EXHIBIT 4.2


FORM OF STOCKHOLDERS RIGHTS AGREEMENT


                    This
Stockholders Rights Agreement (this “Rights Agreement”) is made and
entered into as of [                ] by and between Costamare Inc., a Marshall Islands
corporation (the “Company”), and American Stock Transfer & Trust
Company, LLC, as Rights Agent (the “Rights Agent”).


                    WHEREAS,
the Board (as hereinafter defined) has (a) authorized and declared a grant
of one right (the “Right”) for each share of the Company’s common stock,
par value U.S. $0.0001 per share (the “Common Stock”), held of
record as of the Close of Business (as hereinafter defined) on the date
specified by the Board as the Record Date (the “Record Date”) and (b)
further authorized the issuance of one Right in respect of each share of Common
Stock that shall become outstanding (i) at any time between the Record Date and
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date (as such terms are hereinafter defined) or (ii) upon the
exercise or conversion, prior to the earlier of the Redemption Date or the
Final Expiration Date, of any option or other security exercisable for or
convertible into shares of Common Stock, which option or other such security is
outstanding on the Distribution Date; and


                    WHEREAS,
each Right represents the right of the holder thereof to purchase one
one-thousandth of a share of Series A Participating Preferred Stock (as such
number may hereafter be adjusted pursuant to the provisions hereof), upon the
terms and subject to the conditions set forth herein, having the rights,
preferences and privileges set forth in the Statement of Designation of Rights,
Preferences and Privileges of Series A Participating Preferred Stock of
Costamare Inc., attached hereto as Exhibit A.


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


                    Section
1. Certain Definitions.


                    “Acquiring
Person” shall mean any Person who or which, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, or any entity holding shares
of Common Stock for or pursuant to the terms of any such plan or (iv) any
Exempted Person. Notwithstanding the foregoing, no Person shall be deemed to be
an Acquiring Person as the result of an acquisition of shares of Common Stock
by the Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person to 15% or
more of the shares of Common Stock of the Company then outstanding; provided,
however, that a Person who (i) becomes the Beneficial Owner of 15% or
more of the shares of Common Stock of the Company then outstanding by reason of
share purchases by the Company and (ii) then after such share purchases by the
Company, becomes the Beneficial Owner of any additional shares of Common Stock
of the Company (other than pursuant to a dividend or distribution paid or made
by the Company on the outstanding shares of Common Stock in shares of Common
Stock or pursuant to a split or subdivision of the outstanding shares of Common
Stock) representing one percent or 





more of the
Common Stock then outstanding, such Person shall be deemed to be an Acquiring
Person unless upon becoming the Beneficial Owner of such additional shares of
Common Stock of the Company such Person does not beneficially own 15% or more
of the shares of Common Stock of the Company then outstanding. Notwithstanding
the foregoing, if the Board determines in good faith that a Person who would
otherwise be an “Acquiring Person,” as defined herein, has become such
inadvertently (including, without limitation, because (A) such Person was
unaware that it beneficially owned a percentage of the shares of Common Stock that
would otherwise cause such Person to be an “Acquiring Person,” as defined
herein, or (B) such Person was aware of the extent of the shares of Common
Stock it beneficially owned but had no actual knowledge of the consequences of
such beneficial ownership under this Rights Agreement) and without any
intention of changing or influencing control of the Company, and if such Person
divested or divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an “Acquiring Person,” as
defined herein, then such Person shall not be deemed to be or to have become an
“Acquiring Person” for any purposes of this Rights Agreement.


                    “Adjustment
Fraction” shall have the meaning set forth in Section 11(a)(i) hereof.


                    “Affiliate”
and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act, as in effect on the date of this Rights Agreement.


                    A
Person shall be deemed the “Beneficial Owner” of and shall be deemed to
“Beneficially Own” any securities:


	
  

 	
  

 
	
  

 	
           (i)
 which such Person or any of such Person’s Affiliates or Associates
 beneficially owns, directly or indirectly, for purposes of Section 13(d) of
 the Exchange Act and Rule 13d-3 thereunder (or any comparable or successor
 law or regulation);

 
	
  

 	
  

 
	
  

 	
           (ii)
 which such Person or any of such Person’s Affiliates or Associates has (A)
 the right to acquire (whether such right is exercisable immediately or only
 after the passage of time) pursuant to any agreement, arrangement or
 understanding (other than customary agreements with and between underwriters
 and selling group members with respect to a bona fide public offering of
 securities), or upon the exercise of conversion rights, exchange rights,
 rights (other than the Rights), warrants or options, or otherwise; provided,
 however, that a Person shall not be deemed pursuant to this subsection
 (ii)(A) to be the beneficial owner of, or to beneficially own, (1) securities
 tendered pursuant to a tender or exchange offer made by or on behalf of such
 Person or any of such Person’s Affiliates or Associates until such tendered
 securities are accepted for purchase or exchange, or (2) securities which a
 Person or any of such Person’s Affiliates or Associates may be deemed to have
 the right to acquire pursuant to any merger or other acquisition agreement
 between the Company and such Person (or one or more of its Affiliates or
 Associates) if such agreement has been approved by the Board prior to there
 being an Acquiring Person; or (B) the right to vote pursuant to any
 agreement, arrangement or understanding; provided, however,
 that a Person shall not be deemed the beneficial owner of, or to beneficially
 own, any security under this subsection (ii)(B) if the agreement, arrangement
 or understanding to vote such security (1) arises solely from 

 


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 a revocable
 proxy or consent given to such Person in response to a public proxy or
 consent solicitation made pursuant to, and in accordance with, the applicable
 rules and regulations of the Exchange Act and (2) is not also then reportable
 on Schedule 13D under the Exchange Act (or any comparable or successor
 report); or

 
	
  

 	
  

 
	
  

 	
           (iii)
 which are beneficially owned, directly or indirectly, by any other Person (or
 any Affiliate or Associate thereof) with which such Person or any of such
 Person’s Affiliates or Associates has any agreement, arrangement or
 understanding, whether or not in writing (other than customary agreements
 with and between underwriters and selling group members with respect to a
 bona fide public offering of securities) for the purpose of acquiring,
 holding, voting (except to the extent contemplated by the proviso to subsection
 (ii)(B) above) or disposing of any securities of the Company; provided,
 however, that in no case shall an officer or director of the Company
 be deemed (x) the beneficial owner of any securities beneficially owned by
 another officer or director of the Company solely by reason of actions
 undertaken by such persons in their capacity as officers or directors of the
 Company or (y) the beneficial owner of securities held of record by the
 trustee of any employee benefit plan of the Company or any Subsidiary of the
 Company for the benefit of any employee of the Company or any Subsidiary of
 the Company, other than the officer or director, by reason of any influence
 that such officer or director may have over the voting of the securities held
 in the plan.

 



                    “Board”
means the Board of Directors of the Company from time to time.


                    “Business
Day” shall mean any day other than a Saturday, Sunday or a day on which
banking institutions in New York are authorized or obligated by law or executive
order to close.


                    “Close
of Business” on any given date shall mean 5:00 p.m., New York time, on such
date; provided, however, that if such date is not a Business Day
it shall mean 5:00 p.m., New York time, on the next succeeding Business Day.


                    “Common
Stock” shall have the meaning set forth in the preamble. Common Stock when
used with reference to any Person other than the Company shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.


                    “Common
Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii)
hereof.


                    “Company”
shall have the meaning set forth in the preamble, subject to the terms of
Section 13(a)(iii)(c) hereof.


                    “Current
Per Share Market Price” of any security (a “Security” for purposes
of this definition), for all computations other than those made pursuant to
Section 11(a)(iii) hereof, shall mean the average of the daily closing prices
per share of such Security for the 30 consecutive Trading Days immediately
prior to such date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the Current Per Share Market Price of any Security on


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any date shall
be deemed to be the average of the daily closing prices per share of such
Security for the 10 consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the Current Per Share Market Price of
the Security is determined during a period following the announcement by the
issuer of such Security of (i) a dividend or distribution on such Security payable
in shares of such Security or securities convertible into such shares or (ii)
any subdivision, combination or reclassification of such Security, and prior to
the expiration of the applicable 30 Trading Day period or 10 Trading Day
period, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the Current Per Share Market Price shall be appropriately
adjusted by the Board to reflect the current market price per share equivalent
of such Security. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not reported, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date
the Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market-maker making a
market in the Security selected by the Board. If on any such date no
market-maker is making a market in the Security, the fair value of such shares
on such date as determined in good faith by the Board shall be used. If the
Preferred Shares are not publicly traded, the Current Per Share Market Price of
the Preferred Shares shall be conclusively deemed to be the Current Per Share
Market Price of the shares of Common Stock as determined pursuant to this
definition, as appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof, multiplied by
1,000. If the Security is not publicly held or so listed or traded, Current Per
Share Market Price shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.


                    “Current
Value” shall have the meaning set forth in Section 11(a)(iii) hereof.


                    “Distribution
Date” shall mean the earlier of (i) the Close of Business on the tenth day
after the Shares Acquisition Date (or, if the tenth day after the Shares
Acquisition Date occurs before the Record Date, the Close of Business on the
Record Date) or (ii) the Close of Business on the tenth Business Day (or such
later date as may be determined by action of the Board) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan or an Exempted
Person) is first published or sent or given within the meaning of Rule 14d-2(a)
of the General Rules and Regulations under the Exchange Act, if, assuming the successful
consummation thereof, such Person would be an Acquiring Person.


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                    “Equivalent
Shares” shall mean Preferred Shares and any other class or series of
capital stock of the Company which is entitled to the same rights, privileges and
preferences as the Preferred Shares.


                    “Exchange
Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.


                    “Exchange
Ratio” shall have the meaning set forth in Section 24(a) hereof.


                    “Exempted
Person” shall mean each member of the Konstantakopoulos Group and any
Underwriter.


                    “Exercise
Price” shall have the meaning set forth in Section 4(a) hereof.


                    “Expiration
Date” shall mean the earliest to occur of: (i) the Close of Business on the
Final Expiration Date, (ii) the Redemption Date, or (iii) the time at which the
Board orders the exchange of the Rights as provided in Section 24 hereof.


                    “Final
Expiration Date” shall mean December 31, 2030.


                    “Konstantakopoulos
Group” means:


	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Vasileios Konstantakopoulos, Konstantinos Konstantakopoulos, Christos
 Konstantakopoulos or Achillefs Konstantakopoulos; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any spouse
 or lineal descendant of any of the individuals set out in paragraph (a)
 above;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any trust or
 entity established for the benefit of any such individual or combination of
 such individuals as set out in paragraphs (a) and (b) above;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 any
 Affiliate or Associate of any such individual or combination of such
 individuals as set out in paragraphs (a) and (b) above; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 any other
 entity wholly-owned or controlled by any such individual, trust, entity,
 Affiliate or Associate or combination thereof as set out in paragraphs (a) to
 (c) above.

 



                    “Nasdaq”
shall mean The Nasdaq Stock Market.


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


                    “Post-event
Transferee” shall have the meaning set forth in Section 7(e) hereof.


                    “Preferred
Shares” shall mean shares of Series A Participating Preferred Stock,
U.S. $0.0001 par value, of the Company.


                    “Pre-event
Transferee” shall have the meaning set forth in Section 7(e) hereof.


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                    “Principal
Party” shall have the meaning set forth in Section 13(b) hereof.


                    “Record
Date” shall have the meaning set forth in the recitals at the beginning of
this Rights Agreement.


                    “Redemption
Date” shall have the meaning set forth in Section 23(a) hereof.


                    
“Redemption Price” shall have the meaning set forth in Section 23(a)
hereof.


                    
“Rights Agent” shall mean American Stock Transfer & Trust Company,
LLC, or its successor or replacement as provided in Sections 19 and 21 hereof.


                    
“Rights Certificate” shall mean a certificate substantially in the form
attached hereto as Exhibit B.


                    
“Section 11(a)(ii) Trigger Date” shall have the meaning set forth in
Section 11(a)(iii) hereof.


                    
“Section 13 Event” shall mean any event described in Sections 13(a)(i),
13(a)(ii) or 13(a)(iii) hereof.


                    
“Securities Act” shall mean the U.S. Securities Act of 1933, as amended.


                    
“Shares 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 Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such; provided
that, if such Person is determined not to have become an Acquiring Person as
defined herein, then no Shares Acquisition Date shall be deemed to have
occurred.


                    
“Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.


                    
“Subsidiary” of any Person shall mean any corporation or other entity of
which an amount of voting securities sufficient to elect a majority of the directors
or Persons having similar authority of such corporation or other entity is
beneficially owned, directly or indirectly, by such Person, or any corporation
or other entity otherwise controlled by such Person.


                    
“Substitution Period” shall have the meaning set forth in Section
11(a)(iii) hereof.


                    
“Summary of Rights” shall mean a summary of this Rights Agreement
substantially in the form attached hereto as Exhibit C.


                    
“Total Exercise Price” shall have the meaning set forth in Section 4(a)
hereof.


                    
“Trading Day” shall mean a day on which the principal national
securities exchange on which a referenced security is listed or admitted to
trading is open for the transaction of business or, if a referenced security is
not listed or admitted to trading on any national securities exchange, a
Business Day.


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                    A
“Triggering Event” shall be deemed to have occurred upon any Person,
becoming an Acquiring Person.


                    
“Underwriter” shall mean any financial institution while acting as an
underwriter in a public offering of the Common Stock of the Company.


                    Section
2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the Distribution Date also be
the holders of the shares of Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.


                    Section
3. Issuance of Rights Certificates.


                    
(a) Until the Distribution Date, (i) the Rights will be evidenced (subject to
the provisions of Sections 3(b) and 3(c) hereof) by the certificates for shares
of Common Stock registered in the names of the holders thereof (which
certificates shall also be deemed to be Rights Certificates) and not by
separate Rights Certificates and (ii) the right to receive Rights Certificates
will be transferable only in connection with the transfer of shares of Common
Stock. Until the earlier of the Distribution Date or the Expiration Date, the surrender
for transfer of certificates for shares of Common Stock shall also constitute
the surrender for transfer of the Rights associated with the shares of Common
Stock represented thereby. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, postage-prepaid mail, to each record holder of
shares of Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Rights
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 hereof, then at the time of distribution of the Rights Certificates,
the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates and may be transferred by the transfer of
the Rights Certificates as permitted hereby, separately and apart from any
transfer of shares of Common Stock, and the holders of such Rights Certificates
as listed in the records of the Company or any transfer agent or registrar for
the Rights shall be the record holders thereof.


                    
(b) On the Record Date or as soon as practicable thereafter, the Company will
send a copy of the Summary of Rights by first-class, postage-prepaid mail, to
each record holder of shares of Common Stock as of the Close of Business on the
Record Date that requests a Summary of the Rights, at the address of such
holder shown on the records of the Company’s transfer agent and registrar. With
respect to certificates for shares of Common Stock outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with the
Summary of Rights. Until the Distribution Date (or, if earlier, the Expiration
Date), the surrender for transfer of any 


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certificate
for shares of Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the shares of Common Stock represented thereby.


                    
(c) Unless the Board by resolution adopted at or before the time of the
issuance of any shares of Common Stock specifies to the contrary, Rights shall
be issued in respect of all shares of Common Stock that are issued after the
Record Date but prior to the earlier of the Distribution Date or the Expiration
Date or, in certain circumstances provided in Section 22 hereof, after the
Distribution Date. Certificates representing such shares of Common Stock shall
also be deemed to be certificates for Rights, and shall bear the following
legend:


	
  

 	
  

 
	
  

 	
 THIS CERTIFICATE ALSO EVIDENCES AND
 ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A STOCKHOLDERS
 RIGHTS AGREEMENT BETWEEN COSTAMARE INC. AND AMERICAN STOCK TRANSFER &
 TRUST COMPANY, LLC, AS THE RIGHTS AGENT (THE “RIGHTS AGREEMENT”), THE TERMS
 OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS
 ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF COSTAMARE INC. UNDER CERTAIN CIRCUMSTANCES,
 AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY
 SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE.
 COSTAMARE INC. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE
 RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.
 UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED
 TO, OR HELD BY, ANY PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF WHO IS, WAS
 OR BECOMES AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
 AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
 SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.

 



With respect
to such certificates containing the foregoing legend, until the earlier of (i)
the Distribution Date or (ii) the Expiration Date, the Rights associated with
the shares of Common Stock represented by such certificates shall be evidenced
by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with
the shares of Common Stock represented thereby.


                    
(d) In the event that the Company purchases or acquires any shares of Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such shares of Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock which are no longer outstanding.


                    Section
4. Form of Rights Certificates.


                    
(a) The Rights Certificates (and the forms of election to purchase shares of
Common Stock and of assignment to be printed on the reverse thereof) shall be
substantially in 


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the form of Exhibit
B 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 Rights
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange or a national market system, on which the Rights may from time
to time be listed or included, or to conform to usage. Subject to the provisions
of Section 11 hereof and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date (or in the case of Rights
issued with respect to shares of Common Stock issued by the Company after the
Record Date, as of the date of issuance of such shares of Common Stock) and on
their face shall entitle the holders thereof to purchase such number of
one-thousandths of a Preferred Share as shall be set forth therein at the price
set forth therein (such exercise price per one one-thousandth of a Preferred
Share being hereinafter referred to as the “Exercise Price” and the aggregate
Exercise Price of all Preferred Shares issuable upon exercise of one Right
being hereinafter referred to as the “Total Exercise Price”), but the
number and type of securities purchasable upon the exercise of each Right and
the Exercise Price shall be subject to adjustment as provided herein.


                    
(b) Any Rights Certificate issued pursuant to Section 3(a) hereof or Section 22
hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
hereof or Section 11 hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, shall contain (to
the extent feasible) the following legend:


	
  

 	
  

 
	
  

 	
 THE RIGHTS REPRESENTED BY THIS RIGHTS
 CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
 ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
 TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
 CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
 CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.

 



                    Section
5. Countersignature and Registration.


                    
(a) The Rights Certificates shall be executed on behalf of the Company by its
Chief Executive Officer, its Chief Operating Officer or its Chief Financial
Officer, either manually or by facsimile signature, and by its Secretary or an
Assistant Secretary (if any), either manually or by facsimile signature, and
shall have affixed thereto the Company’s seal (if any) or 


9





a facsimile
thereof. The Rights 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 Rights Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Company with the same force and effect as though the
person who signed such Rights Certificates on behalf of the Company had not
ceased to be such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the execution of this
Rights 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 office designated for such purposes, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.


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


                    
(a) Subject to the provisions of Sections 7(e), 14 and 24 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 Rights Certificate or Rights
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of one-thousandths of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
as the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged at the office of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have 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. Thereupon the
Rights Agent shall, subject to Sections 7(e), 14 and 24 hereof, countersign and
deliver to the person entitled thereto a Rights Certificate or Rights
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
Rights Certificates.


                    
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company’s request, reimbursement
to the Company and the Rights Agent of all reasonable


10






expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will make and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.


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


                    (a)
Subject to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date and prior to the Close of Business on the Expiration Date by
surrender of the Rights Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the
Exercise Price for each one-thousandth of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) as
to which the Rights are exercised.


                    (b)
The Exercise Price for each one-thousandth of a Preferred Share issuable
pursuant to the exercise of a Right shall initially be twenty-five U.S.
Dollars (U.S. $25.00), shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with Section 7(c) hereof.


                    (c)
Upon receipt of a Rights Certificate representing exercisable Rights, with the
form of election to purchase duly executed, accompanied by payment of the
Exercise Price for the number of one-thousandths of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the
case may be) to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Rights Certificate in accordance with
Section 9(e) hereof, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent for the
Preferred Shares) a certificate or certificates for the number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests or (B) if the Company shall have elected to deposit the total
number of one-thousandths of a Preferred Share (or, following a Triggering
Event, other securities, cash or other assets as the case may be) issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) as are to be purchased (in
which case certificates for the Preferred Shares (or, following a Triggering
Event, other securities, cash or other assets as the case may be) represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder and (iv) when appropriate, after receipt thereof, deliver such
cash to or upon the order of the registered holder of such Rights Certificate.
The payment of the Exercise Price (as such amount may be reduced 


11





(including to
zero) pursuant to Section 11(a)(iii) hereof) and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, may be made in cash or by
certified bank check, cashier’s check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue securities of the
Company other than Preferred Shares, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, 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)
In case the registered holder of any Rights Certificate shall exercise less
than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Rights Certificate or to his or
her duly authorized assigns, subject to the provisions of Section 14 hereof.


                    (e)
Notwithstanding anything in this Rights Agreement to the contrary, from and
after the first occurrence of a Triggering Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such (a
“Post-Event Transferee”), (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e) (a
“Pre-Event Transferee”) or (iv) any subsequent transferee receiving
transferred Rights from a Post-Event Transferee or a Pre-Event Transferee,
either directly or through one or more intermediate transferees, shall become
null and void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of this Rights Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or to any other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or any of such
Acquiring Person’s Affiliates, Associates or transferees hereunder.


                    (f)
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, in addition to
having complied with the requirements of Section 7(a), have (i) completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Rights 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.


12





                    Section
8. Cancellation and Destruction of Rights Certificates. All Rights
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 Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.


                    Section
9. Reservation and Availability of Preferred Shares.


                    (a)
The Company covenants and agrees that it will use its best efforts to cause to
be reserved and kept available out of its authorized and unissued Preferred
Shares not reserved for another purpose (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of Common Stock
and/or other securities), the number of Preferred Shares (and, following the
occurrence of the Triggering Event, Common Stock and/or other securities) that
will be sufficient to permit the exercise in full of all outstanding Rights.


                    (b)
If the Company shall hereafter list any of its Preferred Shares on a national
securities exchange, then so long as the Preferred Shares (and, following the
occurrence of a Triggering Event, shares of Common Stock and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that
it is reasonably likely that the Rights will be exercised), all shares reserved
for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.


                    (c)
The Company shall use its best efforts to (i) file, as soon as practicable
following the earliest date after the first occurrence of a Triggering Event in
which the consideration to be delivered by the Company upon exercise of the
Rights is described in Section 11(a)(ii) hereof or Section 11(a)(iii) hereof,
or as soon as is required by law following the Distribution Date, as the case
may be, a registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the date of expiration of the
Rights. The Company may temporarily suspend, for a period not to exceed 90 days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement and notify the Rights
Agent that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement and notification to the Rights Agent at such time
as the suspension is no longer in effect. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or “blue sky” laws of the various states in connection with the
exercisability of the 


13





Rights.
Notwithstanding any provision of this Rights Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction, unless the requisite
qualification in such jurisdiction shall have been obtained, or an exemption
therefrom shall be available, and until a registration statement has been
declared effective.


                    (d)
The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares (or other securities of the
Company) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such securities (subject to payment of the Exercise Price),
be duly and validly authorized and issued and fully paid and nonassessable
shares.


                    (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 which may be payable
in respect of the original issuance or delivery of the Rights Certificates or
of any Preferred Shares (or other securities of the Company) upon the exercise
of Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Rights
Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares (or other
securities of the Company) in a name other than that of, the registered holder
of the Rights Certificate evidencing Rights surrendered for exercise or to
issue or to deliver any certificates or depositary receipts for Preferred
Shares (or other securities of the Company) upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by the holder of
such Rights 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. Record Date. Each Person in whose name any certificate for a number
of one-thousandths of a Preferred Share (or other securities of the Company) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of Preferred Shares (or other securities of the
Company) represented thereon, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Total Exercise Price with respect to which the Rights have
been exercised (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
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 transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a holder
of Preferred Shares (or other securities of the Company) for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.


                    Section
11. Adjustment of Exercise Price, Number of Shares or Number of Rights.
The Exercise Price, the number and kind of shares or other property covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.


14






                    (a)
(i) Notwithstanding anything in this Rights Agreement to the contrary, in the
event the Company shall at any time after the date of this Rights Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares (by reverse stock split or otherwise) into a smaller number of
Preferred Shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, in each such event, except as
otherwise provided in this Section 11 and Section 7(e) hereof: (1) the Exercise
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification shall be
adjusted so that the Exercise Price thereafter shall equal the result obtained
by dividing the Exercise Price in effect immediately prior to such time by a
fraction (the “Adjustment Fraction”), the numerator of which shall be
the total number of Preferred Shares (or shares of capital stock issued in such
reclassification of the Preferred Shares) outstanding immediately following
such time and the denominator of which shall be the total number of Preferred
Shares outstanding immediately prior to such time; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of such Right; and (2) the number of
one-thousandths of a Preferred Share (or share of such other capital stock)
issuable upon the exercise of each Right shall equal the number of
one-thousandths of a Preferred Share (or share of such other capital stock) as
was issuable upon exercise of a Right immediately prior to the occurrence of
the event described in clauses (A)-(D) of this Section 11(a)(i), multiplied by
the Adjustment Fraction; provided, however, that, no such adjustment
shall be made pursuant to this Section 11(a)(i) to the extent that there shall
have simultaneously occurred an event described in clause (A), (B), (C) or (D)
of Section 11(n) hereof with a proportionate adjustment being made thereunder.
Each share of Common Stock that shall become outstanding after an adjustment
has been made pursuant to this Section 11(a)(i) shall have associated with it
the number of Rights, exercisable at the Exercise Price and for the number of
one-thousandths of a Preferred Share (or shares of such other capital stock) as
one share of Common Stock has associated with it immediately following the
adjustment made pursuant to this Section 11(a)(i).


          (ii)
Subject to Section 24 of this Rights Agreement, in the event a Triggering Event
shall have occurred, then promptly following such Triggering Event each holder
of a Right, except as provided in Section 7(e) hereof, shall thereafter have
the right to receive for each Right, upon exercise thereof in accordance with
the terms of this Rights Agreement and payment of the Exercise Price in effect
immediately prior to the occurrence of the Triggering Event, in lieu of a
number of one-thousandths of a Preferred Share, such number of shares of Common
Stock of the Company as shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to the occurrence of the Triggering
Event by the number of one-thousandths of a Preferred Share for which a Right
was exercisable (or would have been exercisable if the Distribution Date had
occurred) immediately prior to the first occurrence of a Triggering Event, and
dividing that product by 50% of the Current Per Share Market Price for shares
of Common Stock on the date of occurrence of the Triggering Event; provided,
however, that the Exercise


15








	
  

 	
  

 
	
  

 	
 Price and
 the number of shares of Common Stock of the Company so receivable upon
 exercise of a Right shall be subject to further adjustment as appropriate in
 accordance with Section 11(e) hereof to reflect any events occurring in
 respect of the shares of Common Stock of the Company after the occurrence of
 the Triggering Event.

 
	
  

 	
  

 
	
  

 	
           (iii)
 In lieu of issuing shares of Common Stock in accordance with Section
 11(a)(ii) hereof, the Company may, if the Board determines that such action
 is necessary or appropriate and not contrary to the interest of holders of
 Rights and, in the event that the number of shares of Common Stock which 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 are
 not sufficient to permit the exercise in full of the Rights, or if any
 necessary regulatory approval for such issuance has not been obtained by the
 Company, the Company shall: (A) determine the excess of (1) the value of the
 shares of Common Stock issuable upon the exercise of a Right (the “Current
 Value”) over (2) the Exercise Price (such excess, the “Spread”)
 and (B) with respect to each Right, make adequate provision to substitute for
 such shares of Common Stock, upon exercise of the Rights, (1) cash, (2) a
 reduction in the Exercise Price, (3) other equity securities of the Company
 (including, without limitation, shares or units of shares of any series of
 preferred stock which the Board has deemed to have the same value as Common
 Stock (such shares or units of shares of preferred stock are herein called “Common
 Stock Equivalents”)), except to the extent that the Company has not
 obtained any necessary stockholder or regulatory approval for such issuance,
 (4) debt securities of the Company, except to the extent that the Company has
 not obtained any necessary stockholder or regulatory approval for such
 issuance, (5) other assets or (6) any combination of the foregoing, having an
 aggregate value equal to the Current Value, where such aggregate value has
 been determined by the Board based upon the advice of a nationally recognized
 investment banking firm selected by the Board; provided, however,
 if the Company shall not have made adequate provision to deliver value
 pursuant to clause (B) above within 30 days following the later of (x) the
 first occurrence of a Triggering Event and (y) the date on which the
 Company’s right of redemption pursuant to Section 23(a) hereof expires (the
 later of (x) and (y) being referred to herein as the “Section 11(a)(ii)
 Trigger Date”), then the Company shall be obligated to deliver, upon the
 surrender for exercise of a Right and without requiring payment of the
 Exercise Price, Common Stock (to the extent available), except to the extent
 that the Company has not obtained any necessary stockholder or regulatory
 approval for such issuance, and then, if necessary, cash, which shares and/or
 cash have an aggregate value equal to the Spread. If the Board shall
 determine in good faith that it is likely that sufficient additional Common
 Stock could be authorized for issuance upon exercise in full of the Rights or
 that any necessary regulatory approval for such issuance will be obtained,
 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 stockholder approval for the authorization of such
 additional shares or take action to obtain such regulatory approval (such
 period, as it may be extended, the “Substitution Period”). To the
 extent that the Company determines that some action need be taken pursuant to
 the first and/or second sentences of this Section 11(a)(iii), the Company (x)
 shall provide, subject to Section 7(e) hereof, 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 

 


16









	
  

 	
  

 
	
  

 	
 order to
 seek any authorization of additional shares, to take any action to obtain any
 required regulatory approval 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 Per Share Market Price of
 the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any
 Common Stock Equivalent shall be deemed to have the same value as the Common
 Stock on such date.

 



                    (b)
In case the Company shall, at any time after the date of this Rights Agreement,
fix a record date for the issuance of rights, options or warrants to all
holders of Preferred Shares entitling such holders (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Preferred Shares or Equivalent Shares or securities convertible into Preferred
Shares or Equivalent Shares at a price per share (or having a conversion price
per share, if a security convertible into Preferred Shares or Equivalent
Shares) less than the then Current Per Share Market Price of the Preferred
Shares or Equivalent Shares on such record date, then, in each such case, the
Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
and Equivalent Shares (if any) outstanding on such record date, plus the number
of Preferred Shares or Equivalent Shares, as the case may be, which the
aggregate offering price of the total number of Preferred Shares or Equivalent
Shares, as the case may be, to be offered or issued (and/or the aggregate
initial conversion price of the convertible securities to be offered or issued)
would purchase at such current market price, and the denominator of which shall
be the number of Preferred Shares and Equivalent Shares (if any) outstanding on
such record date, plus the number of additional Preferred Shares or Equivalent
Shares, as the case may be, to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as determined
in good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Preferred Shares and Equivalent Shares 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 or warrants are not so issued, the Exercise Price shall be adjusted to
be the Exercise Price which would then be in effect if such record date had not
been fixed.


                    (c)
In case the Company shall, at any time after the date of this Rights Agreement,
fix a record date for the making of a distribution to all holders of the
Preferred Shares or of any class or series of Equivalent Shares (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend, 


17





if any, or a
dividend payable in Preferred Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b) hereof), then, in each
such case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current Per
Share Market Price of a Preferred Share or an Equivalent Share on such record
date, less the fair market value per Preferred Share or Equivalent Share (as
determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a Preferred Share or Equivalent Share, as the
case may be, and the denominator of which shall be such Current Per Share
Market Price of a Preferred Share or Equivalent Share on such record date; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. 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 Exercise Price
shall be adjusted to be the Exercise Price which would have been in effect if
such record date had not been fixed.


                    (d)
Notwithstanding anything to the contrary, no adjustment in the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Exercise Price; provided, however, that any
adjustments which by reason of this Section 11(d) 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 ten-thousandth of a share of Common Stock or other share or one
hundred-thousandth of a Preferred Share, as the case may be. Notwithstanding
the first sentence of this Section 11(d), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) 3 years from the date
of the transaction which requires such adjustment or (ii) the Expiration Date.


                    (e)
If as a result of an adjustment made pursuant to Sections 11(a) or 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Preferred Shares, thereafter the
number of such other shares so receivable upon exercise of any Right and, if
required, the Exercise Price thereof, shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Sections 11(a),
11(b), 11(c), 11(d), 11(g), 11(h), 11(i), 11(j), 11(k) and 11(l) hereof, and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Shares shall apply on like terms to any such other shares.


                    (f)
All Rights originally issued by the Company subsequent to any adjustment made
to the Exercise Price hereunder shall evidence the right to purchase, at the
adjusted Exercise Price, the number of one-thousandths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.


                    (g)
Unless the Company shall have exercised its election as provided in Section
11(h) hereof, upon each adjustment of the Exercise Price as a result of the
calculations made in Sections 11(b) and 11(c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Exercise Price, that 


18





number of
Preferred Shares (calculated to the nearest one hundred-thousandth of a share)
obtained by (i) multiplying (x) the number of Preferred Shares covered by a
Right immediately prior to this adjustment, by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and (ii) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.


                    (h)
The Company may elect on or after the date of any adjustment of the Exercise
Price as a result of the calculations made in Section 11(b) or 11(c) hereof to
adjust the number of Rights, in substitution for any adjustment in the number
of Preferred Shares purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one-thousandths of a Preferred Share for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one hundred-thousandth) obtained by
dividing the Exercise Price in effect immediately prior to adjustment of the
Exercise Price by the Exercise Price in effect immediately after adjustment of
the Exercise 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 Exercise Price is adjusted or any
day thereafter, but, if the Rights Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(h), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights 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 Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights 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 Exercise Price) and shall be registered in
the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.


                    (i)
Irrespective of any adjustment or change in the Exercise Price or the number of
Preferred Shares issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Exercise Price per one one-thousandth of a Preferred Share and the number of
one-thousandths of a Preferred Share which were expressed in the initial Rights
Certificates issued hereunder.


                    (j)
Before taking any action that would cause an adjustment reducing the Exercise
Price below the par or stated value, if any, of the number of one-thousandths
of a Preferred Share issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue as fully paid
and nonassessable shares such number of one-thousandths of a Preferred Share at
such adjusted Exercise Price.


19





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


                    (l)
Notwithstanding anything in this Section 11 to the contrary, prior to the
Distribution Date, the Company shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any (i) consolidation or subdivision of the Preferred
Shares or Common Stock, (ii) issuance wholly for cash of any Preferred Shares
or Common Stock at less than the current market price, (iii) issuance wholly
for cash of Preferred Shares or Common Stock or securities which by their terms
are convertible into or exchangeable for Preferred or Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Shares or
Common Stock shall not be taxable to such stockholders.


                    (m)
The Company covenants and agrees that, after the Distribution Date, it will
not, except as permitted by Sections 23, 24 or 27 hereof, take (or permit to be
taken) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.


                    (n)
In the event the Company shall at any time after the date of this Rights
Agreement (A) declare a dividend on the Common Stock payable in shares of
Common Stock, (B) subdivide the outstanding shares of Common Stock, (C) combine
the outstanding Common Stock (by reverse stock split or otherwise) into a
smaller number of shares of Common Stock, or (D) issue any shares of its
capital stock in a reclassification of the shares of Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), then, in each such
event, except as otherwise provided in Section 11(a) hereof and Section 7(e)
hereof: (1) each share of Common Stock (or shares of capital stock issued in
such reclassification of the Common Stock) outstanding immediately following
such time shall have associated with it the number of Rights as were associated
with one share of Common Stock immediately prior to the occurrence of the event
described in clauses (A)-(D) above; (2) the Exercise Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that the
Exercise Price thereafter shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to such time by a fraction, the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the event described in clauses (A)-(D) above,
and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately after such event; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of
the Company issuable


20






upon exercise
of such Right; and (3) the number of one-thousandths of a Preferred Share (or
shares of such other capital stock) issuable upon the exercise of each Right
outstanding after such event shall equal the number of one-thousandths of a
Preferred Share (or shares of such other capital stock) as were issuable with
respect to one Right immediately prior to such event. Each share of Common
Stock that shall become outstanding after an adjustment has been made pursuant
to this Section 11(n) shall have associated with it the number of Rights,
exercisable at the Exercise Price and for the number of one-thousandths of a
Preferred Share (or shares of such other capital stock) as one share of Common
Stock has associated with it immediately following the adjustment made pursuant
to this Section 11(n). If an event occurs which would require an adjustment
under both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(n) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.


                    Section
12. Certificate of Adjusted Exercise Price or Number of Shares. Whenever
an adjustment is made as provided in Sections 11 and 13 hereof, the Company
shall promptly (a) prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Preferred Shares a copy of
such certificate and (c) if a Distribution Date has occurred, mail a brief
summary thereof to each holder of a Rights Certificate in accordance with
Section 26 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to make such certification or give such notice shall not affect the
validity of such adjustment or the force or effect of the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment contained therein and shall not be deemed to
have knowledge of such adjustment unless and until it shall have received such
certificate.


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


                   (a)
In the event that, following a Triggering Event, directly or indirectly:


	
  

 	
  

 
	
  

 	
          (i)
 the Company shall consolidate with, or merge with and into, any other Person
 (other than a wholly owned Subsidiary of the Company in a transaction the
 principal purpose of which is to change the state of incorporation of the
 Company and which complies with Section 11(m) hereof);

 
	
  

 	
  

 
	
  

 	
          (ii)
 any Person shall consolidate with the Company, or merge with and into the
 Company and the Company shall be the continuing or surviving corporation of
 such consolidation or merger and, in connection with such merger, all or part
 of the shares of Common Stock shall be changed into or exchanged for stock or
 other securities of any other person (or the Company); or

 
	
  

 	
  

 
	
  

 	
          (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 earning power aggregating 50% or more of the assets or earning
 power of the Company and its Subsidiaries (taken as a whole) to any other
 Person or Persons (other than the Company or one or more of its wholly owned
 Subsidiaries in one or more transactions, each of which individually (and
 together) complies with Section 11(m) hereof),

 


21









	
  

 	
  

 
	
  

 	
 then,
 concurrently with and in each such case:

 
	
  

 	
  

 
	
  

 	
           (A)
 each holder of a Right (except as provided in Section 7(e) hereof) shall
 thereafter have the right to receive, upon the exercise thereof, at a price
 equal to the Total Exercise Price applicable immediately prior to the
 occurrence of the Section 13 Event in accordance with the terms of this
 Rights Agreement, such number of validly authorized and issued, fully
 paid, nonassessable and freely tradeable shares of Common Stock of the
 Principal Party (as hereinafter defined), free of any liens, encumbrances,
 rights of first refusal or other adverse claims, as shall be equal to the
 result obtained by dividing such Total Exercise Price by 50% of the Current
 Per Share Market Price of the shares of Common Stock of such Principal Party
 on the date of consummation of such Section 13 Event; provided, however,
 that the Exercise Price 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(e) hereof;

 
	
  

 	
  

 
	
  

 	
           (B)
 such Principal Party shall thereafter be liable for, and shall assume, by
 virtue of such Section 13 Event, all the obligations and duties of the
 Company pursuant to this Rights Agreement;

 
	
  

 	
  

 
	
  

 	
           (C)
 the term “Company” shall thereafter be deemed to refer to such Principal
 Party, it being specifically intended that the provisions of Section 11
 hereof shall apply only to such Principal Party following the first
 occurrence of a Section 13 Event;

 
	
  

 	
  

 
	
  

 	
           (D)
 such Principal Party shall take such steps (including, but not limited to,
 the reservation of a sufficient number of its Common Stock) in connection
 with the consummation of any such transaction as may be necessary to ensure
 that the provisions hereof shall thereafter be applicable, as nearly as
 reasonably may be, in relation to its shares of Common Stock thereafter
 deliverable upon the exercise of the Rights; and

 
	
  

 	
  

 
	
  

 	
           (E)
 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 Total Exercise 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 shares of Common Stock of the Principal
 Party receivable upon the exercise of such 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 the Rights in accordance with the terms hereof for
 such cash, shares, rights, warrants and other property.

 
	
  

 	
  

 
	
  

 	
           (F)
 For purposes hereof, the “earning power” of the Company and its Subsidiaries
 shall be determined in good faith by the Board on the basis of the 

 


22









	
  

 	
  

 
	
  

 	
 operating earnings
 of each business operated by the Company and its Subsidiaries during the
 three fiscal years preceding the date of such determination (or, in the case
 of any business not operated by the Company or any Subsidiary during three
 full fiscal years preceding such date, during the period such business was
 operated by the Company or any Subsidiary).

 
	
  

 	
  

 
	
  

 	
 (b) For
 purposes of this Rights Agreement, the term “Principal Party” shall
 mean:

 






	
  

 	
  

 
	
  

 	
           (i)
 in the case of any transaction described in Section 13(a)(i) hereof or
 Section 13(a)(ii) hereof: (A) the Person that is the issuer of the securities
 into which the shares of Common Stock are converted in such merger or
 consolidation, or, if there is more than one such issuer, the issuer the
 shares of Common Stock of which have 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 said merger,
 or, if there is more than one such Person, the Person the shares of Common Stock
 of which have 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 Section 13(a) (iii) 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 more than one Person that is a party to such transaction or transactions
 receives the same portion of the assets or earning power so transferred and
 each such portion would, were it not for the other equal portions, constitute
 the greatest 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 is the issuer of shares of Common
 Stock having the greatest aggregate market value of shares outstanding; provided,
 however, that in any such case described in Section 13(b)(i) hereof or
 Section 13(b)(ii) hereof, if the shares of Common Stock of such Person are
 not at such time or have not been continuously over the preceding 12-month
 period registered under Section 12 of the Exchange Act, then (1) if such
 Person is a direct or indirect Subsidiary of another Person the shares of
 Common Stock of which are and have been so registered, the term “Principal
 Party” shall refer to such other Person, or (2) if such Person is a
 Subsidiary, directly or indirectly, of more than one Person, the Common Stock
 of which are and have been so registered, the term “Principal Party” shall
 refer to whichever of such Persons is the issuer of shares of Common Stock
 having the greatest aggregate market value of shares outstanding, or (3) if
 such Person is owned, directly or indirectly, by a joint venture formed by
 two or more Persons that are not owned, directly or indirectly by the same
 Person, the rules set forth in clauses (1) and (2) 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.

 


23





                    (c)
The Company shall not consummate any Section 13 Event unless the Principal
Party shall have a sufficient number of authorized shares of Common Stock that
have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13 and unless prior thereto the
Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Rights Agreement in
accordance with Sections 13(a) and 13(b) hereof, that all rights of
first refusal or preemptive rights in respect of the issuance of shares of
Common Stock of such Principal Party upon exercise of outstanding Rights have
been waived, that there are no rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights and that such transaction shall
not result in a default by such Principal Party under this Rights Agreement,
and further providing that, as soon as practicable after the date of such
Section 13 Event, such Principal Party will:


	
  

 	
  

 
	
  

 	
           (i)
 prepare and file a registration statement under the Securities Act with respect
 to the Rights and the securities purchasable upon exercise of the Rights on
 an appropriate form, 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 or
 “blue sky” securities laws;

 
	
  

 	
  

 
	
  

 	
           (ii)
 use its best efforts to list (or continue the listing of) the Rights and the
 securities purchasable upon exercise of the Rights on a national securities
 exchange or to meet the eligibility requirements for quotation on Nasdaq and
 list (or continue the listing of) the Rights and the securities purchasable
 upon exercise of the Rights on Nasdaq; and

 
	
  

 	
  

 
	
  

 	
           (iii)
 deliver to holders of the Rights historical financial statements for such
 Principal Party which comply in all respects with the requirements for registration
 on Form F-1 (or any successor form) under the Securities Act.

 



In the event
that at any time after the occurrence of a Triggering Event some or all of the
Rights shall not have been exercised at the time of a transaction described in
this Section 13, the Rights which have not theretofore been exercised
shall thereafter be exercisable in the manner described in Section 13(a)
hereof (without taking into account any prior adjustment required by
Section 11(a)(ii) hereof).


                    (d)
In case the “Principal Party” for purposes of Section 13(b) hereof
has a provision in any of its authorized securities or in its Articles of
Incorporation or by-laws 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 Section 13 hereof),
in connection with, or as a consequence of, the consummation of a
Section 13 Event, shares of Common Stock or Equivalent Shares of such
Principal Party at less than the then Current Per Share Market Price thereof or
securities exercisable for, or convertible into, shares of Common Stock or
Equivalent Shares of such Principal Party at less than such then Current Per
Share Market Price, or (ii) providing for any special payment, tax or
similar provision in connection 


24





with the
issuance of the shares of Common Stock of such Principal Party pursuant to the
provisions of Section 13 hereof, 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
Distribution Date, effect or permit to occur any Section 13 Event, if
(i) at the time or immediately after such Section 13 Event there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Section 13 Event, the stockholders
of the Person who constitutes, or would constitute, the “Principal Party” for
purposes of Section 13(b) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates or
Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.


                    (f)
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.


                    Section
14. Fractional Rights and Fractional Shares.


                    (a)
The Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable, as determined pursuant to this
Rights Agreement.


                    (b)
The Company shall not be required to issue fractions of Preferred Shares (other
than fractions that are integral multiples of one one-thousandth of a Preferred
Share) upon exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions that are integral multiples
of one one-thousandth of a Preferred Share). Interests in fractions of
Preferred Shares in integral multiples of one one-thousandth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary agent
selected by it; provided, that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-thousandth of a Preferred
Share, the Company shall pay to the registered holders of Rights 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 a 


25






Preferred
Share. For purposes of this Section 14(b), the current market value of a
Preferred Share shall be one thousand times the closing price of a share of
Common Stock (as determined pursuant to the terms hereof) for the Trading Day
immediately prior to the date of such exercise.


                    (c)
The Company shall not be required to issue fractions of shares of Common Stock
or to distribute certificates which evidence fractional shares of Common Stock
upon the exercise or exchange of Rights. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of Rights
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 a share of
Common Stock. For purposes of this Section 14(c), the current market value
of a share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the terms hereof) for the Trading Day
immediately prior to the date of such exercise.


                    (d)
The holder of a Right by the acceptance of the Right expressly waives his or
her right to receive any fractional Rights or any fractional shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share) upon exercise of a Right.


                    Section
15. Rights of Action. All rights of action in respect of this Rights
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the shares of Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the shares of Common
Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the shares of Common
Stock), may, in his or her own behalf and for his or her own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his or her right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Rights Agreement and will be entitled to
specific performance of the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of any Person subject to
this Rights Agreement.


                    Section
16. Agreement of Rights Holders. Every holder of a Right, by accepting
the same, consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:


	
  

 	
  

 
	
  

 	
           (a)
 prior to the Distribution Date, the Rights will be transferable only in
 connection with the transfer of the shares of Common Stock;

 
	
  

 	
  

 
	
  

 	
           (b)
 after the Distribution Date, the Rights Certificates are transferable only on
 the registry books of the Rights Agent if surrendered at the principal office
 or offices of the Rights Agent designated for such purposes, duly endorsed or
 accompanied by a proper instrument of transfer and with the appropriate forms
 and certificates fully executed; and

 


26









	
  

 	
  

 
	
  

 	
           (c)
 subject to Sections 6(a) and 7(f) hereof, the Company and the
 Rights Agent may deem and treat the person in whose name the Rights
 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 Rights Certificates or the associated Common Stock certificate made by
 anyone other than the Company or the Rights Agent) for all purposes
 whatsoever, and neither the Company nor the Rights Agent shall be affected by
 any notice to the contrary.

 



                    Section
17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose to be the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.


                    Section
18. 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 Rights Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of
this Rights Agreement, including the costs and expenses of defending against
any claim of liability in the premises. In no event will the Rights Agent be
liable for special, indirect, incidental or consequential loss or damage of any
kind whatsoever, even if the Rights Agent has been advised of the possibility
of such loss or damage.


                    (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 Rights Agreement in reliance upon any Rights Certificate
or certificate for the Preferred Shares or shares of Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.


                    Section
19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to 


27





which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Rights
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto; provided, however,
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Rights
Agreement, any of the Rights 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 Rights Certificates shall
not have been countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the predecessor Rights Agent or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Rights Agreement. In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Rights Agreement.


                    Section
20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Rights Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights 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 written 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 by it in good faith and in accordance with such written
advice or opinion.


                    (b)
Whenever in the performance of its duties under this Rights Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Per Share Market Price) be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Rights Agreement in reliance upon such
certificate.


                    (c)
The Rights Agent shall be liable hereunder to the Company and any other Person
only for its own 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 Rights Agreement or in the Rights
Certificates (except its 


28





countersignature
thereof) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.


                    (e)
The Rights Agent shall not be under any responsibility in respect of the
validity of this Rights Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Rights Agreement or in any Rights Certificate; nor
shall it be responsible for any change in the exercisability of the Rights or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 11, 13, 23 or 24 hereof, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt by the Rights Agent of a certificate furnished
pursuant to Section 12 hereof describing such change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Preferred Shares to be issued
pursuant to this Agreement or any Rights Certificate or as to whether any
Preferred Shares will, when issued, be validly authorized and issued, fully
paid and nonassessable.


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


                    (g)
The Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chairman
of the Board, the Chief Executive Officer, the Chief Financial Officer, the
Secretary or any Assistant Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. 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 Rights Agreement and the date on and/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 stockholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though it 


29





were not
Rights Agent under this Rights Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.


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


                    (j)
No provision of this Rights 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 Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment
or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clauses 1 and/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.


                    Section
21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days’ written notice mailed to the Company and to each
transfer agent of the Preferred Shares and the Common Stock by registered or
certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days’ written notice, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Shares and the Common Stock by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after receiving written notice of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his or
her Rights Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state of the United States, in good standing, which is authorized under
such laws to exercise corporate trust or stockholder services 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 U.S.$100 million. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later 


30






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
Preferred Shares and the Common Stock, and mail a written notice thereof to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case
may be.


                    Section
22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment
or change in the Exercise Price and the number or kind or class of shares
or other securities or property purchasable under the Rights Certificates made
in accordance with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement or upon the exercise, conversion or exchange of other securities of
the Company outstanding at the date hereof or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company and (b) may, in
any other case, if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued and this sentence shall be null and void ab
initio if, and to the extent that, such issuance or this sentence would create
a significant risk of or result in material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued or would
create a significant risk of or result in such options’ or employee plans’ or
arrangements’ failing to qualify for otherwise available special tax treatment
and (ii) no such Rights 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 Company may, at its option and with the approval of the Board, at any time
prior to the earlier of (i) the Close of Business on the tenth day
following the Shares Acquisition Date and (ii) the Close of Business on
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of U.S. $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being herein referred to
as the “Redemption Price”) and the Company may, at its option, pay the
Redemption Price in shares of Common Stock (based on the Current Per Share
Market Price thereof at the time of redemption), cash or any other compensation
as the Board may select. Such redemption of the Rights by the Company
may be made effective at such time, on such basis and with such conditions
as the Board in its sole discretion may establish. The date on which the
Board elects to make the redemption effective shall be referred to as the “Redemption
Date”.


                    (b)
Immediately upon the action of the Board ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent, and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right 


31





thereafter of
the holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption; provided, however,
that the failure to give or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after the action of the Board
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and 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 for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates
may redeem, acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the purchase of shares
of Common Stock prior to the Distribution Date.


                    Section
24. Exchange.


                    (a)
Subject to applicable laws, rules and regulations, and subject to
Section 24(c) hereof, the Company may, at its option, by action of
the Board, at any time after the occurrence of a Triggering 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 7(e) hereof) for shares of Common Stock at an exchange ratio
of one share of Common Stock per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the “Exchange
Ratio”). Notwithstanding the foregoing, the Board shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Stock for or pursuant to the terms of
any such plan or an Exempted 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 action of the Board 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 give public
notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.


32





                    (c)
In the event that there shall not be sufficient shares of Common Stock issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with Section 24(a) hereof, the Company shall
either take such action as may be necessary to authorize additional shares
of Common Stock for issuance upon exchange of the Rights or alternatively, at
the option of a majority of the Board, with respect to each Right (i) pay
cash in an amount equal to the Current Value (as hereinafter defined), in lieu
of issuing shares of Common Stock in exchange therefor, or (ii) issue debt
or equity securities or a combination thereof, having a value equal to the Current
Value, in lieu of issuing shares of Common Stock in exchange for each such
Right, where the value of such securities shall be determined by a nationally
recognized investment banking firm selected by majority vote of the Board, or
(iii) deliver any combination of cash, property, shares of Common Stock
and/or other securities having a value equal to the Current Value in exchange
for each Right. For purposes of this Section 24(c) only, the Current
Value shall mean the product of the Current Per Share Market Price of shares of
Common Stock on the date of the occurrence of the event described in Section
24(a) hereof, multiplied by the number of shares of Common Stock for which the
Right otherwise would be exchangeable if there were sufficient shares
available. To the extent that the Company determines that some action need be
taken pursuant to Sections 24(c)(i), 24(c)(ii) or 24(c)(iii) hereof, the
Board may temporarily suspend the exercisability of the Rights for a
period of up to 60 days following the date on which the event described in
Section 24(a) shall have occurred, in order to seek any authorization
of additional shares of Common Stock and/or to decide the appropriate
form of distribution to be made pursuant to the above provision 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.


                    (d)
The Company shall not be required to issue fractions of shares of Common Stock
or to distribute certificates which evidence fractional shares of Common Stock.
In lieu of such fractional shares of Common Stock, there shall be paid to the
registered holders of the Rights 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 (as determined pursuant to the terms hereof).


                    (e)
The Company may, at its option, by majority vote of the Board, at any time
before any Person has become an Acquiring Person, exchange all or part of
the then outstanding Rights for rights of substantially equivalent value, as
determined reasonably and with good faith by the Board, based upon the advice
of one or more nationally recognized investment banking firms.


                    (f)
Immediately upon the action of the Board ordering the exchange of any Rights
pursuant to Section 24(e) 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 rights in exchange therefor as has been determined by the Board in
accordance with Section 24(e) hereof. The Company shall give public
notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall 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 transfer agent for the shares of Common Stock of the Company. Any
notice which is mailed 


33





in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Rights will be effected.


                    Section
25. Notice of Certain Events.


                    (a)
In case the Company shall propose to effect or permit to occur any Triggering
Event or Section 13 Event, the Company shall give notice thereof to each
holder of Rights in accordance with Section 26 hereof at least 20 days
prior to occurrence of such Triggering Event or such Section 13 Event.


                    (b)
In case any Triggering Event or Section 13 Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Sections
11(a)(ii) and 13 hereof.


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


	
  

 	
  

 
	
  

 	
 Costamare
 Inc.

 
	
  

 	
 60 Zephyrou
 Street &

 
	
  

 	
 Syngrou
 Avenue

 
	
  

 	
 17564 Athens

 
	
  

 	
 Greece

 
	
  

 	
  

 
	
  

 	
 Attention:
 Chief Executive Officer

 
	
  

 	
  

 
	
  

 	
 with a copy
 to:

 
	
  

 	
  

 
	
  

 	
 Cravath,
 Swaine & Moore LLP

 
	
  

 	
 Worldwide
 Plaza

 
	
  

 	
 825 Eighth
 Avenue

 
	
  

 	
 New York,
 New York 10019

 
	
  

 	
  

 
	
  

 	
 Attention:
 William P. Rogers, Jr.

 



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


	
  

 	
  

 
	
  

 	
 American
 Stock Transfer & Trust Company, LLC

 
	
  

 	
 6201 15th
 Avenue

 
	
  

 	
 Brooklyn,
 New York 11219

 
	
  

 	
  

 
	
  

 	
 Attention:
 Corporate Trust Department

 


34







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


                    Section
27. Supplements and Amendments. Prior to the Distribution Date, the
Company may supplement or amend this Rights Agreement in any respect
without the approval of any holders of Rights and the Rights Agent shall, if
the Company so directs, execute such supplement or amendment. From and after
the occurrence of the Distribution Date, the Company and the Rights Agent
may from time to time supplement or amend this Rights Agreement without
the approval of any holders of Rights in order to (i) cure any ambiguity
or omission, (ii) correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein,
(iii) shorten or lengthen any time period hereunder or (iv) to change
or supplement the provisions hereunder in any manner that the Company
may deem necessary or desirable and that shall not adversely affect the
interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, this Rights Agreement
may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights
may be redeemed at such time as the Rights are not then redeemable or
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person). Upon the delivery of a certificate from an appropriate
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. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of shares of Common Stock.


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


                    Section
29. Determinations and Actions by the Board, etc. For all purposes of
this Rights Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board shall have the exclusive power
and authority to administer this Rights Agreement and to exercise all rights
and powers specifically granted to the Board, or the Company, or as may be
necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Rights Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Rights Agreement
(including a determination to redeem or not redeem the Rights or to amend this
Rights Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and


35






binding on the
Company, the Rights Agent, the holders of the Rights Certificates and all other
parties and (y) not subject the Board to any liability to the holders of the
Rights. 


                    Section
30. Benefits of this Rights Agreement. Nothing in this Rights Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the shares of Common Stock) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the shares of Common Stock). 


                    Section
31. Severability. If any term, provision, covenant or restriction of
this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Rights Agreement to
the contrary, if any such term, provision, covenant or restriction is held by
such court or authority to be invalid, void or unenforceable and the Board
determines in its good-faith judgment that severing the invalid language from
this Rights Agreement would adversely affect the purpose or effect of this
Rights Agreement, the right of redemption set forth in Section 23 hereof shall
be reinstated and shall not expire until the Close of Business on the tenth day
following the date of such determination by the Board.  


                    Section
32. Governing Law. This Rights Agreement and each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of New York and for all purposes shall be governed by and construed in
accordance with the laws of such jurisdiction applicable to contracts to be
made and performed entirely within such jurisdiction. 


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


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


REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


36





                    IN
WITNESS WHEREOF, the parties have executed this Stockholders Rights Agreement
as of the date first written above. 


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 COSTAMARE
 INC., 

 
	
  

 	
  

 
	
  

 	
    by 

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
    Name:

 	
 Konstantinos
 Konstantakopoulos 

 
	
  

 	
  

 	
    Title:

 	
 Chief
 Executive Officer 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 AMERICAN
 STOCK TRANSFER & TRUST COMPANY, LLC, 

 
	
  

 	
  

 
	
  

 	
    by 

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
    Name:

 	
  

 
	
  

 	
  

 	
    Title:

 	
  

 


[Signature
Page to Stockholders Rights Agreement]







Exhibit A


STATEMENT OF DESIGNATION OF RIGHTS,
PREFERENCES AND PRIVILEGES OF
SERIES
A PARTICIPATING PREFERRED STOCK OF COSTAMARE INC.


The
undersigned, [   ] and [   ] do hereby certify:


                    1.
That they are the duly elected and acting [   ] and Secretary,
respectively, of Costamare Inc., a Marshall Islands corporation (the “Company”).


                    2.
That pursuant to the authority conferred by the Company’s Amended and Restated
Articles of Incorporation, the Company’s Board of Directors (the “Board”)
on [   ], 2010 adopted the following resolution designating and
prescribing the relative rights, preferences and privileges of the Company’s
Series A Participating Preferred Stock:


                    RESOLVED,
that pursuant to the authority vested in the Board by the Articles of
Incorporation, the Board hereby establishes a series of preferred stock,
par value U.S. $0.0001 per share, and fixes the designation and certain powers,
preferences and other special rights of the shares of such series, and certain
qualifications, limitations and restrictions thereon, as follows:


                    Section
1. Designation and Amount. The shares of such series shall be
designated as “Series A Participating Preferred Stock”. The
Series A Participating Preferred Stock shall have a par value of U.S.
$0.0001 per share, and the number of shares constituting such series shall
initially be 10,000,000, which number the Board may from time to time
increase or decrease (but not below the number then outstanding).


                    Section
2. Proportional Adjustment. In the event the Company shall at any time
after the issuance of any share or shares of Series A Participating
Preferred Stock (i) declare any dividend on the common stock of the
Company, par value U.S. $0.0001 per share (the “Common Stock”), payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Company shall simultaneously effect a
proportional adjustment to the number of outstanding shares of Series A
Participating Preferred Stock.


                    Section
3. Dividends and Distributions.


                    (a)
Subject to the prior and superior right of the holders of any shares of any
series of preferred stock ranking prior and superior to the shares of
Series A Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Participating Preferred Stock shall be
entitled to receive when, as and if declared by the Board out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of March, June, September and December in each year (each such date
being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
1,000 times the aggregate per share amount of all cash dividends, and 1,000
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding


A-1






Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Participating Preferred Stock.


                    (b)
The Company shall declare a dividend or distribution on the Series A
Participating Preferred Stock as provided in paragraph (a) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).


                    (c)
Dividends shall begin to accrue on outstanding shares of Series A
Participating Preferred Stock from the Quarterly Dividend Payment Date
immediately preceding the date of issue of such shares of Series A
Participating Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series A Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Participating Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board may fix a record date for
the determination of holders of shares of Series A Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.


                    Section
4. Voting Rights. The holders of shares of Series A Participating
Preferred Stock shall have the following voting rights:


                    (a)
Each share of Series A Participating Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Company.


                    (b)
Except as otherwise provided herein or required by law, the holders of shares
of Series A Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to
a vote of stockholders of the Company.


                    (c)
Except as otherwise provided herein or required by law, holders of
Series A Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.


                    Section
5. Certain Restrictions.


                    (a)
The Company shall not declare any dividend on, make any distribution on, or
redeem or purchase or otherwise acquire for consideration any shares of Common
Stock after the first issuance of a share or fraction of a share of
Series A Participating Preferred Stock unless


A-2





concurrently
therewith it shall declare a dividend on, make a distribution on, or redeem or
purchase or otherwise acquire for consideration the Series A Participating
Preferred Stock as required by Section 3 hereof.


                    (b)
Whenever quarterly dividends or other dividends or distributions payable on the
Series A Participating Preferred Stock as provided in Section 3 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Participating Preferred Stock outstanding shall have been paid in full, the
Company shall not (i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Participating Preferred Stock;
(ii) declare or pay dividends on, make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with Series A Participating
Preferred Stock, except dividends paid ratably on the Series A
Participating Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders
of all such shares are then entitled; (iii) redeem or purchase or
otherwise acquire for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Participating Preferred Stock, provided that the Company
may at any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Company ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to the
Series A Participating Preferred Stock; (iv) purchase or otherwise
acquire for consideration any shares of Series A Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series A
Participating Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board) to all holders of
such shares upon such terms as the Board, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.


                    (c)
The Company shall not permit any subsidiary of the Company to purchase or
otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (a) of this Section 5, purchase or
otherwise acquire such shares at such time and in such manner.


                    Section
6. Reacquired Shares. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of preferred stock and may be reissued as part of a
new series of preferred stock to be created by resolution or resolutions
of the Board, subject to the conditions and restrictions on issuance set forth
herein and, in the Articles of Incorporation, as then amended.


                    Section
7. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, the holders of shares of
Series A Participating Preferred Stock shall be entitled to receive an
aggregate amount per share equal to 1,000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock plus an


A-3





amount equal
to any accrued and unpaid dividends on such shares of Series A
Participating Preferred Stock.


                    Section
8. Consolidation, Merger, etc. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of Series A
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed
or exchanged.


                    Section
9. No Redemption. The shares of Series A Participating Preferred
Stock shall not be redeemable.


                    Section
10. Ranking. The Series A Participating Preferred Stock shall rank
junior to all other series of the Company’s preferred stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.


                    Section
11. Amendment. The Articles of Incorporation of the Company shall not be
further amended in any manner which would materially alter or change the
powers, preference or special rights of the Series A Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority of the outstanding shares of Series A
Participating Preferred Stock, voting separately as a class.


                    Section
12. Fractional Shares. Series A Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder’s fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Participating Preferred Stock.


                    RESOLVED
FURTHER, that the Board hereby authorizes and directs the [   ]
and the Secretary or any Assistant Secretary of this Company to prepare and
file a Statement of Designation of Rights, Preferences and Privileges in
accordance with the foregoing resolution and the provisions of Marshall Islands
law and to take such actions as they may deem necessary or appropriate to
carry out the intent of the foregoing resolution.


REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK


A-4






                    We
further declare, under penalty of perjury, that the foregoing Statement of
Designation is the act and deed of the Company and that the facts stated
therein are true and correct.


                    Executed
at [   ] on [   ], 2010.


	
  

 	
  

 
	
  

 	
 

 
	
  

 	
 [   ]

 
	
  

 	
  

 
	
  

 	
 

 
	
  

 	
 Secretary

 



A-5






Exhibit B


 [FORM OF RIGHTS CERTIFICATE]


	
  

 	
  

 
	
 Certificate
 No. R-__________

 	
 _________Rights

 






	
  

 	
  

 
	
  

 	
 Not exercisable after [_____], 20[__] or
 earlier if redemption or exchange occurs. The Rights are subject to
 redemption at the option of the Company, at U.S.$0.01 per Right, and to
 exchange on the terms set forth in the Rights Agreement.

 
	
  

 	
  

 
	
  

 	
 Under certain circumstances, Rights
 Beneficially Owned by an Acquiring Person or an Affiliate or Associate of an
 Acquiring Person (as such terms are defined in the Rights Agreement) and by
 any subsequent holder of such Rights may become null and void. [The Rights
 represented by this Rights Certificate are or were beneficially owned by a
 Person who was or became an Acquiring Person or an Affiliate or Associate of
 an Acquiring Person. Accordingly, this Rights Certificate and the Rights
 represented hereby may become null and void in the circumstances specified in
 the Rights Agreement.]

 


RIGHTS CERTIFICATE


COSTAMARE INC.


This
certificate 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 [INSERT MONTH, DATE, YEAR ON WHICH AGREEMENT ENTERED]
(the “Rights Agreement”), between Costamare Inc., a Marshall Island corporation
(the “Company”), and American Stock Transfer & Trust Company, LLC (the
“Rights Agent”), unless the Rights evidenced hereby have been previously
redeemed by the Company, to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and before
5:00 p.m., New York time (such time, the “Close of Business”), on the
Expiration Date at the office of the Rights Agent designated for such purpose,
or at the office of its successor as Rights Agent, one one-thousandth of a
fully paid, nonassessable share of Series A Participating Preferred Stock,
U.S.$0.0001 par value (the “Preferred Shares”), of the Company, at a purchase
price of U.S.$25.00 per one one-thousandth of a Preferred Share (the “Exercise
Price”), upon presentation and surrender of this Rights Certificate with the
form of election to purchase on the reverse side thereof duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of one
one-thousandths of a Preferred Share that may be purchased upon exercise
hereof) set forth above, and the Exercise Price set forth above, are the number
and Exercise Price as of the Close of Business on the date specified by the
Board of Directors of the Company (the “Board”) as the Record Date (the “Record
Date”), based on the Preferred Shares as constituted at such date. As provided
in the Rights Agreement, the Purchase Price and the number of one one-


B-1





thousandths of
a Preferred Share that may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and adjustment
upon the happening of certain events.


This Rights
Certificate is subject to all the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights, limitations
of rights, obligations, duties and immunities hereunder of the Rights Agent,
the Company and the holders of Rights, which limitations include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement
are on file at the principal executive offices of the Company.


This Rights
Certificate, with or without other Rights Certificates, upon surrender at the
office of the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.


Subject to the
provisions of the Rights Agreement, the Rights evidenced by this Certificate
(a) may be redeemed by the Company at a redemption price (in cash or
shares of the Company’s common stock or other securities of the Company deemed
by the Board to be at least equivalent in value) of U.S.$0.01 per Right
(subject to adjustment, as provided in the Rights Agreement) or (b) may be
exchanged in whole or in part for shares of the Company’s common stock or other
consideration as determined by the Company.


The Company
shall not be required to issue fractions of Preferred Shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share) or distribute certificates that evidence fractions of Preferred Shares
(other than fractions that are integral multiples of one one-thousandth of a
Preferred Share) upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional Preferred Shares that are not integral multiples of
one one-thousandth of a Preferred Share, the Company may elect to make a cash
payment as provided in the Rights Agreement for such fractional shares.


No holder of
this Rights Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose to be the holder of the Preferred Shares 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 subscriptions rights, or otherwise,
until the 


B-2





Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.


This Rights
Certificate shall not be valid or obligatory for any purpose until it shall
have been countersigned by the Rights Agent.


B-3





WITNESS the
facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of [     ], 2010.


	
  

 	
  

 	
  

 
	
  

 	
 COSTAMARE
 INC.,

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 


 
	
  

 	
  

 	
  

 






	
  

 	
  

 	
  

 
	
 COUNTERSIGNED:

 	
  

 
	
  

 	
  

 	
  

 
	
 AMERICAN
 STOCK TRANSFER & TRUST COMPANY, LLC,

 
	
 as Rights
 Agent

 
	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
  

 
	
  

 	

 


 	
  

 
	
 Name:

 	
  

 	
  

 
	
  

 	

 


 	
  

 
	
 Title:

 	
  

 	
  

 
	
  

 	

 


 	
  

 


B-4





—Form of Reverse Side of Rights Certificate—


FORM OF
ASSIGNMENT


(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate)


	
  

 
	
 FOR VALUE
 RECEIVED, ________________________________________________________________________________________________________

 
	
 _____________________ hereby sells, assigns and transfers
 unto

 
	
 _________________________________________________________________________________________________________________________________

 
	
  

 
	
 _________________________________________________________________________________________________________________________________

 
	
  

 
	
 _________________________________________________________________________________________________________________________________

 


 (Please print name and address of
transferee)


this Rights Certificate, together with all
rights, title and interest therein, and does hereby irrevocably constitute and
appoint ______________ as attorney-in-fact, to transfer this Rights Certificate
on the books of the within-named Company, with full power of substitution.


The undersigned hereby
certifies that (1) the Rights evidenced by this Rights Certificate are not
being sold, assigned or transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), (2) this Rights Certificate is not being
sold, assigned or transferred to or on behalf of any such Acquiring Person,
Affiliate or Associate, and (3) after inquiry and to the best knowledge of
the undersigned, the undersigned did not acquire the Rights evidenced by this
Rights Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate.


	
  

 	
  

 
	
  

 	
 Dated: ______________________________________________________________________________________________________________________

 
	
  

 	
  

 
	
  

 	
 Signature: ___________________________________________________________________________________________________________________

 
	
  

 	
  

 
	
  

 	
 Signature Guarantee*

 
	
  

 	
  

 
	
  

 	

 ____________________________________________________________________________________________________________________________


 
	
  

 	
  

 
	
  

 	
 *Signatures must be
 guaranteed by an “eligible guarantor institution” as defined in
 Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
 amended. Guarantees by a notary public are not acceptable.

 


B-5





—Form of Reverse Side of Rights Certificate—

(continued)


FORM OF ELECTION TO PURCHASE


(To be executed if holder desires to exercise Rights represented by the
Rights Certificate)


To: COSTAMARE INC.


The undersigned hereby
irrevocably elects to exercise________ Rights represented by this Rights
Certificate to purchase the number of one one-thousandths of a Preferred Share
issuable upon the exercise of such Rights and requests that certificates for
such number of one one-thousandths of a Preferred Share 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 Rights 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)
 _______________________________________________________________________________________________

 	
  

 
	
  

 	
  

 
	
 _________________________________________________________________________________________________________________________

 	
  

 



The undersigned hereby
certifies that (1) the Rights evidenced by this Rights Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement) and (2) after inquiry
and to the best knowledge of the undersigned, the undersigned did not acquire
the Rights evidenced by this Rights Certificate from any Person who is or was
an Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).


	
  

 	
  

 
	
  

 	
 Dated: ______________________________________________________________________________________________________________

 
	
  

 	
  

 
	
  

 	
 Signature:
 ___________________________________________________________________________________________________________

 
	
  

 	
  

 
	
  

 	
 Signature Guarantee* 

 
	
  

 	
  

 
	
  

 	
 ____________________________________________________________________________________________________________________

 


B-6








	
  

 	
  

 
	
  

 	
 *Signatures must be
 guaranteed by an “eligible guarantor institution” as defined in
 Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
 amended. Guarantees by a notary public are not acceptable.

 


B-7





—Form of Reverse Side of Rights Certificate—

(continued)


NOTICE


The signature in the
Form of Assignment or Form of Election to Purchase, as the case may be, must
conform to the name as written on the face of this Rights 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 Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and such Assignment or Election
to Purchase will not be honored.


B-8





Exhibit C


SUMMARY OF RIGHTS


	
  

 	
  

 	
  

 
	
 Distribution
 and Transfer of Rights:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Distribution Date:

 	
  

 	
 The rights will separate
 from the common stock and become exercisable after (1) the tenth day
 after a person or group acquires ownership of 15% or more of the company’s
 common stock or (2) the tenth business day (or such later date as
 determined by the company’s board of directors) after a person or group
 announces a tender or exchange offer which would result in that person or
 group holding 15% or more of the company’s common stock.

 
	
  

 	
  

 	
  

 
	
 Preferred Stock
 Purchasable Upon Exercise of Rights:

 	
  

 	
 On the Distribution Date,
 each holder of a right will be entitled to purchase for U.S.$25.00 (the “Exercise Price”)
 a fraction (1/1000th) of one share of the company’s preferred stock which has
 similar economic terms as one share of common stock.

 
	
  

 	
  

 	
  

 
	
 Flip-in:

 	
  

 	
 If an acquiring person (an
 “Acquiring Person”) acquires more than 15% of the company’s common
 stock then each holder of a right (except that acquiring person) will be
 entitled to buy at the Exercise Price, a number of shares of the company’s
 common stock which has a then current market value of twice the Exercise
 Price.

 
	
  

 	
  

 	
  

 
	
 Flip-over:

 	
  

 	
 If, after an Acquiring
 Person acquires more than 15% of the company’s common stock, the company
 merges into another company (either as the surviving corporation or as the
 disappearing entity) or the company sells more than 50% of its assets or
 earning power, then each holder of a right (except for those owned by the
 Acquiring Person) will be entitled to purchase at the Exercise Price, a
 number of shares of common stock of the surviving entity which has a then
 current market value of twice the Exercise Price.

 
	
  

 	
  

 	
  

 
	
 Exchange Provision:

 	
  

 	
 Any time after the date an
 Acquiring Person obtains more than 15% of the company’s common stock and
 before that Acquiring Person acquires more than 50% of the company’s outstanding
 common stock, the company may exchange each right owned by all other
 rights holders, in whole or in part, for one share of the company’s common
 stock.

 



C-1









	
  

 	
  

 	
  

 
	
 Redemption of Rights:

 	
  

 	
 The company can redeem the
 rights at any time prior to a public announcement that a person has acquired
 ownership of 15% or more of the company’s common stock.

 
	
  

 	
  

 	
  

 
	
 Expiration of Rights:

 	
  

 	
 The rights expire on the
 earliest of (1) December 31, 2030 or (2) the exchange or redemption
 of the rights as described above.

 
	
  

 	
  

 	
  

 
	
 Amendment of Terms of
 Rights:

 	
  

 	
 The terms of the rights
 and the Stockholder Rights Agreement may be amended without the consent
 of the rights holders at any time on or prior to the Distribution Date. After
 the Distribution Date, the terms of the rights and the Stockholder Rights
 Agreement may be amended to make changes, which do not adversely affect
 the rights of the rights holders (other than the Acquiring Person).

 
	
  

 	
  

 	
  

 
	
 Voting Rights:

 	
  

 	
 The rights will not have
 any voting rights.

 
	
  

 	
  

 	
  

 
	
 Anti-dilution Provisions:

 	
  

 	
 The rights will have the
 benefit of certain customary anti-dilution protection.

 


C-2