          necessary  and  permitted  by  applicable  law and any  agreements  or
          instruments  in  effect  on the  date  hereof  to which it is a party,
          shall,  at its  option  (A) pay cash  equal to  twice  the  applicable
          Purchase  Price (as  adjusted  pursuant to this Section 11) in lieu of
          issuing  any  such  shares  of  Common  Stock  and  requiring  payment
          therefor,  (B) issue  equity  securities  having a value  equal to the
          market price of the shares of Common Stock which  otherwise would have
          been  issuable  pursuant to the  foregoing  subparagraph,  which value
          shall be  determined  by the Board of Directors of the Company,  whose
          determination  shall be described in a statement filed with the Rights
          Agent, or (C) distribute a combination of Common Stock,  cash,  and/or
          other  equity  securities  having a value equal to the market price of
          the shares of the Common Stock which are otherwise  issuable  pursuant
          to the foregoing  subparagraph (ii), determined in accordance with the
          preceding clause (B), upon exercise of the related Rights.

     (b) In case the Company  shall fix a record date for the issuance of rights
(other than the  Rights),  options,  or warrants to all holders 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 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 (as defined in Section  11(d)) of
the Common Stock on such record date,  the Purchase  Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall be the number of shares of 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 so to be  offered  (and/or  the  aggregate  initial
conversion price of the convertible  securities so to be offered) would purchase
at such current per share 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 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 per share 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 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

                                      -13-
<PAGE>

fixed;  and in the event  that such  rights,  options,  or  warrants  are not so
issued,  the  Purchase  Price shall be adjusted to be the  Purchase  Price 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  shares of 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, a dividend
payable in shares of Common Stock or other  distribution  referred to in Section
11(a) hereof) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price 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 and shall be binding on the Rights  Agent) of the  portion of such
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 per  share  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 if fixed; and
in the event that 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.

     (d) For the purpose of any  computation  hereunder,  the "CURRENT PER SHARE
MARKET  PRICE" of a share of Common  Stock on any date shall be deemed to be the
average  of the  daily  closing  prices  per  share of  Common  Stock for the 30
consecutive Trading Days immediately prior to such date; provided, however, that
in the event that the current per share  market price of a share of Common Stock
is determined during a period following the announcement by the Company of (A) a
dividend or  distribution  to holders of the shares of Common Stock,  payable in
shares of Common Stock or securities convertible into shares of Common Stock, or
(B) any subdivision,  combination,  or reclassification of the 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 by the Board of  Directors.  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 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 Nasdaq Stock Market,  Inc.  ("NASDAQ") then in use, or, if on
any such date Common Stock is

                                      -14-
<PAGE>

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 on any such date no
market-maker  is making a market in the Common  Stock,  the fair value of Common
Stock on such date as  determined in good faith by the Board of Directors of the
Company  shall be used,  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 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. 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.

     (e) Anything herein to the contrary  notwithstanding,  no adjustment in the
Purchase  Price  shall be  required  unless  such  adjustment  would  require an
increase or decrease of at least 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 ten-thousandth of a share as the case may be.

     (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 shares of 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, 13 and 14 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  hereunder  to the  Purchase  Price  applicable  thereto  shall
evidence the right to purchase,  at the adjusted  Purchase Price,  the number of
shares of Common  Stock or other  capital  stock  purchasable  from time to time
hereunder  upon  exercise of such 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 related  Right  outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to  purchase,  at the  adjusted  Purchase  Price,  the number of shares of
Common Stock (calculated to the nearest one  ten-thousandth of a share) obtained
by (i)  multiplying  (x) the number of shares covered by such Right  immediately
prior to this adjustment by (y) the Purchase Price in effect  immediately  prior
to such Purchase Price adjustment,  and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such Purchase Price adjustment.

                                      -15-
<PAGE>

     (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 such Rights  outstanding  after such adjustment of the number of
such Rights  shall be  exercisable  for the number of shares of Common Stock for
which such Right was exercisable immediately prior to such adjustment. Each such
Right held of record  prior to such  adjustment  of the  number of Rights  shall
become that number of such Rights (calculated to the nearest one ten-thousandth)
obtained  by  dividing  the  Purchase  Price  in  effect  immediately  prior  to
adjustment of such Purchase  Price by the Purchase  Price in effect  immediately
after such  adjustment.  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 such Rights
pursuant to this Section 11(i),  the Company shall,  as promptly as practicable,
cause to be distributed to holders of record of such Right  Certificates on such
record  date  additional  Rights to which such  holders  shall be  entitled as a
result of such adjustment,  or, at the option of the Company,  shall cause to be
distributed to such holders of record in  substitution  and replacement for such
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
such Right Certificates theretofore 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 shares of 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 related 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 shares of 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.

                                      -16-
<PAGE>

     (m)  Anything  in this  Section  11 to the  contrary  notwithstanding,  the
Company shall be entitled, but shall not be required, to make any adjustments 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 (i) any  consolidation  or  subdivision  of the Common  Stock,  (ii)
issuance  wholly for cash or any Common  Stock at less than the  current  market
price,  (iii)  issuance  wholly for cash or Common Stock or securities  which by
their terms are  convertible  into or  exchangeable  for shares of Common Stock,
(iv)  dividends on the Common Stock  payable in shares of Common  Stock,  or (v)
issuance of rights,  options,  or warrants  referred to  hereinabove  in Section
11(b), hereafter made by the Company to holders of shares of Common Stock, shall
not be taxable to such stockholders.

     (n) The Company covenants and agrees that, after the Distribution  Date, it
will not,  except as permitted by Sections 23 or 27 hereof,  take (or permit any
Subsidiary  to take) any  action  the  purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the effect of such action
is to,  materially  diminish or otherwise  eliminate the benefits intended to be
afforded by the Rights. Notwithstanding the foregoing, prior to the Distribution
Date the Company shall be entitled to amend this Rights Agreement and the Rights
in any and all respects.

     SECTION 12.  CERTIFICATE OF  ADJUSTMENT.  Whenever an adjustment is made as
provided in Sections 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) include
a brief summary  thereof in the next  quarterly or current report filed pursuant
to the Exchange Act by the Company,  and,  following the Distribution Date, mail
such summary 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.

     (a) In the event that, on or following the Distribution  Date,  directly or
indirectly,  (x) the Company shall consolidate with, or merge with and into, any
other Person,  (y) the Company shall  consolidate with, or merge with, any other
Person, and the Company shall be the continuing or surviving corporation of such
consolidation  or merger (other than, in a case of any transaction  described in
(x)  or  (y),  a  merger  or  consolidation  which  would  result  in all of the
securities  generally  entitled to vote in the  election of  directors  ("VOTING
SECURITIES") of the Company outstanding  immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into securities
of the  surviving  entity) all of the voting  securities  of the Company or such
surviving entity outstanding  immediately after such merger or consolidation and
the holders of such  securities not having changed as a result of such merger or
consolidation),  or (z) the Company shall sell or otherwise  transfer (or one or
more of its Subsidiaries shall sell or otherwise  transfer),  in one or a series
of related  transactions,  assets or earning power  aggregating more than 50% of
the assets or earning  power of the  Company  and its  Subsidiaries  (taken as a
whole) to any other  Person  (other  than the Company or any  Subsidiary

                                      -17-
<PAGE>

of the  Company  in one or more  transactions  each of which  does  not  violate
Section  11(n)  hereof),  then,  and in each such case  (except as  provided  in
Section 13(d) hereof), proper provision shall be made so that (i) each holder of
a Right,  except as provided in Section 11(a) hereof,  shall thereafter have the
right to receive, upon the exercise thereof at a price equal to the then current
Purchase Price  (without  giving effect to any adjustment to such Purchase Price
pursuant  to  Section  11(a)(ii))  multiplied  by the number of shares of Common
Stock for which such Right is then exercisable,  in accordance with the terms of
this Rights Agreement,  such number of freely tradable shares of Common Stock of
the Principal  Party,  not subject to any liens,  encumbrances,  rights of first
refusal,  or other  adverse  claims,  as shall equal the result  obtained by (A)
multiplying  the then  current  Purchase  Price  (without  giving  effect to any
adjustment to such Purchase Price  pursuant to Section  11(a)(ii)) by the number
of shares of Common  Stock for  which  such  Right is then  exercisable  and (B)
dividing  that  product by 50% of the then current per share market price of the
Common  Stock of such  Principal  Party  (determined  pursuant to Section  11(d)
hereof) on the date of  consummation  of such  consolidation,  merger,  sale, or
transfer;  (ii) such Principal  Party shall  thereafter be liable for, and shall
assume, by virtue of such consolidation,  merger, sale, or transfer,  all of the
obligations and duties of the Company pursuant to this Rights  Agreement;  (iii)
the term "COMPANY" shall  thereafter be deemed to refer to such Principal Party,
it being  specifically  intended that the  provisions of Section 11 hereof shall
apply only to such Principal  Party  following the first  occurrence of an event
described  in this  Section  13; and (iv) such  Principal  Party 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 assure that the provisions hereof
shall  thereafter be applicable,  as nearly as reasonably may be, in relation to
the shares of Common  Stock  thereafter  deliverable  upon the  exercise  of the
Rights.

     (b) "PRINCIPAL PARTY" shall mean

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

          (ii) in the case of any  transaction  described  in clause  (z) of the
          first  sentence  of  Section  13(a),  the  Person  that  is the  party
          receiving  the  greatest  portion  of the  assets  or  earnings  power
          transferred  pursuant to such transaction or  transactions;  provided,
          however,  that in any of the  foregoing  cases,  (1) if the  shares of
          Common  Stock of such  Person  are not at such  time and have not been
          continuously  over the preceding  twelve (12) month period  registered
          under  Section 12 of the Exchange  Act, and such Person is a direct or
          indirect  Subsidiary  of another  Person the shares of Common Stock of
          which are and have been so registered,  "Principal  Party" shall refer
          to  such  other  Person;  (2) in case  such  Person  is a  Subsidiary,
          directly or indirectly,  of more than one Person, the shares of Common
          Stock  of two or  more  of  which  are and  have  been so  registered,
          "PRINCIPAL  Party"  shall refer to  whichever  of such  Persons is the
          issuer of the

                                      -18-
<PAGE>

          Common Stock having the greatest  aggregate  market value;  and (3) in
          case such Person is owned, directly or indirectly,  by a joint venture
          formed  by two or  more  Persons  that  are  not  owned,  directly  or
          indirectly,  by the same  Person,  the  rules set forth in (1) and (2)
          above  shall  apply  to each of the  chains  of  ownership  having  an
          interest in such joint  ventures as if such party were a  "Subsidiary"
          of both or all of such joint  ventures  and the  Principal  Parties in
          each such chain shall bear the  obligations  set forth in this Section
          13 in the same ratio as their  direct or  indirect  interests  in such
          Person bear to the total of such interests.

     (c) The Company shall not consummate any such consolidation,  merger, sale,
or transfer unless the Principal Party shall have a sufficient  number of shares
of its authorized  shares of Common Stock which have not been issued or reserved
for  issuance to permit the  exercise in full of the Rights in  accordance  with
this Section 13 and unless prior  thereto the Company and such  Principal  Party
shall have executed and delivered to the Rights Agent a  supplemental  agreement
providing for the terms set forth in  paragraphs  (a) and (b) of this Section 13
and  further  providing  that,  as soon as  practicable  after  the  date of any
consolidation,  merger,  sale,  or transfer  mentioned in paragraph  (a) of this
Section 13, the Principal Party at its own expense shall:

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

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

          (iii) deliver to holders of the Rights historical financial statements
          for  the  Principal  Party  which  comply  in all  respects  with  the
          requirements for registration on Form 10 under the Exchange Act.

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

     (d) Notwithstanding anything in this Agreement to the contrary,  Section 13
shall not be applicable to a transaction  described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
who acquired  shares of Common Stock pursuant to a Permitted  Offer (or a wholly
owned subsidiary of any such Person or Persons), (ii) the price per share of the
Common Stock offered in such transaction is not less than the price per share of
Common  Stock whose  shares  were  purchased  pursuant  to such tender  offer or
exchange

                                      -19-
<PAGE>

offer,  and (iii)  the form of  consideration  being  offered  to the  remaining
holders of shares of Common Stock  pursuant to such  transaction  is the same as
the form of consideration  paid pursuant to such tender offer or exchange offer.
Upon  consummation of any such  transaction  contemplated by this Section 13(d),
all Rights hereunder shall expire.

     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 such 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 closing
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 such 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 such 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 such Rights on such date 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, shall be used.

     (b) The  Company  shall not be  required  to issue  fractions  of shares of
Common Stock upon exercise of the Rights or exchange of the Rights for shares of
Common Stock pursuant to Section 24 of this Rights  Agreement,  or to distribute
certificates which evidence  fractional shares of such securities.  Fractions of
shares of Common  Stock may, at the  election of the  Company,  be  evidenced by
depository  receipts,  pursuant to an appropriate  agreement between the Company
and a depositary selected by it; provided that such agreement shall provide that
the holders of such depositary receipts shall have the rights,  privileges,  and
preferences  to which they are  entitled as  beneficial  owners of the shares of
Common Stock  represented  by such  depositary  receipts.  In lieu of fractional
shares  of Common  Stock or  depositary  receipts,  the  Company  may 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 share of Common  Stock.  For the  purposes of this  Section
14(b),  the current market value of a share of Common Stock shall be the closing
price of a share of Common Stock (as determined  pursuant to the second sentence
of Section  11(d) hereof) for the Trading Day  immediately  prior to the date of
such exercise.

                                      -20-
<PAGE>

     (c) The holder of a Right by the acceptance of such Right expressly  waives
his 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
Rights 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 own
behalf and for his own  benefit,  enforce,  and may  institute  and maintain any
suit, action, or proceeding against the Company to enforce,  or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right  Certificate and in this Rights  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 Rights  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 Rights Agreement.

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

     (a)  prior to the Distribution  Date, the Rights will be transferable  only
          in connection with the transfer of the 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  certificates for shares of Common Stock) 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 certificates for shares of Common Stock
          made by anyone  other than the  Company  or the Rights  Agent) for all
          purposes  whatsoever,  and neither  the  Company nor the Rights  Agent
          shall be affected by any notice to the contrary;

     (d)  notwithstanding  anything in this Rights  Agreement  to the  contrary,
          neither the Company nor the Rights  Agent shall have any  liability to
          any  holder of a Right or a  beneficial  interest  in a Right or other
          Person as a result of its inability to perform any of its  obligations
          under this Rights  Agreement by reason of any preliminary or permanent
          injunction  or other  order,  decree,  or ruling  issued by a court of

                                      -21-
<PAGE>

          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  must  use  its  best
          reasonable efforts to have any such order, decree, or ruling lifted or
          otherwise overturned as soon as possible; and

     (e)  prior to the Distribution Date and notwithstanding  anything herein to
          the  contrary,  the  Company  shall be  entitled  to amend this Rights
          agreement and the Rights in any and all respects.

     SECTION 17. RIGHT CERTIFICATE  HOLDER NOT DEEMED A STOCKHOLDER.  No holder,
as such, of any Right Certificate shall be entitled to vote,  receive dividends,
or be deemed for any purpose  the holder of 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 stockholder of the Company or any
right to vote for the  election of  directors  or upon any matter  submitted  to
stockholders  at any  meeting  thereof,  or to give or  withhold  consent to any
corporate  action,  or to receive notice of meetings or other actions  affecting
stockholders  (except as provided in Section 25 hereof), or to receive dividends
or subscription  rights,  or otherwise,  until the Right or Rights  evidenced by
such  Right  Certificate  shall  have  been  exercised  in  accordance  with the
provisions hereof.

     SECTION 18.  CONCERNING THE RIGHTS AGENT.  The Company agrees to pay to the
Rights Agent reasonable  compensation for all services  rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable  expenses,
counsel  fees,  and  other  disbursements  incurred  in the  administration  and
execution  of this Rights  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
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 Rights Agreement,  including the costs and
expenses of defending  against any claim of liability in the indemnity  provided
for herein.  Such right to  indemnification  shall survive the expiration of the
Rights and the termination of this Rights Agreement.

     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 Rights Agreement in reliance upon any Right  Certificate
or  certificate  for  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.

     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

                                      -22-
<PAGE>

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  of  all  or
substantially  all of the  corporate  trust  business of the Rights Agent or any
successor  Rights  Agent,  shall be the successor to the Rights Agent under this
Rights 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 Rights  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 Rights 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 the
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 Rights Agreement.

     SECTION 20. DUTIES OF RIGHTS AGENT.  The Rights Agent undertakes the duties
and  obligations  imposed by this Rights  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, but need
not be,  legal  counsel for the Company or its own  in-house  counsel),  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 Rights  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 of
Directors,  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 Rights
Agreement in reliance upon such certificate.

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

                                      -23-
<PAGE>

     (d) The Rights  Agent  shall not be liable for, or by reason of, any of the
statements  of fact or recitals  contained  in this Rights  Agreement  or in the
Right Certificates  (except its countersignature on such Rights Certificates) 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 Rights  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  Rights  Agreement  or in any  Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights  (including  the Rights  becoming void pursuant to Section  11(a)(ii)
hereof) or any  adjustment  in the terms of the Rights  (including  the  manner,
method,  or amount thereof) provided for in Sections 3, 7, 11, 13, 23, 24, 27 or
29 hereof,  or the ascertaining of the existence of facts that would require any
such  change or  adjustment  (except  with  respect  to the  exercise  of Rights
evidenced  by Right  Certificates  after  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 Rights  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 Rights 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 of Directors,  the Chief Executive Officer, the
President,  any Vice President,  the Treasurer, or the Secretary of the Company,
and to apply to such officers for advice or  instructions in connection with its
duties,  and it shall not be liable for any action  taken or  suffered  by it in
good faith in accordance with  instructions of any such officer or for any delay
in acting while waiting for those instructions.

     (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
Rights Agreement.  Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.

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

                                      -24-
<PAGE>

     SECTION  21.  CHANGE OF RIGHTS  AGENT.  The Rights  Agent or any  successor
Rights  Agent may resign and be  discharged  from its duties  under this  Rights
Agreement  upon 30 days'  notice in writing  mailed to the  Company  and to each
transfer  agent of the shares of 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 shares of Common Stock by registered
or certified  mail, and to the holders of the Right  Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall  otherwise  become
incapable of acting,  the Company shall appoint a successor to the Rights Agent.
If the Company  shall fail to make such  appointment  within a period of 30 days
after giving  notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right  Certificate (who shall,  with such notice,  submit his
Right Certificate for inspection by the Company),  then the registered holder of
any Right  Certificate may apply to any court of competent  jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the  Company or by such a court,  shall be (a) a  corporation  organized  and
doing business under the laws of the United States or of any state of the United
States,  in good  standing,  which is  authorized  under  such laws to  exercise
corporate  trust or 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 of at least $25
million,  or (b) an affiliate of a  corporation  described in clause (a) of this
sentence. 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  shares of
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.

     SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.  Notwithstanding any of the
provisions  of this Rights  Agreement or of the Rights,  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 Rights Agreement

     In addition,  in  connection  with the issuance or sale of shares of Common
Stock following the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date, the Company (a) shall with respect to shares
of Common Stock so issued or sold  pursuant to the exercise of stock  options or
under any employee plan or  arrangement,  or upon the exercise,

                                      -25-
<PAGE>

conversion,  or exchange  of  securities,  notes,  or  debentures  issued by the
Company,  and (b) may, in any other case, if deemed  necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however,  that (i) the Company  shall not be  obligated  to issue any such Right
Certificates if, and to the extent that, the Company shall be advised by counsel
that such  issuance  would  create a  significant  risk of material  adverse tax
consequences to the Company or the Person to whom such Right  Certificate  would
be issued,  and (ii) no Right  Certificate shall be issued if, and to the extent
that,  appropriate  adjustment  shall  otherwise  have  been made in lieu of the
issuance thereof.

     SECTION 23. REDEMPTION.

     (a) The Board of Directors  of the Company may, at its option,  at any time
prior to such time as any Person  becomes an Acquiring  Person,  redeem all, but
not less than all, of the then outstanding Rights at an initial redemption price
of $0.0001 per Right (the  "REDEMPTION  PRICE").  The Redemption  Price shall be
appropriately  adjusted to reflect any stock split,  stock dividend,  or similar
transaction occurring after the date hereof. 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, if such Board of Director
action  occurs prior to the  Distribution  Date,  on the  registry  books of the
transfer agent for the shares of Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice.  Each such notice of  redemption  will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem,  acquire,  or purchase for value any Rights
at any time in any manner other than that specifically set forth in this Section
23 or in Section 24 hereof,  and other than in  connection  with the purchase of
shares of Common Stock prior to the Distribution Date.

     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

                                      -26-
<PAGE>

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,  any entity
holding  shares of Common Stock for or pursuant to the terms of any such plan or
any trust agreement entered into by the Company to secure benefits payable under
any employee  benefit  plan of the Company or any  Subsidiary  of the  Company),
together  with  all  Affiliates  and  Associates  of such  Person,  becomes  the
Beneficial  Owner of  shares  of Common  Stock  representing  50% or more of the
shares of Common Stock then outstanding.

     (b)  Immediately  upon the action of the Board of  Directors of the Company
ordering the exchange of any Rights  pursuant to subsection  (a) of this Section
24 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 shall promptly mail a notice
of any such exchange to all of the holders of the Rights at such last  addresses
as they appear upon the registry books of the Rights Agent.  Any notice which is
mailed in the manner herein  provided shall be deemed given,  whether or not the
holder  receives the notice.  Each such notice of exchange will state the method
by which the  exchange of the shares of Common Stock for Rights will be effected
and, in the event of any partial  exchange,  the number and kind of Rights which
will be exchanged.  Any partial exchange shall be effected pro rata based on the
number of Rights  being  exchanged  (other  than  Rights  which have become void
pursuant to the provisions of Section  11(a)(ii)  hereof) held by each holder of
such Rights.

     (c) In the event that there shall not be sufficient  shares of Common Stock
issued,  but not outstanding or authorized,  but unissued to permit any exchange
of Rights as  contemplated in accordance with 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.

     SECTION 25. NOTICE OF CERTAIN EVENTS.

     (a) In case the Company, following the Distribution Date, shall propose (i)
to pay any dividend payable in stock of any class or series to holders of shares
of Common Stock or to make any other distribution to holders of shares of Common
Stock (other than a regular  quarterly cash dividend),  (ii) to offer to holders
of shares of Common Stock  rights or warrants to subscribe  for, or to purchase,
any  additional  shares of  Common  Stock or any other  securities,  rights,  or
options,  (iii) to effect any reclassification of the Common Stock (other than a
reclassification  involving only the subdivision of outstanding shares of Common
Stock),  (iv) to effect any  consolidation  or merger with or into, 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  (other  than  the  Company  and/or  any  of its
Subsidiaries in one or more  transactions each of which does not violate Section
11(n) hereof), or (v) to effect the liquidation,  dissolution,  or winding up of
the Company, then, in each such case, the Company shall give to each holder of a

                                      -27-
<PAGE>

Right  Certificate,  in  accordance  with  Section 26  hereof,  a notice of such
proposed action to the extent feasible,  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 holders of shares of 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 shares 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 holders
of shares of Common Stock,  whichever shall be the earlier.  The failure to give
notice  required by this Section 25 or any defect  therein  shall not affect the
legality  or  validity  of the action  taken by the Company or the vote upon any
such action.

     (b) In case any of the events 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 Rights Agreement
to be  given  or  made  by the  Rights  Agent  or by  the  holder  of any  Right
Certificate to or on the Company shall be sufficiently  given or made if sent by
first-class mail, postage prepaid,  addressed (until another address is filed in
writing with the Rights Agent) as follows:

                           Synovics Pharmaceuticals, Inc.
                           2575 East Camelback Road, Ste. 450
                           Phoenix, Arizona   85016
                           Attention:  President

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

                           Continental Stock Transfer & Trust Company
                           17 Battery Place
                           8th Floor
                           New York, New York  10004
                           Attention:  Compliance Department

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

     SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date, the
Company and the Rights Agent  shall,  if the Company so directs,  supplement  or
amend any

                                      -28-
<PAGE>

provision  of this  Rights  Agreement  without  the  approval  of any holders of
certificates   representing   shares  of  Common  Stock.   From  and  after  the
Distribution  Date,  the Company and the Rights Agent  shall,  if the Company so
directs,  supplement or amend this Rights Agreement  without the approval of any
holders  of  Rights  Certificates  in order (i) to cure any  ambiguity,  (ii) to
correct or supplement any provision  contained  herein which may be defective or
inconsistent with any other provisions herein,  (iii) to shorten or lengthen any
time period hereunder,  or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem  necessary or desirable and which shall
not adversely affect the interests of the holders of Right  Certificates  (other
than an Acquiring  Person or an Affiliate or Associate of an Acquiring  Person);
provided, however, that this Rights Agreement may not be supplemented or amended
to  lengthen,  pursuant  to clause  (iii) of this  sentence,  (A) a time  period
relating  to when the Rights may be  redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for the
purpose of  protecting,  enhancing,  or  clarifying  the  rights of,  and/or the
benefits to, the holders of Rights. Without limiting the foregoing,  the Company
may at any time prior to such time as any Person  becomes  an  Acquiring  Person
amend this Rights  Agreement to lower the  thresholds set forth in Sections 1(a)
and 3(a) hereof with respect to (x) any Person who or which, on the date hereof,
together with Affiliate and Associates of such Person, owns less than 20% of the
outstanding  Common Stock of the  Company,  decrease  the  triggering  ownership
percentage  from 20% to not less than the greater of (i) any percentage  greater
than the largest  percentage of the then outstanding shares of Common Stock then
known by the  Company to be  beneficially  owned by any Person  (other  than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company,  any entity holding shares of Common Stock for
or  pursuant  to the terms of any such  plan,  or any person  exempted  from the
definition of Acquiring  Person  pursuant to the last sentence of the definition
thereof  set forth in  Section 1 of this  Rights  Agreement)  together  with all
Affiliates or Associates of such Person,  or (ii) 10%; and (y) any Person who or
which,  on the date hereof,  together with all Affiliates and Associates of such
Person,  owns in excess of 20% or more of the Common Stock outstanding as of the
date hereof,  decrease the triggering ownership percentage from an additional 1%
of the then current  outstanding  Common Stock to not less than 0.01%.  Upon the
delivery of a  certificate  from an  appropriate  officer of the  Company  which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment,
provided that such supplement or amendment does not adversely  affect the rights
or obligations of the Rights Agent under Section 18 or Section 20 of this Rights
Agreement.  Prior to the  Distribution  Date,  the  interests  of the holders of
Rights shall be deemed coincident with the interests of the holders of shares of
Common Stock.

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

     SECTION 29.  DETERMINATIONS BY THE BOARD OF DIRECTORS.  For all purposes of
this Rights  Agreement,  any calculation of the number of shares of Common Stock
outstanding at any particular  time,  including for purposes of determining  the
particular  percentage of such  outstanding  shares of Common Stock of which any
Person  is the  Beneficial  Owner,  shall  be made in  accordance  with the last
sentence of Rule  13d-3(d)(1)(i)  of the General Rules and

                                      -29-
<PAGE>

Regulations  under the Exchange Act. The Board of Directors of the Company shall
have the exclusive power and authority to administer  this Rights  Agreement and
to exercise all rights and powers specifically granted to the Board of Directors
or to the Company,  or as may be necessary or advisable in the administration of
this Rights Agreement, including, without limitation, the right and power to (i)
interpret  the  provisions  of  this  Rights   Agreement,   and  (ii)  make  all
determinations  deemed  necessary or advisable  for the  administration  of this
Rights  Agreement  (including a determination to redeem or not redeem the Rights
or to amend the Rights  Agreement or a  determination  that an adjustment to the
Redemption Price or Exchange Ratio is or is not appropriate).  All such actions,
calculations,  interpretations,  and determinations  (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board of  Directors in good faith,  shall (x) be final,  conclusive,
and binding on the Company, the Rights Agent, the holders of the Rights, and all
other  parties,  and (y) not subject the Board of Directors to any  liability to
the holders of the Rights.

     SECTION  30.  BENEFITS  OF THE RIGHTS  AGREEMENT.  Nothing  in this  Rights
Agreement  shall be construed to give to any Person 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 Rights Agreement;  but this Rights 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 31. SEVERABILITY. If any term, provision,  covenant, or restriction
of this Rights  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 Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired, or invalidated.

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

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

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -30-
<PAGE>

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

ATTEST:                                 SYNOVICS PHARMACEUTICALS, INC.

BY:                                     BY:
   ------------------------                -------------------------------------
     ASSISTANT SECRETARY                     RONALD H. LANE, PH.D.
                                             CHAIRMAN OF THE BOARD OF DIRECTORS,
                                             PRESIDENT, AND CHIEF EXECUTIVE
                                             OFFICER

ATTEST:                                 CONTINENTAL STOCK TRANSFER
                                          & TRUST COMPANY

BY:                                     BY:
   ------------------------                -------------------------------------
     ASSISTANT SECRETARY                     VICE PRESIDENT

                                      -31-
<PAGE>

                                    EXHIBIT A

                            FORM OF RIGHT CERTIFICATE

CERTIFICATE NO. R-_______                                          ______ RIGHTS

NOT  EXERCISABLE  AFTER  SEPTEMBER 7, 2011 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

                         SYNOVICS PHARMACEUTICALS, INC.

This  certifies  that   ____________________   or  registered  assigns,  is  the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement,  dated as of  September  8, 2006 (the  "RIGHTS  AGREEMENT"),  between
Synovics  Pharmaceuticals,  Inc.,  a  Nevada  corporation  (the  "COMPANY")  and
Continental  Stock  Transfer & Trust Company (the "RIGHTS  AGENT"),  to purchase
from the  Company  at any time  after  the  Distribution  Date (as such  term is
defined  in the  Rights  Agreement)  and prior to 5:00 P.M.  New York City local
time, on September 7, 2011, at the principal  office of the Rights Agent,  or at
the office of its successor as Rights Agent, one fully paid non-assessable share
of Synovics Pharmaceuticals,  Inc. Common Stock, par value $0.001 per share (the
"STOCK"),  at a purchase price of $1,200 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 Stock  which may be  purchased  upon
exercise  hereof) set forth above,  and the Purchase Price set forth above,  are
the number of Rights and  Purchase  Price as of  September  8, 2006 (the "RECORD
DATE") based on the shares of Stock of the Company as  constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of shares
of 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 and the  holders of the Right  Certificates.  Copies of the Rights
Agreement are on file at the principal  executive offices of the Company and the
above-mentioned offices of the Rights Agent.

     This Right  Certificate,  with or without other Rights  Certificates,  upon
surrender at the  principal  office of the Rights  Agent,  may be exchanged  for
another Right  Certificate  or  Certificates  of like tenor and date  evidencing
Rights  entitling  the holder to purchase a like

                                      -32-
<PAGE>

aggregate  number  of  shares  of Stock as the  Rights  evidenced  by the  Right
Certificate  or  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
Certificates for the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this Right  Certificate  (i) may be  redeemed  by the Company at its option at a
redemption  price of $0.0001 per Right,  or (ii) may be exchanged in whole or in
part for shares of Stock. No fractional  shares of 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,  receive
dividends,  or be deemed for any purpose the holder of the shares of Stock or of
any other  securities  of the  Company  which may at any time be issuable on the
exercise hereof,  nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder  hereof,  as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,  or to give or
withhold  consent to any corporate  action,  or to receive notice of meetings or
other  actions  affecting   stockholders  (except  as  provided  in  the  Rights
Agreement), or to receive dividends or subscription rights, or otherwise,  until
the  Right or  Rights  evidenced  by this  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 and
its corporate seal. Dated as of September ___, 2006.

ATTEST:                                       SYNOVICS PHARMACEUTICALS, INC.

                                       BY:
                                          --------------------------------------
                                            RONALD H. LANE PH.D.
                                            CHAIRMAN OF THE BOARD OF DIRECTORS,
                                            PRESIDENT, AND CHIEF EXECUTIVE
                                            OFFICER

COUNTERSIGNED:
              ---------------------

                                       CONTINENTAL STOCK TRANSFER
                                         & TRUST COMPANY

                                       BY:
                                          --------------------------------------
                                            [AUTHORIZED SIGNATURE]

                                      -33-
<PAGE>

              EXHIBIT A - 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 will all right,  title, and interest therein,
and does hereby  irrevocably  constitute and appoint  _________________________,
Attorney,  to  transfer  the  within  Right  Certificate  on  the  books  of the
within-named Company, with full power of substitution.

Dated:
      -------------------                             --------------------------
                                                              Signature

Signature Guaranteed:

     Signatures  must be  guaranteed  by a member firm of a registered  national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.

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

     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).

                                                      --------------------------
                                                              Signature

                              ELECTION TO EXERCISE

To:  Synovics Pharmaceuticals, Inc.

     The undersigned hereby exercises his, her, or its rights to purchase shares
of Common Stock,  par value $0.001 per share ("the Common  Stock"),  of Synovics
Pharmaceuticals,  Inc., a Nevada  corporation  (the  "COMPANY"),  covered by the
within Right  Certificate and tenders a lump sum payment  herewith in the amount
of  $_________  in  accordance  with  the  terms  thereof,   and  requests  that
certificates  for the  securities  constituting  such shares of Common  Stock be
issued in the name of, and delivered to:

     (Print Name, Address, and Social Security or Tax Identification Number)

Dated:                                       Name
      ------------------                         -------------------------------
                                                             (Print)

Address:

                                                 -------------------------------
                                                            (Signature)

                                      -34-
<PAGE>

                                    EXHIBIT B

                              SUMMARY OF RIGHTS TO
                         PURCHASE SHARES OF COMMON STOCK

     Effective  as of  September  8, 2006,  the Board of  Directors  of Synovics
Pharmaceuticals,  Inc. (the "COMPANY")  adopted a Rights  Agreement (the "RIGHTS
AGREEMENT")  and authorized and declared a dividend of one common share purchase
right (a "RIGHT") for each  outstanding  share of common stock, par value $0.001
per share of the  Company  (the  "COMMON  STOCK").  The  dividend  is payable on
September  8,  2006,  to the  stockholders  of record on that date (the  "RECORD
DATE"),  and with respect to shares of Common Stock issued  thereafter until the
Distribution  Date  (as  hereinafter  defined)  or  the  expiration  or  earlier
redemption  or  exchange of the Rights.  Except as set forth  below,  each Right
entitles the registered  holder to purchase from the Company,  at any time after
the Distribution  Date one share of Common Stock at a price per share of $1,200,
subject to adjustment (the "PURCHASE  PRICE").  The description and terms of the
Rights are as set forth in the Rights Agreement.

     Initially  the Rights  will be attached  to all  certificates  representing
shares of Common Stock then  outstanding,  and no separate  Rights  Certificates
will be  distributed.  The Rights will  separate from the shares of Common Stock
upon the  earlier  to occur of (i) 10 days after the  public  announcement  of a
person's  or  group  of  affiliated  or  associated   persons'  having  acquired
beneficial  ownership of 20% or more of the  outstanding  shares of Common Stock
or, in the case of any  Person or group of  affiliated  or  associated  persons'
beneficially  owning in excess of 20% of the outstanding  shares of Common Stock
as of September 8, 2006, the increase in the beneficial ownership of such person
or group of affiliated or associated  person by 1% or more (such person or group
being hereinafter referred to as an "ACQUIRING PERSON");  or (ii) 10 days in (or
such  later  date  as the  Board  of  Directors  may  determine)  following  the
commencement  of, or  announcement  of an  intention  to make, a tender offer or
exchange  offer the  consummation  of which would  result in a person or group's
becoming  an  Acquiring  Person  (the  earlier  of such dates  being  called the
"DISTRIBUTION DATE").

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

                                      -35-
<PAGE>

     The Rights are not exercisable until the Distribution Date. The Rights will
expire on September ___, 2011 (the "FINAL  EXPIRATION  DATE"),  unless the Final
Expiration  Date is  extended  or unless  the  Rights are  earlier  redeemed  or
exchanged by the Company, in each case, as described below.

     In the event that any person becomes an Acquiring  Person (except  pursuant
to a tender or exchange offer or other offer which is for all outstanding shares
of Common  Stock at a price and on terms which a majority of certain  members of
the Board of Directors  determines  to be adequate and in the best  interests of
the Company, its stockholders and other relevant constituencies, other than such
Acquiring  Person,  its affiliates and associates (a "PERMITTED  OFFER")),  each
holder of a Right  will  thereafter  have the right  (the  "FLIP-IN  RIGHT")  to
acquire  one share of Common Stock for a purchase  price equal to 33 1/3% of the
then current market price.  Notwithstanding the foregoing,  all Rights that are,
or were, beneficially owned by an Acquiring Person or any affiliate or associate
thereof will be null and void and not exercisable.

     In the event that, at any time  following the  Distribution  Date,  (i) the
Company is acquired in a merger or other  business  combination  transaction  in
which the holders of all of the outstanding  shares of Common Stock  immediately
prior to the  consummation  of the transaction are not the holders of all of the
surviving  corporations'  voting  power,  or (ii) more than 50% of the Company's
assets or  earning  power is sold or  transferred,  then each  holder of a Right
(except  Rights  which have been  previously  voided as set forth  above)  shall
thereafter have the right (the "FLIP-OVER RIGHT") to receive,  upon exercise and
payment of the Purchase Price,  shares of Common Stock of the acquiring  company
having a value equal to two times the Purchase  Price.  If a  transaction  would
otherwise  result in a holder's  having a Flip-In as well as a Flip-Over  Right,
then only the Flip-Over Right will be exercisable; if a transaction results in a
holder's  having a Flip-Over  Right  subsequent to a transaction  resulting in a
holder's having a Flip-In Right, a holder will have Flip-Over Rights only to the
extent such holder's Flip-In Rights have not been exercised.

     The  Purchase  Price  payable,  and the number of shares of Common Stock or
other  securities or property  issuable,  upon exercise of Rights are subject to
adjustment  from time to time to  prevent  dilution  (i) in the event of a stock
dividend on, or a subdivision,  combination,  or  reclassification of the Common
Stock,  (ii) upon the grant to  holders  of  shares of Common  Stock of  certain
rights or warrants to  subscribe  for or purchase  Common  Stock at a price,  or
securities convertible into shares of Common Stock with a conversion price, less
than the then  current  market  price of the  Common  Stock,  or (iii)  upon the
distribution  to  holders  of  the  shares  of  Common  Stock  of  evidences  of
indebtedness or assets  (excluding  regular  periodic cash dividends paid out of
earnings or retained earnings or dividends payable in shares of Common Stock) or
of  subscription  rights or  warrants  (other  than  those  referred  to above).
However,  no adjustment in the Purchase Price will be required until  cumulative
adjustments require an adjustment of at least 1%.

     No fractional shares of Common Stock will be issued and in lieu thereof, an
adjustment in cash will be made based on the market price of the Common Stock on
the last trading day prior to the date of exercise.

                                      -36-
<PAGE>

     At any time prior to the time a person  becomes an  Acquiring  Person,  the
Board of  Directors  of the Company  may redeem the Rights in whole,  but not in
part, at a price of $0.0001 per Right (the "REDEMPTION  PRICE").  The redemption
of the  Rights  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.
Immediately upon any redemption of the Rights,  the right to exercise the Rights
will  terminate  and the only right of the  holders of Rights will be to receive
the Redemption Price.

     At any time after any person  becomes an Acquiring  Person and prior to the
acquisition by such person or group of shares of Common Stock  representing  50%
or more of the then  outstanding  shares of Common Stock, the Board of Directors
of the Company may exchange the Rights (other than Rights which have become null
and  void),  in whole or in part,  at an  exchange  ratio of one share of Common
Stock per Right (subject to adjustment).

     All of the  provisions of the Rights  Agreement may be amended prior to the
Distribution  Date by the Board of  Directors  of the  Company for any reason it
deems appropriate. Prior to the Distribution Date, the Board is also authorized,
as it deems  appropriate,  to lower the thresholds for  distribution and Flip-In
Rights to not less  than the  greater  of (i) any  percentage  greater  than the
largest  percentage  then held by any stockholder  (other than certain  exempted
parties), or (ii) 10%. After the Distribution Date, the provisions of the Rights
Agreement  may be  amended  by the  Board  of  Directors  in  order  to cure any
ambiguity,  defect or  inconsistency,  to make  changes  which do not  adversely
affect the  interests  of  holders of Rights  (excluding  the  interests  of any
Acquiring Person),  or, subject to certain  limitations,  to shorten or lengthen
any time period under the Rights Agreement.

     Until a Right is  exercised,  the  holder  thereof,  as such,  will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive  dividends.  While the distribution of the Rights will not
be taxable to stockholders of the Company,  stockholders may, depending upon the
circumstances,  recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.

     Notwithstanding  anything herein to the contrary, no Right shall constitute
an offer to sell or the  solicitation  of an  offer to buy any  securities,  nor
shall there by any sale of Rights or the issuance of securities upon exercise of
the  Rights in any state in which  such  offer,  solicitation,  or sale would be
unlawful prior to registration or qualification under the securities laws of any
such states.

     Notwithstanding  the foregoing,  the Rights shall not be exercisable  under
any  circumstances  unless  there shall be at the time of exercise an  effective
registration statement under the Securities Act of 1933, as amended, relating to
the  issuance  of the  shares of Common  Stock  issuable  upon the  exercise  or
exchange of the Rights.

     A copy of the  Rights  Agreement  has been filed  with the  Securities  and
Exchange  Commission  as an Exhibit to the Company's  Registration  Statement on
Form 8-A with  respect to the  Rights  filed with the  Securities  and  Exchange
Commission  (Commission  File No.  0-22011).  A copy of the Rights  Agreement is
available  free of charge from the  Company.  This  summary  description  of the
Rights does not  purport to be  complete  and is  qualified  in its  entirety by
reference  to the  Rights  Agreement,  which is  hereby  incorporated  herein by
reference.

                                      -37-

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