Document:

Exhibit 4.1

 

FORM OF CERTIFICATE FOR SHARES OF 7.00%

SERIES D CUMULATIVE CONVERTIBLE PREFERRED STOCK

 

	
  ARD
  [     ]

  	
   

  	
  Shares [     ]

  

 

	
   

  	
  SEE
  REVERSE FOR IMPORTANT NOTICE ON TRANSFER RESTRICTIONS AND OTHER INFORMATION

  
	
   

  	
   

  
	
   

  	
   

  	
  CUSIP
  015271 50 5

  

 

ALEXANDRIA REAL ESTATE EQUITIES, INC.

Incorporated Under the Laws of the State of Maryland

 

 

THIS
CERTIFIES THAT [    ] is the record holder of [       ]
([     ]) fully paid and nonassessable shares of the
7.00% Series D Cumulative Convertible Preferred Stock, par value $.01 per
share (the “Series D Preferred Stock”), of

 

Alexandria Real Estate Equities, Inc.

 

(the
“Company”) transferable on the books of the Company by the holder hereof in
person or by duly authorized agent upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar. This Certificate and the shares
represented hereby are issued and shall be subject to all of the provisions of
the charter (the “Charter”) and the Bylaws of the Company and any amendments
thereto.

 

Witness
the seal of the Company and the facsimile signatures of its duly authorized
officers.

 

Dated:

 

COUNTERSIGNED AND
REGISTERED:

AMERICAN STOCK TRANSFER &
TRUST COMPANY

(New York, N.Y.)

TRANSFER AGENT AND
REGISTRAR

 

 

	
   

  	
   

  	
  (Seal)

  
	
   

  	
   

  	
   

  
	
  BY

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
  SECRETARY

  	
  CHAIRMAN AND CHIEF 

  EXECUTIVE OFFICER

  
						

 

 

IMPORTANT NOTICE

 

THE
COMPANY IS AUTHORIZED TO ISSUE TWO CLASSES OF STOCK WHICH ARE DESIGNATED AS
COMMON STOCK AND PREFERRED STOCK. THE PREFERRED STOCK MAY BE ISSUED IN ONE
OR MORE SERIES OR CLASSES. THE BOARD OF DIRECTORS IS AUTHORIZED TO DETERMINE
THE PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF EACH SERIES OR CLASS OF
PREFERRED STOCK BEFORE THE ISSUANCE OF ANY SUCH SERIES OR CLASS OF PREFERRED
STOCK. THE COMPANY WILL FURNISH, WITHOUT CHARGE, TO ANY STOCKHOLDER MAKING A
REQUEST THEREFOR, A COPY OF THE COMPANY’S CHARTER AND A FULL STATEMENT OF THE
INFORMATION REQUIRED BY SECTION 2-211(B) OF THE CORPORATIONS AND
ASSOCIATIONS ARTICLE OF THE ANNOTATED CODE OF MARYLAND WITH RESPECT TO THE
DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS,
RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS AND OTHER DISTRIBUTIONS,
QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH
THE COMPANY HAS THE AUTHORITY TO ISSUE AND, SINCE THE COMPANY IS AUTHORIZED TO
ISSUE PREFERRED STOCK IN SERIES OR CLASSES, (i) THE DIFFERENCES IN THE
RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES OR CLASS TO
THE EXTENT SET, AND (ii) THE AUTHORITY OF THE BOARD OF DIRECTORS TO SET
SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES OR CLASSES. REQUEST FOR SUCH
WRITTEN STATEMENT MUST BE DIRECTED TO THE SECRETARY OF THE COMPANY AT ITS
PRINCIPAL OFFICE. THE FOREGOING SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS
SUBJECT TO AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CHARTER OF THE
COMPANY.

 

The
shares of Series D Preferred Stock represented by this Certificate are
subject to restrictions on transfer for the purpose of establishing or
maintaining the Company’s status as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the “Code”). No person may
Beneficially Own shares in excess of the Ownership Limit, which may increase or
decrease from time to time, unless such Person is an Excepted Holder. Any
Person who attempts to beneficially own shares in violation of the above
limitation must immediately notify the Company. If the restrictions on
ownership or transfer are violated, the shares represented hereby will be
automatically exchanged for shares of Excess Stock, which will be held in trust
for a Charitable Beneficiary. The foregoing is qualified in its entirety by
reference to the Charter and all capitalized terms in this legend have the meanings
defined in the Charter. The Company will furnish a copy of the Charter to any
stockholder of the Company on request and without charge. Such request must be
made to the Secretary of the Company at the Company’s principal office.

 

KEEP
THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, OR DESTROYED THE
COMPANY WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A
REPLACEMENT CERTIFICATE.

 

 

The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

 

	
  TEN
  COM —

  TEN ENT —

  JT TEN —

  	
  as
  tenants in common

  as tenants by the entireties 

  as joint tenants with right of

  	
   

  	
  UNIF
  GIFT MIN ACT —

  	
                            
  Custodian               

               (Cust)                     (Minor)

  under Uniform Gifts to Minors

  
	
   

  	
  survivorship
  and not as tenants

  	
   

  	
   

  	
  Act                                                               

  
	
   

  	
  in
  common

  	
   

  	
   

  	
  (State)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UNIF
  TRF MIN ACT —

  	
                    
  Custodian (until age          )

  
	
   

  	
   

  	
   

  	
      (Cust)

  
	
   

  	
   

  	
   

  	
                      
  under Uniform Transfers   (Minor)

  
	
   

  	
   

  	
   

  	
  to
  Minors Act                                               

  
	
   

  	
   

  	
   

  	
                 (State)

  

 

Additional
abbreviations may also be used though not in the above list.

 

FOR
VALUE RECEIVED,
                                hereby
sell, assign and transfer unto

 

 

(PLEASE PRINT OR
TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE AND SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)

 

 

                                                                                                                                                Shares
of the preferred stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint                                                                                                                              Agent
to transfer the said stock on the books of the within named Company with full
power of substitution in the premises.

 

	
  Dated

  	
   

  	
   

  

 

 

	
  X

  	
   

  	
   

  
	
  X

  	
   

  	
   

  

 

NOTICE: THE SIGNATURE(S) TO
THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.

 

Signature(s) Guaranteed

 

 

	
  By

  	
   

  

THE SIGNATURE(S) MUST
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 S.E.C. RULE 17Ad-15.Exhibit 4.1

 

W. R. GRACE & CO.

 

AND

 

MELLON INVESTOR SERVICES LLC, AS

 

RIGHTS AGENT

 

* * *

 

 

AMENDED AND RESTATED RIGHTS AGREEMENT

 

DATED AS OF MARCH 25, 2008

 

 

TABLE OF CONTENTS

 

 

	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.

  	
   

  	
  Certain Definitions

  	
  1

  
	
  Section 2.

  	
   

  	
  Appointment of Rights Agent

  	
  4

  
	
  Section 3.

  	
   

  	
  Issue of Right Certificates

  	
  4

  
	
  Section 4.

  	
   

  	
  Form of Right Certificates

  	
  6

  
	
  Section 5.

  	
   

  	
  Countersignature and Registration

  	
  6

  
	
  Section 6. 

  	
   

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

  	
  7

  
	
  Section 7. 

  	
   

  	
  Exercise of Rights; Purchase Price; Expiration
  Date of Rights

  	
  7

  
	
  Section 8.

  	
   

  	
  Cancellation and Destruction of Right
  Certificates

  	
  9

  
	
  Section 9.

  	
   

  	
  Availability of Preferred Shares

  	
  9

  
	
  Section 10.

  	
   

  	
  Preferred Shares Record Date

  	
  9

  
	
  Section 11.

  	
   

  	
  Adjustment of Purchase Price, Number of Shares
  or Number of Rights

  	
  10

  
	
  Section 12. 

  	
   

  	
  Certificate of Adjusted Purchase Price or
  Number of Shares

  	
  16

  
	
  Section 13. 

  	
   

  	
  Consolidation, Merger or Sale or Transfer of
  Assets or Earning Power

  	
  16

  
	
  Section 14.

  	
   

  	
  Fractional Rights and Fractional Shares

  	
  17

  
	
  Section 15.

  	
   

  	
  Rights of Action

  	
  19

  
	
  Section 16.

  	
   

  	
  Agreement of Right Holders

  	
  19

  
	
  Section 17.

  	
   

  	
  Right Certificate Holder Not Deemed a
  Stockholder

  	
  20

  
	
  Section 18.

  	
   

  	
  Concerning the Rights Agent

  	
  20

  
	
  Section 19.

  	
   

  	
  Merger or Consolidation or Change of Name of
  Rights Agent

  	
  21

  
	
  Section 20.

  	
   

  	
  Duties of Rights Agent

  	
  21

  
	
  Section 21.

  	
   

  	
  Change of Rights Agent

  	
  24

  
	
  Section 22.

  	
   

  	
  Issuance of Shares, Rights and Other
  Securities Without Certificates

  	
  24

  
	
  Section 23.

  	
   

  	
  Redemption

  	
  25

  
	
  Section 24.

  	
   

  	
  Exchange

  	
  25

  
	
  Section 25.

  	
   

  	
  Notice of Certain Events

  	
  26

  
	
  Section 26.

  	
   

  	
  Notices

  	
  27

  
	
  Section 27.

  	
   

  	
  Supplements and Amendments

  	
  28

  
	
  Section 28.

  	
   

  	
  Successors

  	
  28

  
	
  Section 29.

  	
   

  	
   Determination and Actions by the Board of
  Directors

  	
  28

  
	
  Section 30.

  	
   

  	
  Benefits of This Agreement

  	
  28

  
	
  Section 31.

  	
   

  	
  Severability

  	
  29

  
	
  Section 32.

  	
   

  	
  Governing Law

  	
  29

  
	
  Section 33.

  	
   

  	
  Counterparts

  	
  29

  
	
  Section 34.

  	
   

  	
  Descriptive Headings

  	
  29

  
	
  Section 35. 

  	
   

  	
  Force Majeure

  	
  29

  
	
  Exhibit A

  	
   

  	
  Form of Right Certificate

  	
  A-1

  

 

i

 

AMENDED AND RESTATED RIGHTS AGREEMENT

 

AMENDED AND RESTATED RIGHTS AGREEMENT,
dated as of March 25, 2008, between W. R. Grace & Co., a Delaware
corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey
limited liability company, as rights agent (the “Rights Agent”), pursuant to
which, in consideration of the premises and the mutual agreements herein set
forth, the parties hereby agree as follows:

 

WHEREAS, the Company
and The Chase Manhattan Bank, as rights agent, entered into a rights agreement
(the “Prior Agreement”) dated March 31, 1998, pursuant to which preferred
share purchase rights (the “Rights”) were issued with respect to each Common
Share (as hereinafter defined) of the Company, which Rights will expire on March 31,
2008, unless previously redeemed, exercised or exchanged pursuant to the Prior
Agreement;

 

WHEREAS, the Rights
Agent is a successor as rights agent to The Chase Manhattan Bank pursuant to Section 19
of the Prior Agreement; and

 

WHEREAS, the Board
of Directors of the Company (the “Board of Directors”) has determined that it
is desirable to extend the shareholder protections afforded by the Rights for
an additional period of time, and for that purpose has approved this Amended
and Restated Rights Agreement, pursuant to which the Company, acting pursuant
to Section 27 of the Prior Agreement, hereby amends the Prior Agreement by
extending the Final Expiration Date of the Rights (as set forth in Section 7(a) of
the Prior Agreement) from March 31, 2008 to March 30, 2018, and
amends the Prior Agreement in certain other respects, so that the Prior
Agreement is amended and restated in its entirety to read as set forth below;
and is hereinafter referred to as the “Agreement”.

 

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

 

(a) “Acquiring Person” shall mean any
Person (as such term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary (as such term is hereinafter defined) of
the Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any Person holding Common Shares for or pursuant to the terms of
any such plan.

 

Notwithstanding the foregoing, no Person shall
become an “Acquiring Person” as the result of an acquisition or cancellation of
Common Shares or similar action by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial 

 

 

Owner
of 20% or more of the Common Shares of the Company then outstanding by reason
of share purchases, cancellations or similar actions by the Company and shall,
after such share purchases, cancellations or similar actions by the Company,
become the Beneficial Owner of any additional Common Shares of the Company,
then such Person shall be deemed to be an “Acquiring Person.”  Notwithstanding the foregoing, if the Board
of Directors determines in good faith that a Person who would otherwise be an “Acquiring
Person,” as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an “Acquiring Person,” as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
“Acquiring Person” for any purposes of this Agreement.

 

In addition, a Person who becomes the Beneficial
Owner of 20% or more of the Common Shares of the Company then outstanding by an
acquisition of Beneficial Ownership of Common Shares occurring pursuant to a
plan of reorganization approved by the Court (an “Approved Plan Acquisition”)
in the Company’s Chapter 11 Case (as hereinafter defined) shall not be deemed
an Acquiring Person solely by reason of the Approved Plan Acquisition (provided
that such Person was not an Acquiring Person prior to the Approved Plan
Acquisition), but such Person shall be deemed an Acquiring Person if it
acquires Beneficial Ownership of any additional Common Shares which increases
such Person’s Beneficial Ownership of the Common Shares of the Company then
outstanding beyond the level permitted pursuant to the Approved Plan
Acquisition.  If, following an Approved
Plan Acquisition, such Person’s aggregate Beneficial Ownership of the
outstanding Common Shares shall have been reduced to (and shall remain at) less
than 20% of the outstanding Common Shares, such Person shall not be an
Acquiring Person unless such Person subsequently becomes the Beneficial Owner
of 20% or more of the Common Shares of the Company then outstanding.  The principles set forth in the immediately
preceding paragraph of this Section 1(a) with respect to increases of
proportionate ownership by any Person caused by any acquisition or cancellation
of Common Shares or similar action by the Company, reducing the number of
shares outstanding, shall be applicable with respect to the permitted levels of
ownership of a Person having acquired Beneficial Ownership of Common Shares in
an Approved Plan Acquisition.

 

(b) “Affiliate” and “Associate” shall have
the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), as in effect on the date of this Agreement.

 

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

 

(i)   which such Person or
any of such Person’s Affiliates or Associates beneficially owns, directly or
indirectly;

 

(ii)  which such Person or any
of such Person’s Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members 

 

2

 

with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person’s Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement
or understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from
a revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in  accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or

 

(iii) which are beneficially owned,
directly or indirectly, by any other Person with which such Person or any of
such Person’s Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.

 

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

 

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

 

(e) “Chapter 11 Case” shall mean the case
in which the Company (together with certain subsidiaries and affiliates of the
Company) voluntarily petitioned for reorganization under Chapter 11 of the
United States Bankruptcy Code and, since 2001, has been a debtor in possession
subject to the jurisdiction of the United States Bankruptcy Court for the
District of Delaware.

 

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

 

(g) “Common Shares” when used with
reference to the Company shall mean the shares of common stock, par value $.01
per share, of the Company.  “Common Shares”
when used with reference to any Person other than the Company shall mean the
capital stock (or equity interest) 

 

3

 

with
the greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.

 

(h) “Company Security” or “Company
Securities” shall have the meaning set forth in Section 22 hereof.

 

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

 

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

 

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

 

(l) “Preferred Shares” shall mean shares of
Series A Junior Participating Preferred Stock, par value $.01 per share,
of the Company having the rights and preferences set forth in the Amended and
Restated Certificate of Incorporation of the Company.  “Preferred Shares Record Date” shall have the
meaning set forth in Section 10 hereof.

 

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

 

(n) “Shares Acquisition Date” shall mean
the first date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.

 

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

 

(p) “Transaction” or “Transactions” shall
have the meaning set forth in Section 22 hereof.

 

Section 2.  Appointment
of Rights Agent.  The
Company hereby appoints the Rights Agent to act as rights 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 in no event shall be liable for, the acts or
omissions of any such co-rights agent.

 

Section 3.  Issue of
Right Certificates.  (a) Until
the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan) of, or after the date of the
first public announcement of the intention of any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to 

 

4

 

the
terms of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial Owner
of Common Shares aggregating 20% or more of the then outstanding Common Shares;
the earlier of such dates being herein referred to as the “Distribution Date” (x) the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of
Common Shares.  As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested and provided with all necessary information,
send) by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a right
certificate, in substantially the form of Exhibit A hereto (a “Right
Certificate”), evidencing one Right for each Common Share so held.  As of the Distribution Date, the Rights will
be evidenced solely by such Right Certificates. 
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 the same in writing on or before the Business Day
next following.  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.

 

(b)  Until the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date, certificates representing Common Shares of the Company shall have
impressed on, printed on, written on or otherwise affixed to them a legend in
substantially the following form:

 

This certificate also evidences and
entitles the holder hereof to certain rights, as set forth in a Rights
Agreement (the “Rights Agreement”) between W. R. Grace & Co. (the “Company”),
and Mellon Investor Services LLC (the “Rights Agent”), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal offices of the Company.  Under
certain circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced by this
certificate.  The Company will 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
set forth in the Rights Agreement, rights beneficially owned by an Acquiring
Person or any Affiliates or Associates thereof (as such terms are defined in
the Rights Agreement), or certain transferees thereof, may become null and void.

 

With respect to such certificates containing the
foregoing legend, until the Distribution Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.  In the event
that the Company purchases or acquires any Common Shares prior to the 

 

5

 

Distribution
Date, any Rights associated with such Common Shares shall be deemed cancelled
and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.

 

Section 4.  Form of
Right Certificates.  The
Right Certificates (and the forms of election to purchase Preferred Shares and
of assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage; provided, however, that such marks, legends,
summaries or endorsements may not affect the rights, duties or responsibilities
of the Rights Agent unless the Rights Agent consents in writing thereto.  Subject to the provisions of Section 11(o) hereof,
the Right Certificates shall entitle the holders thereof to purchase such
number of hundredths of a Preferred Share as shall be set forth therein at the
price per hundredth of a Preferred Share set forth therein (the “Purchase Price”),
but the number of such hundredths of a Preferred Share and the Purchase Price
shall be subject to adjustment as provided herein.

 

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

 

Following the Distribution Date, receipt by the Rights Agent of notice
to that effect and all other relevant information referred to in Section 3(a) hereof,
the Rights Agent will keep or cause to be kept, at the office designated in Section 26
hereof or such other office designated in writing to the Company (the “Designated
Office”), 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,
books for registration and transfer of the Right Certificates issued
hereunder.  Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates.

 

6

 

Section 6.  Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.  Subject to the provisions of Sections 7(e),
14 and 24 hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have become null and
void pursuant to Section 11(a)(ii) hereof or that have been exchanged
pursuant to Section 24 hereof) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of hundredths of a Preferred Share
as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase.  Any registered
holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
Designated Office.  The Right
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 Right Certificate or Certificates until the
registered holder thereof shall have (i) completed and signed the
certificate contained in the form of assignment set forth on the reverse side
of each such Right Certificate (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) as the
Company or the Rights Agent may 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 of Right Certificates as
required by Section 9 hereof. 
Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested.  The Rights Agent shall
have no duty or obligation under this Section unless and until it is
satisfied that all such taxes and/or charges have been paid.

 

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

 

Section 7.  Exercise
of Rights; Purchase Price; Expiration Date of Rights.  (a) The registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided in this Agreement) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed and properly
completed, to the Rights Agent at the Designated Office, together with payment
of the Purchase Price for each hundredth of a Preferred Share as to which the
Rights are exercised, and an amount equal to any tax or charge required to be
paid under Section 9 hereof, by certified check, cashier’s check or money
order payable to the order of the Company, at or prior to the earliest of (i) the
Close of Business on March 30, 2018 (the “Final Expiration Date”), (ii) the
time at which the Rights are redeemed as provided in Section 23 

 

7

 

hereof
(the “Redemption Date”), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.

 

(b) The Purchase Price for each
hundredth of a Preferred Share purchasable pursuant to the exercise of a Right
shall initially be $100, and shall be subject to adjustment from time to time
as provided in Section 11 or 13 hereof and shall be payable in lawful
money of the U.S. of America in accordance with paragraph (c) below.

 

(c) Upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed and properly completed, 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 by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check,
cashier’s check or money order payable to the order of the Company, subject to Section 20(j) hereof,
the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) requisition
from the depositary agent depositary receipts representing such number of
hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
necessary, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when necessary, after receipt, deliver such cash to or
upon the order of the registered holder of such Right Certificate.

 

(d) In case the registered holder of
any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Sections 6 and 14 hereof.

 

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

 

(f) To the extent that the Company
determines in good faith that some action will or need to be taken pursuant to Section 11(a)(iii) hereof,
or to comply with federal or state securities laws, or to effectuate an exchange
of Rights for Common Shares pursuant to Section 24

 

8

 

hereof,
the Company may suspend the exercisability of the Rights for a reasonable
period in order to take such action or comply with such laws.  In the event of any such suspension, the
Company shall issue as promptly as practicable a public announcement stating
that the exercisability of the Rights has been temporarily suspended.  The Company shall notify the Rights Agent
whenever it makes a public announcement pursuant to this Section 7(f) and
give the Rights Agent a copy of such notice. 
Notice thereof pursuant to Section 25 hereof shall not be required.

 

Section 8.  Cancellation
and Destruction of Right Certificates.  All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Rights Agreement.  The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.  The Rights Agent shall deliver all cancelled
Right Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

 

Section 9.  Availability
of Preferred Shares.  The
Company covenants and agrees that it will use commercially reasonable efforts
to cause to be reserved and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its treasury, the number of
Preferred Shares that will be sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7, and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.

 

The Company further covenants and agrees that it
will pay when due and payable any and all taxes and charges which may be payable
in respect of the issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. 
The Company shall not, however, be required to pay any tax or charge
which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares in a name other
than that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares upon the exercise of any Rights until
any such tax or charge shall have been paid (any such tax or charge being
payable by the holder of such Right 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.

 

Section 10.  Preferred
Shares Record Date.  Each
Person in whose name any certificate for Preferred Shares is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable taxes or charges) was 

 

9

 

made
(the “Preferred Shares Record Date”); provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Shares transfer
books of the Company are closed, the Preferred Shares Record Date shall be the
next succeeding Business Day on which the Preferred Shares transfer books of
the Company are open.  Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Shares for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.

 

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

 

(a) (i) In the event the Company shall
at any time (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue
any shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any 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 Preferred Shares transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right.

 

(ii) Subject to Section 24
of this Agreement, in the event any Person becomes an Acquiring Person, each
holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number
of hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the then current per share market
price of the Company’s Common Shares (determined pursuant to Section 11(d) hereof)
on the date of the occurrence of such event. 
In the event that any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be afforded by the Rights.

 

10

 

From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any Acquiring Person
(or any Associate or Affiliate of such Acquiring Person) shall be null and void
and any holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Agreement. 
No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose Rights would
be null and void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be null and
void pursuant to the preceding sentence or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or Affiliate; and any
Right Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be null and void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate 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) Whenever
the Company shall become obligated under the foregoing subparagraph (ii) to
issue Common Shares upon exercise of (or in exchange for) Rights, the Company
may, at its option, substitute for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Preferred Shares or fraction
thereof such that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current per share market
price of one Common Share as of the date of issuance of such Preferred Shares
or fraction thereof.  In the event that
there shall not be sufficient authorized but unissued Common Shares or
Preferred Shares of the Company or shares held in treasury to permit the
exercise or exchange in full of the Rights in accordance with the foregoing
subparagraph (ii) or Section 24 of this Agreement, the Company shall
either call a meeting of stockholders seeking approval to cause sufficient
additional shares to be authorized or, failing such authorization, take such
action as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments to which it is a party, that
each Right (which shall not have become null and void pursuant to the
provisions of Section 11(a)(ii) hereof) shall thereafter constitute
the right to receive, (x) at the Company’s option, either (A) in
return for the Purchase Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the value of the Common or
Preferred Shares the holder of a Right would have received upon exercise of the
Right pursuant to the foregoing subparagraph (ii), or (B) without payment
of consideration (except as otherwise required by applicable law), debt or
equity securities or other assets (or a combination thereof) having a fair
value equal to the Purchase Price, or (y) if the Board of Directors elects
to exchange the Rights in accordance with Section 24 of this 

 

11

 

Agreement, debt or equity securities or other
assets (or a combination thereof) having a fair value equal to the current per
share market price of a Common Share on the date of such election times the
Exchange Ratio in effect on such date; in any case set forth in (x) or (y) above
the fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors, which determination shall
be conclusive.

 

(b) In case the Company shall fix a record
date for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares (or
shares having the same rights, privileges and preferences as the Preferred
Shares (“equivalent preferred shares”)) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per Preferred Share
or equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred Shares (as
defined in 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 shall be the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares
and/or equivalent preferred shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one
Right.  In case such subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent. 
Preferred Shares owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation.  Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.

 

(c) In case the Company shall fix a record
date for the making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then current per share
market price of the Preferred Shares on such record date, less the fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the 

 

12

 

Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share and the denominator of which
shall be such current per share market price of the Preferred Shares; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one Right.  Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.

 

(d) (i) For the purpose of any
computation hereunder, the “current per share market price” of any security (a “Security”)
for the purpose of this Section 11(d)(i)) on any date shall be deemed to
be the average of the daily closing prices per share of such Security for the
30 consecutive Trading Days (as such term is hereinafter defined) 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, or (B) any subdivision,
combination or reclassification of such Security and prior to the expiration of
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 reflect the current market price per
share equivalent of such Security.  The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last 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 National Association of Securities
Dealers, Inc. Automated Quotations System (“NASDAQ”) or such other system
then in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors.  The term “Trading Day”
shall mean a day on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.

 

(ii) For the
purpose of any computation hereunder, the “current per share market price” of
the Preferred Shares shall be determined in accordance with the method set
forth in Section 11(d)(i).  If the
Preferred Shares are not publicly traded, the “current per share market price”
of the Preferred Shares shall be conclusively 

 

13

 

deemed to be the current per share market price
of the Common Shares as determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred.  If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, “current per share
market price” shall mean the fair value per share as determined in good faith
by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent.

 

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

 

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

 

(g) All Rights originally issued by the
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
hundredths of a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.

 

(h) Unless the Company shall have exercised
its election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of hundredths of a Preferred Share (calculated to the
nearest millionth of a Preferred Share) obtained by (i) multiplying (x) the
number of hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price 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 hundredths of a Preferred
Share purchasable upon the exercise of a Right. 
Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of hundredths of a Preferred Share
for which a Right was exercisable immediately prior to such adjustment. Each 

 

14

 

Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest ten-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,
with written notice thereof to the Rights Agent, of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made.  This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement.  If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment.  Right Certificates so to be
distributed shall be issued, executed, countersigned and delivered in the
manner provided for herein and shall be registered in the names of the holders
of record of Right Certificates on the record date specified in the public announcement.

 

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

 

(k) Before taking any action that would
cause an adjustment reducing the Purchase Price below one hundredth of the then
par value, if any, of the Preferred Shares 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 Preferred Shares at such adjusted Purchase
Price.

 

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

 

(m) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly 

 

15

 

required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred Shares, issuance wholly
for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.

 

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

 

(o) Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.

 

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
or 13 hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment or describing such event, and a brief, reasonably
detailed, statement of the facts, computations and methodology accounting for
such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Shares or the Preferred Shares a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate
in accordance with Section 25 and Section 26 hereof.  The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment or statement contained
therein, and shall have no duty or liability with respect to, and shall not be
deemed to have knowledge of, any adjustment or any such event unless and until
it shall have received such a certificate.

 

Section 13.  Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.  In the event, directly or indirectly, at any
time after a Person has become an Acquiring Person,

 

16

 

(a) the Company shall consolidate with, or
merge with and into, any other Person, (b) any Person shall consolidate
with the Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or the Company) or
cash or any other property, or (c) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person other than the Company or one or more of its wholly
owned Subsidiaries, then, and in each such case, proper provision shall be made
so that (i) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of
hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number
of hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market
price of the Common Shares of such other Person (determined pursuant to Section 11(d) hereof)
on the date of consummation of such consolidation, merger, sale or transfer; (ii) the
issuer of such Common Shares shall thereafter be liable for, and shall assume,
by virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term “Company”
shall thereafter be deemed to refer to such issuer; and (iv) such issuer
shall take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with Section 9
hereof) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the Common Shares thereafter deliverable upon the
exercise of the Rights.  The Company
shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the terms set forth in
this Section 13.  The Company shall
not enter into any transaction of the kind referred to in this Section 13
if at the time of such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights.  The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or sales or other
transfers.

 

Section 14.  Fractional
Rights and Fractional Shares. 
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights.  In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right Certificates with regard
to which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right.  For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.  The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting 

 

17

 

system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors.  If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date
determined in good faith by the Board of Directors shall be used.

 

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

 

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

 

(d) 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.

 

18

 

Section 15.  Rights
of Action.  (a) All
rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. 
Without limiting the foregoing or any remedies 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 by the Company of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations by the Company of the
obligations 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 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 must use all reasonable efforts
to have any such injunction, order, judgment, decree or ruling lifted or
otherwise overturned as soon as possible.

 

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

 

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

 

(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the Designated Office, duly endorsed or accompanied by a proper
instrument of transfer; and

 

(c) the Company and the Rights Agent may
deem and treat the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
associated Common Shares 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.

 

19

 

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

 

Section 18.  Concerning
the Rights Agent.  The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, delivery, administration and execution of this
Agreement and any amendment 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 court of competent
jurisdiction), for any action taken, suffered or
omitted by the Rights Agent in connection with the acceptance, administration,
exercise and performance of its duties under this Agreement.  The costs and expenses of defending against
any claim of liability in the premises and enforcing this right of
indemnification shall be paid by the Company. 
Notwithstanding anything to the contrary contained herein, in no case
will the Rights Agent be liable for special, indirect, punitive, indirect, incidental
or consequential loss or damages whatsoever (including but not limited to lost
profits) of any kind whatsoever, even if the Rights Agent has been advised of
the likelihood of such loss or damages. 
The provisions of this Section 18 and Section 20 below shall
survive the termination of this Agreement, the exercise or expiration of the
Rights and the resignation, removal or replacement of the Rights Agent.

 

The Rights Agent shall be authorized and
protected and shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its acceptance and administration
of this Agreement and the exercise and performance of its duties hereunder, in
reliance upon any Right Certificate or certificate for the Preferred Shares or
Common Shares or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof.  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 

 

20

 

be fully protected and shall incur no liability
for failing to take action in connection therewith unless and until it has
received such notice in writing.

 

Section 19.  Merger
or Consolidation or Change of Name of Rights Agent.  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, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided, that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof.  In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.

 

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

 

Section 20.  Duties
of Rights Agent.  The
Rights Agent undertakes to perform only 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 Right Certificates,
by their acceptance thereof, shall be bound:

 

(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company or any 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 the absence of bad faith and in accordance with 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 an Acquiring Person and the determination of the current per share market
price of any security) 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
one of the Chairman, the Chief Executive Officer, the President, any

 

21

 

Vice President, the Treasurer or the Secretary
of the Company and delivered to the Rights Agent; and such certificate 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 to be taken in the absence of bad faith by it under the
provisions of this Agreement in reliance upon such certificate.

 

(c) The Rights Agent shall be liable
hereunder to the Company and any other Person only for its own gross
negligence, bad faith or willful misconduct (each as
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 Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.

 

(e) The Rights Agent shall not have any
liability for, nor be under any responsibility in respect of the validity of,
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible for
any transfer to an Acquiring Person (unless such transfer is effected after the
giving of the notice specified in Section 11(a)(ii)) or any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 11(a)(ii) hereof) or any change or adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right 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
Preferred Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.

 

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

 

(g) The Rights Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from any one of the Chairman, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the Company,
and to apply to such 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 to be taken by it in the

 

22

 

absence of bad faith, in accordance with
instructions of any such 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 from any such 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 and/or after the date specified in such application (which
date shall not be less than five Business Days after the date any officer of
the Company specified above, actually receives such application, unless any
such officer shall have consented in writing to any 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, suffered 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 it were not Rights Agent under this Agreement.  Nothing herein shall preclude the Rights
Agent or any such stockholder, affiliate, director, officer or employee of
Rights Agent from acting in any other capacity for the Company or for any other
Person.

 

(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, 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 or bad faith in the selection and continued employment thereof (each as
determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction).

 

(j) If, with respect to any Right
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 not been
completed, 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 reasonably believes in the absence of bad faith
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.

 

23

 

Section 21.  Change
of Rights Agent.  The
Rights Agent or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Shares or Preferred Shares
known to the Rights Agent by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. 
The Company may remove the Rights Agent or any successor Rights Agent upon
30 days’ notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. 
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights
Agent.  If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent.  Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a Person,
or an Affiliate of such Person, organized and doing business under the laws of
the U.S. or of the State of New York (or of any other state of the U.S. so long
as such Person is authorized to do business in the State of New York), in good
standing, which is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million.  After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. 
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.

 

Section 22.  Issuance
of Shares, Rights and Other Securities Without Certificates.  Notwithstanding anything to the contrary in this
Agreement (including, without limitation, Sections 3 through 8, 10, 11, 14, 17,
24 and the Form of Right Certificate) providing for the use of
certificates representing securities issued by the Company, the Company may, by
participation in a Direct Registration System through a facility administered
by the Depository Trust Company, or otherwise, provide for the maintenance of
records of ownership (and associated incidents of ownership) of any such
securities by book entry in lieu of certificates.  In any such case, the Company may, with
respect to any Common Shares, Preferred Shares, Rights (including Rights
evidenced by ownership of Common Shares prior to the Distribution Date),
fractional shares, depositary receipts or any other security or securities issued
by the Company (“Company Security” or “Company Securities”) cause its transfer
agent and the Rights Agent, as the case may be, to record any issuance,
transfer, split-up, combination, election, exercise,

 

24

 

exchange, redemption, cancellation, or other transaction with respect
any Company Security (“Transaction” or “Transactions”), including any
separation of Rights from Common Shares upon or after the Distribution Date, by
book entry without the issuance of certificates for such Company Security.  Such book entry records may be evidenced and
accompanied by the issuance to owners of Company Securities of Transaction
advices or other documents or forms as the Company deems appropriate to
evidence such ownership, Transactions and actions taken (including exercises
and elections) with respect thereto by holders of Company Securities.  In any case in which ownership of Rights
shall, upon or after the Distribution Date, be evidenced by book entry without the
issuance of Right Certificates, any reference in this Agreement to any holder
of a Right Certificate shall be deemed a reference to a registered Right holder
as set forth on the registry books of the Rights Agent, and the Company shall
cause the Rights Agent to provide such holders with forms which may be used to
exercise Rights.

 

Section 23.  Redemption.  (a) The Board of Directors may, at its
option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the “Redemption Price”).  The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.

 

(b) Immediately upon the action of the Board
of Directors ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price.  The Company shall promptly give public notice
(with prompt written notice thereof to the Rights Agent) of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the legality or validity of such redemption.  Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights, the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares.  Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice.  Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made.  Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the Distribution Date.

 

                Section 24.  Exchange.  (a) The Board of Directors may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section 11(a)(ii) hereof)
for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being hereinafter
referred to as the “Exchange Ratio”). 
Notwithstanding the foregoing, the Board of Directors shall not be 

 

25

 

empowered to effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.

 

(b) Immediately upon the action of the
Board of Directors ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of
holders of such Rights shall be to receive that number of Common Shares equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio.  The 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 validity of such exchange.  The Company promptly shall mail a notice of
any such exchange to all of the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent.  Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice.  Each such notice of exchange
will state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged.  Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become null and void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.

 

(c) The Company shall not be required to
issue fractions of Common Shares or to distribute certificates which evidence
fractional Common Shares.  In lieu of
such fractional Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. 
For the purposes of this paragraph (c), the current market value of a
whole Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section 24.

 

Section 25.  Notice
of Certain Events.  (a) In
case the Company shall propose (i) to pay any dividend payable in stock of
any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred
Shares (other than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or 

 

26

 

otherwise than by payment of dividends in Common
Shares) then, in each such case, the Company shall give to the Rights Agent and
to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least
10 days prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any such other action,
at least 10 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.

 

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

 

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

 

W. R. Grace & Co.

7500 Grace Drive

Columbia, MD  21044

Attention:  Corporate Secretary

 

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

 

Mellon Investor Services LLC

Newport
Office Center VII

480 Washington
Boulevard

Jersey City,
New Jersey  07310

Attention:  Relationship Manager

 

with a copy to:

Mellon Investor Services LLC

Newport Office
Center VII

480 Washington
Boulevard

Jersey City,
New Jersey  07310

Attention:  General Counsel

 

27

 

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

 

Section 27.  Supplements
and Amendments.  The
Company may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, or to make any other
provisions with respect to the Rights which the Company may deem necessary or
desirable, any such supplement or amendment to be evidenced by a writing signed
by the Company and the Rights Agent; provided, however, that from and after
such time as any Person becomes an Acquiring Person, this Agreement shall not
be amended in any manner which would adversely affect the interests of the
holders of Rights and further provided, however, that the Rights Agent shall
have no duty or obligation to execute such amendment or supplement if such
amendment or supplement changes or increases its rights, duties, obligations or
immunities.  Without limiting the
foregoing, the Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the thresholds set forth in
Sections l(a) and 3(a) to not less than the greater of (i) the
sum of .001% and the largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan) and (ii) 10%.  Upon the delivery of a certificate from an
appropriate officer of the Company that states that the proposed supplement or
amendment complies with this Section 27, the Rights Agent shall execute
such supplement or amendment.

 

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

 

Section 29.  Determinations
and Actions by the Board of Directors.  All actions, calculations, interpretations
and determinations (including, for the purpose of clause (ii) below, all
omissions with respect to the foregoing) which are done or made by the Board of
Directors in good faith shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other Persons, and
(ii) not subject the Board of Directors to any liability to the holders of
the Rights.  The Rights Agent is always
entitled to assume the Board of Directors acted in good faith and shall be
fully protected and incur no liability in reliance thereon.

 

Section 30.  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 Right
Certificates (and, prior to the Distribution Date, the Common Shares) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).

 

28

 

Section 31.  Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that if such excluded provision shall effect the rights,
immunities, duties or obligations of the Rights Agent, the Rights Agent shall
be entitled to resign immediately.

 

Section 32.  Governing
Law.  This Agreement and
each Right Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State; provided,
however, that all provisions regarding the rights, duties and obligations 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 33.  Counterparts.  This Agreement may be executed in any number
of counterparts and each of such counterpart shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

 

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

 

Section 35.  Force
Majeure.  Notwithstanding
anything to the contrary contained herein, the Rights Agent shall not be liable
for any delays or failures in performance resulting from acts beyond its
reasonable control including, without limitation, acts of God, terrorist acts,
shortage of supply, breakdowns or malfunctions, interruptions or malfunctions
of computer facilities, or loss of data due to power failures or mechanical
difficulties with information storage or retrieval systems, labor difficulties,
war or civil unrest.

 

 

[SIGNATURES NEXT PAGE]

 

29

 

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

 

 

	
  Attest:

  	
   

  	
  W.
  R. GRACE & CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Mark A. Shelnitz

  	
   

  	
  By:

  	
  /s/
  W. Brian McGowan

  
	
   

  	
   

  	
   

  
	
  Name:
  Mark A. Shelnitz

  	
   

  	
  Name:
  W. Brian McGowan

  
	
   

  	
   

  	
   

  
	
  Title:
  Secretary

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MELLON
  INVESTOR SERVICES LLC,

  as Rights Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Gary D’Alessandro

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Gary D’Alessandro

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

EXHIBIT A

 

FORM OF RIGHT CERTIFICATE

 

 

	
  Certificate No. R-

  	
                           Rights

  

 

 

NOT EXERCISABLE AFTER MARCH 30, 2018
OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. 
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

 

RIGHT CERTIFICATE

 

W. R. GRACE & CO.

 

 

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 Amended and Restated Rights Agreement, dated
as of                                ,
2008 (the “Rights Agreement”), between W. R. Grace & Co., a Delaware
corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey
limited liability company, as rights agent (the “Rights Agent”), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York time, on
March 30, 2018 at the office of the Rights Agent designated for such
purpose, or at the office of its successor as Rights Agent, one hundredth of a
fully paid nonassessable share of Series A Junior Participating Preferred
Stock, without par value (the “Preferred Shares”), of the Company, at a
purchase price of $100 per hundredth of a Preferred Share (the “Purchase Price”),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed and properly completed.  The number of Rights evidenced by this Right
Certificate (and the number of hundredths of a Preferred Share which may be
purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of                                ,
2008, based on the Preferred Shares as constituted at such date.  As provided in the Rights Agreement, the
Purchase Price and the number of hundredths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events.

 

This Right Certificate is subject to all
of the terms, provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference and made
a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities of the Rights Agent, the Company and the holders of the Right
Certificates.  Copies of the Rights
Agreement are 

 

A-1

 

on file at the principal executive offices of
the Company and the above-mentioned offices of the Rights Agent.

 

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

 

Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate (i) may be redeemed by
the Company at a redemption price of $.01 per Right or (ii) may be
exchanged in whole or in part for Preferred Shares or shares of the Company’s
Common Stock, par value $.01 per share.

 

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

 

No holder of this Right Certificate shall
be entitled to vote or receive dividends or be deemed for any purpose to be the
holder of the Preferred Shares or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote with respect to the election of directors or upon any matter
submitted to shareholder at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of any meeting or other action
affecting shareholder (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.

 

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

 

A-2

 

WITNESS the facsimile signature of the
proper officers of the Company and its corporate seal.

 

 

	
  Dated as of                     
  .

  
	
   

  
	
   

  
	
  ATTEST:

  	
   

  	
  W. R. GRACE & CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Countersigned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MELLON INVESTOR SERVICES LLC,

  	
   

  	
   

  
	
  as Rights Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signature

  	
   

  	
   

  
					

 

A-3

 

Form of Reverse Side of Right
Certificate

 

FORM OF ASSIGNMENT

 

 

(To be executed by the registered holder
if such

holder desires to transfer the Right
Certificate.)

 

 

FOR VALUE
RECEIVED                                                                                                                            hereby
sells,assigns and transfers unto                                                                  

          (Please
print name and address of transferee)

 

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

 

 

	
  Dated: 

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
				

 

 

Signature Guaranteed:

 

Signatures must be guaranteed by a
participant in the Securities Transfer Agent Medallion Program, the Stock
Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program.

 

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

 

 

	
   

  	
   

  
	
   

  	
  Signature

  

 

A-4

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if holder desires to
exercise

Rights represented by the Right
Certificate.)

 

 

To:  W. R.
Grace & Co.

 

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

 

 

Please insert social security

or other identifying number

 

	
   

  	
   

  

(Please print name and address)

 

 

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

 

 

Please insert social security

or other identifying number

 

	
   

  	
   

  

(Please print name and address)

 

 

	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  

 

A-5

 

Signature Guaranteed:

 

Signatures must be guaranteed by a
participant in the Securities Transfer Agent Medallion Program, the Stock
Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program.

 

A-6

 

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

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

NOTICE

 

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

 

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

 

A-7

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