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Exhibit 4.1  


RIGHTS AGREEMENT  


by and between  


 ASK JEEVES, INC.  


 and  


 FLEET NATIONAL BANK, N.A.  


 as Rights Agent  


 Dated as of  


 April 26, 2001  






  



 
  TABLE OF CONTENTS    
  



	 
	 	 
	 	Page

	Section 1.	 	Certain Definitions	 	1
	Section 2.	 	Appointment of Rights Agent	 	4
	Section 3.	 	Issue of Rights Certificates	 	4
	Section 4.	 	Form of Rights Certificates	 	5
	Section 5.	 	Countersignature and Registration	 	6
	Section 6.	 	Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	 	6
	Section 7.	 	Exercise of Rights; Purchase Price; Expiration Date of Rights	 	7
	Section 8.	 	Cancellation and Destruction of Rights Certificates	 	8
	Section 9.	 	Reservation and Availability of Preferred Stock	 	8
	Section 10.	 	Preferred Stock Record Date	 	9
	Section 11.	 	Adjustment of Purchase Price, Number of Shares or Number of Rights	 	10
	Section 12.	 	Certificate of Adjusted Purchase Price or Number of Shares	 	16
	Section 13.	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	 	16
	Section 14.	 	Fractional Rights and Fractional Shares	 	19
	Section 15.	 	Rights of Action	 	19
	Section 16.	 	Agreement of Rights Holders	 	20
	Section 17.	 	Rights Certificate Holder Not Deemed a Stockholder	 	20
	Section 18.	 	Concerning the Rights Agent	 	21
	Section 19.	 	Merger or Consolidation or Change of Name of Rights Agent.	 	21
	Section 20.	 	Duties of Rights Agent	 	21
	Section 21.	 	Change of Rights Agent	 	23
	Section 22.	 	Issuance of New Rights Certificates	 	24
	Section 23.	 	Redemption and Termination	 	24
	Section 24.	 	Exchange	 	25
	Section 25.	 	Notice of Certain Events	 	26
	Section 26.	 	Notices	 	26
	Section 27.	 	Supplements and Amendments	 	27
	Section 28.	 	Successors	 	27
	Section 29.	 	Determinations and Actions by the Board of Directors	 	27
	Section 30.	 	Benefits of This Agreement	 	28
	Section 31.	 	Severability	 	28
	Section 32.	 	Governing Law	 	28
	Section 33.	 	Counterparts	 	28
	Section 34.	 	Descriptive Headings	 	28
	
EXHIBITS	
 	

 	
 	

 
	

Exhibit A	
 	

Form of Certificate of Designation of Series A Junior Participating Preferred Stock	
 	

 
	Exhibit B	 	Form of Rights Certificate	 	 
	Exhibit C	 	Summary of Rights to Purchase Shares of Series A Preferred Stock	 	 




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RIGHTS AGREEMENT    
  



    RIGHTS AGREEMENT, dated as of April 26, 2001 (the "Agreement"), by and between ASK JEEVES, INC., a Delaware corporation (the "Company"), and
FLEET NATIONAL BANK, N.A., a national association (the "Rights Agent"). 


 
 

RECITALS    
  


    WHEREAS, the board of directors of the Company has authorized and declared, effective April 27, 2001 (the "Rights Dividend Declaration Date"), a
distribution of one Right (each, a "Right") for each share of Common Stock (as hereinafter defined) of the Company outstanding as of the Close of Business (as hereinafter defined) on May 7,
2001 (the "Record Date"), each Right initially representing the right to purchase one one-thousandth of a share (a "Unit") of Preferred Stock (as hereinafter defined) upon the terms and
subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each share of Common Stock of the Company that shall become outstanding
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). 


 
 

AGREEMENT    
  


    NOW, THEREFORE, in consideration of the foregoing and the mutual agreements herein set forth, the parties hereto, intending to be legally bound, hereby agree
as follows: 


    Section
1.  Certain Definitions.  For purposes of this Agreement, the following terms have the meanings
indicated: 


    "Acquiring
Person" shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the shares of Common Stock of the Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any employee benefit plan of the Company or any Subsidiary of
the Company, or any entity holding shares of Common Stock of the Company for or pursuant to the terms of any such plan. Notwithstanding the foregoing: 



     (i) no
Person shall become an "Acquiring Person" as the result of an acquisition of shares of Company 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
if a Person shall become 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 shall, after such share purchases by the Company, become the Beneficial Owner of any additional shares of Common Stock of the Company, then such Person
shall be deemed to be an "Acquiring Person" hereunder; and 


    (ii) if
the board of directors of the Company determines in good faith that a Person who would otherwise be an "Acquiring Person" as defined pursuant to the foregoing
provisions of paragraph (i), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of shares of Company Common Stock so that such Person would no
longer be an "Acquiring Person" (as defined pursuant to the foregoing provisions of paragraph (i)), then such Person shall not be deemed to be an "Acquiring Person" for any purpose of this
Agreement. 




    "Adjustment
Shares" shall have the meaning set forth in Section 11(a)(ii). 


    "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
such term is hereinafter defined). 


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    "Agreement" shall have the meaning set forth in the forepart of this 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); or 


    (ii) which
such Person or any of such Person's Affiliates or Associates, directly or indirectly, has (A) the right to acquire (whether such right is exercisable
immediately, contingently or only after the passage of
time) pursuant to 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), or upon the exercise (whether or not then vested) of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise;  provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; provided further, however, that a Person shall not be deemed the "Beneficial Owner" of, or
to "beneficially own," any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding:
(x) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the Exchange Act and
the Exchange Act Regulations, and (y) is not reportable by such Person 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 (B) of subparagraph (ii) 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 (A) 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 (B) 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; 




    Notwithstanding
anything in this definition of "Beneficial Owner" and "beneficially own" to the contrary, the phrase "then outstanding," when used with reference to a Person who is
the Beneficial Owner of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to beneficially own hereunder. 



    "Business
Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in The City of New York is located are authorized or obligated by law or
executive order to close. 


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    "Close of Business" on any given date shall mean 5:00 P.M., New York City time, on such date; provided,  however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day. 



    "Common
Stock" when used with reference to the Company shall mean the shares of common stock, par value $.001 of the Company. "Common Stock" when used with reference to any Person
other than the Company shall mean the capital stock (or other 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. 


    "Company"
shall have the meaning set forth in the forepart to this Agreement. 


    "Current
Per Share Market Price" shall have the meaning set forth in Section 11(d)(i). 



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


    "Distribution
Date" shall have the meaning set forth in Section 3(a). 


    "Equivalent
Preferred Shares" shall have the meaning set forth in Section 11(b). 


    "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. 


    "Exchange
Act Regulations" shall mean the General Rules and Regulations under the Exchange Act, as amended from time to time (including any successor rules). 



    "Exchange
Ratio" shall have the meaning set forth in Section 24. 


    "Expiration
Date" shall have the meaning set forth in Section 7(a). 


    "Final
Expiration Date" shall have the meaning set forth in Section 7(a). 


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


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



    "Preferred
Stock" shall mean shares of Series A Preferred Stock, par value $.001, of the Company having the rights and preferences set forth in the Certificate of Designation
with respect thereto, a form of which attached to this Agreement as Exhibit A. 


    "Preferred
Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii). 


    "Principal
Party" shall have the meaning set forth in Section 13. 


    "Purchase
Price" shall have the meaning set forth in Section 7(b). 


    "Record
Date" shall have the meaning set forth in the recitals to this Agreement. 


    "Redemption
Date" shall have the meaning set forth in Section 7(a). 


    "Redemption
Price" shall have the meaning set forth in Section 23(a). 


    "Right"
shall have the meaning set forth in the recitals to this Agreement. 


    "Rights
Agent" shall have the meaning set forth in the forepart of this Agreement. 



    "Rights
Certificate" shall have the meaning set forth in Section 3(a). 


    "Rights
Dividend Declaration Date" shall have the meaning set forth in the recitals to this Agreement. 


    "Section 11(a)(ii) Event"
shall mean any event described in Section 11(a)(ii)(A), (B) or (C). 


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    "Section 11(a)(iii) Trigger Date" shall have the meaning set forth in Section 11(a)(iii). 


    "Section 13
Event" shall mean any event described in clause (x), (y) or (z) of Section 13(a). 


    "Section 24(a)
Exchange Ratio" shall have the meaning set forth in Section 24(a). 


    "Securities
Act" shall mean the Securities Act of 1933, as amended, or any successor statute. 


    "Share
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) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such. 


    "Spread"
shall have the meaning set forth in Section 11(a)(iii). 


    "Subsidiary"
of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or
indirectly, by such Person. 


    "Summary
of Rights" shall have the meaning set forth in Section 3(b). 



    "Trading
Day" shall have the meaning set forth in Section 11(d)(i). 


    "Triggering
Event" shall mean any Section 11(a)(ii) Event or any Section 13 Event. 


    "Unit"
shall have the meaning set forth in the recitals to this Agreement. 


    Section
2.  Appointment of Rights Agent.  The Company hereby appoints the Rights Agent to act as agent
for the Company in accordance with the terms and conditions of this Agreement, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint co-Rights Agents as it may deem necessary or desirable upon (10) days' prior written notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-Rights agent. 


    Section 3.  Issue of Rights Certificates.  


    (a) Until
the earlier of (i) the Close of Business on the tenth day after the Share Acquisition Date and (ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by action of the Company's board of directors prior to such time as any Person becomes an Acquiring Person and of which the Company will give the Rights
Agent prompt written notice) after the date of the commencement by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity holding shares of Common Stock for or pursuant to the terms of any such plan) of or the first public announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding shares of Common Stock for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer, if upon consummation thereof such Person would be the Beneficial Owner of 15% or more of the shares of Common Stock of the Company then outstanding (the earlier
of (i) and (ii) above being the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of Section 3(b)) by the certificates for shares of Common
Stock of the Company 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 (y) the
right to receive Rights Certificates will be transferable only in connection with the transfer of shares of Common Stock of the Company. As soon as practicable after the Distribution Date, the Company
will notify the Rights Agent of the occurrence of the Distribution Date and 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 of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the 


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Company, a Rights Certificate, in substantially the form of Exhibit B (a "Rights Certificate"), evidencing one Right for each share of Common Stock so held. From and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates. 


    (b) On
the Record Date, or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in substantially the form
of Exhibit C (the "Summary of Rights"), by first-class, postage-prepaid mail, to each record holder of shares of Common Stock of the Company as of the Close of Business on the Record Date, at
the address of such holder shown on the records of the Company. Until the Distribution Date (or the Expiration Date), the surrender for transfer of any certificate evidencing shares of Common Stock of
the Company outstanding on the Record Date shall also constitute the transfer of the Rights associated with the shares of Common Stock represented thereby. 


    (c) Certificates
for shares of Common Stock which become outstanding (including, without limitation, reacquired shares of Common Stock referred to in the last sentence
of this paragraph (c)) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to
them the following legend: 




This
certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement by and between Ask Jeeves, Inc. ("Ask Jeeves"), and Fleet National
Bank, N.A., dated as of April 26, 2001 (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 Ask Jeeves. 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.
Ask Jeeves 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, as set forth in the
Rights Agreement, Rights issued to any Person who becomes an Acquiring Person (as 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. 





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


    Section 4.  Form of Rights Certificates.  


    (a) The
Rights Certificates (and the forms of election to purchase Units of Preferred Stock and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit B and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or
regulation of the Nasdaq Stock Market or any stock exchange or transaction reporting system on which the Rights may from time to time be listed or traded, or to conform to usage. Subject to the
provisions of Sections 11 and 22, the Rights Certificates shall entitle the holders thereof to purchase the number of Units of Preferred Stock as shall be set forth therein at the price per Unit of
Preferred Stock set forth therein, but the number of such Units of Preferred Stock and the Purchase Price shall be subject to adjustment as provided herein. 


    (b) Any
Rights Certificate issued pursuant to this Agreement 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 


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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 of directors of the Company has determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) 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 by and between Ask Jeeves, Inc., and Fleet National Bank, N.A., as Rights Agent, dated as of April 26, 2001 (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 any officer of the Company, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Rights Certificates
shall be 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 had not ceased to be such officer of the Company. 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 this Agreement any such person was not such an officer. 


    (b) Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its office designated for such purpose, books for registration and transfer of
the Rights Certificates issued under this Agreement. 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 4(b), 7(e) and 14, 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 Units of Preferred Stock (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 


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Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e) and 14, 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 of indemnity or security reasonably satisfactory to them, and, at the Company's request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the 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; Purchase Price; Expiration Date of Rights.  


    (a) Except
as provided in Sections 23(c) and 7(e), the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise
provided in this Agreement) in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and the related certification
duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the Purchase Price for each Unit of Preferred Stock as to which the Rights
are exercised, at or prior to the earliest of (i) the Close of Business on the tenth anniversary hereof (the "Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 (the "Redemption Date"), or (iii) the time at which such Rights are exchanged as provided in Section 24 (the earlier of (i), (ii) and
(iii) being the "Expiration Date"). 


    (b) The
Purchase Price for each Unit of Preferred Stock pursuant to the exercise of a Right shall initially be twenty dollars ($20.00), shall be subject to adjustment
from time to time as provided in
Sections 11 and 13 and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. 


    (c) Upon
receipt of a Rights Certificate representing exercisable Rights (with the form of election to purchase duly executed, accompanied by payment of the Purchase
Price for the number of Units of Preferred Stock (or other securities, cash or property, 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) in cash, or by certified check, wire transfer or bank draft payable to the order of the Company), the Rights Agent shall,
subject to Section 20(k), thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Stock a certificate or certificates for the number of Units of Preferred Stock
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 Units
of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent of a depositary receipt or depositary receipts representing such number
of Units of Preferred Stock as are to be purchased (in which case certificates for the Units of Preferred Stock represented by such receipt or 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; (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 Purchase Price (as such amount may be reduced (including to zero) pursuant to Section 11(a)(iii)) may be
made in cash or by certified bank check, wire 


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transfer or bank draft payable to the order of the Company. If the Company is obligated to issue other securities of the Company, pay cash and/or distribute other property pursuant to
Section 11(a), 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) If
the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing a number of Rights
equivalent to the number of Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Rights Certificate or to such registered holder's duly authorized assigns,
subject to Section 14. 


    (e) Notwithstanding
anything in this 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; (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 of directors
of the Company 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); or (iv) any subsequent transferee 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 Agreement or otherwise. The Company shall use all requisite reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) 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. 


    (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 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. 


    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 cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Rights Certificates, and in
such case shall deliver a certificate of destruction thereof to the Company. 


    Section 9.  Reservation and Availability of Preferred Stock.  


    (a) The
Company covenants and agrees that it will use all requisite commercially reasonable efforts to cause to be reserved and kept available out of and to the extent
of its authorized and unissued Units of Preferred Stock not reserved for another purpose that will be sufficient to permit the exercise in full of all outstanding Rights. Upon the occurrence of any
events resulting in an increase in 


8





 




the aggregate number of shares of Preferred Stock (or other equity securities of the Company) issuable upon exercise of all outstanding Rights above the number then reserved, the Company shall make
appropriate increases in the number of shares so reserved. 


    (b) If
the Units of Preferred Stock to be issued and delivered upon the exercise of the Rights are at any time listed on a national securities exchange or included for
quotation on the Nasdaq Stock Market or
any other transaction reporting system, the Company shall during the period from the Distribution Date to the Expiration Date use all requisite commercially reasonable efforts to cause all shares
reserved for such issuance to be listed on such exchange or included for quotation on the Nasdaq Stock Market or any other such transaction reporting system upon official notice of issuance upon such
exercise. 


    (c) The
Company shall use all requisite commercially reasonable efforts to (i) file, as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event in which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii), 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 reasonably 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 Expiration Date. 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 Rights. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction, unless the requisite qualification of the offering made upon exercise of the Rights 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 Units of Preferred Stock (and, following the occurrence of
a Triggering Event, any other securities that may be delivered upon exercise of Rights) shall, at the time of delivery of the certificates for such Units of Preferred Stock (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and non-assessable. 


    (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 issuance or delivery of the Rights Certificates or of any Units of Preferred Stock 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 Units of Preferred Stock 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 Units of
Preferred Stock upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is due. 


    Section
10.  Preferred Stock Record Date.  Each person in whose name any certificate for Units of
Preferred Stock (or, following the occurrence of a Triggering Event, other securities) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the
Units of Preferred Stock (or, following the occurrence of a Triggering Event, other securities) represented thereby on, and such certificate shall be dated at the Close of Business on, the date upon
which the
Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and 


9





 




payment is a date upon which the Preferred Stock (or, following the occurrence of a Triggering Event, other securities) transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares at the Close of Business on, and such certificate shall be dated, the next succeeding Business Day on which such transfer books are open;  provided further, however, that if delivery of Units of Preferred Stock is delayed pursuant to Section 9(c), such Persons shall be deemed to have
become the record holders of such Units of Preferred Stock only when such Units first become deliverable. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a stockholder of the Company with respect to securities 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 expressly provided in this
Agreement. 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 a Unit of Preferred Stock 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 Purchase Price, Number of Shares or Number of Rights.  The Purchase Price, the
number and kinds of securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 



    (a) (i) In
the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares Preferred Stock, or (D) issue
any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Rights exercised
after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Rights had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; 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. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition, and shall be made prior, to any
adjustment required pursuant to Section 11(a)(ii). 



    (ii) Subject
to Section 24, if (A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, shall (1) merge into the
Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and shares of Common Stock of the Company shall remain
outstanding and unchanged, (2) in one transaction or a series of transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of
Common Stock of the Company, for other equity securities of the Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of equity securities of the Company or
any of its Subsidiaries (whether shares of Common Stock of the Company or otherwise) or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional
shares of such equity securities or securities exercisable for or convertible into such equity securities (other than pursuant to a pro rata distribution to all 



10





 


holders of shares of Common Stock of the Company), (3) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such
plan acting in such capacity, assets (including securities) on terms and conditions less favorable to the Company or such Subsidiary or plan than those that could have been obtained in arm's-length
negotiations with an unaffiliated third party, other than pursuant to a transaction set forth in Section 13(a), (4) sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any
of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity (other than transactions, if any, consistent with those engaged in, as of the date hereof, by the
Company and such Acquiring Person or such Associate or Affiliate), assets (including securities or intangible assets) having an aggregate fair market value of more than five million dollars
($5,000,000), other than pursuant to a transaction set forth in Section 13(a), (5) receive, or any designee, agent or representative of such Acquiring Person or any Affiliate or
Associate of such Acquiring Person shall receive, any compensation from the Company or any of its Subsidiaries other than compensation for full-time employment as a regular employee at
rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) receive the benefit, directly or indirectly (except proportionately as a holder of shares of Common Stock of
the Company or as required by law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the
Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person, unless the event causing the Person to become an Acquiring Person is a transaction set forth in Section 13(a); or (C) during such
time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the
Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the
provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person), which has the effect, directly or indirectly, of increasing by more than one percent
(1%) the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries that is directly or indirectly beneficially owned by any Acquiring
Person or any Person or any Associate or Affiliate of any Acquiring Person; then promptly following the occurrence of an event described in Section 11(a)(ii)(A), (B) or (C) (a
"Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right, except as provided in Section 7(e), shall thereafter have the right to receive for each
Right, upon exercise thereof in accordance with the terms of this Agreement and payment of the then-current Purchase Price, in lieu of the number of Units of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, such number of Units of Preferred Stock as shall equal the result obtained by multiplying
the then-current Purchase Price by the then number of Units of Preferred Stock 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 of the Company on the date of occurrence of the Triggering Event (such number of Units of Preferred Stock being hereinafter referred to as the
"Adjustment Shares"). 


    (iii) In
the event that the number of Units of Preferred Stock which are authorized by the Company's certificate 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 



11





 





Rights, or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall, in lieu of issuing Units of Preferred Stock in accordance with
Section 11(a)(ii) hereof: (A) determine the excess of (1) the value of the Units of Preferred Stock issuable upon the exercise of a Right (the "Current Value") over
(2) the Purchase Price (such excess being referred to as the "Spread") and (B) with respect to each Right, make adequate provision to substitute for such Units of Preferred Stock, upon
exercise of the Rights, (1) cash, (2) a reduction in the Purchase Price, (3) other equity securities of the Company (including, without limitation, Common Stock of the Company or
shares or units of shares of any series of preferred stock which the board of directors of the Company shall have conclusively deemed to have the same value as the Units of Preferred Stock (such
shares or units of preferred stock are herein called "Preferred Stock Equivalents")), except to the extent that the Company has not obtained any necessary regulatory approval for such issuance,
(4) debt securities of the Company, except to the extent that the Company has not obtained any necessary 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 shall have conclusively been determined by the board of directors of the Company based
upon the advice of a nationally recognized investment banking firm selected by the board of directors of the Company; provided,  however, if the Company
shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following
the later of (x) occurrence of a Section 11(a)(ii) Event, and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section 11(a)(iii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, Units of Preferred Stock (to the extent available), and then, if necessary, cash, which Units and/or cash have an aggregate value equal to the
Spread. 




    (b) If
the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Units of Preferred Stock entitling them (for a period
expiring within forty five (45) calendar days after such record date) to subscribe for or purchase Units of Preferred Stock (or shares having the same rights, privileges and preferences as the
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible into Units of Preferred Stock or Equivalent Preferred Stock at a price per Unit of Preferred Stock or equivalent preferred
share (or having a conversion price per share, if a security convertible into Units of Preferred Stock or equivalent preferred stock) less than the then Current Per Share Market Price (as determined
pursuant to Section 11(d)) of a Unit of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which shall be the sum of the number of Units of Preferred Stock outstanding on such record date plus the number of Units of
Preferred Stock which the aggregate offering price of the total number of Units of Preferred Stock and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Per Share Market Price and the denominator of which shall be the sum of the number of
Units of Preferred Stock outstanding on such record date plus the number of additional Units of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). If 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 of directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall
be conclusive and binding on the Rights Agent and the holders of the Rights. Units of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and if such rights, options or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had not been fixed. 


12





 


    (c) If the Company shall fix a record date for a distribution to all holders of Units of Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend), assets (other than a
dividend payable in Units of Preferred Stock but including any dividend payable in equity securities other than Preferred Stock) or subscription rights or warrants (excluding those referred to in
Section 11(d)), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then Current Per Share Market Price (as determined pursuant to Section 11(d)) of the Preferred Stock on such record date, less the fair market value (as
determined in good faith by the board of directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive and binding on the Rights
Agent and the holders of the Rights) of the cash, assets or evidences of indebtedness to be distributed or of such subscription rights or warrants distributable in respect of a share of Preferred
Stock, and the denominator of which shall be such Current Per Share Market Price of a share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 


    (d) (i) For
the purpose of any computation hereunder, the "Current Per Share Market Price" of any security on any date shall be deemed to be the average of the
daily closing prices per share of such security for the thirty consecutive Trading Days (as such term is hereinafter defined) ending on and including the Trading Day 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 (A) a dividend or distribution on such security payable in shares of such security or securities
convertible into such shares, or (B) any subdivision, combination or reclassification of such security and prior to the expiration of thirty Trading Days after and not including 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 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 Nasdaq Stock Market ("NASDAQ") or, if the security is not listed or admitted to
trading on the NASDAQ, 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 quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the NASDAQ 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 of directors of the Company. If on any
such date no market maker is making a market in the security, the Current Per Share Market Price of such security on such date as determined in good faith by the board of directors of the Company as
provided for above shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the security is listed or admitted to trading is open for the
transaction of business or, if the security is not listed or admitted to trading on any national securities exchange, a Business Day. 


13









  



    (ii) For
the purpose of any computation hereunder, the Current Per Share Market Price of the Preferred Stock shall be determined in accordance with the method set forth
in Section 11(d)(i). If the Current Per Share Market Price of the Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in Section 11(d)(i), the Current Per Share Market Price of the Preferred Stock shall be conclusively deemed to be an amount equal to the product of one thousand
dollars ($1,000) (as such amount may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to shares of Common Stock of the Company occurring
after the date of this Agreement) multiplied by the Current Per Share Market Price of Common Stock of the Company. If no shares of the Common Stock of the Company or the Preferred Stock are publicly
held or so listed or traded, "Current Per Share Market Price" of the Preferred Stock shall mean the fair value per share as determined in good faith by the board of directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and shall be conclusive and binding on the Rights Agent and the holders of the Rights. For all purposes of this Agreement,
the Current Per Share Market Price of a Unit of Preferred Stock shall be equal to the Current Per Share Market Price of one share of Preferred Stock divided by one thousand (1,000). 




    (e) No
adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one
millionth of a share of Preferred Stock or one one-hundredth of any other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the transaction which requires such adjustment or (ii) the
Expiration Date. 


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


    (g) All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price shall evidence the right to purchase, at the adjusted Purchase
Price, the number of Units of Preferred Stock purchasable from time to time upon exercise of the Rights, all subject to further adjustment as provided in this Agreement. 


    (h) Unless
the Company shall have exercised its election under Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of Units
of Preferred Stock (calculated to the nearest one-millionth of a share of Preferred Stock) obtained by dividing (i) the product obtained by multiplying (x) the number of
Units of Preferred Stock covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price by,
(ii) the Purchase Price in effect immediately after such adjustment of the Purchase Price. 


14





 




    (i)  The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in substitution for any adjustment in the number
of Units of Preferred Stock 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 Units of
Preferred Stock 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-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (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(i), 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, 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 to be so distributed shall be issued, executed and countersigned in the manner provided for
herein and shall be registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement. 


    (j)  Irrespective
of any adjustment or change in the Purchase Price or the number of Units of Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the Purchase Price per Unit and the number of Units of Preferred Stock which were expressed in the initial Rights Certificates
issued hereunder. 


    (k) Before
taking any action that would cause an adjustment reducing the Purchase Price below the then par value of the number of Units of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and
nonassessable number of Units of Preferred Stock at such adjusted Purchase Price. 


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


    (m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any Unit of Preferred Stock at less than the Current Per Share Market Price, (iii) issuance wholly for cash of
Preferred Stock or securities which by their terms are convertible into or exchangeable for Preferred Stock, (iv) dividends on Preferred Stock payable in Preferred Stock, or (v) issuance
of rights, options or 


15





 




warrants referred to in this Section 11, hereafter made by the Company to holders of Units of its Preferred Stock shall not be taxable to such stockholders. 


    (n) The
Company shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), (ii) merge with or into any other Person (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), if (x) at the time of or immediately after such consolidation, merger or sale 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 or (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale, the Person which constitutes, or would constitute, the Principal Party (as defined in Section 13(b)) shall have distributed or otherwise
transferred to its stockholders or other persons holding an equity interest in such Person, Rights previously owned by such Person or any of its Affiliates and Associates;  provided, however, this Section 11(n) shall not affect the ability of any Subsidiary of the
Company to consolidate with, merge with or into, or sell or transfer assets or earning power to, any other Subsidiary of the Company. 


    (o) After
the Distribution Date, the Company shall not, except as permitted by Section 23 or Section 26, take (or permit any of its Subsidiaries to take)
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. 



    (p) If,
at any time after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on outstanding shares
of Common Stock of the Company payable in shares of Common Stock of the Company or (ii) effect a subdivision, combination or consolidation of the Common Stock of the Company (by
reclassification or otherwise than by payment of dividends in shares of Common Stock of the Company) into a greater or lesser number of shares of Common Stock of the Company, then in any such case the
number of Units of Preferred Stock purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of Units of Preferred Stock so purchasable immediately
prior to such event by a fraction, the numerator of which shall be the number of shares of Common Stock of the Company outstanding immediately before such event and the denominator of which shall be
the number of shares of Common Stock of the Company outstanding immediately after such event. The adjustments provided for in this Section 11(p) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation is effected. 


    Section
12.  Certificate of Adjusted Purchase Price or Number of Shares.  Whenever an adjustment is made
as provided in Sections 11 and 13, 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 shares of Common Stock of the Company or Units of Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate in accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the failure by the Company to make such certification or
give such notice shall not affect the validity of 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.  


16





 




    (a) Except as provided in Section 13(b), in the event that, following a Share Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o)), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o)) 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 consolidation or merger,
all or part of the shares of Common Stock of the Company shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer) to any Person or Persons (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), in one or more transactions, directly or indirectly, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole), (any such event being a "Section 13 Event"), then, and in each such case, proper provision shall be made so that: (i) each holder of a Right, except as provided in
Section 7(e), shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price, such
number of validly authorized and issued, fully paid and non-assessable shares of Common Stock of the Principal Party, which shares shall not be subject to any liens, encumbrances, rights
of first refusal, transfer restrictions or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of Units of Preferred
Stock for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence
of a Section 13 Event, multiplying the number of such Units of Preferred Stock for which a Right would be exercisable hereunder but for the occurrence of such
Section 11(a)(ii) Event by the Purchase Price which would be in effect hereunder but for such first occurrence) and (2) dividing that product (which, following the direct
occurrence of a Section 13 Event, shall be the "Purchase Price" for all purposes of this Agreement) 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; (ii) 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 Agreement; (iii) the term "Company" shall, for all purposes of this Agreement, thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions of this Agreement shall thereafter be applicable to its shares of Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) shall be of no further effect following the first occurrence of any Section 13 Event. 



    (b) "Principal
Party" shall mean: 



     (i) in
the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), (A) the Person that is the issuer
of any securities into which shares of Common Stock of the Company are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer of shares of Common Stock that
has the highest Current Per Share Market Price and (B) if no securities are so issued, the Person that is the other party to such merger or consolidation, or, if there is more than one such
Person, the Person whose Common Stock has the highest aggregate Current Per Share Market Price; and 


    (ii) in
the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is the party receiving the largest
portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person that is a party to such transaction or transactions receives the same portion of the
assets or earning power 



17





 





transferred pursuant to such transaction or transactions or if the Person receiving the largest portion of the assets or earning power cannot be determined, whichever Person the Common Stock of which
has the highest aggregate Current Per Share Market Price; provided, however, that in any such case,
(1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding twelve-month period registered under Section 12 of the Exchange Act
("Registered Common Stock"), or such Person is not a corporation, and such Person is a direct or indirect Subsidiary of another Person that has Registered Common Stock outstanding, "Principal Party"
shall refer to such other Person; (2) if the Common Stock of such Person is not Registered Common Stock or such Person
is not a corporation, and such Person is a direct or indirect Subsidiary of another Person but is not a direct or indirect Subsidiary of another Person which has Registered Common Stock outstanding,
"Principal Party" shall refer to the ultimate parent entity of such first-mentioned Person; (3) if the Common Stock of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than one Person, and one or more of such other Persons has Registered Common Stock outstanding, "Principal Party" shall refer
to whichever of such other Persons is the issuer of the Registered Common Stock having the highest aggregate Current Per Share Market Price; and (4) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is directly or indirectly controlled by more than one Person, and none of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever ultimate parent entity is the corporation having the greatest stockholders' equity or, if no such ultimate parent entity is a corporation, shall
refer to whichever ultimate parent entity is the entity having the greatest net assets. 




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



     (i) (A)
file on an appropriate form, as soon as practicable following the execution of such agreement, a registration statement under the Securities Act with respect to
the shares of Common Stock of such Principal Party that may be acquired upon exercise of the Rights, (B) cause such registration statement to remain effective (and to include a prospectus
complying with the requirements of the Securities Act) until the Expiration Date, and (C) as soon as practicable following the execution of such agreement take such action as may be required to
ensure that any acquisition of such shares of Common Stock of such Principal Party upon the exercise of the Rights complies with any applicable state securities or "blue sky" laws; and 


    (ii) deliver
to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the Exchange Act. 




    (d) In
case the Principal Party which is to be a party to a transaction referred to in this Section 13 has a provision in any of its authorized securities or in
its certificate of incorporation, bylaws or other instrument governing its corporate affairs, which provision would have the effect of (i) causing such Principal Party to issue, in connection
with, or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of Common Stock of such Principal Party at less than the Current Per Share Market Price
per share or securities exercisable for, or convertible into, shares of Common Stock of such Principal Party at less than such Current Per Share Market Price (other than to holders of Rights pursuant
to this Section 13) or (ii) providing for any special payment, tax or similar provisions in connection with the issuance of the shares of Common Stock of such Principal Party pursuant to
the provisions of this Section 13, then, in such event, the Company shall not consummate 


18





 


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


    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 Per Share Market Price of a whole Right. For the purposes of this Section 14(a), the Current Per Share Market Price 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. The closing price for any 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 NASDAQ or, if the Rights are not listed or admitted to trading on the NASDAQ, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the
NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the board of directors of the Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the board of directors of the Company shall be conclusively used. 


    (b) The
Company shall not be required to issue fractions of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock). Fractions of Preferred Stock in integral multiples of one one-thousandth of a share of Preferred Stock may, at the election of
the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided,  however, 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 Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred 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 Per Share Market Price of one share of Preferred Stock. 


    (c) The
holder of a Right by the acceptance of the Right expressly waives such holder's right to receive any fractional Rights or any fractional shares upon exercise of
a Right (except as provided above). 



    Section
15.  Rights of Action.  All rights of action in respect of this Agreement, excepting the rights
of action given to the Rights Agent under Section 18, are vested in the respective registered 


19





 




holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of certificates representing shares of Common Stock of the Company); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, a certificate representing shares of Common Stock of the Company), without the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of a certificate representing shares of Common Stock of the Company), may, in such holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder's right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations hereunder, and injunctive relief
against actual or threatened violations of the obligations of any Person subject to this 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 shares of Common Stock of the Company; 



    (b) after
the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; 


    (c) subject
to Sections 6(a) and 7(f), 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; and 


    (d) notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other
Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the
Company must use commercially reasonably efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as practicable. 


    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 the holder of the Units of Preferred Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights represented thereby, nor shall anything contained in this Agreement 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), 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 this Agreement. 


20





 




    Section 18.  Concerning the Rights Agent.  The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it under this Agreement and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence or willful misconduct on the part of the Rights Agent, for any action taken, suffered or omitted by the Rights Agent in connection
with the execution, acceptance and administration of this Agreement and the exercise and performance of its duties, including the costs and expenses of defending against and appealing any claim of
liability in the premises. This indemnity shall survive the termination of this Agreement and the expiration of the Rights. The costs and expenses incurred in enforcing this right of indemnification
shall be paid by the Company. 


    The
Rights Agent may conclusively rely upon and shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement and the exercise and performance of its duties hereunder in reliance upon any Rights Certificate or certificate for Units of Preferred Stock 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
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. 


    Section 19.  Merger or Consolidation or Change of Name of Rights Agent.  


    (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the stock transfer or corporate trust business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto;  provided, that such corporation must be eligible for appointment as a successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this 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 Agreement. 


    (b) 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 Agreement. 


    Section
20.  Duties of Rights Agent.  The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions and no implied duties or obligations shall be read into this Agreement against the Rights Agent, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound: 


21





 




    (a) Before the Rights Agent acts or refrains from acting, it may consult with legal counsel of its choice (who may be legal counsel for the Company), and the advice or
opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken, suffered or omitted by it in good faith and in accordance with such advice
or opinion. 


    (b) Whenever
in the administration, exercise and performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking, suffering or omitting 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 officer of the Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken, suffered or omitted in good faith by it under the provisions of this Agreement in reliance upon such certificate. 


    (c) The
Rights Agent shall be liable hereunder to the Company only for its own gross negligence or willful misconduct. 


    (d) The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates (except
its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 


    (e) The
Rights Agent shall not be under any liability or responsibility in respect of the legality, validity or enforceability of this Agreement or the execution and
delivery hereof (except the due execution by the Rights Agent) or in respect of the legality, validity or enforceability or the execution of any Rights Certificate (except its countersignature); nor
shall it be liable or responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii)) or any adjustment in the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, 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 of the certificate described in Section 12); nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Units of Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any Preferred Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable. 


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


    (g) The
Rights Agent is hereby authorized and directed to accept instructions with respect to the administration, exercise and performance of its duties hereunder from
any one officer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be responsible or liable for any action taken, suffered or
omitted 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 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 (5) Business Days after the
date any officer of the Company actually received such application, unless any such officer shall have consented 


22





 




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


    (i)  The
Rights Agent may execute and exercise any of the rights or powers vested in it or perform any duty under this Agreement 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 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 the Rights Agent in good faith believes 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, transfer, split up, combination or exchange, the certification on the form
of assignment or form of election to purchase, as the case may be, that the Rights evidenced by the Rights Certificate are not owned by an Acquiring Person, or an Affiliate or Associate thereof, has
either not been completed or in any manner indicates any other response thereto, the Rights Agent shall not take any further action with respect to such requested exercise, transfer, split up,
combination or exchange, 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 Agreement upon thirty days' notice in writing mailed to the Company and to each transfer agent of the Common Stock of the Company or Preferred Stock (as to
which the Rights Agent has received prior written notice) by registered or certified mail, and the Company shall mail notice thereof to the holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock or Preferred Stock (as to which the Rights Agent has received prior written notice) 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 thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit such holder's 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, authorized under such laws to exercise corporate trust
or stock transfer powers, and 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 fifty million dollars ($50,000,000). 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 


23





 




predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the
Common Stock or Preferred Stock, and mail a notice thereof in writing 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
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 its board of directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or sale of shares of Common Stock of the Company following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Common Stock of the Company so issued or sold pursuant to the exercise of stock options or under any employee benefit plan or arrangement or upon the
exercise, conversion or exchange of securities of the Company currently outstanding or issued at any time in the future by the Company and (b) may, in any other case, if deemed necessary or
appropriate by the board of directors of the Company 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 and Termination.  


    (a) The
Company may, at its option, upon approval by the board of directors, at any time on or prior to the Close of Business (or such later date as may be determined
by its board of directors) on the earlier of (i) the Distribution Date or (ii) the Final Expiration Date redeem all but not less than all the then outstanding Rights at a redemption
price of $0.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date of this Agreement (such redemption price being hereinafter
referred to as the "Redemption Price"), and the Company may, at its option, pay the Redemption Price either in cash, shares of Common Stock of the Company (based on the Current Per Share Market Price
thereof at the time of redemption), or any other form of consideration deemed appropriate by its board of directors. The redemption of the Rights by the board of directors of the Company may be made
effective at such time on such basis and with such conditions as the board of directors of the Company in its sole discretion may establish. Any such redemption will be effective immediately upon the
action of the board of directors of the Company ordering the same, unless such action of the board of directors of the Company expressly provides that such redemption will be effective at a subsequent
time or upon the occurrence or nonoccurrence of one or more specified events (in which case such redemption will be effective in accordance with the provisions of such action of the board of directors
of the Company). 


    (b) Immediately
upon the action of the board of directors of the Company ordering the redemption of the Rights pursuant to Section 23(a), and without any further
action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not 


24





 




affect the validity of such redemption. Within ten (10) days after such action of the board of directors of the Company ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in such manner shall be deemed given, whether or not the holder
receives the notice. Each 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, and other than in connection with the
purchase of shares of Common Stock prior to the Distribution Date. 


    (c) Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be exercisable pursuant to Section 7(a) at any time when the
Rights are redeemable hereunder. 


    Section 24.  Exchange.  


    (a) The
Company, at its option, upon approval by its board of directors, at any time after any Person becomes an Acquiring Person, may 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 Units of Preferred Stock at an exchange ratio
equal to, subject to adjustment to reflect stock splits, stock dividends and similar transactions occurring after the date hereof, that number obtained by dividing the Purchase Price by the then
Current Per Share Market Price per Unit of Preferred Stock on the earlier of (i) the date on which any Person becomes an Acquiring Person and (ii) the date of      
commencement of a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such capacity) if upon consummation thereof such Person would be the Beneficial Owner of 15% or more of the shares of Common Stock of the
Company then outstanding (such exchange ratio being hereinafter referred to as the "Section 24(a) Exchange Ratio"). Notwithstanding the foregoing, the Company may not effect such exchange at
any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan maintained by the Company or any of its Subsidiaries, or any trustee or fiduciary with
respect to such plan acting in such capacity), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock of the Company then
outstanding. 


    (b) Immediately
upon the action of the board of directors of the Company ordering the exchange of any Rights pursuant to subsection (a) of this Section 24
and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of
Units of Preferred Stock equal to the number of such Rights held by such holder multiplied by the Section 24(a) Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner provided in this Agreement 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 Units of Preferred 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)) held by each holder of Rights. 



    (c) In
the event that the number of shares of Preferred Stock authorized by the Company's certificate of incorporation but not outstanding or reserved for issuance for
purposes other than upon 


25





 




exercise of the Rights is not sufficient to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Preferred Stock for issuance upon exchange of the Rights or make adequate provision to substitute (1) cash, (2) Common Stock of the Company or other equity
securities of the Company, (3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing, having an aggregate value equal to the Adjustment Spread,
where such aggregate value has been determined by the board of directors of the Company. To the extent that the Company determines that some action need be taken pursuant to Section 24(a), the
board of directors of the Company may temporarily
suspend the exercisability of the Rights for a period of up to sixty (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 Preferred 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 smaller than or to distribute certificates which evidence fractions smaller than one one-thousandth
of a share of Preferred Stock. In lieu thereof, the Company shall pay to the registered holders of the Rights Certificates with regard to which such fractional Units would otherwise be issuable an
amount in cash equal to the same fraction of the Current Per Share Market Price of one Unit of Preferred Stock. 


    Section 25.  Notice of Certain Events.  


    (a) In
case the Company shall propose (i) to pay any dividend payable in stock of any class to the holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to
purchase any additional Units of Preferred Stock or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding Preferred Stock), (iv) to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company or (vi) to declare or pay any dividend on the Common Stock of the Company payable in shares of Common Stock of the Company or to effect a subdivision, combination or
consolidation of the shares of Common Stock of the Company (by reclassification or otherwise than by payment of dividends in shares of Common Stock), then, in each such case, the Company shall give to
each holder of a Rights Certificate, in accordance with Section 26, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock of the Company and/or shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least ten (10) days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action, and
in the case of any such other action, at least ten (10) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Common Stock
of the Company and/or shares of Preferred Stock, whichever shall be the earlier. 


    (b) In
case any of the events set forth in Section 11(a)(ii) shall occur, then the Company shall as soon as practicable thereafter give to each holder of
a Rights Certificate, in accordance with Section 26, a notice of the occurrence of such event, which notice shall describe such event and the 


26





 




consequences of such event to holders of Rights under Section 11(a)(ii). In the event any Person becomes an Acquiring Person, the Company will promptly notify the Rights Agent thereof. 



    Section
26.  Notices.  Notices or demands authorized by this 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 registered or certified mail, postage prepaid, addressed (until another address is
filed in writing by the Company with the Rights Agent) as follows: 




Ask
Jeeves, Inc.

5858 Horton Street, Suite 350

Emeryville, CA 94608

Attention: General Counsel 





    Subject
to the provisions of Section 21, any notice or demand authorized by this 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 sent by registered or certified mail and shall be deemed given upon receipt and addressed (until another address is filed in writing by the Rights Agent with the Company)
as follows: 




Fleet
National Bank, N.A.

150 Royall Street

Canton, MA 02021

Attention: Client Administration 





    Notices
or demands authorized by this 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 Agreement in any respect, without the approval of any holders of Rights, by action of its board of directors, and the Rights Agent shall, if the Company so directs, execute such supplement
or amendment. From and after the Distribution Date, the Company may from time to time supplement or amend this Agreement without the approval of any holders of Rights, by action of its board of
directors in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), including, without limitation, to change the Purchase Price, the Redemption Price,
any time periods herein specified, and any other term hereof, any such supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent;  provided, however, that from and
after such time as any Person becomes an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Upon receipt of a certificate from an appropriate officer of the Company that the proposed supplement or amendment is consistent with
this Section 27 and, after such time as any Person has become an Acquiring Person, that the proposed supplement or amendment does not adversely affect the interests of the holders of Rights,
the Rights Agent shall execute such supplement or amendment. 


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


    Section
29.  Determinations and Actions by the Board of Directors.  For all purposes of this Agreement,
any calculation of the number of shares of Common Stock of the Company outstanding at 


27





 




any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of the Company 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 Exchange Act. The board of directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically granted to the board of directors, or the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the 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 of directors of the Company in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights Certificates and all other parties and (y) not subject the board of directors of the Company to any
liability to the holders of the Rights. 


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


    Section
31.  Severability.  If any term, provision, covenant or restriction of this 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 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 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 of directors of the Company determines in its good faith
judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 shall be
reinstated and shall not expire until the tenth Business Day following the date of such determination by the board of directors of the Company. 


    Section
32.  Governing Law.  This Agreement and each Rights Certificate issued hereunder shall be deemed
to be a contract made under, and for all purposes shall be governed by and construed in accordance with, the internal laws of the State of Delaware applicable to contracts to be made and performed
entirely within such state, without regard to the choice-of-law or conflict-of-laws principles of any jurisdiction. 



    Section
33.  Counterparts.  This 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 one and the same instrument. 


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


28





 




    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. 



	 	 	ASK JEEVES, INC.
	

 	
 	

By:	
 	

/s/ A. GEORGE (SKIP) BATTLE   

	 	 	Name:	 	A. George (Skip Battle
	 	 	Title:	 	Chief Executive Officer
	

 	
 	

FLEET NATIONAL BANK, N.A.
	

 	
 	

By:	
 	

 
	 	 	 	 	/s/ MICHAEL CONNOR   

	 	 	Name:	 	Michael Connor
	 	 	Title:	 	Managing Director




29






   Exhibit A  


 FORM

of

CERTIFICATE OF DESIGNATION

of

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

of

ASK JEEVES, INC.,

(Pursuant to Section 151 of the

Delaware General Corporation Law)  





    ASK JEEVES, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by the board of directors of the Corporation as required by Section 151 of the General Corporation Law at a meeting
duly called and held on April 26, 2001; 


    RESOLVED,
that pursuant to the authority granted to and vested in the board of directors of the Corporation (hereinafter the "Board") in accordance with the provisions of the Amended
and Restated Certificate of Incorporation, as currently in effect, the Board hereby creates a series of Preferred Stock, par value $.001 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows: 


    Series A
Junior Participating Preferred Stock: 


    Section 1.  Designation and Amount.  The shares of such series shall be designated as
"Series A Junior Participating Preferred Stock" (the "Series A Preferred Stock") and the number of shares constituting the Series A Preferred Stock shall be one hundred fifty
thousand (150,000). Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock. 


    Section 2.  Dividends and Distributions.  



	(a)
	Subject
to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with
respect to dividends, each holder of a share of Series A Preferred Stock, in preference to the holders of shares of common stock, par value $.001 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive, when declared by the Board out of funds legally available for the purpose, dividends in an amount per share (rounded to the
nearest cent) equal to, subject to the provision for adjustment hereinafter set forth, one thousand (1,000) times the aggregate per share amount of all cash dividends, and one thousand (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. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a 



A–1





 


subdivision
or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 



	(b)
	The
Corporation shall declare a dividend or distribution on the shares of Series A Preferred Stock as provided in Section 2(a) immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided,  however, that, in the event no dividend or
distribution shall be declared by the Board on the Common Stock for which it does not declare the dividend
required to be declared on the Preferred Stock pursuant to Section 2(a).



	(c)
	Accrued
but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A 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 Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than sixty days
prior to the date fixed for the payment thereof. 




    Section 3.  Voting Rights.  The holders of shares of Series A Preferred Stock shall have
the following voting rights: 



	(a)
	Subject
to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to one thousand (1,000) votes on all
matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately prior to such event.



	(b)
	Except
as otherwise provided herein, in any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.



	(c)
	Except
as set forth herein, or as otherwise provided by law, holders of Series A 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 4.  Certain Restrictions.  



	(a)
	Whenever
quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and 



A–2





 



unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not: 


	(i)
	declare
or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;



	(ii)
	declare
or pay dividends, or 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 the Series A Preferred Stock, except dividends paid ratably on the shares of Series A 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 junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; provided, that the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or



	(iv)
	redeem
or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A 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. 





	(b)
	The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under Section 4(a), purchase or otherwise acquire such shares at such time and in such manner. 




    Section 5.  Reacquired Shares.  Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled 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 subject to the conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law. 



    Section 6.  Liquidation, Dissolution or Winding Up.  



	(a)
	Upon
any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (i) to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received the greater
of (A) one thousand dollars ($1,000) per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, to the date of such payment (the "Series A Liquidation
Preference"); or (B) an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to one thousand (1,000) times the aggregate amount to be distributed per
share to holders of shares of Common Stock (the "Common Adjustment"), or (ii) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the 



A–3





 


total
amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the proviso in clause (i) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event
("Adjustment Number"). 



	(b)
	In
the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all
other series of Preferred Stock, if any, which rank on a parity with the Series A Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares
in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining
assets shall be distributed ratably to the holders of Common Stock.



	(c)
	In
the event the Corporation shall at any time after April 27, 2001 (i) declare any dividend on 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 Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 




    Section 7.  Consolidation, Merger, etc.  In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or converted
or changed into other stock or securities, cash and/or any other property (or into the right to receive any of the foregoing), then in any such case each share of Series A Preferred Stock shall
at the same time be similarly exchanged, converted or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to one thousand (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 exchanged, converted or changed. In the event
the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount
set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to
such event. 


    Section 8.  No Redemption.  The shares of Series A Preferred Stock shall not be redeemable. 



    Section 9.  Rank.  The Series A Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other class of the Corporation's Preferred Stock. 


A–4





 


    Section 10.  Amendment.  The certificate of incorporation of the Corporation shall not be amended
in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the
holders of at least a majority of the outstanding shares of Series A Preferred Stock, voting together as a single class. 


    IN
WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Corporation as of     , 2001. 



	 	 	ASK JEEVES, INC.
	

 	
 	

By:	
 	


	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 




A–5






  



Exhibit B  


 
 

Form of Rights Certificate    
  


    
Certificate No. R-            Rights 




NOT
EXERCISABLE AFTER MAY 7, 2011 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY AT $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 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 (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 SUCH AGREEMENT.]* 






	(*)
	The
portion of the legend in bracket shall be inserted only if applicable and shall replace the preceding sentence. 


 
 

Rights Certificate
  
    ASK JEEVES, INC.    
  


    This certifies that            , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of April 26, 2001 (the "Rights Agreement"), between ASK JEEVES, INC., a Delaware
corporation (the "Company"), and FLEET NATIONAL BANK, as Right Agent (the "Rights Agent"), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on May 7, 2011 at the office of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent,
one one-thousandth (a "Unit") of a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value $.001 per share (the "Series A
Preferred Stock") of the Company, at a purchase price of $20.00 per Unit of Series A Preferred Stock (the "Purchase Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase duly executed. The number of Rights evidenced by this Rights Certificate (and the number of Units of Series A Preferred Stock which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of May 7, 2001 based on the Series A Preferred Stock as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the number of Units of Series A Preferred Stock which 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 of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of 


B–1





 




the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates. 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 Series A Preferred Stock 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 may be redeemed by the Company at a redemption price of $.01 per Right. 


    No
fractional shares of Series A Preferred Stock will be issued upon the exercise of any Rights or Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a share of Series A Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. 


    No
holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of Units of Series A Preferred Stock or of
any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights 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. 


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    WITNESS the signature of the proper officers of the Company and its corporate seal. Dated as of     ,    . 



	 	 	ASK JEEVES, INC.
	

 	
 	

By:	
 	


	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 





	COUNTERSIGNED:	 
	FLEET NATIONAL BANK, N.A. as

Rights Agent	 
	

By:	
 	

 Authorized Signatory	

 
	 	 	Name:	 	 	 
	 	 	Title:	 	 	 




B–3






  



 
 

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



	 
	 	 
	 	 

	DATED:             ,    	 	 	 	 
	



	
 	

 	
 	

 Signature





Signature
Guaranteed: 


    Signatures
must be guaranteed by a participant in a Securities Transfer Association Inc. recognized signature guarantee medallion program. 


B–4





 
 
 

CERTIFICATE    



    The
undersigned hereby certifies that the Rights evidenced by this Rights Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (each as
defined in the Rights Agreement). 



	 
	 	 

	 	 	
 Signature






 
 

NOTICE    



    The
signature in the foregoing Form of Assignment must conform to the name as written upon 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 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 (each as defined in the Rights Agreement) and such Assignment will not be honored. 


B–5






  



 
 

FORM OF ELECTION TO PURCHASE    
  


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


To
Ask Jeeves, Inc. 


    The
undersigned hereby irrevocably elects to exercise              Rights represented by this Rights Certificate to purchase the Units of
Series A Preferred Stock issuable upon the exercise of such Rights and requests that certificates for such Series A Preferred Stock 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)





	 
	 	 
	 	 

	DATED:             ,    	 	 	 	 
	



	
 	

 	
 	

 Signature





Signature
Guaranteed: 


    Signatures
must be guaranteed by a participant in a Securities Transfer Association Inc. recognized signature guarantee medallion program. 


B–6





 
 
 

CERTIFICATE    



    The
undersigned hereby certifies that the Rights evidenced by this Rights Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (each as
defined in the Rights Agreement). 



	 
	 	 

	 	 	
 Signature






 
 

NOTICE    



    The
signature in the foregoing Form of Election to Purchase must conform to the name as written upon 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 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 (each as defined in the Rights Agreement) and such Election to Purchase will not
be honored. 


B–7






  



Exhibit C  


 
 

ASK JEEVES, INC.
  
    SUMMARY OF RIGHTS TO PURCHASE
  SHARES OF SERIES A PREFERRED STOCK    
  


    On April 27, 2001, your board of directors declared a dividend distribution of one Right for each outstanding share of our common stock to stockholders
of record at the close of business on May 7, 2001. Each Right entitles the registered holder to purchase from the company one one-thousandth of a share of Series A Junior
Participating preferred stock, par value $0.001 per share (the "Preferred Stock"), at a purchase price of $20.00, subject to adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between Ask Jeeves, Inc. and Fleet National Bank, N.A., as Rights Agent. 


    Initially,
the Rights will be attached to all common stock certificates representing shares then outstanding, and no separate Rights certificates will be distributed. The Rights will
separate from the common stock and a distribution date will occur upon the earlier of (i) ten days following a public announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has (subject to certain exceptions) acquired, or obtained the right to acquire, beneficial ownership of 15% or more of the outstanding shares of our common stock (the "Stock
Acquisition Date"), other than as a result of repurchases of stock by the Company, or (ii) ten business days (or such later date as the board shall determine) following the commencement of a
tender offer or exchange offer that would result in a person or group beneficially owning 15% or more of such outstanding shares of our common stock. Until the Distribution Date, (i) the Rights
will be evidenced by the common stock certificates and will be transferred with and only with such common stock certificates, (ii) new common stock certificates issued after the record date
will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for common stock outstanding will also constitute the transfer
of the Rights associated with the common stock represented by such certificate. Pursuant to the Rights Agreement, the company reserves the right to require, at any time prior to the occurrence of a
Triggering Event (as defined below), the Rights to be exercised in multiples of one thousand so that only whole shares of preferred stock will be issued. 


    The
Rights are not exercisable until the Distribution Date and will expire at the close of business on May 7, 2011, unless earlier redeemed by the company as described below. 


    As
soon as practicable after the Distribution Date, Rights certificates will be mailed to holders of record of our common stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights certificates alone will represent the Rights. Except as otherwise determined by the board, only shares of our common stock issued prior to the Distribution Date
will be issued with Rights. 


    In
the event that an Acquiring Person becomes (subject to certain exceptions) the beneficial owner of 15% or more of the then outstanding shares of common stock (other than pursuant
to an offer for all the outstanding shares of common stock that our board of directors determines to be fair to and otherwise in the best interests of the company and its stockholders), each holder of
a Right will thereafter have the right to receive, upon exercise, Preferred Stock (or, in certain circumstances, cash, property or other securities of the company) having a value equal to two times
the exercise price of the Right. Notwithstanding any of the foregoing, following the occurrence of any of the events set forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. For example, at an exercise price of $20 per Right, each Right not owned by an Acquiring
Person would entitle its holder to purchase $40 worth of Preferred Stock (or other consideration, as noted above) for $20. Assuming that 


C–1





 




our Preferred Stock had a per share value of $5 at such time, the holder of each valid Right would be entitled to purchase 8 shares of Preferred Stock for $20. 



    If
at any time following the Stock Acquisition Date (i) we are acquired in a merger or other business combination transaction in which we are not the surviving corporation
(other than a merger which follows an offer for all outstanding shares of common stock that our board of directors determines to be fair and otherwise in the best interests of the company and its
stockholders), or (ii) 50% or more of our assets, cash flow or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided) shall have the
right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right. The events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering Events." 


    At
any time after a person becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the outstanding common stock, the board may exchange the
Rights (other than Rights owned by the person or group which have become void), in whole or in part, at an exchange ratio of one share of common stock, or one one-thousandth of a share of
preferred stock (or of a share of a class or series of our preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment). 


    At
any time until the Distribution Date, the board may redeem the Rights in whole, but not in part, at a price of $0.01 per Right (payable in cash, common stock or other consideration
deemed appropriate
by the board). Immediately upon the action of the board ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $0.01 redemption
price. 


    Until
a Right is exercised, the holder of a Right will have no voting, dividend or other rights by virtue of ownership as a stockholder of the company. While the distribution of the
Rights will not be taxable to stockholders or to the company, stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Preferred
Stock (or other consideration) of the company or for common stock of the acquiring company. 


    Any
of the provisions of the Rights Agreement may be amended by the board prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be
amended by the board in order to cure any ambiguity, to make changes which do not adversely affect the interests of holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement. However, no amendment may be made at any time when the Rights are not redeemable. 


    A
copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an exhibit to a Current Report on Form 8-K. A copy of the Rights
Agreement is available free of charge from the company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference. 


C–2











QuickLinks


TABLE OF CONTENTS


RIGHTS AGREEMENT

RECITALS

AGREEMENT


Form of Rights Certificate

Rights Certificate ASK JEEVES, INC.



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.)

CERTIFICATE

NOTICE


FORM OF ELECTION TO PURCHASE

CERTIFICATE

NOTICE


ASK JEEVES, INC. SUMMARY OF RIGHTS TO PURCHASE SHARES OF SERIES A PREFERRED STOCK