Exhibit 4.2



 





RIGHTS AGREEMENT




DATED AS OF JULY 25, 2007




BETWEEN




NEW 360




AND




AMERICAN STOCK TRANSFER & TRUST COMPANY




AS RIGHTS AGENT




 









 





DEFINED TERM CROSS REFERENCE SHEET




	 	 	 	 	 
	Acquiring Person
	 	Section 1(a)
	Adjusted Number of Shares
	 	Section 11(a)(iii)
	Adjusted Purchase Price
	 	Section 11(a)(iii)
	Adjustment Shares
	 	Section 11(a)(ii)
	Affiliate
	 	Section 1(e)
	Agreement
	 	Preface
	Associate
	 	Section 1(e)
	Bagerdjian
	 	Section 1(g)
	Beneficial Owner
	 	Section 1(h)
	Beneficially Own
	 	Section 1(h)
	Business Day
	 	Section 1(i)
	Capital Stock Equivalent
	 	Section 11(a)(iii)
	Close of Business
	 	Section 1(k)
	Common Shares
	 	Section 1(l)
	Corporation
	 	Preface
	Current Per Share Market Price
	 	Section 11(d)(i)
	Distribution Date
	 	Section 3(a)
	Equivalent Preferred Shares
	 	Section 11(b)
	Exchange Act
	 	Section 1(q)
	Exchange Ratio
	 	Section 24(a)
	Final Expiration Date
	 	Section 7(a)
	Interested Shareholder
	 	Section 1(t)
	NASD
	 	Section 1(u)
	Permitted Offer
	 	Section 1(v)
	Person
	 	Section 1(w)
	Preferred Shares
	 	Section 1(x)
	Principal Party
	 	Section 13(b)
	Proration Factor
	 	Section 11(a)(iii)
	Purchase Price
	 	Section 4(a)
	Record Date
	 	Recitals
	Redemption Date
	 	Section 7(a)
	Redemption Price
	 	Section 23(a)(i)
	Right
	 	Recitals
	Right Certificate
	 	Section 3(a)
	Rights Agent
	 	Preface
	Rights Agreement
	 	Section 3(c)
	Section 11(a)(ii) Event
	 	Section 1(a)(ii)
	Section 13 Event
	 	Section 1(ii)
	Securities Act
	 	Section 1(kk)
	Security
	 	Section 11(d)(i)
	Shares Acquisition Date
	 	Section 1(mm)
	Subsidiary
	 	Section 1(nn)
	Summary of Rights
	 	Section 3(b)
	Then Outstanding
	 	Section 1(pp)






 









 






	 	 	 	 	 
	Trading Day
	 	Section 11(d)(i)
	Triggering Event
	 	Section 1(rr)
	Voting Securities
	 	Section 13(a)






 









 






TABLE OF CONTENTS




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







 









 





EXHIBIT 4.2




RIGHTS AGREEMENT




     RIGHTS AGREEMENT, dated as of July 25, 2007 (the “Agreement”), between New 360, a
California corporation (the “Corporation”), and American Stock Transfer & Trust Company
(the “Rights Agent”).



RECITALS




     A. The Board of Directors of the Corporation has authorized and declared a dividend of one
preferred share purchase right (a “Right”) for each Common Share (as defined herein) of the
Corporation outstanding at the Close of Business (as defined herein) on August 7, 2007 (the
“Record Date”), each Right representing the right to purchase one one-hundredth of a
Preferred Share (as defined herein), 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 Common Share
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 defined herein); provided,
however, that Rights may be issued with respect to Common Shares that shall become outstanding
after the Distribution Date and before the earlier of the Redemption Date and the Final Expiration
Date in accordance with the provisions of Section 22 of this Agreement.



     B. The Corporation contemplates that it shall change its name to Point.360 prior to September
2007. After such name change, references to New 360 in this Agreement or in any exhibit to this
Agreement shall instead be deemed to refer to Point.360.



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



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



     (a) “Acquiring Person” shall mean any Person (as defined herein) who or which,
together with all Affiliates and Associates (as defined herein) of such Person, shall be the
Beneficial Owner (as defined herein) of 20% or more of the then outstanding Common Shares (other
than as a result of a Permitted Offer (as defined herein)) or was such a Beneficial Owner at any
time after the date hereof, whether or not such person continues to be the Beneficial Owner of 20%
or more of the then outstanding Common Shares. Notwithstanding the foregoing, (A) the term
“Acquiring Person” shall not include (i) the Corporation, (ii) any Subsidiary of the Corporation,
(iii) any employee benefit plan of the Corporation or of any Subsidiary of the Corporation, (iv)
any Person organized, appointed or established by the Corporation for or pursuant to the terms of
any such plan, (v) Haig S. Bagerdjian, or (vi) any Person, who or which together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 20% or more of the then
outstanding Common Shares as a result of the acquisition of Common Shares directly from the
Corporation, and (B) no Person shall be deemed to be an “Acquiring Person” either (X) as a result
of the acquisition of Common Shares by the Corporation which, by reducing the number of Common
Shares outstanding, increases the proportional number of shares beneficially owned by such Person,
together with all Affiliates and Associates of such Person; except that if (i) a Person would
become an Acquiring Person (but for the operation of



 









 




this subclause X) as a result of the acquisition of Common Shares by the Corporation, and (ii) after such share acquisition by the
Corporation, such Person, or an Affiliate or Associate of such Person, becomes the Beneficial Owner
of any additional Common Shares, then such Person shall be deemed an Acquiring Person, or (Y) if
the Board of Directors of the Corporation determines in good faith that a Person who would
otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this Section
1(a), has become such, and such Person divests as promptly as practicable a sufficient number of
Common Shares so that such Person would no longer be an Acquiring Person, as defined pursuant to
the foregoing provisions of this Section 1(a), then such Person shall not be deemed an “Acquiring
Person” for any purposes of this Agreement.




     (b) “Adjusted Number of Shares” shall have the meaning set forth in Section 11(a)(iii)
hereof.



     (c) “Adjusted Purchase Price” shall have the meaning set forth in Section 11(a)(iii)
hereof.



     (d) “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii) hereof.



     (e) “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.



     (f) “Agreement” shall have the meaning set forth in the preface hereof.



     (g) “Bagerdjian” shall mean Haig S. Bagerdjian.



     (h) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to
“beneficially own” any securities:



          (i) of which such Person or any of such Person’s Affiliates or Associates directly or
indirectly, has “beneficial ownership” as determined in accordance with Rule 13d-3 of the General
Rules and Regulations under the Exchange Act;




          (ii) which such Person or any of such Person’s Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately or after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise; provided, however, that
a Person shall not be deemed 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 or dispose of pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security if the agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D or Schedule
13G under the Exchange Act (or any comparable or successor report); or




2









 








          (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 (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide public offering of
securities) relating to the acquisition, holding, voting (except to the extent contemplated by the
proviso to Section 1(h)(ii)(B)) or disposing of any securities of the Corporation.




     Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding,” when used herein with reference to a Person’s Beneficial
Ownership of securities of the Corporation, 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 own beneficially hereunder.



     (i) “Business Day” shall mean any day other than a Saturday, Sunday or U.S. federal
holiday.



     (j) “Capital Stock Equivalent” shall have the meaning set forth in Section 11(a)(iii)
hereof.



     (k) “Close of Business” on any given date shall mean 5:00 P.M., California time, on
such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M.,
California time, on the next succeeding Business Day.



     (l) “Common Shares” when used with reference to the Corporation shall mean the shares
of Common Stock, without par value, of the Corporation or, in the event of a subdivision,
combination or consolidation with respect to such shares of Common Stock, the shares of Common
Stock resulting from such subdivision, combination or consolidation. “Common Shares” when used with
reference to any Person other than the Corporation shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned
Person.



     (m) “Corporation” shall mean New 360, a California corporation; provided that the
“Corporation” shall also mean Point.360, a California corporation, if and when New 360 changes its
name to Point.360 after the date of this Agreement.



     (n) “Current Per Share Market Price” shall have the meaning set forth in Section
11(d)(i) hereof.



     (o) “Distribution Date” shall have the meaning set forth in Section 3(a) hereof.



     (p) “Equivalent Preferred Shares” shall have the meaning set forth in Section 11(b)
hereof.



     (q) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time.



3









 





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



     (s) “Final Expiration Date” shall have the meaning set forth in Section 7(a) hereof.



     (t) “Interested Shareholder” shall mean any Acquiring Person, or any Affiliate or
Associate of an Acquiring Person, or any other Person in which any such Acquiring Person, Affiliate
or Associate has an interest, or any other Person acting directly or indirectly on behalf of or in
concert with any such Acquiring Person, Affiliate or Associate.



     (u) “NASD” shall mean the NASD, Inc..



     (v) “Permitted Offer” shall mean a tender or exchange offer which is for all
outstanding Common Shares at a price and on terms determined, before the purchase of shares under
such tender or exchange offer, by at least a majority of the members of the Board of Directors who
are not officers of the Corporation and who are not Acquiring Persons or Affiliates, Associates,
nominees or representatives of an Acquiring Person, to be adequate (taking into account all factors
that such members of the Board of Directors deem relevant including, without limitation, prices
that could reasonably be achieved if the Corporation or its assets were sold on an orderly basis
designed to realize maximum value) and otherwise in the best interests of the Corporation and its
shareholders (other than the Person or any Affiliate or Associate thereof on whose basis the offer
is being made) taking into account all factors that such directors may deem relevant.



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



     (x) “Preferred Shares” shall mean shares of Series A Junior Participating Preferred
Stock, without par value, of the Corporation having the relative rights, preferences and
limitations set forth in the Form of Certificate of Determination attached to this Agreement as
Exhibit A.



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



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



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



     (bb) “Record Date” shall have the meaning set forth in the Recitals to this Agreement.



     (cc) “Redemption Date” shall have the meaning set forth in Section 7(a) hereof.



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



     (ee) “Right” shall have the meaning set forth in the Recitals to this Agreement.



     (ff) “Right Certificate” shall have the meaning set forth in Section 3(a) hereof.



4









 





     (gg) “Rights Agent” shall have the meaning set forth in preface to this Agreement.



     (hh) “Rights Agreement” shall have the meaning set forth in Section 3(c) hereof.



     (ii) “Section 11(a)(ii) Event” shall mean any event described in Section 11(a)(ii)
hereof.



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



     (kk) “Securities Act” shall mean the Securities Act of 1933, as amended from time to
time.



     (ll) “Security” shall have the meaning set forth in Section 11(d)(i) hereof.



     (mm) “Shares Acquisition Date” shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a report filed pursuant
to the Exchange Act) by the Corporation or an Acquiring Person that an Acquiring Person has become
such; provided, that, if such Person is determined not to have become an Acquiring Person pursuant
to Section 1(a)(Y) hereof, then no Shares Acquisition Date shall be deemed to have occurred.



     (nn) “Subsidiary” of any Person shall mean any corporation or other Person of which a
majority of the voting power of the voting equity securities or equity interest is owned, directly
or indirectly, by such Person.



     (oo) “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.



     (pp) “Then Outstanding” shall have the meaning set forth in Section 1(h) hereof.



     (qq) “Trading Day” shall have the meaning set forth in Section 11(d)(i) hereof.



     (rr) “Triggering Event” shall mean any Section 11(a)(ii) Event or any Section 13
Event.



     (ss) “Voting Securities” shall have the meaning set forth in Section 13(a) hereof.



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



     Section 3. Issuance of Right Certificates. 



     (a) Until the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the Close
of Business on the tenth Business Day (or such later date as may be determined by action



5









 




of the Corporation’s Board of Directors) after the date on which any Person (other than the Corporation,
any Subsidiary of the Corporation, Bagerdjian, any employee benefit plan of the Corporation or of
any Subsidiary of the Corporation or any Person or entity organized, appointed or established by
the Corporation for or pursuant to the terms of any such plan) commences or first publicly
announces the intent to commence (which intention to commence remains in effect for five Business
Days after such announcement), a tender or exchange offer the consummation of which would result in
any Person becoming an Acquiring Person (including, in the case of both (i) and (ii), any such date
which is after the date of this Agreement and before the issuance of the Rights), the earlier of
such dates being herein referred to as the “Distribution Date,” (x) the Rights will be
evidenced by (subject to the provisions of Section 3(b) hereof) the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of the underlying Common
Shares (including a transfer to the Corporation); provided, however, that if a tender offer is
terminated before a Distribution Date occurs, then no Distribution Date shall occur as a result of
such tender offer. As soon as practicable after the Distribution Date, the Corporation will
prepare and execute, the Rights Agent will countersign, and the Corporation will send or cause to
be sent by first-class, postage-prepaid mail, to each record holder of Common Shares as of the
Close of Business on the Distribution Date, at the address of such holder shown on the records of
the Corporation, a Right Certificate, substantially in the form of Exhibit B hereto (a “Right
Certificate”), evidencing one Right for each Common Share so held. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right Certificates.




     (b) As soon as practicable following the Record Date, the Corporation will send a copy of a
Summary of Rights to Purchase Preferred Shares, in substantially the form of Exhibit C hereto (the
“Summary of Rights”), by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Record Date, at the address of such holder shown on the
records of the Corporation. With respect to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the Summary of Rights
attached thereto. Until the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common Shares outstanding on
the Record Date, with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with such Common Shares.



     (c) Certificates for Common Shares, which become outstanding (including, without limitation,
reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record
Date but before the earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date, shall be deemed also to be certificates for Rights and shall bear the following legend:




This certificate also evidences and entities the holder hereof to certain
rights as set forth in a Rights Agreement between New 360 and American Stock
Transfer & Trust Company, dated as of July 25, 2007 (the “Rights
Agreement”), the terms of which are hereby incorporated herein by



6









 






reference and a copy of which is on file at the principal executive offices
of New 360. 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. New 360 will mail to the holder
of this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement) and certain related persons, whether
currently held by or on behalf of such Person or by any subsequent holder,
may become null and void.


With respect to such certificates containing the foregoing legend, until the Distribution Date, the
Rights associated with the Common Shares represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Corporation purchases or acquires any Common Shares after the Record Date but
before the Distribution Date, any Rights associated with such Common Shares shall be deemed
cancelled and retired so that the Corporation shall not be entitled to exercise any Rights
associated with the Common Shares that are no longer outstanding.




     Section 4. Form of Right Certificate. 



     (a) The Right Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall be substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate and as are consistent 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 any stock exchange on
which the Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-hundredths of a Preferred Share as shall be set forth
therein at the price per Preferred Share set forth therein (the “Purchase Price”), but the
amount and type of securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.



     (b) Any Right Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights which are null and void pursuant to Section 7(e) of this Agreement and any Right Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:




The Rights represented by this Right 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 Right Certificate and the Rights represented
hereby are null and void.



7









 




Provisions of Section 7(e) of this Agreement shall be operative whether or not the foregoing legend
is contained on any such Right Certificate.




     Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Corporation by its Chairman of the Board, its Chief Executive Officer,
its President, any of its Vice Presidents, or its Treasurer, either manually or by facsimile
signature, shall have affixed thereto the Corporation’s seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Corporation, either manually or by
facsimile signature. The Right Certificates shall be countersigned by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In the event that any officer of the
Corporation who signs any of the Right Certificates ceases to be such officer of the Corporation
before such countersignature by the Rights Agent and issuance and delivery by the Corporation, such
Right Certificates may nevertheless be countersigned by the Rights Agent and issued and delivered
by the Corporation with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Corporation; and any Right Certificate may be
signed on behalf of the Corporation by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Corporation to sign such Right Certificate,
although at the date of the execution of this Agreement any such person was not such an officer.



     Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate place for surrender or transfer of such
Right Certificate, books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the Right Certificates and the certificate
number and the date of each of the Right Certificates.



     Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificate. Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the Close of Business on the Distribution
Date, and at or before the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-hundredths of a Preferred Share (or, following a Triggering
Event, other securities, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights Agent and shall
surrender the Right Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Corporation shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the registered holder has
completed and signed the certificate contained in the form of assignment on the reverse side of
such Right Certificate and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner), or Affiliates or Associates thereof, as the
Corporation shall reasonably request. Subject to Section 4(b), Section 7(e) and Section 14 hereof,
the Rights Agent shall thereupon countersign and deliver to the Person



8









 




entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Corporation may
require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right Certificates.




     Upon receipt by the Corporation and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Right Certificate and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the
Corporation’s request, reimbursement to the Corporation and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Corporation will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.



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



     (a) Subject to Section 7(e) hereof, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price for the total number of one one-hundredths of a
Preferred Share (or other securities, as the case may be) as to which such surrendered Rights are
exercised, at or before the earliest of (i) the Close of Business on August 6, 2017 (the “Final
Expiration Date”), (ii) the date on which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”), or (iii) the date on which the Rights are exchanged
pursuant to Section 24 hereof.



     (b) The Purchase Price for each one one-hundredth of a Preferred Share pursuant to the
exercise of a Right shall initially be $10, subject to adjustment from time to time as provided in
the next sentence and in Sections 11 and 13(a) hereof, and shall be payable in accordance with
paragraph (c) below. Notwithstanding anything in this Agreement to the contrary, in the event that
at any time after the date of this Agreement and before the Distribution Date, the Corporation
shall (i) declare or pay any dividend on the Common Shares payable in Common Shares or (ii) effect
a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise
than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares,
then in any such case, each Common Share outstanding following such subdivision, combination or
consolidation shall continue to have a Right associated therewith, and the Purchase Price following
any such event shall be proportionately adjusted to equal the result obtained by multiplying the
Purchase Price immediately before such event by a fraction the numerator of which shall be the
total number of Common Shares outstanding immediately before the event occurs and the denominator
of which shall be the total number of Common Shares outstanding immediately after such event
occurs. The adjustment provided for in the preceding sentence shall be made successively whenever
such a dividend is declared or paid or such a subdivision, combination or consolidation is
effected.



9









 





     (c) Upon receiving a Right Certificate representing exercisable Rights, with the form of
election to purchase and the certificate duly executed, accompanied by payment of the Purchase
Price for the Preferred Shares (or other securities, 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 Right
Certificate in accordance with Section 6 hereof, by certified check, cashier’s check or money order
payable to the order of the Corporation, the Rights Agent shall thereupon promptly (i)(A)
requisition from any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased, and the Corporation hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Corporation, in its sole discretion, shall
have elected to deposit the Preferred Shares issuable upon exercise of the Rights hereunder into a
depositary, requisition from the depositary agent depositary receipts representing such number of
one one-hundredths of a Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer agent with the
depositary agent), and the Corporation will direct the depositary agent to comply with such
requests, (ii) when appropriate, requisition from the Corporation the amount of cash to be paid in
lieu of issuance of fractional shares, in accordance with Section 14 hereof, and (iii) after
receipt of such certificates or depositary receipts, cause the same, together with any cash to be
paid in lieu of fractional shares, to be delivered to, or upon the order of the registered holder
of such Right Certificate, registered in such name or names as may be designated by, such holder.
In the event that the Corporation is obligated to issue other securities (including Common Shares)
of the Corporation pursuant to Section 11(a) hereof, the Corporation will make all arrangements
necessary so that such other securities are available for distribution by the Rights Agent, if and
when appropriate.



     In addition, in the case of an exercise of the Rights by a holder pursuant to Section
11(a)(ii) hereof, the Rights Agent shall return such Right Certificate to the registered holder
thereof after imprinting, stamping or otherwise indicating thereon that the rights represented by
such Right Certificate no longer include the rights provided by Section 11(a)(ii) of the Rights
Agreement, and if less than all the Rights represented by such Right Certificate were so exercised,
the Rights Agent shall indicate on the Right Certificate the number of Rights represented thereby
which continue to include the rights provided by Section 11(a)(ii).



     (d) In case the registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of Section 14 hereof, or
the Rights Agent shall place an appropriate notation on the Right Certificate with respect to those
Rights exercised.



     (e) Notwithstanding anything in this Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person
or an Affiliate or Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any Affiliate or Associate thereof) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any Affiliate or Associate thereof) who
becomes a transferee before 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



10









 




or to any Person with whom the Acquiring Person has a continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Corporation, in its sole discretion,
has determined is part of a plan, arrangement or understanding that has as a primary purpose or
effect the avoidance of this Section 7(e) 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 Corporation shall use all reasonable
efforts to insure that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with but shall have no liability to any holder of Right Certificates or other Person as a result of
its failure to make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.




     (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Corporation shall be obligated to undertake any action with respect to a registered holder upon
the occurrence of any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Corporation shall reasonably request.



     Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Corporation 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 Right Certificates shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Agreement. The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Corporation otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to the Corporation, or shall, at the
written request of the Corporation, destroy such cancelled Right Certificates and in such case,
shall deliver a certificate of destruction thereof to the Corporation.



     Section 9. Reservation and Availability of Preferred Shares. The Corporation
covenants and agrees that at all times before a Section 11(a)(ii) Event occurs it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares, or any authorized
and issued Preferred Shares held in its treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding Rights and after a Section 11(a)(ii)
Event occurs, shall, to the extent reasonably practicable, so reserve and keep available a
sufficient number of Common Shares (and/or other securities) which may be required to permit the
exercise in full of the Rights pursuant to this Agreement.



     So long as the Preferred Shares (and, after a Section 11(a)(ii) Event occurs, Common Shares or
any other securities) issuable upon the exercise of the Rights may be listed on any national
securities exchange, the Corporation shall use its best efforts to cause, from and after such time
as the Rights become exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.



11









 





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



     The Corporation further covenants and agrees that it will pay when due and payable any and all
U.S. federal and state transfer taxes and charges which may be payable in respect of the issuance
or delivery of the Right Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Corporation shall not, however,
be required to pay any transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or the issuance or delivery of certificates or
depository receipts for the Preferred Shares (or Common Shares and/or other securities, as the case
may be) in a name other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise, or to issue or to deliver any certificates or depositary receipts
for Preferred Shares (or Common Shares and/or other securities, as the case may be) upon the
exercise of any Rights, until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has been established to the
Corporation’s reasonable satisfaction that no such tax is due.



     The Corporation shall use its best efforts to (i) file, as soon as practicable following the
Shares Acquisition Date, a registration statement under the Securities Act on an appropriate form,
with respect to the securities purchasable upon exercise of the Rights, (ii) cause such
registration statement to become effective as soon as practicable after such filing, and (iii)
cause such registration statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act and the rules and regulations thereunder) until the date of the
expiration of the rights provided by Section 11(a)(ii). The Corporation will also take such action
as may be appropriate or required under the blue sky laws of the various states.



     Section 10. Preferred Shares Record Date. Each person in whose name any certificate
for Preferred Shares (or Common Shares and/or other securities, as the case may be) is issued upon
the exercise of Rights shall for all purposes be deemed to have become the holder of record of the
Preferred Shares (or Common Shares and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes)
was made; provided, however, that, if the date of such surrender and payment is a date upon which
the Preferred Shares (or Common Shares and/or other securities, as the case may be) transfer books
of the Corporation are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares (or Common Shares and/or other securities, as the case may be) transfer books of
the Corporation are open.



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



12









 





     (a) (i) In the event the Corporation shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a consolidation or merger
in which the Corporation is the continuing or surviving corporation), except as otherwise provided
in this Section 11(a) and Section 7(e) hereof, 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 Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately before such date and at a time when the Preferred Shares transfer
books of the Corporation 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 Corporation
issuable upon exercise of one Right. If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made before, any adjustment required pursuant to Section
11(a)(ii).



          (ii) In the event any Person, alone or together with its Affiliates and Associates, shall
become an Acquiring Person, each holder of a Right (except as provided below and in Section 7(e)
hereof) shall, for a period of 60 days after the later of the occurrence of any such event or the
effective date of an appropriate registration statement under the Securities Act pursuant to
Section 9 hereof, have a right to receive, upon exercise thereof at a price equal to the then
current Purchase Price, in accordance with the terms of this Agreement, such number of Common
Shares (or, in the discretion of the Board of Directors, one one-hundredth of a Preferred Share) as
shall equal the result obtained by (x) multiplying the then current Purchase Price by the then
number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately
before the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) 50% of
the then current per share market price of the Corporation’s Common Shares (determined pursuant to
Section 11(d) hereof) on the date of such first occurrence (such number of shares being referred to
as the “Adjustment Shares”); provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply, and no adjustment shall be made
pursuant to this Section 11(a)(ii);




          (iii) In the event that there shall not be sufficient treasury shares or authorized but
unissued (and unreserved) Common Shares to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii) and the Rights become so exercisable (and the Board has
determined to make the Rights exercisable into fractions of a Preferred Share), notwithstanding any
other provision of this Agreement, to the extent necessary and permitted by applicable law, each
Right shall thereafter represent the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, (x) a number of (or fractions of)
Common Shares (up to the maximum number of Common Shares which may permissibly be issued) and (y)
one one-hundredth of a Preferred




13









 







Share or a number of, or fractions of other equity securities of the Corporation (or, in the discretion of the Board of Directors, debt) which the Board of
Directors of the Corporation has determined to have the same aggregate current market value
(determined pursuant to Section 11(d)(i) and (ii) hereof, to the extent applicable,) as one Common
Share (such number of, or fractions of, Preferred Shares, debt, or other equity securities or debt
of the Corporation) being referred to as a “capital stock equivalent”), equal in the
aggregate to the number of Adjustment Shares; provided, however, if sufficient Common Shares and/or
capital stock equivalents are unavailable, then the Corporation shall, to the extent permitted by
applicable law, take all such action as may be necessary to authorize additional Common Shares or
capital stock equivalents for issuance upon exercise of the Rights, including, if necessary, the
calling of a meeting of shareholders; and provided, further, that if the Corporation is unable to
cause sufficient Common Shares and/or capital stock equivalents to be available for issuance upon
exercise in full of the Rights, then each Right shall thereafter represent the right to receive the
Adjusted Number of Shares upon exercise at the Adjusted Purchase Price (as such terms are
hereinafter defined). As used herein, the term “Adjusted Number of Shares” shall be equal
to that number of (or fractions of) Common Shares (and/or capital stock equivalents) equal to the
product of (x) the number of Adjustment Shares and (y) a fraction, the numerator of which is the
number of Common Shares (and/or capital stock equivalents) available for issuance upon exercise of
the Rights and the denominator of which is the aggregate number of Adjustment Shares otherwise
issuable upon exercise in full of all Rights (assuming there were a sufficient number of Common
Shares available) (such fraction being referred to as the “Proration Factor”). The
“Adjusted Purchase Price” shall mean the product of the Purchase Price and the Proration
Factor. The Board of Directors may, but shall not be required to, establish procedures to allocate
the right to receive Common Shares and capital stock equivalents upon exercise of the Rights among
holders of Rights.




     (b) In case the Corporation shall fix a record date for the issuance of rights (other than the
Rights), options or warrants to all holders of Preferred Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred
Shares (or shares having the same rights, privileges and preferences as the Preferred Shares
(“equivalent preferred shares”)) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent preferred share (or having
a conversion price per share, if a security convertible into Preferred Shares or equivalent
preferred shares) less than the then current per share market price of the Preferred Shares (as
determined pursuant to Section 11(d) hereof) 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 before such record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares
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 number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the Corporation
issuable upon exercise of one Right. In case such subscription price may be paid in a



14









 




consideration part or all of which shall be in a form other than cash, the value of such
consideration shall be determined in good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent. Preferred Shares owned by or held for the account of the Corporation shall not
be deemed outstanding for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.




     (c) In case the Corporation shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Corporation is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately before 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) hereof) of the Preferred Shares on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one Preferred Share and the denominator of
which shall be such current per share market price of the Preferred Shares; 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 Corporation to be issued upon exercise of
one Right. Such adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the 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 (a “Security” for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing prices per share of such Security for
the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately before
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 before the expiration of thirty (30) Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination or reclassification,
then, and in each such case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal



15









 




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 NASD 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 Corporation. If on any such
date no such market maker is making market in the Security, the fair value of the Security on such
date as determined in good faith by the Board of Directors of the Corporation 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.




          (ii) For the purpose of any computation hereunder, the “current per share market price” of the
Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the “current per share market price” of the
Preferred Shares shall be conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i), (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by
one hundred. If neither the Common Shares nor the Preferred Shares are publicly held or so listed
or traded, “current per share market price” shall mean the fair value per share as determined in
good faith by the Board of Directors of the Corporation, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent.




     (e) Notwithstanding anything herein to the contrary, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the
nearest one one-hundredth of a Preferred Share or one ten-thousandth 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 mandates such adjustment or (ii) the Final Expiration Date.



     (f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Corporation other than Preferred Shares, thereafter the number of other shares
so receivable upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the provisions of Sections
7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply on like terms to any such
other shares.



     (g) All Rights originally issued by the Corporation subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted



16









 




Purchase Price, the number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.




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



     (i) The Corporation may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in lieu of any adjustment in the number of one one-hundredths of a
Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of one one-hundredths
of a Preferred Share for which a Right was exercisable immediately before such adjustment. Each
Right held of record before such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately before the Purchase Price is adjusted by the Purchase Price in effect
immediately after such adjustment. The Corporation shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (10) days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Corporation, shall cause to be distributed to such
holders of record in substitution and replacement for the Right Certificates held by such holders
before the date of adjustment, and upon surrender thereof, if required by the Corporation, new
Right Certificates evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in
the manner provided for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.



     (j) Irrespective of any adjustment or change in the Purchase Price or the number of one
one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the Purchase Price and the
number of one one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.



     (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then par value, if any, of the number of one one-hundredths of a Preferred Share or other
securities issuable upon exercise of the Rights, the Corporation shall take any corporate



17









 




action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly
and legally issue such number of fully paid and non-assessable one one-hundredths of a Preferred
Share or other securities 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 Corporation may elect to
defer until such event occurs the issuance to the holder of any Right exercised after such record
date the Preferred Shares, Common Shares or other securities of the Corporation, if any, issuable
upon such exercise over and above the Preferred Shares, Common Shares or other securities of the
Corporation, if any, issuable upon exercise on the basis of the Purchase Price in effect before
such adjustment; provided, however, that the Corporation shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such additional shares upon
the occurrence of the event requiring such adjustment.



     (m) Notwithstanding anything in this Section 11 to the contrary, the Corporation 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 (i) any consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of Preferred Shares at less than the current market price, (iii) issuance
wholly for cash of Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Corporation to holders of its
Preferred Shares shall not be taxable to such shareholders.



     (n) The Corporation covenants and agrees that it shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the Corporation in a
transaction that does not violate Section 11(n) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Corporation in a transaction that does not violate Section 11(n)
hereof) or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Corporation and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Corporation and/or any of its Subsidiaries in one or more
transactions each of which does not violate Section 11(n) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or transfer there are any charter or by-law
provisions or any rights, warrants or other instruments or securities outstanding or agreements in
effect or other actions taken, which would materially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) before, simultaneously with or immediately after such
consolidation, merger or sale, the shareholders of the Person who constitutes, or would constitute,
the “Principal Party” for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates and Associates.
The Corporation shall not consummate any such consolidation, merger, sale or transfer unless prior
thereto the Corporation and such other Person shall have executed and delivered to the Rights Agent
a supplemental agreement evidencing compliance with this Section 11(n).



     (o) The Corporation covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any
action the purpose of which is to, or if at the time such action is taken it is reasonably



18









 




foreseeable that the effect of such action is to, materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.




     (p) The exercise of Rights under Section 11(a)(ii) shall only result in the loss of rights
under Section 11(a)(ii) to the extent so exercised and shall not otherwise affect the rights
represented by the Rights under this Agreement, including the rights represented by Section 13
hereof.



     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Sections 11 or 13 hereof, the Corporation 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 Common
Shares a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 26 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of such adjustment unless and until it shall have received such certificate.



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



     (a) In the event that, on or following the Shares Acquisition Date, directly or indirectly,
(x) the Corporation shall consolidate with, or merge with and into, any Interested Shareholder or,
if in such merger or consolidation all holders of Common Shares are not treated alike, (y) the
Corporation shall consolidate with, or merge with, any Interested Shareholder or, if in such merger
or consolidation all holders of Common Shares are not treated alike, and the Corporation shall be
the continuing or surviving corporation of such consolidation or merger (other than, in a case of
any transaction described in (x) or (y), a merger or consolidation which would result in all of the
securities generally entitled to vote in the election of directors (“voting securities”) of
the Corporation outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all of the voting
securities of the Corporation or such surviving entity outstanding immediately after such merger or
consolidation and the holders of such securities not having changed as a result of such merger or
consolidation), or (z) the Corporation shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or earning power of
the Corporation and its Subsidiaries (taken as a whole) to any Interested Shareholder or
Shareholders or, if in such transaction all holders of Common Stock are not treated alike, then,
and in each such case (except as provided in Section 13(d) hereof), proper provision shall be made
so that (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at a price equal to the then current Purchase
Price, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number
of freely tradeable Common Shares of the Principal Party (as hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of
a Preferred Share for which a Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such Section



19









 




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 Corporation pursuant to this Agreement; (iii) the term
“Corporation” shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13 Event; and (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a sufficient number of its
Common Shares) in connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be,
in relation to the Common Shares thereafter deliverable upon the exercise of the Rights.




     (b) “Principal Party” shall mean in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any securities
into which Common Shares of the Corporation are converted in such merger or consolidation, and if
no securities are so issued, the Person that is the other party to such merger or consolidation
(including, if applicable, the Corporation if it is the surviving corporation); 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 greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions provided, however, that in any of the foregoing cases,
(1) if the Common Shares of such Person are not at such time and have not been continuously over
the preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common Shares of which are and have
been so registered, “Principal Party” shall refer to such other Person; (2) in case such Person is
a Subsidiary, directly or indirectly, of more than one Person, the Common Shares of two or more of
which are and have been so registered, “Principal Party” shall refer to whichever of such Persons
is the issuer of the Common Shares having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are
not owned, directly or indirectly, by the same Person, the rules set forth in (1) and (2) above
shall apply to each of the chains of ownership having an interest in such joint venture as if such
party were a “Subsidiary” of both or all of such joint venturers, and the Principal Parties in each
such chain shall bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such interests.



     (c) The Corporation shall not consummate any such consolidation, merger, sale or transfer
unless the Principal Party shall have a sufficient number of its authorized Common Shares 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 Corporation 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, as soon as
practicable after the date of any consolidation, merger, sale or transfer mentioned in paragraph
(a) of this Section 13, the Principal Party at its own expense shall:



          (i) prepare and file a registration statement under the Securities Act with respect to the
Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and use
its best efforts to cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Final Expiration Date;





20










 





          (ii) use its best efforts to qualify or register the Rights and the securities
purchasable upon exercise of the Rights under the blue sky laws of such jurisdictions as may be
necessary or appropriate; and




          (iii) deliver to holders of the Rights historical financial statements for the Principal Party
which comply in all respects with the requirements for registration on Form 10 under the Exchange
Act.




     The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. The rights under this Section 13 shall be in addition
to the rights to exercise Rights and adjustments under Section 11(a)(ii) and shall survive any
exercise thereof.



     (d) Notwithstanding anything in this Agreement to the contrary, this Section 13 shall not be
applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if: (i) such
transaction is consummated with a Person or Persons who acquired Common Shares pursuant to a
Permitted Offer (or a wholly owned Subsidiary of any such Person or Persons); (ii) the price per
Common Share offered in such transaction is not less than the price per Common Share paid to all
holders of Common Shares whose shares were purchased pursuant to such Permitted Offer; and (iii)
the form of consideration offered in such transaction is the same as the form of consideration paid
pursuant to such Permitted Offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.



     Section 14. Fractional Rights and Fractional Shares. 




     (a) The Corporation shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the current market value of
a whole Right shall be the closing price of the Rights for the Trading Day immediately before 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 New York Stock Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities exchange on which the
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 NASD 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 Corporation. 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 Corporation shall be used.



21









 





     (b) The Corporation shall not be required to issue fractions of Preferred Shares (other than
fractions which are one one-hundredth or integral multiples of one one-hundredth of a Preferred
Share) upon exercise of the Rights or to distribute certificates which evidence fractional
Preferred Shares (other than fractions which are one one-hundredth or integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Corporation, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Corporation and a depositary
selected by it; provided that such agreement shall provide that the holders of such depositary
receipts shall have the rights, privileges and preferences to which they are entitled as beneficial
owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not one one-hundredth or integral multiples of one one-hundredth of a
Preferred Share, the Corporation shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Preferred Share. For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately before the date of
such exercise.



     (c) Following the occurrence of one of the transactions or events specified in Section 11
giving rise to the right to receive Common Shares, capital stock equivalents (other than Preferred
Shares) or other securities upon the exercise of a Right, the Corporation shall not be required to
issue fractions of shares or units of such Common Shares, capital stock equivalents or other
securities upon exercise of the Rights or to distribute certificates which evidence fractions of
such Common Shares, capital stock equivalents or other securities. In lieu of fractional shares or
units of such Common Shares, capital stock equivalents or other securities, the Corporation may pay
to the registered holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market value of a share or
unit of such Common Shares, capital stock equivalents or other securities. For purposes of this
Section 14(c), the current market value shall be determined in the manner set forth in Section
11(d) hereof for the Trading Day immediately before the date of such exercise and, if such capital
stock equivalent is not traded, each such capital stock equivalent shall have the value of one
one-hundredth of a Preferred Share.



     (d) The holder of a Right by the acceptance of the Right expressly waives his right to receive
any fractional Rights or any fractional share 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 hereof, are vested in the
respective registered holders of the Right Certificates (and, before the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any Right Certificate (or,
before the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of
the holder of any other Right Certificate (or, before the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Corporation to enforce, or otherwise act in respect of, his right
to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any remedies



22









 




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 under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.




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



     (a) before the Distribution Date, the Rights will be transferable only in connection with the
transfer of the Common Shares;



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



     (c) subject to Section 6 and Section 7(f) hereof, the Corporation and the Rights Agent may
deem and treat the person in whose name the Right Certificate (or, before the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right
Certificate or the associated Common Shares certificate made by anyone other than the Corporation
or the Rights Agent) for all purposes whatsoever, and neither the Corporation nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required to be affected by any notice
to the contrary; and



     (d) notwithstanding anything in this Agreement to the contrary, neither the Corporation nor
the Rights Agent shall have any liability to any holder of a Right or a beneficial interest in 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 Corporation must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.



     Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder, as such, of
any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the Common Shares or any other securities of the Corporation which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such,
any of the rights of a shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or otherwise, until the Right
or



23









 




Rights evidenced by such Right Certificate shall have been exercised in accordance with the
provisions hereof.




     Section 18. Concerning the Rights Agent. The Corporation agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise and performance of
its duties hereunder. The Corporation also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises. The indemnity provided
for herein shall survive the expiration of the Rights and the termination of this Agreement.



     The Rights Agent shall be protected and shall incur no liability for, or in respect of, any
action taken, suffered or omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for Common Shares or for other securities of the
Corporation, 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.



     Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be merged or with which
it may be consolidated, or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or all or substantially all of the 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 would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of
a predecessor Rights Agent and deliver such Right Certificates so counter-signed; and in case at
that time any of the Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the predecessor or in the name
of the successor Rights Agent; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.



     In case at any time the name of the Rights Agent shall be changed and at such time any of the
Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so counter-signed; and in case
at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed



24









 




name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and
in this Agreement.




     Section 20. Duties of Rights Agent. The Rights Agent undertakes only those duties and
obligations imposed by this Agreement upon the following terms and conditions, by all of which the
Corporation and the holders of Right Certificates, by their acceptance thereof, shall be bound:



     (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Corporation), and the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.



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



     (c) The Rights Agent shall be liable hereunder only for its own negligence, bad faith or
willful misconduct.



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



     (e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate (except its
countersignature thereof), nor shall it be responsible for any breach by the Corporation 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 7(e) hereof) or any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after receipt of the certificate
described in Section 12 hereof); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Preferred Shares or Common
Shares to be issued pursuant to this Agreement or any Right Certificate or as to



25









 




whether any Preferred Shares or Common Shares will, when issued, be validly authorized and issued, fully paid
and non-assessable.




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



     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer or the Secretary of the
Corporation, and to apply to such officers for advice or instructions in connection with its
duties, and shall not be liable for any action taken or suffered by it in good faith or lack of
action 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
Corporation may, at the option of the Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The Rights Agent shall not be liable
for any action taken by, or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application (which date shall not be
less than five Business Days after the date any officer of the Corporation actually receives such
application, unless any such officer shall have consented in writing to an earlier date) unless,
before taking any such action (or the effective date in the case of an omission), the Rights Agent
shall have received written instruction in response to such application specifying the action to be
taken or omitted.



     (h) The Rights Agent and any shareholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the Corporation may be interested, or contract
with or lend money to the Corporation 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 Corporation or for any other legal entity.



     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Corporation 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 there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it.



26









 





     (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has not been completed, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with the Corporation.



     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 (30) days’ notice in
writing mailed to the Corporation and to each transfer agent of the Common Shares or Preferred
Shares by registered or certified mail, and to the holders of the Right Certificates by first-class
mail. The Corporation may remove the Rights Agent or any successor Rights Agent upon sixty (60)
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 Shares or Preferred Shares by registered or certified
mail, and to holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Corporation shall appoint a
successor to the Rights Agent. If the Corporation shall fail to make such appointment within a
period of sixty (60) 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 Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Corporation), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Corporation or by such a court, shall be a corporation
organized and doing business under the laws of the United States or any state of the United States
in good standing, which is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus of at least $10 million.
After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment the Corporation shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right 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 Right Certificates. Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new
Right 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 Right Certificates made in accordance with the
provisions of this Agreement.



     In addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and before the earlier of the Redemption Date and the Final Expiration Date,



27









 




the Corporation (a) shall with respect to Common Shares so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Corporation, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of the Corporation, issue Right
Certificates representing the appropriate number of Rights in connection with such issuance or
sale; provided, however, that (i) the Corporation shall not be obligated to issue any such Right
Certificates if, and to the extent that, the Corporation shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to the Corporation or
the Person to whom such Right Certificate would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.




     Section 23. Redemption and Termination.



     (a) (i) The Board of Directors of the Corporation may, at its option, redeem all but not less
than all the then outstanding Rights at a redemption price of $.0001 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter referred to as the
“Redemption Price”), at any time before the earlier of (x) the occurrence of a Section
11(a)(ii) Event, (y) or the Final Expiration Date. The Corporation may, at its option, pay the
Redemption Price either in Common Shares (based on the “current per share market price,” as defined
in Section 11 hereof, of the Common Shares at the time of redemption) or cash; provided that if the
Corporation elects to pay the Redemption Price in Common Shares, the Corporation shall not be
required to issue any fractional Common Shares and the number of Common Shares issuable to each
holder of Rights shall be rounded down to the next whole share.



          (ii) In addition, the Board of Directors of the Corporation may, at its option, at any time
following the occurrence of a Section 11(a)(ii) Event and the expiration of any period during which
the holder of Rights may exercise the rights under Section 11(a)(ii) but before any Section 13
Event, redeem all but not less than all of the then outstanding Rights at the Redemption Price in
connection with any merger, consolidation or sale or other transfer (in one transaction or in a
series of related transactions) of assets or earning power aggregating 50% or more of the earning
power of the Corporation and its subsidiaries (taken as a whole) in which all holders of Common
Shares are treated alike and not involving (other than as a holder of Common Shares being treated
like all other such holders) an Interested Shareholder or (x) if and for so long as the Acquiring
Person is not thereafter the Beneficial Owner of 20% of the Common Shares, and (y) at the time of
redemption no other Persons are Acquiring Persons.




     (b) In the case of a redemption permitted under Section 23(a)(i), immediately upon the date
for redemption set forth (or determined in the manner specified in) in a resolution of the Board of
Directors of the Corporation ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate, and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price for each Right so held. In the case of a redemption permitted
only under Section 23(a)(ii), evidence of which shall have been filed with the Rights Agent, the
right to exercise the Rights will terminate and represent only the right to receive the Redemption
Price upon the later of ten (10) Business Days following the giving of



28









 




such notice or the expiration of any period during which the rights under Section 11(a)(ii) may be exercised. The
Corporation shall promptly give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within ten (10) days after such date for redemption set forth in a resolution of the
Board of Directors ordering the redemption of the Rights, the Corporation 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, before the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price will be made.
Neither the Corporation 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 and other than in connection with the purchase of Common Shares before the Distribution Date.




     (c) The Corporation may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the Rights in
accordance with this Agreement and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry books of the Rights
Agent or, before the Distribution Date, on the registry books of the Transfer Agent of the Common
Shares, and upon such action, all outstanding Rights and Right Certificates shall be null and void
without any further action by the Corporation.



     Section 24. Exchange. 



     (a) The Board of Directors of the Corporation may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares of the Corporation at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than the Corporation, any
Subsidiary of the Corporation, Bagerdjian, any employee benefit plan of the Corporation or any such
Subsidiary, any entity holding Common Shares for or pursuant to the terms of any such a plan),
together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.



     (b) Immediately upon the action of the Board of Directors of the Corporation 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 Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The Corporation 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 Corporation shall
promptly 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



29









 




Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the Common Shares 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 11(a)(ii) hereof) held by
each holder of Rights.




     (c) In any exchange pursuant to this Section 24, the Corporation, at its option, may
substitute Preferred Shares (or equivalent preferred shares, as such term is defined in Section
11(b) hereof) for some or all of the Common Shares exchangeable for Rights, at the initial rate of
one one-hundredth of a Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the Preferred Shares pursuant
to the terms thereof, so that the fraction of a Preferred Share delivered in lieu of each Common
Share shall have the same voting rights as one Common Share.



     (d) In the event that there shall not be sufficient Common Shares issued but not outstanding
or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Corporation shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exchange of the Rights.



     Section 25. Notice of Certain Events. 



     (a) In case the Corporation shall propose (i) to pay any dividend payable in stock of any
class to the holders of its Preferred Shares or to make any other distribution to the holders of
its Preferred Shares (other than a regularly quarterly cash dividend), (ii) to offer to the holders
of its Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or options, (iii) to effect
any reclassification of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation or merger into or
with any other Person (other than a Subsidiary of the Corporation in a transaction which does not
violate Section 11(n) hereof), 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 Corporation and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Corporation and/or any of its Subsidiaries in one or
more transactions each of which does not violate Section 11(n) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Corporation, then, in each such case, the Corporation
shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action to the extent feasible and file a certificate with the Rights Agent to that
effect, 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 Preferred Shares, 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 twenty (20) days before the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least twenty (20) days before
the date of the



30









 




taking of such proposed action or the date of participation therein by the holders
of the Preferred Shares, whichever shall be the earlier.




     (b) In case of a Section 11(a)(ii) Event, then (i) the Corporation shall as soon as
practicable thereafter give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Shares shall be deemed thereafter to refer also
to Common Shares and/or, if appropriate, other securities of the Corporation.



     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 Right Certificate to or on the Corporation shall
be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:


New 360

2777 Ontario Street

Burbank, CA 91504

Attention: Alan R.
Steel



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



American Stock Transfer & Trust Company

59 Maiden Lane

New York, New York 10038

Attention: Corporate Trust Department



Notices or demands authorized by this Agreement to be given or made by the Corporation or the
Rights Agent to the holder of any Right Certificate or, if before the Distribution Date, to the
holder of certificates representing Common Shares 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 Corporation.




     Section 27. Supplements and Amendments. Before the Distribution Date, the Corporation
and the Rights Agent shall, if the Corporation so directs, supplement or amend any provision of
this Agreement without the approval of any holders of certificates representing Common Shares.
From and after the Distribution Date, the Corporation and the Rights Agent shall, if the
Corporation so directs, supplement or amend this Agreement without the approval of any holders of
Right Certificates 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 Corporation may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided, however, that



31









 




this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon the
delivery of a certificate from an appropriate officer of the Corporation which states that the
proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment, provided that such supplement or amendment does
not adversely affect the rights or obligations of the Rights Agent under Section 18 or Section 20
of this Agreement. Before the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares.




     Section 28. Determination and Actions by the Board of Directors, etc. The Board of
Directors of the Corporation shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the Board, or the
Corporation, or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for the administration of
this Agreement (including, without limitation, a determination to redeem or not redeem the Rights
or to amend the Agreement and whether any proposed amendment adversely affects the interests of the
holders of Right Certificates). For all purposes of this Agreement, any calculation of the number
of Common Shares or other securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any other securities of
which any Person is the Beneficial Owner, shall be made in accordance with Rule 13d-3 of the
General Rules and Regulations under the Exchange Act. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final,
conclusive and binding on the Corporation, the Rights Agent, the holders of the Right Certificates
and all other parties, and (y) not subject the Board to any liability to the holders of the Right
Certificates.



     Section 29. Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Corporation or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.



     Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any person or corporation other than the Corporation, the Rights Agent and the
registered holders of the Right Certificates (and, before the Distribution Date, the Common Shares)
any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Corporation, the Rights Agent and the registered holders of
the Right Certificates (and, before the Distribution Date, the Common Shares).



     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.



32









 





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



     Section 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 but one and the same instrument.



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



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



	 	 	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	NEW 360	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

Name:
	 	 
	 	 	 	 

Name: Alan R. Steel
	 	 
	 

	 	Title:
	 	 	 	 	 	Title:    Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	Attest:	 	 	 	AMERICAN STOCK TRANSFER & TRUST COMPANY	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:
	 		 	 
	 

	 	 

Name:
	 	 
	 	 	 	 

Name:
	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 






33









 






EXHIBIT A




FORM OF




CERTIFICATE OF DETERMINATION




OF




NEW 360




     Haig S. Bagerdjian and Alan R. Steel hereby certify that:



     1. They are the duly elected and acting President and Chief Financial Officer, respectively,
of New 360, a California corporation (the “Corporation”).



     2. The number of shares of Series A Junior Participating Preferred Stock of the Corporation is
400,000, none of which has been issued.



     3. The Board of Directors of the Corporation has duly adopted the following recitals and
resolutions.



     WHEREAS, the Articles of Incorporation of the Corporation authorize the Preferred Stock of the
Corporation to be issued in series and authorize the Board of Directors of the Corporation to
determine the rights, preferences, privileges and restrictions granted to or imposed upon any
wholly unissued series of Preferred Stock and to fix the number of shares and designation of any
such series; and



     WHEREAS, the Board of Directors of the Corporation desires, pursuant to its authority as
aforesaid, to determine and fix the rights, preferences, privileges and restrictions relating to a
series of Series A Junior Participating Preferred Stock and the number of shares constituting and
the designation of said series;



     NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines the
designation of, the number of shares constituting, and the rights, preferences, privileges and
restrictions relating to, said series of Series A Junior Participating Preferred Stock as follows:



          Series A Junior Participating Preferred Stock.



     Section 1. Designation, Par Value and Amount. The shares of such series shall be
designated as “Series A Junior Participating Preferred Stock” (hereinafter referred to as
“Series A Preferred Stock”) and shall be without par value, and the number of shares
constituting such series shall be 400,000.



A-1









 





     Section 2. Dividends and Distributions.



     (a) Subject to the prior and superior rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the shares of Series A Preferred Stock with respect
to dividends, the holders of shares of Series A Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors out of assets legally available for the purpose,
quarterly dividends payable in cash on the first business day of November, February, May and August
in each year (each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100
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, without par value, Common
Stock, of the Corporation (the “Common Stock”) or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock.



     (b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock
as provided in paragraph (a) above immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event
no dividend or distribution shall have been declared on the Common Stock during the period between
any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.



     (c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series A Preferred Stock, unless the date of issue of such shares is before the record
date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. 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 of
Directors 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 60 days before 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-2









 





     (a) Except as provided in paragraph (c) of this Section 3 and subject to the provision for
adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the shareholders of the Corporation.



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



     (c) (i) If, on the date used to determine shareholders of record for any meeting of
shareholders for the election of directors, a default in preference dividends (as defined in
subparagraph (v) below) on the Series A Preferred Stock shall exist, the holders of the Series A
Preferred Stock shall have the right, voting as a class as described in subparagraph (ii) below, to
elect two directors, and the holders of shares of Common Stock shall have the right to elect the
remaining directors. Such right may be exercised at any meeting of shareholders for the election
of directors until all such cumulative dividends (referred to above) shall have been paid in full
or until non-cumulative dividends have been paid regularly for at least one year.



          (ii) The right of the holders of Series A Preferred Stock to elect two directors, as described
above, shall be exercised as a class concurrently with the rights of holders of any other series of
Preferred Stock upon which voting rights to elect such directors have been conferred and are then
exercisable. The Series A Preferred Stock and any additional series of Preferred Stock which the
Corporation may issue and which may provide for the right to vote with the foregoing series of
Preferred Stock are collectively referred to herein as “Voting Preferred Stock.”




          (iii) Each director elected by the holders of shares of Voting Preferred Stock shall be
referred to herein as a “Preferred Director.” A Preferred Director so elected shall
continue to serve as such director for a term of one year, except that upon any termination of the
right of all of such holders to vote as a class for Preferred Directors, the term of office of such
directors shall terminate. Any Preferred Director may be removed by, and shall not be removed
except by, the approval the outstanding shares of Voting Preferred Stock then entitled to vote for
the election of directors, subject to Sections 302, 303 and 304 of the General Corporation Law of
the State of California.




          (iv) So long as a default in any preference dividends on the Series A Preferred Stock shall
exist or the holders of any other series of Voting Preferred Stock shall be entitled to elect
Preferred Directors, any vacancy in the office of a Preferred Director may only be filled by the
vote or written consent of the holders of a majority of the outstanding shares of Voting Preferred
Stock then entitled to vote for the election of directors, present (in person or by proxy) and
voting together as a single class. Each director so elected to fill a vacancy shall be deemed, for
all purposes hereof, to be a Preferred Director.




          (v) For purposes hereof, a “default in preference dividends” on the Series A Preferred
Stock shall be deemed to have occurred whenever the amount of cumulative and unpaid dividends on
the Series A Preferred Stock shall be equivalent to six full quarterly dividends or more (whether
or not consecutive), and, having so occurred, such default shall be




A-3









 







deemed to exist thereafter until, but only until, all cumulative dividends on all shares of the Series A Preferred Stock then
outstanding shall have been paid through the last Quarterly Dividend Payment Date or until, but
only until, non-cumulative dividends have been paid regularly for at least one year.




     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
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 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 (except as provided in (iv)
below) 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;




          (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 (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of Directors, 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 paragraph (a) of this Section 4, 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.



A-4









 





     Section 6. Liquidation, Dissolution or Winding Up.



     (a) Subject to the prior and superior rights of holders of any shares of any series of
Preferred Stock ranking prior and superior to the shares of Series A Preferred Stock with respect
to rights upon liquidation, dissolution or winding up (voluntary or otherwise), no distribution
shall be made 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 $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment (the “Series A Liquidation Preference”). Following the payment of the
full amount of the Series A Liquidation Preference, holders of Series A Preferred Stock and holders
of Common Stock shall receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the “Adjustment Number” to 1 with respect to such Series A Preferred
Stock and Common Stock, on a per share basis, respectively. The “Adjustment Number” shall
equal an amount per share equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100.



     (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 Series A Preferred Stock and the
holders of such parity shares in proportion to their respective liquidation preferences.



     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 changed into other stock or securities, cash and/or any other property, then in
any such case the shares of Series A Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of Common Stock is
changed or exchanged.



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



     Section 9. Ranking. The Series A Preferred Stock shall rank junior to all other
series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of
assets, unless the terms of any such series shall provide otherwise.



     Section 10. Amendment. The Articles of Incorporation of the Corporation shall not be
further 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 a majority or more of the outstanding shares of Series A
Preferred Stock, voting separately as a class.



(Remainder of page left blank intentionally.)




A-5









 








     We further declare under penalty of perjury under the laws of the State of California that the
matters set forth in this certificate are true and correct of our own knowledge.



	 	 	 	 	 
	 	 	 
	Dated: [______], 2007 	 	 	 
	 	Haig S. Bagerdjian, President
 	 
	 	 	 	 
	 
	 	 	 
	Dated: [______], 2007 	 	
	 
	 	Alan R. Steel, Chief Financial Officer
 	 
	 	 	 	 
	 	 	 	 
	 




A-6









 





EXHIBIT B




FORM OF RIGHT CERTIFICATE




	 	 	 
	No.                     

	 	                     Rights






NOT EXERCISABLE AFTER AUGUST 6, 2017 OR EARLIER IF REDEEMED

BY THE CORPORATION. THE RIGHTS ARE SUBJECT TO

REDEMPTION AT $.0001 PER RIGHT ON THE TERMS

SET FORTH IN THE RIGHTS AGREEMENT




Right Certificate

New 360




     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 that certain Rights Agreement, dated as of July 25, 2007 (the
“Rights Agreement”), between New 360, a California corporation (the “Corporation”),
and American Stock Transfer & Trust Company (the “Rights Agent”), to purchase from the
Corporation at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and before 5:00 P.M., California time, on August 6, 2017 unless the Rights evidenced
hereby shall have been previously redeemed by the Corporation, at the principal office or offices
of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series A Junior Participating Preferred
Stock, without par value (the “Preferred Shares”), of the Corporation, at a purchase price
of $10 per one one-hundredth of Preferred Share (the “Purchase Price”), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a
Preferred Share 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                     , based on the Preferred
Shares as constituted at such date.



     Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Right Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate who becomes a transferee after the Acquiring Person becomes such, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of any such Acquiring Person,
Associate or Affiliate who becomes a transferee before or concurrently with the Acquiring Person
becoming such, such Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.



     As provided in the Rights Agreement, the Purchase Price and the number of one one-hundredths
of a Preferred Share or other securities which may be purchased upon the exercise of



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the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening
of certain events, including Triggering Events (as such term is defined in the Rights Agreement).




     This Right 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
the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights
Agent, the Corporation and the holders of the Right Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the
principal executive offices of the Corporation and the principal office or offices of the Rights
Agent.



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



     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Corporation at a redemption price of $.0001 per Right (subject to adjustment
as provided in the Rights Agreement) payable in cash.



     No fractional Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions which are one one-hundredth or integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Corporation, 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 Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred Shares or of any other securities of the
Corporation 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 shareholder of the Corporation or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions affecting shareholders
(except as provided in the Rights Agreement), or to receive dividends or other distributions or to
exercise any preemptive or subscription rights, or otherwise, until the Right or Rights evidenced
by this Right Certificate shall have been exercised as provided in the Rights Agreement.



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



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     WITNESS the facsimile signature of the proper officers of the Corporation. Dated as of
                    .



	 	 	 	 	 
	 	NEW 360

 	 
	Attest: 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 





	 	 	 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



















	 	 	 	 	 
	Countersigned:



AMERICAN STOCK TRANSFER & TRUST COMPANY


 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



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Form of Reverse Side of Right Certificate




FORM OF ASSIGNMENT



(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)




     FOR VALUE RECEIVED                                                              hereby sells, assigns
and transfers
unto                                                                                 
                                                                            
         



(Please print name and address of transferee)


this Right Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint                                          Attorney, to transfer the within Right
Certificate on the books of the within-named Corporation, with full power of substitution.



Dated:                                         




	 	 	 	 	 
	 

	 	 

Signature
	 	 






Signature Guaranteed:




     Signatures must be guaranteed by an eligible guarantor institution (a bank, stockbroker,
savings and loan association or credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.



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



	 	 	 	 	 
	 

	 	 

Signature
	 	 






B-4









 






Form of Reverse Side of Right Certificate — continued




FORM OF ELECTION TO PURCHASE




(To be executed by the registered holder if such holder desires to exercise

Rights represented by the Right Certificate.)




To: The Rights Agent:




     The undersigned hereby irrevocably elects to exercise                                          Rights represented by
this Right Certificate to purchase the Preferred Shares, Common Shares or other securities issuable
upon the exercise of such Rights and requests that certificates for such Preferred Shares, Common
Shares or other securities to be issued in the name of:




	 	 	 
	Please insert social security	 	 
	or other identifying number	 	 






 




(Please print name and address)



 




If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a
new Right 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
	 	 






B-5









 






Form of Reverse Side of Right Certificate — continued




Signature Guaranteed:




     Signatures must be guaranteed by an eligible guarantor institution (a bank, stockbroker,
savings and loan association or credit union with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.



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



	 	 	 	 	 
	 

	 	 

Signature
	 	 






NOTICE




     The signature in the Form of Assignment or Form of Election to Purchase, as the case may be,
must conform to the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.



     In the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Corporation and the Rights Agent
will deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement), and such
Assignment or Election to Purchase will not be honored.




B-6









 





EXHIBIT C




SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES




     On July 25, 2007, the Board of Directors of New 360 (the “Corporation”) declared a
dividend distribution of one preferred share purchase right (a “Right”) for each
outstanding share of Common Stock, without par value (the “Common Shares”), of the
Corporation. The dividend is payable to the shareholders of record on August 7, 2007 (the
“Record Date”), and with respect to Common Shares issued thereafter until the Distribution
Date (as defined below) and, in certain circumstances, with respect to Common Stock issued after
the Distribution Date. Except as set forth below, each Right, when it becomes exercisable,
entitles the registered holder to purchase from the Corporation one one-hundredth of a share of
Series A Junior Participating Preferred Stock, without par value (the “Preferred Shares”),
of the Corporation at a price of $10 per one one-hundredth of a Preferred Share (the “Purchase
Price”), subject to adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the “Rights Agreement”) between the Corporation and American Stock
Transfer & Trust Company, as Rights Agent (the “Rights Agent”) dated as of July 25, 2007.



     Initially, the Rights will be attached to all certificates representing Common Shares then
outstanding, and no separate Right Certificates will be distributed. The Rights will separate from
the Common Shares upon the earlier to occur of (i) ten days after a person or group of affiliated
or associated persons has acquired beneficial ownership of 20% or more of the outstanding Common
Shares (except pursuant to a Permitted Offer, as hereinafter defined) or (ii) 10 Business Days (as
defined in the Rights Agreement) (or such later date as the Board may determine) following the
commencement of, or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group becoming an Acquiring Person (as
hereinafter defined) (the earlier of such dates being called the “Distribution Date”). A
person or group whose acquisition of Common Shares causes a Distribution Date pursuant to clause
(i) above is an “Acquiring Person.” The date that a person or group becomes an Acquiring
Person is the “Shares Acquisition Date.”



     The Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred solely with the Common Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Share certificates issued after the Record Date upon transfer
or new issuances of Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of the Record Date,
even if such notation or a copy of this Summary of Rights is not attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date (and to each initial record
holder of certain Common Shares issued after the Distribution Date), and such separate Right
Certificates alone will evidence the Rights.



C-1









 





     The Rights are not exercisable until the Distribution Date and will expire at the close of
business on August 6, 2017, unless earlier redeemed by the Corporation as described below.



     In the event that any person becomes an Acquiring Person (except pursuant to a tender or
exchange offer which is for all outstanding Common Shares at a price and on terms which a majority
of members of the Board of Directors (who are not also officers of the Corporation or an Acquiring
Person or affiliate or associate thereof) determines to be adequate and in the best interests of
the Corporation and its shareholders, other than such Acquiring Person, its affiliates and
associates (a “Permitted Offer”)), each holder of a Right will thereafter have the right
(the “Flip-In Right”) to receive upon exercise the number of Common Shares (or, in certain
circumstances, one one-hundredths of a share of Preferred Shares or other securities of the
Corporation) having a market value (immediately before such triggering event) equal to two times
the exercise price of the Right. At such time, all Rights that are beneficially owned by the
Acquiring Person or any affiliate, associate or transferee thereof will be null and void.



     In the event that, at any time following the Shares Acquisition Date, (i) the Corporation is
acquired in a merger or other business combination transaction in which the holders of all of the
outstanding Common Shares immediately before the consummation of the transaction are not the
holders of all of the surviving corporation’s voting power, or (ii) more than 50% of the
Corporation’s assets or earning power are sold or transferred, in either case with or to an
Acquiring Person or any affiliate or associate or any other person in which such Acquiring Person,
affiliate or associate has an interest or any person acting on behalf of or in concert with such
Acquiring Person, affiliate or associate, or, if in such transaction all holders of Common Shares
are not treated alike, then each holder of a Right (except Rights which previously have been voided
as set forth above) shall thereafter have the right (the “Flip-Over Right”) to receive,
upon exercise, common shares of the acquiring company having a value equal to two times the
exercise price of the Right. The holder of a Right will continue to have the Flip-Over Right only
to the extent that the Flip-In Right has not previously been exercised.



     The Purchase Price payable and the number of Preferred Shares, Common Shares or other
securities issuable upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a price (or conversion
price as the case may be), less than the then current market price of the Preferred Shares or (iii)
upon the distribution to holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).



     The number of outstanding Rights and the number of one one-hundredths of a Preferred Share
issuable upon exercise of each Right are also subject to adjustment in the event of a stock split
of the Common Shares or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares occurring, in any such case,
before the Distribution Date.



     Preferred Shares purchasable upon exercise of the Rights will not be redeemable. Each
Preferred Share will be entitled to a minimum preferential quarterly dividend payment of $1.00



C-2









 




per share but, if greater, will be entitled to an aggregate dividend per share of 100 times the
dividend declared per Common Share. In the event of liquidation, the holders of the Preferred
Shares will be entitled to a minimum preferential liquidation payment of $100 per share;
thereafter, the holders of the Preferred Shares and the holders of the Common Shares will share the
remaining assets in the ratio of 1 to 1 (subject to adjustment) for each Preferred Share and Common
Share so held, respectively. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights are protected by customary
antidilution provisions. In the event that the amount of accrued and unpaid dividends on the
Preferred Shares is equivalent to six full quarterly dividends or more (whether or not
consecutive), the holders of the Preferred Shares shall have the right, voting as a class, to elect
two directors in addition to the directors elected by the holders of the Common Shares until all
cumulative dividends on the Preferred Shares have been paid through the last quarterly dividend
payment date or until non-cumulative dividends have been paid regularly for at least one year.




     With certain exceptions, no adjustment to the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are one one-hundredth or integral multiples of
one one-hundredth of a Preferred Share, which may, at the election of the Corporation, be evidenced
by depositary receipts) and in lieu thereof, a payment in cash will be made based on the market
price of the Preferred Shares on the last Trading Day (as defined in the Rights Agreement) before
the date of exercise.



     At any time before the earliest to occur of (i) a person becoming an Acquiring Person, (ii)
the expiration of the Rights, or (iii) in certain circumstances, after the Shares Acquisition Date,
the Corporation may redeem all but not less than all of the Rights at a price of $.0001 per Right
(the “Redemption Price”) which redemption shall be effective upon the action of the Board
of Directors.



     All of the provisions of the Rights Agreement may be amended by the Board of Directors of the
Corporation before 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, defect or
inconsistency, to make changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain limitations, to shorten
or lengthen any time period under the Rights Agreement.



     Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Corporation, including, without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to shareholders of the Corporation,
shareholders may, depending upon the circumstances, recognize taxable income should the Rights
become exercisable or upon the occurrence of certain events thereafter.



     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A dated July 26, 2007. A copy of the Rights
Agreement is available free of charge from the Corporation. 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 hereby incorporated herein by reference.



C-3