Document:

exv4w1

 

Exhibit 4.1

IMPERIAL PARKING CORPORATION

and

NATIONAL CITY BANK

as Rights Agent

SHAREHOLDER RIGHTS AGREEMENT

Dated as of May 12, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section	 	Page
	
	 	

	Section 1.   Certain Definitions
	 	 	1	 
	Section 2.   Appointment of Rights Agent
	 	 	7	 
	Section 3.   Issue of Right Certificates
	 	 	7	 
	Section 4.   Form of Right Certificates
	 	 	9	 
	Section 5.   Countersignature and Registration
	 	 	10	 
	Section 6.  
Transfer, Split Up, Combination and Exchange of Right
Certificates;

                Mutilated, Destroyed, Lost or Stolen Right Certificates
	 	 	11	 
	Section 7.   Exercise of Rights; Exercise Price; Expiration Date of Rights
	 	 	11	 
	Section 8.   Cancellation and Destruction of Right Certificates
	 	 	13	 
	Section 9.   Reservation and Availability of Preferred Stock
	 	 	14	 
	Section 10. Preferred Stock Record Date
	 	 	15	 
	Section 11. Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights
	 	 	15	 
	Section 12. Certificate of Adjusted Exercise Price or Number of Shares
	 	 	23	 
	Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	23	 
	Section 14. Fractional Rights and Fractional Shares
	 	 	26	 
	Section 15. Rights of Action
	 	 	27	 
	Section 16. Agreement of Right Holders
	 	 	27	 
	Section 17. Right Certificate Holder Not Deemed a Shareholder
	 	 	28	 
	Section 18. Concerning the Rights Agent
	 	 	28	 
	Section 19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	29	 
	Section 20. Duties of Rights Agent
	 	 	29	 
	Section 21. Change of Rights Agent
	 	 	31	 

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	Section	 	Page
	
	 	

	Section 22. Issuance of New Right Certificates
	 	 	32	 
	Section 23. Redemption
	 	 	32	 
	Section 24. Exchange
	 	 	33	 
	Section 25. Notice of Certain Events
	 	 	35	 
	Section 26. Notices
	 	 	36	 
	Section 27. Supplements and Amendments
	 	 	37	 
	Section 28. Successors
	 	 	37	 
	Section 29. Determinations and Actions by the Board of Directors
	 	 	37	 
	Section 30. Benefits of this Agreement
	 	 	38	 
	Section 31. Severability
	 	 	38	 
	Section 32. Governing Law
	 	 	38	 
	Section 33. Counterparts
	 	 	38	 
	Section 34. Descriptive Headings
	 	 	38	 

	 	 	 	 	 
	Exhibit A —
	 	Certificate of
Designations of Series A Junior Participating Cumulative Preferred Stock
	 
	Exhibit B —
	 	Form of Right Certificate

-ii-

 

SHAREHOLDER RIGHTS AGREEMENT

     Agreement, dated as of May 12, 2003, between Imperial Parking Corporation,
a Delaware corporation (the “Company”), and National City Bank, a federally
chartered trust company (the “Rights Agent”).

W I T N E S S E T H

     WHEREAS, the Board of Directors of the Company desires to provide
shareholders of the Company with the opportunity to benefit from the long-term
prospects and value of the Company and to ensure that shareholders of the
Company receive fair and equal treatment in the event of any proposed takeover
of the Company; and

     WHEREAS, on May 12, 2003 the Board of Directors of the Company authorized
and declared a dividend distribution of one Right (as such term is hereinafter
defined) for each share of Common Stock, par value $0.01 per share, of the
Company (the “Common Stock”) outstanding as of May 22, 2003 (the “Record
Date”), and authorized the issuance of one Right for each share of Common Stock
of the Company issued (whether or not originally issued or sold from the
Company’s treasury, except in the case of treasury shares having associated
Rights) between the Record Date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right initially
representing the right to purchase one ten-thousandth of a share of Series A
Junior Participating Cumulative Preferred Stock of the Company having the
rights, powers and preferences set forth on Exhibit A hereto, upon the terms
and subject to the conditions hereinafter set forth (the “Rights”); and

     WHEREAS, the Company desires to appoint the Rights Agent to act as rights
agent hereunder, in accordance with the terms and conditions hereof.

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

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

     (a)  “Acquiring Person” shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter
defined) of 15% or more of the shares of Common Stock of the Company then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary (as
such term is hereinafter defined) of the Company, (iii) any employee benefit
plan or compensation arrangement of the Company or any Subsidiary of the
Company or (iv) any Person holding shares of Common Stock of the Company
organized, appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such employee benefit plan
or compensation arrangement (the Persons described in clauses (i) through
(iv) above are

 

 

referred to herein as “Exempt Persons”); provided, however, that
the term “Acquiring Person” shall not include any Grandfathered Person, unless
such Grandfathered Person becomes the Beneficial Owner of a percentage of the
shares of Common Stock of the Company then outstanding equal to or exceeding
such Grandfathered Person’s Grandfathered Percentage.

     Notwithstanding the foregoing, no Person shall become an “Acquiring
Person” as the result of an acquisition by the Company of Common Stock of the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares Beneficially Owned by such Person to 15% (or in
the case of a Grandfathered Person, the Grandfathered Percentage applicable to
such Grandfathered Person) or more of the shares of Common Stock of the Company
then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% (or in the case of a Grandfathered Person, the
Grandfathered Percentage applicable to such Grandfathered Person) or more of
the shares of Common Stock of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional shares (other than pursuant to a
stock split, stock dividend or similar transaction) of Common Stock of the
Company and immediately thereafter be the Beneficial Owner of 15% (or in the
case of a Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock of the Company then
outstanding, then such Person shall be deemed to be an “Acquiring Person.”

     In addition, notwithstanding the foregoing, and notwithstanding anything
to the contrary provided in the Agreement including without limitation in
Sections 1(hh), 3(a) or 27, a Person shall not be an “Acquiring Person” if the
Board of Directors of the Company determines at any time that a Person who
would otherwise be an “Acquiring Person,” has become such without intending to
become an “Acquiring Person,” and such Person divests as promptly as
practicable (or within such period of time as the Board of Directors of the
Company determines is reasonable) a sufficient number of shares of Common Stock
of the Company so that such Person would no longer be an “Acquiring Person,” as
defined pursuant to the foregoing provisions of this Section 1(a).

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

     (c) 
“Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations (the
“Rules”) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), as in effect on the date of this Agreement; provided,
however, that no
Person who is a director or officer of the Company shall be deemed an Affiliate
or an Associate of any other director or officer of the Company solely as a
result of his or her position as director or officer of the Company.

     (d)  A Person shall be deemed the “Beneficial Owner” of, and shall be
deemed to “Beneficially Own” and have “Beneficial Ownership” of, any
securities:

		
	 	     (i) which such Person or any of such Person’s Affiliates or
Associates, directly or indirectly, Beneficially Owns (as determined
pursuant to Rule 13d-3 of the Rules under the Exchange Act, as in effect
on the date of this Agreement);

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	 	     (ii) which such Person or any of such Person’s Affiliates or
Associates, directly or indirectly, has:

		
	 	     (A) the right to acquire (whether or not such right is
exercisable immediately or only after the passage of time or upon
the satisfaction of any conditions or both) pursuant to any
agreement, arrangement or understanding (whether or not in writing)
or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
“Beneficial Owner” of, or to “Beneficially Own” or have “Beneficial
Ownership” of, (1) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person’s Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; (2) securities issuable upon
exercise of Rights at any time prior to the occurrence of a
Triggering Event; or (3) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event, which
Rights were acquired by such Person or any of such Person’s
Affiliates or Associates prior to the Distribution Date or pursuant
to Sections 3(a), 11(i) or 22 hereof; or
	 
	 	     (B) the right to vote pursuant to any agreement, arrangement
or understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the “Beneficial Owner” of, or to
“Beneficially Own” or have “Beneficial Ownership” of, any security
under this clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to a written proxy or consent
solicitation statement filed with the Securities and Exchange
Commission in accordance with the Rules of the Exchange Act and (2)
is not also then reportable by such person on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
	 
	 	     (C) the right to dispose of pursuant to any agreement,
arrangement or understanding (whether or not in writing); or

		
	 	     (iii) which are Beneficially Owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person’s Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy or consent as described in clause (B) of Section 1(d)(ii) hereof)
or disposing of any securities of the Company;

provided, however, that (1) no Person engaged in business as an underwriter of
securities shall be deemed the Beneficial Owner of any securities acquired
through such Person’s participation as an underwriter in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition, and (2) no
Person who is a director or an officer of the

3

 

Company shall be deemed, as a
result of his or her position as director or officer of the Company, the
Beneficial Owner of any securities of the Company that are Beneficially Owned
by any other director or officer of the Company.

     For all purposes of this Agreement, the phrase “then outstanding,” when
used with reference to the percentage of the then outstanding securities
Beneficially Owned by a Person, shall mean the number of securities then issued
and outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to Beneficially Own
hereunder.

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

     (f)  “Certificate of Incorporation” when used in reference to the Company
shall mean the Amended and Restated Certificate of Incorporation, as may be
amended from time to time, of the Company.

     (g)  “Close of Business” on any given date shall mean 5:00 p.m., New York,
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, New York time, on the next
succeeding Business Day.

     (h)  “Common Stock” when used in reference to the Company shall mean the
common stock, par value $0.01 per share, of the Company or any other shares of
capital stock of the Company into which such stock shall be reclassified or
changed. “Common Stock” when used with reference to any Person other than the
Company organized in corporate form shall mean (i) the capital stock or other
equity interest of such Person with the greatest voting power, (ii) the equity
securities or other equity interest having power to control or direct the
management of such Person or (iii) if such Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned
Person and which have issued any such outstanding capital stock, equity
securities or equity interest. “Common Stock” when used with reference to any
Person not organized in corporate form shall mean units of beneficial interest
which (x) shall represent the right to participate generally in the profits and
losses of such Person (including without limitation any flow-through tax
benefits resulting from an ownership interest in such Person) and (y) shall be
entitled to exercise the greatest voting power of such Person or, in the case
of a limited partnership, shall have the power to remove or otherwise replace
the general partner or partners.

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

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

     (k)  “Depositary Agent” shall have the meaning set forth in Section 7(c)
hereof.

     (l)  “Distribution Date” shall have the meaning defined in Section 3(a)
hereof.

4

 

     (m)  “Exempt Person” shall have the meaning set forth in the definition of
“Acquiring Person.”

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

     (o)  “Expiration Date” and “Final Expiration Date” shall have the meanings
set forth in Section 7(a) hereof.

     (p)  “Fair Market Value” of any securities or other property shall be as
determined in accordance with Section 11(d) hereof.

     (q)  “Grandfathered Percentage” shall mean, with respect to (A) any of the
Persons specified in clause (A) and (B) of the definition of “Grandfathered
Person, together with all Affiliates and Associates of such Persons, 31.6%, and
(B) any other Grandfathered Person, the percentage of the outstanding shares of
Common Stock of the Company that such Grandfathered Person, together with all
Affiliates and Associates of such Grandfathered Person, Beneficially Owns as of
the Grandfathered Time, plus an additional 1/2%; provided, however, that, in
the event any Grandfathered Person shall sell, transfer, or otherwise dispose
of any outstanding shares of Common Stock of the Company after the
Grandfathered Time, the Grandfathered Percentage shall, subsequent to such
sale, transfer or disposition, mean, with respect to such Grandfathered Person,
the lesser of (i) the Grandfathered Percentage as in effect immediately prior
to such sale, transfer or disposition or (ii) the percentage of outstanding
shares of Common Stock of the Company that such Grandfathered Person
Beneficially Owns immediately following such sale, transfer or disposition,
plus an additional 1/2%.

     (r)  “Grandfathered Person” shall mean any one or more of the following
Persons: (A) Gotham Partners, L.P., Gotham International Advisors, L.L.C.,
Gotham Partners III, L.P., Gotham Holdings II, L.L.C., Gotham Holdings
Management, L.L.C., (B) William A. Ackman and (C) any other Person who or
which, together with all Affiliates and Associates of such Person, is, as of
the Grandfathered Time, the Beneficial Owner of 15% or more of the shares of
Common Stock of the Company then outstanding. Notwithstanding anything to the
contrary provided in this Agreement, any Grandfathered Person who after the
Grandfathered Time becomes the Beneficial Owner of less than 15% of the shares
of Common Stock of the Company then outstanding shall cease to be a
Grandfathered Person and shall be subject to all of the provisions of this
Agreement in the same manner as any Person who is not and was not a
Grandfathered Person.

     (s)  “Grandfathered Time” shall mean 8:00 p.m., New York City time, on May
12, 2003.

     (t)  “Group” shall have the meaning set forth in clause (b) of the
definition of “Person.”

     (u)  “Person” shall mean (a) an individual, a corporation, a partnership, a
limited liability company, an association, a joint stock company, a trust, a
business trust, a government or political subdivision, any unincorporated
organization, or any other association or entity including any successor (by merger or otherwise) thereof or
thereto, and (b) a “group” as

5

 

that term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended.

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

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

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

     (y)  “Redemption Price” shall have the meaning defined in Section 23
hereof.

     (z)  “Registered Common Stock” shall have the meaning set forth in Section
13(b) hereof.

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

     (bb)  “Section 11(a)(ii) Event” shall have the meaning set forth in Section
11(a)(ii) hereof.

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

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

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

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

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

     (hh)  “Stock Acquisition Date” shall mean the date of the first public
announcement (which for purposes of this definition shall include, without
limitation, the issuance of a press release or the filing of a
publicly-available report or other document with the Securities and Exchange
Commission or any other governmental agency) by the Company, acting pursuant to
a resolution adopted by the Board of Directors of the Company, or by an
Acquiring Person, subject in each case to the last paragraph of Section 1(a),
that an Acquiring Person has become such.

     (ii)  “Subsidiary” shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient, in the absence of contingencies, to
elect a majority of the board of directors or other persons performing similar functions of such corporation or other entity
are at the time directly

6

 

or indirectly Beneficially Owned or otherwise
controlled by such Person either alone or together with one or more Affiliates
of such Person.

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

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

     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the Distribution Date (as
hereinafter defined in Section 3(a)) also be the holders of the Common Stock of
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. In the
event the Company appoints one or more Co-Rights Agents, the respective duties
of the Rights Agent and any Co-Rights Agents shall be as the Company shall
determine. The Company shall give ten (10) days’ prior written notice to the
Rights Agent of the appointment of one or more Co-Rights Agents and the
respective duties of the Rights Agent and any such Co-Rights Agents. The
Rights Agent shall have no duty to supervise, and shall in no event be liable
for, the acts or omissions of any such Co-Rights Agent.

     Section 3. Issue of Right Certificates.

     (a)  From the date hereof until the earlier of (i) the Close of Business on
the tenth calendar day after the Stock Acquisition Date or (ii) the Close of
Business on the tenth Business Day (or such later calendar day, if any, as the
Board of Directors of the Company may determine in its sole discretion) after
the date a tender or exchange offer by any Person, other than an Exempt Person,
is first published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act, or any successor rule, if, upon consummation thereof, such Person
could become the Beneficial Owner of 15% (or in the case of a Grandfathered
Person, the Grandfathered Percentage applicable to such Grandfathered Person)
or more of the shares of Common Stock of the Company then outstanding
(including any such date which is after the date of this Agreement and prior to
the issuance of the Rights) (the earliest 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 the Common Stock
of the Company registered in the names of the holders of the Common Stock of
the Company (which certificates for Common Stock of the Company shall be deemed
also to be certificates for Rights) and not by separate certificates, and (y)
the Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock of the Company. As soon as practicable after
the Distribution Date, the Rights Agent will, at the Company’s expense send, by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
certificates, in substantially the form of Exhibit B hereto (the “Right
Certificates”), evidencing one Right for each share of Common Stock of the
Company so held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Common Stock of the Company has been made
pursuant to Section 11(o) hereof, the

7

 

Company may make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) at
the time of distribution of the Right Certificates, so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Close of Business on the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

     (b)  With respect to certificates for the Common Stock of the Company
issued prior to the Close of Business on the Record Date, the Rights will be
evidenced by such certificates for the Common Stock of the Company on or until
the Distribution Date (or the earlier redemption, expiration or termination of
the Rights), and the registered holders of the Common Stock of the Company also
shall be the registered holders of the associated Rights. Until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), the transfer of any of the certificates for the Common Stock of the
Company outstanding prior to the date of this Agreement shall also constitute
the transfer of the Rights associated with the Common Stock of the Company
represented by such certificate.

     (c)  Certificates for the Common Stock of the Company issued after the
Record Date, but prior to the earlier of the Distribution Date or the
redemption, expiration or termination of the Rights, shall be deemed also to be
certificates for Rights, and shall bear a legend, substantially in the form set
forth below:

		
	 	This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Shareholder Rights Agreement between Imperial Parking
Corporation and National City Bank (or any successor
thereto), as Rights Agent, dated as of May 12, 2003 as
amended, restated, renewed, supplemented or extended
from time to time (the “Rights Agreement”), the terms
of which are hereby incorporated herein by reference
and a copy of which is on file at the principal
offices of Imperial Parking Corporation and the stock
transfer administration office of the Rights Agent.
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. Imperial Parking Corporation may
redeem the Rights at a redemption price of $0.01 per
Right, subject to adjustment, under the terms of the
Rights Agreement. Imperial Parking Corporation 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, Rights
issued to or held by Acquiring Persons or any
Affiliates or Associates thereof (as defined in the
Rights Agreement), and any subsequent holder of such
Rights, may become null and void. The Rights shall
not be exercisable, and shall be void so long as held,
by a holder in any jurisdiction where the requisite
qualification, if any, to the issuance to such
holder, or the exercise by such holder, of the Rights
in such jurisdiction shall not have been obtained or
be obtainable.

8

 

     With respect to such certificates containing the foregoing legend, the
Rights associated with the Common Stock of the Company represented by such
certificates shall be evidenced by such certificates alone until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock of the Company
represented by such certificates. In the event that the Company purchases or
acquires any shares of Common Stock of the Company after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Stock of
the Company shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the shares of Common Stock
of the Company which are no longer outstanding. The failure to print the
foregoing legend on any such certificate representing Common Stock of the
Company or any defect therein shall not affect in any manner whatsoever the
application or interpretation of the provisions of Section 7(e) hereof.

     Section 4. Form of Right Certificates.

     (a)  The Right Certificates (and the forms of election to purchase shares
and of assignment and certificate to be printed on the reverse thereof) shall
each be substantially in the form of Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation 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
customary usage. The Right Certificates shall be in a machine printable format
and in a form reasonably satisfactory to the Rights Agent. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates,
whenever distributed, shall be dated as of the Record Date, shall show the date
of countersignature, and on their face shall entitle the holders thereof to
purchase such number of one ten-thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (the “Exercise
Price”), but the number of such shares and the Exercise Price shall be subject
to adjustment as provided herein.

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

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therefrom the second sentence of the
existing legend on such Right Certificate and in substitution therefor shall
contain the following legend:

		
	 	The Rights represented by this Right Certificate are
or were Beneficially Owned by a Person who was or

became an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may
become null and void under certain circumstances as
specified in Section 7(e) of the Rights Agreement.

     The Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence and identity of any Acquiring Person or any
Associate or Affiliate thereof. The Company shall instruct the Rights Agent in
writing of the Rights which should be so legended. The failure to print the
foregoing legend on any such Right Certificate or any defect therein shall not
affect in any manner whatsoever the application or interpretation of the
provisions of Section 7(e) hereof.

     Section 5. Countersignature and Registration.

     (a)  The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board of Directors, or its President or any Vice President
and by its Treasurer or any Assistant Treasurer, or by its Secretary or any
Assistant Secretary, either manually or by facsimile signature, and shall have
affixed thereto the Company’s seal or a facsimile thereof which shall be
attested to by the Secretary or any Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by an authorized signatory of the Rights Agent and shall not be
valid for any purpose unless so countersigned, and such countersignature upon
any Right Certificate shall be conclusive evidence, and the only evidence, that
such Right Certificate has been duly countersigned as required hereunder. 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 an authorized
signatory of 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 Certificates
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.

     (b)  Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at one of its offices designated as the appropriate place for
surrender of Right Certificates upon exercise or transfer, 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.

10

 

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

     (a)  Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Right
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Certificates, entitling the registered holder
to purchase a like number of one ten-thousandths of a share of Preferred Stock
(or following a Triggering Event, preferred stock, cash, property, debt
securities, Common Stock of the Company or any combination thereof) as the
Right Certificate or Certificates surrendered then entitled such holder to
purchase and at the same Exercise Price. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Certificates to be transferred, split up, combined or exchanged,
with the form of assignment and certificate duly executed, at the office or
offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Certificates, as the case may be, as so
requested. The Company may require payment by the registered holder of a Right
Certificate, of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.

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

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

     (a)  Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Exercise Price for the total number of
one ten-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercised, at or prior to the earlier of (i) the Close of Business on the tenth
anniversary of the Record Date (the “Final Expiration Date”), (ii)

11

 

the time at which the Rights are redeemed as provided in Section 23 hereof
or (iii) the time at which such Rights are exchanged as provided in Section 24
hereof (the earlier of (i), (ii) or (iii) being herein referred to as the
“Expiration Date”). Except as set forth in Section 7(e) hereof and
notwithstanding any other provision of this Agreement, any Person who prior to
the Distribution Date becomes a record holder of shares of Common Stock of the
Company may exercise all of the rights of a registered holder of a Right
Certificate with respect to the Rights associated with such shares of Common
Stock of the Company in accordance with the provisions of this Agreement, as of
the date such Person becomes a record holder of shares of Common Stock of the
Company.

     (b)  The Exercise Price for each one ten-thousandth of a share of Preferred
Stock pursuant to the exercise of a Right shall initially be One Hundred
Thirty-Three and 50/100 United States Dollars (U.S. $133.50), shall be subject
to adjustment from time to time as provided in Section 11 and Section 13 hereof
and shall be payable in lawful money of the United States of America in
accordance with Section 7(c) below.

     (c)  As promptly as practicable following the Distribution Date, the
Company shall deposit with a corporation, trust, bank or similar institution in
good standing organized under the laws of the United States or any State of the
United States, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by a
federal or state authority (such institution is hereinafter referred to as the
“Depositary Agent”), certificates representing the shares of Preferred Stock
that may be acquired upon exercise of the Rights and the Company shall cause
such Depositary Agent to enter into an agreement pursuant to which the
Depositary Agent shall issue receipts representing interests in the shares of
Preferred Stock so deposited. Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, accompanied by payment of the
Exercise Price for the shares to be purchased and an amount equal to any
applicable transfer tax (as determined by the Rights Agent) by certified check
or bank draft payable to the order of the Company or by money order, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
requisition from the Depositary Agent (or make available, if the Rights Agent
is the Depositary Agent) depositary receipts or certificates for the number of
one ten-thousandths of a share of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes the Depositary Agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount
of cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly 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
appropriate, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. In the event that the Company
is obligated to issue other securities (including Common Stock) of the Company,
pay cash or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash or other property are available for distribution by the Rights Agent, if
and when appropriate. The payment of the Exercise Price may be made by
certified or bank check payable to the order of the Company, or by money order
or wire transfer of immediately available funds to the account of the Company
(provided that notice of such wire transfer shall be given by the holder of the
related Right to the Rights Agent).

12

 

     (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 and delivered to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.

     (e)  Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event or Section 13 Event,
any Rights Beneficially Owned by (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any Associate or Affiliate of an Acquiring Person) who becomes a transferee
after the Acquiring Person becomes such or (iii) a transferee of an Acquiring
Person (or of any Associate or Affiliate of an Acquiring Person) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, the shares of Common Stock of the Company associated with such Rights
or the Company, or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall be null and
void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or any Affiliates or Associates of an Acquiring
Person or any transferee of any of them hereunder.

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

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

13

 

     Section 9. Reservation and Availability of Preferred Stock.

     (a)  The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock or
any authorized and issued shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding and exercisable Rights. Upon the
occurrence of any events resulting in an increase in the aggregate number of
shares of Preferred Stock issuable upon exercise of all outstanding Rights in
excess of the number then reserved, the Company shall make appropriate
increases in the number of shares so reserved.

     (b)  The Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares of Preferred Stock issued or
reserved for issuance to be listed, upon official notice of issuance, upon the
principal national securities exchange, if any, upon which the Common Stock of
the Company is listed or, if the principal market for the Common Stock of the
Company is not on any national securities exchange, to be eligible for
quotation on the National Association of Securities Dealers Automated Quotation
System (“NASDAQ”) or any successor thereto or other comparable quotation
system.

     (c)  The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii) hereof, or as soon as required by law following the Distribution
Date, as the case may be, a registration statement under the Securities Act of
1933, as amended (the “Securities Act”), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus that at all times meets the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities or (B) the Expiration Date. The Company will
also take such action as may be appropriate under, and which will ensure
compliance with, the securities or “blue sky” laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date
determined in accordance with the provisions of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. Upon such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect, in
each case with prompt written notice to the Rights Agent. Notwithstanding any
such provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained.

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

14

 

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

     Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock (including any fraction of a share of
Preferred Stock) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares of
Preferred Stock 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 Exercise Price (and any applicable
transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Stock transfer
books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock
transfer books of the Company are open; and further provided, however,
that if delivery of shares of Preferred Stock is delayed pursuant to
Section 9(c), such Person shall be deemed to have become the record holder
of such shares of Preferred Stock only when such shares first become
deliverable. Prior to the exercise of the Right evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to 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 Exercise Price, Number and Kind of Shares or Number
of Rights. The Exercise Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.

		
	 	     (a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of
shares or (D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Exercise Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, 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 

15

 

		
	 	exercised immediately prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of a Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of a Right. If an
event occurs which would require an adjustment under both Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.

		
	 	     (ii) Subject to the provisions of Section 24 hereof, in the event any
Person, alone or together with its Affiliates and Associates, shall
become an Acquiring Person, then, promptly following any such occurrence
(a “Section 11(a)(ii) Event”), proper provision shall be made so that
each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have a right to receive, upon exercise thereof at the then
current Exercise Price in accordance with the terms of this Agreement, in
lieu of a number of one ten-thousandths of a share of Preferred Stock,
such number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Exercise Price by the
then number of one ten-thousandths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, whether or not such Right was then
exercisable, and dividing that product by (y) 50% of the Fair Market
Value per share of Common Stock of the Company (determined pursuant to
Section 11(d)) on the date of the occurrence of a Section 11(a)(ii) Event
(such number of shares being referred to as the “Adjustment Shares”).

		
	 	     (iii) In lieu of issuing any shares of Common Stock of the Company in
accordance with Section 11(a)(ii) hereof, the Company, acting by or
pursuant to a resolution of the Board of Directors of the Company, may,
and in the event that the number of shares of Common Stock of the Company
which are authorized by the Company’s Certificate of Incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company, acting by or pursuant to a resolution of the
Board of Directors of the Company, shall: (A) determine the excess of
(X) the Fair Market Value of the Adjustment Shares issuable upon the
exercise of a Right (the “Current Value”) over (Y) the Exercise Price
attributable to each Right (such excess being referred to as the
“Spread”) and (B) with respect to all or a portion of each Right (subject
to Section 7(e) hereof), make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Exercise Price, (1)
Common Stock of the Company or equity securities, if any, of the Company
other than Common Stock of the Company (including without limitation
shares, or units of shares, of Preferred Stock that the Board of
Directors of the Company has determined to have the same value as shares
of Common Stock of the Company (such shares of Preferred Stock being
referred to herein as “Common Stock
Equivalents”)), (2) cash, (3) a reduction in the Exercise Price, (4)
Preferred Stock Equivalents which the Board of Directors of the Company
has deemed to have the same value as shares of Common Stock of the
Company, (5) debt securities of the Company, 

16

 

		
	 	(6) other assets or securities of the Company or (7) any combination of the foregoing having
an aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm selected by
the Board of Directors of the Company; provided, however, that if the
Company shall not have made adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company’s right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the “Section
11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring payment
of the Exercise Price, shares of Common Stock of the Company (to the
extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the Board of Directors
of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock of the Company could be
authorized for issuance upon exercise in full of the Rights, the 30-day
period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek shareholder approval for the
authorization of s
uch additional shares (such period, as it may be
extended, being referred to herein as the “Substitution Period”). To the
extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended and a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock of the Company and of the
Preferred Stock shall be the Fair Market Value (as determined pursuant to
Section 11(d) hereof) per share of the Common Stock of the Company and
the Preferred Stock, respectively, on the Section 11(a)(ii) Trigger Date,
the value of any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock of the Company on such date and the value of
any Preferred Stock Equivalent shall be deemed to have the same value as
the Preferred Stock on such date.

     (b)  If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Stock (or securities having the same or
more favorable rights, privileges and preferences as the shares of Preferred
Stock (“Preferred Stock Equivalents”)) or securities convertible into Preferred
Stock or Preferred Stock Equivalents at a price per share of Preferred Stock or
per share of Preferred Stock Equivalents (or having a conversion price per
share, if a security convertible into Preferred Stock or Preferred Stock
Equivalents) less than the Fair Market Value (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record date,
the Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number

17

 

of shares of Preferred Stock outstanding on such record date, plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of
shares of Preferred Stock and/or Preferred Stock Equivalents to be offered (and
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Fair Market Value and the denominator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred Stock and Preferred
Stock Equivalents 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 a Right be less than the aggregate par value of the shares of stock of the
Company issuable upon exercise of a 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 the Fair Market Value thereof
determined in accordance with Section 11(d) hereof. Shares of Preferred Stock
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
rights or warrants are not so issued, the Exercise Price shall be adjusted to
be the Exercise Price which would then be in effect if such record date had not
been fixed.

     (c)  If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
convertible securities, subscription rights or warrants (excluding those
referred to in Section 11(b)), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Fair Market Value (as determined pursuant to Section 11(d) hereof)
per one ten-thousandth of a share of Preferred Stock on such record date, less
the Fair Market Value (as determined pursuant to Section 11(d) hereof) of the
portion of the cash, assets or evidences of indebtedness so to be distributed
or of such convertible securities, subscription rights or warrants applicable
to one ten-thousandth of a share of Preferred Stock and the denominator of
which shall be the Fair Market Value (as determined pursuant to Section 11(d)
hereof) per one ten-thousandth of a share of Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the exercise
of a Right be less than the aggregate par value of the shares of stock of the
Company issuable upon exercise of a Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Exercise Price shall again be adjusted to be
the Exercise Price which would be in effect if such record date had not been
fixed.

     (d)  For the purpose of this Agreement, the “Fair Market Value” of any
share of Preferred Stock, Common Stock or any other stock or any Right or other
security or any other property shall be determined as provided in this Section
11(d).

		
	 	     (i) In the case of a publicly-traded stock or other security, the
Fair Market Value on any date shall be deemed to be the average of the
daily closing prices per share of such stock or per unit of such other
security for the 30 consecutive Trading 

18

 

		
	 	Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in the
event that the Fair Market Value per share of any share of stock is
determined during a period following the announcement by the issuer of
such stock of (x) a dividend or distribution on such stock payable in
shares of such stock or securities convertible into shares of such stock
or (y) any subdivision, combination or reclassification of such stock,
and prior to the expiration of the 30 Trading Day period after the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each
such case, the Fair Market Value shall be properly adjusted to take into
account ex-dividend trading. 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 securities 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
such security is listed or admitted to trading; or, if not listed or
admitted to trading on any national securities exchange, the last quoted
price (or, if not so quoted, the average of the last quoted 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 no bids for
such security are 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 such security selected by the Board of Directors of
the Company. If on any such date no market maker is making a market in
such security, the Fair Market Value of such security on such date shall
be determined reasonably and with utmost good faith to the holders of the
Rights by the Board of Directors of the Company, provided, however, that
if at the time of such determination there is an Acquiring Person, the
Fair Market Value of such security on such date shall be determined by a
nationally recognized investment banking firm selected by the Board of
Directors of the Company, which determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. The term “Trading Day” shall mean a
day on which the principal national securities exchange on which such
security is listed or admitted to trading is open for the transaction of
business or, if such security is not listed or admitted to trading on any
national securities exchange, a Business Day.

		
	 	     (ii) If a security is not publicly held or not so listed or traded,
“Fair Market Value” shall mean the fair value per share of stock or per
other unit of such security, determined reasonably and with utmost good
faith to the holders of the Rights by the Board of Directors of the
Company; provided, however, that if at the time of such determination
there is an Acquiring Person, the Fair Market Value of such security on
such date shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors of the Company, which
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the
Rights; provided, however, that for the purposes of making
any adjustment provided for by Section 11(a)(ii) hereof, the Fair
Market Value of a share of Preferred Stock shall not be less than the
product of the then Fair Market Value of a share of Common Stock
multiplied by the higher of the then Dividend Multiple or Vote 

19

 

		
	 	Multiple (as both of such terms are defined in the Certificate of Designations
attached as Exhibit A hereto) applicable to the Preferred Stock and shall
not exceed 105% of the product of the then Fair Market Value of a share
of Common Stock multiplied by the higher of the then Dividend Multiple or
Vote Multiple applicable to the Preferred Stock.

		
	 	     (iii) In the case of property other than securities, the Fair Market
Value thereof shall be determined reasonably and with utmost good faith
to the holders of Rights by the Board of Directors of the Company;
provided, however, that if at the time of such determination there is an
Acquiring Person, the Fair Market Value of such property on such date
shall be determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company, which determination
shall be described in a statement filed with the Rights Agent and shall
be binding upon the Rights Agent and the holders of the Rights.

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

     (f)  If as a result of any provision of Section 11(a) or Section 13(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 Stock,
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 Stock contained in Section 11(a), (b), (c), (d), (e), (g) through (k)
and (m), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Preferred Stock shall apply on like terms to any such other
shares.

     (g)  All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one ten-thousandths of
a share of Preferred Stock (or other securities or amount of cash or
combination thereof) 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 Exercise Price as a result of the
calculations made in Section 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 Exercise Price, that number of one ten-thousandths of a share of
Preferred Stock (calculated to the nearest hundred-millionth) as the Board of
Directors of the Company determines is appropriate to preserve the

20

 

economic value of the Rights, including, by way of example, that number obtained by (i)
multiplying (x) the number of one ten-thousandths of a share of Preferred Stock
for which a Right may be exercisable immediately prior to this adjustment by
(y) the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise Price.

     (i)  The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one ten-thousandths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights (calculated to the
nearest one-millionth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise Price in
effect immediately after adjustment of the Exercise Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
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 and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.

     (j)  Irrespective of any adjustment or change in the Exercise Price or the
number of one ten-thousandths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Exercise Price per share and the number of
shares which were expressed in the initial Right Certificates issued hereunder
without prejudice to any adjustment or change.

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

     (l)  In any case in which this Section 11 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may

21

 

elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the number
of one ten-thousandths of a share of Preferred Stock or other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one ten-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such
additional shares 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 Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the Fair Market Value, issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, stock dividends or issuance
of rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock, shall not be
taxable to such shareholders.

     (n)  The Company covenants and agrees that it shall not, at any time after
the Distribution Date and so long as the Rights have not been redeemed pursuant
to Section 23 hereof or exchanged pursuant to Section 24 hereof, (i)
consolidate with (other than a Subsidiary of the Company in a transaction that
complies with the proviso at the end of this sentence), (ii) merge with or
into, or (iii) sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries taken as a whole, to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with the proviso at the end of this sentence) if (x) at the time
of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments outstanding or agreements or arrangements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, or (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale the shareholders
of a Person who constitutes, or would constitute, the “Principal Party” for the
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates;
provided, however, that, subject to the following sentence, this Section 11(n)
shall not affect the ability of any Subsidiary of the Company to consolidate
with, or merge with or into, or sell or transfer assets or earning power to,
any other Subsidiary of the Company. The Company further covenants and agrees
that after the Distribution Date it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.

     (o)  Notwithstanding anything in this Agreement to the contrary, in the
event the Company shall at any time after the date of this Agreement and prior
to the Distribution Date (i) declare or pay any dividend on the outstanding Common Stock of the
Company payable in shares of Common Stock of the Company or (ii) effect a
subdivision, combination or

22

 

consolidation of the outstanding shares of Common
Stock of the Company (by reclassification or otherwise than by payment of
dividends in shares of Common Stock of the Company) into a greater or lesser
number of shares of Common Stock of the Company, then in any such case (A) the
number of one ten-thousandths of a share of Preferred Stock purchasable after
such event upon proper exercise of each Right shall be determined by
multiplying the number of one ten-thousandths of a share of Preferred Stock so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock of the Company outstanding
immediately prior to such event and the denominator of which is the number of
shares of Common Stock of the Company outstanding immediately after such event,
and (B) each share of Common Stock of the Company outstanding immediately after
such event shall have issued with respect to it that number of Rights which
each share of Common Stock of the Company outstanding immediately prior to such
event had issued with respect to it. The adjustments provided for in this
Section 11(o) shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or consolidation is effected.

     (p)  The exercise of Rights under Section 11(a)(ii) shall only result in
the loss of rights under Section 11(a)(ii) to the extent so exercised and shall
not otherwise affect the rights of holders of Right Certificates under this
Rights Agreement, including rights to purchase securities of the Principal
Party following a Section 13 Event which has occurred or may thereafter occur,
as set forth in Section 13 hereof. Upon exercise of a Right Certificate under
Section 11(a)(ii), the Rights Agent shall return such Right Certificate duly
marked to indicate that such exercise has occurred.

     Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock of the Company a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate (or,
if prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock of the Company) in accordance with Section 26 hereof.
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment contained therein and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received such
certificate.

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

     (a)  In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which is
not prohibited by Section 11(n) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which is not
prohibited by the proviso at the end of the first sentence of Section 11(n)
hereof) 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 shares of Common Stock of the
Company shall be changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company shall sell,
mortgage or otherwise transfer (or one or more of its Subsidiaries shall sell,

23

 

mortgage or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions, each of which is not prohibited by the
proviso at the end of the first sentence of Section 11(n) hereof), then, and in
each such case, proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall have the right to
receive, upon the exercise thereof at the then current Exercise Price in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid and nonassessable shares of freely tradable Common Stock
of the Principal Party (as hereinafter defined in Section 13(b)), free and
clear of rights of call or first refusal, liens, encumbrances, transfer
restrictions or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Exercise Price by the number of one
ten-thousandths of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event, and dividing
that product by (2) 50% of the Fair Market Value (determined pursuant to
Section 11(d) hereof) per share of the Common Stock of such Principal Party on
the date of consummation of such consolidation, merger, sale or transfer; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale, mortgage 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 Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock to permit exercise of all outstanding Rights in
accordance with this Section 13(a) and the making of payments in cash and/or
other securities in accordance with Section 11(a)(iii) 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
its shares of Common Stock thereafter deliverable upon the exercise of the
Rights.

     (b)  “Principal Party” shall mean

		
	 	     (i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, or, if there is more than one such
issuer, the issuer of Common Stock that has the highest aggregate Fair
Market Value (determined pursuant to Section 11(d)), and if no securities
are so issued, the Person that is the other party to the merger or
consolidation, or, if there is more than one such Person, the Person the
Common Stock of which has the highest aggregate Fair Market Value
(determined pursuant to Section 11(d)); and

		
	 	     (ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant
to such transaction or transactions, or, if each Person that is a party
to such transaction or transactions receives the same portion of
the assets or earning power transferred pursuant to such transaction
or transactions or if the Person receiving the largest portion of the
assets or earning power cannot be determined, whichever Person the Common
Stock of which has the highest aggregate Fair Market Value (determined
pursuant to Section 11(d));

24

 

provided, however, that in any such case described in clauses (i) or (ii) of
Section 13(b) hereof, (1) if the Common Stock of such Person is not at such
time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act (“Registered Common Stock”) or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary or Affiliate of another Person who has Registered Common Stock
outstanding, “Principal Party” shall refer to such other Person; (2) if the
Common Stock of such Person is not Registered Common Stock or such Person is
not a corporation, and such Person is a direct or indirect Subsidiary of
another Person but is not a direct or indirect Subsidiary of another Person
which has Registered Common Stock outstanding, “Principal Party” shall refer to
the ultimate parent entity of such first-mentioned Person; (3) if the Common
Stock of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and one or more of such other Persons has Registered Common Stock
outstanding, “Principal Party” shall refer to whichever of such other Persons
is the issuer of the Registered Common Stock having the highest aggregate Fair
Market Value (determined pursuant to Section 11(d)); and (4) if the Common
Stock of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and none of such other Persons has Registered Common Stock
outstanding, “Principal Party” shall refer to whichever ultimate parent entity
is the corporation having the greatest shareholders’ equity or, if no such
ultimate parent entity is a corporation, “Principal Party” shall refer to
whichever ultimate parent entity is the entity having the greatest net assets.

     (c)  The Company shall not consummate any such consolidation, merger, sale
or transfer unless prior thereto (x) the Principal Party shall have a
sufficient number of authorized shares of its Common Stock, which have not been
issued or reserved for issuance, to permit the exercise in full of the Rights
in accordance with this Section 13, and (y) the Company and each Principal
Party and each other Person who may become a Principal Party as a result of
such consolidation, merger, sale or transfer shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth
in Section 13(a) and (b) and further providing that, as soon as practicable
after the date of any consolidation, merger, sale or transfer of assets
mentioned in Section 13(a), the Principal Party at its own expense will:

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

		
	 	     (ii) qualify or register the Rights and the securities purchasable
upon exercise of the Rights under the blue sky laws of such jurisdictions
as may be necessary or appropriate;
	 
	 	     (iii) list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements for quotation
on NASDAQ; and

25

 

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

     (d)  In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its certificate of incorporation or By-laws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current Fair Market Value
(determined pursuant to Section 11(d)) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than such Fair
Market Value, or (ii) providing for any special payment, tax or similar
provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of this Section 13, then, in such
event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.

     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, except
prior to the Distribution Date as provided in Section 11(o) hereof, or to
distribute Right Certificates which evidence fractional Rights. If the Company
elects not to issue such fractional Rights, the Company shall pay, in lieu of
such fractional Rights, 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 Fair Market Value of a whole
Right, as determined pursuant to Section 11(d) hereof.

     (b)  The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
ten-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one ten-thousandth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock
that are not integral multiples of one ten-thousandth of a share of Preferred
Stock, the Company may pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the Fair Market Value of one ten-thousandth of a share
of Preferred Stock. For purposes of this Section 14(b), the Fair Market
Value of one ten-thousandth of a share of Preferred Stock shall be
determined pursuant to Section 11(d) hereof for the Trading Day immediately
prior to the date of such exercise.

26

 

     (c)  The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.

     Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Sections 18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (or, prior to the Distribution Date, the registered
holders of the Common Stock of the Company); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Common Stock of
the Company), 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
Stock of the Company), may, in such registered holder’s own behalf and for such
registered holder’s own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Right 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 of this Agreement and shall be
entitled to specific performance of the obligations hereunder and injunctive
relief against actual or threatened violations of the obligations hereunder of
any Person subject to this Agreement. Holders of Rights shall be entitled to
recover the reasonable costs and expenses, including attorneys’ fees, incurred
by them in any action to enforce the provisions of this Agreement.

     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, each Right will be transferable only
simultaneously and together with the transfer of shares of Common Stock of the
Company;

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

     (c)  subject to Sections 6(a) and 7(f), the Company and the Rights Agent
may deem and treat the person in whose name a Right Certificate (or, prior to
the Distribution Date, the associated certificate representing Common Stock of
the Company) 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 certificate representing Common Stock of
the Company made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and, subject to the last sentence of Section 7(e), neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary; and

     (d)  notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as the result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission,

27

 

or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligations; provided, however, that the Company must use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.

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

     (a)  The Company agrees to pay to the Rights Agent such compensation as
shall be agreed to in writing between the Company and the Rights Agent for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability arising therefrom, directly or indirectly. The
provisions of this Section 18(a) shall survive the expiration of the Rights and
the termination of this Agreement.

     (b)  The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Right Certificate or
certificate representing Common Stock of the Company, Preferred Stock, or 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 in good faith
and without negligence to be genuine and to be signed and executed by the
proper Person or Persons.

     (c)  The Rights Agent shall not be liable for consequential damages under
any provision of this Agreement or for any consequential damages arising out of
any act or failure to act hereunder.

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

     (a)  Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or 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 corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of 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 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.

     (b)  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 the duties and
obligations expressly imposed by this Agreement 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 selected by it (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.

     (b)  Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of “Fair Market Value”) be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof shall be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the Chairman of the Board
of Directors, a Vice Chairman of the Board of Directors, the President, a Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company and delivered to the Rights Agent. Any

29

 

such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

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

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

     (e)  The Rights Agent shall not be under any responsibility in respect of
the validity of this 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 change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 7(e) hereof) or any adjustment
required under the provisions of Sections 11, 13 or 23(c) hereof or responsible
for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after receipt
of a certificate describing any such adjustment furnished in accordance with
Section 12 hereof), nor shall it be responsible for any determination by the
Board of Directors of the Company of the Fair Market Value of the Rights or
Preferred Stock pursuant to the provisions of Section 14 hereof; nor shall it
by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock of the Company or
Preferred Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether or not any shares of Common Stock of the Company
or Preferred Stock will, when so 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 and
certificates delivered pursuant to any provision hereof from any person
believed by the Rights Agent to be the Chairman of the Board of Directors, any
Vice Chairman of the Board of Directors, the President, a Vice President, the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of
the Company, and is authorized to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of 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 or omitted by the Rights Agent
under this Agreement and the date on or after which such action shall be taken
or such omission shall be effective. The Rights Agent shall not be liable for
any action taken by, or omission of, the Rights Agent in accordance with a

30

 

proposal included in such application on or after the date specified in such
application (which date shall not be less than five Business Days after the
date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.

     (h)  The Rights Agent and any shareholder, 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 the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.

     (i)  The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents.

     (j)  No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.

     (k)  If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause (1) or clause (2)
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company.

     Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days’ notice in writing mailed to the Company by first class
mail. The Company may remove the Rights Agent or any successor Rights Agent
(with or without cause), effective immediately or on a specified date, by
written notice given to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock of the Company and
Preferred Stock, and by giving notice to the holders of the Right Certificates
by any means reasonably determined by the Company to inform such holders of
such removal (including without limitation, by including such information in
one or more of the Company’s reports to shareholders or reports or filings with
the Securities and Exchange Commission). If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of thirty (30) days after giving notice of
such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the incumbent Rights
Agent or the registered holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent.

31

 

Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the Commonwealth of Massachusetts or the State of New York
(or of any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the Commonwealth of
Massachusetts or the State of New York), in good standing, which is authorized
under such laws to exercise stock transfer or corporate trust powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $10,000,000 or (b) an Affiliate of a Person described in
clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock of the Company and the Preferred Stock, and give
notice to the holders of the Right Certificates by any means reasonably
determined by the Company to inform such holders of such appointment (including
without limitation, by including such information in one or more of the
Company’s reports to shareholders or reports or filings with the Securities and
Exchange Commission). Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.

     Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by the Board of Directors of the Company to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of shares of Common Stock
of the Company following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock of the Company so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however,
that (i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustments
shall otherwise have been made in lieu of the issuance thereof.

     Section 23. Redemption.

     (a)  The Board of Directors of the Company may, at its option, redeem all
but not less than all of the then outstanding Rights at a redemption price of
$0.01 per Right, appropriately adjusted to reflect any stock dividend declared
or paid, any subdivision or

32

 

combination of the outstanding shares of Common Stock of the Company or any similar event occurring after the date of this
Agreement (such redemption price, as adjusted from time to time, being
hereinafter referred to as the “Redemption Price”). The Rights may be redeemed
only until the earlier to occur of (i) the time at which any Person becomes an
Acquiring Person or (ii) the Final Expiration Date.

     (b)  Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights in accordance with Section 23 hereof, and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly
after the action of the Board of Directors of the Company ordering the
redemption of the Rights in accordance with Section 23 hereof, the Company
shall give notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice to the Rights Agent and to all
such holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the Transfer Agent for the Common Stock of the Company. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. 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 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 Section 24 hereof or in connection with the
purchase of shares of Common Stock of the Company prior to the Distribution
Date.

     (c)  The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock of the Company (based on the Fair Market Value of the
Common Stock of the Company as of the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors of the Company.

     Section 24. Exchange.

     (a)  (i) The Board of Directors of the Company may, at its option, at any
time on or after the occurrence of a Section 11(a)(ii) Event, exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock of the Company at an exchange ratio of one share of
Common Stock of the Company 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 “Section
24(a)(i) Exchange Ratio”). Notwithstanding the foregoing, the Board of
Directors of the Company shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Stock of the Company.

33

 

		
	 	     (ii) Notwithstanding the foregoing, the Board of Directors of the
Company may, at its option, at any time on or after the occurrence of a
Section 11(a)(ii) Event, 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 7(e) hereof) for shares of
Common Stock of the Company at an exchange ratio specified in the
following sentence, as appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date of this
Agreement. Subject to the adjustment described in the foregoing
sentence, each Right may be exchanged for that number of shares of Common
Stock of the Company obtained by dividing the Spread (as defined in
Section 11(a)(iii)) by the then Fair Market Value per one ten-thousandth
of a share of Preferred Stock on the earlier of (x) the date on which any
person becomes an Acquiring Person or (y) the date on which a tender or
exchange offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act or any successor rule, if upon consummation thereof such
Person could become an Acquiring Person (such exchange ratio being
referred to herein as the “Section 24(a)(ii) Exchange Ratio”).
Notwithstanding the foregoing, the Board of Directors of the Company
shall not be empowered to effect such exchange at any time after any
Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of
the Common Stock of the Company.

     (b)  Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock of the Company
equal to the number of such Rights held by such holder multiplied by the
Section 24(a)(i) Exchange Ratio or the Section 24(a)(ii) Exchange Ratio, as
applicable. The Company shall promptly give notice of any such exchange in
accordance with Section 26 hereof and shall promptly mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the shares of
Common Stock of the Company 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 7(e) hereof) held by each holder of Rights.

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

34

 

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

     (e)  The Company shall not be required to issue fractions of Common Stock
of the Company or to distribute certificates which evidence fractional shares
of Common Stock of the Company. If the Company elects not to issue such
fractional shares of Common Stock of the Company, the Company shall pay, in
lieu of such fractional shares of Common Stock of the Company, to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock of the Company would otherwise be issuable,
an amount in cash equal to the same fraction of the Fair Market Value of a
whole share of Common Stock of the Company. For the purposes of this paragraph
(e), the Fair Market Value of a whole share of Common Stock of the Company
shall be the closing price of a share of Common Stock of the Company (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, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular periodic cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation or merger into
or with, or to effect any sale, mortgage or other transfer (or to permit one or
more of its Subsidiaries to effect any sale, mortgage or other transfer), in
one transaction or a series of related 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 (other than a Subsidiary of the Company in one or more
transactions each of which is not prohibited by the proviso at the end of the
first sentence of Section 11(n) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Stock of the Company payable in Common Stock of the
Company or to effect a subdivision, combination or consolidation of the Common
Stock of the Company (by reclassification or otherwise than by payment of
dividends in Common Stock of the Company) then in each such case, the Company
shall give to each holder of a Right Certificate and to the Rights Agent, 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,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the
holders of the shares of Common Stock of the Company and/or Preferred Stock, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least twenty (20) days prior
to the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in

35

 

the case of any such other action, at least twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Common Stock of
the Company and/or Preferred Stock, whichever shall be the earlier; provided,
however, no such notice shall be required pursuant to this Section 25 as a
result of any Subsidiary of the Company effecting a consolidation or merger
with or into, or effecting a sale or other transfer of assets or earnings power
to, any other Subsidiary of the Company in a manner not inconsistent with the
provisions of this Agreement.

     (b)  In case any Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right Certificate and to the Rights Agent, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
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, by facsimile transmission or by nationally-recognized
overnight courier addressed (until another address is filed in writing with the
Rights Agent) as follows:

	 	 
	 	Imperial Parking Corporation

601 West Cordova Street, Suite 300

Vancouver, BC Canada V6B 1G1

Facsimile No. (604) 331-7289

Attention: General Counsel

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

	 	 
	 	National City Bank

Dept 3116

Corporate Trust Administration

629 Euclid Avenue, Suite 635

Cleveland, Ohio 44114

Facsimile No. (216) 222-2649

Attention: Administration

     Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior
to the Distribution Date, to the holder of any certificate representing shares
of Common Stock of the Company) 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.

36

 

     Section 27. Supplements and Amendments. Prior to the occurrence of a Section
11(a)(ii) Event, the Company and the Rights Agent shall, if the Board of
Directors of the Company so directs, supplement or amend any provision of
this Agreement as the Board of Directors of the Company may deem necessary
or desirable without the approval of any holders of certificates
representing shares of Common Stock of the Company. From and after the
occurrence of a Section 11(a)(ii) Event, the Company and the Rights Agent
shall, if the Board of Directors of the Company so directs, supplement or
amend this Agreement without the approval of any holder of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereof in any manner which the Board of Directors of the
Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than an
Acquiring Person or any Affiliate or Associate of an Acquiring Person);
provided, however, that from and after the occurrence of a Section
11(a)(ii) Event this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are
not then redeemable or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and the benefits to, the holders of Rights (other than an Acquiring Person
or any Affiliate or Associate of an Acquiring Person). Without limiting
the foregoing, the Company may at any time prior to the occurrence of a
Section 11(a)(ii) Event amend this Agreement to lower the threshold set
forth in Section 1(a) to not less than the greater of (i) the sum of .001%
and the largest percentage of the outstanding Common Stock of the Company
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 Stock of the Company for or pursuant to the terms of any such plan)
and (ii) 10%. Upon the delivery of such certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment, and any failure of the
Rights Agent to so execute such supplement or amendment shall not affect
the validity of the actions taken by the Board of Directors of the Company
pursuant to this Section 27. Prior to the occurrence of a Section
11(a)(ii) Event, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock of the
Company. Notwithstanding any other provision hereof, the Rights Agent’s
consent must be obtained regarding any amendment or supplement pursuant to
this Section 27 which alters the Rights Agent’s rights or duties.

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

37

 

or to amend the Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board of Directors in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and
all other parties, and (y) not subject any member of the Board of
Directors to any liability to the holders of the Rights or to any other
person.

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

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

     Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of 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 to be performed entirely within such State. The
courts of the State of Delaware and of the United States of America
located in the State of Delaware (the “Delaware Courts”) shall have
exclusive jurisdiction over any litigation arising out of or relating to
this Agreement and the transactions contemplated hereby, and any Person
commencing or otherwise involved in any such litigation shall waive any
objection to the laying of venue of such litigation in the Delaware Courts
and shall not plead or claim in any Delaware Court that such litigation brought
therein has been brought in an inconvenient forum.

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

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

[Remainder of page intentionally left blank]

38

 

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

	 	 	 
	ATTEST:	 	
Imperial Parking Corporation
	 	 	 
	By: /s/ Todd Croll	 	
By: /s/ Charles Huntzinger

Name: Charles Huntzinger

Title: Chief Executive Officer
	 	 	 
	ATTEST:	 	
National City Bank,

as Rights Agent
	 	 	 
	By: /s/ Matthew R. Hostelley   	 	
By: /s/ Victor W. LaTessa

Name: Victor W. LaTessa

Title: Vice President

 

Exhibit A

VOTE OF DIRECTORS ESTABLISHING

SERIES A JUNIOR PARTICIPATING CUMULATIVE

PREFERRED STOCK

of

IMPERIAL PARKING CORPORATION

     Pursuant to Section 151 of the General Corporation Law of the State of
Delaware:

     VOTED, that pursuant to authority conferred upon and vested in the Board
of Directors by the Amended and Restated Certificate of Incorporation, as
amended (the “Certificate of Incorporation”), of Imperial Parking Corporation
(the “Corporation”), the Board of Directors hereby establishes and designates a
series of Preferred Stock of the Corporation, and hereby fixes and determines
the relative rights and preferences of the shares of such series, in addition
to those set forth in the Certificate of Incorporation, as follows:

     Section 1. Designation and Amount. The shares of such series shall be
designated as “Series A Junior Participating Cumulative Preferred Stock” (the
“Series A Preferred Stock”), and the number of shares initially constituting
such series shall be 15,000; provided, however, that if more than a total of
15,000 shares of Series A Preferred Stock shall be issuable upon the exercise
of Rights (the “Rights”) issued pursuant to the Shareholder Rights Agreement
dated as of May 12, 2003, between the Corporation and National City Bank, as
Rights Agent (the “Rights Agreement”), the Board of Directors of the
Corporation, pursuant to Section 151(g) of the General Corporation Law of the
State of Delaware, may direct by resolution or resolutions that a certificate
be properly executed, acknowledged, filed and recorded, in accordance with the
provisions of Section 103 thereof, providing for the total number of shares of
Series A Preferred Stock authorized to be issued to be increased (to the extent
that the Certificate of Incorporation then permits) to the largest number of
whole shares (rounded up to the nearest whole number) issuable upon exercise of
such Rights.

     Section 2. Dividends and Distributions.

     (A)  (i) Subject to the rights of the holders of any shares of any series
of preferred stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of shares of common
stock and of any other junior stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a “Quarterly Dividend Payment Date”), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provisions for adjustment hereinafter set forth, 10,000 times the aggregate per
share amount of all cash dividends, and 10,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of common stock or a subdivision of the
outstanding

 

 

shares of common stock (by reclassification or otherwise), declared on the
common stock since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. The
multiple of cash and non-cash dividends declared on the common stock to which
holders of the Series A Preferred Stock are entitled, which shall be 10,000
initially but which shall be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the “Dividend Multiple.” In the event
the Corporation shall at any time after May 12, 2003 (the “Rights Declaration
Date”) (i) declare or pay any dividend on common stock payable in shares of
common stock, or (ii) effect a subdivision or combination or consolidation of
the outstanding shares of common stock (by reclassification or otherwise than
by payment of a dividend in shares of common stock) into a greater or lesser
number of shares of common stock, then in each such case the Dividend Multiple
thereafter applicable to the determination of the amount of dividends which
holders of shares of Series A Preferred Stock shall be entitled to receive
shall be the Dividend Multiple applicable immediately prior to such event
multiplied by a fraction, the numerator of which is the number of shares of
common stock outstanding immediately after such event and the denominator of
which is the number of shares of common stock that were outstanding immediately
prior to such event.

     (ii)  Notwithstanding anything else contained in this paragraph (A), the
Corporation shall, out of funds legally available for that purpose, declare a
dividend or distribution on the Series A Preferred Stock as provided in this
paragraph (A) immediately after it declares a dividend or distribution on the
common stock (other than a dividend payable in shares of common stock);
provided that, in the event no dividend or distribution shall have been
declared on the common stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.

     (B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Preferred Stock,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix in accordance with applicable law a record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record
date shall be not more than such number of days prior to the date fixed for the
payment thereof as may be allowed by applicable law.

 

 

     Section 3. Voting Rights. In addition to any other voting rights
required by law, the holders of shares of Series A Preferred Stock shall have
the following voting rights:

     (A)  Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 10,000
votes on all matters submitted to a vote of the stockholders of the
Corporation. The number of votes which a holder of a share of Series A
Preferred Stock is entitled to cast, which shall initially be 10,000 but which
may be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the “Vote Multiple.” In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare or pay any dividend on
common stock payable in shares of common stock, or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of common stock (by
reclassification or otherwise than by payment of a dividend in shares of common
stock) into a greater or lesser number of shares of common stock, then in each
such case the Vote Multiple thereafter applicable to the determination of the
number of votes per share to which holders of shares of Series A Preferred
Stock shall be entitled shall be the Vote Multiple immediately prior to such
event multiplied by a fraction, the numerator of which is the number of shares
of common stock outstanding immediately after such event and the denominator of
which is the number of shares of common stock that were outstanding immediately
prior to such event.

     (B)  Except as otherwise provided herein or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of common stock and the
holders of shares of any other capital stock of this Corporation having general
voting rights, shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.

     (C)  (i) Whenever, at any time or times, dividends payable on any shares of
Series A Preferred Stock shall be in arrears in an amount equal to at least two
full quarter dividends (whether or not declared and whether or not
consecutive), the holders of record of the outstanding shares of Series A
Preferred Stock shall have the exclusive right, voting separately as a single
class, to elect two directors of the Corporation at a special meeting of
stockholders of the Corporation or at the Corporation’s next annual meeting of
stockholders, and at each subsequent annual meeting of stockholders, as
provided below. At elections for such directors, each Series A Preferred Share
shall entitle the holder thereof to 10,000 votes in such elections.

     (ii)  Upon the vesting of such right of the holders of shares of Series A
Preferred Stock, the maximum authorized number of members of the Board of
Directors shall automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of the outstanding shares of
Series A Preferred Stock as hereinafter set forth. A special meeting of the
stockholders of the Corporation then entitled to vote shall be called by the
Chairman and Chief Executive Officer or the Secretary of the Corporation, if
requested in writing by the holders of record of not less than 15% of the
shares of Series A Preferred Stock then outstanding. At such special meeting,
or, if no such special meeting shall have been called, then at the next annual
meeting of stockholders of the Corporation, the holders of the shares of Series
A Preferred Stock shall elect, voting as above provided, two directors of the
Corporation to fill the aforesaid vacancies created by the automatic increase
in the number of members of the Board of Directors. At any and all such
meetings for such election, the holders of a majority of the outstanding shares
of Series A Preferred Stock shall be necessary to constitute a quorum for

 

 

 such election, whether present in person or proxy, and such two directors
shall be elected by the vote of at least a majority of the shares of Series A
Preferred Stock held by such stockholders present or represented at the
meeting. Any director elected by holders of shares of Series A Preferred Stock
pursuant to this Section may be removed at any annual or special meeting, by
vote of a majority of the stockholders voting as a class who elected such
director, with or without cause. In case any vacancy shall occur among the
directors elected by the holders of shares of Series A Preferred Stock pursuant
to this Section, such vacancy may be filled by the remaining director so
elected, or his successor then in office, and the director so elected to fill
such vacancy shall serve until the next meeting of stockholders for the
election of directors. After the holders of shares of Series A Preferred Stock
shall have exercised their right to elect directors in any default period and
during the continuance of such period, the number of directors shall not be
further increased or decreased except by vote of the holders of shares of
Series A Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series A Preferred
Stock.

     (iii)  The right of the holders of shares of Series A Preferred Stock,
voting separately as a class, to elect two members of the Board of Directors of
the Corporation as aforesaid shall continue until, and only until, such time as
all arrears in dividends (whether or not declared) on the Series A Preferred
Stock shall have been paid or declared and set apart for payment, at which time
such right shall terminate, except as herein or by law expressly provided
subject to revesting in the event of each and every subsequent default of the
character above-mentioned. Upon any termination of the right of the holders of
the Series A Preferred Stock as a class to vote for directors as herein
provided, the term of office of all directors then in office elected by the
holders of shares of Series A Preferred Stock pursuant to this Section shall
terminate immediately. Whenever the term of office of the directors elected by
the holders of shares of Series A Preferred Stock pursuant to this Section
shall terminate and the special voting powers vested in the holders of the
Series A Preferred Stock pursuant to this Section shall have expired, the
maximum number of members of this Board of Directors of the Corporation shall
be such number as may be provided for in the By-laws of the Corporation,
irrespective of any increase made pursuant to the provisions of this Section.

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

     Section 4. Certain Restrictions.

     (A)  Whenever dividends or distributions payable on the Series A Preferred
Stock as provided in Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:

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

 

 

     (ii)  declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;

     (iii)  except as permitted in subsection 4(A)(iv) below, redeem, purchase
or otherwise acquire for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or

     (iv)  purchase or otherwise acquire for consideration any shares of Series
A Preferred Stock, or any shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.

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

     Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board of Directors, subject
to the conditions and restrictions on issuance set forth herein.

     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made (x) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (1) $10,000.00 per share
or (2) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 10,000 times the aggregate amount to be
distributed per share to holders of common stock, or (y) to the holders of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all other such
parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at

 

 

 any time after the Rights Declaration Date (i) declare or pay any dividend
on common stock payable in shares of common stock, or (ii) effect a subdivision
or combination or consolidation of the outstanding shares of common stock (by
reclassification or otherwise than by payment of a dividend in shares of common
stock) into a greater or lesser number of shares of common stock, then in each
such case the aggregate amount per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause (x)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of common stock
outstanding immediately after such event and the denominator of which is the
number of shares of common stock that were outstanding immediately prior to
such event.

     Neither the consolidation of nor merging of the Corporation with or into
any other corporation or corporations, nor the sale or other transfer of all or
substantially all of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation within the meaning of
this Section 6.

     Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of common stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 10,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of common stock is changed or exchanged,
plus accrued and unpaid dividends, if any, payable with respect to the Series A
Preferred Stock. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare or pay any dividend on common stock payable
in shares of common stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of common stock (by reclassification or
otherwise than by payment of a dividend in shares of common stock) into a
greater or lesser number of shares of common stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
common stock outstanding immediately after such event and the denominator of
which is the number of shares of common stock that were outstanding immediately
prior to such event.

     Section 8. Redemption. The shares of Series A Preferred Stock shall not
be redeemable; provided, however, that the foregoing shall not limit the
ability of the Corporation to purchase or otherwise deal in such shares to the
extent otherwise permitted hereby and by law.

     Section 9. Ranking. Unless otherwise expressly provided in the
Certificate of Incorporation or a Certificate of Designations relating to any
other series of preferred stock of the Corporation, the Series A Preferred
Stock shall rank junior to every other series of the Corporation’s preferred
stock previously or hereafter authorized, as to the payment of dividends and
the distribution of assets on liquidation, dissolution or winding up and shall
rank senior to the common stock.

 

 

     Section 10. Amendment. The Certificate of Incorporation and this
Certificate of Designations shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of two-thirds or more of the outstanding shares of Series A
Preferred Stock, voting separately as a class.

     Section 11. Fractional Shares. Series A Preferred Stock may be issued in
whole shares or in any fraction of a share that is one ten-thousandth
(1/10,000th) of a share or any integral multiple of such fraction, which shall
entitle the holder, in proportion to such holder’s fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.
In lieu of fractional shares, the Corporation may elect to make a cash payment
as provided in the Rights Agreement for fractions of a share other than one
ten-thousandth (1/10,000th) of a share or any integral multiple thereof.

 

 

Exhibit B

[Form of Right Certificate]

Certificate No. R-________ Rights

     NOT EXERCISABLE AFTER MAY 22, 2013 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF IMPERIAL PARKING
CORPORATION, AT $0.01 PER RIGHT, ON THE TERMS SET FORTH IN THE SHAREHOLDER
RIGHTS AGREEMENT BETWEEN IMPERIAL PARKING CORPORATION AND NATIONAL CITY BANK,
AS RIGHTS AGENT, DATED AS OF MAY 12, 2003 (THE “RIGHTS AGREEMENT”). UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

Right Certificate

IMPERIAL PARKING CORPORATION

     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 Shareholder Rights Agreement dated as of May 12, 2003 (the “Rights
Agreement”) between Imperial Parking Corporation (the “Company”) and National
City Bank, 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 the close of business on May 22, 2013 at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one ten-thousandth of a fully paid, non-assessable share of the
Series A Junior Participating Cumulative Preferred Stock (the “Preferred
Stock”) of the Company, at a purchase price of __________ per one ten-thousandth of
a share (the “Exercise Price”), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and the related Certificate
duly executed. The number of Rights evidenced by this Right Certificate (and
the number of shares which may be purchased upon exercise thereof) set forth
above, and the Exercise Price per share set forth above, are the number and
Exercise Price as of __________________, based on the Preferred Stock as constituted at
such date.

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

 

 

     As provided in the Rights Agreement, the Exercise Price and the number of
shares of Preferred Stock or other securities 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 hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal office of the
Company and the designated office of the Rights Agent and are also available
upon written request to the Company or the Rights Agent.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or 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
Certificates for the number of whole Rights not exercised. If this Right
Certificate shall be exercised in whole or in part pursuant to Section
11(a)(ii) of the Rights Agreement, the holder shall be entitled to receive this
Right Certificate duly marked to indicate that such exercise has occurred as
set forth in the Rights Agreement.

     Under certain circumstances, subject to the provisions of the Rights
Agreement, the Board of Directors of the Company at its option may exchange all
or any part of the Rights evidenced by this Certificate for shares of the
Company’s Common Stock or Preferred Stock at an exchange ratio (subject to
adjustment) specified in the Rights Agreement.

     Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Board of Directors of the Company at
its option at a redemption price of $0.01 per Right (payable in cash, Common
Stock or other consideration deemed appropriate by the Board of Directors).

     The Company is not obligated to issue fractional shares of stock upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one ten-thousandth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts). If the Company elects not to issue such fractional shares, in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.

     No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock, Common Stock or 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
for

2

 

 the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive dividends or 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 an authorized signatory of the Rights
Agent.

     WITNESS the facsimile signature of the proper officers of the Company as a
document under corporate seal.

	 	 	 
	Attested:

By: __________________________

[Secretary or Assistant Secretary]	 	
IMPERIAL PARKING CORPORATION

By: __________________________

Name:
	 	 	
Title: [Chairman, Vice Chairman, President or

             Vice President]

Countersigned:

NATIONAL CITY BANK

By: _________________________

Name:

Title:

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: ________________________________

CERTIFICATE

     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

	 	 	 	 
	 	Dated: _______________, _____	 	_________________________

____________________________

Signature

 

 

NOTICE

     The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.

 

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to

exercise the Right Certificate.)

To IMPERIAL PARKING CORPORATION:

     The undersigned hereby irrevocably elects to exercise ___________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name
of:

Please insert social security or other identifying taxpayer number: _______________________

_____________________________________________________________________________________________________

_____________________________________________________________________________________________________

(Please print name and address)

     If such number of Rights shall not be all the Rights evidenced by this
Right Certificate or if the Rights are being exercised pursuant to Section
11(a)(ii) of the Rights Agreement, a new Right Certificate for the balance of
such Rights shall be registered in the name of and delivered to:

Please insert social security or other identifying taxpayer number: _______________________

_____________________________________________________________________________________________________

_____________________________________________________________________________________________________

(Please print name and address)

	 	 	 	 
	 	Dated: _______________, _____	 	_________________________

____________________________

Signature
	 
	 	Signature Guaranteed: ________________________________

 

 

CERTIFICATE

     The undersigned hereby certifies by checking the appropriate boxes that:

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

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

	 	 	 	 
	 	Dated: _______________, _____	 	_________________________

____________________________

Signature

 

 

NOTICE

     The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.Exhibit 4.1

<PAGE>

                                      NOTE

          Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
(as defined below) or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered owner
hereof, Cede & Co., has an interest herein.

          This Security is a global Security within the meaning of the Indenture
(as defined below) and is registered in the name of the Depositary or a nominee
of the Depositary. This Security is exchangeable for Securities registered in
the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture. Unless and until this
certificate is exchanged in whole or in part for Securities in definitive
registered form in accordance with the provisions of the Indenture applicable to
such exchange, this certificate may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.

<PAGE>

                                   VIACOM INC.

                          4.625% Senior Notes due 2018

                   Unconditionally guaranteed as to payment of
                          principal of and interest by
                            VIACOM INTERNATIONAL INC.
                   (a wholly owned subsidiary of Viacom Inc.)

                                                                    $300,000,000

                                                             CUSIP:  925524 AU 4

          Viacom Inc., a Delaware corporation (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of $300,000,000 on May 15, 2018 at the
office or agency of the Company referred to below, and to pay interest thereon
on November 15, 2003 and semi-annually in arrears thereafter, on May 15 and
November 15 of each year (each, an "Interest Payment Date"), from May 14, 2003,
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, at the rate of 4.625% per annum, until the principal hereof
is paid or duly provided for.

          The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid, in
immediately available funds, to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be May 1 and November 1, as
the case may be, preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and such Defaulted Interest, may be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner, all as more
fully provided in said Indenture.

          Payment of the principal of and interest on this Security will be made
at the Corporate Trust Office of the Trustee or such other office or agency of
the Company as may be designated for such purpose, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided however, that each installment of
interest and principal on this Security may at the Company's option be paid by
check to the payee or in immediately available funds by transfer to an account
maintained by the payee located in the United States.

          Any payment of principal or interest required to be made on a day that
is not a Business Day need not be made on such day, but may be made on the next
succeeding Business Day and no interest shall accrue as a result of such delayed
payment. For purposes of this Security, "Business Day" means any day that is not
a Saturday or Sunday and that, in The City of New York, is not a day on which
banking institutions are generally authorized or obligated by law or executive
order to close.

          General. This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), unlimited in aggregate
principal amount, issued and to be issued in one or more series under an
indenture dated as of June 22, 2001 among the Company, Viacom International
Inc., as guarantor (the "Guarantor") and The Bank of New York, as trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture) (the "Indenture"), to which Indenture and the respective

<PAGE>

resolutions of the Company's board of directors or resolutions pursuant to the
authority of the board of directors, an Officer's Certificate and/or indentures
supplemental thereto, as the case may be, reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of a series designated as
4.625% Senior Notes due 2018, initially limited in aggregate principal amount to
$300,000,000. This Security is a global Security representing $300,000,000 of
the Securities.

          Authorized Denominations. The Securities of this series are issuable
only in registered form without coupons in denominations of not less than $1,000
and any integral multiple thereof.

          Book-Entry Security. This Security is a "book-entry" Security and is
being registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"). Subject to the terms of the Indenture, this Security will be
held by DTC or its nominee, and beneficial interests will be held by beneficial
owners through the book-entry facilities of DTC or its nominee in denominations
of not less than $1,000 and integral multiples thereof. As long as this Security
is registered in the name of DTC or its nominee, the Trustee will make payments
of principal of and interest on this Security by wire transfer of immediately
available funds to DTC or its nominee. Notwithstanding the above, upon the
maturity of this Security, the principal, together with accrued interest
thereon, will be paid in immediately available funds upon surrender of this
Security at the Corporate Trust Office of the Trustee or such other offices or
agencies appointed by the Trustee for that purpose or such other locations
provided in the Indenture.

          Event of Default. If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.

          Sinking Fund. The Securities of this series are not subject to any
sinking fund.

          Optional Redemption. The Securities of this series will be redeemable
at any time, at the option of the Company, in whole or from time to time in
part, upon not less than 30 nor more than 60 days' prior notice, on any date
prior to their maturity at a Redemption Price equal to the sum of 100% of the
principal amount thereof and the Make-Whole Amount and any accrued and unpaid
interest, to the Redemption Date (subject to the rights of holders of record on
the relevant Regular Record Date that is on or prior to the Redemption Date to
receive interest due on the relevant Interest Payment Date).

          The term "Make-Whole Amount" means, the excess, if any, of (i) the
aggregate present value as of the Redemption Date of principal being redeemed
and the amount of interest (exclusive of interest accrued to the Redemption
Date) that would have been payable if redemption had not been made, determined
by discounting, on a semiannual basis, the remaining principal and interest at
the Reinvestment Rate (determined on the third Business Day preceding the date
notice of redemption is given) from the dates on which the principal and
interest would have been payable if the redemption had not been made, to the
Redemption Date, over (ii) the aggregate principal amount of the Securities
being redeemed.

          The term "Reinvestment Rate" means 0.20% plus the arithmetic mean of
the yields under the heading "Week Ending" published in the most recent Federal
Reserve Statistical Release H.15 (or any comparable successor publication) under
the caption "Treasury Constant Maturities" for the maturity (rounded to the
nearest month) corresponding to the remaining life to maturity, as of the
maturity of the principal being redeemed or paid. If no maturity exactly
corresponds to the maturity, yields for the two published maturities most
closely corresponding to the maturity will be so calculated and the Reinvestment
Rate will be interpolated or extrapolated on a straight-line basis, rounding to
the nearest month. The most recent Federal Reserve Statistical Release H.15
published prior to the date of determination of the Make-Whole Amount will be
used for purposes of calculating the Reinvestment

                                       2

<PAGE>

Rate.

          The Make-Whole Amount will be calculated by an independent investment
banking institution of national standing appointed by the Company. If the
Company fails to make the appointment at least 45 business days prior to the
date of redemption, or if the institution is unwilling or unable to make the
calculation, the calculation will be made by an independent investment banking
institution of national standing appointed by the Trustee.

          If the Reinvestment Rate is not available as described above, the
Reinvestment Rate will be calculated by interpolation or extrapolation of
comparable rates selected by the independent investment banking institution.

          In the case of any partial redemption, selection of the Securities of
this series for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities of this series are listed or, if the Securities of this series are
not listed on a national securities exchange, by lot or by such other method as
the Trustee in its sole discretion shall deem to be fair and appropriate;
provided that no Securities of this series of $1,000 in principal amount or less
shall be redeemed in part. If any Security is to be redeemed in part only, the
notice of redemption relating to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security.

          Defeasance and Covenant Defeasance. The Indenture contains provisions
for defeasance at any time of (a) the entire indebtedness of the Company on this
Security and (b) certain restrictive covenants and the related Defaults and
Events of Default, upon compliance by the Company with certain conditions set
forth therein, which provisions apply to this Security.

          Modification and Waivers; Obligations of the Company Absolute. The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Securities of each series. Such amendment may
be effected under the Indenture at any time by the Company, the Guarantor and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
thereby. The Indenture also contains provisions permitting the Holders of not
less than specified percentages in aggregate principal amount of the Outstanding
Securities of each series, on behalf of the Holders of all the Securities of
such series, to waive compliance by the Company and the Guarantor with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver shall be conclusive and binding
upon the Holders of this Security and upon all future Holders of this Security
and of any Security issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security.

          As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series shall
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding Securities
of this series a direction inconsistent with such request and shall have failed
to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of or interest on this Security on or
after the respective due dates expressed herein.

                                       3
<PAGE>

          No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Security at the times, place, and rate, and in the coin or currency, herein
prescribed.

          Registration of Transfer or Exchange. As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Security
will be registered on the Security Register of the Company upon surrender of
this Security for registration of transfer at the office or agency of the
Company maintained for such purpose in New York, New York or at such other
office or agency as the Company may designate, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

          As provided in the Indenture and subject to certain limitations
therein set forth, the Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of a different
authorized denomination, as requested by the Holder surrendering the same.

          No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

          Prior to the time of due presentment of this Security for registration
of transfer, the Company, the Guarantor, the Trustee and any agent of the
Company, the Guarantor or the Trustee may treat the Person in whose name this
Security is registered as the absolute owner hereof for all purposes, whether or
not this Security be overdue, and none of the Company, the Guarantor, the
Trustee or any agent of the Company, the Guarantor or the Trustee shall be
affected by notice to the contrary.

          This Security is a global Security. If at any time, a Depositary is at
any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by the Company within 90 days, then the Company will
execute and the Trustee will authenticate and deliver Securities in definitive
registered form, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of this Security in exchange for this
Security. Such Securities in definitive registered form shall be registered in
such names and issued in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Securities to the
Persons in whose names such Securities are so registered.

          Defined Terms. All terms used in this Security that are defined in the
Indenture and are not otherwise defined herein shall have the meanings assigned
to them in the Indenture.

          Governing Law. This Security shall be governed by, and construed in
accordance with, the laws of the State of New York.

          Unless the certificate of authentication hereon has been duly executed
by or on behalf of The Bank of New York, as Trustee under the Indenture, or its
successor thereunder, by the manual signature of one of its authorized officers,
this Security shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.

                                       4

<PAGE>

          IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated: May 14, 2003                      VIACOM INC.,
                                         as Issuer

                                         By:  /s/ Richard J. Bressler
                                              ________________________

Attest:

/s/ George Nelson
___________________________
Authorized Signature

                                       5
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Securities of a series referred to in the
within-mentioned Indenture.

                                        THE BANK OF NEW YORK,
                                        as Trustee

                                        By:  /s/ Julie Salovitch-Miller
                                             _________________________
                                               Authorized Signatory
Dated: May 14, 2003

<PAGE>

                     GUARANTEE OF VIACOM INTERNATIONAL INC.

          FOR VALUE RECEIVED, VIACOM INTERNATIONAL INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the "Guarantor", which term includes any successor corporation under the
Indenture referred to in the Security upon which this Guarantee is endorsed),
hereby fully and unconditionally guarantees to the holder of the Security upon
which this Guarantee is endorsed the due and punctual payment of the principal
of and interest (including, in case of default, interest on principal and, to
the extent permitted by applicable law, on overdue interest), if any, on this
Security, when and as the same shall become due and payable, whether at Stated
Maturity, upon redemption, upon declaration of acceleration or otherwise,
according to the terms thereof and of the Indenture referred to therein. In case
of the failure of Viacom Inc. or any successor thereto (herein called the
"Company") punctually to pay any such principal or interest, the Guarantor
hereby agrees to cause any such payment to be made punctually when and as the
same shall become due and payable, whether at Stated Maturity, upon redemption,
upon declaration of acceleration or otherwise, as if such payment were made by
the Company.

          The Guarantor hereby agrees that its obligations hereunder shall be as
if it were principal debtor and not merely surety, and shall be absolute and
unconditional, irrespective of the identity of the Company, the validity,
regularity or enforceability of this Security or said Indenture, the absence of
any action to enforce the same, any waiver or consent by the Holder of this
Security with respect to any provisions thereof, the recovery of any judgment
against the Company or any action to enforce the same, or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in this Security and in this Guarantee.

          The Guarantor shall be subrogated to all rights of the Holder of this
Security against the Company in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Guarantee or the Indenture referred to in
this Security; provided, however, that the Guarantor shall not be entitled to
enforce or to receive any payment arising out of, or based upon, such right of
subrogation until the principal of and interest on all Securities of the series
of which the Security upon which this Guarantee is endorsed constitutes a part
shall have been indefeasibly paid in full.

          The Indenture provides that in the event that this Guarantee would
constitute or result in a fraudulent transfer or conveyance for purposes of, or
result in a violation of, any United States federal, or applicable United States
state, fraudulent transfer or conveyance or similar law, then the liability of
the Guarantor hereunder shall be reduced to the extent necessary to eliminate
such fraudulent transfer or conveyance or violation under the applicable
fraudulent transfer or conveyance or similar law.

          If the Trustee or the Holder of the Security upon which this Guarantee
is endorsed is required by any court or otherwise to return to the Company or
the Guarantor, or any custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official acting in relation to the Company or the
Guarantor, any amount paid to the Trustee or such Holder in respect of the
Security upon which this Guarantee is endorsed, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. The
Guarantor further agrees, to the fullest extent that it may lawfully do so,
that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Five of the Indenture for the purposes
of this Guarantee, notwithstanding any stay, injunction or other prohibition
extant under any applicable bankruptcy law preventing such acceleration in
respect of the obligations guaranteed hereby.

<PAGE>

          All terms used in this Guarantee that are defined in the Indenture and
are not otherwise defined herein shall have the meanings assigned to them in the
Indenture.

          This Guarantee shall be governed by, and construed in accordance with,
the laws of the State of New York.

          Subject to the next following paragraph, the Guarantor hereby
certifies and warrants that all acts, conditions and things required to be done
and performed and to have happened precedent to the creation and issuance of
this Guarantee and to constitute the same valid obligation of the Guarantor have
been done and performed and have happened in due compliance with all applicable
laws.

          This Guarantee shall not be valid or become obligatory for any purpose
until the certificate of authentication on the Security upon which this
Guarantee is endorsed has been signed by the Trustee under the Indenture
referred to in this Security.

                                       2

<PAGE>

          IN WITNESS WHEREOF, the Guarantor has caused this instrument to be
duly executed.

Dated: May 14, 2003                        VIACOM INTERNATIONAL INC.,
                                           as Guarantor

                                           By:  /s/ Richard J. Bressler
                                                __________________________

Attest:

/s/ George Nelson
_________________________
Authorized Signature

                                       3

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