Document:

Exhibit 4.1

Execution Copy

QUIXOTE CORPORATION 

and 

COMPUTERSHARE TRUST COMPANY, N.A.

as Rights Agent 

RIGHTS AGREEMENT 

Dated as of March 16, 2009

Table of Contents

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page 

	
 

	
 

	
 

	
 

	 

	
Section 1.

	
 

	
Certain Definitions

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 2.

	
 

	
Appointment of Rights Agent

	
 

	
5

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 3.

	
 

	
Issue of Right Certificates

	
 

	
6

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 4.

	
 

	
Form of Right Certificates

	
 

	
7

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 5.

	
 

	
Countersignature and Registration

	
 

	
8

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 6.

	
 

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

	
 

	
8

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 7.

	
 

	
Exercise of Rights, Purchase Price; Expiration Date of Rights

	
 

	
9

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 8.

	
 

	
Cancellation and Destruction of Right Certificates

	
 

	
10

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 9.

	
 

	
Availability of Shares of Preferred Stock

	
 

	
11

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 10.

	
 

	
Preferred Stock Record Date

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 11.

	
 

	
Adjustment of Purchase Price, Number and Kind of Shares and Number of
 Rights

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 12.

	
 

	
Certificate of Adjusted Purchase Price or Number of Shares

	
 

	
20

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 13.

	
 

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

	
 

	
20

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 14.

	
 

	
Fractional Rights and Fractional Shares

	
 

	
23

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 15.

	
 

	
Rights of Action

	
 

	
24

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 16.

	
 

	
Agreement of Right Holders

	
 

	
25

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 17.

	
 

	
Right Certificate Holder Not Deemed a Stockholder

	
 

	
25

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 18.

	
 

	
Concerning the Rights Agent

	
 

	
26

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 19.

	
 

	
Merger or Consolidation or Change of Name of Rights Agent

	
 

	
26

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 20.

	
 

	
Duties of Rights Agent

	
 

	
27

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 21.

	
 

	
Change of Rights Agent

	
 

	
29

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 22.

	
 

	
Issuance of New Right Certificates

	
 

	
30

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 23.

	
 

	
Redemption

	
 

	
31

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 24.

	
 

	
Exchange

	
 

	
31

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 25.

	
 

	
Notice of Certain Events

	
 

	
32

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 26.

	
 

	
Notices

	
 

	
33

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 27.

	
 

	
Supplements and Amendments

	
 

	
34

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 28.

	
 

	
Successors

	
 

	
34

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 29.

	
 

	
Benefits of this Agreement

	
 

	
34

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 30.

	
 

	
Determinations and Actions by the Board of Directors

	
 

	
34

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 31.

	
 

	
Severability

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 32.

	
 

	
Governing Law

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 33.

	
 

	
Counterparts

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 34.

	
 

	
Descriptive Headings

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 35

	
 

	
Force Majeure

	
 

	
35

	
 

ii

RIGHTS AGREEMENT

          Rights
Agreement, dated as of March 16, 2009 (“Agreement”), by and between Quixote
Corporation, a Delaware corporation (the “Company”), and Computershare Trust
Company, N.A., a federally chartered trust company, as Rights Agent (the
“Rights Agent”). 

          The
Board of Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Right”) for each share of Common Stock (as
hereinafter defined) of the Company outstanding as of the Close of Business (as
defined below) on March 26, 2009 (the “Record Date”), each Right initially
representing the right to purchase one one-thousandth (subject to adjustment)
of a share of Preferred Stock (as hereinafter defined), upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each share of Common Stock that shall become outstanding
between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined); provided, however,
that Rights may be issued with respect to shares of Common Stock that shall
become outstanding after the Distribution Date and prior to the Expiration Date
in accordance with Section 22. 

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

          Section 1. Certain
Definitions. 

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

          (a)     “Acquiring
Person” shall mean any Person (other than the Company, any Related Person or
any Exempt Person) that has become, in itself or, together with all Affiliates
and Associates of such Person, the Beneficial Owner of 4.9% or more of the
shares of Common Stock then-outstanding, provided, however, that
any Person who would otherwise qualify as an Acquiring Person as of the Close
of Business on March 16, 2009 will not be deemed to be an Acquiring Person for
any purpose of this Agreement on and after such date unless and until such time
as such Person (and its Affiliates and Associates) acquires the beneficial
ownership of additional shares of Common Stock representing one-half of one
percent (.5%) or more of the shares of Common Stock then outstanding (unless,
upon becoming the Beneficial Owner of such additional shares of Common Stock,
such Person is not then the Beneficial Owner of 4.9% or more of the shares of
Common Stock then outstanding); provided, further, the exclusion
in the immediately preceding proviso shall cease to apply with respect to any
Person at such time as such Person, together with its Affiliates and
Associates, beneficially own less than 4.9% or more of the shares of Common
Stock then outstanding. A Person will not be deemed to have become an Acquiring
Person solely as a result of (i) a reduction in the number of shares of
Common Stock outstanding, (ii) the exercise of any options, warrants,
rights or similar interests (including restricted stock) granted by the Company
to its directors, officers and employees, (iii) any unilateral grant of
any security by the Company, or (iv) an Exempt Transaction, unless and
until such time as such stockholder acquires the beneficial ownership of one
additional share of Common Stock. Notwithstanding the foregoing, if the Board
of Directors determines in good faith that a Person who would otherwise be an
“Acquiring Person” as defined pursuant to the foregoing provisions of this Section 1(a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an “Acquiring Person” as defined pursuant to the foregoing
provisions of this Section 1(a), then such Person shall not be deemed to
be an “Acquiring Person” for any purposes of this Agreement. 

          (b)     “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934 (the “Exchange Act”) as in effect on the date of this
Agreement, and to the extent not included within the foregoing clause of this
Section 1(b), shall also include, with respect to any Person, any other
Person (whether or not a Related Person or an Exempt Person) whose shares of
Common Stock would be deemed constructively owned by such first Person, owned
by a single “entity” as defined in Section 1.382-3(a)(1) of the Treasury
Regulations, or otherwise aggregated with shares owned by such first Person
pursuant to the provisions of the Code, or any successor provision or
replacement provision, and the Treasury Regulations thereunder, provided,
however, that a Person shall not be deemed to be the Affiliate or
Associate of another Person solely because either or both Persons are or were
directors of the Company. 

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

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

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

2

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

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

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

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

          (g)     “Common
Stock” when used with reference to the Company shall mean the Common Stock,
presently par value $.01-2/3 per share, of the Company. “Common Stock” when
used with reference to any Person other than the Company shall mean the common
stock (or, in the case of an unincorporated entity, the equivalent equity
interest) with the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person. 

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

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

3

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

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

          (l)     “Exempt
Person” shall mean a Person whose beneficial ownership (together with all Affiliates
and Associates of such Person) of 4.9% or more of the then-outstanding Common
Stock will not, as determined by the Board of Directors in its sole discretion,
jeopardize or endanger the availability to the Company of the Tax Attributes; provided,
however, that such a Person will cease to be an “Exempt Person” if the
Board of Directors makes a contrary determination with respect to the effect of
such Person’s beneficial ownership (together with all Affiliates and Associates
of such Person) upon the availability to the Company of its Tax Attributes. 

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

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

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

          (p)     “Final
Expiration Date” shall mean the earliest to occur of (i) the Close of Business
on March 16, 2019, (ii) the repeal of Section 382 or any successor statute if
the Board of Directors determines that this Rights Agreement is no longer
necessary for the preservation of Tax Attributes, or (iii) the beginning of a
taxable year of the Company to which the Board of Directors determines that no
Tax Attributes may be carried forward. 

          (q)     “Flip-In
Event” shall have the meaning set forth in Section 11(a)(ii) hereof. 

          (r)     “NASDAQ”
shall mean The Nasdaq Stock Market. 

          (s)     “New
York Stock Exchange” shall mean the New York Stock Exchange, Inc. 

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

          (u)
“Preferred Stock” shall mean the Series C Junior Participating Preferred
Stock, no par value per share, of the Company having the rights and preferences
set forth in the Form of Certificate of Designation attached to this Agreement
as Exhibit A. 

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

          (w)     “Purchase
Price” shall have the meaning set forth in Section 7(b) hereof. 

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

4

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

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

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

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

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

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

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

          (ff)     “Subsidiary”
of any Person shall mean any corporation or other entity of which securities or
other ownership interests having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by such Person, and
any corporation or other entity that is otherwise controlled by such Person. 

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

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

          (ii)     “Tax
Attributes” shall mean the Company’s U.S. net operating loss, capital loss and
tax credit carryovers. 

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

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

          Section 2. Appointment of
Rights Agent. 

          The
Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable, upon ten (10) days’ prior written
notice to the Rights Agent. The Rights Agent shall have no duty to supervise,
and in no event shall be liable for, the acts or omissions of any such
co-Rights Agent. 

5

          Section 3. Issue of Right
Certificates. 

          (a)     Until
the earlier of (i) the Close of Business on the tenth Business Day after
the Stock Acquisition Date or (ii) the Close of Business on the tenth Business
Day (or, unless the Distribution Date shall have previously occurred, such
later date as may be specified by the Board of Directors of the Company) after
the commencement of a tender or exchange offer by any Person (other than the
Company, any Related Person or any Exempt Person), if upon the consummation
thereof such Person would be the Beneficial Owner of 4.9% or more of the
then-outstanding Common Stock (the earlier of such dates being referred to as
the “Distribution Date”), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates,
(y) the registered holders of shares of Common Stock shall also be the
registered holders of the Rights issued with respect thereto and (z) the Rights
will be transferable by, and only in connection with the transfer of Common
Stock. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign and the Company will
send or cause to be sent (and the Rights Agent will, if requested and provided
with all necessary information, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Stock as of the Close of Business on the
Distribution Date (other than any Acquiring Person or any Associate or
Affiliate of an Acquiring Person), at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a “Right Certificate”), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so held. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Right Certificates, and the Rights will be transferable only separately from
the transfer of Common Stock. The Company shall promptly notify the Rights
Agent in writing upon the occurrence of the Distribution Date and, if such
notification is given orally, the Company shall confirm same in writing on or
prior to the Business Day next following. Until such notice is received by the
Rights Agent, the Rights Agent may presume conclusively for all purposes that
the Distribution Date has not occurred. 

          (b)     On
the Record Date, or as soon as practicable thereafter, the Company will send a
copy of a Summary of Rights to Purchase Shares of Preferred Stock, in
substantially the form of Exhibit C hereto (the “Summary of Rights”), by
first-class, postage-prepaid mail, to each record holder of Common Stock as of
the Close of Business on the Record Date (other than any Acquiring Person or
any Associate or Affiliate of any Acquiring Person), at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Stock outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of
the holders thereof together with the Summary of Rights. Until the Distribution
Date (or, if earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby. 

6

          (c)     Rights
shall be issued in respect of all shares of Common Stock issued or disposed of
(including, without limitation, upon disposition of Common Stock out of treasury
stock or issuance or reissuance of Common Stock out of authorized but unissued
shares) after the Record Date but prior to the earlier of the Distribution Date
and the Expiration Date, or in certain circumstances provided in
Section 22 hereof, after the Distribution Date. Certificates issued for
Common Stock (including, without limitation, upon transfer of outstanding
Common Stock, disposition of Common Stock out of treasury stock or issuance or
reissuance of Common Stock out of authorized but unissued shares) after the Record
Date but prior to the earlier of the Distribution Date and the Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to them a
legend in substantially the following form: 

	
 

	
 

	
 

	
This
 certificate also evidences and entitles the holder hereof to certain Rights
 as set forth in a Rights Agreement between Quixote Corporation (the
 “Company”) and Computershare Trust Company, N.A., as Rights Agent, dated as
 of March 16, 2009 and as amended from time to time (the “Rights Agreement”),
 the terms of which are hereby incorporated herein by reference and a copy of
 which is on file at the principal executive offices of the Company. Under
 certain circumstances, as set forth in the Rights Agreement, such Rights will
 be evidenced by separate certificates and will no longer be evidenced by this
 certificate. The Company will mail to the holder of this certificate a copy
 of the Rights Agreement without charge after receipt of a written request
 therefor. Under certain circumstances, as set forth in the Rights
 Agreement, Rights owned by or transferred to any Person who is or becomes an
 Acquiring Person (as defined in the Rights Agreement) and certain transferees
 thereof will become null and void and will no longer be transferable. 

With respect
to such certificates containing the foregoing legend, until the Distribution
Date the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate, except as otherwise provided herein,
shall also constitute the transfer of the Rights associated with the Common
Stock represented thereby. In the event that the Company purchases or otherwise
acquires any Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which are no longer outstanding. 

Notwithstanding
this paragraph (c), the omission of a legend shall not affect the
enforceability of any part of this Agreement or the rights of any holder of the
Rights. 

          Section 4. Form of Right
Certificates. 

          The
Right Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially in the
form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate (but which do not affect the
rights, duties or responsibilities of the Rights Agent) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or interdealer
quotation system on which the Rights may from time to time be listed or quoted,
or to conform to usage. Subject to the provisions of this Agreement, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein at
the Purchase Price, but the number of such one one-thousandths of a share of Preferred
Stock and the Purchase Price shall be subject to adjustment as provided herein.

7

          Section 5.
Countersignature and Registration. 

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

          (b)     Following
the Distribution Date, receipt by the Rights Agent of notice to that effect and
all other relevant information referred to in Section 3(a), the Rights
Agent will keep or cause to be kept, at an office or agency designated for such
purpose, 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 this Agreement, at any time after, and including, the
Distribution Date and prior to, and including, the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a share
of Preferred Stock as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office or agency of the
Rights Agent designated for such purpose. The Right Certificates are
transferable only on the registry books of the Rights Agent. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate or
Certificates until the registered holder thereof shall have (i) completed
and signed the certificate contained in the form of assignment set forth on the
reverse side of each such Right Certificate, (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
thereof and of the Rights evidenced thereby and the Affiliates and Associates
of such Beneficial Owner (or former Beneficial Owner) as the Company or the
Rights Agent shall reasonably request, and (iii) paid a sum sufficient to
cover any tax or charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates as required by Section
9(e) hereof. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested, registered in such name or names as may be designated
by the surrendering registered holder. The Rights Agent shall promptly forward
any such sum collected by it to the Company or to such Persons as the Company
shall specify by written notice. The Rights Agent shall have no duty or
obligation under any Section of this Agreement which requires the payment of
taxes or charges unless and until it is satisfied that all such taxes and/or
charges have been paid. 

8

          (b)     Subject
to the provisions of this Agreement, at any time after the Distribution Date
and prior to the Expiration Date, 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, at the
Company’s request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated. 

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

          (a)     Except
as otherwise provided herein, the Rights shall become exercisable on the
Distribution Date, and thereafter the registered holder of any Right
Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof properly completed and duly executed, to
the Rights Agent at the office or agency of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-thousandths of a share of Preferred
Stock (or other securities, cash or other assets, as the case may be) as to
which the Rights are exercised and an amount equal to any tax or charge
required to be paid under Section 9(e) hereof, by certified check,
cashier’s check, bank draft or money order payable to the order of the Company,
at time which is both after the Distribution Date and prior to the time (the
“Expiration Date”) that is the earliest of: (i) 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. 

          (b)     The
Purchase Price shall be initially $20.00 for each one one-thousandth of a share
of Preferred Stock purchasable upon the exercise of a Right. The Purchase Price
and the number of one one-thousandths of a share of Preferred Stock or other
securities or property to be acquired upon exercise of a Right shall be subject
to adjustment from time to time as provided in Sections 11 and 13 hereof
and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) of this Section 7.

9

          (c)     Except
as otherwise provided herein, upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase properly completed
and duly executed, accompanied by payment of the aggregate Purchase Price for
the shares of Preferred Stock to be purchased and an amount equal to any
applicable tax or charge required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash or by certified
check, cashier’s check, bank draft or money order payable to the order of the
Company, subject to Section 20 hereof, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred
Stock, or make available if the Rights Agent is the transfer agent for the
Preferred Stock, certificates for the number of shares of Preferred Stock to be
purchased, and the Company hereby irrevocably authorizes each such transfer
agent to comply with all such requests, or (B) requisition from a depositary
agent appointed by the Company depositary receipts representing interests in
such number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary
agent), and the Company hereby directs any such depositary agent to comply with
such request, (ii) when necessary to comply with this Rights Agreement,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof,
(iii) 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 necessary to comply with this Rights
Agreement, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. 

          (d)     Except
as otherwise provided herein, in case the registered holder of any Right
Certificate shall exercise less than all of the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the exercisable Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof. 

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

          Section 8. Cancellation
and Destruction of Right
Certificates. 

          All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in 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, or shall, at the
written request of the Company, destroy such canceled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.

10

          Section 9. Availability of
Shares 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
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 Rights. 

          (b)     So
long as the shares of Preferred Stock issuable upon the exercise of Rights may
be listed or admitted to trading on any national securities exchange, or quoted
on NASDAQ, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed or admitted to trading on such exchange, or quoted on NASDAQ, upon
official notice of issuance upon such exercise. 

          (c)     From
and after such time as the Rights become exercisable, the Company shall use its
best efforts, if then necessary to permit the issuance of shares of Preferred
Stock upon the exercise of Rights, to register and qualify such shares of
Preferred Stock under the Securities Act and any applicable state securities or
“Blue Sky” laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of the date as of which the Rights are no
longer exercisable for such securities and the Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. The
Company shall notify the Rights Agent whenever it makes a public announcement
pursuant to this Section 9(c) and give the Rights Agent a Copy of such announcement.
Notwithstanding any 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 and until a registration
statement under the Securities Act shall have been declared effective, unless
an exemption therefrom is available. 

          (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 exercise
of Rights shall, at the time of delivery of the certificates therefor (subject
to payment of the Purchase Price and compliance with all other applicable
provisions of this Agreement), be duly and validly authorized and issued and
fully paid and nonassessable shares. 

11

          (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 shares of
Preferred Stock upon the exercise of Rights. The Company shall not, however, be
required to pay any tax or charge which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Stock in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock upon the exercise
of any Rights until any such tax or charge shall have been paid (any such tax
or charge being payable by that holder of such Right Certificate at the time of
surrender) or until it has been established to the Company’s or the Rights
Agent’s satisfaction that no such tax or charge is due. 

          Section 10. Preferred
Stock Record Date. 

          Each
Person in whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the shares of Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes or charges) was duly made; provided, however, that if
the date of such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred Stock for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein. 

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

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

          (a)(i)     In
the event the Company shall at any time after the date of this Agreement
(A) declare and pay 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
of Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including without limitation any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the number and kind of shares of capital
stock issuable upon exercise of a Right as of the record date for such dividend
or the effective date of such subdivision, combination or reclassification 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, the holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. 

12

          (ii)     Subject
to Section 24 of this Agreement, in the event any Person becomes an
Acquiring Person (the first occurrence of such event being referred to
hereinafter as the “Flip- In Event”), then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to the Flip-In
Event multiplied by the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such Flip-In
Event, whether or not such Right was then exercisable, and (B) each holder
of a Right, except as otherwise provided in this Section 11(a)(ii) and
Section 11(a)(iii) hereof, shall thereafter have the right to receive,
upon exercise thereof at a price equal to the Purchase Price (as so adjusted),
in accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock, such number of shares of Common Stock as shall equal the
result obtained by dividing the Purchase Price (as so adjusted) by 50% of the
current per share market price of the Common Stock (determined pursuant to
Section 11(d) hereof) on the date of such Flip-In Event; provided, however,
that the Purchase Price (as so adjusted) and the number of shares of Common
Stock so receivable upon exercise of a Right shall, following the Flip-In
Event, be subject to further adjustment as appropriate in accordance with
Section 11(f) hereof. 

          Notwithstanding
anything in this Agreement to the contrary, however, from and after the Flip-In
Event, any Rights that are beneficially owned by (x) any Acquiring Person
(or any Affiliate or Associate of any Acquiring Person), (y) a transferee
of any Acquiring Person (or any such Affiliate or Associate) who becomes a
transferee after the Flip-In Event or (z) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who became a transferee prior to or
concurrently with the Flip-In Event pursuant to either (I) a transfer from
the Acquiring Person to holders of its equity securities or to any Person with
whom it has any continuing agreement, arrangement or understanding regarding
the transferred Rights or (II) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or understanding
which has the purpose or effect of avoiding the provisions of this paragraph,
and subsequent transferees of such Persons, shall be null and void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Agreement.
The Company shall use all reasonable efforts to ensure that the provisions of
this Section 11(a)(ii) are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. From and after the Flip-In Event, no Right
Certificate shall be issued pursuant to Section 3 or Section 6 hereof
that represents Rights that are or have become null and void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become null and void pursuant to
the provisions of this paragraph shall be canceled. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only in accordance with Section 13 and not
pursuant to this Section 11(a)(ii). The Rights Agent shall not be deemed to
have any knowledge of the identity of any such Acquiring Person, Associate or
Affiliate, or the nominee of any of the foregoing unless and until it shall
have received notice of the identity of such Person from the Company and the
Rights Agent may rely on such notice in carrying out its duties under this
Agreement. 

13

          (iii)     The
Company may at its option substitute for a share of Common Stock issuable upon
the exercise of Rights in accordance with the foregoing subparagraph (ii) a
number of shares of Preferred Stock or fraction thereof such that the current
per share market price of one share of Preferred Stock multiplied by such
number or fraction is equal to the current per share market price of one share
of Common Stock. In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board of Directors of the Company shall, with respect to
such deficiency, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine the
excess (such excess, the “Spread”) of (1) the value of the shares of
Common Stock issuable upon the exercise of a Right in accordance with the
foregoing subparagraph (ii) (the “Current Value”) over (2) the Purchase
Price (as adjusted in accordance with the foregoing subparagraph (ii)), and
(B) with respect to each Right (other than Rights which have become null
and void pursuant to the foregoing subparagraph (ii)), make adequate provision
to substitute for the shares of Common Stock issuable in accordance with the
foregoing subparagraph (ii) upon exercise of the Right and payment of the
Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a
reduction in such Purchase Price, (3) shares of Preferred Stock or other
equity securities of the Company (including, without limitation, shares or
fractions of shares of preferred stock which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those of the shares
of Common Stock, are deemed in good faith by the Board of Directors of the
Company to have substantially the same value as the shares of Common Stock
(such shares of Preferred Stock and shares or fractions of shares of preferred
stock are hereinafter referred to as “Common Stock Equivalents”)),
(4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having a value which, when added to the value of
the shares of Common Stock issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value (less the amount of any reduction in
such Purchase Price), where such aggregate value has been determined by the
Board of Directors of the Company upon the advice of a nationally recognized
investment banking firm selected in good faith by the Board of Directors of the
Company; provided, however, that if the Company shall not make adequate provision
to deliver value pursuant to clause (B) above within thirty (30) days
following the Flip-In Event (the date of the Flip-In Event being the
“Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to
deliver, to the extent permitted by applicable law and any material agreements
then in effect to which the Company is a party, upon the surrender for exercise
of a Right and without requiring payment of such Purchase Price, shares of
Common Stock (to the extent available), and then, if necessary, such number or
fractions of shares of Preferred Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If, upon the occurrence of the Flip-In Event, the Board of Directors of
the Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, then, if the Board of Directors of the Company
so elects, the thirty (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
thirty (30) day period, as it may be extended, is herein called the
“Substitution Period”). To the extent that the Company determines that some
action need be taken pursuant to the second and/or third sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section
11(a)(ii) hereof and the last sentence of this Section 11(a)(iii) hereof,
that such action shall apply uniformly to all outstanding Rights and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such second sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement (with prompt
written notice thereof to the Rights Agent) stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement
(with prompt written notice thereof to the Rights Agent) at such time as the
suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the shares of Common Stock shall be the
current per share market price (as determined pursuant to
Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per
share or fractional value of any “Common Stock Equivalent” shall be deemed to
equal the current per share market price of the Common Stock. The Board of
Directors of the Company may, but shall not be required to, establish
procedures to allocate the right to receive shares of Common Stock upon the
exercise of the Rights among holders of Rights pursuant to this
Section 11(a)(iii). 

14

          (b)     In
case 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 45 calendar days after such record date) to subscribe for or
purchase Preferred Stock (or shares having the same rights, privileges and
preferences as the Preferred Stock (“Equivalent Preferred Shares”)) or
securities convertible into Preferred Stock or Equivalent Preferred Shares at a
price per share of Preferred Stock or Equivalent Preferred Shares (or having a
conversion price per share, if a security convertible into shares of Preferred
Stock or Equivalent Preferred Shares) less than the than current per share
market price of the Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock and Equivalent Preferred
Shares outstanding on such record date plus the number of shares of Preferred
Stock and Equivalent Preferred Shares which the aggregate offering price of the
total number of shares of Preferred Stock and/or Equivalent Preferred Shares so
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Preferred Stock and
Equivalent Preferred Shares outstanding on such record date plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be
paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Shares of Preferred Stock and Equivalent
Preferred Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed. 

15

          (c)         In
case the Company shall fix a record date for the making of a distribution to
all holders of the Preferred Stock (including without limitation any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Preferred Stock (determined pursuant to Section 11(d) hereof) on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the denominator of which shall
be such current per share market price (determined pursuant to Section 11(d)
hereof) of the Preferred Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed. 

          (d)(i)     Except
as otherwise provided herein, for the purpose of any computation hereunder, the
“current per share market price” of any security (a “Security” for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to, but not
including, such date; provided, however, that in the event that the current per
share market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security, and prior to the expiration of 30 Trading
Days after, but not including, the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported by the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock Exchange
or NASDAQ or, if the Security is not listed or admitted to trading on the New
York Stock Exchange or NASDAQ, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or admitted to
trading or, if not listed on a national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market as reported by any system then in use, or, if not
so quoted, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors of the Company. If on any such date no market maker is making a
market in the Security, the fair value of such Security on such date as
determined in good faith by the Board of Directors of the Company shall be
used, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. The term “Trading Day”
shall mean a day on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day. 

16

          (ii)     For
the purpose of any computation hereunder, if the Preferred Stock is publicly
traded, the “current per share market price” of the Preferred Stock shall be determined
in accordance with the method set forth in Section 11(d)(i). If the
Preferred Stock is not publicly traded but the Common Stock is publicly traded,
the “current per share market price” of the Preferred Stock shall be
conclusively deemed to be the current per share market price of the Common
Stock as determined pursuant to Section 11(d)(i) multiplied by the then
applicable Adjustment Number (as defined in and determined in accordance with
the Certificate of Designation for the Preferred Stock). If neither the Common
Stock nor the Preferred Stock is publicly traded, “current per share market
price” shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. 

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

          (f)     If
as a result of an adjustment made pursuant to Section 11(a) hereof, the holder
of any Right thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than the Preferred Stock, thereafter the
Purchase Price and the number of such other shares so receivable upon exercise
of a 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 Sections 11(a), 11(b), 11(c), 11(e), 11(h),
11(i) and 11(m) hereof, as applicable, 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 Purchase Price hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-thousandths of a share of
Preferred Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein. 

          (h)     Unless
the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and 11(c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-thousandths of a share of Preferred Stock (calculated to the nearest one
hundred-thousandth of a share of Preferred Stock) obtained by (i) multiplying
(x) the number of one one-thousandths of a share purchasable upon the
exercise of a Right immediately prior to such adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment. 

17

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

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

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

18

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

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

          (n)     Anything
in this Agreement to the contrary notwithstanding, in the event that at any
time after the date of this Agreement and prior to the Distribution Date, the
Company shall (i) declare and pay any dividend on the Common Stock payable
in Common Stock or (ii) effect a subdivision, combination or consolidation
of the Common Stock (by reclassification or otherwise than by payment of a
dividend payable in Common Stock) into a greater or lesser number of shares of
Common Stock, then, in each such case, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered thereafter,
shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event. 

          (o)     The
Company agrees that, after the earlier of the Distribution Date or the Stock
Acquisition Date, it will not, except as permitted by Sections 23, 24 or
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
diminish substantially or eliminate the benefits intended to be afforded by the
Rights. 

19

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

          Whenever
an adjustment is made or any event affecting the Rights or their exercisability
(including without limitation an event which causes Rights to become null and
void) occurs as provided in Section 11 or 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjustment or
describing such event, and a brief, reasonably detailed statement of the facts
accounting for such adjustment, (b) file with the Rights Agent and with
each transfer agent for the Common Stock and the Preferred Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof (if so required under
Section 25 hereof). The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment or statement therein contained
and shall have no duty or liability with respect to, and shall not be deemed to
have knowledge of any adjustment or any such event unless and until it shall
have received such a certificate. 

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

          (a)     In
the event, directly or indirectly, at any time after the Flip-In Event
(i) the Company shall consolidate with or shall merge into any other
Person, (ii) any Person shall merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property, or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more
wholly-owned Subsidiaries of the Company), then upon the first occurrence of
such event, proper provision shall be made so that: (A) each holder of a
Right (other than Rights which have become null and void pursuant to Section 11(a)(ii)
hereof) shall thereafter have the right to receive, upon the exercise thereof
at the Purchase Price (as theretofore adjusted in accordance with
Section 11(a)(ii) hereof), in accordance with the terms of this Agreement
and in lieu of shares of Preferred Stock or Common Stock of the Company, such
number of validly authorized and issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall equal the result obtained by dividing
the Purchase Price (as theretofore adjusted in accordance with
Section 11(a)(ii) hereof) by 50% of the current per share market price of
the Common Stock of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; provided, however, that the Purchase Price (as theretofore adjusted
in accordance with Section 11(a)(ii) hereof) and the number of shares of Common
Stock of such Principal Party so receivable upon exercise of a Right shall be
subject to further adjustment as appropriate in accordance with Section 11(f)
hereof to reflect any events occurring in respect of the Common Stock of such
Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement;
(C) the term “Company” shall thereafter be deemed to refer to such
Principal Party; and (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
shares of Common Stock in accordance with Section 9 hereof) in connection
with such consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the shares of its Common Stock thereafter deliverable
upon the exercise of the Rights; provided that, upon the subsequent occurrence
of any consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had such holder, at the time of such transaction, owned the Common
Stock of the Principal Party receivable upon the exercise of a Right pursuant
to this Section 13(a), and such Principal Party shall take such steps (including,
but not limited to, reservation of shares of stock) as may be necessary to
permit the subsequent exercise of the Rights in accordance with the terms
hereof for such cash, shares, rights, warrants and other property. 

20

          (b)     “Principal
Party” shall mean: 

                    (i)     in
the case of any transaction described in (i) or (ii) of the first
sentence of Section 13(a) hereof: (A) the Person that is the issuer of the
securities into which the shares of Common Stock are converted in such merger
or consolidation, or, if there is more than one such issuer, the issuer the
shares of Common Stock of which have the greatest aggregate market value of
shares outstanding, or (B) if no securities are so issued, (x) the
Person that is the other party to the merger, if such Person survives said
merger, or, if there is more than one such Person, the Person the shares of
Common Stock of which have the greatest aggregate market value of shares
outstanding or (y) if the Person that is the other party to the merger
does not survive the merger, the Person that does survive the merger (including
the Company if it survives) or (z) the Person resulting from the
consolidation; and 

                    (ii)     in
the case of any transaction described in (iii) of the first sentence of
Section 13(a) hereof, 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 so
transferred or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding; 

          provided,
however, that in any such case described in the foregoing clause (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time or has not been
continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, the term “Principal Party” shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stock of all of which is and has been so
registered, the term “Principal Party” shall refer to whichever of such Persons
is the issuer of Common Stock having the greatest aggregate market value of
shares outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
clauses (1) and (2) above shall apply to each of the owners having an
interest in the venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint venturers, and the Principal Party in
each such case shall bear the obligations set forth in this Section 13 in
the same ratio as its interest in such Person bears to the total of such
interests. 

21

          (c)     The
Company shall not consummate any consolidation, merger, sale, disposition or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections
13(a) and (b) hereof shall promptly be performed in accordance with their
terms and that such consolidation, merger, sale or transfer of assets shall not
result in a default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to Sections 13(a) and
(b) hereof and providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will: 

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

                    (ii)      use
its best efforts, if the Common Stock of the Principal Party shall be listed or
admitted to trading on the New York Stock Exchange, NASDAQ or on another
national securities exchange, to list or admit to trading (or continue the
listing of) the Rights and the securities purchasable upon exercise of the
Rights on the New York Stock Exchange, NASDAQ or such securities exchange, or,
if the Common Stock of the Principal Party shall not be listed or admitted to
trading on the New York Stock Exchange, NASDAQ or a national securities
exchange, to cause the Rights and the securities receivable upon exercise of
the Rights to be authorized for quotation on any system then in use; 

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

                    (iv)     obtain
waivers of any rights of first refusal or preemptive rights in respect of the
Common Stock of the Principal Party subject to purchase upon exercise of
outstanding Rights. 

          (d)     In
case the Principal Party 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 or
Common Stock Equivalents of such Principal Party at less than the then current
market price per share thereof (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock or Common Stock
Equivalents of such Principal Party at less than such then current market
price, or (ii) providing for any special payment, tax or similar provision
in connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in such event, the Company
hereby agrees with each holder of Rights that it 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. 

22

          (e)     The
Company covenants and agrees that it shall not, at any time after the Flip-In
Event, enter into any transaction of the type described in clauses
(i) through (iii) of Section 13(a) hereof if (i) at the time of
or immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights,
(ii) prior to, simultaneously with or immediately after such
consolidation, merger, sale, transfer or other transaction, the stockholders of
the Person who constitutes, or would constitute, the Principal Party for
purposes of Section 13(b) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or
(iii) the form or nature of organization of the Principal Party would
preclude or limit the exercisability of the Rights. 

          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 in accordance with Section 11(n) hereof) or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or NASDAQ, if the Rights are not listed or admitted to trading on the
New York Stock Exchange or NASDAQ, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported
by such system then in use or, if on any such date the Rights are not so
quoted, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board
of Directors of the Company. If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Company shall be used. 

23

          (b)     The
Company shall not be required to issue fractions of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock) or to distribute certificates which evidence fractional shares
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon the exercise or exchange of
Rights. Interests in fractions of Preferred Stock in integral multiples of one
one-thousandth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided, that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company
shall pay to the registered holders of Right Certificates at the time such
Rights are exercised or exchanged as herein provided an amount in cash equal to
the same fraction of the current market value of a whole share of Preferred
Stock (as determined in accordance with Section 14(a) hereof) for the Trading
Day immediately prior to the date of such exercise or exchange. 

          (c)     The
Company shall not be required to issue fractions of shares of Common Stock or
to distribute certificates which evidence fractional shares of Common Stock
upon the exercise or exchange of Rights. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right Certificates
with regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock (as determined in accordance with
Section 14(a) hereof) for the Trading Day immediately prior to the date of such
exercise or exchange. 

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

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

          Section 15. Rights of
Action. 

          (a)     All
rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 and Section 20 hereof, are
vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock), 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), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, such Common Stock) in the manner provided therein and in
this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach by the Company of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations by the
Company of, the obligations of any Person subject to this Agreement. 

24

          (b)     Notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, judgment,
decree or ruling (whether interlocutory or final) issued by a court or by a
governmental, regulatory, self-regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation. 

          Section 16. Agreement of
Right Holders. 

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

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

          (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 agency of
the Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer; and 

          (c)     the
Company and the Rights Agent may deem and treat the Person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to Section 7(e) hereof,
shall be affected by any notice to the contrary. 

          Section 17. Right
Certificate Holder Not Deemed a
Stockholder. 

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

25

          Section 18. Concerning the
Rights Agent. 

          (a)     The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, delivery, amendment, administration and execution
of this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, damage, judgment, fine, penalty, claim, demand,
settlement, cost or expense (including, without limitation, the reasonable fees
and expenses of legal counsel), incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance,
administration, exercise and performance of its duties under this Agreement. To
the extent that the Rights Agent is successful in an action to enforce its
right to indemnification, the costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. The provisions of this
Section 18 and Section 20 below shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation,
replacement or removal of the Rights Agent. 

          (b)     The
Rights Agent shall be authorized and protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with its acceptance and administration of this Agreement and the exercise and
performance of its duties hereunder, in reliance upon any Right Certificate or
certificate for the Preferred Stock or Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof. The Rights Agent shall not be deemed to have knowledge
of any event of which it was supposed to receive notice thereof hereunder, and
the Rights Agent shall be fully protected and shall incur no liability for
failing to take any action in connection therewith unless and until it has
received such notice. 

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

          (a)     Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be
a party, or any Person succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, that
such Person would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement. 

26

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

          (a)     The
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company or an employee of the Rights Agent), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any
action taken, suffered or omitted by it in the absence of bad faith and in
accordance with such advice or opinion. 

          (b)     Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including without limitation,
the identity of an Acquiring Person and the determination of the current per
share market price of any security) be proved or established by the Company
prior to taking, suffering or omitting to take any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the President and the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full and
complete authorization and protection to the Rights Agent and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in the absence of bad faith under the provisions of this
Agreement in reliance upon such certificate. 

          (c)     The
Rights Agent shall be liable hereunder to the Company and any other Person only
for its own gross negligence, bad faith or willful misconduct. Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for
special, punitive, indirect, consequential or incidental loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage. Any liability of
the Rights Agent under this Agreement will be limited to the amount of annual
fees paid by the Company to the Rights Agent. 

27

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

          (e)     The
Rights Agent shall not have any liability for or 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 null and void pursuant to Section 11(a)(ii)
hereof) or any change or adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 and
24, or the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after receipt of a certificate furnished pursuant to
Section 12, describing such change or adjustment, upon which the Rights
Agent may rely); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock or other securities to be issued pursuant to this Agreement
or any Right Certificate or as to whether any shares of Preferred Stock or
other securities will, when issued, be validly authorized and issued, fully
paid and nonassessable. 

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

          (g)     The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any person reasonably
believed by the Rights Agent to be one of the President or the Secretary of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and such instructions shall be full authorization and
protection to the Rights Agent and the Rights Agent shall not be liable for or
in respect of any action taken, suffered or omitted by it in the absence of bad
faith in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. The Rights Agent shall be fully
authorized and protected in relying upon the most recent instructions received
by any such officer. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken, suffered or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action shall
be taken, suffered or such omission shall be effective. The Rights Agent shall
not be liable for any action taken or suffered by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on or
after the date specified in such application (which date shall not be less than
five Business Days after the date any 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,
suffered or omitted. 

28

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

          (i)     The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself (through its directors,
officers and employees) or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect or
misconduct absent gross negligence, bad faith or willful misconduct in the
selection and continued employment thereof. 

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

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

          Section 21. Change of
Rights Agent. 

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

29

          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 forms as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of Common Stock following the Distribution
Date and prior to the Expiration Date, the Company may with respect to shares
of Common Stock so issued or sold pursuant to (i) the exercise of stock
options, (ii) under any employee plan or arrangement, (iii) upon the
exercise, conversion or exchange of securities, notes or debentures issued by
the Company or (iv) a contractual obligation of the Company, in each case
existing prior to the Distribution Date, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale.
Further, in connection with the issuance by the Company of shares of Common
Stock following the Distribution Date and prior to the Expiration Date pursuant
to the conversion of the Company’s 7% Convertible Senior Subordinated Notes due
2025( the 7% Notes”), the Company shall issue Rights Certificates
representing the appropriate number of Rights as would have been issued in
respect of such shares of Common Stock if they had been issued on conversion of
the Notes on the date prior to the Record Date, as appropriately adjusted as
provided herein as if they had been so issued; provided,
however, that (i) no such
Rights Certificate shall be issued if, and to the extent that, in its good
faith judgment the Board of Directors determines that the issuance of such
Rights Certificate could have a material adverse tax consequence to the Company
or to the Person to whom or which such Rights Certificate otherwise would be
issued, and (ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.

30

          Section 23.
Redemption. 

          (a)     The
Board of Directors of the Company may, at any time prior to the Flip-In Event,
redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring in respect of the Common Stock
after the date hereof (the redemption price being hereinafter referred to as
the “Redemption Price”). The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors of
the Company in its sole discretion may establish. The Redemption Price shall be
payable, at the option of the Company, in cash, shares of Common Stock, or such
other form of consideration as the Board of Directors of the Company shall determine.

          (b)     Immediately
upon the action of the Board of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23
(or at such later time as the Board of Directors of the Company may establish
for the effectiveness of such redemption), and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any such
redemption (with prompt written notice thereof to the Rights Agent); provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the legality or validity of such redemption. Within 10 days after such
action of the Board of Directors of the Company ordering the redemption of the
Rights (or such later time as the Board of Directors of the Company may
establish for the effectiveness of such redemption), the Company shall mail a notice
of redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the Redemption
Price will be made. 

          Section 24. Exchange.

          (a)     The
Board of Directors of the Company may, at its option, at any time after the
Flip-In 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 11(a)(ii) hereof) for Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring in
respect of the Common Stock after the date hereof (such amount per Right being
hereinafter referred to as the “Exchange Ratio”). Notwithstanding the
foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after an Acquiring Person shall have become
the Beneficial Owner of shares of Common Stock aggregating 50% or more of the
shares of Common Stock then outstanding. From and after the occurrence of an
event specified in Section 13(a) hereof, any Rights that theretofore have not
been exchanged pursuant to this Section 24(a) shall thereafter be exercisable
only in accordance with Section 13 and may not be exchanged pursuant to
this Section 24(a). The exchange of the Rights by the Board of Directors of the
Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors of the Company in its sole discretion may
establish. 

31

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

          (c)     The
Company may at its option substitute, and, in the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but
unissued to permit an exchange of Rights for Common Stock as contemplated in
accordance with this Section 24, the Company shall substitute to the
extent of such insufficiency, for each share of Common Stock that would
otherwise be issuable upon exchange of a Right, a number of shares of Preferred
Stock or fraction thereof (or Equivalent Preferred Shares, as such term is
defined in Section 11(b)) such that the current per share market price
(determined pursuant to Section 11(d) hereof) of one share of Preferred Stock
(or Equivalent Preferred Share) multiplied by such number or fraction is equal
to the current per share market price of one share of Common Stock (determined
pursuant to Section 11(d) hereof) as of the date of such exchange. 

          Section 25. Notice of
Certain Events. 

          (a)     In
case the Company shall at any time after the earlier of the Distribution Date
or the Stock Acquisition Date propose (i) to pay any dividend payable in stock
of any class to the holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its 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, (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision or
combination of outstanding Preferred Stock), (iv) to effect the
liquidation, dissolution or winding up of the Company, or (v) to pay any
dividend on the Common Stock payable in Common Stock or to effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock),
then, in each such case, the Company shall give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date for the purposes
of such dividend or distribution or offering of rights or warrants, or the date
on which such liquidation, dissolution, winding up, reclassification,
subdivision, combination or consolidation is to take place and the date of
participation therein by the holders of the Common Stock 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
10 days prior to the record date for determining holders of the Preferred
Stock for purposes of such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the Common Stock and/or
Preferred Stock, whichever shall be the earlier. 

32

          (b)     In
case any event described in Section 11(a)(ii) or Section 13 shall
occur then the Company shall as soon as practicable thereafter give to the
Rights Agent and to each holder of a Right Certificate (or if occurring prior
to the Distribution Date, the holders of the Common Stock) in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) and Section 13 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 overnight delivery service or first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows: 

	
 

	
 

	
 

	
Quixote
 Corporation

	
 

	
11th
 Floor

	
 

	
35 E. Wacker
 Drive

	
 

	
Chicago,
 Illinois 60601

	
 

	
Attention:
 General Counsel 

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

	
 

	
 

	
 

	
Computershare
 Trust Company, N.A.

	
 

	
250 Royall
 Street

	
 

	
Canton, MA
 02021

	
 

	
Attention:
 Client Services

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

33

          Section 27. Supplements
and Amendments. 

          Except
as provided in this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of
this Agreement in any respect without the approval of
any holders of the Rights. At any time when the Rights are no longer
redeemable, except as provided in this Section 27, the Company may, and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights, provided that no such
supplement or amendment may (a) adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), (b) cause this Agreement again to
become amendable other than in accordance with this sentence or (c) cause
the Rights again to become redeemable. Notwithstanding anything contained in
this Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Company, which states that the proposed supplement
or amendment is in compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or amendment, provided that,
notwithstanding anything contained in this Agreement to the contrary, the
Rights Agent may, but shall not be obligated to, enter into any supplement or
amendment that affects the Rights Agent’s own rights, duties, obligations or
immunities under this Agreement. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock. 

          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. Benefits of
this Agreement. 

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

          Section 30. 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 the rights and powers specifically
granted to the Board of Directors of the Company 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 deemed necessary or
advisable for the administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the Rights or to amend or
not amend this Agreement). All such actions, calculations, interpretations and
determinations that are done or made by the Board of Directors of the Company
in good faith shall be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights, as such, and all other parties. The Rights
Agent is entitled always to assume that the Board of Directors of the Company
acted in good faith and shall be fully protected and incur no liability in
reliance thereon. 

34

          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; and provided however, that that
if any such excluded term, provision, covenant or restriction shall adversely
affect the rights, immunities, duties or obligations of the Rights Agent, the
Rights Agent shall be entitled to resign immediately. 

          Section 32. Governing
Law. 

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

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

35

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

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 QUIXOTE
 CORPORATION

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
 /s/ Bruce
 Reimer

 	
  

 
	
  

 	
  

 	
  

 	

 

 	
  

 	
  

 
	
  

 	
 Name:

 	
 Bruce Reimer

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Title:

 	
 President
 & Chief Executive Officer

 	
  

 
	
  

 	
  

 	 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 COMPUTERSHARE
 TRUST COMPANY,
 N.A., as Rights Agent

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Dennis
 V. Moccia

 	
  

 
	
  

 	
  

 	 

 	
  

 
	
  

 	
 Name:

 	
 Dennis V.
 Moccia

 	
  

 
	
  

 	
  

 	 

 	
  

 
	
  

 	
 Title: 

 	
 Managing
 Director

 	
  

 
	
  

 	
  

 	 

 	
  

 

 36

Exhibit A 

FORM OF

CERTIFICATE OF DESIGNATION 

of 

SERIES C JUNIOR

PARTICIPATING PREFERRED STOCK

of 

QUIXOTE CORPORATION 

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

     QUIXOTE
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:

     That
pursuant to the authority vested in the Board of Directors of the Corporation (the
“Board of Directors”) in accordance with the provisions of the Restated
Certificate of Incorporation (the “Certificate of Incorporation”) of the said
Corporation, the said Board of Directors on March 16, 2009 adopted the
following resolution creating a series of 10,000 shares of Preferred Stock
designated as “Series C Junior Participating Preferred Stock”: 

     RESOLVED,
that pursuant to the authority vested in the Board of Directors of this
Corporation in accordance with the provisions of the Restated Certificate of
Incorporation, a series of Preferred Stock, no par value, 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 C Junior Participating Preferred
Stock

     1. Designation and Amount. There shall be a
series of Preferred Stock that shall be designated as “Series C Junior
Participating Preferred Stock,” and the number of shares constituting such
series shall be 10,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, however, that no
decrease shall reduce the number of shares of Series C Junior
Participating Preferred Stock to less than the number of shares then issued and
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued
by the Corporation. 

     2. Dividends
and Distribution. 

          (A) Subject
to the prior and superior rights of the holders of any shares of any class or
series of stock of the Corporation ranking prior and superior to the shares of
Series C Junior Participating Preferred Stock with respect to dividends,
the holders of shares of Series C Junior Participating Preferred Stock, in
preference to the holders of shares of any class or series of stock of the
Corporation ranking junior to the Series C Junior Participating Preferred
Stock in respect thereof, 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 30th 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 C Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $10.00 or
(b) the Adjustment Number (as defined below) times the aggregate per share
amount of all cash dividends, and the Adjustment Number 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, par value $.01-2/3 per share, of the Corporation (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 C Junior
Participating Preferred Stock. The “Adjustment Number” shall initially be 1000.
In the event the Corporation shall at any time after March 16, 2009
(i) declare and pay any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately prior
to such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event. 

          (B) The
Corporation shall declare a dividend or distribution on the Series C
Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock). 

          (C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series C
Junior Participating Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series C Junior
Participating 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 C Junior Participating 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 C Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series C Junior Participating Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof. 

A-2

     3. Voting Rights. The holders of shares of
Series C Junior Participating Preferred Stock shall have the following voting
rights: 

          (A) Each
share of Series C Junior Participating Preferred Stock shall entitle the holder
thereof to a number of votes equal to the Adjustment Number on all matters
submitted to a vote of the stockholders of the Corporation. 

          (B) Except
as required by law, by Section 3(C) and by Section 10 hereof, holders
of Series C Junior Participating 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. 

          (C) If,
at the time of any annual meeting of stockholders for the election of
directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series C Junior Participating
Preferred Stock are in default, the number of directors constituting the Board
of Directors of the Corporation shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of other
directors of the Corporation, the holders of record of the Series C Junior
Participating Preferred Stock, voting separately as a class to the exclusion of
the holders of Common Stock, shall be entitled at said meeting of stockholders
(and at each subsequent annual meeting of stockholders), unless all dividends
in arrears on the Series C Junior Participating Preferred Stock have been paid
or declared and set apart for payment prior thereto, to vote for the election
of two directors of the Corporation, the holders of any Series C Junior
Participating Preferred Stock being entitled to cast a number of votes per
share of Series C Junior Participating Preferred Stock as is specified in
paragraph (A) of this Section 3. Each such additional director shall
not be a member of any existing class 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). Until the default in payments of all
dividends which permitted the election of said directors shall cease to exist,
any director who shall have been so elected pursuant to the provisions of this
Section 3(C) may be removed at any time, without cause, only by the
affirmative vote of the holders of the shares of Series C Junior Participating
Preferred Stock at the time entitled to cast a majority of the votes entitled
to be cast for the election of any such director at a special meeting of such
holders called for that purpose, and any vacancy thereby created may be filled
by the vote of such holders. If and when such default shall cease to exist, the
holders of the Series C Junior Participating Preferred Stock shall be divested
of the foregoing special voting rights, subject to revesting in the event of
each and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of all
persons who may have been elected directors pursuant to said special voting
rights shall forthwith terminate, and the number of directors constituting the
Board of Directors shall be reduced by two. 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 C Junior Participating Preferred Stock in this
Section 3. 

A-3

     4. Certain
Restrictions. 

          (A) Whenever
quarterly dividends or other dividends or distributions payable on the Series C
Junior Participating 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 C Junior
Participating 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 C
Junior Participating 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 C Junior Participating Preferred Stock, except
dividends paid ratably on the Series C Junior Participating 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; or 

               (iii) purchase
or otherwise acquire for consideration any shares of Series C Junior
Participating Preferred Stock, or any shares of stock ranking on a parity with
the Series C Junior Participating 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 Series C Junior Participating Preferred Stock, or
to such holders and holders of any such shares ranking on a parity therewith,
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective Series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes. 

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

     5. Reacquired Shares. Any shares of
Series C Junior Participating 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 any conditions and
restrictions on issuance set forth herein. 

A-4

     6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation, dissolution or winding up of the Corporation, voluntary or
otherwise, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series C Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series C Junior Participating Preferred
Stock shall have received an amount per share (the “Series C Liquidation
Preference”) equal to the greater of (i) $10.00 plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, or (ii) the Adjustment Number times the per share
amount of all cash and other property to be distributed in respect of the
Common Stock upon such liquidation, dissolution or winding up of the
Corporation. 

          (B) In
the event, however, that there are not sufficient assets available to permit
payment in full of the Series C 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 C Junior Participating
Preferred Stock in respect thereof, then the assets available for such
distribution shall be distributed ratably to the holders of the Series C
Junior Participating Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences. 

          (C) Neither
the merger or consolidation of the Corporation into or with another entity nor
the merger or consolidation of any other entity into or with the Corporation
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 6. 

     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 property, then
in any such case each share of Series C Junior Participating Preferred
Stock shall at the same time be similarly exchanged or changed in an amount per
share equal to the Adjustment Number 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.

     8. No Redemption. Shares of Series C
Junior Participating Preferred Stock shall not be subject to redemption by the
Corporation. 

     9. Ranking. The Series C Junior
Participating Preferred Stock shall rank junior to all other series of the
Preferred Stock as to the payment of dividends and as to the distribution of
assets upon liquidation, dissolution or winding up, unless the terms of any
such series shall provide otherwise, and shall rank senior to the Common Stock
as to such matters. 

     10. Amendment. At any time that any shares of
Series C Junior Participating Preferred Stock are outstanding, the
Certificate of Incorporation of the Corporation shall not be amended, by
merger, consolidation or otherwise, which would materially alter or change the
powers, preferences or special rights of the Series C Junior Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of two-thirds of the outstanding shares of Series C Junior
Participating Preferred Stock, voting separately as a class. 

A-5

     11. Fractional Shares. Series C Junior
Participating Preferred Stock may be issued in fractions of a share that shall
entitle the holder, in proportion to such holder’s fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series C Junior Participating
Preferred Stock. 

     IN
WITNESS WHEREOF, the undersigned has executed this Certificate this ___day of
March 2009. 

	
 

	
 

	
 

	
 

	
 

	
 

	
QUIXOTE
 CORPORATION

	
 

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
Name:

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
Title:

	
 

	
 

	
 

	
 

	 

A-6

Exhibit B

Form of Right Certificate

Certificate
No. R-______ 

NOT
EXERCISABLE AFTER MARCH 16, 2019 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO
IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE. 

RIGHT CERTIFICATE 

QUIXOTE 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 Rights Agreement, dated
as of March 16, 2009, as the same may be amended from time to time (the “Rights
Agreement”), between Quixote Corporation, a Delaware corporation (the
“Company”), and Computershare Trust Company, N.A., as Rights Agent (the “Rights
Agent”), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
Eastern time, on March 16, 2019 at the office or agency of the Rights Agent
designated for such purpose, or of its successor as Rights Agent, one
one-thousandth of a fully paid non-assessable share of Series C Junior
Participating Preferred Stock, no par value (the “Preferred Stock”), of the
Company at a purchase price of $20.00 per one one-thousandth of a share of
Preferred Stock (the “Purchase Price”), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase properly completed and
duly executed. The number of Rights evidenced by this Right Certificate (and
the number of one one-thousandths of a share of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of March 16, 2009, based on the
Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price, the number of one one-thousandths of a share of
Preferred Stock (or other securities or property) which may be purchased upon
the exercise of the Rights and the number of 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. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The Company
will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor. 

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

     Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at a redemption price of $.01
per Right or (ii) may be exchanged in whole or in part for shares of the
Company’s Common Stock, par value $.01-2/3 per share, or shares of Preferred
Stock. 

     No
fractional shares of Preferred Stock or Common Stock will be issued upon the
exercise or exchange of any Right or Rights evidenced hereby (other than
fractions of Preferred Stock which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depository receipts), but 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 the Preferred Stock or of
any other securities of the Company which may at any time be issuable on the
exercise or exchange 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 or exchanged as provided in the Rights
Agreement. 

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

B-2

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

	
 

	
 

	
 

	
Dated as of
 _______ ___, 2009.

	
 

	
 

	
 

	
 

	
 

	
 

	
QUIXOTE
 CORPORATION

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
 

	
 

	
     [Title]

	
 

	
 

	
 

	
ATTEST:

	
 

	
 

	 

	 

	
 

	
 

	
 

	
[Title]

	
 

	
 

	
Countersigned:

	
 

	
 

	
COMPUTERSHARE
 TRUST COMPANY, N.A., as Rights Agent

	
 

	
 

	
By

	
 

	
 

	
 

	
 

	
     [Title]

B-3

Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT 

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate) 

          FOR
VALUE RECEIVED ______________ hereby sells, assigns and transfers unto
____________________
______________________________________________________________________________________
________________________________________________________________________________

          (Please
print name and address of transferee)

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

	
 

	
 

	
Dated:

	
 

	 

	
 

	
 

	
 

	 

	
 

	
Signature 

	
 

	
 

	
 

	
Signature
 Guaranteed:

	
 

          Signatures
must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature guarantee medallion
program. 

(To be completed)

          The
undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, were not acquired by the undersigned
from, and are not being assigned to an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement). 

	
 

	
 

	 

	
 

	
Signature 

	
 

Form of Reverse Side of Right Certificate —
continued

FORM OF ELECTION TO PURCHASE 

(To be executed if holder desires to exercise

Rights represented by the Right Certificate) 

To QUIXOTE
CORPORATION: 

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

(Please print name and address)

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

Please insert
social security

or other identifying number 

(Please print name and address)

	
 

	
 

	
Dated:

	
 

	 

	
 

	
 

	
 

	 

	
 

	
Signature 

	
 

(Signature must conform to holder specified
on Right Certificate)

Signature
Guaranteed: 

          Signature
must be guaranteed by a bank, trust company, broker, dealer or other eligible
institution participating in a recognized signature guarantee medallion
program. 

Form of Reverse Side of Right Certificate —
continued

(To be completed)

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

	
 

	
 

	 

	
 

	
Signature 

	
 

NOTICE

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

          In
the event the certification set forth above in the Form of Assignment or the
Form of Election to Purchase, as the case may be, is not completed, such
Assignment or Election to Purchase will not be honored. 

Exhibit C

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

SUMMARY OF RIGHTS TO PURCHASE

SHARES OF PREFERRED STOCK OF

QUIXOTE CORPORATION

          On
March 16, 2009, the Board of Directors of Quixote Corporation (the “Company”)
declared a dividend of one preferred share purchase right (a “Right”) for each
outstanding share of common stock, par value $.01-2/3 per share, of the Company
(the “Common Stock”). The dividend is payable on March 26, 2009 (the “Record
Date”) to the stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series C Junior Participating Preferred Stock, no par value, of the Company
(the “Preferred Stock”) at a price of $20.00 per one one-thousandth of a share
of Preferred Stock (the “Purchase Price”), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated
as of March 16, 2009, as the same may be amended from time to time (the “Rights
Agreement”), between the Company and Computershare Trust Company, N.A., as
Rights Agent (the “Rights Agent”). 

          The
Board of Directors adopted the Rights Agreement in an effort to protect
stockholder value by attempting to protect against a possible limitation on the
Company’s ability to use its U.S. net operating loss, capital loss and tax
credit carryovers (the “Tax Attributes”). The Company has experienced
significant losses in the U.S., and under the Internal Revenue Code and rules
promulgated by the Internal Revenue Service, the Company may “carry forward”
these losses and various tax credits in certain circumstances to offset any
current and future taxable income and thus reduce our federal income tax
liability, subject to certain requirements and restrictions. To the extent that
the Tax Attributes do not otherwise become limited, the Company believes that a
significant amount of Tax Attributes will be able to be carried forward, and
therefore these Tax Attributes could be a substantial asset to the Company.
However, if the Company experiences an “Ownership Change,” as defined in
Section 382 of the Internal Revenue Code, the Company’s ability to use the
Tax Attributes could be severely limited, which could therefore significantly
impair the value of the Tax Attributes. 

          Until
the earlier to occur of (i) the close of business on the tenth business
day following a public announcement or determination by the Board of Directors
of the Company that a Person, together with its Affiliates and Associates (as
such terms are defined in the Rights Agreement) has acquired beneficial
ownership of 4.9% or more of the outstanding shares of Common Stock (with
certain exceptions, an “Acquiring Person”) or (ii) the close of business
on the tenth business day (or such later date as may be determined by the Board
of Directors of the Company prior to a public announcement or determination by
the Board of directors of the Company that a Person, together with its
Affiliates and Associates, has become an Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a Person, together with its
Affiliates and Associates, (with certain exceptions) of 4.9% or more of the
outstanding shares of Common Stock (the earlier of such dates being called the
“Distribution Date”), the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of the Record Date, by such Common
Stock certificate together with this Summary of Rights and the Rights will be
transferable only in connection with the transfer of Common Stock. Any Person,
together with its Affiliates and Associates, that beneficially holds 4.9% or
more of the outstanding shares of Common Stock on March 16, 2009 will not be
deemed an Acquiring Person unless and until such Person: (i) acquires the
beneficial ownership of additional shares of Common Stock representing one-half
of one percent (.5%) or more of the outstanding shares of Common Stock; or (ii)
falls under 4.9% ownership of Common Stock and then re-acquires 4.9% or more of
the Common Stock of the Company. The Board of Directors of the Company may, in
its sole discretion, exempt any Person together with its Affiliates and
Associates, from being deemed an Acquiring Person for purposes of the Rights
Agreement if the Board of Directors of the Company determines that such
Person’s, together with its Affiliates’ and Associates’, ownership of Common
Stock will not jeopardize or endanger the availability of the Tax Attributes to
the Company and the Board of Directors of the Company may also, in its sole
discretion, exempt any transaction from the provisions of the Rights Agreement.

          The
Rights Agreement provides that, until the Distribution Date (or earlier
expiration of the Rights), the Rights will be transferred with and only with
the Common Stock. Until the Distribution Date (or earlier expiration of the
Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
expiration of the Rights), the surrender or transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights, will also constitute the transfer
of the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (“Right Certificates”) will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights. 

          The
Rights are not exercisable until the Distribution Date. The Rights will expire
on March 16, 2019 (the “Final Expiration Date”), unless the Final Expiration
Date is advanced or extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below. 

C-2

          The
Purchase Price payable, and the number of shares of Preferred Stock or other
securities or property issuable, upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the Preferred Stock or
(iii) upon the distribution to holders of the Preferred Stock of evidences
of indebtedness or assets (excluding regular periodic cash dividends or
dividends payable in Preferred Stock) or of subscription rights or warrants
(other than those referred to above). 

          The
number of outstanding Rights is subject to adjustment in the event of a stock
dividend on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date. 

          Shares
of Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of the greater
of (a) $10.00 per share, and (b) an amount equal to 1000 times the
dividend declared per share of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Preferred Stock
will be entitled to a minimum preferential payment of the greater of (a) $10.00
per share (plus any accrued but unpaid dividends), and (b) an amount equal
to 1000 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 1000 votes, voting together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in which
outstanding shares of Common Stock are converted or exchanged, each share of
Preferred Stock will be entitled to receive 1000 times the amount received per
share of Common Stock. These rights are protected by customary antidilution
provisions. 

          Because
of the nature of the Preferred Stock’s dividend, liquidation and voting rights,
the value of the one one-thousandth interest in a share of Preferred Stock
purchasable upon exercise of each Right should approximate the value of one
share of Common Stock. 

          In
the event that any Person, together with its Affiliates and Associates, becomes
an Acquiring Person, each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereupon become null and void), will
thereafter have the right to receive upon exercise of a Right that number of
shares of Common Stock having a market value of two times the exercise price of
the Right. 

          In
the event that, after a Person, together with its Affiliates and Associates,
has become an Acquiring Person, the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold, proper provisions will be made so that each holder of a
Right (other than Rights beneficially owned by an Acquiring Person which will
have become null and void) will thereafter have the right to receive upon the
exercise of a Right that number of shares of common stock of the Person with
whom the Company has engaged in the foregoing transaction (or its parent) that
at the time of such transaction have a market value of two times the exercise
price of the Right. 

C-3

          At
any time after any Person, together with its Affiliates and Associates, becomes
an Acquiring Person and prior to the earlier of one of the events described in
the previous paragraph or the acquisition by such Acquiring Person of 50% or
more of the outstanding shares of Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such Acquiring
Person which will have become null and void), in whole or in part, for shares
of Common Stock or Preferred Stock (or a series of the Company’s preferred
stock having equivalent rights, preferences and privileges), at an exchange
ratio of one share of Common Stock, or a fractional share of Preferred Stock
(or other preferred stock) equivalent in value thereto, per Right. 

          With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional shares of Preferred Stock or Common Stock will be issued
(other than fractions of Preferred Stock which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), and in lieu thereof an
adjustment in cash will be made based on the current market price of the
Preferred Stock or the Common Stock. 

          At
any time prior to the time an Acquiring Person becomes such, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the “Redemption Price”) payable, at the option of the
Company, in cash, shares of Common Stock or such other form of consideration as
the Board of Directors of the Company shall determine. The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors of the Company in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be
to receive the Redemption Price. 

          For
so long as the Rights are then redeemable, the Company may, except with respect
to the Redemption Price, amend the Rights Agreement in any manner. After the
Rights are no longer redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights Agreement in any manner that does not
adversely affect the interests of holders of the Rights. 

          Until
a Right is exercised or exchanged, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. 

          A
copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A dated March
___, 2009. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, as the
same may be amended from time to time, which is hereby incorporated herein by
reference. 

C-4Exhibit 10.4

        

        PARTICIPATION
        AGREEMENT

        

        between

        

        APACHE
        CORPORATION

        

        and

        

        RIDGEWOOD
        ENERGY
CORPORATION

        

        SOUTH TIMBALIER
        BLOCK 287

        

        OCS-G
        24987

        

        GULF OF
        MEXICO

        

        PARTICIPATION
        AGREEMENT

        SOUTH TIMBALIER BLOCK 287

        OCS-G 24987

        GULF OF MEXICO

        

        This Participation
        Agreement (“Agreement”) is made and entered into effective as of the
        15th day of November, 2007, (the “Effective Date”), by and between
        Apache Corporation (“Apache”) and Ridgewood Energy Corporation
        (“Ridgewood”), sometimes hereinafter referred to collectively as the
        “Parties” and individually as “Party”.

        

        
        WITNESSETH:

        

        WHEREAS, the
        Parties have entered into that certain letter agreement dated October 5, 2007, that
        provides, among other things, for the execution of this Agreement and Ridgewood’s
        participation in the South Timbalier 287, OCS-G 24987 #A-8 Well (“Initial Test
        Well”); and

        

        WHEREAS,
        Pursuant to Magnum Hunter Production Inc.‘s (“Magnum Hunter”)
        election to farm out pursuant to that certain Option Agreement dated August 20, 2007, by
        and between Apache and Magnum Hunter, Apache has entered into that certain farmout
        agreement dated November 7, 2007 (“Farmout Agreement”), by and between
        Apache and Magnum Hunter. Ridgewood ratified and accepted the Farmout Agreement by
        agreement dated November 15, 2007, thereby providing for Ridgewood’s assumption of
        all rights, duties, interests, and obligations arising thereunder. Pursuant to the terms
        and conditions of the Farmout Agreement, the Parties desire to drill the Initial Test Well
        in an effort to earn an assignment of Magnum Hunter’s interest in the Lease (as
        defined below in Article 1);

        

        NOW,
        THEREFORE, in consideration of the mutual covenants and agreements herein contained,
        the Parties agree as follows:

        

        ARTICLE
        1
        
 Definitions

        

        Affiliate means a
        legal entity that Controls, or is Controlled by, or that is Controlled by an entity that
        Controls, a Party.

        

        Authorization for Expenditure
        (AFE) means an authorization to expend funds that estimates costs to be incurred
        for an operation pursuant to the Operating Agreement, defined below.

        

        Casing
        Point means that point in time after the contract depth has been reached in
        drilling the Initial Test Well, as hereinafter defined, said well has been fully evaluated
        by the running of such logs and conducting such other open-hole evaluation as Apache
        recommends together with such other evaluations as the Parties hereto may deem appropriate,
        and after the results of said logs and open-hole evaluation are known and delivered to the
        Parties hereto, and a decision is made to attempt to complete or deepen the Initial Test
        Well or to plug and abandon the well. However, should the decision be to plug and abandon
        the well, it shall be deemed not to have reached Casing Point until all operations are
        complete with respect to the plugging and abandoning of the Initial Test Well.

        
        

        

        
        Control means the
        ownership directly or indirectly of fifty percent (50%) or more of the voting rights in a
        legal entity. Controls, Controlled by, and other derivatives
        shall be construed accordingly.

        

        Ground Floor
        Interest has the meaning ascribed to it in Article 2.2.

        

        Gulf Coast
        Conditions has the meaning ascribed to it in Article 5.6.

        

        Effective
        Date has the meaning ascribed to it in the preamble.

        

        Evaluation
        Datameans geological or geophysical data and other data and information relating to
        a Prospect including, without limitation, all relevant geological and geophysical
        interpretations and information, including reports, interpretations, models, maps, and all
        specialty processing and analysis of seismic data, and may also include commercial,
        contractual, and financial information.

        

        Farmout
        Agreement has the meaning ascribed to it in the preamble.

        

        Force
        Majeure means an act of God, strike, lockout, or other industrial disturbance, act
        of the public enemy, war, blockade, public riot, lightning, fire, storm, flood, or other
        act of nature, explosion, governmental action or restraint, unavailability of equipment,
        and any other cause, whether of the kind specifically enumerated above or otherwise, that
        is not reasonably within the control of the Party claiming suspension. It is, however,
        expressly agreed that promptness of performance is of the essence under this Agreement and
        that every reasonable effort will be made by the Parties to avoid delay or suspension of
        any work or acts to be performed under this Agreement. The requirement that the Force
        Majeure be remedied with all reasonable dispatch shall not require a Party to settle
        strikes or other labor difficulties.

        

        Initial Test
        Well is set out in the Preamble as the South Timbalier 287, OCS-G 24987 #A-8
        Well.

        

        Lease
        means OCS-G 24987 dated effective May 1, 2003, between the United States of America, as
        Lessor, Farmor, as Leasee, covering all of Block 287, South Timbalier Area, South Addition,
        OCS Leasing Map, Louisiana Map No, 6A, containing 5,000 acres, more or less.

        

        Net Revenue
        Interest means the Working Interest, less Lessor’s royalty interest and other
        applicable burdens (including Farmor’s retained ORRI as set forth in the Farmout
        Agreement), proportionately reduced.

        

        Operating
        Agreement has the meaning ascribed to it in Article 3.

        

        Objective Depth has
        the meaning ascribed to it in Article 4.1.

        

        Production Handling
        Agreement has the meaning ascribed to it in Article 2.7.

        

        
        Prospect means, in
        general, a geologic structural, stratigraphic trap, or combination thereof that is believed
        to have the potential for accumulations of Hydrocarbons in commercial quantities. Further,
        the Prospect means, specifically as it relates to this Agreement, the South Timbalier 287
        Prospect presented to Ridgewood on August 24, 2007, which encompasses South Timbalier Block
        287, the Southeast Quarter (SE/4) of South Timbalier Block 288, portions of South Timbalier
        Block 308, and Ewing Bank Block 785.

        
        

        

        Prospect Area means
        the geographic area encompassing the Prospect.

        

        Promoted Interest has
        the meaning ascribed to it in Article 2.2.

        

        Substitute Well has
        the meaning ascribed to it in Article 5.6.

        

        Working Interest means
        the undivided interest of a Party, expressed as a percentage of the total interests of all
        Parties, in the rights and obligations derived from this Agreement and also means the
        undivided interest of a Party, expressed as a percentage of the total interests of all
        Parties, in the rights and obligations in and to a Lease.

        

        ARTICLE
        2

        Assignment and
        Assumption of Rights

        

        
        2.1    In exchange for
        the consideration stated herein, Apache hereby agrees to assign and transfer to Ridgewood,
        concurrent with the execution of this Agreement, and Ridgewood hereby agrees to accept, an
        assignment of twenty-five percent (25%) of Apache’s one hundred percent (100%)
        Working Interest rights in the Lease (those right granted pursuant to the Farmout
        Agreement), together with a corresponding Net Revenue Interest associated with each
        Party’s respective Working Interest.

        

        
        2.2    Working Interests
        for the Initial Test Well, or any Substitute Well to that point in time when Casing Point
        has been reached in such well or to such point in time that one hundred ten percent (110%)
        of the costs associated with drilling AFE to Casing Point have been expended, whichever is
        the earlier (“Promoted Interest”), shall be:

	 	 	
           Apache:
	 	60
	 %
	 	 	 
	 	 	Ridgewood:
	 	40
	%
	 	 	 
	 	 	Total:
	 	100
	%
	 	 	 

        Working Interests
        for the Initial Test Well, or any Substitute Well , after that point in time when Casing
        Point has been reached in such well or to such point in time that costs in such well have
        exceeded one hundred ten percent (110%) of the drilling AFE to Casing Point, whichever is
        the earlier (“Ground Floor Interest”):

	 	 	
           Apache:
	 	75
	 %
	 	 	 
	 	 	Ridgewood:
	 	25
	%
	 	 	 
	 	 	Total
	 	100
	%
	 	 	 

        
        

        

        2.3    Working Interests for the mobilization and
        demobilization of the rig used to drill the Initial Test Well shall be:

	 	 	
           Apache: 
	 	60
	 %
	 	 	 
	 	 	Ridgewood:
	 	40
	%
	 	 	 
	 	 	Total: 
	 	100
	%
	 	 	 

        

        
        2.4    For the purposes
        of Article 2, Apache shall provide Ridgewood a final AFE for the estimated cost of drilling
        of the Initial Test Well (inclusive of the estimated cost to plug and abandon such well in
        the event that is unsuccessful), at least thirty (30) days prior to the actual spud of the
        Initial Test Well. Additionally, Apache shall provide an AFE for the estimated costs of
        mobilization and demobilization of the rig that will be utilized to drill the Initial Test
        Well within fifteen (15) days of contracting the rig. In the event that the drilling AFE
        exceeds twenty-eight million dollars ($28,000,000), the Promoted Interest of Ridgewood
        would revert to a Ground Floor Interest once one hundred ten percent (110%) of the
        twenty-eight million dollars ($28,000,000) is expended. As to the mobilization and
        demobilization of the rig used to drill the Initial Test Well, the interest of the Parties
        will be as provided in Article 2.3 above, until such time as costs for the mobilization and
        demobilization exceed eight million dollars ($8,000,000), at which time the interest will
        revert to the Ground Floor Interest.

        

        
        2.5    Apache shall have
        the option to cash call, and Ridgewood would have the obligation to pay within fifteen (15)
        days of receipt of Apache’s cash call, one hundred percent (100%) of
        Ridgewood’s share of the cost and expense associated with the drilling AFE; however,
        in no such event shall Apache cash call Ridgewood prior to the date Apache has entered into
        a drilling contract for the drilling of the Initial Test Well. However, should Apache cash
        call Ridgewood for any portion of Ridgewood’s share of the drilling AFE on having
        entered into a drilling contract, and if Apache fails to spud the Initial Test Well within
        three (3) months of said cash call, then Apache shall owe and pay to Ridgewood interest on
        the cash call amount. The interest-only payment shall be due and payable to Ridgewood
        within fifteen (15) days after the expiration date of said three (3) month period provided
        for above. Interest will continue to accumulate and be due and payable thereafter for every
        additional three (3) month period the Initial Test Well remains undrilled. The interest
        rate shall be equal to that rate provided for in Article 1 Section 3 of the COPAS attached
        to the Operating Agreement.

        

        
        2.6    Within ten (10)
        days of notification by Apache that a platform rig has been offloaded onto Apache’s
        South Timbalier 308 A Platform, Ridgewood shall pay to Apache a one-time slot fee of five
        hundred thousand dollars ($500,000) proportionately reduced to Ridgewood’s Ground
        Floor Interest, that being a net sum of one hundred twenty-five thousand dollars
        ($125,000).

        

        
        2.7    Ridgewood and
        Apache further agree that Ridgewood will not be required to contribute to any capital
        expenditures associated with the facility for modifications or upgrades thereto, other than
        those costs directly associated with a new separator for the Initial Test Well and the
        hook-up of the Initial Test Well, but in lieu thereof, will be subject to and charged
        processing fees, those being of $0.15/mcf for gas, $1.00/bbl for oil and condensate,
        $1.00/bbl for water, $0.075/mcf per stage of compression, and a monthly contract operating
        fee of $10,000 for the first well and $5,000 for each additional well. Such fees shall be
        incorporated into a mutually agreed to production handling agreement (“Production
        Handling Agreement”) . Said Production Handling Agreement will be executed within ten
        (10) days of the execution of this Agreement.

        
        

        

        

        ARTICLE
        3

Operating
        Agreement

        

        Within ten (10) days
        of the execution of this Agreement, the Parties shall execute an offshore operating
        agreement (“Operating Agreement”) which shall name Apache as operator. The
        Operating Agreement shall be in substantially the same form as that offshore operating
        agreement entered into by Apache and Ridgewood effective July 24, 2006, which now governs
        operations on portions of South Pelto Blocks 2 and 9, with such other terms and conditions
        as the Parties may agree. All operations conducted pursuant to this Agreement shall be
        governed by the terms and provisions of said Operating Agreement.

        

        ARTICLE
        4

Initial Test
        Well

        

        
        4.1    The Initial Test
        Well will be drilled from a surface location on Apache’s South Timbalier 308 A
        Platform to a bottomhole location on the Lease, pursuant to the well plan attached hereto
        as Exhibit “A” and to a depth sufficient to test the lowest Catinaster coalitus
        Sand as seen in the ST 308 #A-3 with top of sand at 20,750’ MD/19,604’ TVD and
        base at 20,868’ MD/19,720’ TVD (“Objective Depth”).

        

        
        4.2    Apache will plan
        to enter into a contract for the platform rig to be utilized for the drilling of the
        Initial Test Well on or before December 1, 2007. Should Apache fail to contract the
        platform rig by such date, then at Ridgewood’s sole election, its participation
        commitment may be terminated immediately with no continuing liability obligation or penalty
        to either Party. For avoidance of doubt, in the event Apache fails, for any reason to
        contract the platform rig by December 1, 2007, Ridgewood’s sole remedy against Apache
        will be to terminate this Agreement and Ridgewood hereby waives any and all claims and
        damages of every kind whatsoever resulting from Apache’s failure to enter into a
        drilling contract on or before December 1, 2007.

        

        
        4.3    Subject to
        permitting, rig availability, and events of Force Majeure, Apache shall use all
        commercially reasonable efforts to commence operations on the Initial Test Well within
        ninety (90) days of the Effective Date hereof.

        

        
        4.4    In the event
        operations for the Initial Test Well are not commenced by Apache or another third party
        within ninety (90) days of the Effective Date hereof other than for reasons attributable to
        permitting, rig unavailability, or Force Majeure or if Apache is not the operator, then
        Ridgewood may, within thirty (30) days following such ninety (90) day period, elect to
        terminate this Agreement immediately with no continuing liability obligation or penalty to
        either party and Ridgewood hereby waives any and all claims and damages of every kind
        whatsoever arising out of this Agreement.

        
        

        

        
        4.5    Apache shall
        provide Ridgewood with copies of all well information from the Initial Test Well as
        required under the Operating Agreement.

        

        
        4.6    In the event the
        Initial Test Well does not reach the Objective Depth because of mechanical difficulties or
        Gulf Coast Conditions (i.e. rock salt, heaving shale, excessive water flow, depleted sands,
        excessive pressure, base or other impenetrable matter) that prevent the operator from
        drilling the Initial Test Well to the Objective Depth, the Parties hereto, pursuant to the
        Operating Agreement, may cause the drilling of a substitute well (hereinafter
        “Substitute Well”) on or before ninety (90) days following the plugging and
        abandonment of the Initial Test Well (or plugging back in the case of a proposed
        sidetrack). As between the Parties hereto, any Substitute Well shall require the
        concurrence of one (1) or more of said Parties with at least fifty percent (50%) Working
        Interest, proportionately reduced, and shall be drilled to target the same objective as the
        Initial Test Well. If the Parties elect to drill a Substitute Well, then the consideration
        to be paid in accordance with the Promoted Interest, provided for in Article 2.2 hereof,
        shall be carried over to the Substitute Well, but the Promoted Interest limitation provided
        for in Article 2.2 and Article 2.4 shall remain in effect.

        

        ARTICLE
        5

        Representations and
        Warranties

        5.1    Ridgewood makes the following representations and
        warranties to Apache as of the Effective Date:

        	
                A. 	
                  	
                    There
                    are no material claims, demands, actions, suits, governmental inquiries, or
                    proceedings pending, or to Ridgewood’s knowledge, threatened, against
                    Ridgewood that would have an adverse effect on the consummation of the
                    transactions contemplated by this Agreement.

                

        

        

        	
                B. 	
                  	
                    Ridgewood
                    has sufficient cash, available lines of credit, or other sources of immediately
                    available funds to enable it to fulfill all its obligations under this
                    Agreement.

                

        

        

        	
                C. 	
                  	
                    Each Party
                    represents and warrants that it is duly qualified with the Minerals Management
                    Service to do business in the Outer Continental Shelf.

                

        

        

        	
                D. 	
                  	
                    Ridgewood
                    has the technical capability, personnel, and resources to fulfill its
                    obligations under this Agreement.

                

        

        5.2    The Parties make the following representations and
        warranties to each other as of the Effective Date:
        

        	
                A. 	
                  	
                    Such Party
                    is duly organized and validly existing under the laws of the state where it is
                    organized;

                

        

        

        	
                B. 	
                  	
                    Such Party
                    has all requisite corporate power and authority to enter into this Agreement,
                    to perform its obligations hereunder, and to consummate the transactions
                    contemplated hereby; and

                

        

        

        	
                C. 	
                  	
                    This
                    Agreement has been duly executed and delivered by each Party and constitutes a
                    legal, valid, and binding obligation of each Party, enforceable against each
                    Party in accordance with its terms.

                

        

        
        
        

        

        
        5.3    APACHE MAKES
        NO REPRESENTATION OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE QUALITY, ACCURACY, AND
        COMPLETENESS OF THE INFORMATION INCLUDED IN THE PROSPECT PRESENTATION OR ANY OTHER
        EVALUATION DATA FURNISHED BY APACHE TO RIDGEWOOD, AND RIDGEWOOD EXPRESSLY ACKNOWLEDGES THE
        INHERENT RISK OF ERROR IN THE ACQUISITION, PROCESSING, AND INTERPRETATION OF GEOLOGICAL AND
        GEOPHYSICAL DATA. APACHE AND ITS AFFILIATED COMPANIES, THEIR OFFICERS, DIRECTORS, AND
        EMPLOYEES SHALL HAVE NO LIABILITY WHATSOEVER WITH RESPECT TO THE USE OF OR RELIANCE ON THE
        EVALUATION DATA BY RIDGEWOOD OR ITS REPRESENTATIVE.

        

        ARTICLE
        6

        Confidentiality

        

        The Evaluation Data covering the
        Prospect Area will be subject to the terms and provisions of the Confidentiality Agreement
        dated August 24, 2007.

        

        ARTICLE
        7

         Governing
        Law

        

        
                The
        substantive law of the State of Texas, exclusive of any conflicts of laws principles that
        could require the application of any other law, shall govern this Agreement for all
        purposes, including the resolution of disputes between or among Parties; provided, however,
        that no law, theory, or public policy shall be given effect which would undermine,
        diminish, or reduce the effectiveness of the waiver of damages contained within this
        Agreement, it being the express intent, understanding, and agreement of the Parties that
        such waiver is to be given the fullest effect, notwithstanding the negligence (whether
        sole, joint or concurrent), gross negligence, willful misconduct, strict liability or other
        legal fault of Party.

        

        ARTICLE
        8

Notices

        

        Notice by one (1)
        Party to another under this Agreement shall be in writing and shall be delivered by hand,
        registered mail, overnight mail, or facsimile to the respective Party at the address or
        facsimile number shown below, or such other address or facsimile number as a Party may
        designate by notice to the other Party, and shall be deemed to be delivered only when
        received by the Party to whom such notice is directed:

        
        

        

	  	  
	   	APACHE CORPORATION  	   	   	RIDGEWOOD ENERGY CORPORATION  	   	   
	   	2000 Post Oak Boulevard, Suite 100  	   	   	11700 Old Katy Road, Suite 280  	   	   
	   	Houston, Texas 77056-4400  	   	   	Houston, Texas 77079  	   	   
	   	ATTN: Land Manager--Gulf Coast Region  	   	   	ATTN: Mr. W. Greg Tabor  	   	   
	   	Facsimile: 713-296-7024  	   	   	Facsimile: 281-293-7705  	   	    

        ARTICLE
        9

          Public
        Announcements

        

        Except as required
        by applicable law, rule, or stock exchange regulation or a third-party agreement as
        referenced above, neither Party nor their Affiliates will make any public comment,
        statement, or communication with respect to the existence of this Agreement or any ongoing
        negotiations between the Parties without the prior consent of the other Party. If a Party
        is required by law, rule, or stock exchange requirement to make any such disclosure, it
        will provide advance written notice to the other Party specifying the content of the
        proposed disclosure, the reasons such disclosure is required, and the time and place that
        the disclosure will be made, and shall limit any disclosure only to such information that
        the disclosing Party reasonable believes on advice of counsel is required to be disclosed.
        Notwithstanding anything to the contrary above, Ridgewood or its designated subsidiary will
        not be restricted or precluded from providing certain non-confidential information about
        the program or a Prospect(s) in any marketing brochure, drilling fund prospectus, or
        related company Website.

        

        ARTICLE
        10

        Force
        Majeure

        

        If a Party is
        unable, wholly or in part by Force Majeure, to carry out its obligations under this
        Agreement, other than the obligation to make money payments, that Party shall give the
        other Party prompt written notice of the Force Majeure with full particulars about it.
        Thereupon, the obligations of the Party giving the notice, so far as they are affected by
        the Force Majeure, shall be suspended during, but no longer than, the continuance of the
        Force Majeure.

        

        ARTICLE
        11

        Internal Revenue
        Provision

        

        It is not the
        purpose or intention of this Agreement to create any partnership, mining partnership, or
        association, and neither this Agreement nor the operations hereunder shall be construed as
        creating any such legal relationship; however, for income tax purposes only, the Parties
        agree that this Agreement shall be governed in accordance with the Operating
        Agreement.

        

        ARTICLE
        12

        Term

        

        This Agreement shall
        remain in effect for so long as the Lease or any portion thereof covering the Prospect Area
        remains in effect or the Operating Agreement as to the Prospect Area remains in effect,
        whichever is later; provided, however, that the obligations under the Confidentiality
        Agreement shall survive termination of this Agreement.

        
        

        

        ARTICLE
        13

        General
        Provisions

        

        
        13.1    This Agreement,
        together with all its exhibits, is intended by the Parties to be a complete and final
        statement of the agreement of the Parties with respect to the subject matter hereof, and
        supersedes any prior oral or written statements or agreements.

        

        
        13.2    Subject to all
        matters hereof, this Agreement shall be binding on the Parties hereto and their respective
        successors and assigns.

        

        
        13.3    In the event of
        any conflict between the provisions of the main body of this Agreement and any of its
        exhibits, the provisions of the main body of the Agreement shall prevail. In the event of
        any conflict between the provisions of this Agreement and the Operating Agreement, the
        provisions of this Agreement shall prevail, but only to the extent of such
        conflict.

        

        
        13.4    Failure by any
        Party to comply with any of its obligations, agreements, or conditions herein contained may
        be waived in writing, but not in any other manner, by the Party to whom such compliance is
        owed. No waiver of, or consent to a change in, any of the provisions of this Agreement
        shall be deemed or shall constitute a waiver of, or consent to a change in, other
        provisions hereof (whether or not similar), nor shall such waiver constitute a continuing
        waiver unless otherwise expressly provided.

        

        
        13.5    None of the
        rights or liabilities derived from this Agreement is assignable by either Party except with
        the prior written consent of the other Party, such consent not to be unreasonably withheld,
        except with respect to assignments to an Affiliate.

        

        
        13.6    This Agreement
        shall be binding on, and shall inure to the benefit of, the Parties hereto and their
        respective permitted successors and assigns. This Agreement shall be a covenant running
        with the land and shall bind any assignee of a Party’s right, title or interest in
        this Agreement.

        

        
        13.7    The captions in
        this Agreement are for convenience only and shall not be considered part of or affect the
        construction or interpretation of any provision of this Agreement.

        13.8    References herein to the singular
        include the plural, and vice versa.
        

        
        13.9    The rights,
        duties, obligations and liabilities of the Parties under this Agreement shall be
        individual, not joint or collective. It is not the intention of the Parties to create, nor
        shall this Agreement be deemed or construed to create, a mining or other partnership, joint
        venture or association, or trust. This Agreement shall not be deemed or construed to
        authorize any Party to act as an agent, servant or employee for any other Party for any
        purpose whatsoever except as explicitly set forth in this Agreement. In their relations
        with each other under this Agreement, the Parties shall not be considered fiduciaries
        except as expressly provided in this Agreement.

        
        

        

        13.10  
        Each provision of this Agreement shall be construed as though all Parties participated
        equally in the drafting of the same. Consequently, the Parties acknowledge and agree that
        any rule of construction that a document is to be construed against the drafting Party
        shall not be applicable to this Agreement.

        

        13.11   If
        and for so long as any provision of this Agreement shall be deemed to be judged invalid for
        any reason whatsoever, such invalidity shall not affect the validity or operation of any
        other provision of this Agreement except only so far as shall be necessary to give effect
        to the construction of such invalidity, and any such invalid provision shall be deemed
        severed from this Agreement without affecting the validity of the balance of this
        Agreement.

        

        
        13.12   Notwithstanding
        anything herein to the contrary, should Ridgewood terminate its participation under this
        Agreement pursuant to Article 4.2, Article 4.3 or Article 4.4, and if Ridgewood has paid to
        Apache prior to such termination any slot fee, cash call(s) or AFE amounts, pursuant to the
        terms of this Agreement, Apache will immediately reimburse to Ridgewood within five (5)
        business days of receipt of Ridgewood’s notice to terminate, one hundred percent
        (100%) of all amounts paid to Apache hereunder.

        

        13.12  
        There shall be no modification of this Agreement except by written consent of all
        Parties.

        

        IN WITNESS WHEREOF, the
        Parties entered into this Agreement as of the Effective Date.

	 APACHE CORPORATION 
 	 	 RIDGEWOOD ENERGY CORPORATION 
	   
	   
 	   	 	   	   	   	  
 	   	    	  	   	   
	BY: 
 	   	 	   	   	   	BY: 
 	   	    	  	   	   
	  
 	   	
	   	   	   	  
 	   	 
  	  	   	   
	   	   	C.R. Harden 
 	   	   	   	   	   	W. Greg Tabor 
 	   	   	   
	   	   	Land Manager, Gulf Coast Region   
 	   	   	   	   	   	Executive Vice President 
  	   	   	   

        

RATIFICATION OF
FARMOUT
AGREEMENT 

        Whereas,
Apache Corporation (“Apache”) and Magnum Hunter Production, Inc. (“Magnum
Hunter’s) have entered into that certain farmout agreement, dated November 7, 2007,
(“Farmout Agreement”) whereby Apache has been granted the right to drill the
South Timbalier 287, OCS-G 24987 #A-8 Well (“Initial Test Well”) in an effort to
earn an assignment of all of Magnum Hunter’s interest in and to South Timbalier Block
287, OCS-G 24987 (the “Lease”). A copy of the fully executed Farmout Agreement
was previously provided to Ridgewood Energy Corporation (“Ridgewood”); 

        Whereas,
Ridgewood and/or Apache may hereinafter be referred to in this Ratification of Farmout
Agreement individually as a “Party” or collectively as the “Parties”; 

        Whereas,
pursuant to that certain Participation Agreement effective November 15, 2007, by and
between Apache and Ridgewood (the “Participation Agreement”), Apache and
Ridgewood set forth the terms of participation and the cost sharing in the Initial Test
Well to be drilled on the Lease; 

        Whereas,
Apache and Ridgewood desire to make Ridgewood a party to the Farmout Agreement by the
execution of this ratification agreement; and 

        Now,
therefore, in consideration of the premises and ten dollars ($10.00) and other good
and valuable consideration in hand paid by the Parties, the receipt is hereby acknowledged
and confessed, Ridgewood does hereby adopt, ratify and confirm said Farmout Agreement and
assumes all of the obligations and liabilities contained therein to the extent of its
participating interest as determined by the Participating Agreement, subject to and in
accordance with all of the terms and conditions set forth in said above described Farmout
Agreement. 

        Ridgewood’s
acceptance and ratification of the Farmout Agreement as provided herein shall in no way
modify, amend or otherwise supercede the Participation Agreement and the Parties agree
that all covenants and obligations of the Parties as stated in the Participation Agreement
shall remain in full force and effect. 

        The
Parties hereto agree that this instrument shall be binding upon them, their heirs,
successors and assigns. 

        In
witness whereof, this agreement is executed effective as of November 15, 2007. 

	WITNESSES:			 APACHE CORPORATION
	 	 	 	 	 	 	 
	 
 	 
	 	 	By:	
	 
	  	  	 	 	 	C.R. Harden	 
	 
 	 
	 	 	Title:	Land Manager –  Gulf Coast Region	 
	 	 	 	 	 	 	 
	WITNESSES:			RIDGEWOOD ENERGY CORPORATION
	 	 	 	 	 	 	 
	 
 	 
	 	 	By:	
	 
	  	  	 	 	 	W. Greg Tabor	 
	 
 	 
	 	 	Title:	Executive Vice President

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