Preview | Rights Agreement |


Section 1. Section 2. Section 3. Section 4. Section 5.		Certain Definitions. Appointment of Rights Agent. Issue of Rights Certificates. Form of Rights Certificates. Countersignature and Registration.

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


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

Section 8.Cancellation of Rights Certificates.

Section 9.Reservation and Availability of Capital Stock.

Section 10.		Preferred Stock Record Date.

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

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


Section 14. Section 15. Section 16. Section 17. Section 18. Section 19. Section 20. Section 21. Section 22. Section 23. Section 24. Section 25. Section 26. Section 27. Section 28. Section 29. Section 30. Section 31. Section 32. Section 33. Section 34.		Fractional Rights and Fractional Shares. Rights of Action. Agreement of Rights Holders. Rights Certificate Holder Not Deemed a Stockholder. Duties of Rights Agent. Compensation and Indemnification of the Rights Agent. Merger or Consolidation or Change of Name of Rights Agent. Change of Rights Agent. Issuance of New Rights Certificates. Redemption and Review. Exchange. Notice of Certain Events. Notices. Supplements and Amendments. Successors. Determinations and Actions by the Board, Etc. Benefits of this Agreement. Severability. Governing Law. Counterparts. Descriptive Headings.

Rights Agreement, dated as of April 26, 2007 (the Agreement), between Avalon Pharmaceuticals, Inc., a Delaware corporation (the Company), and American Stock Transfer & Trust Company, a New York corporation (the Rights Agent).

WHEREAS, on April 25, 2007, the Board of Directors of the Company determined it desirable and in the best interests of the Company and its stockholders for the Company to implement a rights plan by executing this Agreement;

WHEREAS, on April 25, 2007 (the Rights Dividend Declaration Date), the Board of Directors of the Company authorized and declared a dividend of one preferred share purchase right (a Right) for each share of Common Stock (as hereinafter defined) of the Company outstanding at the Close of Business (as defined herein) on the Record Date (as defined herein), and has authorized the issuance of one Right with respect to each share of Common Stock of the Company issued (whether originally issued or delivered from the Companys treasury) between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined); provided, however that Rights may be issued with respect to shares of Common Stock that become outstanding after the Distribution Date and prior to the Expiration Date (as defined herein) in accordance with Section 22; and

WHEREAS, each Right shall initially represent the right to purchase one one-thousandth of one share of Series C Junior Participating Preferred Stock of the Company having the rights, powers and preferences set forth in the form of Certificate of Designation, Preferences and Rights attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth;

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