Exhibit 4.1


 


RIGHTS
AGREEMENT


 


 


dated
as of


 


February 13,
2009


 


 


between


 


 


CLST
Holdings, Inc.


 


 


and


 


 


Mellon
Investor Services LLC,


 


 


as
Rights Agent


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1

  	
  Certain Definitions

  	
  1

  
	
  Section 2

  	
  Appointment of Rights Agent

  	
  6

  
	
  Section 3

  	
  Issuance of Rights Certificates

  	
  6

  
	
  Section 4

  	
  Form of Rights Certificates

  	
  8

  
	
  Section 5

  	
  Countersignature and Registration

  	
  8

  
	
  Section 6

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

  	
  9

  
	
  Section 7

  	
  Exercise of Rights; Purchase Price;
  Expiration Date of Rights

  	
  10

  
	
  Section 8

  	
  Cancellation and Destruction of Rights Certificates

  	
  11

  
	
  Section 9

  	
  Company Covenants Concerning Securities and
  Rights

  	
  12

  
	
  Section 10

  	
  Record Date

  	
  13

  
	
  Section 11

  	
  Adjustment of Purchase Price, Number and
  Kind of Securities or Number of Rights

  	
  14

  
	
  Section 12

  	
  Certificate of Adjusted Purchase Price or Number
  of Shares

  	
  21

  
	
  Section 13

  	
  Fractional Rights and Fractional Shares

  	
  21

  
	
  Section 14

  	
  Rights of Action

  	
  23

  
	
  Section 15

  	
  Agreement of Rights Holders

  	
  23

  
	
  Section 16

  	
  Rights Certificate Holder Not Deemed a
  Stockholder

  	
  24

  
	
  Section 17

  	
  Concerning the Rights Agent

  	
  24

  
	
  Section 18

  	
  Merger, Consolidation or Change of Name of
  Rights Agent

  	
  25

  
	
  Section 19

  	
  Duties of Rights Agent

  	
  26

  
	
  Section 20

  	
  Change of Rights Agent

  	
  28

  
	
  Section 21

  	
  Issuance of New Rights Certificates

  	
  29

  
	
  Section 22

  	
  Redemption

  	
  30

  
	
  Section 23

  	
  Exchange

  	
  30

  
	
  Section 24

  	
  Notice of Certain Events

  	
  31

  
	
  Section 25

  	
  Notices

  	
  32

  
	
  Section 26

  	
  Supplements and Amendments

  	
  33

  
	
  Section 27

  	
  Successors

  	
  33

  
	
  Section 28

  	
  Determinations and Actions by the Board

  	
  33

  
	
  Section 29

  	
  Benefits of this Agreement

  	
  34

  
	
  Section 30

  	
  Severability

  	
  34

  
	
  Section 31

  	
  Governing Law

  	
  34

  
	
  Section 32

  	
  Counterparts

  	
  35

  
	
  Section 33

  	
  Descriptive Headings; Interpretation

  	
  35

  



 


EXHIBITS


 


Exhibit A:  Form of Certificate of Designation of Series B
Junior Participating Preferred Stock


Exhibit B:  Form of Rights Certificate


Exhibit C:  Summary of Rights


 


i

















 


RIGHTS AGREEMENT


 


RIGHTS
AGREEMENT, dated as of February 13, 2009 (the “Agreement”), between
CLST Holdings, Inc., a Delaware corporation (the “Company”), and
Mellon Investor Services LLC, a New Jersey limited liability company, as Rights
Agent (the “Rights Agent”).


 


W I T N E S S E T H


 


WHEREAS, on February 5,
2009 (the “Rights Dividend Declaration Date”), the Board (as hereinafter
defined) authorized and declared a dividend distribution of one right (a “Right”)
for each share of common stock, par value $0.01 per share, of the Company (the “Common
Stock”) outstanding at the Close of Business (as hereinafter defined) on February 16,
2009 (the “Record Date”), each Right initially representing the right to
purchase one ten-thousandth of a share of Preferred Stock (as hereinafter
defined) of the Company, upon the terms and subject to the conditions
hereinafter set forth, and further authorized and directed the issuance of one
Right (subject to adjustment as provided herein) with respect to each share of
Common Stock issued or delivered by the Company (whether originally issued or
delivered from the Company’s treasury) after the Record Date but prior to the
earlier of the Distribution Date (as hereinafter defined) and the Expiration
Date (as hereinafter defined) or as provided in Section 21.


 


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


 


Section 1                                             Certain
Definitions


 


For purposes
of this Agreement, the following terms shall have the meanings indicated:


 


(a)                                  “Acquiring
Person” shall mean any Person (other than the Company, any Related Person
or any Exempt Person) that has become, in itself or, together with all
Affiliates and Associates of such Person, the Beneficial Owner of 4.9% or more
of the shares of Common Stock then-outstanding, provided, however,
that any Person who would otherwise qualify as an Acquiring Person as of the
Close of Business on the Record Date will not be deemed to be an Acquiring
Person for any purpose of this Agreement on and after such date unless and
until such time as such stockholder acquires the beneficial ownership of one
additional share of Common Stock, and provided, further, that a
Person will not be deemed to have become an Acquiring Person solely as a result
of (i) a reduction in the number of shares of Common Stock outstanding, (ii) the
exercise of any options, warrants, rights or similar interests (including
restricted stock) granted by the Company to its directors, officers and
employees, (iii) any unilateral grant of any security by the Company, or (iv) an
Exempt Transaction, unless and until such time as such stockholder acquires the
beneficial ownership of one additional share of Common Stock. The Board shall
not make any determination with respect to a potential Acquiring Person until
five (5) Business Days after the date on which all Board members first
received notice of the change of beneficial ownership at issue. Notwithstanding
the foregoing, the Board may, in its sole discretion, determine that any Person
shall not be deemed to be an “Acquiring Person” for any purposes of this
Agreement.


 


(b)                                 “Act”
shall mean the Securities Act of 1933, as amended.


 

















 


(c)                                  “Affiliate”
and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement, and to the extent
not included within the foregoing clause of this Section 1(c),
shall also include, with respect to any Person, any other Person (whether or
not a Related Person or an Exempt Person) whose shares of Common Stock would be
deemed constructively owned by such first Person, owned by a single “entity” as
defined in Section 1.382-3(a)(1) of the Treasury Regulations,
or otherwise aggregated with shares owned by such first Person pursuant to the
provisions of the Code, or any successor provision or replacement provision,
and the Treasury Regulations thereunder, provided, however, that
a Person shall not be deemed to be the Affiliate or Associate of another Person
solely because either or both Persons are or were directors of the Company.


 


(d)                                 “Agreement”
shall have the meaning set forth in the preamble of this Agreement.


 


(e)                                  “Authorized
Officer” shall mean the Chief Executive Officer, President, any Vice
President, the Treasurer or the Secretary of the Company.


 


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


 


(i)                                     which
such Person or any of such Person’s Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of conversion
rights, exchange rights, warrants, options, or other rights (in each case,
other than upon exercise or exchange of the Rights); provided, however,
that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially
own” securities (including rights, options or warrants) which are
convertible or exchangeable into Common Stock until such time as the
convertible or exchangeable securities are exercised and converted or exchanged
into Common Stock except to the extent the acquisition or transfer of such
rights, options or warrants would be treated as exercised on the date of its
acquisition or transfer under Section 1.382-4(d) of the
Treasury Regulations; and, provided  further, 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 such Person
or any of such Person’s Affiliates or Associates until such tendered securities
are accepted for purchase or exchange;


 


(ii)                                  which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, or has “beneficial
ownership” of (as defined under Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any agreement,
arrangement or understanding (whether or not in writing), but only if the
effect of such agreement, arrangement or understanding is to treat such Persons
as an “entity” under Section 1.382-3(a)(1) of the Treasury
Regulations, or


 


(iii)                               which
any other Person is the Beneficial Owner, if such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) with such other Person (or any of such other Person’s
Affiliates or Associates) with respect to acquiring, holding, voting or
disposing of any securities of the 


 


2

















 


Company, but only if the effect of such
agreement, arrangement or understanding is to treat such Persons as an “entity”
under Section 1.382-3(a)(1) of the Treasury Regulations; provided,
however, that a Person shall not be deemed the “Beneficial Owner” of, or
to “beneficially own” any security (A) if such Person has the right to
vote such security pursuant to an agreement, arrangement or understanding
(whether or not in writing) which (1) arises solely from a revocable proxy
given to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
of the Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report), or (B) if
such beneficial ownership arises solely as a result of such Person’s status as
a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act; provided
further, however, that nothing in this Section 1(f) shall
cause a Person engaged in business as an underwriter of securities or member of
a selling to group to be the Beneficial Owner of, or to “beneficially own,” any
securities acquired through such Person’s participation in good faith in an
underwriting syndicate until the expiration of forty (40) calendar days after
the date of such acquisition, or such later date as the directors of the
Company may determine in any specific case. Notwithstanding anything herein to
the contrary, to the extent not within the foregoing provisions of this Section 1(f),
a Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially
own” or have “beneficial ownership” of, securities which such Person would be
deemed to constructively own or which otherwise would be aggregated with shares
owned by such pursuant to Section 382 of the Code, or any successor
provision or replacement provision and the Treasury Regulations thereunder.


 


(g)                                 “Board”
shall mean the Board of Directors of the Company.


 


(h)                                 “Business
Day” shall mean any day other than a Saturday, Sunday or a day on which
banking institutions in the State of New York or New Jersey (or such other
state in which the principal office of the Rights Agent may be located) are
authorized or obligated by law or executive order to close.


 


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


 


(j)                                     “Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


(k)                                  “Common
Stock” shall have the meaning set forth in the preamble of this Agreement.


 


(l)                                     “Company”
shall have the meaning set forth in the preamble of this Agreement.


 


(m)                               “Current
Per Share Market Price” shall have the meaning set forth in Section 11(d)(i) or
Section 11(d)(ii) hereof, as applicable.


 


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


 


(o)                                 “Distribution
Date” shall mean the earliest of (i) the Close of Business on the
tenth (10th) Business
Day after the Stock Acquisition Date or (ii) the Close of Business on the
tenth Business Day (or, unless the Distribution Date shall have previously
occurred, such later 


 


3

















 


date as may be specified by the Board of
Directors of the Company) after the commencement of a tender or exchange offer
by any Person (other than the Company, any Related Person or any Exempt
Person), if upon the consummation thereof such Person would be the Beneficial
Owner of 4.9% or more of the then-outstanding Common Stock.


 


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


 


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


 


(r)                                    “Exchange
Ratio” shall have the meaning set forth in Section 23(a) hereof.


 


(s)                                  “Exempt
Person” shall mean (i) a Person whose Beneficial Ownership (together
with all Affiliates and Associates of such Person) of 4.9% or more of the
then-outstanding Common Stock would not, as determined by the Board in
its sole discretion, jeopardize or endanger the availability to the Company of
its NOLs and (ii) any Person that beneficially owns, as of the Record
Date, 4.9% or more of the outstanding shares of Common Stock, provided, however,
that, with respect to clause (ii) of this paragraph, any such Person shall
only be deemed to be an Exempt Person for so long as it beneficially owns no
more than the amount of Common Stock it owned on the Record Date; and provided,
further, that, with respect to clauses (i) and (ii) of this
paragraph, any Person shall cease to be an Exempt Person as of the date that
such Person ceases to beneficially own 4.9% or more of the shares of the then
outstanding Common Stock. Additionally, a Person shall cease to be an Exempt
Person if the Board, in its sole discretion, makes a contrary determination
with respect to the effect of such Person’s Beneficial Ownership (together with
all Affiliates and Associates of such Person) with respect to the availability
to the Company of its NOLs.


 


(t)                                    “Exempt
Transaction” shall mean any transaction that the Board determines, in its
sole discretion, is exempt, which determination shall be irrevocable.


 


(u)                                 “Expiration
Date” shall mean the earliest of (i) the Final Expiration Date, (ii) the
time at which the Rights are redeemed as provided in Section 22
hereof, (iii) the time at which the Rights are exchanged as provided in Section 23
hereof, (iv) the repeal of Section 382 of the Code or any successor
statute if the Board determines that this Agreement is no longer necessary for
the preservation of Tax Benefits and (v) the beginning of a taxable year
of the Company to which the Board determines that no Tax Benefits may be
carried forward.


 


(v)                                 “Final
Expiration Date” shall be February 13, 2019.


 


(w)                               “Nasdaq”
means The Nasdaq Stock Market.


 


(x)                                   “NOLs”
shall mean the Company’s net operating loss carryforwards.


 


(y)                                 “Person”
shall mean any individual, firm, corporation, partnership, limited liability
company, limited liability partnership, trust or other entity, group of Persons
making a “coordinated acquisition” of shares or otherwise treated as an entity
within the meaning of Section 1.382-3(a)(1) of the Treasury
Regulations or otherwise, and includes any successor (by merger or otherwise)
of such individual or entity.


 


4

















 


(z)                                   “Preferred
Stock” shall mean shares of Series B Junior Participating Preferred
Stock, par value $0.01 per share, of the Company having the rights and
preferences set forth in the form of Certificate of Designation of Series B
Junior Participating Preferred Stock attached hereto as Exhibit A.


 


(aa)                            “Purchase
Price” shall mean initially $6.01 per one ten-thousandth of a
Preferred Stock, subject to adjustment from time to time as provided in this
Agreement.


 


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


 


(cc)                            “Redemption
Price” shall mean $0.01 per Right, subject to adjustment of the Company to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof.


 


(dd)                          “Related
Person” shall mean (i) any Subsidiary of the Company or (ii) any
employee benefit or stock ownership plan of the Company or of any Subsidiary of
the Company or any Person holding shares of Common Stock for or pursuant to the
terms of any such plan.


 


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


 


(ff)                                “Rights
Agent” shall have the meaning set forth in the preamble of this Agreement.


 


(gg)                          “Rights
Certificates” shall mean certificates evidencing the Rights, in
substantially the form attached hereto as Exhibit B.


 


(hh)                          “Rights
Dividend Declaration Date” shall have the meaning set forth in the recitals
to this Agreement.


 


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


 


(jj)                                  “Securities
Act” shall mean Securities Act of 1933, as amended.


 


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


 


(ll)                                  “Stock
Acquisition Date” shall mean the first date of public announcement (which
for purposes of this definition shall include, without limitation, a report
filed pursuant to Section 13(d) of the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such or such earlier
date as a majority of the Board shall become aware of the existence of an
Acquiring Person.


 


(mm)                      “Subsidiary”
shall mean, with reference to any Person, any corporation or other legal entity
of which a majority of the voting power of the voting equity securities or
equity interests is owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.


 


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


 


5

















 


(oo)                          “Summary
of Rights “ shall mean a copy of a summary of the terms of the Rights, in
substantially the form attached hereto as Exhibit C.


 


(pp)                          “Tax
Benefits” shall mean the net operating loss carry-overs, capital loss
carry-overs, general business credit carry-overs, alternative
minimum tax credit carry-overs and foreign tax credit carry-overs,
as well as any “net unrealized built-in loss” within the meaning of Section 382,
of the Company or any direct or indirect Subsidiary thereof.


 


(qq)                          “Trading
Day” shall mean a day on which the principal national securities exchange
on which the shares of Common Stock are listed or admitted to trading is open
for the transaction of business or, with respect to the shares of Common Stock
which are not listed or admitted to trading on any national securities
exchange, a Trading Day for the Common Stock.


 


(rr)                                “Treasury
Regulations” shall mean final, temporary and proposed income tax
regulations promulgated under the Code, including any amendments thereto.


 


Section 2                                             Appointment
of Rights Agent


 


The Company
hereby appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-rights
agents as it may deem necessary or desirable. The Rights Agent shall have no
duty to supervise, and shall in no event be liable for, the acts or omission of
any such co-rights agent. Prior to the appointment of a co-rights
agent, the specific duties and obligations of each such co-rights agents
shall be set forth in writing and delivered to the Rights Agent and the
proposed co-rights agent. Any actions which may be taken by the Rights
Agent pursuant to the terms of this Agreement may be taken by any such
co-rights agent. To the extent that any co-rights agent takes any
action pursuant to this Agreement, such co-rights agent shall be entitled
to all of the rights and protections of, and subject to all of the applicable
duties and obligations imposed upon, the Rights Agent pursuant to the terms of
this Agreement.


 


Section 3                                             Issuance
of Rights Certificates


 


(a)                                  Until
the Distribution Date, (i) the Rights shall be evidenced (subject to Section 3(b))
by the certificates representing the shares of Common Stock registered in the
names of the record holders thereof (which certificates representing such
shares of Common Stock shall also be deemed to be Rights Certificates), (ii) the
Rights shall be transferable only in connection with the transfer of the
underlying shares of Common Stock, and (iii) the surrender for transfer of
any certificates representing such shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with the shares of Common Stock represented by such certificates.


 


(b)                                 On
or as promptly as practicable after the Record Date, the Company shall send by
first class, postage prepaid mail, to each record holder of shares of Common
Stock as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company as of such date, a copy of a Summary
of Rights to Purchase Preferred Stock in substantially the form attached hereto
as Exhibit C. With respect to certificates for Common Stock
outstanding as of the Record Date, until the Distribution Date, the Rights will
be 


 


6

















 


evidenced by such certificates registered in
the names of the holders thereof together with the Summary of Rights.


 


(c)                                  Rights
shall be issued by the Company in respect of all shares of Common Stock (other
than any shares of Common Stock that may be issued upon the exercise or
exchange of any Right) issued or delivered by the Company (whether originally
issued or delivered from the Company’s treasury) after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date, except
as specially provided in Section 21 hereof, after the Distribution
Date. Certificates representing such shares of Common Stock shall have stamped
on, impressed on, printed on, written on, or otherwise affixed to them a legend
in substantially the following form or such similar legend as the Company may
deem appropriate and is not inconsistent with the provisions of this Agreement
and as do not affect the rights, duties or responsibilities of the Rights
Agent, or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange or transaction reporting system on which the shares of Common
Stock may from time to time be listed or quoted:


 


This
certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between CLST Holdings, Inc. and Mellon
Investor Services LLC, as Rights Agent, dated as of February 13, 2009 and
as amended from time to time (the “Rights Agreement”), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of CLST Holdings, Inc. The Rights
are not exercisable prior to the occurrence of certain events specified in the
Rights Agreement. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may be exchanged, may expire, may be
amended, or may be evidenced by separate certificates and no longer be
evidenced by this certificate. CLST Holdings, Inc. shall mail to the
holder of this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances as set forth in the Rights Agreement,
Rights that are or were beneficially owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement) may become null and void.


 


(d)                                 Any
Rights Certificate issued pursuant to this Section 3 or Section 21
hereof that represents Rights beneficially owned by an Acquiring Person or any
of its Associates or Affiliates and any Rights Certificate issued at any time
upon the transfer of any Rights to an Acquiring Person or any of its Associates
or Affiliates or to any nominee of such Acquiring Person, Associate or
Affiliate and any Rights Certificate issued pursuant to Section 6
or 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall be subject to and
contain a legend in substantially the following form or such similar legend as
the Company may deem appropriate and is not inconsistent with the provisions of
this Agreement or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed:


 


The Rights
represented by this Rights Certificate are or were beneficially owned by a
Person who was an Acquiring Person or an Affiliate or an Associate of an
Acquiring 


 


7

















 


Person (as
such terms are defined in the Rights Agreement). This Rights Certificate and
the Rights represented hereby may become null and void in the circumstances
specified in Section 11(a)(ii) of the Rights Agreement.


 


(e)                                  As
promptly as practicable after the Distribution Date, the Company shall prepare
and execute, the Rights Agent shall countersign and the Company shall send or
cause to be sent (and the Rights Agent will, if requested, and if provided with
all necessary information, send), by first class, insured, postage prepaid
mail, to each record holder of shares of Common Stock, as of the Close of
Business on the Distribution Date (other than an Acquiring Person or any
Associate or Affiliate of an Acquiring Person), at the address of such holder
shown on the records of the Company or the transfer agent or registrar for the
Common Stock, a Rights Certificate representing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. As of and after
the Distribution Date, the Rights shall be represented solely by such Rights
Certificates, and the Rights will be transferable only separately from the transfer
of Common Stock. The Company shall promptly notify the Rights Agent in writing
upon the occurrence of the Distribution Date and, if such notification is given
orally, the Company shall confirm same in writing on or prior to the next
Business Day. Until such notice is received by the Rights Agent, the Rights
Agent may presume conclusively for all purposes that the Distribution Date has
not occurred.


 


(f)                                    In
the event that the Company purchases or otherwise acquires any shares of Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such shares of Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock so purchased or acquired.


 


Section 4                                             Form of
Rights Certificates


 


The Rights
Certificates (and the form of election to purchase and the form of assignment
to be printed on the reverse thereof) shall each be substantially in the form
attached hereto as Exhibit B with such changes and marks of
identification or designation, and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate (but which do not affect
the rights, duties, liabilities or responsibilities of the Rights Agent) and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
or transaction reporting system on which the Rights may from time to time be
listed or quoted, or to conform to usage. Subject to the provisions of Section 21
hereof, the Rights Certificates, whenever distributed shall entitle the holders
thereof to purchase such number of one ten-thousandths of a share of
Preferred Stock as is set forth therein at the Purchase Price; provided,
however, that the Purchase Price, the number and kind of securities
issuable upon exercise of each Right and the number of Rights outstanding shall
be subject to adjustments as provided in this Agreement.


 


Section 5                                             Countersignature
and Registration


 


(a)                                  The
Rights Certificates shall be executed on behalf of the Company by any
Authorized Officer, either manually or by facsimile signature, and shall have
affixed thereto the


 


8
















 


Company’s seal or a facsimile thereof which shall be attested by any
Authorized Officer, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by the Rights Agent, either manually or by
facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any Authorized Officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such Authorized Officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such Authorized Officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper Authorized Officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Agreement any such person was not
such an Authorized Officer.


 


(b)                                 Following
the Distribution Date, upon receipt by the Rights Agent of written notice of
the occurrence of the Distribution Date pursuant to Section 3(e) hereof,
a stockholder list and all other relevant information referred to in Section 3(e) or
as reasonably requested by the Rights Agent, the Rights Agent shall keep, books
for registration and transfer of the Rights Certificates issued hereunder or
cause to be kept, at its office or offices designated for such purposes and at
such other offices as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or any transaction reporting system on which
the rights may from time to time be listed or quoted. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.


 


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


 


(a)                                  Subject
to the provisions of Section 7(d) and Section 13
hereof, at any time after the Close of Business on the Distribution Date, and
prior to the Expiration Date, any Rights Certificate(s) (other than Rights
Certificates representing Rights that have become null and void pursuant to Section 11(a)(ii) hereof
or that may have been exchanged pursuant to Section 23 hereof)
representing exercisable Rights may be transferred, split up, combined or
exchanged for another Rights Certificate(s), entitling the registered holder to
purchase a like number of one ten-thousandths of a share of Preferred
Stock (or other securities, as the case may be) as the Rights Certificate(s) 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 such Rights Certificate(s) must make such request in writing
delivered to the Rights Agent, and must surrender the Rights Certificate(s) to
be transferred, split up, combined or exchanged, with the forms of assignment
and certificate contained therein duly executed, at the office or offices of
the Rights Agent designated for such purpose. The Rights Certificates are
transferable only on the registry books of the Rights Agent. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate(s) until
the registered holder thereof shall have (i) completed and signed the
certificate contained in the form of assignment on the reverse side of each
such Rights Certificate, (ii) provided such additional evidence of the
identity of the Beneficial Owner (or 


 


9

















 


former Beneficial Owner) thereof and of the Rights evidenced thereby
and the Affiliates and Associates of such Beneficial Owner (or former
Beneficial Owner) as the Company or the Rights Agent shall reasonably request
and (iii) paid a sum sufficient to cover any tax or charge that may be
imposed in connection with any transfer, split up, combination or exchange or
Rights Certificates as required by Section 9(d) hereof.
Thereupon the Rights Agent shall countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so
requested registered in such name or names as may be designated by the
surrendering registered holder. The Rights Agent shall promptly forward any
such sum collected by it to the Company or to such Person or Persons as the
Company shall specify by written notice. The Rights Agent shall have no duty or
obligation under any Section of this Agreement which requires the payment
of taxes or charges unless and until it is satisfied that all such taxes and/or
charges have been paid.


 


(b)                                 Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or security
satisfactory to them, and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Rights Certificate, if mutilated, the Company
shall execute and deliver a new Rights Certificate of like tenor to the Rights
Agent and the Rights Agent will countersign and deliver such new Rights
Certificate to the registered holder in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.


 


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


 


(a)                                  Except
as otherwise provided herein, the Rights shall become exercisable on the
Distribution Date and prior to the Expiration Date, and thereafter the
registered holder of any Right Certificate may, subject to Section 11(a)(ii) and
Section 23 hereof, exercise the Rights evidenced thereby in whole
or in part upon surrender of the Rights Certificate, with the form of election
to purchase on the reverse side thereof properly completed and duly executed,
to the Rights Agent at the office or agency of the Rights Agent designated for
such purpose, together with payment of the Purchase Price (including any
applicable tax or charge required to be paid by the holder of such Rights
Certificate in accordance with the provisions of Section 9(d))
hereof for each one ten-thousandth of a share of Preferred Stock (or
other securities, cash or assets, as the case may be) as to which the Rights
are exercised.  Except for those
provisions herein which expressly survive the termination of this Agreement,
this Agreement shall terminate on the Expiration Date.


 


(b)                                 Upon
receipt of a Rights Certificate representing exercisable Rights with the form
of election to purchase and the certificate properly completed and duly
executed, accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable tax or charge required to be
paid under Section 9(d) hereof by certified check, cashier’s
check, bank draft or money order payable to the order of the Company, subject
to Section 19(j) hereof, the Rights Agent shall, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates representing
the total number of one ten-thousandths of a share of Preferred Stock to
be purchased (and the Company hereby irrevocably authorizes and directs each
such transfer agent to comply with all such requests) or (B) if the
Company 


 


10

















 


shall have elected to deposit any shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number of one
ten-thousandths of a share of Preferred Stock as are to be purchased (and
the Company hereby irrevocably authorizes and directs such depositary agent to
comply with all such requests), (ii) after receipt of such certificates
(or depositary receipts, as the case may be) cause the same to be delivered to
or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, (iii) when
necessary to comply with this Agreement, requisition from the Company or any
transfer agent therefor of certificates representing the number of equivalent
shares to be issued in lieu of the issuance of shares of Common Stock in
accordance with the provisions of Section 11(a)(iii), (iv) when
necessary to comply with this Agreement, after receipt of such certificates,
cause the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, (v) when necessary to comply with this Agreement,
requisition from the Company the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with the provisions of Section 13
hereof, and (vi) when necessary to comply with this Agreement, after
receipt, deliver such cash to the registered holder of such Rights Certificate.


 


(c)                                  In
case the registered holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, the Rights Agent shall prepare, execute and
deliver a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised to the registered holder of such Rights Certificate or to
his duly authorized assigns, subject to the provisions of Section 13
hereof.


 


(d)                                 Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to any
purported transfer, split up, combination or exchange of any Rights Certificate
pursuant to Section 6 or exercise or assignment of a Rights
Certificate as set forth in this Section 7 unless the registered
holder of such Rights Certificate shall have (i) properly completed and
duly executed the certificate following the form of assignment or the form of
election to purchase, as applicable, set forth on the reverse side of the
Rights Certificate surrendered for such transfer, split up, combination,
exchange, exercise or assignment and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
thereof and of the Rights evidenced thereby and of the Affiliates and
Associates of such Beneficial Owner (or former Beneficial Owner) as the Company
or the Rights Agent may reasonably request.


 


Section 8                                             Cancellation
and Destruction of Rights Certificates


 


All Rights
Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the 


 


11

















 


Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.


 


Section 9                                             Company
Covenants Concerning Securities and Rights


 


(a)                                  The
Company covenants and agrees that it shall cause to be reserved, authorized for
issuance and kept available out of its authorized and unissued shares of
Preferred Stock, and/or other securities, or any shares of any such security of
the Company held in its treasury, a number of shares of Preferred Stock (or any
other security of the Company as may be applicable at the time of exercise)
that shall be sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7.


 


(b)                                 The
Company covenants and agrees so long as the shares of Preferred Stock (and,
following the occurrence of any Person becoming an Acquiring Person, shares of
Common Stock and/or other securities) issuable upon the exercise of the Rights
may be listed on any national securities exchange it shall endeavor to cause,
from and after such time as the Rights become exercisable, all securities
reserved for issuance upon the exercise of Rights to be listed on such exchange
upon official notice of issuance upon such exercise.


 


(c)                                  The
Company covenants and agrees it will take all such actions as may be necessary
to ensure that all shares of Preferred Stock (and, following the occurrence of
any Person becoming an acquiring Person shares of Common Stock and/or other
securities) delivered upon exercise of Rights, at the time of delivery of the
certificates for such securities, shall be (subject to payment of the Purchase
Price and compliance with all other applicable provisions of this Agreement)
duly authorized, validly issued, fully paid and nonassessable securities.


 


(d)                                 The
Company covenants and agrees it will pay when due and payable any and all taxes
and charges that may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates representing securities issued upon
the exercise of Rights; provided, however, that the Company shall
not be required to pay any tax or charge which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts representing
securities issued upon the exercise of Rights in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered for
exercise, or to issue or deliver any certificates or depositary receipts
representing securities issued upon the exercise of any Rights until any such
tax or charge has been paid (any such tax or charge being payable by the holder
of such Rights Certificate at the time of surrender) or until it has been
established to the Company’s or the Rights Agent’s satisfaction that no such
tax or charge is due.


 


(e)                                  If
the Company determines that registration under the Securities Act is required,
then the Company shall use commercially reasonable efforts (i) to file, as
soon as practicable after the Distribution Date, on an appropriate form, a
registration statement under the Securities Act with respect to the securities
issuable upon exercise of the Rights, (ii) to cause such registration
statement to become effective as soon as practicable after such filing and (iii) to
cause such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company shall also take 


 


12

















 


such action as may be appropriate under, or to ensure compliance with,
the securities or “blue sky” laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not exceed ninety (90) days, the exercisability of the Rights in order
to prepare and file such registration statement and to permit it to become
effective or to qualify the rights, the exercise thereof or the issuance of
shares of Preferred Stock, Common Stock, or other securities upon the exercise
thereof under state securities or “blue sky” laws. Upon any such suspension,
the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. The Company shall notify
the Rights Agent in writing whenever it makes a public announcement pursuant to
this Section 9(e) and give the Rights Agent a copy of such
announcement. In addition, if the Company determines that a registration
statement or other document should be filed under the Securities Act or any
state securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights, for a period of time not
to exceed ninety (90) days, in each relevant jurisdiction until such time as a
registration statement has been declared effective or any such other document
filed and, if required, approved, and, upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of the rights
has been temporarily suspended, as well as a public announcement at such time
as the suspension is no longer in effect. 
Notwithstanding anything in this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite registration or
qualification in such jurisdiction has not been effected or the exercise of the
Rights is not permitted under applicable law.


 


(f)                                    Notwithstanding
anything in this Agreement to the contrary, after the later of the Stock Acquisition
Date and the Distribution Date, the Company shall not take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action shall eliminate or otherwise diminish
the benefits intended to be afforded by the Rights.


 


(g)                                 In
the event that the Company is obligated to issue other securities of the
Company and/or pay cash pursuant to Sections 7, 11, 13 or 23
it shall make all arrangements necessary so that such other securities and/or
cash are available for distribution by the Rights Agent, if and when necessary
to comply with this Agreement.


 


Section 10                                      Record
Date


 


Each Person in
whose name any certificate for a number of one ten-thousandths of a share
of Preferred Stock (or Common Stock 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 such shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Rights Certificate
representing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable taxes and charges) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
transfer books of the Company for shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) are closed, such Person shall be
deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books of the 


 


13

















 


Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to any rights
of a holder of any security of the Company with respect to shares for which the
Rights are or may be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.


 


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


 


The Purchase
Price, the number of shares of Preferred Stock or other securities or property
purchasable upon exercise of each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.


 


(a)                                  (i)                                     In
the event the Company shall at any time after the Record Date (A) declare
a dividend on the shares of Preferred Stock payable in shares of Preferred
Stock, (B) subdivide the outstanding shares of Preferred Stock, (C) combine
the outstanding shares of Preferred Stock into a smaller number of shares of
Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the shares of Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, as the case may be, 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 prior to such
date and at a time when the transfer books of the Company for the shares of
Preferred Stock were open, the 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 (1) Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one (1) Right.


 


(ii)                                  Subject
to Section 23 of this Agreement and except as otherwise provided in
this Section 11(a)(ii) and Section 11(a)(iii), in
the event that any Person becomes an Acquiring Person, each holder of a Right
shall thereafter have the right to receive, upon exercise thereof at a price
equal to the then-current Purchase Price, in accordance with the terms of
this Agreement and in lieu of shares of Preferred Stock, such number of shares
of Common Stock (or at the option of the Company, such number of one
ten-thousandths of a share of Preferred Stock) as shall equal the result
obtained by (x) multiplying the then-current Purchase Price by the
number of one ten-thousandths of a share of Preferred Stock for which a
Right is then exercisable and dividing that product by (y) 50% of the
Current Per Share Market Price of the Company’s Common Stock (determined
pursuant to Section 11(d) hereof) on the date of the
occurrence of such event; provided, however, that the Purchase
Price (as so adjusted) and the number of shares of Common Stock so receivable
upon exercise of a Right shall thereafter be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof.


 


14

















 


Notwithstanding anything in this Agreement to the contrary, however,
from and after the time (the “invalidation time”) when any Person first
becomes an Acquiring Person, any Rights that are beneficially owned by (A) any
Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (B) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the invalidation time or (C) a transferee of
any Acquiring Person (or any such Affiliate or Associate) who became a
transferee prior to or concurrently with the invalidation time pursuant to
either (1) a transfer from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement, arrangement
or understanding, written or otherwise, regarding the transferred Rights or (2) a
transfer that the Board has determined is part of a plan, arrangement or
understanding, written or otherwise, which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent transferees of such
Persons, shall be null and void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever with respect to such
Rights under any provision of this Agreement. The Company will use commercially
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of Rights 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. From and after the invalidation time, no Right Certificates shall be
issued pursuant to Section 3 or Section 6 hereof that
represent Rights that are or have become null and void pursuant to the
provisions of this paragraph, and any Right Certificates delivered to the
Rights Agent that represent Rights that are or have become null and void
pursuant to the provisions of this paragraph shall be cancelled. The Company
shall give the Rights Agent written notice of the identity of any such
Acquiring Person, Associate or Affiliate, or the nominee of any of the
foregoing, and the Rights Agent may rely on such notice in carrying out its
duties under this Agreement and shall be deemed not to have any knowledge of
the identity of any such Acquiring Person, Associate or Affiliate, or the
nominee of any of the foregoing unless and until it shall have received such
notice.


 


(iii)                               The
Company may at its option substitute for a share of Common Stock issuable upon
the exercise of Rights in accordance with the foregoing subparagraph (ii) such
number or fractions of shares of Preferred Stock having an aggregate current
market value equal to the Current Per Share Market Price of a share of Common
Stock. In the event that there shall be an insufficient number of shares of
Common Stock authorized but unissued (and unreserved) to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the
Board shall, with respect to such deficiency, to the extent permitted by
applicable law and any material agreements then in effect to which the Company
is a party (A) determine the excess of (x) the value of the shares of
Common Stock issuable upon the exercise of a Right in accordance with the
foregoing subparagraph (ii) (the “Current Value”) over (y) the
then-current Purchase Price multiplied by the number of one
ten-thousandths of shares of Preferred Stock for which a Right was
exercisable immediately prior to the time that the Acquiring Person became such
(such excess, the “Spread”), and (B) with respect to each Right
(other than Rights which have become null and void pursuant to Section 11(a)(ii)),
make adequate provision to substitute for the shares of Common Stock issuable
in accordance with subparagraph (ii) upon exercise of the Right and
payment of the applicable Purchase Price, (1) cash, (2) a reduction
in such Purchase Price, (3) shares of Preferred Stock or other equity
securities of the Company (including, without limitation, shares or fractions
of shares of preferred stock) which, by virtue of having dividend, voting and
liquidation rights substantially comparable to those of the shares of Common
Stock, 


 


15

















 


are deemed in good faith by the Board to have substantially the same
value as the shares of Common Stock (such shares of preferred stock and shares
or fractions of shares of preferred stock are hereinafter referred to as “Common
Stock equivalents”) (4) debt securities of the Company, (5) other
assets or (6) any combination of the foregoing, having a value which, when
added to the value of the shares of Common Stock actually issued upon exercise
of such Right, shall have an aggregate value equal to the Current Value (less
the amount of any reduction in such Purchase Price), where such aggregate value
has been determined by the Board (upon the advice of a nationally recognized
investment banking firm selected by the Board in good faith); provided, however,
if the Company shall not make adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the date that the
Acquiring Person became such (the “Section 11(a)(ii) Trigger Date”),
then the Company shall be obligated to deliver, to the extent permitted by
applicable law and any material agreements then in effect to which the Company
is a party, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If within the
thirty (30) day period referred to above the Board shall determine in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, then, if the
Board so elects, such thirty (30) day period may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such thirty (30) day period, as it may
be extended, is hereinafter called the “Substitution Period”). To the
extent that the Company determines that some action need be taken pursuant to
the second and/or third sentence of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 11(a)(ii) hereof
and the last sentence of this Section 11(a)(iii) hereof, that
such action shall apply uniformly to all outstanding Rights and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such second sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement (with prompt
written notice thereof to the Rights Agent) stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement
(with prompt written notice thereof to the Rights Agent) at such time as the
suspension is no longer in effect.


 


(b)                                 If
the Company fixes a record date for the issuance of rights, options or warrants
to all holders of shares of Preferred Stock entitling them (for a period
expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase shares of Preferred Stock (or securities having equivalent
rights, privileges and preferences as the shares of Preferred Stock (for
purposes of this Section 11(b), “Equivalent Preferred Stock”))
or securities convertible into shares of Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or Equivalent Preferred
Stock (or having a conversion price per share, if a security convertible into
shares of Preferred Stock or Equivalent Preferred Stock) less than the Current
Per Share Market Price of the shares of Preferred Stock (determined pursuant to
Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which is the number of shares of Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of 


 


16

















 


shares of Preferred Stock and/or Equivalent Preferred Stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Per Share Market
Price and the denominator of which is the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock 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 (1) Right
be less than the aggregate par value of the shares of capital stock issuable
upon exercise of one (1) Right. In case such subscription price may be
paid in a consideration part or all of which is in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board,
whose determination shall be described in a written statement filed with the
Rights Agent. Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed, and 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)                                  If
the Company fixes a record date for the making of a distribution to all holders
of shares of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend), assets, stock (other than a dividend
payable in shares of Preferred Stock) or subscription rights, options or
warrants (excluding those referred to in Section 11(b)), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which is the Current Per Share Market Price of
the shares of Preferred Stock (as determined pursuant to Section 11(d))
on such record date or, if earlier, the date on which shares of Preferred Stock
begin to trade on an ex-dividend or when issued basis for such
distribution, less the fair market value (as determined in good faith by the
Board, whose determination shall be described in a written statement filed with
the Rights Agent) of the portion of the evidences of indebtedness, cash, assets
or stock so to be distributed or of such subscription rights, options or
warrants applicable to one share of Preferred Stock, and the denominator of
which is such Current Per Share Market Price of the shares of Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one (1) Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one (1) 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 purposes of this Section 11(d)(i) only)
on any date shall be deemed to be the average of the daily closing prices per
share of a share of the Common Stock for the thirty (30) consecutive Trading
Days immediately prior to, but not including, 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 (other than
the Rights) or (B) any subdivision, 


 


17

















 


combination or reclassification of such Security, and prior to, but not
including, the expiration of thirty (30) Trading Days after, but not including,
the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the Current Per Share Market Price shall be appropriately adjusted
to take into account ex-dividend trading or to reflect the current per
share market price per share equivalent of such Security. The closing price for
each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last 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 Nasdaq or such other system
then in use, or, if on any such date Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the
Board. If the Security is not publicly held or not so listed or traded, or is
not the subject of available bid and asked quotes, the Current Per Share Market
Price of such Security shall mean the fair value per share as determined in
good faith by the Board, whose determination shall be described in a written
statement filed with the Rights Agent.


 


(ii)                                  For
the purpose of any computation hereunder, the “Current Per Share Market
Price” of shares of the Preferred Stock shall be determined in accordance
with the method set forth above in Section 11(d)(i) other than
the last sentence thereof.  If the
Current Per Share Market Price of Preferred Stock cannot be determined in the
manner provided above, it shall be conclusively deemed to be an amount equal to
the current per share market price of the shares of Common Stock multiplied by
ten thousand (as such number may be appropriately adjusted to reflect events
such as stock splits, stock dividends, recapitalizations or similar
transactions relating to the shares of Common Stock occurring after the date of
this Agreement). If neither the Common Stock nor the Preferred Stock are
publicly held or so listed or traded, or the subject of available bid and asked
quotes, “Current Per Share Market Price” of the Preferred Stock shall mean the
fair value per share as determined in good faith by the Board, whose
determination shall be described in a written statement filed with the Rights
Agent. For all purposes of this Agreement, the current per share market price
of one ten-thousandth of a Preferred Share will be equal to the current
per share market price of one Preferred Share divided by ten thousand.


 


(e)                                  Except
as set forth below, no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such 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-millionth of a share of Preferred Stock or
one ten-thousandth of a share of Common Stock or other 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) 


 


18

















 


years from the date of the
transaction which requires such adjustment and (ii) the Expiration Date.


 


(f)                                    If
as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised becomes entitled to receive any
securities of the Company other than shares of Preferred Stock, thereafter the
number and/or kind of such other securities so receivable upon exercise of any
Right (and/or the Purchase Price in respect thereof) shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Preferred Stock
(and the Purchase Price in respect thereof) contained in this Section 11,
and the provisions of Sections 7, 9, 10, 12 and 13
with respect to the shares of Preferred Stock (and the Purchase Price in
respect thereof) shall apply on like terms to any such other securities (and
the Purchase Price in respect thereof).


 


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


 


(h)                                 Unless
the Company has exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price pursuant to Section 11(b) or
Section 11(c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of one ten-thousandths of a
share of Preferred Stock (calculated to the nearest one one-millionth of
a share of Preferred Stock) obtained by (i) multiplying (x) the
number of one ten-thousandths of a share of Preferred Stock issuable upon
exercise of a Right immediately prior to such adjustment of the Purchase Price
by (y) the Purchase Price in effect immediately prior to 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
Company may elect, on or after the date of any adjustment of the Purchase
Price, to adjust the number of Rights in substitution for any adjustment in the
number of one ten-thousandths of a share of Preferred Stock issuable upon
the exercise of a Right.  Each of the
unexercised Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one ten-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each unexercised Right held of record prior to such adjustment of
the number of unexercised Rights shall become that number of Rights (calculated
to the nearest one hundred-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. The Company shall also,
as promptly as practicable, notify the Rights Agent in writing of same pursuant
to Section 9(e) hereof and give the Rights Agent a copy of
such announcement. Such record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but if the Rights Certificates have been
issued, such record date shall be at least ten (10) calendar days later
than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section 11(i),
the Company shall, as 


 


19

















 


promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to the provision of Section 13, the additional Rights to
which such holders are entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof if required
by the Company, new Rights Certificates evidencing all the Rights to which such
holders are entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed, and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.


 


(j)                                     Without
respect to any adjustment or change in the Purchase Price and/or the number
and/or kind of securities issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number and kind of securities which were expressed in
the initial Rights Certificate issued hereunder.


 


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


 


(l)                                     In
any case in which this Section 11 otherwise requires that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice
thereof to the Rights Agent) until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of one
ten-thousandths of a share of Preferred Stock or other securities of the
Company, if any, issuable upon such exercise over and above the number of one
ten-thousandths of a share of Preferred Stock or other securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the
Company delivers to such holder a due bill or other appropriate instrument
evidencing such holder’s right to receive such additional shares of Preferred
Stock or other securities upon the occurrence of the event requiring such
adjustment.


 


(m)                               Notwithstanding
anything in this Agreement to the contrary, the Company shall be entitled to
make such reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in
its judgment the Board determines to be necessary or advisable in order that
any (i) consolidation or subdivision of the shares of Preferred Stock, (ii) issuance
wholly for cash of shares of Preferred Stock at less than the Current Per Share
Market Price therefor, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its shares of Preferred Stock is
not taxable to such stockholders.


 


20
















 


(n)                                 Notwithstanding
anything in this Agreement to the contrary, in the event that the Company at
any time after the Record Date and prior to the Distribution Date (i) pays
a dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivides the outstanding shares of Common Stock, (iii) combines
the outstanding shares of Common Stock into a smaller number of shares or (iv) issues
any shares of its capital stock in a reclassification of the outstanding shares
of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event equals the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event by a fraction
the numerator of which is the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which is the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.  The adjustments provided for in this Section 11(n) shall
be made successively whenever such a dividend is paid or such a subdivision,
combination or reclassification is effected.


 


Section 12                                      Certificate
of Adjusted Purchase Price or Number of Shares


 


Whenever an
adjustment is made or any event affecting the Rights or their exercisability
(including without limitation an event which causes Rights to become null and
void) occurs as provided in Section 11, the Company shall promptly (a) prepare
a certificate setting forth such adjustment and a brief, reasonably detailed
statement of the facts and calculations accounting for such adjustment or
describing such event, (b) file with the Rights Agent, and with each
transfer agent for the shares of Preferred Stock and the shares of Common
Stock, a copy of such certificate, and (c) mail a brief summary thereof to
each holder of a Rights Certificate in accordance with Section 24 and Section 25
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment or statement therein contained and shall have
no duty or liability with respect to, and shall not be deemed to have knowledge
of, any such adjustment or any such events unless and until it shall have
received such a certificate.


 


Section 13                                      Fractional
Rights and Fractional Shares


 


(a)                                  The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company shall pay to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of one Right. For purposes of this Section 13(a), the current
market value of one Right is the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price for any Trading 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


 


21

















 


which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights, such market maker
to be selected by the Board. If the Rights are not publicly held or are not so
listed or traded, or are not the subject of available bid and asked quotes, the
current market value of one Right shall mean the fair value thereof as
determined in good faith by the Board, whose determination shall be described
in a written statement filed with the Rights Agent.


 


(b)                                 The
Company shall not be required to issue fractions of shares of Preferred Stock
(other than fractions which are integral multiples of one ten-thousandth
of a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one ten-thousandth of a share
of Preferred Stock). Fractions of Preferred Stock in integral multiples of one
ten-thousandth of such Preferred Stock may, in the sole discretion of the
Company, be evidenced by depositary receipts pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement provides that the holders of such depositary receipts have all
the rights, privileges and preferences to which they are entitled as beneficial
owners of the Preferred Stock represented by such depositary receipts. In lieu
of fractional shares of Preferred Stock that are not integral multiples of one
ten-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one ten-thousandth of a share of Preferred Stock. For
purposes of this Section 13(b), the current market value of one
ten-thousandth of a share of Preferred Stock shall be one
ten-thousandth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise; provided, however,
that if the closing price of the shares of the Preferred Stock cannot be so
determined, the closing price of the shares of the Preferred Stock for such
Trading Day shall be conclusively deemed to be an amount equal to the closing
price of the shares of Common Stock shares for such Trading Day multiplied by
ten thousand (as such number may be appropriately adjusted to reflect events
such as stock splits, stock dividends, recapitalizations or similar
transactions relating to the Common Stock shares occurring after the date of
this Agreement).


 


(c)                                  Following
the occurrence of any Person becoming an Acquiring Person, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise or
exchange of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of issuing any such fractional securities, the
Company may pay to any Person to whom or which such fractional securities would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of one such security. For purposes of this Section 13(c),
the current market value of one (1) share of Common Stock, or other
security issuable upon the exercise or exchange of Rights shall be the closing
price thereof (as determined pursuant to Section 11(d)(i) hereof)
on the Trading Day immediately prior to the date of such exercise or exchange.


 


22

















 


(d)                                 The
holder of a Right by the acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise of a
Right, except as permitted by this Section 13.


 


(e)                                  Whenever
a payment for fractional Rights or fractional shares is to be made by the
Rights Agent, the Company shall (i) promptly prepare and deliver to the
Rights Agent a certificate setting forth in reasonable detail the facts related
to such payments and the prices and/or formulas utilized in calculating such
payments, and (ii) provide sufficient monies to the Rights Agent in the
form of fully collected funds to make such payments.  The Rights Agent shall be fully protected in
relying upon such a certificate and shall have no duty with respect to, and
shall not be deemed to have knowledge of any payment for fractional Rights or
fractional shares under any Section of this Agreement relating to the
payment of fractional Rights or fractional shares unless and until the Rights
Agent shall have received such a certificate and sufficient monies.


 


Section 14                                     Rights
of Action


 


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


 


(b)                                 Notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, judgment,
decree or ruling (whether interlocutory or final) issued by a court of
competent jurisdiction or by a governmental regulatory, self-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 that the Company shall use commercially reasonable efforts to
have any such injunction, order, judgment, decree or ruling lifted or otherwise
overturned as soon as possible.


 


Section 15                                     Agreement
of Rights Holders


 


Every holder
of a Right consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:


 


23

















 


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


 


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


 


(c)                                  the
Company and the Rights Agent may deem and treat the Person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock share certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Stock share certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; and


 


(d)                                 such
holder expressly waives any right to receive any fractional Rights and any
fractional securities upon exercise or exchange of a Right, except as otherwise
provided in Section 13.


 


Section 16                                     Rights
Certificate Holder Not Deemed a Stockholder


 


No holder, of
any Rights Certificate, by means of such possession, shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of one
ten-thousandths of a share of Preferred Stock or any other securities of
the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate,
by means of such possession, any of the rights of a stockholder of the Company
including any right to vote on any matter submitted to stockholders at any
meeting thereof, including the election of directors, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 24
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Rights Certificate have been exercised in
accordance with the provisions of this Agreement.


 


Section 17                                     Concerning
the Rights Agent


 


(a)                                  The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder, and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the preparation, negotiation, delivery,
amendment, administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense (including,
without limitation, the reasonable fees and expenses of legal counsel), incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (which gross negligence, bad faith or willful misconduct must be
determined by a final, non-appealable order, judgment, decree or ruling
of a


 


24

















 


court of competent
jurisdiction), for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement and the
performance of its duties and responsibilities and the exercise of its rights
hereunder, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly. The costs and expenses of
enforcing this right of indemnification shall also be paid by the Company. The
provisions of this Section 17 and Section 19 below
shall survive the exercise, exchange, redemption or expiration of the Rights,
the resignation, replacement or removal of the Rights Agent and the termination
of this Agreement.


 


(b)                                 The
Rights Agent shall be authorized and may conclusively rely on, and will be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with, its acceptance or administration
of this Agreement and the exercise and performance of its duties and
responsibilities and the exercise of its rights hereunder, in reliance upon any
Rights Certificate or certificate evidencing shares of Preferred Stock, Common
Stock or other securities of the Company, or any instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to
be genuine and to be signed, executed and, where necessary, verified or acknowledged,
by the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 19.  The
Rights Agent shall not be deemed to have knowledge of any event of which it was
supposed to receive notice thereof hereunder, and the Rights Agent shall be
fully protected and shall incur no liability for failing to take any action in
connection therewith unless and until it has received such notice.


 


(c)                                  Notwithstanding
anything in this Agreement to the contrary, in no event will the Rights Agent
be liable for special, punitive, indirect, incidental or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action.


 


Section 18                                     Merger,
Consolidation or Change of Name of Rights Agent


 


(a)                                  Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger
or consolidation to which the Rights Agent or any successor Rights Agent shall
be a party, or any Person succeeding to the shareholder services business of
the Rights Agent or any successor Rights Agent, will 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
Person would be eligible for appointment as a successor Rights Agent under the
provisions of Section 20 hereof. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights Agent
and deliver such Rights Certificates so countersigned; and if at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.


 


25

















 


(b)                                 If
at any time the name of the Rights Agent changes and at such time any of the
Rights Certificates have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and if at that time any of the Rights
Certificates have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in all
such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.


 


Section 19                                     Duties
of Rights Agent


 


The Rights
Agent undertakes to perform the duties and obligations expressly imposed by
this Agreement (and no implied duties) upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:


 


(a)                                  The
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company or an employee of the Rights Agent), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any
action taken, suffered or omitted by it in accordance with the content of such
advice or 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 any Acquiring Person and the determination of the
Current Per Share Market Price) be proved or established by the Company prior
to taking, suffering or omitting to take 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 Authorized Officer and delivered to the Rights Agent;
and such certificate, pursuant to its terms, shall be full and complete
authorization and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted
by it under the provisions of this Agreement in reliance upon such certificate.


 


(c)                                  The
Rights Agent shall be liable hereunder to the Company and any other Person only
for its own gross negligence, bad faith or willful misconduct (which gross
negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).  Any liability of the
Rights Agent under this Agreement will be limited to the amount of annual fees
paid by the Company to the Rights Agent.


 


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


 


(e)                                  The
Rights Agent will have no liability for or be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any


 


26

















 


breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Sections  3, 11, 12, 22 or 23 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 change or
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt of the certificate described in Section 12
hereof, upon which the Rights Agent may rely); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred Stock shall, when so issued, be
validly authorized and issued, fully paid and nonassessable.


 


(f)                                    The
Company agrees that it shall 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 and the exercise of the rights
hereunder from any person reasonably believed by the Rights Agent to be one of
the Authorized Officers, and to apply to such Authorized Officers for advice or
instructions in connection with its duties, and such instructions shall be full
authorization and protection to the Rights Agent and the Rights Agent shall not
be liable for or in respect of any action taken, suffered or omitted by it in
accordance with instructions of any such Authorized Officer or for any delay in
acting while waiting for those instructions. The Rights Agent shall be fully
authorized and protected in relying upon the most recent instructions received
by any such Authorized Officer.  Any
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to
be taken, suffered or omitted by the Rights Agent under this Agreement and the
date on and/or after which such action shall be taken or suffered or such
omission shall be effective. The Rights Agent shall not be liable for any
action taken or suffered 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 Authorized Officer of the Company actually receives such
application, unless any such Authorized Officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.


 


(h)                                 The
Rights Agent and any stockholder, affiliate, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though the Rights Agent were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent or
any such stockholder, affiliate, director, officer or employee from acting in
any other capacity for the Company or for any other Person.


 


27

















 


(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 (through its directors,
officers or employees) or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, omission, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect or
misconduct, absent gross negligence, bad faith or willful misconduct in the
selection and continued employment thereof (which gross negligence, bad faith
or willful misconduct must be determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction).


 


(j)                                     If,
with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate contained in the form of assignment or
the form of election to purchase set forth on the reverse thereof, as the case
may be, has either not been completed to certify the holder is not an Acquiring
Person (or an Affiliate or Associate thereof) or a transferee thereof, or
indicates an affirmative response to clause 1 or 2 thereof, the Rights Agent
shall not take any further action with respect to such requested exercise or
transfer without first consulting with the Company.


 


(k)                                  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 it believes
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.


 


(l)                                     The
Rights Agent will not be required to take notice or be deemed to have notice of
any fact, event or determination (including, without limitation, any dates or
events defined in this Agreement or the designation of any Person as an
Acquiring Person, Affiliate or Associate) under this Agreement unless and until
the Rights Agent is specifically notified in writing by the Company of such
fact, event or determination.


 


(m)                               The
provisions of this Section 19 shall survive the exercise, exchange,
redemption or expiration of the Rights, the resignation, replacement or removal
of the Rights Agent and the termination of this Agreement.


 


Section 20                                     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’ written notice mailed to the
Company, and to each transfer agent of the shares of Common Stock and Preferred
Stock known to the Rights Agent, respectively, by registered or certified mail,
and, if such resignation occurs after the Distribution Date, to the registered
holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30) days’
written notice, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the shares of Common Stock and the
Preferred Stock, by registered or certified mail, and, if such removal occurs
after the Distribution Date, to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall, in its sole
discretion, appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a


 


28

















 


period of thirty (30) days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a Person
organized and doing business under the laws of the United States or of the
State of New York or of any other state of the United States, in good standing,
which is authorized under such laws to exercise corporate trust, stock transfer
or shareholder services powers and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
affiliate of a Person described in clause (a) of this sentence. 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 Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the shares of
Common Stock and the Preferred Stock, and, if such appointment occurs after the
Distribution Date, mail a notice thereof in writing to the registered holders
of the Rights Certificates. Failure to give any notice provided for in this Section 20,
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 21                                     Issuance
of New Rights Certificates


 


Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale by the Company of shares of Common Stock following
the Distribution Date and prior to the Expiration Date, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant to the
exercise, exchange or conversion of securities (other than Rights) issued prior
to the Distribution Date which are exercisable or exchangeable for, or
convertible into, shares of Common Stock and (b) may, in any other case,
if deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights as would have been issued in
respect of such shares of Common Stock if they had been issued or sold prior to
the Distribution Date, as appropriately adjusted as provided herein as if they
had been so issued or sold; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, in its good
faith judgment the Board determines that the issuance of such Rights
Certificate could have a material adverse tax consequence to the Company or to
the Person to whom or which such Rights Certificate otherwise would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.


 


29

















 


Section 22                                     Redemption


 


(a)                                  The
Board may, at any time prior to such time as any Person first becomes an
Acquiring Person, redeem all but not less than all the then-outstanding
Rights at the Redemption Price. The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board in
its sole discretion may establish. The Company may, at its option, pay the
Redemption Price in cash, securities or any other form of consideration deemed
appropriate by the Board.


 


(b)                                 Immediately
upon the effectiveness of the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights shall terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held without interest thereon. Promptly
after the effectiveness of the redemption of the Rights, the Company shall give
written notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice to all such holders at each
holder’s last address as it appears upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the shares of Common Stock; provided  however, that the
failure to give, or any defect in, any such notice will not affect the validity
of the Redemption of the Rights.  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
shall state the method by which the payment of the Redemption Price shall be
made.


 


Section 23                                     Exchange


 


(a)                                  The
Board may, at its option, at any time after any Person first becomes an
Acquiring Person, exchange all or part of the then-outstanding and
exercisable Rights (which shall not include Rights that have not become
effective or that have become null and void pursuant to the provisions of Section 11(a)(ii) hereof)
for shares of Common Stock at an exchange ratio of one (1) share of Common
Stock (or ten-thousandth of a share of Preferred Stock) per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such amount per Right being
hereinafter referred to as the “Exchange Ratio”). The exchange of the
Rights by the Board may be made effective at such time, on such basis and with
such conditions as the Board in its sole discretion may establish.


 


(b)                                 Immediately
upon the effectiveness of the action of the Board ordering the exchange of any
Rights pursuant to subsection (a) of this Section 23 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange (with prompt
written notice thereof to the Rights Agent); provided, however, that the
failure to give, or any defect in, such notice shall not affect the legality or
validity of such exchange. The Company shall promptly mail a notice of any such
exchange to all of the holders of the Rights so exchanged at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the shares of Common Stock, for
Rights shall be effected and, in the event of any partial exchange,


 


30

















 


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 null and void pursuant to
the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.


 


(c)                                  The
Company may at its option substitute and, in the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but
unissued (and unreserved) to permit an exchange of Rights as contemplated in accordance
with this Section 23, the Company shall substitute to the extent of
such insufficiency, for each share of Common Stock that would otherwise be
issuable upon exchange of a Right, a number of shares of Preferred Stock or
fraction thereof (or equivalent preferred shares as such term is defined in Section 11(b))
such that the Current Per Share Market Price of one share of Preferred Stock
(or equivalent preferred share) multiplied by such number or fraction is equal
to the Current Per Share Market Price as of the date of such exchange.


 


Section 24                                     Notice
of Certain Events


 


(a)                                  If
the Company proposes to (i) pay any dividend payable in stock of any class
to the holders of shares of Preferred Stock or to make any other distribution
to the holders of shares of Preferred Stock (other than a regular periodic cash
dividend), (ii) offer to the holders of shares of Preferred Stock rights,
options, warrants or any similar instrument to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), (iv) effect any
consolidation or merger into or with any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company or (vi) declare or
pay any dividend on the shares of Common Stock payable in shares of Common
Stock, or to effect a subdivision, combination or reclassification of the
Common Stock then, in each such case, the Company shall give to the Rights
Agent and, to the extent possible, to each holder of a Rights Certificate, in
accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution or offering of rights, warrants, options or any similar
instrument or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least
ten (10) days prior to the record date for determining holders of the
shares of Common Stock and/or Preferred Stock for purposes of such action, and
in the case of any such other action covered by clause (1) or (ii) above
at least ten (10) days prior to the date of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock,
whichever is the earlier.


 


(b)                                 If
a Stock Acquisition Date occurs, then the Company shall as soon as practicable
thereafter give to the Rights Agent and each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights.


 


31
















 


Section 25                                      Notices


 


(a)                                  Notices
or demands authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any Rights Certificate to or on the Company shall be
sufficiently given or made (a) immediately, if made by personal delivery
to the party to be notified, (b) on the fifth (5th) day if sent by
first-class mail, postage prepaid, (c) the next Business Day if by
nationally recognized overnight courier or (d) upon confirmation, if
transmission by facsimile combined with a phone call to the Company notifying
it of such transmission, all addressed (until another address is filed in
writing by the Company with the Rights Agent) as follows:


 


CLST Holdings, Inc.


17304 Preston Road


Suite 420


Dallas, Texas  75252


 


Attention:  Robert A. Kaiser


Facsimile:  (972) 267-0504


Phone:  (972) 267-0500


 


With a copy to:


 


Jackson Walker L.L.P.


901 Main Street


Suite 6000


Dallas, Texas  75202


 


Attention:  Jeffrey M. Sone


Facsimile:  (214) 661-6697


Phone:  (214) 953-6107


 


(b)                                 Subject
to the provisions of Section 20, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made (a) immediately, if made by personal delivery to the party to be
notified, (b) on the fifth (5th)
day if sent by first-class mail, postage prepaid, (c) the next
Business Day if by nationally recognized overnight courier or (d) upon
confirmation, if transmission by facsimile combined with a phone call to the
Rights Agent notifying it of such transmission, all addressed (until another
address is filed in writing by the Rights Agent with the Company) as follows:


 


Mellon Investor Services LLC


600 N. Pearl
Street, Suite 1010


Dallas, TX
75201


Attention:  Ann Peters


Facsimile:  (214) 922-4455


 


32

















 


With a copy
to:


 


Mellon
Investor Services LLC


480 Washington
Boulevard


Jersey City,
NJ 07310


Attention:  General Counsel


Facsimile:  (201) 680-4610


 


(c)                                  Notices
or demands authorized by this Agreement to be given or made by the Company or
the Rights Agent to the holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates representing shares of Common
Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.


 


Section 26                                      Supplements
and Amendments


 


Subject to
this Section 26, prior to the Distribution Date, the Company may in its
sole and absolute discretion, and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of Rights, any such supplement or amendment
to be evidenced by writing signed by the Company and the Rights Agent. From and
after the time at which the Rights cease to be redeemable pursuant to Section 22,
the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
Rights 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 amend or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable, any such supplement or amendment to be evidenced by writing signed
by the Company and the Rights Agent; provided, however, that no
such supplement or amendment shall adversely affect the interests of the
holders of Rights (other than an Acquiring Person or any Affiliate or Associate
of an Acquiring Person), and no such amendment may cause the Rights again to
become redeemable or cause this Rights Agreement again to become amendable
other than in accordance with this sentence. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 26,
the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained herein to the contrary, the Rights Agent shall not be
obligated to enter into any supplement or amendment that affects the Rights
Agent’s own rights, duties, obligations or immunities under this Agreement.


 


Section 27                                      Successors


 


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


 


Section 28                                      Determinations
and Actions by the Board


 


(a)                                  For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock or any other class of capital stock outstanding at any particular
time, including 


 


33

















 


for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act or the provisions of Section 382 of the
Code or any successor or replacement provision.


 


(b)                                 The
Board shall have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board or to
the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations and
calculations deemed necessary or advisable for the administration of this
Agreement (including without limitation a determination to redeem or not redeem
the Rights or amend this Agreement).


 


(c)                                  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 Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board, or any of the
directors on the Board to any liability to the holders of the Rights. Unless
otherwise notified, the Rights Agent shall always be entitled to assume that
the Board acted in good faith and the Rights Agent shall be fully protected and
shall incur no liability in reliance thereon.


 


Section 29                                      Benefits
of this Agreement


 


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


 


Section 30                                      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, null and void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however,
that nothing contained in this Section 30 will affect the ability
of the Company under the provisions of Section 26 to supplement or
amend this Agreement to replace such invalid, null and void or unenforceable
term, provision, covenant or restriction with a legal, valid and enforceable
term, provision, covenant or restriction ; and provided, further,
that if any such excluded term, provision, covenant or restriction shall
materially adversely affect the rights, immunities, duties or obligations of
the Rights Agent, the Rights Agent shall be entitled to resign upon five (5) Business
Days’ prior written notice to the Company.


 


Section 31                                      Governing
Law


 


This Agreement,
each Right and each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes
shall 


 


34

















 


be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State; provided,
however, that all provisions, regarding the rights, duties, obligations
and liabilities of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.


 


Section 32                                      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 33                                      Descriptive
Headings; Interpretation


 


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.


 


[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]


 


35

















 


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


 


	
   

  	
  CLST
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ ROBERT A. KAISER

  
	
   

  	
   

  	
    Robert
  A. Kaiser

  
	
   

  	
   

  	
    President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MELLON
  INVESTOR SERVICES LLC,

  
	
   

  	
  as Rights
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ ANN PETERS

  
	
   

  	
   

  	
    Ann
  Peters

  
	
   

  	
   

  	
    Relationship
  Manager

  



 


Signature
page to Rights Agreement


 

















 


Exhibit A


 


CERTIFICATE
OF DESIGNATION 

OF 

SERIES B JUNIOR PREFERRED STOCK 

OF 

CLST HOLDINGS, INC.


 


(Pursuant
to Section 151 of the General Corporation Law of the State of Delaware)


 


CLST Holdings, Inc.
(hereinafter called the “Company”), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the “DGCL”),
does hereby certify:


 


1.                                       The
name of the Company is CLST Holdings, Inc.


 


2.                                       The
amended and restated certificate of incorporation as filed with the Secretary
of State of the State of Delaware on April 28, 1995, as amended (the “Certificate of Incorporation”) of the Company authorizes the
issuance of 5,000,000 shares of Preferred Stock, $0.01 par value (the “Preferred Stock”), and expressly vests in the Board of
Directors of the Company (the “Board”) the
authority provided therein to provide for the issuance of said shares in series
and by filing a certificate pursuant to the applicable law of the State of
Delaware, to establish from time to time the number of shares to be included in
each such series, and to fix the designation, powers, preferences and rights of
the shares of each such series and the qualifications, limitations, or
restrictions thereof.


 


3.                                       The
Board, pursuant to the authority expressly vested in it as aforesaid, on February 5,
2009 adopted the following resolutions creating a “Series B
Junior” series of Preferred Stock:


 


RESOLVED, that
a series of the class of authorized Preferred Stock of the Company be and
hereby is created, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:


 


SERIES
B JUNIOR PREFERRED STOCK


 


Section 1                                             Designation
and Amount.


 


The shares of
such series will be designated as Series B Junior Participating Preferred
Stock (the “Series B Preferred”) and the
number of shares constituting the Series B Preferred is 200,000. Such
number of shares may be increased or decreased by resolution of the Board;
provided, however, that no decrease will reduce the number of shares of Series B
Preferred to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding
securities issued by the Company and convertible into Series B Preferred.


 


A-1

















 


Section 2                                             Dividends
and Distributions.


 


(a)                                  Subject
to the rights of the holders of any shares of any series of Preferred Stock
ranking prior to the Series B Preferred with respect to dividends, the
holders of shares of Series B Preferred, in preference to the holders of
Common Stock, par value $0.01 per share (the “Common
Stock”), of the Company, and of any other junior stock, will be
entitled to receive, when, as and if declared by the Board out of funds legally
available for the purpose, dividends payable in cash (except as otherwise
provided below) on such dates as are from time to time established for the
payment of dividends on the Common Stock (each such date being referred to
herein as a “Dividend Payment Date”),
commencing on the first Dividend Payment Date after the first issuance of a
share or fraction of a share of Series B Preferred (the “First Dividend Payment Date”), in an amount
per share (rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, the greater of (i) $1 and (ii) ten
thousand (10,000) times the aggregate per share amount of all cash dividends,
and ten thousand (10,000) times the aggregate per share amount (payable in
kind) of all non-cash dividends, other than a dividend payable in shares
of Common Stock, or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the immediately
preceding Dividend Payment Date or, with respect to the First Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series B
Preferred. In the event that the Company at any time (i) declares a
dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivides the outstanding shares of Common Stock, (iii) combines
the outstanding shares of Common Stock into a smaller number of shares or (iv) issues
any shares of its capital stock in a reclassification of the outstanding shares
of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such case and regardless of whether any shares of Series B
Preferred are then issued or outstanding, the amount to which holders of shares
of Series B Preferred would otherwise be entitled immediately prior to
such event will be correspondingly adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.


 


(b)                                 The
Company will declare a dividend on the Series B Preferred as provided in
paragraph (a) of this Section 2 immediately after it declares
a dividend on the Common Stock (other than a dividend payable in shares of
Common Stock). Each such dividend on the Series B Preferred will be
payable immediately prior to the time at which the related dividend on the
Common Stock is payable.


 


(c)                                  Dividends
will accrue, and be cumulative, on outstanding shares of Series B
Preferred from the Dividend Payment Date next preceding the date of issue of
such shares, unless (i) the date of issue of such shares is prior to the
record date for the First Dividend Payment Date, in which case dividends on
such shares will accrue from the date of the first issuance of a share of Series B
Preferred or (ii) the date of issue is a Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series B
Preferred entitled to receive a dividend and before such Dividend Payment Date,
in either of which events such dividends will accrue, and be cumulative, from
such Dividend Payment Date. Accrued but unpaid dividends will cumulate from the
applicable Dividend Payment Date but will not bear 


 


A-2

















 


interest. Dividends paid on the
shares of Series B Preferred in an amount less than the total amount of
such dividends at the time accrued and payable on such shares will be allocated
pro rata on a share–by–share basis among all such shares at the time
outstanding. The Board may fix a record date for the determination of holders
of shares of Series B Preferred entitled to receive payment of a dividend
or distribution declared thereon, which record date will be not more than sixty
(60) calendar days prior to the date fixed for the payment thereof.


 


Section 3                                             Voting
Rights.


 


The holders of shares of Series B Preferred shall have the
following voting rights:


 


(a)                                  Subject
to the provision for adjustment hereinafter set forth and except as otherwise
provided in the Certificate of Incorporation or required by law, each share of Series B
Preferred shall entitle the holder thereof to 10,000 votes, on all matters upon
which the holders of the Common Stock of the Company are entitled to vote. In
the event the Company shall at any time after the Record Date declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of shares
of Series B Preferred were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.


 


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


 


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


 


Section 4                                             Restrictions.


 


(a)                                  Whenever
dividends or other dividends or distributions payable on the Series B
Preferred are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series B
Preferred outstanding have been paid in full, the Company will 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) (“Junior Stock”) to the shares
of Series B Preferred;


 


A-3

















 


(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) (“Parity Stock”) with
the shares of Series B Preferred, except dividends paid ratably on the
shares of Series B Preferred 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,
purchase or otherwise acquire for consideration shares of any Junior Stock;
provided, however, that the Company may at any time redeem, purchase or
otherwise acquire shares of any such Junior Stock in exchange for shares of any
other Junior Stock of the Company; or


 


(iv)                              Redeem,
purchase or otherwise acquire for consideration any shares of Series B
Preferred, or any shares of Parity Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board) to all
holders of such shares upon such terms as the Board, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, may determine in good faith will result in
fair and equitable treatment among the respective series or classes.


 


(b)                                 The
Company will not permit any majority-owned subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.


 


Section 5                                             Reacquired
Shares.


 


Any shares of Series B
Preferred purchased or otherwise acquired by the Company in any manner
whatsoever will be retired and canceled promptly after the acquisition thereof.
All such shares will upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation of the Company, or in any
other Certificate of Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.


 


Section 6                                             Liquidation,
Dissolution or Winding Up.


 


Upon any
liquidation, dissolution or winding up of the Company, no distribution will be
made (a) to the holders of shares of Junior Stock unless, prior thereto, the
holders of shares of Series B Preferred have received an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment; provided, however, that the holders of
shares of Series B Preferred will be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set
forth, equal to a minimum per share liquidation payment of $10,000 but will be
entitled to an aggregate per share liquidation payment of 10,000 times the
payment made per share of Common Stock or (b) to the holders of shares of
Parity Stock, except distributions made ratably on the shares of Series B
Preferred and all such Parity Stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Company at any time (i) declares a
dividend on the outstanding shares of Common Stock payable in shares of 


 


A-4

















 


Common Stock, (ii) subdivides the outstanding shares of Common
Stock, (iii) combines the outstanding shares of Common Stock into a
smaller number of shares or (iv) issues any shares of its capital stock in
a reclassification of the outstanding shares of Common Stock (including any
such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such case
and regardless of whether any shares of Series B Preferred are then issued
or outstanding, the aggregate amount to which each holder of shares of Series B
Preferred would otherwise be entitled immediately prior to such event will be
correspondingly adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.


 


Section 7                                             Consolidation,
Merger, Etc.


 


In the event
that the Company enters 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 each
such case, each share of Series B Preferred will at the same time be
similarly exchanged for or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to ten thousand (10,000)
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Company at any time (a) declares
a dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (b) subdivides the outstanding shares of Common Stock, (c) combines
the outstanding shares of Common Stock in a smaller number of shares or (d) issues
any shares of its capital stock in a reclassification of the outstanding shares
of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such case and regardless of whether any shares of Series B
Preferred are then issued or outstanding, the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series B
Preferred will be correspondingly adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.


 


Section 8                                             Redemption.


 


The shares of Series B
Preferred are not redeemable.


 


Section 9                                             Rank.


 


The Series B
Preferred rank, with respect to the payment of dividends and the distribution
of assets, junior to all other series of the Company’s Preferred Stock, unless
the terms of such series shall so provide.


 


Section 10                                      Fractional
Shares.


 


Series B
Preferred may be issued in fractions of a share that shall entitle the holder,
in proportion to such holder’s fractional shares, to exercise voting rights,
receive dividends, 


 


A-5

















 


participate in distributions and to have the benefit of all other
rights of holders of Series B Preferred.


 


FURTHER
RESOLVED, that the statements contained in the foregoing resolutions creating
and designating the said Series B Junior Preferred Stock and fixing the
number, powers, preferences and relative, optional, participating, and other
special rights and the qualifications, limitations, restrictions, and other
distinguishing characteristics thereof shall, upon the effective date of said
series, be deemed to be included in and be a part of the Certificate of
Incorporation of the Company pursuant to the provisions of Sections 104 and 151
of the DGCL.


 


[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]


 


A-6

















 


IN WITNESS
WHEREOF, this Certificate of Designation is executed on behalf of the Company
by the undersigned on February 5, 2009.


 


	
   

  	
  CLST
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Robert
  Kaiser

  
	
   

  	
   

  	
  Chief
  Executive Officer

  



 


A-7
















 


Exhibit B


 


FORM OF RIGHTS CERTIFICATE


 


Certificate No. R-__________________                              __________________Rights in respect of
Common Stock


 


NOT
EXERCISABLE AFTER FEBRUARY 13, 2019 OR EARLIER IF REDEEMED, EXCHANGED OR
AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR
WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
TRANSFEREE THEREOF SHALL BECOME NULL AND VOID AND NO LONGER TRANSFERABLE.


 


RIGHTS CERTIFICATE


 


CLST HOLDINGS, INC.


 


This certifies
that _________________, or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions, and conditions of the Rights Agreement, (the “Rights Agreement”), by and between
CLST Holdings, Inc., a Delaware corporation (the “Company”),
and Mellon Investor Services LLC, as Rights Agent (the “Rights
Agent”), dated as of February 13, 2009, to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 p.m. (New York time) on the
Expiration Date (as such term is defined in the Rights Agreement) at the office
or offices of the Rights Agent designated for such purpose, one
ten-thousandth of a fully paid nonassessable share of Series B Junior
Participating Preferred Stock, par value $0.01 per share (the “Preferred Shares”), of the Company,
at a purchase price of $6.01 per one ten-thousandth of a Preferred Share
(the “Purchase Price”), upon
presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. If this Rights
Certificate is exercised in part, the holder will be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised. The number of Rights evidenced by this
Rights Certificate (and the number of one ten-thousandths of a Preferred
Share which may be purchased upon exercise thereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of the
date of the Rights Agreement, based on the Preferred Shares as constituted at
such date. Terms used herein with initial capital letters and not defined
herein are used herein with the meanings ascribed thereto in the Rights
Agreement.


 


As provided in
the Rights Agreement, the Purchase Price and/or the number and/or kind of
Preferred Shares (or other securities, as the case may be) which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to adjustment upon the occurrence of certain events.


 


This Rights
Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by 


 


B-1

















 


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 of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension of
the exercisability of the Rights under the circumstances specified in the
Rights Agreement. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and can be obtained from the Company without
charge upon written request therefor.


 


Pursuant to
the Rights Agreement, from and after the occurrence of any Person becoming an
Acquiring Person, any Rights that are Beneficially Owned by (i) any
Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee
of any Acquiring Person (or any such Affiliate or Associate) who becomes a
transferee after the occurrence of any Person becoming an Acquiring Person or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with any Person becoming an
Acquiring Person pursuant to either (a) a transfer from an Acquiring
Person to holders of its equity securities or to any Person with whom it has
any continuing agreement, arrangement or understanding regarding the
transferred Rights or (b) a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding which
has the purpose or effect of avoiding certain provisions of the Rights
Agreement, and subsequent transferees of any of such Persons, will be null and
void without any further action and any holder of such Rights will thereafter
have no rights whatsoever with respect to such Rights under any provision of
the Rights Agreement. From and after the occurrence of any Person becoming an
Acquiring Person, no Rights Certificate will be issued that represents Rights
that are or have become null and void pursuant to the provisions of the Rights
Agreement, and any Rights Certificate delivered to the Rights Agent that
represents Rights that are or have become null and void pursuant to the
provisions of the Rights Agreement will be canceled.


 


This Rights
Certificate, with or without other Rights Certificates, may be exchanged for
another Rights Certificate or Rights Certificates entitling the holder to
purchase a like number of one ten-thousandths of a Preferred Share (or
other securities, as the case may be) as the Rights Certificate or Rights Certificates
surrendered entitled such holder (or former holder in the case of a transfer)
to purchase, upon presentation and surrender hereof at the office or offices of
the Rights Agent designated for such purpose, with the Form of Assignment
(if appropriate) and the related Certificate duly executed.


 


Subject to the
provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $0.01 per
Right or may be exchanged in whole or in part. The Rights Agreement may be
supplemented and amended by the Company, as provided therein.


 


The Company is
not required to issue fractions of Preferred Shares (other than fractions which
are integral multiples of one ten-thousandth of a Preferred Share, which
may, at the option of the Company, be evidenced by depositary receipts) or
other securities issuable, as the case may be, upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing such fractional Preferred Shares
or other Securities, the Company may make a cash payment, as provided in the
Rights Agreement.


 


B-2

















 


No holder of
this Rights Certificate, as such, will 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 Company which may at any time be issuable upon the exercise
of the Right or Rights represented hereby, nor will anything contained herein
or in the Rights Agreement be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate have been exercised in accordance with the provisions of the Rights
Agreement.


 


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


 


[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]


 


B-3

















 


WITNESS the
facsimile signature of the proper officers of the Company and its corporate
seal. Dated as of                                ,
20     .


 


	
   

  	
  CLST HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	 

	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  	 

	
   

  	
   

  
	
   

  	
  Countersigned

  
	
   

  	
   

  
	
   

  	
  MELLON INVESTOR SERVICES LLC,

  
	
   

  	
  as Rights Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	 

	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  	 

								



 


Signature
page to Rights Agreement


 


B-4

















 


Form of
Reverse Side of Rights Certificate


 


FORM OF ASSIGNMENT


 


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


 


FOR VALUE
RECEIVED, _______________________ hereby sells, assigns and transfers unto


 


	
   

  
	
  (Please print name and address of
  transferee)

  



 


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


 


	
  Dated : __________,________________________

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Signature(s) Guaranteed:

  	
   

  	
   

  	
   

  	
   

  
					



 


SIGNATURE(S) SHOULD
BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO SEC RULE 17Ad-15.


 


                                


 


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


 


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  



 


B-5

















 


CERTIFICATE


 


The
undersigned hereby certifies by checking the appropriate boxes that:


 


(1)           the Rights evidenced by this Rights
Certificate  o
are  o
are not  being sold, assigned,
transferred, split up, combined or exchanged by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such Person (as
such terms are defined in the Rights Agreement); and


 


(2)           after due inquiry and to the best
knowledge of the undersigned, it  o
did  o
did not acquire the Rights evidenced by this Rights Certificate from any Person
who is, was or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.


 


	
  Dated : __________,________________________

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  



 


B-6

















 


Form of
Reverse Side of Rights Certificate — continued


 


FORM OF ELECTION TO PURCHASE


 


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


 


To CLST
Holdings, Inc.:


 


The
undersigned hereby irrevocably elects to exercise ________________ Rights
represented by this Rights Certificate to purchase the one ten-thousandths
of a Preferred Share or other securities issuable upon the exercise of such
Rights and requests that certificates for such securities be issued in the name
of and delivered to:


 


Please insert
social security or other identifying number:


 


                                                                                                                                                              


(Please
print name and address)


 


If such number
of Rights is not all the Rights evidenced by this Rights Certificate, a new
Rights Certificate for the balance remaining of such Rights will be registered
in the name of and delivered to:


 


Please insert
social security or other identifying number:                                                                                                 


 


	
   

  
	
  (Please print name and address)

  



 


	
  Dated : __________,________________________

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Signature(s) Guaranteed:

  	
   

  	
   

  	
   

  	
   

  
					



 


SIGNATURE(S) SHOULD
BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO SEC RULE 17Ad-15.


 






 


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


 


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  



 


B-7

















 


CERTIFICATE


 


The
undersigned hereby certifies by checking the appropriate boxes that:


 


(1)           the Rights evidenced by this Rights
Certificate  o
are o are not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate of any
such Person (as such terms are defined pursuant to the Rights Agreement); and


 


(2)           after due inquiry and to the best
knowledge of the undersigned, it o
did o did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was, or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.


 


	
  Dated : __________,________________________

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  



 


B-8

















 


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, such Assignment or
Election to Purchase will not be honored.


 


B-9

















 


Exhibit C


 


UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS PLAN) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND
WILL NO LONGER BE TRANSFERABLE.


 


SUMMARY OF RIGHTS


 


On February 5,
2009, the Board of Directors (the “Board”) of
CLST Holdings, Inc., a Delaware corporation (the “Company”),
adopted a rights plan and declared a dividend of one preferred share purchase
right for each outstanding share of common stock.  The dividend is payable to our stockholders
of record as of February 16, 2009. The terms of the rights and the rights
plan are set forth in a Rights Agreement, by and between us and Mellon Investor
Services LLC, as Rights Agent, dated as of February 13, 2009 (the “Rights Plan”).


 


This summary
of rights provides only a general description of the Rights Plan, and thus,
should be read together with the entire Rights Plan, which is incorporated into
this summary by reference. All capitalized terms used herein but not defined
herein shall have the meanings ascribed to such terms in the Rights Plan. Upon
written request, the Company will provide a copy of the Rights Plan free of
charge to any of its stockholders.


 


Our Board
adopted the Rights Plan in an effort to protect stockholder value by attempting
to protect against a possible limitation on our ability to use our net
operating loss carryforwards (the “NOLs”) to
reduce potential future federal income tax obligations. We have experienced and
continue to experience substantial operating losses, and under the Internal
Revenue Code and rules promulgated by the Internal Revenue Service, we may
“carry forward” these losses in certain circumstances to offset any current and
future earnings and thus reduce our federal income tax liability, subject to
certain requirements and restrictions. To the extent that the NOLs do not
otherwise become limited, we believe that we will be able to carry forward a
significant amount of NOLs, and therefore these NOLs could be a substantial
asset to us. However, if we experience an “Ownership Change,” as defined in Section 382
of the Internal Revenue Code, our ability to use the NOLs will be substantially
limited, and the timing of the usage of the NOLs could be substantially
delayed, which could therefore significantly impair the value of that asset.


 


The Rights
Plan is intended to act as a deterrent to any person or group acquiring 4.9% or
more of our outstanding common stock (an “Acquiring Person”)
without the approval of our Board. Stockholders who own 4.9% or more of our
outstanding common stock as of the close of business on February 16, 2009
will not trigger the Rights Plan so long as they do not (i) acquire any
additional shares of common stock or (ii) fall under 4.9% ownership of
common stock and then re-acquire 4.9% or more of the common stock. The
Rights Plan does not exempt any future acquisitions of common stock by such
persons.  Any rights held by an Acquiring
Person are null and void and may not be exercised. Our Board may, in its sole
discretion, exempt any person or group from being deemed an Acquiring Person
for purposes of the Rights Plan.


 


C-1

















 


The Rights.
Our Board authorized the issuance of one right per each outstanding share of
our common stock payable to our stockholders of record as of February 16,
2009. Subject to the terms, provisions and conditions of the Rights Plan, if
the rights become exercisable, each right would initially represent the right
to purchase from us one ten-thousandth of a share of our Series B
Junior Participating Preferred Stock (“Series B Preferred
Stock”) for a purchase price of $6.01 (the “Purchase
Price”). If issued, each fractional share of Series B
Preferred Stock would give the stockholder approximately the same dividend,
voting and liquidation rights as does one share of our common stock. However,
prior to exercise, a right does not give its holder any rights as a stockholder
of the Company, including without limitation any dividend, voting or
liquidation rights.


 


Series B
Preferred Stock Provisions.  Each one ten-thousandth of a share of Series B
Preferred Stock, if issued: (1) will not be redeemable; (2) will
entitle holders to quarterly dividend payments of $0.01 per one ten-thousandth
of a share of Series B Preferred Stock, or an amount equal to the dividend
paid on one share of common stock, whichever is greater; (3) will entitle
holders upon liquidation either to receive $1.00 per one ten-thousandth of a
share of Series B Preferred Stock or an amount equal to the payment made
on one share of common stock, whichever is greater; (4) will have the same
voting power as one share of common stock; and (5) if shares of our common
stock are exchanged via merger, consolidation, or a similar transaction, will
entitle holders to a per share payment equal to the payment made on one share
of common stock.  The value of one one-hundredth
interest in a Preferred Share should approximate the value of one share of
common stock.


 


Exercisability.
The rights will not be exercisable until the earlier of (i) ten business
days after a public announcement by us that a person or group has become an
Acquiring Person and (ii) ten business days after the commencement of a
tender or exchange offer by a person or group for 4.9% of the common stock.


 


We refer to
the date that the rights become exercisable as the “Distribution
Date.” Until the Distribution Date, our common stock
certificates will evidence the rights and will contain a notation to that
effect. Any transfer of shares of common stock prior to the Distribution Date
will constitute a transfer of the associated rights. After the Distribution
Date, the rights may be transferred other than in connection with the transfer
of the underlying shares of common stock.


 


After the
Distribution Date, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereupon become null and void), will
thereafter have the right to receive upon exercise of a Right and payment of
the Purchase Price, that number of shares of common stock, having a market
value of two times the Purchase Price.


 


Exchange.
After the Distribution Date, the Board may exchange the Rights (other than
Rights owned by such person or group which will have become null and void), in
whole or in part, at an exchange ratio of one share of common stock, or a
fractional share of Series B Preferred Stock (or of a share of a similar
class or series of the Company’s preferred stock having similar rights,
preferences and privileges) of equivalent value, per Right (subject to
adjustment).


 


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Expiration.
The rights and the Rights Plan will expire on the earliest of (i) February 13,
2019, (ii) the time at which the Rights are redeemed pursuant to the
Rights Agreement, (iii) the time at which the Rights are exchanged
pursuant to the Rights Agreement, (iv) the repeal of Section 382 of
the Code or any successor statute if the Board determines that the Rights
Agreement is no longer necessary for the preservation of Tax Benefits and (v) the
beginning of a taxable year of the Company to which the Board determines that
no Tax Benefits may be carried forward.


 


Redemption.
At any time prior to the time an Acquiring Person becomes such, the Board may
redeem the Rights in whole, but not in part, at a price of $0.01 per Right (the
“Redemption Price”). The redemption
of the Rights may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.


 


Anti-Dilution
Provisions. Our Board may adjust the purchase price of
the Series B Preferred Stock, the number of shares of Series B
Preferred Stock issuable and the number of outstanding rights to prevent
dilution that may occur as a result of certain events, including among others,
a stock dividend, a stock split or a reclassification of the Series B
Preferred Stock or our common stock.  No
adjustments to the purchase price of less than 1% will be made.


 


Amendments.
Before the Distribution Date, our Board may amend or supplement the Rights Plan
without the consent of the holders of the Rights. After the Distribution Date,
our Board may amend or supplement the Rights Plan only to cure an ambiguity, to
alter time period provisions, to correct inconsistent provisions, or to make
any additional changes to the Rights Plan, but only to the extent that those
changes do not impair or adversely affect any rights holder and do not result
in the rights again becoming redeemable, and no such amendment may cause the
Rights again to become redeemable or cause this Rights Agreement again to
become amendable other than in accordance with this sentence.


 


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