AMENDED RIGHTS AGREEMENT

EXHIBIT 4.7

This Amended Rights Agreement(this "Agreement"),is dated as of February __,

2008 between CompuMed, Inc., a Delaware corporation (the "COMPANY"), and

Computershare (the "RIGHTS AGENT"). Capitalized terms included in this

Agreement shall have the meaning set forth herein.

W I T N E S S E T H:

WHEREAS, on October 28, 2005, the Board of Directors of the Company (i)

authorized the issuance and declared a dividend of one right (a "Right") for

each share of the Common Stock, par value $0.01 per share ("Common Stock"), of

the Company outstanding as of the close of business on August 1, 2005 (the

"RECORD DATE"), each Right representing the right to purchase, on the terms and

conditions contained herein, one share (subject to adjustment) of Common Stock,

of the Company, and (ii) further authorized the issuance of one Right (subject

to adjustment) with respect to each share of Common Stock that shall become

outstanding (whether originally issued or delivered from the Company's treasury)

between the Record Date and the Distribution Date (as defined below); PROVIDED,

HOWEVER, that Rights may be issued with respect to shares of Common Stock that

shall become outstanding after the Distribution Date and prior to the Expiration

Date in accordance with Section 22; and

WHEREAS, on March 27, 2007, the Board of Directors of the Company authorized

that the Rights Agreement dated October 28, 2005 be amended to increase the

beneficial ownership percentage of an “Acquiring Person” as defined below; and

WHEREAS, on February 15, 2008, the Board of Directors of the Company

authorized that the Amended Rights Agreement dated March 27, 2007 be further

amended to include Boston Avenue Capital, LLP and its Affiliates as an “Exempt

Person” defined below.

NOW, THEREFORE, in consideration of the premises and the mutual agreements

set forth herein, the parties agree as follows:

SECTION 1. CERTAIN DEFINITIONS.

For purposes of this Agreement, the following terms shall have the

meanings indicated:

(a) "ACQUIRING PERSON" shall mean any Person who or which shall be the

Beneficial Owner of 35% or more of the shares of Common Stock then outstanding,

but shall not include an Exempt Person; PROVIDED, HOWEVER, that

(i) if the Board of Directors of the Company determines in good

faith that a Person who would otherwise be an "Acquiring Person" became such

inadvertently (including, without limitation, because:

(A) such Person was unaware that it beneficially owned a

percentage of Common Stock that would otherwise cause such Person to be an

"Acquiring Person;" or

(B) such Person was aware of the extent of its Beneficial

Ownership of Common Stock but had no actual knowledge of the consequences of

such Beneficial Ownership under this Agreement) and without any intention of

changing or influencing control of the Company, and if such Person as promptly

as practicable divested or divests itself of Beneficial Ownership of a

sufficient number of shares of Common Stock so that such Person would no longer

be an "Acquiring Person," then such Person shall not be deemed to be or to have

become an "Acquiring Person" for any purposes of this Agreement;

(ii) if, as of the date hereof, any Person is the Beneficial Owner of 35%

or more of the shares of Common Stock outstanding, such Person shall not be or

become an "Acquiring Person" unless and until such time as such Person shall

become the Beneficial Owner of additional shares of Common Stock (other than

pursuant to a dividend or distribution paid or made by the Company on the

outstanding Common Stock in shares of Common Stock or pursuant to a split or

subdivision of the outstanding Common Stock), unless, upon becoming the

Beneficial Owner of such additional shares of Common Stock, such Person is not

then the Beneficial Owner of 35% or more of the shares of Common Stock then

outstanding; and

(iii) no Person shall become an "Acquiring Person" as the result of an

acquisition of shares of Common Stock by the Company which, by reducing the

number of shares outstanding increases the proportionate number of shares of

Common Stock beneficially owned by such Person to 35% or more of the shares of

Common Stock then outstanding, PROVIDED, HOWEVER, that if a Person shall become

the Beneficial Owner of 35% or more of the shares of Common Stock then

outstanding by reason of such share acquisitions by the Company and shall

thereafter become the Beneficial Owner of any additional shares of Common Stock

(other than pursuant to a dividend or distribution paid or made by the Company

on the outstanding Common Stock in shares of Common Stock or pursuant to a split

or subdivision of the outstanding Common Stock), then such Person shall be

deemed to be an "Acquiring Person" unless upon becoming the Beneficial Owner of

such additional shares of Common Stock such Person does not beneficially own 35%

or more of the shares of Common Stock then outstanding. For all purposes of this

Agreement, any calculation of the number of shares of Common Stock outstanding

at any particular time, including for purposes of determining the particular

percentage of such outstanding shares of Common Stock of which any Person is the

Beneficial Owner, shall be made in accordance with the last sentence of Rule

13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act, as

in effect on the date hereof.

(b) "ADJUSTMENT SHARES" shall have the meaning set forth in Section

11(a)(ii) hereof.

ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under

the Exchange Act as in effect on the date of this Agreement.

(d) A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be

deemed to "BENEFICIALLY OWN," any shares of Common Stock:

(i) that 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 in effect on the date of this Agreement);

(ii) that such Person or any of such Person's Affiliates

or Associates has

(A) the right to acquire (whether such right is exercisable

immediately or only after the passage of time) pursuant to any agreement,

arrangement or understanding, whether or not in writing, or upon the exercise of

conversion rights, exchange rights, rights, warrants or options, or otherwise;

PROVIDED, HOWEVER, that a Person shall not be deemed the "Beneficial Owner" of,

or to "beneficially own,"

(x) securities tendered pursuant to a tender or exchange offer

made by such Person or any of such Person's Affiliates or Associates until such

tendered securities are accepted for purchase or exchange,

(y) securities that such Person has a right to acquire on the

exercise of Rights at any time prior to the occurrence of a Section 11(a)(ii)

Event, or

(z) securities issuable upon exercise of Rights from and after

the occurrence of a Section 11(a)(ii) Event if such Rights were acquired by

such Person or any of such Person's Affiliates or Associates prior to the

Distribution Date or pursuant to Section 22 hereof ("ORIGINAL RIGHTS") or

pursuant to Section 11(i) or Section 11(o) hereof with respect to an adjustment

to Original Rights; or

(B) the right to vote pursuant to any agreement, arrangement

or understanding (whether or not in writing); PROVIDED, HOWEVER, that a Person

shall not be deemed the "Beneficial Owner" of, or to beneficially own," any

security if the agreement, arrangement or understanding to vote such security

arises solely from a revocable proxy or consent given in response to a public

proxy or consent solicitation made pursuant to, and in accordance with,the

applicable General Rules and Regulations under the Exchange Act; or

(iii) that are beneficially owned, directly or indirectly (as

determined pursuant to Rule 13d-3 of the General Rules and Regulations under the

Exchange Act, as in effect on the date of this Agreement), by any other Person

with which such Person or any of such Person's Affiliates or Associates has any

agreement, arrangement or understanding, whether or not in writing, for the

purpose of acquiring, holding, voting (except as described in clause (B) of

subparagraph (ii) of this paragraph (d)) or disposing of any securities of the

Company.

Notwithstanding anything in this paragraph (d) to the contrary,

(A) a Person engaged in the business of underwriting

securities shall not be deemed the "Beneficial Owner" of, or to "beneficially

own," any securities acquired in good faith in a firm commitment underwriting

until the expiration of 40 days after the date of such acquisition, and

(B) no Person who is an officer, director or employee of an

Exempt Person shall be deemed, solely by reason of such Person's status or

authority as such, to be the "Beneficial Owner" of, to have "Beneficial

Ownership" of or to "beneficially own" any securities that are "beneficially

owned" (as defined in this Section 1(d)), including, without limitation, in a

fiduciary capacity, by an Exempt Person or by any other such officer, director

or employee of an Exempt Person.

(e) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company

or any duly authorized committee thereof.

(f) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday, or a

day on which banking institutions in the State of California are authorized or

obligated by law or executive order to close.

(g) "CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., Los

Angeles, California time, on such date; PROVIDED, HOWEVER, that if such date is

not a Business Day it shall mean 5:00 p.m., Los Angeles, California time, on the

next succeeding Business Day.

(h) "COMMON STOCK" when used with reference to the Company shall mean the

Common Stock (currently par value $.01 per share) of the Company. "COMMON STOCK"

when used with reference to any Person other than the Company which shall be

organized in corporate form shall mean the capital stock or other equity

security with the greatest per share voting power of such Person. "COMMON STOCK"

when used with reference to any Person other than the Company which shall not be

organized in corporate form shall mean units of beneficial interest that shall

represent the right to participate in profits, losses, deductions and credits of

such Person and that shall be entitled to exercise the greatest voting power per

unit of such Person.

(i) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in Section

11(a)(iii) hereof.

(j) "CURRENT MARKET PRICE" shall have the meaning set forth in Section

11(d) hereof.

(k) "CURRENT VALUE" shall have the meaning set forth in Section 11(a)(iii)

hereof.

(l) "DISTRIBUTION DATE" shall have the meaning set forth in Section 3(a)

hereof.

(m) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as

amended.

(n) "EXCHANGE RATIO" shall have the meaning set forth in Section 24(a)

hereof.

(o) "EXEMPT PERSON" shall mean Boston Avenue Capital, LLC and its
Affiliates, the Company, any Subsidiary of the Company, any employee benefit
plan or employee stock plan of the Company or of any Subsidiary of the
Company, or any person or entity organized, appointed or established for or
pursuant to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or of
any Subsidiary of the Company.

(p) "EXPIRATION DATE" shall have the meaning set forth in Section 7(a)

hereof.

(q) "FINAL EXPIRATION DATE" shall have the meaning set forth in Section

7(a) hereof.

(r) "INVALIDATION TIME" shall have the meaning set forth in Section

11(a)(ii) hereof.

(s) "NASDAQ" shall mean the National Association of Securities Dealers,

Inc. Automated Quotations System.

(t) "ORIGINAL RIGHTS" shall have the meaning set forth in Section 1(d)(ii)

hereof.

(u) "PERSON" shall mean any individual, firm, corporation, partnership or

other entity.

(v) "PRINCIPAL PARTY" shall have the meaning set forth in Section 13(b)

hereof.

(w) "PURCHASE PRICE" shall have the meaning set forth in Section 4 hereof.

(x) "RECORD DATE," with respect to the initial issuance of the Rights

shall be August 1, 2005.

(y) "REDEMPTION PRICE" shall have the meaning set forth in Section

23(a)(ii) hereof.

(z) "RIGHT CERTIFICATE" shall have the meaning set forth in Section 3(a)

hereof.

(aa) "SECTION 11(A)(II) EVENT" shall mean any instance in which any

Person, alone or together with its Affiliates and Associates, shall become an

Acquiring Person.

(ab) "SECTION 11(A)(II) TRIGGER DATE" shall have the meaning set forth in

Section 11(a)(iii) hereof.

(ac) "SECTION 13 EVENT" shall mean any event described in clause (i), (ii)

or (iii) of Section 13(a) hereof.

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

(ae) "SPREAD" shall have the meaning set forth in Section 11(a)(iii)

hereof.

(af) "STOCK ACQUISITION DATE" shall mean the first date of public

announcement (which for purposes of this definition shall include, without

limitation, a report filed pursuant to the Exchange Act) by the Company or an

Acquiring Person that an Acquiring Person has become such or such earlier date

as a majority of the Board of Directors shall become aware of the existence of

an Acquiring Person.

(ag) "SUBSTITUTION PERIOD" shall have the meaning set forth in Section

11(a)(iii) hereof.

(ah) "SUBSIDIARY" of a Person shall mean any corporation or other entity

which securities or other ownership interests having ordinary voting power

sufficient to elect a majority of the board of directors or other persons

performing similar functions are beneficially owned, directly or indirectly, by

such Person and any corporation or other entity that is otherwise controlled by

such Person.

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

hereof.

(aj) "TRADING DAY" shall have the meaning set forth in Section 11(d)(i)

hereof.

(ak) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or Section

13 Event.

SECTION 2. APPOINTMENT OF RIGHTS AGENT.

The Company hereby appoints the Rights Agent to act as agent for the

Company in accordance with the terms and conditions hereof, and the Rights Agent

hereby accepts such appointment. The Company may from time to time appoint such

co-Rights Agent as it may deem necessary or desirable. The Rights Agent shall

have no duty to supervise, and shall in no event be liable for, the acts or

omissions of any such co-Rights Agent. In the event the Company appoints one or

more co-Rights Agents, the respective duties of the Rights Agent and any

co-Rights Agent will be as the Company may determine.

SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.

(a) Until the Close of Business on the day (the "DISTRIBUTION DATE") which

is the EARLIER OF

(i) the tenth day after the Stock Acquisition Date or

(ii) the tenth Business Day (or such later day as may be determined

by action of the Board of Directors taken prior to the Close of Business on such

tenth Business Day and prior to such time as any Person becomes an Acquiring

Person) following the commencement by any Person (other than an Exempt Person)

of, or the first public announcement of the intent of any Person (other than an

Exempt Person) to commence, a tender or exchange offer upon the successful

consummation of which such Person would be the Beneficial Owner of 35% or more

of the outstanding Common Stock(irrespective of whether any shares are actually

purchased pursuant to any such offer),

(x) the Rights will be evidenced (subject to the provisions of

Section 3(c) hereof) by the certificates for the Common Stock registered in the

names of the holders of the Common Stock and not separate Right Certificates,

and

(y) each Right will be transferable only in connection with

the transfer of a share (subject to adjustment as hereinafter provided) of

Common Stock; PROVIDED, HOWEVER, that if the Distribution Date would be prior to

the Record Date, the Record Date shall be the Distribution Date; and PROVIDED

FURTHER, that if a tender offer or exchange offer referred to in clause (ii)

above is canceled or withdrawn prior to the Distribution Date, such offer shall

be deemed, for purposes of this Agreement, never to have been made.

As soon as practicable after the Distribution Date, the Rights Agent will

mail, by first-class, postage-prepaid mail, to each record holder of the Common

Stock as of the Close of Business on the Distribution Date, as shown by the

records of the Company, at the address of such holder shown on such records, a

Right Certificate in substantially the form of EXHIBIT A hereto ("RIGHT

CERTIFICATE"), evidencing one Right for each share of Common Stock so held,

subject to adjustment as provided herein. In the event that an adjustment in the

number of Rights per share of Common Stock has been made pursuant to Section

11(i) or Section 11(o) hereof, at the time of distribution of the Right

Certificates, the Company shall make the necessary and appropriate rounding

adjustments (in accordance with Section 14(a) hereof) so that Right Certificates

representing only whole numbers of Rights are distributed and cash is paid in

lieu of any fractional Rights. As of and after the Distribution Date, the Rights

will be evidenced solely by such Right Certificates.

(b) On the Record Date or as soon as practicable thereafter, the Company

will send a copy of a Summary of Rights to Purchase Common Stock, substantially

in the form attached hereto as EXHIBIT B ("SUMMARY OF Rights"), by first-class,

postage-prepaid mail, to each record holder 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.

Record Date, until the Distribution Date (or, if earlier, the Expiration Date),

the Rights will be evidenced by such certificates for Common Stock registered in

the names of the holders thereof together with a copy of the Summary of Rights.

Until the Distribution Date (or, if earlier, the Expiration Date), the surrender

for transfer of any certificate for Common Stock outstanding on the Record Date,

with or without a copy of the Summary of Rights, shall (subject to the

provisions of Section 11(a)(ii) and the other provisions hereof) also constitute

the surrender for transfer of the Rights associated with the Common Stock

represented thereby.

(d) Subject to the provisions of Section 11(a)(ii) and the other

provisions hereof, Rights shall be issued in respect of all shares of Common

Stock that become outstanding after the Record Date but prior to the earlier of

the Distribution Date or the Expiration Date and, in certain circumstances

provided for in Section 22 hereof, may be issued in respect of shares of Common

Stock that become outstanding after the Distribution Date. Certificates issued

for Common Stock (including without limitation certificates issued upon original

issuance, disposition from the Company's treasury or transfer or exchange of

Common Stock) after the Record Date but prior to the earlier of the Distribution

Date or the Expiration Date (or, in certain circumstances as provided in Section

22 hereof, after the Distribution Date) shall have impressed on, printed on,

written on or otherwise affixed to them the following legend:

This certificate also evidences and entitles the holder hereof to certain Rights

as set forth in a Rights Agreement between CompuMed, Inc. and U.S. Stock

Transfer Corporation, as Rights Agent, dated as of October 28, 2005 and as

amended from time to time (the "AGREEMENT"), the terms of which are incorporated

herein by reference and a copy of which is on file at the principal executive

office of CompuMed, Inc. Under certain circumstances, as set forth in the

Agreement, such Rights will be evidenced by separate certificates and will no

longer be evidenced by this certificate. CompuMed, Inc. will mail to the holder

of this certificate a copy of the Agreement without charge promptly after

receipt by it of a written request therefore. Rights issued to or beneficially

owned by a Person who is or becomes an Acquiring Person or an Affiliate or

Associate of such Acquiring Person (as such terms are defined in the Agreement)

or, under certain circumstances, transferees thereof, will become void as

provided in Section 11(a)(ii) of the Agreement and thereafter may not be

transferred to any Person.

With respect to such certificates containing the foregoing legend, the

Rights associated with the Common Stock represented by such certificates shall,

until the Distribution Date, be evidenced by such certificates alone, and the

surrender for transfer of any such certificate shall (subject to the provisions

of Section 11(a)(ii) and the other provisions hereof) also institute the

surrender for transfer of the Rights associated with the Common Stock

represented thereby.

Notwithstanding this paragraph (d), the omission of a legend shall not

affect the enforceability of any part of this Agreement or the rights of any

holder of the Rights.

SECTION 4. FORM OF RIGHT CERTIFICATES.

The Right Certificates (including the forms of assignment and election to

purchase to be printed on the reverse thereof), when, as and if issued, shall be

substantially in the form set forth in EXHIBIT A hereto and may have such marks

of identification or designation and such legends, summaries or endorsements

printed thereon as the Company may deem appropriate and as are not inconsistent

with the provisions of this Agreement, or as may be required to comply with any

law or with any rule or regulation made pursuant thereto or with any rule or

regulation of any stock exchange or automated quotation system on which the

Rights may from time to time be listed, or to conform to usage. Subject to the

provisions of Sections 11 and 22 hereof, the Right Certificates, whenever

issued, evidencing the Rights issued on the Record Date shall be dated as of the

Record Date, and Right Certificates evidencing Rights issued after the Record

Date shall be dated as of the date of such issuance, and on their face Right

Certificates shall entitle the holders thereof to purchase one share of Common

Stock, or other securities or property as provided herein, as the same may from

time to time be adjusted as provided herein, at the price per share set forth

therein, as the same may from time to time be adjusted as provided herein (the

"PURCHASE PRICE").

SECTION 5. COUNTERSIGNATURE AND REGISTRATION.

(a) The Right Certificates shall be executed on behalf of the Company by

its Chairman of the Board, President, Chief Executive Officer or any Vice

President, either manually or by facsimile signature, and have affixed thereto

the Company's seal or a facsimile thereof which shall be attested by the

Secretary or an Assistant Secretary of the Company, either manually or by

facsimile signature. The Right Certificates shall be manually countersigned by

the Rights Agent and shall not be valid for any purpose unless so countersigned.

In case any officer of the Company who shall have signed any of the 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,

issued and delivered with the same force and effect as though the Person who

signed such Right Certificates had not ceased to be such officer of the Company;

and any Right Certificate may be signed on behalf of the Company by any Person

who, at the actual date of the execution of such Right Certificate, shall be a

proper officer of the Company to sign such Right Certificate, although at the

date of the execution of this Agreement any such Person was not such an officer.

(b) Following the Distribution Date, the Rights Agent will keep or cause

to be kept, at its principal office, books for registration and transfer of the

Right Certificates issued hereunder. Such books shall show the names and

addresses of the respective holders of the Right Certificates, the number of

Rights evidenced on its face by each Right Certificate, the date of each Right

Certificate, and the certificate number for each Right Certificate.

SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;

MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.

(a) Subject to the provisions of Section 11(a)(ii) and the other

provisions hereof, at any time after the Close of Business on the Distribution

Date and at or prior to the Close of Business on the Expiration Date, any Right

Certificate or Right Certificates may be transferred or split up, combined or

exchanged for another Right Certificate or Right Certificates, entitling the

registered holder to purchase a like number 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 any Right Certificate shall

surrender the Right Certificate at the principal office of the Rights Agent with

the form of assignment on the reverse side thereof duly endorsed (or enclose

with such Right Certificate a written instrument of transfer in form

satisfactory to the Company and the Rights Agent), duly executed by the

registered holder thereof or his attorney duly authorized in writing, and with

such signature duly guaranteed. Any registered holder desiring to split up,

combine or exchange any Right Certificate shall make such request in writing

delivered to the Rights Agent, and shall surrender the Right Certificate or

Right Certificates to be split up, combined or exchanged at the principal office

of the Rights Agent. Thereupon the Rights Agent, subject to the provisions of

Section 11(a)(ii) and the other provisions hereof, shall countersign (by manual

signature) 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.

(b) Subject to the provisions of Section 11(a)(ii) and the other

provisions hereof, upon receipt by the Company and the Rights Agent of evidence

reasonably satisfactory to them of the loss, theft, destruction or mutilation of

a Right Certificate, and, in case of loss, theft or destruction, of indemnity or

security reasonably satisfactory to them, and, if requested by the Company,

reimbursement to the Company of all reasonable expenses incidental thereto, and

upon surrender to the Rights Agent and cancellation of the Right Certificate if

mutilated, the Company will execute and deliver a new Right Certificate of like

tenor to the Rights Agent for delivery to the registered owner in lieu of the

Right Certificate so lost, stolen, destroyed or mutilated.

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

(a) Except as otherwise provided herein, the Rights shall become

exercisable at the Close of Business on the Distribution Date, and thereafter

may be exercised in whole or in part to purchase shares of Common Stock upon

surrender of the Right Certificate, with the form of election to purchase on the

reverse side thereof duly executed (with such signature duly guaranteed), to the

Rights Agent at its principal office, together with payment of the aggregate

Purchase Price (subject to adjustment as hereinafter provided) with respect to

the number of shares of Common Stock (except as otherwise provided herein) as to

which such surrendered Rights are then being exercised, at or prior to the Close

of Business on the date (the "EXPIRATION DATE") which is the earliest of (i)

October 28, 2009 (the "FINAL EXPIRATION DATE"), (ii) the time at which the

Rights are redeemed as provided in Section 23 hereof, or (iii) the time at which

the Rights are exchanged as provided in Section 24 hereof.

(b) The Purchase Price shall initially be $0.40 for each share of Common

Stock issued pursuant to the exercise of a Right. The Purchase Price and the

number of shares of Common Stock or other securities to be acquired upon

exercise of a Right shall be subject to adjustment from time to time as provided

in Sections 11 and 13 hereof. The Purchase Price shall be payable in lawful

money of the United States of America, in accordance with Section 7(c) hereof.

Certificate representing exercisable Rights with the form of election to

purchase duly executed, accompanied by payment of the aggregate Purchase Price

for the number of shares of Common Stock to be purchased and an amount equal to

any applicable transfer tax, by cash, certified or official bank check or money

order payable to the order of the Company or the Rights Agent, the Rights Agent

shall, subject to Section 20(j) and Section 20(k) hereof, thereupon promptly

(i) requisition from any transfer agent of the Common Stock

certificates for the number of shares of Common Stock so elected to be purchased

(and/or requisition from the depository agent depository receipts representing

interests in such number of fractional shares of Common Stock as are to be

purchased, in which case certificates for the fractional shares of Common Stock

so represented shall be deposited with the depository agent) and the Company

will comply and hereby authorizes and directs such transfer agent (and any such

depository agent) to comply with all such requests,

(ii) requisition from the Company the amount of cash to be paid in

lieu of issuance of fractional shares in accordance with Section 14(b) hereof,

and

(iii) promptly after receipt of such Common Stock 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, or, when appropriate, after receipt promptly deliver such

depository receipts and cash to or upon the order of the registered holder of

such Right Certificate; PROVIDED, HOWEVER, that in the case of a purchase of

securities, other than Common Stock, pursuant to Section 11 or Section 13

hereof, the Rights Agent shall promptly take the appropriate actions

corresponding to the foregoing clauses (i) through (iii).

In the event that the Company is obligated to issue other securities of

the Company, pay cash and/or distribute other property pursuant to Section 11(a)

thereof, the Company will make all arrangements necessary so that such other

securities, cash and/or other property are available for distribution by the

Rights Agent, if and when appropriate.

(d) Except as otherwise provided herein, 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) Notwithstanding anything in this Agreement to the contrary, neither

the Rights Agent nor the Company shall be obligated to undertake any action with

respect to a registered holder upon the occurrence of any purported exercise as

set forth in this Section 7 unless such registered holder shall have

(i) completed and signed the certificate contained in the form of

election to purchase set forth on the reverse side of the Right Certificate

surrendered for such exercise and

(ii) provided such additional evidence of the identity of the

Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates

thereof as the Company shall reasonably request.

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 Agreement. The Company shall deliver to the

Rights Agent for cancellation and retirement, and the Rights Agent shall so

cancel and retire, any Right Certificate purchased or acquired by the Company

otherwise than upon the exercise thereof. The Rights Agent shall deliver all

canceled Right Certificates to the Company 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. RESERVATION AND AVAILABILITY OF SHARES OF COMMON STOCK.

(a) The Company covenants and agrees that at all times it will cause to be

reserved and kept available, out of and to the extent of its authorized and

unissued shares of Common Stock not reserved for another purpose held in its

treasury, the number of shares of Common Stock that, as provided in this

Agreement, including Section 11(a)(iii) hereof, will be sufficient to permit the

exercise in full of all outstanding Rights, provided that the Company shall not

be required to reserve and keep available shares of Common Stock or other

securities sufficient to permit the exercise in full of all outstanding Rights

pursuant to the adjustments set forth in Section 11(a)(ii), Section 11(a)(iii)

or Section 13 hereof unless the Rights become exercisable pursuant to such

adjustments, and then only to the extent the Rights become exercisable pursuant

to such adjustments.

(b) So long as the shares of Common Stock issuable and deliverable upon

the exercise of Rights may be listed on any national securities exchange or

automated quotation system, as the case may be, the Company shall use its best

efforts to cause, from and after such time as the Rights become exercisable, all

shares reserved for such issuance to be listed on such exchange or automated

quotation system, as the case may be, upon official notice of issuance upon such

exercise.

shall use its best efforts to, if then necessary to permit the issuance of

shares of Common Stock upon the exercise of Rights, register the offering and

issuance of and qualify such shares of Common Stock (and, following the

occurrence of a Triggering Event, shares of Common Stock and other securities)

under the Securities Act and any applicable state securities or "blue sky" laws

(to the extent exemptions therefrom are not available), cause the related

registration statement and qualifications to become effective as soon as

possible after such filing and keep such registration and qualifications

effective until the earlier of the date as of which the Rights are no longer

exercisable for such securities and the Expiration Date. The Company may

temporarily suspend, for a period of time not to exceed 90 days, the

exercisability of the Rights in order to prepare and file a registration

statement under the Securities Act and permit it to become effective. In the

event of any such suspension, the Company shall issue a public announcement

stating that the exercisability of the Rights has been temporarily suspended, as

well as a public announcement at such time as the suspension is no longer in

effect. Notwithstanding any provision of this Agreement to the contrary, the

Rights shall not be exercisable in any jurisdiction unless the requisite

qualification in such jurisdiction shall have been obtained and until a

registration statement under the Securities Act (if required) shall have been

declared effective.

(d) The Company covenants and agrees that it will take all such action as

may be necessary to insure that all shares of Common Stock delivered upon

exercise of Rights shall, to the extent applicable, at the time of delivery of

the certificates for such securities (subject to payment of the aggregate

Purchase Price in respect thereof), be duly and validly authorized and issued

and fully paid and nonassessable securities in accordance with applicable law.

(e) The Company further covenants and agrees that it will pay when due and

payable any and all federal and state transfer taxes and charges that may be

payable in respect of the issuance or delivery of the Right Certificates or of

any shares of Common Stock (or other securities, as the case may be) upon the

exercise of Rights; PROVIDED, HOWEVER, that the Company shall not be required to

pay any transfer tax that may be payable in respect of any transfer or delivery

of Right Certificates to a Person other than, or the issuance or delivery of

certificates for Common Stock (or other securities, as the case may be) upon

exercise of rights in a name other than that of, the registered holder of the

Right Certificate, and the Company shall not be required to issue or deliver a

Right Certificate or certificate for Common Stock (or other securities, as the

case may be) to a Person other than such registered holder 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 satisfaction that no such tax is due.

SECTION 10. COMMON STOCK RECORD DATE.

Each Person in whose name any certificate for shares of Common Stock (or

other securities, as the case may be) is issued upon the exercise of Rights

shall for all purposes be deemed to have become the holder of record of the

Common Stock (or other securities, as the case may be) 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 aggregate

Purchase Price therefore (and any applicable transfer taxes) was made, PROVIDED,

HOWEVER, that if the date of such surrender and payment is a date upon which the

Common Stock transfer books of the Company are closed, such Person shall be

deemed to have become the record holder of such shares on, and such certificate

shall be dated, the next succeeding Business Day on which the Common Stock

transfer books of the Company are open. Prior to the exercise of the Rights

evidenced thereby, the holder of a Right Certificate shall not be entitled to

any rights of a holder of Common Stock for which the Rights shall be

exercisable, including, without limitation, the right to vote or to receive

dividends or other distributions, and shall not be entitled to receive any

notice of any proceedings of the Company except as provided herein.

SECTION 11. ADJUSTMENTS TO NUMBER AND KIND OF SHARES, NUMBER OF RIGHTS OR

PURCHASE PRICE.

The number and kind of shares subject to purchase upon the exercise of

each Right, the number of Rights outstanding and the Purchase Price are subject

to adjustment from time to time as provided in this Section 11.

(a) CHANGES IN COMPANY CAPITALIZATION; SUBSTITUTIONS.

(i) In the event that the Company shall at any time after the Record

Date

(A) declare or pay any dividend on Common Stock payable in

shares of Common Stock,

(B) subdivide or split the outstanding shares of Common Stock

into a greater number of shares,

Stock into a smaller number of shares or effect a reverse split of the

outstanding shares of Common Stock or

(D) issue any shares of its capital stock in a

reclassification of the Common Stock (including any such reclassification in

connection with a consolidation or merger in which the Company is the continuing

or surviving corporation),except as otherwise provided in this Section 11(a),

the Purchase Price in effect immediately prior to 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 Common Stock or capital

stock, as the case may be, issuable upon exercise of a Right on such date, shall

be proportionately adjusted so that the holder of any Right exercised after such

time shall be entitled to receive, upon payment of an amount equal to (x) the

Purchase Price in effect immediately prior to the record date or effective date

of such dividend, subdivision, combination or reclassification, multiplied by

(y) the number of shares of Common Stock, or shares of capital stock, as the

case may be, as to which a Right was exercisable immediately prior to such date,

the aggregate number and kind of shares of Common Stock or capital stock, as the

case may be, which, if such Right had been exercised immediately prior to such

date, the holder thereof would have owned upon such exercise and been entitled

to receive, or would be deemed to have owned, by virtue of such dividend,

subdivision, combination or reclassification.

(ii) Subject to Section 24 of this Agreement, in the event any

Person becomes an Acquiring Person (the first occurrence of such event being

referred to hereinafter as the "SECTION 11(A)(II) EVENT"), then

(A) the Purchase Price shall be adjusted to be the Purchase

Price in effect immediately prior to the Section 11(a)(ii) Event multiplied by

the number of shares of Common Stock for which a Right was exercisable

immediately prior to such Section 11(a)(ii) Event, whether or not such Right was

then exercisable, and

(B) each holder of a Right, except as otherwise provided in

this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the

right to receive upon exercise thereof at a price equal to the Purchase Price

(as so adjusted), in accordance with the terms of this Agreement, such number of

shares of Common Stock (the "Adjustment Shares") as shall equal the result

obtained by dividing the Purchase Price (as so adjusted) by 50% of the current

per share market price of the Common Stock (determined pursuant to Section 11(d)

hereof) on the date of such Section 11(a)(ii) Event;

PROVIDED, HOWEVER, that the Purchase Price (as so adjusted) and the number of

Adjustment Shares so receivable upon exercise of a Right shall, following the

Section 11(a)(ii) Event, be subject to further adjustment as appropriate in

accordance with Section 11(f) hereof. Notwithstanding anything in this Agreement

to the contrary, however, from and after the Section 11(a)(ii) Event

("INVALIDATION TIME"), any Rights that are beneficially owned by (x) any

Acquiring Person (or Affiliate or Associate of any Acquiring Person), (y) a

transferee of any Acquiring Person (or such Affiliate or Associate) who becomes

a transferee after the Section 11(a)(ii) Event or (z) a transferee of any

Acquiring Person (or any such Affiliate or Associate) who became a transferee

prior to or concurrently with the Section 11(a)(ii) Event pursuant to either (I)

a transfer from the Acquiring Person to holders of its equity securities or to

any Person with whom it has any continuing agreement, arrangement or

understanding regarding the transferred Rights or (II) a transfer that the Board

of Directors has determined is part of a plan, arrangement or understanding that

has the purpose or effect of avoiding the provisions of this paragraph, and

subsequent transferees of such Persons, shall be void without any further action

and any holder of such Rights shall thereafter have no rights whatsoever with

respect to such Rights under any provision of this Agreement. The Company shall

use all reasonable efforts to ensure that the provisions of this Section

11(a)(ii) are complied with, but shall have no liability to any holder of Right

Certificates or other Person as a result of its failure to make any

determinations with respect to an Acquiring Person or its Affiliates, Associates

or transferees hereunder. From and after the Section 11(a)(ii) Event, no Right

Certificate shall be issued pursuant to Section 3 or Section 6 hereof that

represents Rights that are or have become void pursuant to the provisions of

this paragraph, and any Right Certificate delivered to the Rights Agent that

represents Rights that are or have become void pursuant to the provisions of

this paragraph shall be canceled. From and after the occurrence of an event

specified in Section 13(a) hereof, any Rights that theretofore have not been

exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable

only in accordance with Section 13 and not pursuant to this Section 11(a)(ii).

(iii) The Company may at its option substitute for a share of Common

Stock issuable upon the exercise of Rights in accordance with the foregoing

subparagraph (ii) a number of shares of other capital stock or fraction thereof

such that the current per share market price of one share of other capital stock

multiplied by such number or fraction is equal to the current per share market

price of one share of Common Stock. In the event that the number of shares of

Common Stock that are authorized by the Company's Articles of Incorporation but

not outstanding or reserved for issuance for purposes other than upon exercise

of the Rights is not sufficient to permit the exercise in full of the Rights in

accordance with Section 11(a)(ii) hereof and the Rights shall become so

exercisable, the Board of Director shall, to the extent permitted by applicable

law and any material agreements then in effect to which the Company is a party,

(A) determine the excess of (1) the value of the

Adjustment Shares issuable upon the exercise of

a Right (computed using the Current Market Price

used to determine the number of Adjustment

Shares) (the "CURRENT VALUE"), over (2) the then

current Purchase Price times the number of

shares of Common Stock for which a Right was

exercisable immediately prior to the first

occurrence of a Section 11(a)(ii) Event (such

excess, the "SPREAD") and

(B) with respect to each Right (other than

Rights which have become void pursuant to

Section 11(a)(ii) hereof), make adequate

provision to substitute for any or all such

Adjustment Shares (1) cash, (2) shares of other

equity securities of the Company (including,

without limitation, shares, or units of shares,

of preferred stock which, by virtue of having

dividend, voting or liquidation rights

substantially comparable to those of the Common

Stock, are deemed in good faith by the Board of

Directors to have substantially the same value

as shares of Common Stock (such shares of or

units of shares of preferred stock are herein

called "COMMON STOCK EQUIVALENTS")), (3) debt

securities of the Company, (4) other assets,

(5) a reduction of the Purchase Price, or (6) any

combination of the foregoing, having a value

which, when added to the value of the shares of

Common Stock actually issued upon exercise of

such Right, shall have an aggregate value equal

to the Current Value, where such aggregate value

has been determined in good faith by the Board

of Directors based upon the advice of a

nationally recognized independent investment

banking firm selected in good faith by the

Board of Directors;

PROVIDED, HOWEVER, that if the Company shall not have made adequate provision to

deliver value pursuant to clause (B) above within 30 days following the date

(the "SECTION 11(A)(II) TRIGGER DATE") of the first occurrence of a Section

11(a)(ii) Event, then the Company shall be obligated to deliver, to the extent

permitted by applicable law and any material agreements then in effect to which

the Company is a party, upon the surrender for exercise of a Right and without

requiring payment of the Purchase Price, shares of Common Stock (to the extent

available) and then, if necessary, cash, which shares and cash have an aggregate

value equal to the Spread. If, upon the occurrence of a Section 11(a)(ii) Event,

the number of shares of Common Stock authorized by the Company's Articles of

Incorporation but not outstanding or reserved for issuance for purposes other

than upon exercise of the Rights is not sufficient to permit exercise in full of

the Rights in accordance with Section 11(a)(ii) hereof, and if the Board of

Directors shall determine in good faith that it is likely that sufficient

additional shares of Common Stock could be authorized for issuance upon exercise

in full of the Rights, then, if the Board of Directors so elects, the 30 day

period set forth above may be extended to the extent necessary, but not more

than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company

may seek shareholder approval for the authorization of such additional shares

(such 30 day period, as it may be extended, is herein called the "SUBSTITUTION

PERIOD"). To the extent that the Company determines that some action must be

taken pursuant to the first or second sentence of this Section 11(a)(iii), the

Company (x) shall provide, subject to Section 11(a)(ii) hereof and the last

sentence of this Section 11(a)(iii), that such action shall apply uniformly to

all outstanding Rights and (y) may suspend the exercisability of the Rights

until the expiration of the Substitution Period in order to seek any

authorization of additional shares and/or to decide the appropriate form of

distribution to be made pursuant to such first sentence and to determine the

value thereof. In the event of any such suspension, the Company shall issue a

public announcement stating that the exercisability of the Rights has been

temporarily suspended, as well as a public announcement at such time as the

suspension is no longer in effect. For purposes of this Section 11(a)(iii), the

value of the Common Stock shall be the Current Market Price per share of the

Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit

value of any Common Stock Equivalent shall be deemed to be equal to the Current

Market Price per share of the Common Stock on such date. The Board of Directors

may, but shall not be required to, establish procedures to allocate the right to

receive Common Stock upon the exercise of the Rights among holders of Rights

pursuant to this Section 11(a)(iii).

(b) In case the Company shall fix a record date for the issuance of

rights, options or warrants to all holders of Common Stock entitling them to

subscribe for or purchase (for a period expiring within 45 calendar days after

such record date) shares of Common Stock, shares having the same rights,

privileges and preferences as Common Stock ("EQUIVALENT COMMON Stock") or

securities convertible into Common Stock or Equivalent Common Stock at a price

per share of Common Stock or Equivalent Common Stock (or having a conversion

price per share, if a security convertible into Common Stock or Equivalent

Common Stock) less than the Current Market Price per share of 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 of Common Stock and Equivalent Common Stock (and the aggregate

initial conversion price of the convertible securities so to be offered,

including the price required to be paid to purchase such convertible security)

would purchase at such Current Market Price, and the denominator of which shall

be the number of shares of Common Stock outstanding on such record date, plus

the number of additional shares of Common Stock or Equivalent Common Stock to be

offered for subscription or purchase (or into which the convertible securities

so to be offered are initially convertible). In case such subscription price may

be paid by delivery of consideration part or all of which may be in a form other

than cash, the value of such noncash consideration shall be as determined in

good faith by the Board of Directors, whose determination shall be described in

a statement filed with the Rights Agent. Shares of Common Stock owned by or held

for the account of the Company shall not be deemed outstanding for the purpose

of any such computation. Such adjustment shall be made successively whenever

such a record date is fixed, and in the event that such rights, options,

warrants or convertible securities are not so issued, the Purchase Price shall

be adjusted to be the Purchase Price that would then be in effect if such record

date had not been fixed.

holders 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, cash (other than a regular quarterly

cash dividend out of the earnings or retained earnings of the Company), assets

(other than a dividend payable in Common Stock, but including any dividend

payable in stock other than Common Stock) or subscription rights or warrants

(excluding those referred to in Section 11(b) hereof), the Purchase Price to be

in effect after such record date shall be determined by multiplying the Purchase

Price in effect immediately prior to such record date by a fraction, the

numerator of which shall be the Current Market Price per share of Common Stock

on such record date, less the fair market value (as determined in good faith by

the Board of Directors of the Company, whose determination shall be described in

a statement filed with the Rights Agent) of the portion of the cash, assets,

subscription rights or warrants applicable to a share of Common Stock and the

denominator of which shall be such Current Market Price per share of Common

Stock. Such adjustments shall be made successively whenever such a record date

is fixed, and in the event that such distribution is not so made, the Purchase

Price shall be adjusted to be the Purchase Price which would then be in effect

if such record date had not been fixed.

(d) CURRENT MARKET PRICE. (i) For the purpose of any computation hereunder

(including computations pursuant to Section 14 hereof), other than computations

made pursuant to Section 11(a)(iii) hereof, the "CURRENT MARKET PRICE" per share

of Common Stock on any date shall be deemed to be the average of the daily

closing prices per share of such stock for the 30 consecutive Trading Days

immediately prior to such date, and for purpose of computations made pursuant to

Section 11(a)(iii) hereof, the "CURRENT MARKET PRICE" per share of Common Stock

on any date shall be deemed to be the average of the daily closing prices per

share of such stock for the 10 consecutive Trading Days immediately following

such date; PROVIDED, however, that in the event the Current Market Price per

share of Common Stock is determined during a period following the announcement

by the issuer of such stock of (i) any dividend or distribution on such stock

(other than a regular quarterly cash dividend) or (ii) any subdivision,

combination or reclassification of the stock, and prior to the expiration of the

requisite 30 Trading Day or 10 Trading Day period, as set forth above, the

ex-dividend date for such dividend or distribution, or the effective date of

such subdivision, combination or reclassification, occurs, then, and in each

such case, the Current Market Price shall be properly adjusted to take into

account ex-dividend trading. The closing price for each day shall be the last

sale price, or, in case no such sale takes place on such day, the average of the

closing bid and asked prices, in either case as reported in the principal

consolidated transaction reporting system with respect to securities listed on

the principal national securities exchange on which the shares of Common Stock

are listed or admitted to trading or, if the shares of Common Stock are not

listed or admitted to trading on any national securities exchange, the last

quoted sale 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 or such

other system as may then be in use, or, if on any such date the prices of shares

of Common Stock are not reported 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 stock selected by the Board of Directors. If on any such date

no market maker is making a market in the Common Stock, the fair value of such

shares on such date as determined in good faith by the Board of Directors shall

be used. The term "TRADING DAY" shall mean a day on which the principal national

securities exchange on which the shares of Common Stock are listed or admitted

to trading is open for the transaction of business or, if the shares of Common

Stock are not listed or admitted to trading on any national securities exchange,

a Business Day. If the Common Stock is not publicly held or not so listed or

traded, "CURRENT MARKET PRICE" per share shall mean the fair value per share as

determined in good faith by the Board of Directors, 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-thousandth of a share, as the case may be.

Notwithstanding the first sentence of this Section 11(e), any adjustment

required by this Section 11 shall be made no later than the earlier of (i) three

years after the date of the transaction that mandates such adjustment or (ii)

one month prior to the Expiration Date.

(f) If as a result of an adjustment made pursuant to Section 11(a) or

Section 13(a) hereof, the holder of any Right thereafter exercised shall become

entitled to receive any shares of capital stock other than Common Stock,

thereafter the number of such other shares so receivable upon exercise of any

Right and the Purchase Price thereof shall be subject to adjustment from time to

time in a manner and on terms as nearly equivalent as practicable to the

applicable provisions with respect to the shares of Common Stock contained in

Sections 7, 9, 10, 11, 13 and 14 hereof, and such provisions shall apply on like

terms to any such other shares.

(g) All Rights originally issued by the Company subsequent to any

adjustment made to the Purchase Price hereunder shall evidence the right to

purchase, at the adjusted Purchase Price, the number of shares of Common Stock

purchasable from time to time hereunder upon exercise of the Rights, all subject

to further adjustments as provided herein.

(h) Unless the Company shall have exercised its election as provided in

Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of

the calculations made in Section 11(b) and (c) hereof, each Right outstanding

immediately prior to the making of such adjustment shall thereafter evidence the

right to purchase, at the adjusted Purchase Price, that number of shares of

Common Stock obtained by (i) multiplying (x) the number of shares covered by a

Right immediately prior to such adjustment by (y) the Purchase Price in effect

immediately prior to such adjustment of the Purchase Price and (ii) dividing the

product so obtained by the Purchase Price in effect immediately after such

adjustment of the Purchase Price.

(i) The Company may elect, on or after the date of any adjustment of the

Purchase Price, to adjust the number of Rights in substitution for any

adjustment in the number of shares of Common Stock purchasable upon the exercise

of a Right. Each of the Rights outstanding after the adjustment in the number of

Rights shall be exercisable for the number of shares of Common Stock for which a

Right was exercisable immediately prior to such adjustment. Each Right held of

record prior to such adjustment in the number of Rights shall become that number

of Rights (calculated to whole number and eliminating any fractions thereof)

obtained by dividing the Purchase Price in effect immediately prior to

adjustment of the Purchase Price by the Purchase Price in effect immediately

after adjustment of the Purchase Price. The Company shall make a public

announcement of its election to adjust the number of Rights, indicating the

record date for the adjustment, and, if known at the time, the amount of the

adjustment to be made. This record date may be the date on which the Purchase

Price is adjusted or any day thereafter, but, if the Right Certificates have

been issued, shall be at least 10 days later than the date of the public

announcement. If Right Certificates have been issued, upon each adjustment of

the number of Rights pursuant to this Section 11(i), the Company shall, as

promptly as practicable, cause to be distributed to holders of record of Right

Certificates on such record date Right Certificates evidencing, subject to

Section 14 hereof, the additional Rights to which such holders shall be entitled

as a result of such adjustment, or, at the option of the Company, shall cause to

be distributed to such holders of record in substitution and replacement for the

Right Certificates held by such holders prior to the date of adjustment, and

upon surrender thereof, if required by the Company, new Right Certificates

evidencing all the Rights to which such holders shall be entitled after such

adjustment. Right Certificates so to be distributed shall be issued, executed

and countersigned in the manner provided for herein (and may bear, at the option

of the Company, the adjusted Purchase Price) and shall be registered in the

names of the holders of record of 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 that were expressed in the initial Right

Certificates issued hereunder.

(k) Before taking any action that would cause an adjustment reducing the

Purchase Price below the then par value, if any, of the fraction of Common Stock

or other shares of capital stock issuable upon exercise of a Right, 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 or other such shares at such adjusted

Purchase Price.

(l) In any case in which this Section 11 shall require that an adjustment

in the Purchase Price be made effective as of a record date for a specified

event, the Company may elect to defer until the occurrence of such event the

issuance to the holder of any Right exercised after such record date the shares

of Common Stock and cash, other capital stock or securities of the Company, if

any, issuable upon such exercise over and above the shares of Common Stock and

cash, 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 that the Company shall deliver to such holder a due ▇▇▇▇ or

other appropriate instrument evidencing such holder's right to receive such

additional shares of Common Stock and cash, other capital stock or securities,

if any, upon the occurrence of the event requiring such adjustment.

(m) Anything in this Section 11 to the contrary notwithstanding, the

Company shall be entitled to make such reductions in the Purchase Price, in

addition to those adjustments expressly required by this Section 11, as and to

the extent in their good faith judgment the Board of Directors shall determine

to be advisable in order that any

(i) consolidation or subdivision of the Common Stock,

(ii) issuance for cash of any shares of Common Stock,

(iii) issuance for cash of securities that by their terms are

convertible into or exchangeable for shares of Common Stock,

(iv) stock dividends or

(v) issuance of rights, options or warrants referred to in this

Section 11, hereafter made by the Company, shall not be taxable to holders of

its Common Stock.

(n) The Company covenants and agrees that, after the earlier of the

Distribution Date or the Stock Acquisition Date, it will not, except as

permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to

take) any action if at the time such action is taken it is reasonably

foreseeable that such action will diminish substantially or eliminate the

benefits intended to be afforded by the Rights.

(o) Anything in this Agreement to the contrary notwithstanding, in the

event that the Company shall at any time after the Record Date and prior to the

Distribution Date:

(i) declare a dividend on the outstanding shares of Common Stock

payable in shares of Common Stock,

(ii) subdivide the outstanding shares of Common Stock,

(iii) combine the outstanding shares of Common Stock into a smaller

number of shares, or

(iv) issue any shares of its capital stock in a reclassification of

the outstanding Common Stock, the number of Rights associated with each share of

Common Stock then outstanding, or issued or delivered thereafter, shall be

proportionately adjusted so that the number of Rights thereafter associated with

each share of Common Stock following any such event shall equal the result

obtained by multiplying the number of Rights associated with each share of

Common Stock immediately prior to such event by a fraction the numerator of

which shall be the total number of shares of Common Stock outstanding

immediately prior to the occurrence of the event and the denominator of which

shall be the total number of shares of Common Stock outstanding immediately

following the occurrence of such event.

SECTION 12. CERTIFICATE OF ADJUSTMENTS.

Whenever an adjustment is made as provided in Sections 11 and 13 hereof,

the Company shall

(a) promptly prepare a certificate setting forth such adjustment and a

brief statement of the facts giving rise to such adjustment,

(b) promptly file with the Rights Agent and with each transfer agent for

the Common Stock a copy of such certificate and

prior to the Distribution Date, to each holder of Common Stock) in accordance

with Section 26 hereof.

Notwithstanding the foregoing sentence, the failure of the Company to give

such notice shall not affect the validity of or the force or effect of or the

requirement for such adjustment. The Rights Agent shall be fully protected in

relying upon any certificate prepared by the Company pursuant to this Section 12

hereof and on any adjustment therein described and shall not be obligated or

responsible for calculating any adjustment nor shall it be deemed to have

knowledge of any such adjustment unless and until it shall have received such a

certificate.

SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING

POWER.

(a) In the event that, directly or indirectly, at any time after the

Section 11(a)(ii) Event

(i) the Company shall consolidate with or shall merge into any other

Person,

(ii) any Person shall merge with and into the Company and the

Company shall be the continuing or surviving corporation of such merger and, in

connection with such merger, all or part of the Common Stock shall be changed

into or exchanged for stock or other securities of any other Person (or of the

Company) or cash or any other property, or

(iii) the Company shall sell or otherwise transfer (or one or more

of its Subsidiaries shall sell or otherwise transfer), in one or more

transactions, assets or earnings power aggregating 50% or more of the assets or

earning power of the Company and its Subsidiaries (taken as a whole) to any

other Person (other than the Company or one or more wholly owned Subsidiaries of

the Company), then upon the first occurrence of such event, proper provision

shall be made so that:

(A) each holder of a Right (other than Rights which have

become void pursuant to Section 11(a)(ii) hereof) shall thereafter

have the right to receive, upon the exercise thereof at the Purchase

Price (as theretofore adjusted in accordance with Section 11 hereof), in

accordance with the terms of this Agreement and in lieu of shares of Common

Stock of the Company, such number of validly authorized and issued, fully paid,

nonassessable and freely tradable shares of Common Stock of the Principal Party

(as such term is hereinafter defined), not subject to any liens, encumbrances,

rights of first refusal or other adverse claims, as shall equal the result

obtained by dividing the Purchase Price (as theretofore adjusted in accordance

with Section 11 hereof) by 50% of the 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; PROVIDED, HOWEVER, that the Purchase Price (as theretofore adjusted in

accordance with Section 11 hereof) and the number of shares of Common Stock of

such Principal Party so receivable upon exercise of a Right shall be subject to

further adjustment as appropriate in accordance with Section 11(f) hereof to

reflect any events occurring in respect of the Common Stock of such Principal

Party after the occurrence of such consolidation, merger, sale or transfer;

(B) such Principal Party shall thereafter be liable for, and

shall assume, by virtue of such consolidation, merger, sale or

transfer, all the obligations and duties of the Company pursuant to

this Rights Agreement;

such Principal Party; and

(D) 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

of any such transaction as may be necessary to assure that the provisions hereof

shall thereafter be applicable, as nearly as reasonably may be, in relation to

the shares of its Common Stock thereafter deliverable upon the exercise of the

Rights; provided that, upon the subsequent occurrence of any consolidation,

merger, sale or transfer of assets or other extraordinary transaction in respect

of such Principal Party, each holder of a Right shall thereupon be entitled to

receive, upon exercise of a Right and payment of the Purchase Price as provided

in this Section 13(a), such cash, shares, rights, warrants and other property

which such holder would have been entitled to receive had such holder, at the

time of such transaction, owned the Common Stock of the Principal Party

receivable upon the exercise of a Right pursuant to this Section 13(a), and such

Principal Party shall take such steps (including, but not limited to,

reservation of shares of stock) as may be necessary to permit the subsequent

exercise of Rights in accordance with the terms hereof for such cash, shares,

rights, warrants and other property.

(b) "PRINCIPAL PARTY" shall mean

(i) in the case of any transaction described in clause (i) or (ii)

of the first sentence of Section 13(a) hereof:

(A) the Person that is the issuer of the securities into which

shares of Common Stock of the Company are converted in such merger or

consolidation, or, if there is more than one such issuer, the issuer the Common

Stock of which has the greatest aggregate market value of shares outstanding or

(B) if no securities are so issued,

(x) the Person that is the other party to the merger, if such

Person survives the merger, or, if there is more than one such

Person, the Person the Common Stock of which has the greatest aggregate market

value of shares outstanding, or

(y) if the Person that is the other party to the merger does

not survive the merger, the Person that does survive the merger (including the

Company if it survives), or

(z) the Person resulting from the consolidation; and

(ii) in the case of any transaction described in clause (iii) of the

first sentence of Section 13(a) hereof, the Person that is the party receiving

the greatest portion of the assets or earning power transferred pursuant to such

transaction or transactions, or, if each Person that is a party to such

transaction or transactions receives the same portion of the assets or earning

power so transferred or if the Person receiving the greatest portion of the

assets or earning power cannot be determined, whichever of such Persons as is

the issuer of Common Stock having the greatest aggregate market value of shares

outstanding; PROVIDED, HOWEVER, that in any such case described in the foregoing

clause (b)(i) or (b)(ii),

(A) if the Common Stock of such Person is not at such time or

has not been continuously over the preceding 12-month period

registered under Section 12 of the Exchange Act, and if such Person

is a direct or indirect Subsidiary of another Person the Common Stock of which

is and has been so registered, the term "PRINCIPAL PARTY" shall refer to such

other Person, or

(B) if such Person is a Subsidiary, directly or indirectly, of

more than one Person, the Common Stocks of all of which are and have been so

registered, the term "PRINCIPAL PARTY" shall refer to whichever of such Persons

is the issuer of the Common Stock having the greatest aggregate market value of

shares outstanding, or

joint venture formed by two or more Persons that are not owned, directly or

indirectly, by the same Person, the rules set forth in clauses (A) and (B) above

shall apply to each of the owners having an interest in the venture as if the

Person owned by the joint venture was a Subsidiary of both or all of such joint

venturers, and the Principal Party in each such case shall bear the obligations

set forth in this Section 13 in the same ratio as its interest in such Person

bears to the total of such interests.

transfer referred to in Section 13(a) hereof unless prior thereto the Company

and the Principal Party involved therein shall have executed and delivered to

the Rights Agent an agreement confirming that the requirements of Section 13(a)

and (b) hereof shall promptly be performed in accordance with their terms and

that such consolidation, merger, sale or transfer of assets shall not result in

a default by the Principal Party under this Agreement as the same shall have

been assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof

and providing that, as soon as practicable after executing such agreement

pursuant to this Section 13, the Principal Party will:

(i) prepare and file a registration statement under the Securities

Act, if necessary, with respect to the Rights and the offering and sale of the

securities purchasable upon exercise of the Rights on an appropriate form, use

its best efforts to cause such registration statement to become effective as

soon as practicable after such filing and use its best efforts to cause such

registration statement to remain effective (with a prospectus at all times

meeting the requirements of the Securities Act) until the Expiration Date, and

similarly comply with applicable state securities laws;

(ii) use its best efforts, if the Common Stock of the Principal

Party shall be listed on a national securities exchange, to list (or continue

the listing of) the Rights and the securities purchasable upon exercise of the

Rights on such securities exchange and, if the Common Stock of the Principal

Party shall not be listed on a national securities exchange, to cause the Rights

and the securities purchasable upon exercise of the Rights to be reported by

Nasdaq or such other system as may then be in use;

(iii) deliver to holders of the Rights historical financial

statements for the Principal Party that comply in all respects with the

requirements for registration on Form 10 (or any successor form) under the

Exchange Act; and

(iv) obtain waivers of any rights of first refusal or preemptive

rights in respect of the shares of Common Stock of the principal Party subject

to purchase upon exercise of outstanding Rights.

In the event that any of the transactions described in Section 13(a)

hereof shall occur, the Rights which have not theretofore been exercised

pursuant to either Section 7 or Section 11(a)(ii) hereof shall thereafter be

exercisable only in the manner described in Section 13(a) hereof.

(d) Furthermore, in case the Principal Party that is to be a party to a

transaction referred to in this Section 13 has provision in any of its

authorized securities or in its Certificate or Articles of Incorporation or

Bylaws or other instrument governing its corporate affairs, which provision

would have the effect of

(i) causing such Principal Party to issue (other than to holders of

Rights pursuant to this Section 13), in connection with, or as a consequence of,

the consummation of a transaction referred to in this Section 13, shares of

Common Stock of such Principal Party at less than the then Current Market Price

per share (determined pursuant to Section 11(d) hereof) or securities

exercisable for, or convertible into, Common Stock of such Principal Party at

less than such then Current Market Price, or

(ii) providing for any special payment, tax or similar provisions in

connection with the issuance of the Common Stock of such Principal Party

pursuant to the provisions of Section 13, then, in such event, the Company

hereby agrees with each holder of Rights that it shall not consummate any such

transaction unless prior thereto the Company and such Principal Party shall have

executed and delivered to the Rights Agent a supplemental agreement providing

that the provision in question of such Principal Party shall have been canceled,

waived or amended, or that the authorized securities shall be redeemed, so that

the applicable provision will have no effect in connection with, or as a

consequence of, the consummation of the proposed transaction.

(e) The Company covenants and agrees that it shall not, at any time after

the occurrence of a Section 11(a)(ii) Event, enter into any transaction of the

type contemplated by clauses (i) through (iii) of Section 13(a) hereof if:

(x) at the time of or immediately after such

consolidation, merger, sale or other

transaction there are any rights, warrants

or other instruments or securities

outstanding or agreements in effect that

would substantially diminish or otherwise

eliminate the benefits intended to be

afforded by the Rights; or

(y) prior to, simultaneously with or

immediately after such consolidation, merger,

sale or other transaction, the shareholders

of the Person who constitutes, or would

constitute, the "Principal Party" for

purposes of Section 13(a) hereof shall have

received a distribution of Rights previously

owned by such Person or any of its Affiliates

or Associates; or

(z) the form or nature of organization of the

Principal Party would preclude or limit the

exercisability of the Rights.

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. If the Company

shall not issue fractions of Rights, in lieu of such fractional Rights, there

shall be paid to the holders of record 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 then current market value of a whole Right. For the

purposes of this Section 14(a), the then current market value of a Right shall

be the closing price of the Rights for the Trading Day immediately prior to the

date on which fractional Rights would have been issuable, determined in the same

manner as the closing price of a share of Common Stock shall be determined

pursuant to Section 11(d) hereof.

(b) Following the occurrence of a Triggering Event, the Company shall not

be required to issue fractions of shares of Common Stock upon exercise of the

Rights or to distribute certificates that evidence fractional shares of Common

Stock. In lieu of fractional shares of Common Stock, 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 purposes of this Section 14(c),

the current market value of one share of Common Stock shall be the closing price

of one share of Common Stock (as determined pursuant to Section 11(d)(i) hereof)

for the Trading Day immediately prior to the date of such exercise.

his right to receive any fractional Right or any fractional share of Common

Stock or other securities of the Company upon exercise of a Right, except as

provided by this Section 14.

SECTION 15. RIGHTS OF ACTION.

All rights of action in respect of this Agreement are vested in the

respective holders of record of the Right Certificates (and, prior to the

Distribution Date, the holders of record of the Common Stock); and any holder of

record of any Right Certificate (or, prior to the Distribution Date, of the

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 Common

Stock), may, in his own behalf for his own benefit, enforce, and may institute

and maintain any suit, action or proceeding against the Company or any other

Person to enforce, or otherwise act in respect of, his right to exercise the

Rights evidenced by such Right Certificate in the manner provided in such Right

Certificate and in this Agreement. Without limiting the foregoing or any

remedies available to the holders of Rights, it is specifically acknowledged

that the holders of Rights would not have an adequate remedy at law for any

breach of this Agreement and, accordingly, that they will be entitled to

specific performance of the obligations under, and injunctive relief against

actual or threatened violations of the obligations of any Person subject to,

this Agreement.

SECTION 16. AGREEMENT OF RIGHT HOLDERS.

Every holder of a Right by accepting the same consents and agrees with the

Company and the Rights Agent and with every other holder of a Right that:

(a) prior to the Distribution Date, the Rights will not be evidenced by a

Right Certificate and will be transferable only in connection with the transfer

of Common Stock;

(b) after the Distribution Date, the Right Certificates will be

transferable only on the registry books of the Rights Agent if surrendered at

the designated office of the Rights Agent, duly endorsed or accompanied by a

proper instrument of transfer;

whose name the Right Certificate (or, prior to the Distribution Date, the

associated Common Stock certificate) is registered as the absolute owner thereof

and of the Rights evidenced thereby (notwithstanding any notations of ownership

or writing on the Right Certificate or the associated Common Stock certificate

made by anyone other than the Company or the Rights Agent or the transfer agent

of the Common Stock) for all purposes whatsoever, and neither the Company nor

the Rights Agent shall be affected by any notice to the contrary; and

(d) notwithstanding anything in this Agreement to the contrary, neither

the Company nor the Rights Agent shall have any liability to any holder of a

Right or other Person as a result of its inability to perform any of its

obligations under this Agreement by reason of any preliminary or permanent

injunction or other order, decree or ruling issued by a court of competent

jurisdiction or by a governmental, regulatory or administrative agency or

commission, or any statute, rule, regulation or executive order promulgated or

enacted by any governmental authority, prohibiting or otherwise restraining

performance of such obligations; provided that the Company must use its best

efforts to have any such order, decree or ruling lifted or otherwise overturned

as soon as possible.

SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.

No holder of a Right, as such, shall be entitled to vote, receive

dividends in respect of or be deemed for any purpose to be the holder of Common

Stock or any other securities of the Company that may at any time be issuable

upon the exercise of the Rights, nor shall anything contained herein or in any

Right Certificate be construed to confer upon the holder of any Right

Certificate, as such, any of the rights of a shareholder of the Company or any

right to vote for the election of directors or upon any matter submitted to

shareholders at any meeting thereof, or to give or withhold consent to any

corporate action, or to receive notice of meetings or other actions affecting

shareholders, or to receive dividends or subscription rights in respect of any

such stock or securities, 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.

(a) The Company agrees to pay to the Rights Agent reasonable compensation

for all services rendered by it hereunder and, from time to time, on demand of

the Rights Agent, its reasonable expenses and counsel fees and other

disbursements incurred in the administration and execution of this Agreement and

the exercise and performance of its duties hereunder. The Company also agrees to

indemnify the Rights Agent, its directors, officers, employees and agents for,

and to hold each of them harmless against, any loss, liability or expense

incurred without gross negligence, bad faith or willful misconduct on the part

of the Rights Agent for anything done or omitted to be done by the Rights Agent

or such other indemnified party in connection with the acceptance and

administration of this Agreement or the performance of the Rights Agent's duties

hereunder, including the cost and expenses of defending against any claim of

liability in the premises.

(b) The Rights Agent shall be protected and shall incur no liability for

or in respect of any action taken, suffered or omitted by it in connection with

its administration of this Agreement or the performance of the Rights Agent's

duties hereunder, in reliance upon any Right Certificate, certificate for Common

Stock or 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, guaranteed, verified or

acknowledged, by the proper Person or Persons.

of the Rights, the resignation or removal of the Rights Agent and the

termination of this Agreement.

SECTION 19. MERGER, CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.

(a) Any corporation into which the Rights Agent or any successor Rights

Agent may be merged or with which it may be consolidated, or any corporation

resulting from any merger or consolidation to which the Rights Agent or any

successor Rights Agent shall be a party, or any corporation succeeding to the

corporate trust or stock transfer business of the Rights Agent or any successor

Rights Agent, shall be the successor to the Rights Agent under this Agreement

without the execution or filing of any paper or any further act on the part of

any of the parties hereto; provided that such corporation would be eligible for

appointment as a successor Rights Agent under the provisions of Section 21

hereof. In case at the time such successor Rights Agent shall succeed to the

agency created by this Agreement, any of the Right Certificates shall have been

countersigned but not delivered, any such successor Rights Agent may adopt the

countersignature of the predecessor Rights Agent and deliver such Rights

Certificates so countersigned, and in case at that time any of the Right

Certificates shall not have been countersigned, any successor Rights Agent or in

the name of the successor Rights Agent, and in all such cases such Right

Certificates shall have the full force provided in the Right Certificates and in

this Agreement.

(b) 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 such Right Certificates so countersigned; and in case at that time

any of the Right Certificates shall not have been countersigned, the Rights

Agent may countersign such Right Certificates either in its prior name or in its

changed name; and in all such cases such Right Certificates shall have the full

force provided in the Right Certificates and in this Agreement.

SECTION 20. DUTIES OF RIGHTS AGENT.

The Rights Agent undertakes the duties and obligations imposed by this

Agreement upon the following terms and conditions, by all of which the Company

and the holders of Right Certificates, by their acceptance thereof, shall be

bound:

(a) The Rights Agent may consult with legal counsel (who may be legal

counsel for the Company), and the advice or opinion of such counsel shall be

full and complete authorization and protection to the Rights Agent as to any

action taken or omitted to be taken by it in good faith and in accordance with

such advice or opinion.

(b) Whenever in the performance of its duties under this Agreement the

Rights Agent shall deem it necessary or desirable that any fact or matter

(including without limitation the identity of any Acquiring Person and the

determination of Current Market Price) be proved or established by the Company

prior to taking or suffering to be taken any action hereunder, such fact or

matter (unless other evidence in respect thereof be herein specifically

prescribed) may be deemed to be conclusively proved and established by a

certificate signed by the Chairman of the Board, the President, the Chief

Executive Officer, any Vice President 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 to be taken in good faith

by it under the provisions of this Agreement in reliance upon such certificate.

negligence, bad faith or willful misconduct.

(d) The Rights Agent shall not be liable for or by reason of any of the

statements of fact or recitals contained in this Agreement or in the Right

Certificates (except its countersignature thereof) or be required to verify the

same, but all such statements and recitals are and shall be deemed to have been

made by the Company only.

(e) The Rights Agent shall not (i) be responsible for (A) the validity of

this Agreement or the execution and delivery hereof (except the due execution

hereof by the Rights Agent) or the validity or execution of any Right

Certificate (except its countersignature thereof), (B) any breach by the Company

of any covenant or condition contained in this Agreement or in any Right

Certificate, (C) any adjustment required under the provisions of Section 11 or

13 hereof or (D) the manner, method or amount of any such adjustment or the

ascertaining of the existence of facts that would require any such adjustment

(except with respect to the exercise of Rights evidenced by Right Certificates

after actual notice of any such adjustment) or (ii) by any act hereunder be

deemed to make any representation or warranty as to the authorization or

reservation of any shares of Common Stock to be issued pursuant to this

Agreement or any Right Certificate or as to whether any shares of Common Stock

will, when issued, be validly authorized and issued, fully paid and

nonassessable.

(f) The Company agrees that it will perform, execute, acknowledge and

deliver or cause to be performed, executed, acknowledged and delivered all such

further and other acts, instruments and assurances as may reasonably be required

by the Rights Agent for the carrying out or performing by the Rights Agent of

the provisions of this Agreement.

(g) The Rights Agent is hereby authorized and directed to accept

instructions with respect to the performance of its duties hereunder from the

Chairman of the Board, the President, the Chief Executive Officer, any Vice

President, 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 to be taken by it in good faith in accordance

with instructions of any such officer, or for any delay in acting while awaiting

instructions. Any application by the Rights Agent for written instructions from

the Company may, at the option of the Rights Agent, set forth in writing any

action proposed to be taken or omitted by the Rights Agent under this Agreement

and the date on or after which such action shall be taken or such omission shall

be effective. The Rights Agent shall not be liable for any action taken by, or

omission of, the Rights Agent in accordance with a proposal included in any such

application on or after the date specified in such application (which date shall

not be less than five Business Days after the date any officer of the Company

actually receives such application, unless any such officer shall have consented

in writing to an earlier date) unless, prior to taking any such action (or the

effective date in the case of an omission), the Rights Agent shall have received

written instructions in response to such application specifying the action to be

taken or omitted.

(h) The Rights Agent and any shareholder, 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 the Rights Agent under

this Agreement. Nothing herein shall preclude the Rights Agent from acting in

any other capacity for the Company or for any other entity.

(i) The Rights Agent may execute and exercise any of the rights or powers

hereby vested in it or perform any duty hereunder either itself or by or through

its attorneys or agents, and the Rights Agent shall not be answerable or

accountable for any act, default, neglect or misconduct of any such attorneys or

agents or for any loss to the Company resulting from any such act, default,

neglect or misconduct; provided that the Rights Agent was not grossly negligent

in the selection thereof.

(j) No provision of this Agreement shall require the Rights Agent to

expend or risk its own funds or otherwise incur any financial liability in the

performance of any of its duties hereunder or in the exercise of its rights if

there shall be reasonable grounds for believing that repayment of such funds or

adequate indemnification against such risk or liability is not reasonably

assured to it.

(k) If, with respect to any Right Certificate surrendered to the Rights

Agent for exercise or transfer, the certificate contained in the form of

election to purchase or the form of assignment set forth on the reverse thereof,

as the case may be, has either not been completed or indicates an affirmative

response to clause 1 or 2 thereof, the Rights Agent shall not take any further

action with respect to such requested exercise or transfer without first

consulting with the Company.

(l) The Rights Agent undertakes only the express duties and obligations

imposed on it by this Agreement and no implied duties or obligations shall be

read into this Agreement against the Rights Agent.

(m) Anything in this Agreement to the contrary withstanding, in no event

shall the Rights Agent be liable for special, indirect or consequential loss or

damage of any kind whatsoever (including but not limited to lost profits).

SECTION 21. CHANGE OF RIGHTS AGENT.

(a) The Rights Agent or any successor Rights Agent may resign and be

discharged from its duties under this Agreement upon 30 days' notice in writing

mailed to the Company and to each transfer agent of the Common Stock by

registered or certified mail, and to the holders of the Right Certificates by

first-class mail. The Company may remove the Rights Agent or any successor

Rights Agent (with or without cause) upon 30 days' notice in writing, mailed to

the Rights Agent or successor Rights Agent, as the case may be, and to each

transfer agent of the Common Stock by registered or certified mail, and to the

holders of the Right Certificates by first-class mail. 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. Notwithstanding the foregoing

provisions of this Section 21, in no event shall the resignation or removal of a

Rights Agent be effective until a successor Rights Agent shall have been

appointed and have accepted such appointment. If the Company shall fail to make

such appointment within a period of 30 days after 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 incumbent Rights Agent or the holder of record 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

(i) a corporation organized and doing business under the laws of the

United States or any State thereof, 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 $10,000,000 or

(ii) an Affiliate controlled by a corporation described in clause

(i) of this sentence.

(b) After appointment, the successor Rights Agent shall be vested with the

same powers, rights, duties and responsibilities as if it had been originally

named as Rights Agent without further act or deed, but the predecessor Rights

Agent shall deliver and transfer to the successor Rights Agent any property at

the time held by it hereunder, and execute and deliver any further assurance,

conveyance, act or deed necessary for the purpose. Not later than the effective

date of any such appointment the Company shall file notice thereof in writing

with the predecessor Rights Agent and each transfer agent of the Common Stock,

and mail a notice thereof in writing to the registered holders of the Right

Certificates. The failure to give any notice required by this Section 21 or any

defect therein shall not affect the legality or validity of the resignation or

removal of the Rights Agent or the appointment of the successor Rights Agent, as

the case may be.

SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.

Notwithstanding any of the provisions of this Agreement to the contrary,

the Company may, at its option, issue new Right Certificates evidencing Rights

in such form as may be approved by the Board of Directors to reflect any

adjustment or change in the Purchase Price and the number or kind or class of

shares of stock or other securities or property purchasable under the Right

Certificates made in accordance with the provisions of this Agreement. In

addition, in connection with the issuance or sale of shares of Common Stock

following the Distribution Date and prior to a Triggering Event or the

redemption or expiration of the Rights, the Company may, with respect to shares

of Common Stock so issued or sold pursuant to the exercise of employee stock

options or under any employee plan or arrangement, or upon the exercise,

conversion or exchange of securities hereafter issued by the Company, or in any

other case, if deemed necessary or appropriate by the Board of Directors, issue

Right Certificates representing the appropriate number of Rights in connection

with such issuance or sale; provided that

(i) no such Right Certificate shall be issued 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 such 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 may, at its option, at any time prior to the

earlier of

(i) the first occurrence of a Section 11(a)(ii) Event, and

(ii) the Close of Business on the Expiration Date,

cause the Company to redeem all but not less than all of the then outstanding

Rights at a redemption price of $0.001 per Right, as such amount may be

appropriately adjusted to reflect any stock split, stock dividend or similar

transaction occurring after the date hereof (such redemption price being

hereinafter referred to as the "REDEMPTION PRICE").

(b) Immediately upon the effective time of the redemption of the Rights as

specified by the action of the Board of Directors ordering the redemption of the

Rights, 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, without any interest

thereon. Promptly after the effective time of the redemption of the Rights as

specified by the action of the Board of Directors ordering the redemption of the

Rights, the Company shall give notice of such redemption to the holders of the

then outstanding Rights by mailing such notice to all such holders at their last

addresses as they appear upon the registry books of the Rights Agent or, prior

to the Distribution Date, on the registry books of the transfer agent of the

Common Stock. Any notice which is mailed in the manner provided herein shall be

deemed given, whether or not the holder receives the notice. Each such notice of

redemption will state the effective time of the redemption, the method by which

the payment of the Redemption Price will be made and the time for such payment.

The failure to give any notice required by this Section 23(b) or any defect

therein shall not affect the legality or validity of the action taken by the

Company.

SECTION 24. EXCHANGE.

(a) The Board of Directors may, at its option, at any time after the first

occurrence of a Section 11(a)(ii) Event, exchange all or part of the then

outstanding and exercisable Rights (which shall not include Rights that have

become void pursuant to the provisions of Section 11(a)(ii) hereof) for shares

of Common Stock at an exchange ratio of one share of Common Stock per Right

(such exchange ratio being hereinafter referred to as the "EXCHANGE RATIO").

Notwithstanding the foregoing, the Board of Directors shall not be empowered to

effect such exchange at any time after any Person (other than an Exempt Person),

together with all Affiliates and Associates of such Person, becomes the

Beneficial Owner of 50% or more of the Common Stock then outstanding.

(b) Immediately upon the effective time of the exchange of the Rights as

specified by the action of the Board of Directors ordering the exchange of any

Rights pursuant to Section 24(a) hereof and without any further action and

without any notice, the right to exercise such Rights shall terminate and the

only right thereafter of a holder of such Rights shall be to receive that number

of 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 notice of any

such exchange; provided that the failure to give, or any defect in, such notice

shall not affect the validity of such exchange. The Company promptly shall mail

a notice of any such exchange to all of the holders of such Rights at their last

addresses as they appear upon the registry books of the Rights Agent. Any notice

that is mailed in the manner herein provided shall be deemed given, whether or

not the holder receives the notice. Each such notice of exchange will state the

method by which the exchange of shares of Common Stock for Rights will be

effected and, in the event of any partial exchange, the number of Rights that

will be exchanged. Any partial exchange shall be effected pro rata based on the

number of Rights (other than Rights which have become void pursuant to the

provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

issued but not outstanding or authorized but unissued to permit any exchange of

Rights as contemplated by 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.

(d) In any exchange pursuant to Section 24(a) hereof, the Company shall

not be required to issue fractions of shares of Common Stock or to distribute

certificates that evidence fractional shares of Common Stock. In lieu of such

fractional shares of Common Stock, the Company shall pay to the registered

holders of the Right Certificates with regard to which such fractional shares of

Common Stock would otherwise be issuable an amount in cash equal to the same

fraction of the current market value of a whole share of Common Stock. For the

purposes of this Section 24(d), the current market value of a whole share of

Common Stock shall be the Current Market Price of a share of Common Stock (as

determined pursuant to the second sentence of Section 11(d)(i) hereof) for the

Trading Day immediately prior to the date of exchange pursuant to Section 24(a)

hereof.

SECTION 25. NOTICE OF PROPOSED ACTIONS.

(a) In case the Company, after the earlier of the Distribution Date or

the Stock Acquisition Date, shall propose to

(i) effect any of the transactions referred to in Section 11(a)(i)

hereof or to pay any dividend to the holders of record of Common Stock payable

in stock of any class or to make any other distribution to the holders of record

of Common Stock (other than a regular quarterly cash dividend), or

(ii) offer to the holders of record of Common Stock options,

warrants, or other rights to subscribe for or to purchase shares of Common Stock

(including any security convertible into or exchangeable for Common Stock) or

shares of stock of any class or any other securities, options, warrants,

convertible or exchangeable securities or other rights, or

(iii) effect any reclassification of the Common Stock or any

recapitalization or reorganization of the Company, or

(iv) to effect the liquidation, dissolution or winding up of the

Company,

then, in each such case, the Company shall give to each holder of record of a

Right Certificate, in accordance with Section 26 hereof, notice of such proposed

action, which shall specify the record date for the purposes of such transaction

referred to in Section 11(a)(i), or such dividend or distribution, or the date

on which such reclassification, recapitalization, reorganization, liquidation,

dissolution or winding up is to take place and the record date for determining

participation therein by the holders of record 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 record of common Stock for purposes of such action,

and in the case of any such other action, at least 10 days prior to the date of

the taking of such proposed action or the date of participation therein by the

holders of record of Common Stock, whichever shall be the earlier. The failure

to give any 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) If a Section 11(a)(ii) Event shall occur, then the Company shall, as

soon as practicable thereafter, give to each holder of Rights, 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 the holders of

Rights under Section 11(a)(ii) hereof.

proposed, then, in any such case, the Company shall give to each holder of

Rights, in accordance with Section 26 hereof, notice of the proposal of such

transaction at least 10 days prior to consummating such transaction, which

notice shall specify the proposed event and the consequences of the event to

holders of Rights.

SECTION 26. NOTICES.

Notices or demands authorized by this Agreement to be given or made by the

Rights Agent or by the holder of record of any Right Certificate or Right to or

on behalf of 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:

CompuMed, Inc.

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇

▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Subject to the provisions of Section 21 hereof, any notice or demand

authorized by this Agreement to be given or made by the Company or by the holder

of record of any Right Certificate or Right 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:

Computershare

▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇

Notices or demands authorized by this Agreement to be given or made by the

Company or the Rights Agent to the holder of record of any Right Certificate or

Right 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 it appears

upon the registry books of the Rights Agent or, prior to the Distribution Date,

on the registry books of the transfer agent of the Common Stock.

SECTION 27. SUPPLEMENTS AND AMENDMENTS.

For as long as the Rights are redeemable, and except as provided in the

last sentence of this Section 27, the Company may, in its sole and absolute

discretion, and the Rights Agent shall, if the Company so directs, supplement or

amend any provision of this Agreement in any respect without the approval of any

holders of the Rights or the Common Stock. At any time when the Rights are not

redeemable, and except as provided in the last sentence of this Section 27, the

Company may, and the Rights Agent shall if the Company so directs, supplement or

amend this Agreement without the approval of any holders of Right certificates

in order to:

(a) cure any ambiguity;

(b) correct or supplement any provision contained herein that may be

defective or inconsistent with any other provisions herein; or

Company may deem necessary or desirable;

provided that no such supplement or amendment shall adversely affect the

interests of the holders of Right Certificates as such; and provided that this

Agreement may not be so supplemented or amended to:

(i) lengthen a time period relating to when the Rights may be

redeemed or this Agreement amended at the sole and absolute discretion of the

Company at such time as the Rights are not redeemable; or

(ii) lengthen or shorten any other time period unless such

lengthening or shortening of such other time period is for the purpose of

protecting, enhancing or clarifying the rights of, or the benefits to, the

holders of Rights as such (other than any Acquiring Person or an Affiliate or

Associate of such an Acquiring Person).

Upon the delivery of a certificate from an officer of the Company that

states that the proposed supplement or amendment is in compliance with the terms

of this Section 27, the Rights Agent shall execute such supplement or amendment.

Notwithstanding anything contained in this Agreement to the contrary, no

supplement or amendment shall be made that changes the Redemption Price or the

number of one one-thousandth of a share of Common Stock for which a Right is

exercisable; and no supplement or amendment that changes the rights or duties of

the Rights Agent under this Agreement shall be effective without the consent of

the Rights Agent.

SECTION 28. SUCCESSORS.

All of the covenants and provisions of this Agreement by or for the

benefit of the Company or the Rights Agent shall bind and inure to the benefit

of their respective successors and assigns hereunder.

Nothing in this Agreement shall be construed to give any Person other than

the Company, the Rights Agent and the registered holders of the Rights

Certificates (and, prior to the Distribution Date, the Common Stock) any legal

or equitable right, remedy or claim under this Agreement, and this Agreement

shall be for the sole and exclusive benefit of the Company, the Rights Agent and

the holders of record of the Right Certificates (and, prior to the Distribution

Date, the Common Stock).

SECTION 30. CHOICE OF LAW.

This Agreement and each Right Certificate issued hereunder shall be deemed

to be a contract made under the laws of the State of Delaware and for all

purposes shall be governed by and construed in accordance with the laws of such

state applicable to contracts to be made and performed entirely within such

state.

SECTION 31. COUNTERPARTS.

This Agreement may be executed in any number of counterparts, 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 32. DESCRIPTIVE HEADINGS.

Descriptive headings of the several sections of this Agreement are

inserted for convenience only and shall not control or affect the meaning or

construction of any of the provisions hereof.

SECTION 33. SEVERABILITY.

If any provision of this Agreement is held to be illegal, invalid or

unenforceable under present or future laws effective during the term hereof,

such provision shall be fully severable and this Agreement shall be construed

and enforced as if such illegal, invalid or unenforceable provision never

comprised a part hereof; and the remaining provisions hereof shall remain in

full force and effect and shall not be affected by the illegal, invalid or

unenforceable provision or by its severance herefrom. Furthermore, in lieu of

such illegal, invalid or unenforceable provision, there shall be added

automatically as part of this Agreement a provision as similar in its terms to

such illegal, invalid or unenforceable provision as may be possible and be

legal, valid and enforceable.

SECTION 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.

The Board of Directors of the Company shall have the exclusive power and

authority to administer this Agreement and to exercise the rights and powers

specifically granted to the Board of Directors of the Company or to the Company,

or as may be necessary or advisable in the administration of this Agreement,

including, without limitation, the right and power to (i) interpret the

provisions of this Agreement, and (ii) make all determinations deemed necessary

or advisable for the administration of this Agreement (including, without

limitation, a determination to redeem or not redeem the Rights or to amend this

Agreement). All such actions, calculations, interpretations and determinations

(including, for purposes of clause (y) below, all omissions with respect to the

foregoing) that are done or made by the Board of Directors of the Company in

good faith shall (x) be final, conclusive and binding on the Company, the Rights

Agent, the holders of the Rights, as such, and all other parties, and (y) not

subject the Board of Directors to any liability to the holders of the Rights.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

duly executed, all as of the day and year first above written.

CompuMed, Inc.

By:

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

Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇

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

Title: Interim Chief Executive Officer

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

Computershare

By:

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

Name: ▇▇▇▇ ▇. ▇▇▇▇▇

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

Title: Relationship Manager

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

EXHIBIT A

----------

[Form of Right Certificate]

Certificate No. _______ ________ Rights

NOT EXERCISABLE AFTER OCTOBER 28, 2009 OR EARLIER IF REDEEMED OR EXCHANGED. THE

RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF COMPUMED, INC., AT $0.001 PER

RIGHT (SUBJECT TO ADJUSTMENT) ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY A PERSON WHO IS OR BECOMES AN

ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF SUCH ACQUIRING PERSON (AS SUCH

TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR, UNDER CERTAIN CIRCUMSTANCES,

TRANSFEREES THEREOF, WILL BECOME VOID AS PROVIDED IN SECTION 11(a)(ii) OF THE

RIGHTS AGREEMENT AND THEREAFTER MAY NOT BE TRANSFERRED TO ANY PERSON.

Right Certificate

CompuMed, 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 October 28, 2005, as the same may be amended

from time to time ("Rights Agreement"), between CompuMed, Inc., a Delaware

corporation (the "Company"), and Computershare(the "Rights Agent"), to purchase

from the Company at any time after the Distribution Date (as that term is

defined in the Rights Agreement) and prior to 5:00 P.M. (San Antonio time) on

October 28, 2009 at the principal office of the Rights Agent, or its successor

as Rights Agent, fully paid and nonassessable shares of Common Stock, par value

$.01 per share ("Stock"), of the Company at a purchase price of 0.40, as the

same may from time to time be adjusted in accordance with the Rights Agreement

the "Purchase Price"), upon presentation and surrender of this Right Certificate

with the Form of Election to Purchase duly executed. The number of Rights

evidenced by this Right Certificate (and the number of shares of Common Stock

which may be purchased upon exercise hereof) set forth above,and the Purchase

Price set forth above,are the number and Purchase Price as of October 28, 2005.

As provided in the Rights Agreement, the Purchase Price and the number of

shares of Common Stock that 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 and, upon the happening of certain events,

securities other than shares of Common Stock, or other property, may be acquired

upon exercise of the Rights evidenced by this Right Certificate, as provided by

the Rights Agreement.

This Right Certificate is subject to all of the terms, provisions and

conditions of the Rights Agreement, as amended from time to time, which terms,

provisions and conditions are incorporated herein by reference and made a part

hereof, and reference to the Rights Agreement is made for a full description of

the rights, limitations of rights, obligations, duties and immunities of the

Rights Agent, the Company and the holders of record of Right Certificates.

Copies of the Rights Agreement are on file at the principal executive office of

the Company.

This Right Certificate, with or without other Right Certificates, upon

surrender at the principal office of the Rights Agent designated for that

purpose, may be exchanged for another Right Certificate or Right Certificates of

like tenor and date evidencing Rights entitling the holder of record to purchase

the same aggregate number of shares of Common Stock as the Rights evidenced by

the Right Certificate or Right Certificates surrendered entitled that holder to

purchase. If this Right Certificate is exercised in part, the holder shall be

entitled to receive, upon surrender hereof, another Right Certificate or Right

Certificates for the number of whole rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by

this right Certificate may be (i) redeemed by the Company by action of the Board

of Directors at its option at a redemption price of $0.001 per Right, or (ii)

exchanged by action of the Board of Directors at its option in whole or in part

for shares of the Common Stock, par value $.01 per share, of the Company.

No fractional shares of Common Stock or other securities of the Company are

required to be issued upon the exercise of any Right or Rights evidenced hereby,

and in lieu thereof, as provided in the Rights Agreement, a cash payment may be

made. As provided in the Rights Agreement, interests in fractions of shares of

Common Stock may, at the election of the Company, be evidenced by depository

receipts.

No holder of this Right Certificate shall be entitled to vote or receive

dividends or be deemed for any purpose the holder of Common Stock or of any

other securities of the Company that 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.

The Board of Directors shall have the exclusive power and authority to

administer the Rights Plan in accordance with the Rights Agreement and to

exercise the rights and powers specifically granted to the Board of Directors or

the Company, or as may be necessary or advisable in the administration of the

Rights Plan.

[Signature Page Follows]

<PAGE>

WITNESS the facsimile signature of the proper officers of the Company and

its corporate seal.

Dated as of ________________________, 2007.

ATTEST: COMPUMED, INC.

_________________________ By:_______________________________________

▇▇▇▇▇▇ ▇▇▇▇, Secretary ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,

and Principal Financial Officer Interim Chief Executive Officer

and President

COUNTERSIGNED:

__________________________

as Rights Agent

By:_______________________

Name:_____________________

Title:____________________

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder

desires to transfer the Rights evidenced by this

Right Certificate)

FOR VALUE RECEIVED _______________________________________ hereby sells,

assigns and transfers unto

______________________________________________________

(Please print name and address of transferee)

_____________________________________________________________________ rights

evidenced by this Right Certificate, together with all right, title and interest

therein, and does hereby irrevocably constitute and appoint

______________________ Attorney, to transfer such Rights on the books of the

within-named company, with full power of substitution.

Dated:

_________________________

Signature

MEDALLION SIGNATURE GUARANTEE:

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 and were not acquired by the

undersigned from, and are not being assigned to, an Acquiring Person or an

Affiliate or Associate thereof (as defined in the Rights Agreement).

_______________________

Signature

FORM OF ELECTION TO PURCHASE

(To be executed by the registered holder if such holder

desires to exercise the Rights evidenced by this

Right Certificate.)

To: CompuMed, Inc.

The undersigned hereby irrevocably elects to exercise _______ Rights

evidenced by this Right Certificate to purchase the securities or other property

due upon the exercise of such Rights and requests that certificates for any such

securities be issued in the name of:

Please insert social security or other identifying number:

(Please print name and address)

If such number of Rights shall not be all the Rights evidenced by this Right

Certificate a new Rights Certificate for the balance remaining of such Rights

shall be registered in the name of and delivered to:

Please insert social security or other identifying number:

(Please print name and address)

Dated: ________________________

_____________________

Signature

MEDALLION SIGNATURE GUARANTEE:

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, and were not acquired by the

undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as

defined in the Rights Agreement).

___________________________

Signature

NOTICE

The signature in the Form of Assignment or Form of Election to Purchase, as

the case may be, must conform to the name as written upon the face of this Right

Certificate in every particular, without alteration or enlargement or any change

whatsoever.

In the event the certification set forth above in the Form of Assignment or

the Form of Election to Purchase, as the case may be, is not completed, the

Company and the Rights Agent will deem the beneficial owner of the Rights

evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or

Associate thereof (as defined in the Rights Agreement) and such Assignment or

Election to Purchase will not be honored.

EXHIBIT B

----------

UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT DATED AS OF

OCTOBER 28, 2005 , AS AMENDED, BETWEEN COMPUMED, INC. AND COMPUTERSHARE

CORPORATION AS RIGHTS AGENT (THE "RIGHTS AGREEMENT, AS AMENDED"), RIGHTS ISSUED

TO OR BENEFICIALLY OWNED BY A PERSON WHO IS OR BECOMES AN ACQUIRING PERSON OR

AN AFFILIATE OR ASSOCIATE OF SUCH ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED

IN THE RIGHTS AGREEMENT, AS AMENDED) OR, UNDER CERTAIN CIRCUMSTANCES, TRANSFEREES

THEREOF, WILL BECOME VOID AS PROVIDED IN SECTION 11(a)(ii) OF THE RIGHTS

AGREEMENT, AS AMENDED, AND THEREAFTER MAY NOT BE TRANSFERRED TO ANY PERSON.

SUMMARY OF RIGHTS TO

PURCHASE COMMON STOCK

On October 28, 2005, the Board of Directors of CompuMed, Inc., a Delaware

corporation (the "Company"), declared a dividend of one Right for each

outstanding share of Common Stock, par value $.01 per share, of the Company (the

"Common Stock"). The dividend is payable to holders of record of Common Stock

at the close of business on August 1, 2005 (the "Record Date"). Each Right

entitles the registered holder to purchase from the Company shares of Common

Stock at a Purchase Price of $0.40. The terms and conditions of the Rights are

contained in a Rights Agreement between the Company and Computershare

Corporation. On March 27, 2007, the Board of Directors of the Company authorized

that the Rights Agreement dated October 28, 2005 be amended. The Amended Rights

Agreement modified the terms and conditions of the Rights Agreement dated

August 1, 2005 . On February ____, 2008, the Board of Directors of the Company

authorized that the Amended Rights Agreement, dated March 27, 2007, be further

amended to include Boston Avenue Capital, LLC and its Affiliates in the

definition of an “Exempt Person.” Any terms amended in the Rights Agreement are

reflected in this Summary of Rights to Purchase Common Stock.

As discussed below, initially the Rights will not be exercisable,

certificates for the Rights will not be issued and the Rights will automatically

trade with the Common Stock.

Until the close of business on the earlier of (i) the tenth day following

the public announcement that a person or group of affiliated or associated

persons ("Acquiring Person") other than Boston Avenue Capital, LLC and its

Affiliates, the Company, any subsidiary of the Company or any employee benefit

plan or employee stock plan of the Company or of any subsidiary of the Company

("Exempt Person") has acquired, or obtained the right to acquire, beneficial

ownership of 35% or more of the outstanding Common Stock(the "Stock Acquisition

Date") or (ii) the tenth business day following the commencement by any person

(other than an Exempt Person) of, or the announcement of the intention to

commence, a tender or exchange offer that would result in the ownership of

35% or more of the outstanding Common Stock(the earlier of such dates in clauses

(i) and (ii) being called the "Distribution Date"),the Rights will be evidenced,

with respect to any of the Common Stock certificates outstanding as of August 1,

2005, by such Common Stock certificate,together with a copy of this Summary

of Rights.

The Rights Agreement provides that, until the Distribution Date (or the

earlier redemption or expiration of the Rights), the Rights will be represented

by and transferred with, and only with, the Common Stock. Until the

Distribution Date (or the earlier redemption or expiration of the Rights), new

Common Stock certificates issued after the Record Date upon transfer or new

issuance of shares of Common Stock will contain a legend incorporating the

Rights Agreement by reference. Until the Distribution Date (or the earlier

redemption or expiration of the Rights), the surrender for transfer of any of

the Company's Common Stock certificates, with or without such legend or a copy

of this Summary of Rights, will also constitute the surrender for transfer of

the Rights associated with the Common Stock evidenced by such certificates. As

soon as practicable following the Distribution Date, separate Right Certificates

will be mailed to holders of record of Common Stock at the close of business on

the Distribution Date, and thereafter the Right Certificates alone will evidence

the Rights and the Rights will be transferable separate and apart from the

Common Stock.

The Rights are not exercisable until the Distribution Date. The Rights

will expire at the close of business on October 28, 2009, unless redeemed or

exchanged earlier as described below.

The Purchase Price payable and the number of shares of Common Stock or

other securities or property issuable upon exercise of the 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 the Common Stock of certain rights or

warrants to subscribe for Common Stock or convertible securities at less than

the current market price of the Common Stock or (iii) upon the distribution to

holders of the Common Stock of evidences of indebtedness or assets (excluding

regular cash dividends and dividends payable in Common Stock) or of subscription

rights or warrants.

If any Person (other than an Exempt Person) becomes the beneficial owner of

35% or more of the then outstanding shares of Common Stock, each holder of a

Right, other than the Acquiring Person and/or its affiliates, associates and

transferees, will have the right to receive, upon payment of the Purchase Price,

a number of shares of Common Stock having a market value equal to twice the

Purchase Price. In the event that insufficient shares of Common Stock are

available for the exercise in full of the Rights, the Company shall, in lieu of

issuing shares of Common Stock upon exercise of Rights, to the extent permitted

by applicable law and any material agreements then in effect to which the

Company is a party, issue cash, property or other securities of the Company

(which may be accompanied by a reduction in the Purchase Price), in proportions

determined by the Company, so that the aggregate value of such cash, property or

other securities received is equal to twice the Purchase Price. After the

acquisition of shares of Common Stock by an Acquiring Person as described in

this paragraph, Rights that are (or, under certain circumstances, Rights that

were) beneficially owned by an Acquiring Person and/or its affiliates,

associates and transferees will be void.

The Board of Directors may, at its option, at any time after a person

becomes an Acquiring Person, authorize the Company to exchange all or part of

the then outstanding and exercisable Rights for shares of Common Stock at an

exchange ratio of one share of Common Stock per Right, provided that the Board

of Directors may not effect such exchange after the time that any Person (other

than an Exempt Person) becomes the beneficial owner of 50% or more of the Common

Stock then outstanding. In the event that insufficient shares of Common Stock

are available for such exchange, the Board of Directors shall take all such

action as may be necessary to authorize such additional shares of Common Stock.

Unless the Rights are earlier redeemed, if, after the Stock Acquisition

Date, the Company is acquired in a merger or other business combination (in

which any shares of the Common Stock are changed into or exchanged for other

securities or assets) or more than 50% of the assets or earning power of the

Company and its subsidiaries (taken as a whole) is sold or transferred in one or

more transactions, other than a transfer to a lender (or an assignee of a

lender) of the Company pursuant to material agreements then in effect to which

the Company is a party, the Rights Agreement provides that proper provision

shall be made so that each holder of record of a Right will from and after that

time have the right to receive, upon payment of the Purchase Price, that number

of shares of common stock of the acquiring company which has a current market

price at the time of such transaction equal to twice the Purchase Price.

Interests in fractions of shares of Common Stock may, at the election of

the Company, be evidenced by depository receipts. The Company may also issue

cash in lieu of fractional shares of Common Stock.

At any time until a person becomes an Acquiring Person, the Board of

Directors may cause the Company to redeem the Rights in whole, but not in part,

at a price of $0.001 per Right, subject to adjustment. Immediately upon the

effective time of the redemption authorized by the Board of Directors the right

to exercise the Rights will terminate, and the holders of the Rights will only

be entitled to receive the redemption price without any interest thereon.

As long as the Rights are redeemable, the Company may, except with respect

to the redemption price or the number of shares of Common Stock for which a

Right is exercisable, amend the Rights in any manner. At any time when the

Rights are not redeemable, the Company may amend the Rights in any manner that

does not adversely affect the interests of holders of the Rights as such.

Until a Right is exercised, the holder, as such, will have no rights as a

stockholder of the Company, including without limitation the right to vote or to

receive dividends.

The Board of Directors shall have the exclusive power and authority to

administer the Rights Plan and to exercise the rights and powers specifically

granted to the Board of Directors or the Company, or as may be necessary or

advisable in the administration of the Rights Plan.

A copy of the Rights Agreement has been filed with the Securities and

Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A

copy of the Rights Agreement is available free of charge from the Company by

written request sent to ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇

▇▇▇▇▇, Attn: Secretary. This summary description of the Rights does not purport

to be complete and is qualified in its entirety by reference to the Rights

Agreement, as amended from time to time, which is incorporated in this summary

description by reference. In the event of a conflict between this summary

description and the Rights Agreement, the Rights Agreement will prevail.

CERTIFICATE OF AMENDMENT TO
AMENDED RIGHTS AGREEMENT OF
COMPUMED, INC.

The undersigned certifies that:

The undersigned is the Interim Chief Executive Officer of CompuMed, Inc. (the “Company”), a Delaware corporation.

Section 1.(o) of the Amended Rights Agreement of this Company with Computershare is amended to read as follows:

“ “EXEMPT PERSON" shall mean Boston Avenue Capital, LLC and its Affiliates, the Company, any Subsidiary of the Company, any employee benefit plan or employee stock plan of the Company or of any Subsidiary of the Company, or any person or entity organized, appointed or established for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or of any Subsidiary of the Company.”

The foregoing amendment of Amended Rights Agreement has been duly approved by the Board of Directors of the Company.

The foregoing amendment of the Amended Rights Agreement is in compliance with the terms of Section 27 of the Amended Rights Agreement.

I further declare under penalty of perjury that the matters set forth in this certificate are true and correct of my own knowledge.

DATED: February 15, 2008

__________________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Interim Chief Executive Officer

AMENDED RIGHTS AGREEMENT

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