Document:

Exhibit
4.1

 

MAC-GRAY CORPORATION

 

AND

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY, LLC

 

AS RIGHTS AGENT

 

SHAREHOLDER RIGHTS
AGREEMENT

 

DATED AS OF JUNE 8,
2009

 

 

Table of Contents

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  Section 1. Certain
  Definitions

  	
  2

  
	
   

  	
   

  
	
  Section 2. Appointment of
  Rights Agent

  	
  8

  
	
   

  	
   

  
	
  Section 3. Issue of Right
  Certificates

  	
  8

  
	
   

  	
   

  
	
  Section 4. Form of
  Right Certificates

  	
  10

  
	
   

  	
   

  
	
  Section 5. Countersignature
  and Registration

  	
  11

  
	
   

  	
   

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

  	
  12

  
	
   

  	
   

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

  	
  13

  
	
   

  	
   

  
	
  Section 8. Cancellation
  and Destruction of Right Certificates

  	
  15

  
	
   

  	
   

  
	
  Section 9. Reservation and
  Availability of Preferred Stock

  	
  15

  
	
   

  	
   

  
	
  Section 10. Preferred
  Stock Record Date

  	
  16

  
	
   

  	
   

  
	
  Section 11. Adjustment of
  Exercise Price, Number and Kind of Shares or Number of Rights

  	
  17

  
	
   

  	
   

  
	
  Section 12. Certificate of
  Adjusted Exercise Price or Number of Shares

  	
  25

  
	
   

  	
   

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

  	
  25

  
	
   

  	
   

  
	
  Section 14. Fractional
  Rights and Fractional Shares

  	
  28

  
	
   

  	
   

  
	
  Section 15. Rights of
  Action

  	
  28

  
	
   

  	
   

  
	
  Section 16. Agreement of
  Right Holders

  	
  29

  
	
   

  	
   

  
	
  Section 17. Right
  Certificate Holder Not Deemed a Stockholder

  	
  29

  
	
   

  	
   

  
	
  Section 18. Concerning the
  Rights Agent

  	
  30

  
	
   

  	
   

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

  	
  30

  
	
   

  	
   

  
	
  Section 20. Duties of
  Rights Agent

  	
  31

  
	
   

  	
   

  
	
  Section 21. Change of
  Rights Agent

  	
  33

  
	
   

  	
   

  
	
  Section 22. Issuance of
  New Right Certificates

  	
  34

  

 

i

 

	
  Section 23. Redemption

  	
  34

  
	
   

  	
   

  
	
  Section 24. Exchange

  	
  35

  
	
   

  	
   

  
	
  Section 25. Notice of
  Certain Events

  	
  37

  
	
   

  	
   

  
	
  Section 26. Notices

  	
  38

  
	
   

  	
   

  
	
  Section 27. Supplements
  and Amendments

  	
  38

  
	
   

  	
   

  
	
  Section 28. Successors

  	
  39

  
	
   

  	
   

  
	
  Section 29. Determinations
  and Actions by the Board of Directors

  	
  39

  
	
   

  	
   

  
	
  Section 30. Benefits of
  this Agreement

  	
  39

  
	
   

  	
   

  
	
  Section 31. Severability

  	
  40

  
	
   

  	
   

  
	
  Section 32. Governing Law

  	
  40

  
	
   

  	
   

  
	
  Section 33. Counterparts

  	
  40

  
	
   

  	
   

  
	
  Section 34. Descriptive Headings

  	
  40

  
	
   

  	
   

  
	
  Section 35.
  Force Majeure

  	
  40

  

 

Exhibit A —   Amended
and Restated 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 June 8,  2009, between
Mac-Gray Corporation, a Delaware corporation (the “Company”), and
American Stock Transfer & Trust Company LLC, a New York Limited
Liability 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;

 

WHEREAS, on June 15, 1999, the Board of Directors of the Company
authorized the Shareholder Rights Agreement dated as of June 15, 1999
between the Company and American Stock Transfer & Trust Company LLC
(as successor rights agent to State Street Bank and Trust Company), as Rights
Agent (the “1999 Rights Agreement”), declared a dividend distribution of
one Right (as such term is defined in the 1999 Rights Agreement) for each outstanding
share of Common Stock, par value $0.01 per share, of the Company (the “Common
Stock”) outstanding as of the close of business on June 17, 1999 (the “1999
Record Date”), and authorized the issuance of one Right (as such term is
defined in the 1999 Rights Agreement) for each share of Common Stock of the
Company issued between the 1999 Record Date and the earlier of the Distribution
Date or the Expiration Date (as such terms are defined in the 1999 Rights
Agreement), 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 upon the terms and subject to the conditions set
forth in the 1999 Rights Agreement;

 

WHEREAS, on June 8, 2009, the Board of Directors of the Company
determined it desirable and in the best interests of the Company and its
shareholders for the Company to extend the benefits afforded by the 1999 Rights
Agreement and to implement such extension by terminating the 1999 Rights
Agreement and executing this Agreement;

 

WHEREAS, on June 8, 2009, the Board of Directors of the Company
authorized the adoption of this Agreement and declared a dividend distribution
of one Right (as such term is hereinafter defined) for each
outstanding share of Common Stock of the Company outstanding as of June 15, 2009
(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(kk), 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

 

2

 

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);

 

(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) (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities), including, for the avoidance of
doubt, through agreements to enter into agreements that permit a Person to
purchase such securities, 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

 

3

 

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) (other
than customary arrangements with and between underwriters and selling group
members with respect to a bona fide public offering of securities); or

 

(iii)          which are Beneficially Owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person or any of such Person’s Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except 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, (2) no
Person who is a director or an officer of the 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, and (3) no Family Stockholder or any
of its Affiliates or Associates shall be deemed to Beneficially Own any shares
of Common Stock of the Company Beneficially Owned by any of the other Family
Stockholders or any of their Affiliates or Associates as a result, in and of
itself, of such Family Stockholder’s execution of, or being a party to, the
Stockholders’ Agreement, any of such Family Stockholder’s rights and
obligations thereunder and/or the exercise of any such rights or the
performance of any such obligations.

 

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 Commonwealth of Massachusetts are authorized or obligated
by law or executive order to close.

 

4

 

(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., Boston,
Massachusetts time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 p.m., Boston, Massachusetts
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 set forth in Section 3(a) hereof.

 

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

 

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

 

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

 

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

 

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

 

5

 

(r)            “Family
Stockholders” shall mean any of The Evelyn C. MacDonald Family Trust for
the benefit of Stewart G. MacDonald, Jr. (the “ECM/SGM Trust”); The Evelyn
C. MacDonald Family Trust for the benefit of Sandra E. MacDonald (the “ECM/SEM
Trust”); The Evelyn C. MacDonald Family Trust for the benefit of Daniel W.
MacDonald (the “ECM/DWM Trust”); Stewart G. MacDonald, Jr.; Sandra E. MacDonald;
Daniel W. MacDonald; The Stewart G. MacDonald, Jr. 1984 Trust; The Daniel
W. MacDonald Revocable Living Trust (the “DWM Trust”); the New Century Trust;
Richard G. MacDonald 2004 GST Non-Exempt Irrevocable Trust (the “RGM Non-Exempt
Trust”); The Richard G. MacDonald 2004 GST Exempt Irrevocable Trust (the “RGM
Exempt Trust”); The Whitney E. MacDonald GST Trust-1997 (the “WEM/GST Trust”);
The Jonathan S. MacDonald GST Trust-1997 (the “JSM/GST Trust”); The Robert C.
MacDonald GST Trust-1997 (the “RCM/GST Trust”); The Whitney E. MacDonald Gift
Trust (the “WEM Gift Trust”); The Jonathan S. MacDonald Gift Trust (the “JSM
Gift Trust”); The Robert C. MacDonald Gift Trust (the “RCM Gift Trust”);
Cynthia V. Doggett; Peter C. Bennett, in his capacity as a trustee of the
ECM/SGM Trust, the ECM/SEM Trust and the ECM/DWM Trust; R. Robert Woodburn, Jr.,
in his capacity as a trustee of the ECM/SGM Trust, the ECM/SEM Trust and the
ECM/DWM Trust; Richard G. MacDonald, in his capacity as a trustee of the
WEM/GST Trust, the JSM/GST Trust, the RCM/GST Trust, the WEM Gift Trust, the
JSM Gift Trust and the RCM Gift Trust; Gilbert M. Roddy, Jr., in his
capacity as a trustee of the New Century Trust; Edward D. Tarlow, in his
capacity as trustee of the RGM Non-Exempt Trust and the RGM Exempt Trust; The
MacDonald Annuity Trust; the Cynthia Doggett MacDonald custodial accounts for
the benefit of Stewart Gray MacDonald, III, Tucker William MacDonald and
Dylan Crowdis MacDonald; and any other party to the Stockholders’ Agreement from
time to time.

 

(s)           “Grandfathered
Percentage” shall mean, with respect to any 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 3.0%; 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 3.0%.

 

(t)            “Grandfathered
Person” shall mean any one or more of the following Persons: (A) Stewart
G. MacDonald, Jr. and his Affiliates and Associates and (B) 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.

 

6

 

(u)           “Grandfathered
Time” shall mean 10:35 a.m., Boston, Massachusetts time, on June 9,
2009.

 

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

 

(w)          “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 that term is used for purposes of
Section 13(d)(3) of the Exchange Act.

 

(x)            “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 Amended and Restated Certificate of
Designations attached hereto as Exhibit A.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

(kk)         “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.

 

(ll)           “Stockholders’
Agreement” shall mean the Stockholders’ Agreement, dated as of June 26,
1997, by and among the Company and the Family Stockholders, as amended.

 

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

 

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

 

(oo)         “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 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

 

8

 

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 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 Expiration Date, 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 Mac-Gray Corporation and American Stock
Transfer & Trust Company, LLC (or any successor thereto), as Rights
Agent, dated as of June 8, 2009 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 Mac-Gray 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

 

9

 

certificates and will no
longer be evidenced by this certificate. 
Mac-Gray Corporation may redeem the Rights at a redemption price of
$0.001 per Right, subject to adjustment, under the terms of the Rights
Agreement.  Mac-Gray 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.

 

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 earlier of
the Distribution Date or the Expiration Date, 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.

 

10

 

(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 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 or Vice Chairman of the Board of
Directors, its President or any Vice President and by its Treasurer, any
Assistant Treasurer, 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
countersigned, either manually or by facsimile signature, 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 

 

11

 

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.

 

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,
Common Stock of the Company, cash, property, debt securities, Preferred Stock
or any combination thereof, including any such securities, cash or property
following a Section 13 Event) 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 

 

12

 

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) the time at which
the Rights are redeemed as provided in Section 23 hereof (the “Redemption
Date”) or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof (the “Exchange Date”) (the earliest
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 Forty-Five United States Dollars (U.S. $45.00), 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) and Section 14(b) hereof,
thereupon promptly (i) requisition from the Depositary Agent (or make
available, if the Rights Agent is the 

 

13

 

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 of each
certificate or depositary receipts 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) 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).

 

(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 

 

14

 

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.

 

(g)                                 A committee of the Board of Directors of
the Company shall periodically review this Agreement in order to consider
whether the maintenance of this Agreement continues to be in the best interests
of the Company and its stockholders.  The
committee shall consist of independent directors of the Company and shall
conduct such review when, as and in such manner as the committee deems
appropriate, after giving due regard to all relevant circumstances; provided,
however, that the committee shall take such action at least once every three
years.  Following each such review, the
committee will report its conclusions to the Board of Directors of the Company
as to whether this Agreement should be maintained or terminated.  The committee is authorized to retain such
legal counsel, financial advisors and other advisors as the committee deems
appropriate in order to assist the committee in carrying out its foregoing
responsibilities under this Agreement.

 

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.

 

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 such system as the Common Stock is
then quoted.

 

15

 

(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.

 

(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
and/or other property 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 or the issuance or delivery of other securities
or property to a person other than, or in respect of the issuance or delivery
of securities or other property 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 or other property 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 or other securities
(including any fraction of a share of Preferred Stock or such other securities)
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 or such other
securities represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate

 

16

 

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 transfer books
of the Company for the Preferred Stock or such other securities, as applicable,
are closed, such person shall be deemed to have become the record holder of
such shares of Preferred Stock or such other securities on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books of the Company are open; and further provided, however,
that if delivery of shares of Preferred Stock or such other securities is
delayed pursuant to Section 9(c), such Person shall be deemed to have
become the record holder of such shares of Preferred Stock or such other
securities only when such shares or such other securities 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 stockholder 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, change or alter any shares of its
capital stock in a reclassification or recapitalization of the Preferred Stock
(including any such reclassification or recapitalization in connection with a
consolidation or merger in which the Company is the continuing or surviving
Person), 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 the effective time of such subdivision, combination, reclassification or
recapitalization, and the number and kind of shares of capital stock issuable
on such date or at such time, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
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, reclassification or recapitalization; 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 

 

17

 

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, (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 after receiving 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

 

18

 

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 stockholder approval for the
authorization of such 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 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

 

19

 

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 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 

 

20

 

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
the OTC Bulletin Board, the Pink Sheets 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 in
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 Multiple (as both of such
terms are defined in the Amended and Restated 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 in
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.

 

21

 

(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 1.0% 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 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

 

22

 

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 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

 

23

 

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 stockholders.

 

(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 stockholders 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 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.

 

24

 

(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 neither such exercise nor any exchange of Rights
pursuant to Section 24 shall 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, 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 (without taking into account any adjustment previously made pursuant to Section 11(a)(ii) or
11(a)(iii) hereof), and dividing that product by (2) 50% of the

 

25

 

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));

 

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 

 

26

 

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 stockholders’ 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 listing on an
automated quotation system or such other system on which the Common Stock of
the Company is then traded; and

 

(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

 

27

 

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.

 

(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

 

28

 

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, 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 Stockholder.  No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of the 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 stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions

 

29

 

affecting
stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions hereof.

 

Section 18.  Concerning the Rights Agent.

 

(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 attorney
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.

 

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 stockholder 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

 

30

 

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 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

 

31

 

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 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 stockholder,
director, officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not 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.

 

32

 

(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, provided, however, that in
the event the transfer agency relationship in effect between the Company and
the Rights Agent with respect to the Common Stock of the Company terminates,
the Rights Agent will be deemed to have resigned automatically on the effective
date of such termination.  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 stockholders 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.  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, the State of Delaware,
the State of New York or the Commonwealth of Massachusetts (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 State of Delaware, the State of New
York or the Commonwealth of Massachusetts), 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

 

33

 

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 stockholders 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 $0.001 per Right, appropriately adjusted to
reflect any stock dividend declared or paid, any subdivision or 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

 

34

 

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.

 

(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 of a
share of Common Stock of the Company 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

 

35

 

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 pursuant to Section 11(a)(ii) 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; provided,
however, that the holder of a Right exchanged pursuant to this Section 24
shall continue to have the right to purchase securities or other property of
the Principal Party following a Section 13 Event that has occurred or may
thereafter occur.  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.

 

(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

 

36

 

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 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

 

37

 

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:

 

Mac-Gray Corporation

404 Wyman Street, Suite 400

Waltham, MA 02451

Facsimile No.:  (781) 487-7601

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:

 

American Stock Transfer &
Trust Company, LLC

59 Maiden Lane

New York, NY 10038

Facsimile No. (718)
236-4588

Attention: Executive Vice President

 

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.

 

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

 

38

 

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 0.001% 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) 10.0%.  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 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).

 

39

 

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.  Notwithstanding the foregoing,
the Company and the Rights Agent may mutually agree to a jurisdiction other
than Delaware for any litigation directly between the Company and the Rights
Agent arising out of or relating to this Agreement.

 

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.

 

Section 35. 
Force Majeure.  Notwithstanding
anything to the contrary contained herein, neither the Company nor the Rights
Agent shall be liable for any delay or failure in performance resulting
directly from any act or event beyond its reasonable control and without the
fault or gross negligence of the delayed or non-performing party that causes a
sudden, substantial or widespread disruption in business activities, including,
without limitation, fire, flood, natural disaster or act of God, strike or
other industrial disturbance, war (declared or undeclared), embargo, blockade,
legal restriction, riot, insurrection, act of terrorism, disruption in
transportation, communications, electric power or other utilities, or other
vital infrastructure or any means of disrupting or damaging internet or other
computer networks or facilities (each, a “Force Majeure Condition”); provided,
that such delayed or non-performing party shall use reasonable commercial
efforts to resume performance as soon as practicable.  If any Force Majeure Condition occurs, the
party delayed or unable to perform shall give prompt written

 

40

 

notice
to the other party, stating the nature of the Force Majeure Condition and any
action being taken to avoid or minimize its effect.

 

[Remainder of page intentionally
left blank]

 

41

 

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:

  	
   

  	
  MAC-GRAY CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Linda A. Serafini

  	
   

  	
  By:

  	
  /s/ Michael J. Shea

  
	
   

  	
   

  	
  Name:

  	
  Michael J. Shea

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice
  President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  AMERICAN STOCK
  TRANSFER & TRUST COMPANY, LLC,

  
	
   

  	
   

  	
  as Rights Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Anthony S. Foti

  	
   

  	
  By:

  	
  /s/ Joseph F. Wolf

  
	
   

  	
   

  	
  Name: 

  	
  Joseph F. Wolf

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

Exhibit A

 

AMENDED AND RESTATED

 

CERTIFICATE OF DESIGNATIONS

 

of

 

SERIES A JUNIOR PARTICIPATING CUMULATIVE PREFERRED
STOCK

 

of

 

MAC-GRAY CORPORATION

 

MAC-GRAY CORPORATION, a corporation organized and
existing under the General Corporation Law of the State of Delaware (the “Corporation”),
in accordance with the provisions of Section 103 thereof,

 

DOES
HEREBY CERTIFY:

 

Pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation (the “Certificate
of Incorporation”), and Section 151(g) of the General Corporation
Law of the State of Delaware, on June 8, 2009, the Board of Directors
adopted the following resolution determining it desirable and in the best
interests of the Corporation and its stockholders for the Corporation to create
a series of 12,000 shares of preferred stock designated as “Series A
Junior Participating Cumulative Preferred Stock”:

 

RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation, in accordance with the provisions of
the Certificate of Incorporation, a series of preferred stock, par value $0.01
per share, of the Corporation be and hereby is created, and that the
designation and number of shares thereof and the voting and other powers, preferences
and relative, participating, optional or other rights of the shares of such
series and the qualifications, limitations and restrictions thereof are as
follows:

 

Series A
Junior Participating Cumulative Preferred Stock

 

Section 1.               Designation
and Amount.  There shall be a series
of preferred stock that 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 12,000; provided, however, that if more than a total of 12,000
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 June 8, 2009, between the Corporation and American Stock
Transfer & Trust Company, LLC, 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 class or 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 class or
series of stock ranking junior to the Series A Preferred 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 June 15, 2009 (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.

 

2

 

(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 six 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 

 

3

 

the Corporation or at the Corporation’s next annual
meeting of stockholders, and at each subsequent annual meeting of stockholders,
as provided below.

 

(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 5% 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, the holders of
Series A Preferred Stock being entitled to cast a number of votes per
share of Series A Preferred Stock as is specified in paragraph (A) of
this Section 3.  Each such
additional director shall not be a member of Class I, Class II or Class III
of the Board of Directors of the Corporation, but shall serve until the next
annual meeting of stockholders for the election of directors, or until his
successor shall be elected and shall qualify, or until his right to hold such
office terminates pursuant to the provisions of this Section 3(C).  Any director elected by holders of shares of Series A
Preferred Stock pursuant to this Section 3(C) 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 3(C), 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.

 

(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 3(C) 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 3(C) shall terminate and the
special voting powers vested in the holders of the Series A Preferred
Stock pursuant to this Section 3(C) 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, 

 

4

 

irrespective of any increase made pursuant to the
provisions of this Section 3(C). 
The voting rights granted by this Section 3(C) shall be in
addition to any other voting rights granted to the holders of the Series A
Preferred Stock in this Section 3.

 

(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.

 

5

 

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 promptly after the acquisition thereof.  All such shares shall upon their retirement
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, dissolution or winding up of the Corporation (voluntary or
otherwise), 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 (the “Series A Liquidation Preference”) 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 of all cash or other property to be distributed per
share to holders of common stock upon such liquidation, dissolution or winding
up of the Corporation, 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.

 

In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Series A Preferred
Stock in respect thereof, then the assets available for such distribution shall
be distributed ratably to the holders of the Series A Preferred Stock and
the holders of such parity shares in proportion to their respective liquidation
preferences.

 

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 outstanding shares of common stock are exchanged for or changed into
other stock or securities, cash and/or any other 

 

6

 

property, then in any such case each share 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.  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.

 

Section 11.  Amendment.  At any time any shares of Series A
Preferred Stock are outstanding, the Certificate of Incorporation and the
foregoing Sections 1 through 10, inclusive, and this Section 11 of the
Certificate of Designations shall not be amended in any manner, including by
merger, consolidation or otherwise, 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.

 

7

 

Exhibit B

 

FORM OF
RIGHT CERTIFICATE

 

Certificate
No. R-            
Rights

 

NOT EXERCISABLE AFTER JUNE 15, 2019 OR EARLIER IF NOTICE OF REDEMPTION
IS GIVEN.  THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF MAC-GRAY CORPORATION, AT $0.001 PER RIGHT, ON THE
TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT BETWEEN MAC-GRAY
CORPORATION AND AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, AS
RIGHTS AGENT, DATED AS OF JUNE 8, 2009 (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

 

MAC-GRAY
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 June 8,
2009 (the “Rights Agreement”) between Mac-Gray Corporation (the “Company”)
and American Stock Transfer & Trust Company, LLC, 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 June 15, 2019 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 

 

8

 

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 $0.001 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 

 

9

 

other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the 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:

  	
   

  	
  MAC-GRAY CORPORATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  [Secretary
  or Assistant Secretary]

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Countersigned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AMERICAN STOCK
  TRANSFER & TRUST COMPANY, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
								

 

10

 

[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
MAC-GRAY 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

 

Execution Version

 

To:          UPC Broadband Holding B.V. (the Company)

Boeing Avenue 53

1119 PE Schiphol Rijk

Amsterdam

The Netherlands

 

For the attention of:  Jonathan Pearson

 

9 June 2009

 

Dear Sirs,

 

€1,072,000,000 senior secured credit facility
(the Agreement) dated 16th January, 2004 between, among others, the Company and
Toronto Dominion (Texas) LLC as facility agent, as amended from time to time

 

1.             Background

 

(a)           This letter is supplemental to and amends
the Agreement.

 

(b)           Pursuant to clause 25 (Amendments and
waivers) of the Agreement, the Majority Lenders have consented to the
amendments to the Agreement and the waiver contemplated by this letter.  Accordingly, we are authorised to execute
this letter on behalf of the Finance Parties.

 

2.             Construction

 

(a)           Capitalised terms defined in the Agreement
have the same meaning when used in this letter.

 

(b)           The provisions of clause 1.2 (Construction)
of the Agreement apply to this letter as though they were set out in full in
this letter except that references to the Agreement are to be construed as
references to this letter.

 

(c)           Amendment Effective Date has the meaning given to it
in paragraph 4 (Amendment Effective Date).

 

3.             Amendments

 

(a)           We are authorised to confirm on behalf of
the Majority Lenders that, with effect from the Amendment Effective Date the
Agreement will be amended as set out in this paragraph 3 (Amendments).

 

(b)           The definition of “EBITDA” in Clause 17.1
(Financial definitions) of the Agreement will be amended so that it reads as
follows:

 

“EBITDA means, in relation to any Ratio Period, operating income
(expense) plus depreciation, amortisation, non cash stock compensation
expenses, other non cash impairment charges, one off reorganisation or
restructuring charges, direct acquisition costs, losses (gains) on the sale of
operating assets and accrued Management Fees (whether or not paid) for such Ratio
Period as reflected in the consolidated statement of operations identified as
such in the consolidated financial statements of the Borrower Group, to the extent attributed to
the 

 

1

 

Distribution Business of the Borrower Group
and all as determined in accordance with GAAP and (in the case of the Borrower
Group or any part of the Borrower Group) as shown in the relevant financial
statements prepared and delivered to the Facility Agent pursuant to Clause 16.2(a) or
(b) (Financial information) (as the case may be).

 

For the
avoidance of doubt, as a result of US GAAP purchase accounting adjustments,
certain deferred revenues on the balance sheet of Cablecom GmbH were required
to be written off. The Borrower shall, when calculating EBITDA, have
the option to include revenues that would have been recognised had
this US GAAP purchase accounting not taken place.”; and

 

(b)           the definition of “Net Income” in Clause
17.1 (Financial definitions) of the Agreement will be deleted.

 

4.             Amendment Effective Date

 

This letter shall take effect on the date
(the Amendment Effective Date) on which the
Facility Agent notifies the Company and the Lenders that it has received in
form and substance to it (acting reasonably):

 

(a)           evidence of the due authorisation and
execution of this letter by each Obligor;

 

(b)           legal opinions in respect of Dutch, English
and New York law from Allen & Overy LLP, English, Dutch and New York
legal advisers to the Facility Agent, addressed to the Finance Parties.

 

5.             Reservation of rights

 

Each Finance Party reserves any other right
or remedy it may have now or subsequently. 
This letter does not constitute a waiver of any right or remedy.

 

6.             Miscellaneous

 

(a)           This letter is a Finance Document and the
Agreement, as amended by this letter, is a Finance Document.

 

(b)           Subject to the terms of this letter, the
Agreement will remain in full force and effect and the Agreement and this
letter will be read and construed as one document.

 

(c)           Each Obligor confirms that the Security
Interests granted to the Beneficiaries pursuant to the Security Documents and
its obligations under the Finance Documents shall continue and remain
unaffected by the entry into of this letter and shall extend to the liability
and obligations of the Obligors to the Finance Parties under the Finance
Documents as amended by this letter.

 

(d)           The representations and warranties in
Clause 15 (Representations and Warranties) of the Agreement (with the exception
of Clauses 15.6(a) (Consents), 15.10 (Financial Condition), 15.12
(Security Interests), 15.13(b) (Litigation and insolvency proceedings),
15.14 (Business Plan), 15.15 (Tax liabilities), 15.16 (Ownership of assets),
15.18 (Works councils), 15.19 (Borrower Group Structure),  15.20 (ERISA), 15.24 (UPC Financing) and 15.25
(Dutch Banking Act)) are true and correct as if made on the date of this letter
and on the Amendment Effective Date, with reference to the facts and
circumstances then existing, as if each 

 

2

 

reference to (i) the
Finance Documents includes a reference to this letter and (ii) references
to the Agreement are to the Agreement as amended by this letter.

 

(e)           This letter may be executed in any number
of counterparts, and by each party on separate counterparts.  Each counterpart is an original, but all
counterparts shall together constitute one and the same instrument.  Delivery of an executed counterpart signature
page of this letter by e-mail (PDF) or telecopy shall be as effective as
delivery of a manually executed counterpart of this letter.

 

7.             Governing law

 

This letter and any non-contractual
obligations arising in connection with it are governed by English law.

 

For

TORONTO DOMINION (TEXAS) LLC

as Facility Agent

 

3

 

We agree with the terms of this letter.

 

Borrowers:

 

UPC BROADBAND HOLDING B.V.

 

By: Authorized Signatory

 

 

UPC FINANCING PARTNERSHIP

 

By: Authorized Signatory

 

 

Guarantors:

 

UPC BROADBAND HOLDING B.V.

 

By: Authorized Signatory

 

 

UPC HOLDING II B.V.

 

By: Authorized Signatory

 

 

UPC FINANCING PARTNERSHIP

 

By: Authorized Signatory

 

 

UPC HOLDING B.V.

 

By: Authorized Signatory

 

 

UPC FRANCE HOLDING B.V.

 

By: Authorized Signatory

 

4

 

UPC SCANDINAVIA HOLDING B.V.

 

By: Authorized Signatory

 

 

UPC WESTERN EUROPE HOLDING B.V.

 

By: Authorized Signatory

 

 

UPC CENTRAL EUROPE HOLDING B.V.

 

By: Authorized Signatory

 

 

UPC NEDERLAND B.V.

 

By: Authorized Signatory

 

 

UPC POLAND HOLDING B.V.

 

By: Authorized Signatory

 

 

UPC BROADBAND N.V.

 

By: Authorized Signatory

 

 

UPC BROADBAND IRELAND B.V.

 

By: Authorized Signatory

 

 

UPC CHILE HOLDING B.V.

 

By: Authorized Signatory

 

 

UPC SWITZERLAND HOLDING B.V.

 

By: Authorized Signatory

 

5

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